Exhibit 10.7

SECOND AMENDED AND RESTATED TAX RECEIVABLE AGREEMENT
This SECOND AMENDED AND RESTATED TAX RECEIVABLE AGREEMENT (this “Agreement”),
dated as of November 26, 2018 (the “Effective Date”), is entered into by and
among Ares Management Corporation, a Delaware corporation (the “Parent”), Ares
Holdings Inc., a Delaware corporation (“Holdings Inc.”), Ares Offshore Holdings
Ltd., a Cayman Islands exempted company (“Offshore Holdings Ltd.”), Ares AI
Holdings L.P., a Delaware limited partnership (“AI Holdings” and together with
the Parent, Holdings Inc. and Offshore Holdings Ltd., the “AOG Topco Entities”),
Ares Holdings L.P., a Delaware limited partnership (“Ares Holdings”), Ares
Offshore Holdings L.P. (“Ares Offshore”), Ares Investments L.P. (“Ares
Investments” and together with Ares Holdings, Ares Offshore and all other
Persons (as defined herein) in which the AOG Topco Entities acquire a
partnership interest or similar interest after the Effective Date and who
execute and deliver a joinder contemplated in Section 7.12, the “Partnerships”),
Ares Owners Holdings L.P., a Delaware limited partnership (“AOH”), Alleghany
Insurance Holdings LLC, a Delaware limited liability company (“Alleghany”) and
each of the parties set forth on Schedule A hereto (the “Limited Partners” and
together with AOH and Alleghany, the “TRA Holders”).
RECITALS
WHEREAS, TRA Holders directly or indirectly hold limited partnership interests
in each of the Partnerships (“Partnership Units”), and each of the Partnerships
is classified as a partnership for U.S. federal income tax purposes;
WHEREAS, as of the Effective Date, each AOG Topco Entity or its direct or
indirect Subsidiary is the general partner of the Partnership in which such AOG
Topco Entity owns an interest;
WHEREAS, pursuant to and subject to the provisions of the Exchange Agreement (as
defined below), TRA Holders are entitled to surrender Partnership Units to the
Partnerships in exchange for the delivery by the Partnerships of Class A Shares,
cash or other consideration and the general partners of the Partnerships have a
superseding right to acquire such Partnership Units for Class A Shares, cash or
other consideration;
WHEREAS, each of the Partnerships will, and certain of their direct and indirect
Subsidiaries that are treated as partnerships for U.S. federal income tax
purposes may, have in effect an election under Section 754 of the Code, for each
Taxable Year in which a taxable exchange of Partnership Units for Class A
Shares, cash or other consideration occurs, which election is intended to result
in an adjustment to the tax basis of the assets owned by the Partnerships at the
time of such an exchange of Partnership Units for Class A Shares, cash or other
consideration (collectively, an “Exchange”, the date of such Exchange, the
“Exchange Date”, and 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
“Reference 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
Partnerships solely with respect to the AOG Topco Entities may be affected by
the Basis Adjustment (defined below) and (ii) the AOG Topco Entities may be
affected by the Imputed Interest (as defined below);
WHEREAS, effective as of March 1, 2018, Ares Management, L.P., a Delaware
limited partnership and the predecessor of the Parent (“Ares LP”), elected to be
classified as an association taxable as a corporation for U.S. federal income
tax purposes pursuant to Treasury Regulation Section 301.7701-3(c) (the “Tax
Election”);
WHEREAS, certain of the parties to this Agreement entered into the Amended and
Restated Tax Receivable Agreement, effective as of March 1, 2018 (the “A&R
Agreement”), to make certain arrangements with respect to the effect of the
Basis Adjustment and Imputed Interest on the actual liability for Taxes of the
AOG Topco Entities;
WHEREAS, effective as of the Effective Date, Ares LP has filed with the
Secretary of State of the State of Delaware a Certificate of Conversion to
convert to the Parent, in accordance with the Delaware General Corporation Law
and the Delaware Revised Uniform Limited Partnership Act (the “Conversion”); and
WHEREAS, in connection with the Conversion, the parties hereto now desire to
amend and restate the Original Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01.    Definitions. As used in this Agreement, the terms set forth in
this Article I shall have the following meanings.
“A&R Agreement” is defined in the Recitals of this Agreement.
“Advisory Firm” means Proskauer Rose LLP, other advisors as indicated by the
Parent or any other accounting firm or law firm that is nationally recognized as
being expert in Tax matters and that is designated as such by the Board.
“Advisory Firm Letter” means a letter from the Advisory Firm stating that the
relevant schedule, notice or other information to be provided or made available
by the AOG Topco Entities to TRA Holders or the Principals, as the case may be,
and all supporting schedules and work papers were prepared in a manner
consistent with the 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
or made available to the TRA Holders or the Principals, as the case may be.
“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 plus 100 basis points.
“Agreement” is defined in the Preamble of this Agreement.
“Alleghany” is defined in the Preamble of this Agreement.
“Amended Schedule” is defined in Section 2.04(b) of this Agreement.
“AOG Topco Entities” is defined in the Preamble of this Agreement.
“AOH” is defined in the Preamble of this Agreement.
“AOH Partnership Agreement” means the limited partnership agreement of AOH.
“AOH Units” means limited partnership interests in AOH.
“Ares Group” means, collectively, the AOG Topco Entities, the Partnerships and
any other entity designated by the Board as being a member of the Ares Group.
“Ares LP” is defined in the Recitals of this Agreement.
“Bankruptcy Code” means The Bankruptcy Reform Act of 1978, codified as 11 U.S.C.
Section 101 et seq.
