Exhibit 10.2


 


Tax
Receivable Agreement


 


between


 


DIRECT
DIGITAL HOLDINGS, Inc.


 


and


 


THE PERSONS NAMED HEREIN


 


Dated as of February 15, 2022


 









     


     


    

 


TABLE OF CONTENTS


 


 


		TAX RECEIVABLE AGREEMENT	1
		RECITALS        	1
		ARTICLE
                            I Definitions	
2







	1.1	 	Definitions	 	2






		Article II
Determination of Certain Realized Tax Benefits	10






	2.1	 	Basis Schedule	 	10
	2.2	 	Tax Benefit Schedule	 	11
	2.3	 	Procedures, Amendments	 	12
	2.4	 	Basis Adjustments	 	13





		Article	III Tax Benefits Payments	13






	3.1	 	Payments	 	13
	3.2	 	No Duplicative Payments	 	14
	3.3	 	Pro Rata Payments	 	14
	3.4	 	Payment Ordering	 	15
	3.5	 	Excess Payments	 	15





		Article	IV Termination	15






	4.1	 	Early Termination of Agreement; Breach of Agreement	 	15
	4.2	 	Early Termination Notice	 	17
	4.3	 	Payment upon Early Termination	 	17





		Article	V Subordination and Late Payments	18






	5.1	 	Subordination	 	18
	5.2	 	Late Payments by the Corporate Taxpayer	 	18





		Article	VI No Disputes; Consistency; Cooperation	18






	6.1	 	Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters	 	18
	6.2	 	Consistency	 	19
	6.3	 	Cooperation	 	19





		Article	VII Miscellaneous	19






	7.1	 	Notices	 	19
	7.2	 	Counterparts	 	20
	7.3	 	Entire Agreement; No Third Party Beneficiary	 	20
	7.4	 	Governing Law	 	20


 






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	7.5	 	Severability	 	20
	7.6	 	Successors; Assignment; Amendments; Waivers	 	21
	7.7	 	Titles and Subtitles	 	21
	7.8	 	Resolution of Disputes	 	22
	7.9	 	Reconciliation	 	23
	7.10	 	Withholding	 	23
	7.11	 	Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets	 	24
	7.12	 	Confidentiality	 	25
	7.13	 	Partnership Agreement	 	26
	7.14	 	Change in Law	 	26
	7.15	 	Electronic Signatures	 	26



 









    -ii-


     


    

 


TAX RECEIVABLE AGREEMENT


 


This TAX RECEIVABLE AGREEMENT
(this “Agreement”), is dated as of February 15, 2022, and is between Direct Digital Holdings, Inc., a Delaware
corporation, each of the undersigned parties, and each of the other persons from time to time that becomes a party hereto (each, excluding
the Corporate Taxpayer and OpCo (each as defined below), a “TRA Party” and together the “TRA Parties”).


 


RECITALS


 


WHEREAS, the TRA Parties directly
or indirectly hold Class A Common Units (the “Class A Units”) in Direct Digital Holdings, LLC, a Delaware
limited liability company (“OpCo”), which is classified as a partnership for U.S. federal income Tax purposes;


 


WHEREAS, after the Pre-IPO
Exchanges (as defined in the LLC Agreement), the Corporate Taxpayer will be the sole managing member of OpCo, and will hold, directly
and/or indirectly, all of the Class B Voting Units (the “Class B Units,” and together with the Class A
Units, the “Units”);


 


WHEREAS, from time to time
following the Lock-Up Period (as defined in the LLC Agreement), each holder of Class A Units has the right to require OpCo to redeem
(a “Redemption”) all or a portion of such holder’s Class A Units for, at the Corporate Taxpayer’s
election, cash or shares of Class A common stock of the Corporate Taxpayer (the “Class A Shares”), in either
case contributed to OpCo by the Corporate Taxpayer, provided that, at the election of the Corporate Taxpayer in its sole discretion,
the Corporate Taxpayer may effect a direct exchange (a “Direct Exchange”) of such cash or Class A Shares for such
Class A Units, all in accordance with and subject to the provisions of the LLC Agreement (as defined below);


 


WHEREAS, OpCo and each of
its direct and indirect Subsidiaries (as defined below) treated as a partnership for U.S. federal income Tax purposes currently have and
will have in effect an election under Section 754 of the Code, for each Taxable Year (as defined below) that includes the IPO Date
and for each Taxable Year in which a taxable acquisition (including a deemed taxable acquisition under Section 707(a) of the
Code) of Class A Units by the Corporate Taxpayer or by OpCo from any of the TRA Parties (an “Exchanging Holder”)
for Class A Shares and/or other consideration occurs;


 


WHEREAS, the income, gain,
loss, expense and other Tax items of the Corporate Taxpayer may be affected by the (i) Basis Adjustments and (ii) Imputed Interest
(each as defined below) (collectively, the “Tax Attributes”); and


 


WHEREAS, the parties to this
Agreement desire to provide for certain payments and make certain arrangements with respect to the effect of the Tax Attributes on the
liability for Taxes (as defined below) 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


 


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


 


“Actual Tax Liability”
means, with respect to any Taxable Year, an amount, not less than zero, equal to the actual liability for Taxes of (i) the Corporate
Taxpayer and (ii) without duplication, OpCo (and OpCo’s applicable Subsidiaries), but in the case of this clause (ii), only
with respect to Taxes imposed on OpCo (and OpCo’s applicable Subsidiaries) and allocable to the Corporate Taxpayer; provided, that
the actual liability for Taxes described in clauses (i) and (ii) shall be calculated (a) using the Assumed Rate, solely
for purposes of calculating the U.S. state and local Actual Tax liability of the Corporate Taxpayer, and (b) assuming, solely for
purposes of calculating the liability for U.S. federal income Taxes, in order to prevent double counting, that U.S. state and local Taxes
are not deductible by the Corporate Taxpayer for U.S. federal income Tax purposes.


 


“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 a per annum rate of the lesser of (i) 6.5% and (ii) LIBOR plus 100 basis points.


 


“Agreement”
has the meaning set forth in the Preamble to this Agreement.


 


“Amended Schedule”
has the meaning set forth in Section 2.3(b) of this Agreement.


 


“Assumed Rate”
means, with respect to any Taxable Year, the tax rate equal to the sum of the product of (x) OpCo’s income and franchise Tax
apportionment percentage(s) for each U.S. state and local jurisdiction in which OpCo files income or franchise Tax Returns for the
relevant Taxable Year, and (y) the highest corporate income and franchise Tax rate(s) for each such U.S. state and local jurisdiction
in which OpCo files income or franchise Tax Returns for each relevant Taxable Year; provided, that the Assumed Rate calculated
pursuant to the foregoing shall be reduced by the assumed U.S. federal income Tax benefit received by the Corporate Taxpayer with respect
to U.S. state and local jurisdiction income and franchise Taxes (with such benefit calculated as the product of (a) the Corporate
Taxpayer’s marginal U.S. federal income Tax rate for such Taxable Year and (b) the Assumed Rate (without regard to this proviso)).


 


“Attributable”
means the portion of any Tax Attribute of the Corporate Taxpayer that is “Attributable” to any present or former holder of
Units, other than the Corporate Taxpayer, and shall be determined by reference to the Tax Attributes, under the following principles:


 


(i)            the
Basis Adjustments shall be determined separately with respect to each Exchanging Holder, using reasonable methods for tracking such Basis
Adjustments, and are Attributable to each Exchanging Holder in an amount equal to the total Basis Adjustments relating to such Class A
Units Exchanged by such Exchanging Holder (determined without regard to any dilutive or antidilutive effect of any contribution to or
distribution from OpCo after the date of an applicable Exchange, and taking into account any adjustment under Section 743(b) of
the Code); and


 


(ii)            any
deduction to the Corporate Taxpayer with respect to a Taxable Year in respect of Imputed Interest is Attributable to the Person that is
required to include the Imputed Interest in income (without regard to whether such Person is actually subject to Tax thereon).


