Document:

Exhibit 10.9

 

GUARANTEE AGREEMENT

 

dated as of

 

August 18, 2015

 

among

 

ORIX USA CORPORATION

 

and

 

HOULIHAN LOKEY CAPITAL (HOLDINGS) LTD.

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
SECTION 1. Definitions
    	
1
    
	
SECTION 2. Guarantee by ORIX
    	
1
    
	
SECTION 3. General Representations and Warranties
    	
3
    
	
SECTION 4. Fees and Expenses; Indemnification
    	
4
    
	
SECTION 5. Notices
    	
4
    
	
SECTION 6. No Waiver; Enforceability
    	
5
    
	
SECTION 7. Condition of Borrower
    	
5
    
	
SECTION 8. Successors and Assigns
    	
5
    
	
SECTION 9. Amendments and Waivers
    	
5
    
	
SECTION 10. APPLICABLE LAW
    	
5
    
	
SECTION 11. WAIVER OF JURY TRIAL
    	
5
    
	
SECTION 12. Jurisdiction; Consent to Service of Process
    	
6
    
	
SECTION 13. Severability
    	
6
    
	
SECTION 14. Counterparts
    	
7
    
	
SECTION 15. Headings
    	
7
    
	
SECTION 16. Conflicts
    	
7
    

 

 

GUARANTEE AGREEMENT dated as of August 18, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), between ORIX USA Corporation, a Delaware corporation (“ORIX”), and Houlihan Lokey Capital (Holdings) Ltd., a UK private limited Company (“HL UK”).

 

Reference is made to the Cash Management Agreement entered into on August 18, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Cash Management Agreement”), by and between HL UK and ORIX Global Capital, Ltd., a UK private limited company  (“OGC”).

 

HL UK has agreed to make advances to OGC pursuant to, and upon the terms and conditions specified in, the Cash Management Agreement.  The obligations of the HL UK to make advances to OGC are conditioned upon, among other things, the execution and delivery of this Agreement by ORIX.  ORIX is an affiliate of OGC, will derive substantial benefits from the making of advances to OGC pursuant to the Cash Management Agreement and is willing to execute and deliver this Agreement in order to induce HL UK to extend such credit.

 

Accordingly, the parties hereto agree as follows:

 

SECTION 1.  Definitions.

 

(a)        Terms Defined in Cash Management Agreement.  Terms defined in the Cash Management Agreement and not otherwise defined in subsection (b) of this Section 1 have, as used herein, the respective meanings provided for therein.

 

(b)        Additional Definitions.  The following additional terms, as used herein, have the following meanings:

 

“Cash Management Agreement” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“Guarantee” means, with respect to ORIX, its guarantee of the Guaranteed Obligations under Section 2.

 

“Guaranteed Obligations” means the Obligations.

 

SECTION 2.  Guarantee by ORIX.

 

(a)        Guarantees.  ORIX absolutely and unconditionally guarantees as a guarantee of payment and performance and not merely as a guarantee of collection, payment and performance of all Guaranteed Obligation (whether at stated maturity, upon acceleration or otherwise).

 

(b)        Guarantees Unconditional.  Except as otherwise expressly provided herein, the obligations of ORIX under its Guarantee shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

 

 

(i)            any extension, renewal, settlement, compromise, waiver, discharge or release in respect of any Obligation, by operation of law or otherwise;

 

(ii)           any discharge, release, impairment, non-perfection or invalidity of any future direct or indirect security for any Obligation;

 

(iii)          any change in the corporate existence, structure or ownership of ORIX, OGC, or any other Person or any of their respective subsidiaries, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any ORIX, OGC, or any other Person or any of their assets or any resulting release or discharge of any Guaranteed Obligation hereunder;

 

(iv)          the existence of any claim, set-off or other right that ORG or ORIX may have at any time against HL UK; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

 

(v)           any invalidity or unenforceability relating to or against ORIX, OGC or any other Person for any reason hereunder, or any provision of applicable law or regulation purporting to prohibit the payment of any Guaranteed Obligation by ORIX, OGC or any other Person;

 

(vi)          any other act or omission to act or delay of any kind by ORIX, OGC, HL UK or any other Person, or any other circumstance whatsoever that might, but for the provisions of this clause (vi), constitute a legal or equitable discharge of or defense to any obligation of ORIX hereunder.

 

(c)        Termination.  This Agreement is a continuing and irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and shall remain in full force and effect until all Guaranteed Obligations and any other amounts payable under this Agreement are indefeasibly paid and performed in full and any commitments of HL UK with respect to the Guaranteed Obligations are terminated (in each case, other than contingent indemnification, cost, expense and expense reimbursement obligations as to which no claim has been been asserted).  If at any time any payment of a Guaranteed Obligation is rescinded or must be otherwise restored or returned upon the insolvency or receivership of ORIX or otherwise, the Agreement shall be reinstated with respect thereto as though such payment had been due but not made at such time.