“Basis Adjustment” means the adjustment to the tax basis of a Reference Asset
under Sections 1012, 732, 734(b), 743(b) and 754 of the Code and, in each case,
comparable sections of U.S. state and 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. In the case of an interest in a
Partnership that owns a Reference Asset and that has been the subject of an
Exchange, if at any time after such Exchange, the interest is transferred to
(i) an AOG Topco Entity or (ii) any entity that is owned directly or indirectly
in whole or in part by an AOG Topco Entity or that is a member of an affiliated
or consolidated group of corporations described in Section 7.11(b) that includes
an AOG Topco Entity, the Basis Adjustment for such Reference Asset shall
include, to the extent reasonably determined to be appropriate by such AOG Topco
Entity, any adjustment to the tax basis of the Reference Asset under Sections
1012, 732, 734(b), 743(b) and 754 of the Code and, in each case, comparable
sections of U.S. state and local and foreign tax laws (as calculated under
Section 2.01 of this Agreement) as a result of such transfer to the extent such
adjustment does not exceed the unamortized Basis Adjustment for the Reference
Asset as determined immediately before such transfer. Notwithstanding any other
provision of this Agreement, the amount of any Basis Adjustment resulting from
an Exchange of one or more Partnership Units shall be determined separately for
each such Exchange and without regard to any Pre-Exchange Transfer of such
Partnership 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 or (ii) investment power, which includes the power to
dispose, or to direct the disposition of, such security. The terms “Beneficially
Own” and “Beneficial Ownership” shall have correlative meanings.
“Board” means the board of directors of the Parent.
“Business Day” means Monday through Friday of each week, except that a legal
holiday recognized as such by the U.S. government or the State of New York shall
not be regarded as a Business Day.
“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, excluding a group of Persons, which, if it includes any Principal or any
of its Affiliates, includes all Principals then employed by the Parent or any of
its Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Parent representing more than 50% of the combined voting power
of the Parent’s then outstanding voting securities; or
(ii) the stockholders of the Parent approve a plan of complete liquidation or
dissolution of the Parent or there is consummated an agreement or series of
related agreements for the sale or other disposition, directly, or indirectly,
by the Parent of all or substantially all of the Parent’s assets, other than
such sale or other disposition by the Parent of all or substantially all of the
Parent’s assets to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by stockholders of the Parent in
substantially the same proportions as their ownership of the Parent immediately
prior to such sale.
Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred (i) by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
stock of the Parent 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 Parent
immediately following such transaction or series of transactions, or (ii) as a
result of the Conversion.
“Class A Shares” means shares of Class A Common Stock of the Parent.
“Code” means the Internal Revenue Code of 1986.
“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.
“Conversion” is defined in the Recitals of this Agreement.
“Default Rate” means LIBOR plus 500 basis points.
“Delaware General Corporation Law” means the General Corporation Law of the
State of Delaware, 8 Del. C. § 101, et seq.
“Delaware Revised Uniform Limited Partnership Act” means the Revised Uniform
Limited Partnership Act of the State of Delaware, 6 Del. C. §17-101, et seq.
“Determination” has the meaning ascribed to such term in Section 1313(a) of the
Code or similar provision of U.S. state and local and foreign tax law, as
applicable, or any other event (including the execution of an IRS Form 870-AD
(Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and
Acceptance of Overassessment)) that finally and conclusively establishes the
amount of any liability for Tax.
“Early Termination Date” means the date of an Early Termination Notice for
purposes of determining the Early Termination Payment.
“Early Termination Notice” is defined in Section 4.02 of this Agreement.
“Early Termination Objection 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) the Agreed Rate.
“Effective Date” is defined in the Preamble of this Agreement.
“Exchange” is defined in the Recitals of this Agreement.
“Exchange Agreement” means the Fourth Amended and Restated Exchange Agreement
among the AOG Topco Entities, the Partnerships and the other parties thereto.
“Exchange Basis Schedule” is defined in Section 2.02 of this Agreement.
“Exchange Date” is defined in the Recitals of this Agreement.
“Exchange Payment” means any Tax Benefit Payment or Early Termination Payment
required to be made by an AOG Topco Entity to the TRA Holders under this
Agreement.
“Exchange Price” is the amount of cash, Class A Shares or other consideration
transferred to a holder of Partnership Units pursuant to an Exchange as payment
for the exchanged Partnership Units, other than amounts payable pursuant to this
Agreement.
“Expert” is defined in Section 7.09 of this Agreement.
“Holdcos” means, collectively, each of the AOG Topco Entities and any other
entity designated as a Holdco by the Board.
“Imputed Interest” means any interest imputed under Section 1272, 1274, 483 or
other provision of the Code and any similar provision of state, local and
foreign tax law with respect to payment obligations under this Agreement.
“IRS” means the U.S. 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).
“Limited Partner” is defined in the Preamble of this Agreement.
“Market Value” means 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 (the “National
Exchange”), as reported in the principal consolidated transaction reporting
system of the National Exchange; provided that if the closing price is not so
reported on 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 Exchange, as reported in the principal
consolidated transaction reporting system of the National Exchange; 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 Parent in good
faith.
“Net Tax Benefit” is defined 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.
“Non-Stepped Up Tax Liability” means, with respect to any Taxable Year, the
liability for Taxes of the Parent or any Partnership in which the Parent
directly or indirectly owns an interest, but only with respect to Taxes imposed
on such Partnership and allocable to the Parent, but using the Non-Stepped Up
Tax Basis instead of the tax basis of the Reference Assets attributable to each
Partnership and excluding any deduction attributable to the Imputed Interest.
“Objection Notice” is defined in Section 2.04(a) of this Agreement.