 






     2


     


    

 


“Basis Adjustment”
means the adjustment to the Tax basis of a Reference Asset under Sections 732, 734(b), 754 and/or 1012 of the Code (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), 754 and/or 755 of the Code (in situations where, following an Exchange, OpCo remains in existence
as an entity treated as a partnership for U.S. federal income Tax purposes) and, in each case, analogous sections of state, local and
foreign Tax laws, as a result of an Exchange and the payments made pursuant to this Agreement in respect of such Exchange. For the avoidance
of doubt, the amount of any Basis Adjustment resulting from an Exchange of one or more Class A Units shall be determined without
regard to any Pre-Exchange Transfer of such Class A Units and as if any such Pre-Exchange Transfer had not occurred. The amount of
any Basis Adjustment shall be determined using the Market Value at the time of the Exchange.


 


“Basis Schedule”
has the meaning set forth in Section 2.1 of this Agreement.


 


“Beneficial Owner”
means, with respect to any security, 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. The term “Beneficial
Ownership” shall have a correlative meaning.


 


“Board”
means the Board of Directors of the Corporate Taxpayer.


 


“Business Day”
means each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or New York, New York are authorized
or required by law to close.


 


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


 


(i)            any
Person or any group of Persons acting together that would constitute a “group” for purposes of Section 13(d) of
the Securities Exchange Act of 1934, as amended or any successor provisions thereto (excluding (a) 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 of the Corporate Taxpayer or (b) a group of Persons in which one or more Affiliates of the Founder Member, directly or indirectly
hold Beneficial Ownership of securities representing more than 50% of the total voting power held by such group) 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


 






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(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 stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the IPO Date or whose appointment, election or nomination for election was previously
so approved or recommended by the directors referred to in this clause (ii); or


 


(iii)           there
is consummated a merger or consolidation of the 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 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
stockholders 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, lease 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 stockholders 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 voting control over, and own substantially all of the shares of, an entity which owns, directly
or indirectly, all or substantially all of the assets of the Corporate Taxpayer immediately following such transaction or series of transactions.


 


“Class A Shares”
has the meaning set forth in the Recitals of this Agreement.


 


“Class A Units”
has the meaning set forth in the Recitals of this Agreement.


 


“Class B Units”
has the meaning set forth in the Recitals of this Agreement.


 


“Code”
means the U.S. Internal Revenue Code of 1986, as amended.


 


“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.


 






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“Corporate Taxpayer”
means Direct Digital Holdings, Inc. and any successor corporation and shall include any Person that is a member of any consolidated
Tax Return of which Direct Digital Holdings, Inc. is a member.


 


“Corporate Taxpayer
Return” means the U.S. federal income Tax Return of the Corporate Taxpayer filed with respect to Taxes of any Taxable Year,
including any consolidated Tax Return.


 


“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 Realized Tax Detriment 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 Schedules or Amended Schedules, if any, in
existence at the time of such determination; provided, that, for the avoidance of doubt, the computation of the Cumulative Net
Realized Tax Benefit shall be adjusted to reflect any applicable Determination with respect to any Realized Tax Benefits and/or Realized
Tax Detriments.


 


“DDM” means
Direct Digital Management, LLC, a Delaware limited liability company.


 


“Default Cap”
has the meaning set forth in Section 3.1(c) of this Agreement.


 


“Default Rate”
means a per annum rate of LIBOR plus 500 basis points.


 


“Determination”
shall have the meaning ascribed to such term in Section 1313(a) of the Code or any other event (including the execution of IRS
Form 870-AD), including a settlement with the applicable Taxing Authority, that establishes the amount of any liability for Tax.


 


“Direct Exchange”
has the meaning set forth in the Recitals of this Agreement.


 


“Dispute”
has the meaning set forth in Section 7.8(a) of this Agreement.


 


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


 


“Early Termination
Effective Date” means the date on which an Early Termination Schedule becomes binding pursuant to Section 4.2 of
this Agreement.


 


“Early Termination
Notice” has the meaning set forth in Section 4.2 of this Agreement.


 


“Early Termination
Payment” has the meaning set forth in Section 4.3(b) of this Agreement.


 


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


 


“Early Termination
Schedule” has the meaning set forth in Section 4.2 of this Agreement.


 






     5


     


    

 


“Exchange”
means any taxable acquisition (including a deemed taxable acquisition under Section 707(a) of the Code) of Class A Units
by the Corporate Taxpayer in exchange for Class A Shares and/or other consideration, and any deemed Exchange of Units pursuant to
this Agreement.


 


“Exchange Date”
means the date of any Exchange.


 


“Exchanging Holder”
has the meaning set forth in the Recitals of this Agreement.


 


“Expert”
has the meaning set forth in Section 7.9 of this Agreement.


 


“Founder Member”
means DDM and its permitted transferees.


 


“Future TRAs”
has the meaning set forth in Section 5.1 of this Agreement.


 


“Hypothetical Tax
Liability” means, with respect to any Taxable Year, an amount, not less than zero, equal to the liability for Taxes of (i) the
Corporate Taxpayer and (ii) without duplication, OpCo (and OpCo’s applicable Subsidiaries), but in the case of this clause
(ii) only with respect to Taxes imposed on OpCo (and OpCo’s applicable Subsidiaries) and allocable to the Corporate Taxpayer,
in each case using the same methods, elections, conventions, and practices used on the relevant Tax Return of the Corporate Taxpayer,
but (a) using the Non-Stepped Up Tax Basis as reflected on the Basis Schedule including amendments thereto for the Taxable Year,
(b) excluding any deduction attributable to Imputed Interest attributable to any payment made under this Agreement for the Taxable
Year, (c) using the Assumed Rate, solely for purposes of calculating the U.S. state and local Hypothetical Tax Liability of the Corporate
Taxpayer, and (d) assuming, solely for purposes of calculating the liability for U.S. federal income Taxes, in order to prevent double
counting, that U.S. state and local Taxes are not deductible by the Corporate Taxpayer for U.S. federal income Tax purposes. For the avoidance
of doubt, Hypothetical Tax Liability shall be determined without taking into account the carryover or carryback of any Tax item (or portions
thereof) that is attributable to a Tax Attribute as applicable.


 


“Imputed Interest”
in respect of a TRA Party shall mean any interest imputed under Section 1272, 1274, 7872 or 483 or other provision of the Code with
respect to the Corporate Taxpayer’s payment obligations in respect of such TRA Party under this Agreement.


 


“Interest Amount”
has the meaning set forth in Section 3.1(b) of this Agreement.


 


“IPO” means
the initial public offering of Class A Shares by the Corporate Taxpayer (including any greenshoe related to such initial public offering).


 


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


 


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


 


“Joinder”
has the meaning set forth in Section 7.6(a) of this Agreement.


 






     6


     


    

 


“LIBOR”
means during any period, the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that
displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is
quoted by another source selected by the Corporate Taxpayer as an authorized information vendor for the purpose of displaying rates at
which U.S. dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate Source”),
at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of such period as the London interbank offered
rate for U.S. dollars having a borrowing date and a maturity comparable to such period or, if such period is longer than one year, the
London interbank offered rate for U.S. dollars having a maturity of one year (or if there shall at any time, for any reason, no longer
exist a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a comparable replacement rate determined by
the Corporate Taxpayer at such time, which determination shall be conclusive absent manifest error); provided, that at no time shall LIBOR
be less than 0%. If the Corporate Taxpayer has made the determination (such determination to be conclusive absent manifest error) that
(i) LIBOR is no longer a widely recognized benchmark rate for newly originated loans in the U.S. loan market in U.S. dollars or (ii) the
applicable supervisor or administrator (if any) of LIBOR has made a public statement identifying a specific date after which LIBOR shall
no longer be used for determining interest rates for loans in the U.S. loan market in U.S. dollars, then the Corporate Taxpayer shall,
subject to the prior written consent of the TRA Party Representative, which consent shall not be unreasonably withheld, conditioned or
delayed, establish a replacement interest rate (the “Replacement Rate”), after giving due consideration to any evolving
or then prevailing conventions for similar loans in the U.S. loan market in U.S. dollars for such alternative benchmark, and including
any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then prevailing convention for similar
loans in the U.S. loan market in U.S. dollars for such benchmark, which adjustment, method for calculating such adjustment and benchmark
shall be published on an information service as selected from time to time by the Corporate Taxpayer. The Replacement Rate shall, subject
to the next two sentences, replace LIBOR for all purposes under this Agreement. In connection with the establishment and application of
the Replacement Rate, this Agreement shall be amended solely with the consent of the Corporate Taxpayer and OpCo, as may be necessary
or appropriate, in the reasonable judgment of the Corporate Taxpayer, to effect the provisions of this definition. The Replacement Rate
shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively
feasible for the Corporate Taxpayer, such Replacement Rate shall be applied as otherwise reasonably determined by the Corporate Taxpayer.