 

(d)        Waiver by Guarantors.  ORIX irrevocably waives acceptance hereof and of the extension or continuation of the Guaranteed Obligations or any part thereof.  ORIX further waives presentment, demand, protest and any notice not expressly provided for herein, as well as any requirement that at any time any action be taken by any Person against ORIX, OGC or any other Person.

 

(e)        Subrogation.  To the extent that ORIX makes a payment with respect to a Guaranteed Obligation hereunder it shall be subrogated to the rights of the payee against OGC with respect to such payment; provided that ORIX shall not exercise any right of 

 

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subrogation, contribution or similar rights with respect to such payment until all Guaranteed Obligations and any other amounts payable under this Agreement are indefeasibly paid and performed in full and any commitments of HL UK with respect to the Guaranteed Obligations are terminated. If any amounts are paid to ORIX in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of HL UK and shall forthwith be paid to HL UK to reduce the amount of the Guaranteed Obligations, whether matured or unmatured.

 

(f)        Exhaustion of Other Remedies Not Required.  The obligations of ORIX hereunder are those of primary obligor, and not merely as surety, and are independent of the Guaranteed Obligations.  ORIX waives diligence by HL UK and action on delinquency in respect of the Guaranteed Obligations or any part thereof, including, without limitation any provisions of law requiring HL UK to exhaust any right or remedy or to take any action against OGC, any other guarantor or any other person, entity or property before enforcing this Guaranty against ORIX.

 

(g)        Stay of Acceleration.  If acceleration of the time for payment or performance of any Guaranteed Obligation by OGC is stayed by reason of the insolvency or receivership of OGC or otherwise, all Guaranteed Obligations otherwise subject to acceleration hereunder shall nonetheless be payable ORIX forthwith on demand by HL UK.

 

(h)        No Setoff or Deductions; Taxes.  All payments by ORIX hereunder shall be subject to Section 6.12 of the Cash Management Agreement, it being understood that references to OGC therein shall mean ORIX for purposes of this Section 2(h).

 

(i)         Subordination.  ORIX hereby subordinates the payment of all obligations and indebtedness of OGC owing to ORIX, whether now existing or hereafter arising, including but not limited to any obligation of OGC to ORIX as subrogee of HL UK or resulting from ORIX’s performance under this Agreement to the indefeasible payment and performance in full of all Guaranteed Obligations; provided that (a) so long as no Event of Default (as defined in the Cash Management Agreement) has occurred and is continuing, ORIX may continue to make and accept payments on such obligations and indebtedness, and (b) upon the occurrence and during the continuation of an Event of Default, ORIX may continue to make and accept payments on such obligations and indebtedness with HL UK’s consent.  If HL UK so requests, any such obligation or indebtedness of OGC to ORIX shall be enforced and performance received by ORIX as trustee for HL UK and the proceeds thereof shall be paid over to HL UK on account of the Guaranteed Obligations, but without reducing or affecting in any manner the liability of ORIX under this Guaranty.

 

SECTION 3.  General Representations and Warranties.  ORIX represents and warrants on the Effective Date that:

 

(i)            ORIX is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

 

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(ii)           The execution and delivery of this Agreement by ORIX and the performance by it of its obligations under this Agreement are within its corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational action.

 

(iii)          ORIX’s obligations under this Agreement are legal, valid, binding and enforceable, except to the extent that enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights and by the availability of injunctive relief, specific performance and other equitable remedies.

 

(iv)          The making and performance of this Agreement by ORIX does not and will not violate in any material respect the provisions of any applicable law, regulation or order, and does not and will not result in the breach of, or constitute a default or require any consent (that has not been obtained) under, any material agreement, instrument, or document to which ORIX is a party or by which ORIX or any of its property may be bound or affected

 

(v)           All consents, approvals, licenses and authorizations of, and filings and registrations with, any governmental authority required under applicable law and regulations for the making and performance of this Agreement by ORIX have been obtained or made and are in full force and effect.

 

SECTION 4.  Fees and Expenses; Indemnification.

 

(a)        Fees and Expenses.  ORIX will, forthwith upon demand, pay to HL UK all reasonable and documented expenses incurred by HL UK (including the reasonable and documented fees, charges and disbursements of one counsel for HL UK) in any way relating to the enforcement or protection of the HL UK’s rights under this Agreement, including any incurred in the preservation, protection or enforcement of any rights of HL UK in any case commenced by or against ORIX under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute.