“Parent” is defined in the Preamble of this Agreement.
“Partnership Agreement” means, with respect to a Partnership, the limited
partnership agreement or similar agreement of such Partnership.
“Partnership Units” is defined in the Recitals of this Agreement.
“Partnerships” is defined in the Preamble of this Agreement.
“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 direct or indirect transfer of one or more
Partnership Units (i) that occurs prior to an Exchange of such Partnership
Units, and (ii) to which either Section 734(b) or 743(b) of the Code applies.
“Principals” means the Persons set forth on Schedule B hereto and any additional
Persons who may from time to time be designated by the Board as Principals;
provided that (i) unless the Parent determines otherwise, if any Principal is an
employee of the Parent or one or more of its Subsidiaries or Affiliates as of
the date of this Agreement or hereafter, such Person shall cease to be a
Principal once such Person ceases to be an employee of the Parent or one or more
of its Subsidiaries or Affiliates and (ii) a Person will be a Principal only
with respect to the provisions of this Agreement, and subject to the
limitations, set forth on Schedule B.
“Put Right” means a contractual right, pursuant to which a TRA Holder has the
right, but not the obligation, to cause the Partnerships or their Affiliates to
redeem all, or a portion of, such TRA Holder’s Partnership Units at a
predetermined price.
“Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the
Non-Stepped Up Tax Liability over the actual liability for Taxes of the Parent
or any Partnership in which the Parent directly or indirectly owns an interest,
but only with respect to Taxes imposed on such Partnership and allocable to the
Parent, using the “with or without” methodology. If all or a portion of the
actual tax liability for 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 the Parent or any Partnership in which the Parent
directly or indirectly owns an interest, but only with respect to Taxes imposed
on such Partnership and allocable to the Parent, over the Non-Stepped Up Tax
Liability for such Taxable Year using the “with or without” methodology. If all
or a portion of the actual tax liability for 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.
“Reconciliation Dispute” is defined in Section 7.09 of this Agreement.
“Reconciliation Procedures” means those procedures set forth in Section 7.09 of
this Agreement.
“Reference Assets” is defined in the Recitals of this Agreement.
“Schedule” means any Exchange Basis Schedule, Tax Benefit Schedule and the Early
Termination Schedule.
“Subsequent Exchange” is defined in Section 4.01 of this Agreement.
“Subsidiaries” means, with respect to any Person, 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 general partner interest,
managing member interest 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 Election” is defined in the Recitals 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
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 the 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 measured with respect to net income or profits
and any interest related to such Tax.
“Taxing Authority” means 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.
“TRA Holder” is defined in the Preamble of this Agreement, and for the avoidance
of doubt shall not include any direct or indirect holder of Partnership Units
that is not a party to this Agreement.
“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” means, as of an Early Termination Date, with respect to
the Parent, the assumptions that (1) in each Taxable Year ending on or after
such Early Termination Date, the Parent will have taxable income sufficient to
fully utilize the tax benefits 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 the Parent on a
pro rata basis from the date of the Early Termination Date through the scheduled
expiration date of such loss carryovers, (4) any non-amortizable assets are
deemed to be disposed of (A) with respect to fund related assets, pro-rata over
the number of years remaining under the original fund agreement until expected
liquidation (without extensions) of the applicable fund (or, (y) if such
expected liquidation date has passed, on the Early Termination Date and (z) if
with respect to “evergreen” funds, after eighteen (18) months) and (B) with
respect to all other assets, on the fifteenth anniversary of the earlier of the
Basis Adjustment and the Early Termination Date and (5) if an Early Termination
is effected prior to an Exchange of Partnership Units, the first sentence of
Section 2.01 shall be read to include the cash, Class A Shares or other
consideration that would be transferred if the Exchange occurred on the Early
Termination Date.
Section 1.02.    Interpretation. Unless a clear contrary intention appears: (i)
the defined terms herein shall apply equally to both the singular and plural
forms of such terms; (ii) reference to any Person includes such Person’s
successors and assigns but, if applicable, only if such successors and assigns
are not prohibited by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually; (iii) any
pronoun shall include the corresponding masculine, feminine and neuter forms;
(iv) reference to any agreement, document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof; (v) reference to any law, rule or regulation
means such law, rule or regulation as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time, including rules
and regulations promulgated thereunder, and reference to any section or other
provision of any law, rule or regulation means that provision of such law, rule
or regulation from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment of such
section or other provision; (vi) “hereunder,” “hereof,” “hereto,” and words of
similar import shall be deemed references to this Agreement as a whole and not
to any particular article, section or other provision hereof; (vii) numbered or
lettered articles, sections and subsections herein contained refer to articles,
sections and subsections of this Agreement; (viii) “including” (and with
correlative meaning “include”) means including without limiting the generality
of any description preceding such term; (ix) “or” is used in the inclusive sense
of “and/or”; (x) references to documents, instruments or agreements shall be
deemed to refer as well to all addenda, exhibits, schedules or amendments
thereto; and (xi) reference to dollars or $ shall be deemed to refer to U.S.
dollars.
ARTICLE II
DETERMINATION OF REALIZED TAX BENEFIT
Section 2.01.    Basis Adjustment. The AOG Topco Entities and the Partnerships,
on the one hand, and the TRA Holders, on the other hand, acknowledge that, as a
result of an Exchange, each AOG Topco Entity’s tax basis in the applicable
Reference Assets shall be increased, if at all, as provided in the definition of
Basis Adjustment. 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. The parties agree that (i) all Tax
Benefit Payments attributable to the Basis Adjustments (other than amounts
treated as interest under the Code) (A) will be treated as purchase price
adjustments that result in additional Basis Adjustments to the Reference Assets
for the AOG Topco Entities and (B) have the effect of creating additional Basis
Adjustments to the Reference Assets for each of the AOG Topco Entities in the
year such Tax Benefit Payments are made, and (ii) as a result, such additional
Basis Adjustments will be included in computing the current year’s Tax Benefit
Payment calculation and included in computing future years’ Tax Benefit Payment
calculations, as appropriate. Determination of the portion of Tax Benefit
Payments attributable to each of the AOG Topco Entities shall be made by the
Parent in its reasonable discretion.