 


“LLC Agreement”
means, with respect to OpCo, the Second Amended and Restated Limited Liability Company Agreement of OpCo, dated on or about the date hereof,
as such agreement may be further amended, restated, supplemented and/or otherwise modified from time to time.


 


“Market Value”
shall mean, (i) with respect to an Exchange, the value of the Class A Shares on the applicable Exchange Date determined by the
Corporate Taxpayer on a reasonable and consistent basis and used by the Corporate Taxpayer in its U.S. federal income Tax reporting with
respect to such Exchange, and (ii) with respect to a deemed Exchange pursuant to Valuation Assumption (6), (A) if the Class A
Shares trade on a National Securities Exchange (as defined in the LLC Agreement) or automated or electronic quotation system, the arithmetic
average of the high trading price on such date (or if such date is not a Trading Day (as used in this definition, as defined in the LLC
Agreement), the immediately preceding Trading Day) and the low trading price on such date (or if such date is not a Trading Day, the immediately
preceding Trading Day) or (B) if the Class A Shares are not then traded on a National Securities Exchange or automated or electronic
quotation system, as applicable, the Appraiser FMV (as defined in the LLC Agreement) of one (1) Class A Share on such date.


 






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“Material Objection
Notice” has the meaning set forth in Section 4.2 of this Agreement.


 


“Net Tax Benefit”
has the meaning set forth in Section 3.1(b) of this 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.


 


“Objection Notice”
has the meaning set forth in Section 2.3(a) of this Agreement.


 


“OpCo”
has the meaning set forth in the Recitals of this Agreement.


 


“Opt-Out Notice”
has the meaning set forth in Section 4.1(c) of this Agreement.


 


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


 


“Pre-Exchange Transfer”
means any transfer (including upon death) or distribution in respect of one or more Units (i) that occurs prior to an Exchange of
such Units, and (ii) to which Section 734(b) or 743(b) of the Code applies.


 


“Realized Tax Benefit”
means, for a Taxable Year, the excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability of (i) the Corporate
Taxpayer and (ii) without duplication, OpCo (and OpCo’s applicable Subsidiaries), but only with respect to Taxes imposed on
OpCo (and OpCo’s applicable Subsidiaries) that are allocable to the Corporate Taxpayer under Section 704 of the Code. If all
or a portion of the Actual Tax Liability 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 Tax Liability over the Hypothetical Tax Liability of (i) the Corporate
Taxpayer and (ii) without duplication, OpCo (and OpCo’s applicable Subsidiaries), but only with respect to Taxes imposed on
OpCo (and OpCo’s applicable Subsidiaries) that are allocable to the Corporate Taxpayer under Section 704 of the Code. If all
or a portion of the Actual Tax Liability for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year,
such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.


 


“Reconciliation Dispute”
has the meaning set forth in Section 7.9 of this Agreement.


 


“Reconciliation Procedures”
has the meaning set forth in Section 2.3(a) of this Agreement.


 


“Redemption”
has the meaning set forth in the Recitals of this Agreement.


 






     8


     


    

 


“Reference Asset”
means any tangible or intangible asset that is held by OpCo, or by any of its direct or indirect Subsidiaries treated as a partnership
or disregarded entity (but only to the extent such indirect Subsidiaries are held through Subsidiaries treated as partnerships or disregarded
entities) 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. For the avoidance of doubt, a Reference
Asset does not include an asset held directly or indirectly by a Subsidiary treated as a corporation for U.S. federal income Tax purposes.


 


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


 


“Senior Obligations”
has the meaning set forth in Section 5.1 of this Agreement.


 


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


 


“Subsidiary Stock”
means stock or other equity interest in a Subsidiary of OpCo that is treated as a corporation for U.S. federal income Tax purposes.


 


“Tax Attributes”
has the meaning set forth in the Recitals of this Agreement.


 


“Tax Benefit Payment”
has the meaning set forth in Section 3.1(b) of this Agreement.


 


“Tax Benefit Schedule”
has the meaning set forth in Section 2.2 of this Agreement.


 


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


 


“Taxable Year”
means a taxable year 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 twelve (12) months for which a Tax
Return is made), ending after the IPO Date.


 


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


 


“Taxing Authority”
means 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.


 


“TRA Party”
has the meaning set forth in the Preamble to this Agreement.


 






     9


     


    

 


“TRA Party Representative”
means Mark D. Walker.


 


“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.


 


“Units”
has the meaning set forth in the Recitals of this Agreement.


 


“Valuation Assumptions”
shall mean, as of an Early Termination Date, the assumptions that in each Taxable Year ending on or after such Early Termination Date,
(1) the Corporate Taxpayer will have taxable income sufficient to fully utilize the Tax items arising from the Tax Attributes (other
than any items addressed in clause (2) below) during such Taxable Year or future Taxable Years (including, for the avoidance of doubt,
Basis Adjustments and Imputed Interest that would result from future payments made under this Agreement that would be paid in accordance
with the Valuation Assumptions) in which such deductions would become available, (2) loss carryovers generated by deductions arising
from any Tax Attributes or Imputed Interest that are available as of the date of such Early Termination Date will be used by the Corporate
Taxpayer on a pro rata basis from the date of such Early Termination Date through the earlier of (x) the scheduled expiration date
under applicable Tax law of such loss carryovers or (y) the fifth (5th) anniversary of the Early Termination Date, (3) the U.S.
federal 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, the Assumed Rate will be calculated based on such rates and the apportionment
factors applicable in the most recently ended Taxable Year (except to the extent any change to such Tax rates has already been enacted
into law), and LIBOR or the Replacement Rate, as applicable, that will be in effect for each such Taxable Year will be the rate in effect
on the Early Termination Date, (4) any non-amortizable, non-depreciable assets (other than any Subsidiary Stock) will be disposed
of on the fifteenth (15th) anniversary of the applicable Exchange and any cash equivalents will be disposed of twelve (12) months following
the Early Termination Date, unless such date has passed in which case such assets will be deemed disposed of on the fifth (5th) anniversary
of the Early Termination Date; provided, that in the event of a Change of Control, such non-amortizable, non-depreciable assets
shall be deemed disposed of at the time of sale (if applicable) of the relevant asset in the Change of Control (if earlier than such fifteenth
(15th) anniversary), (5) any Subsidiary Stock will not be deemed to be disposed unless actually disposed, and (6) if, at the
Early Termination Date, there are Units that have not been Exchanged, then each such Unit shall be deemed Exchanged for the Market Value
(as determined in accordance with clause (ii) of the definition thereof) of the Class A Shares that would be transferred if
the Exchange occurred on the Early Termination Date.


 


Article II

Determination of Certain Realized Tax Benefits


 


2.1            Basis
Schedule. Within ninety (90) calendar days after the due date (including extensions) of IRS Form 1120 (or any successor form)
of the Corporate Taxpayer for each relevant Taxable Year, the Corporate Taxpayer shall deliver to the TRA Party Representative a schedule
(the “Basis Schedule”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement,
(i) the Non-Stepped Up Tax Basis of the Reference Assets as of each applicable Exchange Date, if any, (ii) the Basis Adjustment
with respect to the Reference Assets as a result of the Exchanges effected in such Taxable Year or any prior Taxable Year, if any, calculated
(1) in the aggregate and (2) with respect to Exchanges by each TRA Party, and (iii) the period (or periods) over which
each such Basis Adjustment is amortizable and/or depreciable. All costs and expenses incurred in connection with the provision and preparation
of the Basis Schedules and Tax Benefit Schedules under this Agreement shall be borne by OpCo.