 

(b)        Indemnification.  ORIX shall indemnify HL UK against, and hold it harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel and consultant or other expert fees, charges and disbursements, incurred by or asserted against it arising out of, in any connection with, or as a result of this Agreement or the performance of ORIX of its obligations hereunder provided that the foregoing shall not apply to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by a final and non-appealable judgment to have resulted primarily from the gross negligence, bad faith or willful misconduct of HL UK.

 

SECTION 5.  Notices.  Each notice, request or other communication given to any party hereunder shall be given in accordance with Section 6.1 of the Cash Management Agreement, and in the case of any such notice, request or other communication to ORIX, shall be given to it in care of OGC.

 

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SECTION 6.  No Waiver; Enforceability.  No failure by HL UK to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy or power hereunder preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision herein.

 

SECTION 7  Condition of Borrower.  ORIX acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from OGC such information concerning the financial condition, business and operations of OGC as ORIX requires, and that HL UK has no duty, and ORIX are not relying on HL UK at any time, to disclose to ORIX any information relating to the business, operations or financial condition of OGC.

 

SECTION 8.  Successors and Assigns.  This Agreement is for the benefit of HL UK.  If all or any part of HL UK’s interest in any Obligation is assigned or otherwise transferred in accordance with the term of the Cash Management Agreement, the transferor’s rights hereunder, to the extent applicable to the obligation so transferred, shall be automatically transferred with such obligation.  This Agreement shall be binding on ORIX and its respective successors and assigns; provided that ORIX may not assign any of its right, or delegate any of any obligations, this Agreement without the prior written consent of HL UK (and any attempted assignment without such consent shall be void).

 

SECTION 9.  Amendments and Waivers.  Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated except pursuant to an agreement or agreements in writing entered into by HL UK and ORIX.

 

SECTION 10.  APPLICABLE LAW.  THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

SECTION 11.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO 

 

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ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 11.

 

SECTION 12.  Jurisdiction; Consent to Service of Process.

 

(a)        Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. Federal or New York State court sitting in the Borough of Manhattan, in the City of New York (or any appellate court therefrom) over any suit, action or proceeding arising out of, or relating to, this Agreement and agrees that all claims in respect of any such action or proceeding shall (except as permitted below) be heard and determined in such New York State or, to the extent permitted by law, federal court.  The parties hereto agree that service of any process, summons, notice or document by registered mail addressed to such person shall be effective service of process against such person for any suit, action or proceeding brought in any such court.  Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum.  Each of the parties hereto agrees that a final judgment in any such action or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(b)        Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of, or relating to, this Agreement in any court referred to in paragraph (a) of this Section 12.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, any claim or defense of an inconvenient forum to the maintenance of such action, suit or proceeding in any such court.

 

(c)        To the extent permitted by law, each party to this Agreement hereby irrevocably waives personal service of any and all process upon it and agrees that all such service of process may be made by registered mail (or any substantially similar form of mail) directed to it at its address for notices as provided for in Section 6.1 of the Cash Management Agreement.  Each party to this Agreement hereby waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder that service of process was invalid and ineffective.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

SECTION 13.  Severability.  To the extent permitted by law, any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

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SECTION 14.  Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or by email as a “.pdf” or “.tif” attachment shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 15.  Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

SECTION 16. Conflicts.  Notwithstanding anything to the contrary contained herein or in any other Cash Management Documents in the event of any conflict between the provisions contained in this Agreement and the provisions contained in the Cash Management Agreement, the provision contained in the Cash Management Agreement shall control.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	
 
    	
 
    	
HOULIHAN LOKEY CAPITAL   (HOLDINGS) LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Scott L. Beiser
    
	
 
    	
 
    	
 
    	
Name:
    	
Scott L. Beiser
    
	
 
    	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ORIX USA CORPORATION
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Paul E. Wilson
    
	
 
    	
 
    	
 
    	
Name:
    	
Paul E. Wilson
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ORIX USA CORPORATION
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Noboru Kawai
    
	
 
    	
 
    	
 
    	
Name:
    	
Noboru Kawai
    
	
 
    	
 
    	
 
    	
Title:
    	
Executive Vice   President and TreasurerExhibit 10.10

 

Houlihan Lokey, Inc.