Section 2.02.    Exchange Basis Schedule. Within 90 calendar days after the
filing of the U.S. federal income tax return of the Parent for each Taxable Year
in which any Exchange has been effected, the Parent shall deliver to the
Principals, at any Principal’s request, a schedule (an “Exchange Basis
Schedule”) that shows, in reasonable detail, for purposes of Taxes, (i) the
actual unadjusted tax basis of the Reference Assets as of each applicable
Exchange Date, (ii) the Basis Adjustment with respect to the Reference Assets as
a result of the Exchanges effected in such Taxable Year, calculated in the
aggregate and separately stated for each applicable TRA Holder, (iii) the period
or periods, if any, over which the Reference Assets are amortizable or
depreciable and (iv) the period or periods, if any, over which each Basis
Adjustment is amortizable or depreciable (which, for non-amortizable assets
shall be based on the Valuation Assumptions). For the avoidance of doubt, after
a Principal has surrendered all of its Partnership Units under the Exchange
Agreement, the Parent shall no longer be obligated to provide an Exchange Basis
Schedule (other than an Amended Schedule or an Exchange Basis Schedule for any
previous Taxable Year in which the Principal surrendered its Partnership Units
under the Exchange Agreement) with respect to such Principal under this Section
2.02.
Section 2.03.    Tax Benefit Schedule. Within 90 calendar days after the filing
of the U.S. federal income tax return of the Parent for any Taxable Year in
which there is a Realized Tax Benefit or Realized Tax Detriment, the Parent
shall provide to the Principals, at any Principal’s request, a schedule showing,
in reasonable detail, the calculation of the Realized Tax Benefit or Realized
Tax Detriment for such Taxable Year setting forth the Realized Tax Benefit or
Realized Tax Detriment, as the case may be, for each TRA Holder (a “Tax Benefit
Schedule”). The Schedule will become final as provided in Section 2.04(a) and
may be amended as provided, and subject to the procedures set forth, in
Section 2.04(b). For the avoidance of doubt, if a Principal has surrendered all
of its Partnership Units under the Exchange Agreement and is no longer entitled
to receive a Tax Benefit Payment under this Agreement, the Parent shall no
longer be obligated to provide a Tax Benefit Schedule (other than an Amended
Schedule or a Tax Benefit Schedule for any previous Taxable Year with respect to
which the Principal received a Tax Benefit Payment) with respect to such
Principal under this Section 2.03.
Section 2.04.    Procedures, Amendments
(a)    Procedure. Every time the Parent delivers to the Principals 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 Parent shall also (x) deliver to the Principals
schedules and work papers providing reasonable detail regarding the preparation
of the Schedule and an Advisory Firm Letter supporting such Schedule and
(y) allow the Principals reasonable access at no cost to the appropriate
representatives at the Parent and the Advisory Firm in connection with a review
of such Schedule. The applicable Schedule shall become final and binding on all
parties unless a Principal, within 30 calendar days after receiving an Exchange
Basis Schedule or amendment thereto or 30 calendar days after receiving a Tax
Benefit Schedule or amendment thereto, provides the Parent with notice (an
“Objection Notice”) of a material objection to such Schedule made in good faith;
provided that only Principals (or their designees) shall have the right to
object to any Schedule or Amended Schedule pursuant to this Section 2.04. If the
parties, for any reason, are unable to successfully resolve the issues raised in
such Objection Notice within 30 calendar days of receipt by the Parent of the
Objection Notice, if with respect to an Exchange Basis Schedule, or 30 calendar
days of receipt by the Parent of the Objection Notice, if with respect to a Tax
Benefit Schedule, after such Schedule was delivered to the Principals, the
Parent and such Principal shall employ the Reconciliation Procedures.
(b)    Amended Schedule. The applicable Schedule for any Taxable Year may be
amended from time to time by the Parent (i) in connection with a Determination
affecting such Schedule, (ii) to correct material inaccuracies in the Schedule
identified as a result of the receipt of additional factual information relating
to a Taxable Year after the date the Schedule was made available to the
Principals, (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”).
ARTICLE III
TAX BENEFIT PAYMENTS
Section 3.01.    Payments
(a)    Payments. Within five calendar days of a Tax Benefit Schedule (or any
amendment thereto) becoming final in accordance with Section 2.04(a), the Parent
or the applicable AOG Topco Entity, as determined by the Parent, shall pay to
each applicable TRA Holder for such Taxable Year the Tax Benefit Payment
determined pursuant to Section 3.01(b). The portion of such Tax Benefit Payment
that is payable to a particular TRA Holder shall be determined by taking into
account (A) in the case of an Exchange by a TRA Holder (other than pursuant to
the exercise of a Put Right), the portion of such Tax Benefit Payment
attributable to such TRA Holder’s Exchanges and (B) in the case of AOH, the
portion of such Tax Benefit Payment attributable to an Exchange pursuant to the
exercise of a Put Right or an Exchange by a holder of Partnership Units who is
not a TRA Holder, in all cases, for such Taxable Year, relative to the aggregate
Tax Benefit Payments attributable to all Exchanges for such Taxable Year,
provided that such accounting shall be determined by the Parent in good faith
and exercising reasonable discretion. Each such Tax Benefit Payment shall be
made by wire transfer of immediately available funds to a bank account
previously designated by the applicable TRA Holder. For the avoidance of doubt,
no Tax Benefit Payment shall be made in respect of estimated tax payments,
including federal income tax payments. For the avoidance of doubt, no Tax
Benefit Payment shall be made to any current or former holder of AOH Units or
Partnership Units that is not a party to this Agreement. Notwithstanding
anything herein to the contrary, in no event shall the aggregate Tax Benefit
Payments to any TRA Holder (other than amounts treated as interest under the
Code) in respect of the Exchanges under this Agreement exceed an amount equal to
85% of the portion of the Exchange Price paid to such TRA Holder (or in the case
of AOH, the Exchange Price paid to the holders of Partnership Units who are not
party to this Agreement or the Exchange Price paid pursuant to the exercise of a
Put Right, as applicable) pursuant to such Exchanges.