 






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2.2            Tax
Benefit Schedule.


 


(a)            Tax
Benefit Schedule. Within ninety (90) calendar days after the due date (including extensions) of IRS Form 1120 (or any successor
form) of the Corporate Taxpayer for any Taxable Year in which there is a Realized Tax Benefit or a Realized Tax Detriment, the Corporate
Taxpayer shall provide to the TRA Party Representative a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit
and Tax Benefit Payment, or the Realized Tax Detriment, as applicable, in respect of each TRA Party for such Taxable Year (a “Tax
Benefit Schedule”). Each Tax Benefit Schedule will become final as provided in Section 2.3(a) and may be amended
as provided in Section 2.3(b) (subject to the procedures set forth in Section 2.3(b)).


 


(b)            Applicable
Principles. Subject to Section 3.3, the Realized Tax Benefit (or the Realized Tax Detriment) for each Taxable Year is
intended to measure the decrease (or increase) in the actual liability for Taxes of the Corporate Taxpayer for such Taxable Year attributable
to the Tax Attributes, determined using a “with and without” methodology. Carryovers or carrybacks of any Tax item attributable
to any of the Tax Attributes 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 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 any Tax Attribute (“TRA
Portion”) and another portion that is not (“Non-TRA Portion”), such portions shall be considered to be used
in accordance with the “with and without” methodology so that the amount of any Non-TRA Portion is deemed utilized, to the
extent available, prior to the amount of any TRA Portion, to the extent available (with the TRA Portion being applied on a proportionate
basis consistent with the provisions of Section 3.3). For the avoidance of doubt, the Corporate Taxpayer shall be entitled
to make reasonable simplifying assumptions in making determinations contemplated by this Agreement, including reasonable assumptions regarding
basis recovery periods based on available balance sheet information and including the assumption that the Assumed Rate is to be applied
against the amount of taxable income of the Corporate Taxpayer for U.S. federal income Tax purposes that is used in calculating the Actual
Tax Liability and the Hypothetical Tax Liability (and the parties hereby agree that that the Corporate Taxpayer’s determination
of the Realized Tax Benefit and Realized Tax Detriment with respect to U.S. state and local Taxes will not take into account jurisdiction-specific
U.S. state and local adjustments to the U.S. federal taxable income base or to the U.S. federal rules regarding the utilization of
Tax attribute carryovers). The parties agree that (A) all Tax Benefit Payments (other than the portion of the Tax Benefit Payments
treated as Imputed Interest) attributable to the Basis Adjustments will be treated as subsequent upward purchase price adjustments that
have the effect of creating additional Basis Adjustments to Reference Assets for the Corporate Taxpayer in the year of payment, (B) as
a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations,
as appropriate, on an iterative basis continuing until any incremental Basis Adjustment is immaterial as reasonably determined by the
TRA Party Representative and the Corporate Taxpayer in good faith, (C) the Actual Tax Liability will take into account the deduction
of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest, and (D) the liability for U.S. federal
income Taxes of the Corporate Taxpayer and the amount of taxable income of the Corporate Taxpayer for U.S. federal income Tax purposes
as determined for purposes of calculating the Actual Tax Liability and the Hypothetical Tax Liability shall include, without duplication,
such liability for U.S. federal income Taxes and such U.S. federal taxable income that is economically borne by or allocated to the Corporate
Taxpayer as a result of the provisions of Section 4.6(d) of the LLC Agreement; provided, however, that such liability for Taxes
and such taxable income shall be included in the Hypothetical Tax Liability and the Actual Tax Liability subject to the adjustments and
assumptions set forth in the definitions thereof and, to the extent any such amount is taken into account on an Amended Schedule, such
amount shall adjust a Tax Benefit Payment, as applicable, in accordance with Section 2.3(b).


 






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2.3            Procedures,
Amendments.


 


(a)            Procedures.
Every time the Corporate Taxpayer delivers to the TRA Party Representative an applicable Schedule under this Agreement, including any
Amended Schedule delivered pursuant to Section 2.3(b), and any Early Termination Schedule or amended Early Termination Schedule,
the Corporate Taxpayer shall also (x) deliver to the TRA Party Representative supporting schedules and work papers, as determined
by the Corporate Taxpayer or as reasonably requested by the TRA Party Representative, providing reasonable detail regarding data and calculations
that were relevant for purposes of preparing the Schedule and (y) allow the TRA Party Representative reasonable access at no cost
to the appropriate representatives at the Corporate Taxpayer, as determined by the Corporate Taxpayer or as reasonably requested by the
TRA Party Representative, in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, the
Corporate Taxpayer shall ensure that any Tax Benefit Schedule that is delivered to the TRA Party Representative, along with any supporting
schedules and work papers, provides a reasonably detailed presentation of the calculation of the Actual Tax Liability and the Hypothetical
Tax Liability and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations.
An applicable Schedule or amendment thereto shall become final and binding on all parties thirty (30) calendar days from the date on which
the TRA Party Representative is treated as having received the applicable Schedule or amendment thereto under Section 7.1
unless the TRA Party Representative (i) within thirty (30) calendar days from such date provides the Corporate Taxpayer with written
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 Corporate Taxpayer and the TRA Party Representative,
for any reason, are unable to successfully resolve the issues raised in the Objection Notice within thirty (30) calendar days after receipt
by the Corporate Taxpayer of an Objection Notice, the Corporate Taxpayer and the TRA Party Representative shall employ the reconciliation
procedures as described in Section 7.9 of this Agreement (the “Reconciliation Procedures”).


 






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(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 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 provided to the TRA Party Representative,
(iii) to comply with an Expert’s determination under the Reconciliation Procedures, (iv) to reflect a change in the Realized
Tax Benefit, or the 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 change in the Realized Tax Benefit or the Realized Tax Detriment for such Taxable Year attributable
to an amended Tax Return filed for such Taxable Year or (vi) to adjust an applicable TRA Party’s Basis Schedule to take into
account payments made pursuant to this Agreement (any such Schedule, an “Amended Schedule”). The Corporate Taxpayer
shall provide an Amended Schedule to the TRA Party Representative when the Corporate Taxpayer delivers the Basis Schedule for the following
taxable year.


 


2.4            Basis
Adjustments.


 


(a)            Basis
Adjustments. The parties to this Agreement acknowledge and agree to treat (A) to the fullest extent permitted by law each Direct
Exchange as giving rise to Basis Adjustments and (B) to the fullest extent permitted by law each Redemption using cash or Class A
Shares contributed to OpCo by the Corporate Taxpayer as a direct purchase of Class A Units by the Corporate Taxpayer from the applicable
TRA Party pursuant to Section 707(a)(2)(B) of the Code as giving rise to Basis Adjustments.


 


(b)            Section 754
Election. The Corporate Taxpayer shall ensure that, on and after the date hereof for each taxable year in which an Exchange may occur,
and each direct and indirect Subsidiary of OpCo that is treated as a partnership for U.S. federal income Tax purposes will have in effect
an election under Section 754 of the Code (and under any similar provision of applicable U.S. state or local law).


 


Article III

Tax Benefits Payments


 


3.1            Payments.


 


(a)            Payments.
Within five (5) Business Days after a Tax Benefit Schedule delivered to the TRA Party Representative becomes final in accordance
with Section 2.3(a) and Section 7.9, if applicable, the Corporate Taxpayer shall pay each TRA Party for
the applicable Taxable Year the Tax Benefit Payment determined pursuant to Section 3.1(b) that is Attributable to such
TRA Party. Each such Tax Benefit Payment shall be made by wire transfer of immediately available funds to the bank account previously
designated by such TRA Party to the Corporate Taxpayer or as otherwise agreed by the Corporate Taxpayer and such TRA Party. For the avoidance
of doubt, (x) no Tax Benefit Payment shall be made in respect of estimated Tax payments, including, without limitation, U.S. federal
estimated income Tax payments and (y) the payments provided for pursuant to the above sentence shall be computed separately for
each TRA Party. A separate Capital Account shall be maintained for each Member, including any Member who shall hereafter acquire an interest
in the Company.


 






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(b)            A
 “Tax Benefit Payment” in respect of a TRA Party for a Taxable Year means an amount, not less than zero, equal to the
Net Tax Benefit that is Attributable to such TRA Party and the Interest Amount with respect thereto. 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 in the
applicable transaction, unless otherwise required by law. Subject to Section 3.3, 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 total amount of payments previously made under the first sentence of Section 3.1(a) (excluding
payments attributable to Interest Amounts); provided, for the avoidance of doubt, that no such recipient shall be required to
return any portion of any previously made Tax Benefit Payment. Notwithstanding anything to the contrary in this Agreement, the parties
acknowledge and agree that the determination of the portion of the Tax Benefit Payment to be paid to a TRA Party under this Agreement
with respect to U.S. state and local Taxes shall not require separate “with and without” calculations in respect of each
applicable U.S. state and local Tax jurisdiction but rather will be based on the U.S. federal taxable income or gain for such taxable
year reported on the Corporate Taxpayer’s IRS Form 1120 (or any successor form) and the Assumed Rate. 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 IRS Form 1120 (or any successor form) of the Corporate Taxpayer with respect to Taxes for such Taxable Year until the
payment date under Section 3.1(a). Notwithstanding the foregoing, for each Taxable Year ending on or after the date of a
Change of Control that occurs after the IPO Date, all Tax Benefit Payments shall be calculated by utilizing Valuation Assumptions (1),
(2), (4) and (5), substituting in each case the terms “date of a Change of Control” for an “Early Termination
Date.”


 


(c)            Notwithstanding
anything herein to the contrary, the aggregate payments to a TRA Party under this Agreement in respect of an Exchange shall not exceed
60% of the fair market value of the initial consideration received by a TRA Party on such Exchange (the “Default Cap”),
provided that, if a TRA Party delivers written notification before the end of its taxable year that includes the Exchange to the Corporate
Taxpayer of a stated maximum selling price (within the meaning of Treasury Regulation 15A.453-1(c)(2)), the amount of the initial consideration
received in connection with the applicable Exchange and the aggregate Tax Benefit Payments to such TRA Party in respect of such Exchange
(other than amounts accounted for as interest under the Code) shall not exceed such stated maximum selling price, and the Default Cap
shall not apply with respect to such TRA Party.


 


3.2            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. The provisions of this Agreement shall be construed in the appropriate manner to ensure such
intentions are realized.


 


3.3            Pro
Rata Payments. Notwithstanding anything in Section 3.1 to the contrary, to the extent that the aggregate Realized Tax
Benefit of the Corporate Taxpayer with respect to the Tax Attributes is limited in a particular Taxable Year because the Corporate Taxpayer
does not have sufficient taxable income, the Net Tax Benefit of the Corporate Taxpayer shall collectively be allocated among all parties
eligible for Tax Benefit Payments under this Agreement in proportion to the amount of Net Tax Benefit, as such term is defined in this
Agreement, that would have been Attributable to each such party if the Corporate Taxpayer had sufficient taxable income so that there
were no such limitation.


 






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3.4            Payment
Ordering. If for any reason the Corporate Taxpayer does not fully satisfy its payment obligations to make all Tax Benefit Payments
due under this Agreement in respect of a particular Taxable Year, then the Corporate Taxpayer and the TRA Parties agree that (i) Tax
Benefit Payments for such Taxable Year shall be allocated to all parties eligible for Tax Benefit Payments under this Agreement in proportion
to the amounts of Net Tax Benefit, respectively, that would have been Attributable to each TRA Party if the Corporate Taxpayer had sufficient
cash available to make such Tax Benefit Payments and (ii) no Tax Benefit Payments shall be made in respect of any Taxable Year until
all Tax Benefit Payments to all TRA Parties in respect of all prior Taxable Years have been made in full.


 


3.5            Excess
Payments. To the extent the Corporate Taxpayer makes a payment to a TRA Party in respect of a particular Taxable Year under Section 3.1(a) of
this Agreement (taking into account Section 3.3 and Section 3.4) in an amount in excess of the amount of such
payment that should have been made to such TRA Party in respect of such Taxable Year, then (i) such TRA Party shall not receive
further payments under Section 3.1(a) until such TRA Party has foregone a cumulative amount of payments equal to such
excess and (ii) the Corporate Taxpayer will pay the amount of such TRA Party’s foregone payments to the other Persons to whom
a payment is due under this Agreement and that have not received any such excess payment in a manner such that each such Person to whom
a payment is due under this Agreement, to the maximum extent possible, receives aggregate payments under Section 3.1(a) (taking
into account Section 3.3 and Section 3.4) in the amount it would have received if there had been no excess payment
to such TRA Party.


 


Article IV

Termination


 


4.1            Early
Termination of Agreement; Breach of Agreement.


 


(a)            The
Corporate Taxpayer may terminate this Agreement with respect to all amounts payable to the TRA Parties and with respect to all of the
Class A Units held by the TRA Parties at any time by paying to each TRA Party the Early Termination Payment in respect of such TRA
Party; provided, however, that this Agreement shall only terminate upon the receipt of the Early Termination Payment by
all TRA Parties, and provided, further, that the Corporate Taxpayer may withdraw any notice to execute its termination
rights under this Section 4.1(a) prior to the time at which any Early Termination Payment has been paid. Upon payment
of the Early Termination Payment by the Corporate Taxpayer, none of the TRA Parties or the Corporate Taxpayer shall have any further
payment obligations under this Agreement, other than for any (a) Tax Benefit Payments due and payable and that remain 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 Corporate Taxpayer makes all of the required Early Termination Payments, the Corporate Taxpayer shall
have no obligations under this Agreement with respect to such Exchange.


 






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(b)            In
the event that the Corporate Taxpayer (1) materially 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 or (2)(A) shall commence
any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking
to adjudicate a bankruptcy or insolvency, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts or (ii) seeking an appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its assets, or it shall make a general assignment for the benefit
of creditors or (B) there shall be commenced against the Corporate Taxpayer any case, proceeding or other action of the nature referred
to in clause (A) above that remains undismissed or undischarged for a period of sixty (60) calendar days, all obligations hereunder
shall be automatically accelerated and shall be immediately due and payable, 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
Payments calculated as if an Early Termination Notice had been delivered on the date of a breach, (2) any Tax Benefit Payment due
and payable and that remains unpaid as of the date of a breach, and (3) any Tax Benefit Payment in respect of any TRA Party due
for the Taxable Year ending with or including the date of a breach; provided that procedures similar to the procedures of Section 4.2
shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this sentence. Notwithstanding
the foregoing (other than as set forth in subsection (2) above), in the event that the Corporate Taxpayer breaches this Agreement,
each TRA Party 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 (3) months
of the date such payment is due shall be deemed to be a material breach of a material obligation under this Agreement for all purposes
of this Agreement, and that it will not be considered to be a material breach of a material obligation under this Agreement to make a
payment due pursuant to this Agreement within three (3) months of the date such payment is due. Notwithstanding anything in this
Agreement to the contrary, it shall not be a material breach of a material obligation of this Agreement if the Corporate Taxpayer fails
to make any Tax Benefit Payment when due to the extent that the Corporate Taxpayer has insufficient funds to make such payment; provided,
(i) the Corporate Taxpayer has used reasonable efforts to obtain such funds and (ii) that the interest provisions of Section 5.2
shall apply to such late payment (unless the Corporate Taxpayer does not have sufficient funds to make such payment as a result of
limitations imposed by any Senior Obligations, in which case Section 5.2 shall apply, but the Default Rate shall be replaced
by the Agreed Rate); provided further, for the avoidance of doubt, the last sentence of this Section 4.1(b) shall not
apply to any payments due pursuant to the acceleration upon a Change of Control contemplated by Section 4.1(c).