(b)    A “Tax Benefit Payment” means an amount, not less than zero, equal to 85%
of the sum of the Net Tax Benefit and the Interest Amount. The “Net Tax Benefit”
shall equal: (1) the Parent’s Realized Tax Benefit, if any, for a Taxable Year
plus (2) the excess of the Realized Tax Benefit reflected on an amended Tax
Benefit Schedule for a previous Taxable Year over the Realized Tax Benefit (or
Realized Tax Detriment (expressed as a negative number)) reflected on the Tax
Benefit Schedule for such previous Taxable Year, minus (3) an amount equal to
the Parent’s Realized Tax Detriment (if any) for the current or any previous
Taxable Year, minus (4) the excess of the Realized Tax Benefit reflected on a
Tax Benefit Schedule for a previous Taxable Year over the Realized Tax Benefit
(or Realized Tax Detriment (expressed as a negative number)) reflected on the
amended Tax Benefit Schedule for such previous Taxable Year; provided that (x)
to the extent the amounts described in 3.01(b)(2), (3) and (4) were taken into
account in determining any Tax Benefit Payment in a preceding Taxable Year, such
amounts shall not be taken into account in determining a Tax Benefit Payment
attributable to any other Taxable Year and (y) no TRA Holder shall be required
to return any portion of any previously made Tax Benefit Payment. The “Interest
Amount” shall equal the interest on the Net Tax Benefit calculated at the Agreed
Rate from the due date (without extensions) for filing the Parent’s Tax Return
with respect to Taxes for such Taxable Year until the Payment Date. For the
avoidance of doubt, the Net Tax Benefit shall be calculated based on the
Parent’s consolidated taxable income pursuant to Section 7.11(b), but the
Imputed Interest shall be calculated based on the portion of the Tax Benefit
Payment attributable to the Realized Tax Benefit generated by each Partnership.
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
Partnership 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 utilizing Valuation Assumptions (1), (3), and (4), substituting in
each case the terms “the closing date of a Change of Control” for an “Early
Termination Date”.
Section 3.02.    No Duplicative Payments. It is intended that the above
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 provide that 85% of the Parent’s Realized
Tax Benefit and Interest Amount is paid to the TRA Holders pursuant to this
Agreement. The provisions of this Agreement shall be construed in the
appropriate manner so that such intentions are realized.
Section 3.03.    Pro Rata Payments. For the avoidance of doubt, to the extent
the Parent’s utilization of Tax benefits with respect to a Basis Adjustment is
limited in a particular Taxable Year, or the Parent lacks sufficient funds to
satisfy its obligations to make all Tax Benefit Payments due in a particular
taxable year, the limitation on such Tax benefit shall be taken into account, or
the Tax Benefit Payments shall be made, as the case may be, to each TRA Holder
on a pro rata basis which reflects the proportion of the total amount of Tax
benefits attributable to such TRA Holder relative to the aggregate Tax benefits
for all of the TRA holders (as determined by the Parent in good faith and
exercising reasonable discretion).
ARTICLE IV
TERMINATION
Section 4.01.    Early Termination and Breach of Agreement.
(a)    The Parent may terminate this Agreement with respect to all of the
Partnership Units held (or previously held and exchanged) by the TRA Holders, or
indirectly held by holders of AOH Units, at any time by paying to the TRA
Holders the Early Termination Payment; provided that (a) this Agreement shall
only terminate upon the receipt of the Early Termination Payment by the TRA
Holders, and (b) the Parent may withdraw any notice to execute its termination
rights under this Section 4.01 prior to the time at which any Early Termination
Payment has been paid. Upon payment of the Early Termination Payments by the
Parent, the Parent shall not have any further payment obligations under this
Agreement in respect of the TRA Holders, other than for any (a) Tax Benefit
Payment agreed to by the Parent and the Principals 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). If an Exchange occurs after the Parent exercises its
termination rights under this Section 4.01, no AOG Topco Entity shall have
obligations under this Agreement with respect to such Exchange.
(b)    If an AOG Topco Entity 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 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 calculated as
if an Early Termination Notice had been delivered on the date of a breach, (2)
any Tax Benefit Payment agreed to by such AOG Topco Entity and any TRA Holders
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. Notwithstanding the foregoing, if an AOG Topco Entity breaches this
Agreement, the TRA Holders shall be entitled to elect to receive the amounts set
forth in (1), (2) and (3), above or to seek specific performance of the terms
hereof. 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;
provided 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 if such
payment is made within three months of the date such payment is due.
(c)    The undersigned parties agree that the aggregate value of the Tax Benefit
Payments cannot be ascertained with any reasonable certainty for U.S. federal
income tax purposes.
Section 4.02.    Early Termination Notice. If the Parent chooses to exercise its
right of early termination under Section 4.01 above, the Parent shall deliver to
the TRA Holders notice of such intention to exercise such right (“Early
Termination Notice”) and shall deliver to the Principals a schedule (the “Early
Termination Schedule”) specifying the Parent’s intention to exercise such right
and showing in reasonable detail the calculation of the Early Termination
Payment. The applicable Early Termination Schedule shall become final and
binding on all parties unless a Principal, within 30 calendar days after
receiving the Early Termination Schedule thereto provides the Parent with notice
(“Early Termination Objection Notice”) of a material objection to such Schedule
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 after receipt
by the Parent of the Early Termination Objection Notice, the Parent and a
Principal shall employ the Reconciliation Procedures as described in
Section 7.09 of this Agreement.
Section 4.03.    Payment upon Early Termination. (a) Within three calendar days
after agreement between the Principals and the Parent of the Early Termination
Schedule, the Parent shall pay to the TRA Holders an amount equal to the Early
Termination Payment. Such payment shall be made by wire transfer of immediately
available funds to the bank accounts designated by each of the TRA Holders.
(b)    The “Early Termination Payment” as of the date of the delivery of an
Early Termination Schedule shall equal with respect to a TRA Holder 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 Parent to such TRA
Holder beginning from the Early Termination Date assuming the Valuation
Assumptions are applied.
ARTICLE V
LATE PAYMENTS
Section 5.01.    Late Payments by the Parent. The amount of all or any portion
of any Exchange Payment not made to the TRA Holders 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.    Principal Participation in the AOG Topco Entities’ and
Partnerships’ Tax Matters. Except as otherwise provided herein, the Parent shall
have full responsibility for, and sole discretion over, all Tax matters
concerning AOG Topco Entities and the Partnerships, including the preparation,
filing or amending of any Tax Return and defending, contesting or settling any
issue pertaining to Taxes. Notwithstanding the foregoing, the Parent shall
notify each Principal of, and keep the Principals reasonably informed with
respect to the portion of any audit of any AOG Topco Entity and the Partnerships
by a Taxing Authority the outcome of which is reasonably expected to affect any
TRA Holder’s rights and obligations under this Agreement, and shall provide to
the Principals reasonable opportunity to provide information and other input to
the Parent or such AOG Topco Entity, the Partnerships and their respective
advisors concerning the conduct of any such portion of such audit; provided that
each AOG Topco Entity and the Partnerships shall not be required to take any
action that is inconsistent with any provision of any of the Partnership
Agreements.
Section 6.02.    Consistency. Except upon the written advice of an Advisory
Firm, the Parent and the TRA Holders 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 the Basis
Adjustment and each Tax Benefit Payment) in a manner consistent with that
specified by the Parent in any Schedule required to be provided by or on behalf
of the Parent under this Agreement.
Section 6.03.    Cooperation. The TRA Holders shall (a) furnish to the Parent in
a timely manner such information, documents and other materials as the Parent
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 themselves reasonably available to the Parent and its
representatives to provide explanations of documents and materials and such
other information as the Parent 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 Parent
shall reimburse the TRA Holders for any reasonable and documented third-party
costs and expenses incurred pursuant to this Section 6.03.
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 email upon
confirmation of transmission by the sender’s server 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 Parent, to:
Ares Management Corporation
2000 Avenue of the Stars, 12th Floor
Los Angeles, California 90067
(T) (310) 201-4100
Attention: Michael D. Weiner
Email: list_taxreceivablenotice@aresmgmt.com
with a copy to:
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, California 90067
(T) (310) 557-2900
Attention: Michael A. Woronoff
Jonathan Benloulou
Email: MWoronoff@proskauer.com
JBenloulou@proskauer.com

If to any AOG Topco Entity, any Partnership or AOH, to:
c/o Ares Management Corporation
2000 Avenue of the Stars, 12th Floor
Los Angeles, California 90067
(T) (310) 201-4100
Attention: Michael D. Weiner
Email: list_taxreceivablenotice@aresmgmt.com
with a copy to:
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, California 90067
(T) (310) 557-2900
Attention: Michael A. Woronoff
Jonathan Benloulou
Email: MWoronoff@proskauer.com
JBenloulou@proskauer.com

If to Alleghany, to:
The address and electronic mail address set forth in the records of the
Partnerships.
If to a Limited Partner, to:
The address and electronic mail address set forth in the records of AOH.
Any party may change its address or electronic mail address by giving the other
party written notice of such new address in the manner set forth above.
Section 7.02.    Counterparts. This Agreement may be executed in one or more
counterparts (including by facsimile or electronic transmission), all of which
shall constitute one and the same instrument.
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 construed and enforced,
along with any rights, remedies, or obligations provided for hereunder, in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within the State of Delaware by residents of the
State of Delaware; provided, that the enforceability of Section 7.08 shall be
governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and not the laws
of the State of Delaware.
Section 7.05.    Severability. Whenever possible, each provision or portion of
any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein, if the economic and legal substance of the arrangements
contemplated hereby are not affected in any manner materially adverse to any
party hereto. Upon such a determination, the Parent and the Principals 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 that the
transactions contemplated hereby shall be consummated as originally contemplated
to the fullest extent possible.