 






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(c)            The
Corporate Taxpayer shall provide written notice to the TRA Party Representative thirty (30) days in advance of the closing of any Change
of Control, and the TRA Party Representative shall have the option, upon written notice to the Corporate Taxpayer (“Opt-Out
Notice”) within twenty (20) days thereafter, to cause its respective TRA Parties to continue as TRA Parties under this Agreement
after such Change of Control, in which case each such TRA Party will not be entitled to receive the amounts set forth in the remainder
of this Section 4.1(c), and Valuation Assumptions (1), (2), (4) and (5) shall apply to Tax Benefit Payments to
each such TRA Party following the closing of such Change of Control. Notwithstanding anything to the contrary in the foregoing sentence
in this Section 4.1(c), if an Opt-Out Notice is not timely provided with respect to a TRA Party, all obligations hereunder
will be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such
Change of Control and shall include (1) the Early Termination Payments calculated with respect to such TRA Parties as if the Early
Termination Date is the date of such Change of Control, (2) any Tax Benefit Payment due and payable and that remains unpaid as of
the date of such Change of Control, and (3) any Tax Benefit Payment in respect of any TRA Party due for the Taxable Year ending
with or including the date of such Change of Control. If an Opt-Out Notice is not timely provided with respect to a TRA Party, (i) such
TRA Party shall be entitled to receive the amounts set forth in clauses (1), (2) and (3) of the preceding sentence, (ii) any
Early Termination Payment described in the preceding sentence shall be calculated utilizing Valuation Assumptions (1), (2), (3), (4),
(5) and (6), substituting in each case the terms “date of a Change of Control” for an “Early Termination Date,”
and (iii) Section 4.2 and Section 4.3 shall apply, mutatis mutandis, with respect to payments to
such TRA Party upon the Change of Control.


 


4.2            Early
Termination Notice. If the Corporate Taxpayer chooses to exercise its right of early termination under Section 4.1 above,
the Corporate Taxpayer shall deliver to each TRA Party notice of such intention to exercise such right (“Early Termination Notice”)
and shall deliver to the TRA Party Representative 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(s) due
for each TRA Party. Each Early Termination Schedule shall become final and binding on all parties thirty (30) calendar days from the
first date on which all applicable TRA Parties are treated as having received such Schedule or amendment thereto under Section 7.1
unless the TRA Party Representative (i) within thirty (30) calendar days after such date 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. If the Corporate Taxpayer and the TRA Party Representative,
for any reason, are unable to successfully resolve the issues raised in such notice within thirty (30) calendar days after receipt by
the Corporate Taxpayer of the Material Objection Notice, the Corporate Taxpayer and the TRA Party Representative shall employ the Reconciliation
Procedures in which case such Schedule becomes binding ten (10) calendar days after the conclusion of the Reconciliation Procedures.


 


4.3            Payment
upon Early Termination.


 


(a)            Within
three (3) calendar days after an Early Termination Effective Date, the Corporate Taxpayer shall pay to each TRA Party an amount
equal to the Early Termination Payment in respect of such TRA Party. Such payment shall be made by wire transfer of immediately available
funds to a bank account or accounts designated by such TRA Party or as otherwise agreed by the Corporate Taxpayer and such TRA Party
or, in the absence of such designation or agreement, by check mailed to the last mailing address provided by such TRA Party to the Corporate
Taxpayer.


 


(b)            “Early
Termination Payment” in respect of a TRA Party shall equal the present value, discounted at the Early Termination Rate as of
the applicable Early Termination Effective Date, of all Tax Benefit Payments in respect of such TRA Party that would be required to be
paid by the Corporate Taxpayer beginning from the Early Termination Date and assuming that the Valuation Assumptions in respect of such
TRA Party are applied and that each Tax Benefit Payment for the relevant Taxable Year would be satisfied on the due date (without extensions)
under applicable law as of the Early Termination Effective Date for filing of IRS Form 1120 (or any successor form) of the Corporate
Taxpayer.


 






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Article V

Subordination and Late Payments


 


5.1            Subordination.
Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or payments made with respect to Section 4.1(c) due
to events described in paragraph (ii) of the definition of Change of Control required to be made by the Corporate Taxpayer to the
TRA Parties 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 in right of payment with all current or future unsecured obligations
of the Corporate Taxpayer that are not Senior Obligations. To the extent that any payment under this Agreement is not permitted to be
made at the time payment is due as a result of this Section 5.1 and the terms of agreements governing Senior Obligations,
such payment obligation nevertheless shall accrue for the benefit of TRA Parties and the Corporate Taxpayer shall make such payments
at the first opportunity that such payments are permitted to be made in accordance with the terms of the Senior Obligations. Notwithstanding
any other provision of this Agreement to the contrary, to the extent that the Corporate Taxpayer or any of its Affiliates enters into
future Tax receivable or other similar agreements (“Future TRAs”), the Corporate Taxpayer shall ensure that the terms
of any such Future TRA shall provide that the Tax Attributes subject to this Agreement are considered senior in priority to any Tax attributes
subject to any such Future TRA for purposes of calculating the amount and timing of payments under any such Future TRA.


 


5.2            Late
Payments by the Corporate Taxpayer. Subject to the proviso in the last sentence of Section 4.1(b), the amount of all
or any portion of any Tax Benefit Payment or Early Termination Payment not made to the TRA Parties when due under the terms of this Agreement,
whether as a result of Section 5.1 or otherwise, 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 first due and payable to the date
of actual payment.


 


Article VI

No Disputes; Consistency; Cooperation


 


6.1            Participation
in the Corporate Taxpayer’s and OpCo’s Tax Matters. Except as otherwise provided herein, the Corporate Taxpayer shall
have full responsibility for, and sole discretion over, all Tax matters concerning the Corporate Taxpayer and OpCo, including without
limitation the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes.
Notwithstanding the foregoing, the Corporate Taxpayer shall notify the TRA Party Representative of, and keep the TRA Party Representative
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 materially affect the rights and obligations of the TRA Parties under this Agreement, and shall provide
the TRA Party Representative 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.


 






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6.2            Consistency.
The Corporate Taxpayer and the TRA Parties agree to report and cause to be reported for all purposes, including U.S. federal, state and
local Tax purposes and financial reporting purposes, all Tax-related items (including, without limitation, the Tax Attributes and each
Tax Benefit Payment) in a manner consistent with that contemplated by this Agreement or 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. The Corporate
Taxpayer shall (and shall cause OpCo and its other Subsidiaries to) use commercially reasonable efforts (for the avoidance of doubt,
taking into account the interests and entitlements of all TRA Parties under this Agreement) to defend the Tax treatment contemplated
by this Agreement and any Schedule in any audit, contest or similar proceeding with any Taxing Authority.


 


6.3            Cooperation.
Each of the TRA Parties shall (a) furnish to the Corporate Taxpayer in a timely manner such information, documents and other materials
in its possession as the Corporate Taxpayer 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 Corporate Taxpayer and its representatives to provide explanations of documents
and materials and such other information as the Corporate Taxpayer 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 such TRA Party for any reasonable and documented out-of-pocket costs and expenses incurred pursuant to
this Section 6.3. Upon the request of any TRA Party, the Corporate Taxpayer shall cooperate in taking any action reasonably
requested by such TRA Party in connection with its tax or financial reporting and/or the consummation of any assignment or transfer of
any of its rights and/or obligations under this Agreement, including without limitation, providing any information or executing any documentation.


 


Article VII

Miscellaneous


 


7.1            Notices.
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given and received
(a) on the date of delivery if delivered personally, or by facsimile or email with confirmation of transmission by the transmitting
equipment 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 Corporate Taxpayer, to:


 


Direct Digital Holdings, Inc.


1233 West Loop South, Suite 1170


Houston, TX 77027


 


Attention: Mark Walker, Chief Executive Officer


Email:
mwalker@directdigitalholdings.com


 






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If to the TRA Parties, to
the respective addresses, fax numbers and email addresses set forth in the records of OpCo.


 


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


 


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


 


7.3            Entire
Agreement; No Third Party Beneficiary. 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.


 


7.4            Governing
Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware.


 


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


 






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7.6            Successors;
Assignment; Amendments; Waivers.


 


(a)            No
TRA Party may, directly or indirectly, assign or otherwise transfer its rights under this Agreement to any Person (other than a permitted
transferee) without the express prior written consent of the Corporate Taxpayer, such consent not to be unreasonably withheld, conditioned,
or delayed, and without such Person (including a permitted transferee) executing and delivering a joinder to this Agreement, substantially
in the form of Exhibit A hereto, agreeing to become a TRA Party for all purposes of this Agreement, except as otherwise provided
in such joinder (a “Joinder”). For avoidance of doubt, this Section 7.6(a) shall apply regardless
of whether such TRA Party continues to hold any interest in the Corporate Taxpayer or OpCo; provided, however, that if a TRA Party transfers
Class A Units in accordance with the terms of the LLC Agreement but does not assign to the transferee of such Units its rights under
this Agreement with respect to such transferred Class A Units, such TRA Party shall continue to be entitled to receive the Tax Benefit
Payments arising in respect of a subsequent Exchange of such Class A Units. Any assignment, or attempted assignment in violation
of this Agreement, including any failure of a purported assignee to enter into a Joinder or to provide any forms or other information
to the extent required hereunder, shall be null and void, and shall not bind or be recognized by the Corporate Taxpayer or the TRA Parties.
The Corporate Taxpayer shall be entitled to treat the record owner of any rights under this Agreement as the absolute owner thereof and
shall incur no liability for payments made in good faith to such owner until such time as a written assignment of such rights is permitted
pursuant to the terms and conditions of this Section 7.6(a) and has been recorded on the books of the Corporate Taxpayer.


 


(b)            No
provision of this Agreement may be amended unless such amendment is approved in writing by each of the Corporate Taxpayer and by the
TRA Party Representative; provided, that no such amendment shall be effective if such amendment will have a disproportionate effect on
the payments one or more TRA Parties receive under this Agreement unless such amendment is consented in writing by such TRA Parties disproportionately
affected who would be entitled to receive at least two-thirds of the total amount of the Early Termination Payments payable to all TRA
Parties disproportionately affected hereunder if the Corporate Taxpayer had exercised its right of early termination on the date of the
most recent Exchange prior to such amendment (excluding, for purposes of this sentence, all payments made to any TRA Party pursuant to
this Agreement since the date of such most recent Exchange). 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.


 


(c)            All
of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties
hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The 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.


 


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


 






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7.8            Resolution
of Disputes.


 


(a)            Except
as provided by Section 7.9, any dispute that is not amicably resolved within thirty (30) days after being notified to
the other parties rising out of or relating to this Agreement, 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), or the propriety of the commencement of the arbitration (each
a “Dispute”) shall be finally settled by arbitration conducted by a single arbitrator in accordance with the then-existing
Rules of Arbitration of the International Chamber of Commerce. The seat or legal place of arbitration shall be Houston, Texas. If
the parties to the Dispute fail to agree on the selection of an arbitrator within thirty (30) calendar days of the receipt of the
request for arbitration, the International Chamber of Commerce shall make the appointment. Performance under this Agreement shall continue
if reasonably possible during any arbitration proceedings. The arbitration shall be deemed to meet these qualifications unless a party
objects with five (5) days of nomination.


 


(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, enforcing
and/or challenging an arbitration award and, for the purposes of this paragraph (b), each TRA Party (i) expressly consents to the
application of paragraph (c) of this Section 7.8 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 TRA Party 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 the TRA
Party of any such service of process, shall be deemed in every respect effective service of process upon the TRA Party in any such action
or proceeding.


 


(c)            (i) EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN HOUSTON, TEXAS FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT
IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 7.8, 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, enforce or challenge
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; and (ii) 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 7.8 and
such parties agree not to plead or claim the same.


 






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7.9            Reconciliation.
In the event that the Corporate Taxpayer and the TRA Party Representative are unable to resolve a disagreement with respect to the matters
governed by Sections 2.3 and 4.2 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 the TRA Party Representative agree otherwise, the Expert shall not, and
the firm that employs the Expert shall not, have any material relationship with the Corporate Taxpayer or the TRA Party Representative
or other actual or potential conflict of interest. If the Corporate Taxpayer and the TRA Party Representative 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,
then the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter
relating to the TRA Party’s Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within
thirty (30) calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen
(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 the TRA Party
Representative shall bear their own costs and expenses of such proceeding, unless (i) the Expert adopts the TRA Party Representative’s
position, in which case the Corporate Taxpayer shall reimburse the relevant TRA Party Representative for any reasonable out-of-pocket
costs and expenses in such proceeding, or (ii) the Expert adopts the Corporate Taxpayer’s position, in which case the TRA
Party Representative 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 7.9 shall be decided by the
Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.9
shall be binding on the Corporate Taxpayer and each of the TRA Parties and may be entered and enforced in any court having jurisdiction.


 


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; provided that, prior to deducting or withholding any such amounts, the Corporate Taxpayer shall notify the
TRA Party Representative and shall consult in good faith with such TRA Party Representative regarding the basis for such deduction or
withholding. 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 Person in respect of whom such withholding
was made. To the extent that any payment pursuant to this Agreement is not reduced by such deductions or withholdings, such recipient
shall indemnify the applicable withholding agent for any amounts imposed by any Taxing Authority together with any costs and expenses
related thereto, but not including penalties and interest attributable to the applicable withholding agent’s gross negligence or
willful misconduct. Each TRA Party shall promptly provide the Corporate Taxpayer, OpCo or other applicable withholding agent with any
applicable Tax forms and certifications (including IRS Form W-9 or the applicable version of IRS Form W-8) reasonably requested,
in connection with determining whether any such deductions and withholdings are required under the Code or any provision of state, local
or foreign Tax law.


 






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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, consolidated, combined or unitary group of corporations that files a
consolidated, combined or unitary income Tax Return pursuant to Sections 1501 et seq. of the Code or any corresponding provisions of
state, local or foreign law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and
(ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder shall be computed with reference to the
consolidated, combined or unitary taxable income, gain, loss, deduction and attributes of the group as a whole.


 


(b)            If
the Corporate Taxpayer (or any member of a group described in Section 7.11(a)) transfers or is deemed to transfer any Unit
or any Reference Asset to a transferee that is treated as a corporation for U.S. federal income Tax purposes (other than a member of
a group described in Section 7.11(a)) in a transaction in which the transferee’s basis in the property acquired is
determined in whole or in part by reference to such transferor’s basis in such property, then the Corporate Taxpayer shall cause
such transferee to assume the obligation to make payments hereunder with respect to the applicable Tax Attributes associated with any
Reference Asset or interest therein acquired (directly or indirectly) in such transfer (taking into account any gain recognized in the
transaction) in a manner consistent with the terms of this Agreement as the transferee (or one of its Affiliates) actually realizes Tax
benefits from the Tax Attributes.


 


(c)            If
OpCo or any applicable Subsidiary transfers (or is deemed to transfer for U.S. federal income Tax purposes) any Reference Asset to a
transferee that is treated as a corporation for U.S. federal income Tax purposes (other than a member of a group described in Section 7.11(a))
in a transaction in which the transferee’s basis in the property acquired is determined in whole or in part by reference to such
transferor’s basis in such property, OpCo or the applicable Subsidiary shall be treated as having disposed of the Reference Asset
in a wholly taxable transaction. The consideration deemed to be received by OpCo or the applicable Subsidiary in the transaction contemplated
in the prior sentence shall be equal to the fair market value of the deemed transferred asset, plus (i) the amount of debt to which
such asset is subject, in the case of a transfer of an encumbered asset or (ii) the amount of debt allocated to such asset, in the
case of a transfer of a partnership interest. The transactions described in this Section 7.11(c) and Section 7.11(e) below
shall be taken into account in determining the Realized Tax Benefit or Realized Tax Detriment, as applicable, for such Taxable Year based
on the income, gain or loss deemed allocated to the Corporate Taxpayer using the Non-Adjusted Tax Basis of the Reference Assets in calculating
its Hypothetical Tax Liability for such Taxable Year and using the actual Tax basis of the Reference Assets in calculating its Actual
Tax Liability, determined using the “with and without” methodology. Thus, for example, in determining the Hypothetical Tax
Liability of the Corporate Taxpayer, the taxable income of the Corporate Taxpayer shall be determined by treating OpCo as having sold
the applicable Reference Asset for its fair market value, recovering any basis applicable to such Reference Asset (using the Non-Adjusted
Tax Basis), while the Actual Tax Liability of the Corporate Taxpayer would be determined by recovering the actual Tax basis of the Reference
Asset that reflects any Basis Adjustments.