Section 7.06.    Successors; Assignment; Amendments; Waivers. No TRA Holder may
assign this Agreement to any Person without the prior written consent of the
Parent; provided that (i) except with respect to a transfer of Partnership Units
(including indirectly through a transfer of AOH Units), to the extent the
Partnership Units are effectively transferred by a TRA Holder (including
indirectly through a transfer of AOH Units) in accordance with the terms of the
relevant Partnership Agreements (or the AOH Partnership Agreement), the
transferring TRA Holder shall have the option to assign to the transferee of
such Partnership Units (including indirectly through a transfer of AOH Units)
the transferring TRA Holder’s rights under this Agreement, 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 Parent, agreeing to become a “TRA Holder” for all
purposes of this Agreement, except as otherwise provided in such joinder, and
(ii) once an Exchange has occurred, any and all payments that may become payable
to a TRA Holder 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
Parent. For the avoidance of doubt, to the extent a Principal or other Person
transfers Partnership Units (including indirectly through a transfer of AOH
Units) to another Principal, the Principal receiving such Partnership Units
(including indirectly through a transfer of AOH Units) shall have all rights
under this Agreement with respect to such transferred Partnership Units as such
Principal has, under this Agreement, with respect to the other Partnership Units
directly or indirectly held by such Principal.
No provision of this Agreement may be amended unless such amendment is approved
in writing by the Parent and by the Principals that control, directly or
indirectly, at least two-thirds of the Partnership Units held by all Principals;
provided that no such amendment shall be effective if such amendment will have a
disproportionate adverse effect on the payments certain TRA Holders will or may
receive under this Agreement unless all such TRA Holders disproportionately
adversely affected consent in writing. 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. Each AOG Topco Entity 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 such AOG Topco Entity, by
written agreement, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that such AOG Topco Entity would be
required to perform if no such succession had taken place. Notwithstanding
anything to the contrary herein, if a Principal transfers Partnership Units
(including indirectly through a transfer of AOH Units), to a Permitted
Transferee (as defined in the relevant Partnership Agreements), excluding any
other Principal, such Principal shall have the right, on behalf of such
transferee, to enforce the provisions of Sections 2.04, 4.02 or 6.01 with
respect to such transferred Partnership Units.
Section 7.07.    Headings. All headings herein are inserted only for convenience
and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
Section 7.08.    Resolution of Disputes. (a) Any and all disputes, claims or
controversies arising out of or relating to this Agreement, including any and
all disputes, claims or controversies arising out of or relating to (i) the
parties to this Agreement, (ii) any party’s rights and obligations hereunder,
(iii) the validity or scope of any provision of this Agreement, (iv) whether a
particular dispute, claim or controversy is subject to arbitration under this
Section 7.08, and (v) the power and authority of any arbitrator selected
hereunder, that are not resolved by mutual agreement shall be submitted to
final, binding and confidential arbitration in Los Angeles, California, before
one arbitrator, conducted by the Judicial Arbitration and Mediation
Services/Endispute, Inc. (“JAMS”), or its successor. Disputes shall be resolved
in accordance with the Federal Arbitration Act, 9 U.S.C. §§1–16, and JAMS’
Comprehensive Arbitration Rules and Procedures then in effect. The arbitrator
will have the same, but no greater, remedial authority than would a court of law
and shall issue a written decision including the arbitrator’s essential findings
and conclusions and a statement of the award. Judgment upon the award rendered
by the arbitrator may be entered by any court having jurisdiction thereof. The
prevailing party in any such arbitration proceeding, as determined by the
arbitrator, or in any proceeding to enforce the arbitration award, will be
entitled, to the extent permitted by law, to reimbursement from the other party
for all of the prevailing party’s costs (including but not limited to the
arbitrator’s compensation), expenses and attorneys’ fees. If no party entirely
prevails in such arbitration or proceeding, the arbitrator or court shall
apportion an award of such fees based on the relative success of each party. In
the event of a conflict between this provision and any provision in the
applicable rules of JAMS, the provisions of this Agreement will prevail. The
parties to the arbitration shall participate in the arbitration in good faith.
(b)    The provisions of this Section 7.08 may be enforced by any court of
competent jurisdiction, and, to the extent permitted by law, the party seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys’ fees, to be paid by the party against whom enforcement is
ordered. Notwithstanding any provision of this Agreement to the contrary, a
party to an arbitration pursuant to this Section 7.08 shall be entitled to seek
a restraining order or injunction in any court of competent jurisdiction to
prevent any violation of the provisions of this Agreement pending a final
determination on the merits by the arbitrator, and each party hereby consents
that such a restraining order or injunction may be granted without the necessity
of posting any bond.
(c)    The details of any arbitration pursuant to this Section 7.08, including
the existence and/or outcome of such arbitration and any information obtained in
connection with any such arbitration, shall be kept strictly confidential and
shall not be disclosed or discussed with any person not a party to the
arbitration; provided that such party may make such disclosures as are required
by applicable law or legal process; provided further that such party may make
such disclosures to its, his or her attorneys, accountants or other agents and
representatives who reasonably need to know the disclosed information in
connection with any arbitration pursuant to this Section 7.08 and who are
obligated to keep such information confidential to the same extent as such
party. If either party to the arbitration, as the case may be, receives a
subpoena or other request for information from a third party that seeks
disclosure of any information that is required to be kept confidential pursuant
to the prior sentence, or otherwise believes that it, he or she may be required
to disclose any such information, such the party to the arbitration, as the case
may be, shall (i) promptly notify the other party to the arbitration and
(ii) reasonably cooperate with such other party in taking any legal or otherwise
appropriate actions, including the seeking of a protective order, to prevent the
disclosure, or otherwise protect the confidentiality, of such information.