 






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(d)            If
any member of a group described in Section 7.11(a) that owns any Unit deconsolidates from the group (or the Corporate
Taxpayer deconsolidates from the group), then the Corporate Taxpayer shall cause such member (or the parent of the consolidated group
in a case where the Corporate Taxpayer deconsolidates from the group) to assume the obligation to make payments hereunder with respect
to the applicable Tax Attributes associated with any Reference Asset it owns (directly or indirectly) in a manner consistent with the
terms of this Agreement as the member (or one of its Affiliates) actually realizes Tax benefits. If a transferee or a member of a group
described in Section 7.11(a) assumes an obligation to make payments pursuant to this Section 7.11(d), then
the initial obligor is relieved of the obligation assumed.


 


(e)            If
the Corporate Taxpayer (or any member of a group described in Section 7.11(a)) transfers (or is deemed to transfer for U.S.
federal income Tax purposes) any Unit in a transaction that is wholly or partially taxable, then for purposes of calculating payments
under this Agreement, OpCo shall be treated as having disposed of the portion of any Reference Asset (determined based on a pro rata
share of an undivided interest in each Reference Asset) that is indirectly transferred by the Corporate Taxpayer or other entity described
above (i.e., taking into account the number of Units transferred) in a wholly or partially taxable transaction, as applicable,
in which all income, gain or loss is allocated to the Corporate Taxpayer. The consideration deemed to be received by OpCo shall be equal
to the fair market value of the deemed transferred asset, plus (i) the amount of debt to which such asset is subject, in the case
of a transfer of an encumbered asset or (ii) the amount of debt allocated to such asset, in the case of a transfer of a partnership
interest.


 


7.12            Confidentiality.


 


(a)            Each
TRA Party and each of their assignees acknowledge and agree that the information of the Corporate Taxpayer is confidential and, except
in the course of performing any duties as necessary for the Corporate Taxpayer and its Affiliates, as required by law or legal process
or to enforce the terms of this Agreement, such person shall keep and retain in the strictest confidence and not disclose to any Person
any confidential matters, acquired pursuant to this Agreement, of the Corporate Taxpayer and its Affiliates and successors, concerning
OpCo, its members and its Affiliates and successors, learned by the TRA Party heretofore or hereafter. This Section 7.12
shall not apply to (i) any information that has been made publicly available by the Corporate Taxpayer or any of its Affiliates,
becomes public knowledge (except as a result of an act of the TRA Party in violation of this Agreement) or is generally known to the
business community and (ii) the disclosure of information to the extent necessary for the TRA Party to prepare and file its Tax
Returns, to respond to any inquiries regarding the same from any Taxing Authority or to prosecute or defend any action, proceeding or
audit by any Taxing Authority with respect to such Tax Returns. Notwithstanding anything to the contrary herein, each TRA Party and each
of their assignees (and each employee, representative or other agent of the TRA Party or its assignees, as applicable) may disclose to
any and all Persons, without limitation of any kind, the Tax treatment and Tax structure of the Corporate Taxpayer, OpCo and their Affiliates,
and any of their transactions, and all materials of any kind (including opinions or other Tax analyses) that are provided to the TRA
Party relating to such Tax treatment and Tax structure.


 






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


 


7.13            Partnership
Agreement. This Agreement shall be treated as part of the LLC Agreement as described in Section 761(c) of the Code and
Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.


 


7.14            Change
in Law. Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in law, a TRA Party
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 the TRA Party upon any Exchange by such TRA Party 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 such TRA Party, then at the election of such TRA Party and to the extent specified by such TRA Party, this Agreement (i) shall
cease to have further effect with respect to such TRA Party, (ii) shall not apply to an Exchange by such TRA Party occurring after
a date specified by such TRA Party, or (iii) shall otherwise be amended in a manner determined by such TRA Party, provided that
such amendment shall not result in an increase in payments under this Agreement at any time as compared to the amounts and times of payments
that would have been due in the absence of such amendment.


 


7.15            Electronic
Signatures. The words “execution,” “signed,” “signature,” “delivery,” and words of
like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include
electronic signatures (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com),
deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability
as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and
the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.


 


[Remainder of page intentionally blank]


 






    26


     


    

 


IN
WITNESS WHEREOF, the Corporate Taxpayer and each TRA Party have duly executed this Agreement as of the date first written
above.


 


	 	Corporate Taxpayer
	 	 	 
	 	DIRECT DIGITAL HOLDINGS, INC.
	 	 	 
	 	By:	/s/ Mark D. Walker
	 	 	Name: Mark D. Walker
	 	 	Title: Chairman and Chief Executive Officer
	 	 	 
	 	OpCo:
	 	 	 
	 	DIRECT DIGITAL HOLDINGS, LLC
	 	 	 
	 	By:	/s/ Mark D. Walker
	 	 	Name: Mark D. Walker
	 	 	Title: Chief Executive Officer



 


[Signature Page to the Tax Receivable Agreement]


 




    


     


    

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.


 


	 	DIRECT DIGITAL MANAGEMENT, LLC
	 	 	 
	 	By:	/s/ Mark D. Walker
	 	 	Name: Mark D. Walker
	 	 	Title: Managing Partner



 


[Signature Page to the Tax Receivable Agreement]


 




    


     


    

 


Exhibit A


 


Form of Joinder


 


This JOINDER (this “Joinder”)
to the Tax Receivable Agreement (as defined below), is by and among Direct Digital Holdings, Inc., a Delaware corporation (including
any successor corporation the “Corporate Taxpayer”), ______________________ (“Transferor”) and
______________________ (“Permitted Transferee”).


 


WHEREAS, on ______________________,
Permitted Transferee shall acquire ______________________ percent of the Transferor’s right to receive payments that may become
due and payable under the Tax Receivable Agreement (as defined below) (the “Acquired Interests”) from Transferor (the
 “Acquisition”); and


 


WHEREAS, Transferor, in connection
with the Acquisition, has required Permitted Transferee to execute and deliver this Joinder pursuant to Section 7.6(a) of the
Tax Receivable Agreement, dated as of February 15, 2022, between the Corporate Taxpayer, OpCo and the TRA Parties (as defined therein)
(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:


 


1.1            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.


 


1.2            Acquisition.
For good and valuable consideration, the sufficiency of which is hereby acknowledged by the Transferor and the Permitted Transferee,
the Transferor hereby transfers and assigns absolutely to the Permitted Transferee all of the Acquired Interests.


 


1.3            Joinder.
Permitted Transferee hereby acknowledges and agrees (i) that it has received and read the Tax Receivable Agreement, (ii) that
the Permitted Transferee is acquiring the Acquired Interests in accordance with and subject to the terms and conditions of the Tax Receivable
Agreement and (iii) to become a “TRA Party” (as defined in the Tax Receivable Agreement) for all purposes of
the Tax Receivable Agreement.


 


1.4            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 7.1 of the
Tax Receivable Agreement.


 


1.5            Governing
Law. This Joinder shall be governed by and construed in accordance with the law of the State of Delaware.


 




    


     


    

 


 


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


 


	 	DIRECT DIGITAL HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	[TRANSFEROR]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	[PERMITTED TRANSFEREE]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	Address for Notices:



 


[Signature Page to Joinder]