Section 7.09.    Reconciliation. If the Parent and a Principal 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 the Parent, an Affiliate of the
Parent or such Principal or other actual or potential conflict of interest. If
the parties are unable to agree on an Expert within 15 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
is due or any Tax Return reflecting the subject of a disagreement is due, such
payment shall be made on the date prescribed by this Agreement and such Tax
Return may be filed as prepared by the Parent, 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 Parent; except as
provided in the next sentence. The Parent and each Principal shall bear their
own costs and expenses of such proceeding, unless the Principal has a prevailing
position that is more than 10% of the payment at issue, in which case the Parent
shall reimburse such Principal 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 determinations of the Expert pursuant to this Section 7.09
shall be final and binding on the Parent and such Principal and may be entered
and enforced in any court having jurisdiction.
Section 7.10.    Withholding. Each AOG Topco Entity shall be entitled to deduct
and withhold from any payment payable pursuant to this Agreement such amounts as
such AOG Topco Entity 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 AOG Topco Entity, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to such
TRA Holder. The TRA Holders shall provide each AOG Topco Entity with such
withholding and other tax certificates (including all required attachments) as
may be reasonably requested from time to time.
Section 7.11.    Affiliated Corporations of the Holdcos; Consolidated Group;
Transfers of Corporate Assets.
(a)    Holdcos (other than the AOG Topco Entities) shall provide that all
provisions of this Agreement shall correspondingly apply, including the payment
of Tax Benefit Payments by any corporation owned directly or indirectly in whole
or in part, now or in the future, by such Holdcos, with respect to any Realized
Tax Benefit with respect to limited partnership interests in the other Ares
Group entities, that are part of the Exchange and in which such corporation owns
an interest, under the same terms and conditions as set forth in this Agreement,
and such Holdcos shall cause such corporation to execute and deliver a joinder
to this Agreement to such effect. If any Holdco (other than the AOG Topco
Entities) elects to be treated or is otherwise treated as a corporation for tax
purposes (which, for the avoidance of doubt, shall include the Parent for this
purpose), then the provisions of this Agreement shall apply (w) to such Holdco
or such entity as the case may be in the same manner as it applies to the AOG
Topco Entities and (x) to each partnership, limited partnership and limited
liability company Controlled by any such Holdco as if each such entity were a
Partnership; provided that, if any Partnership Units or limited partnership
interests in other Ares Group entities were Exchanged prior to an event
described in the foregoing clause above or prior to the effectiveness of the Tax
Election, then (y) such Exchange shall be treated for purposes of this Agreement
as having occurred immediately after such event at the Market Value in existence
at the time of such prior Exchange, and (z) the entity that is to be treated in
the same manner as the AOG Topco Entities shall be required to make, or the
Parent shall make on its behalf, the same Tax Benefit Payments pursuant to the
terms of this Agreement that it would have been required to make had it been
treated in the same manner as the AOG Topco Entities on the date of such
Exchange; provided that such Tax Benefit Payments shall be payable only with
respect to (I) Reference Assets that are still owned at the time of the event
described in the foregoing clause above or prior to the effectiveness of the Tax
Election, and (II) taxable years of such entity ending on or after the date of
the event described in the foregoing clause above or ending on or after the
effectiveness of the Tax Election.
(b)    Each of the parties hereto agree that (i) Holdings Inc. is 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, the common
parent of which is the Parent, and (ii) the liability for Taxes of the Parent
shall be calculated based on the consolidated net income of such affiliated or
consolidated group and the provisions of this Agreement shall be applied with
respect to such group as a whole and Tax Benefit Payments shall be computed with
reference to the consolidated taxable income of such group as a whole, including
with respect to any Holdco that elects to be treated or is otherwise treated as
a corporation for tax purposes that becomes a member of such group.
(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 or any
corresponding provisions of state, local or foreign law, 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, 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.
Section 7.12.    Partnerships. Each AOG Topco Entity hereby agrees that, to the
extent it acquires a general partnership interest, managing member interest or
similar interest in any Person after the Effective Date, it shall cause such
Person to execute and deliver a joinder to this Agreement and become a
“Partnership” for all purposes of this Agreement.
Section 7.13.    Conclusive Nature of Calculations. All determinations,
interpretations, calculations, adjustments and other actions of an AOG Topco
Entity or any Partnership or a designee of any of the foregoing that are within
such Person’s authority hereunder (including in connection with the preparation
of any Schedule) shall be made in good faith by such Person and shall be binding
and conclusive absent manifest error. In connection with any such determination,
interpretation, calculation, adjustment or other action, each AOG Topco Entity
or any Partnership or the designee of any of the foregoing shall be entitled to
resolve any ambiguity with respect to the manner in which such determination,
interpretation, calculation, adjustment or other action is to be made or taken,
and shall be entitled to interpret the provisions of this Agreement, in such a
manner as it determines to be fair and equitable, and such resolution or
interpretation shall be binding and conclusive absent manifest error.
[Signatures on following pages]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
Ares Management Corporation
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares Holdings Inc.
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares Offshore Holdings Ltd.
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares AI Holdings, L.P.
By: Ares Management Corporation,
its general partner
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares Holdings L.P.
By: Ares Holdco LLC, its general partner
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares Offshore Holdings L.P.
By: AOF Holdco, LLC, its general partner
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares Investments L.P.
By: AI Holdco LLC, its general partner
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Ares Owners Holdings L.P.
By: Ares Partners Holdco LLC, its general partner
By:
/s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Authorized Signatory

Alleghany Insurance Holdings LLC
By:
/s/ Peter R. Sismondo
Name: Peter R. Sismondo
Title: Vice President

Each Limited Partner set forth on Schedule A hereto:
By:    /s/ Michael D. Weiner
    Name: Michael D. Weiner
    Title: Attorney-in-fact