10250 Constellation Boulevard, 5th Floor

Los Angeles, California 90067

 

August 18, 2015

 

ORIX USA Corporation

1717 Main Street — Suite 10100

Dallas, TX 75201

Attention: Ron Barger, General Counsel

 

Fram Holdings, LLC

c/o ORIX USA Corporation

1717 Main Street — Suite 10100

Dallas, TX 75201

Attention: Ron Barger, General Counsel

 

Re:                             Assignment and Assumption of Fram Promissory Notes; Indemnification Agreements

 

Ladies and Gentlemen:

 

Pursuant to this Agreement (this “Agreement”), for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Houlihan Lokey, Inc., a Delaware corporation (“HL”), Fram Holdings, LLC, a Delaware limited liability company (“Fram”), ORIX USA Corporation, a Delaware corporation (“ORIX”), and, solely with respect to Section 7 hereof, the Shareholder Representative (as defined in the Contribution and Share Purchase Agreement), on behalf of himself and the HLHZ Security Holders (as defined in the Contribution and Share Purchase Agreement), hereby agree as follows:

 

1.             Certain Definitions.  For purposes of this Agreement capitalized words and phrases used and not otherwise defined elsewhere in this Agreement shall have the following meanings:

 

“Action” means any action, claim, suit, litigation, proceeding (including arbitral), demand or investigation.

 

“Affiliate” means, with respect to any specified Person, any other Person, at the time of such determination, directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such specified Person; provided, that, for the purposes of this Agreement, as of and after the date hereof, none of ORIX or any of its Subsidiaries shall be deemed an Affiliate of HL or any of its Subsidiaries, and none of HL or any of its Subsidiaries shall be deemed an Affiliate of ORIX and its Subsidiaries, as a result of any control relationship between such Persons.

 

“Closing” means the closing of the Reorganization or the IPO, whichever closing is later.

 

 

“Contribution and Share Purchase Agreement” means that certain Contribution and Share Purchase Agreement, by and among, ORIX, Houlihan, Lokey, Howard & Zukin, Inc., the Shareholders of Houlihan, Lokey, Howard & Zukin, Inc., the Shareholder Representative (as defined therein), and Fram, dated as of October 30, 2005, as amended from time to time.

 

“Control,” and the correlative terms “Controlling” and “Controlled,” means, with respect to any specified Person, the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and whether or not exercised.

 

“Fram” has the meaning set forth in the preamble hereto, and shall include any predecessor (including Fram Holdings, Inc.) or successor thereto.

 

“Fram Business” means the business of Fram and its Subsidiaries (excluding (i) the HL Business and (ii) any activities of Fram relating to the issuance of shares (or ownership thereof) or payment of compensation, in each case, to any Holder or similar payments by Fram with respect to any Holder) as conducted on or prior to the Closing.

 

“Fram Promissory Notes” means the promissory notes set forth on Schedule A hereto.

 

“Fram Stockholders’ Agreement” means that certain Third Amended and Restated Stockholders’ Agreement, by and among ORIX, Fram and the other parties thereto, dated as of February 17, 2009, as amended by that certain Amendment No. 1 to the Third Amended and Restated Stockholders’ Agreement, dated as of April 28, 2011, that certain Amendment No. 2 to the Third Amended and Restated Stockholders’ Agreement, dated as of December 20, 2013, and that certain Amendment No. 3 to the Third Amended and Restated Stockholders’ Agreement, dated as of the date hereof.

 

“HL” has the meaning set forth in the preamble hereto, and shall include any predecessor (including HL CA) or successor thereto.

 

“HL Business” means the business of HL and the HL Subsidiaries as conducted on or prior to the Closing.

 

“HL CA” means Houlihan Lokey, Inc., a California corporation and the predecessor of Houlihan Lokey, Inc., a Delaware corporation.

 

“HL Stockholders’ Agreement’” means that certain Stockholders’ Agreement of HL, by and among HL and the holders named therein, dated as of the date hereof.

 

“HL Subsidiaries” means the Subsidiaries in existence from time to time of HL or any successor entity to HL (whether by merger, consolidation, sale of all or substantially all of a Subsidiary’s assets or otherwise).

 

“Holder” means any current or former employee of HL or a Subsidiary of HL who is a former holder of (i) shares of Series A common stock, (ii) shares of Series B common stock and/or (iii) Series E common stock, in each case, of Fram.

 

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“Indemnifiable Losses” means all after-tax liabilities suffered or incurred by an Indemnified Person, including any reasonable legal or other fees, costs or expenses of defending or investigating any claim or proceeding or enforcing any indemnity hereunder; provided, however, that “Indemnifiable Losses” shall not include any special, indirect, incidental, punitive or consequential damages whatsoever, including damages for lost profits and lost business opportunities or damages calculated based upon a multiple of earning approach or variant thereof, except, in each case, to the extent awarded in an Action involving a Third-Party Claim against such Indemnified Person; provided, further, that, in the event of a dispute concerning any Indemnifiable Losses, no party shall have any liability with respect thereto except to the extent that such Indemnifiable Losses shall have been finally judicially determined to be owed by such party; provided, further, that “Indemnifiable Losses” shall not include any taxes (it being understood that the allocation and indemnification of taxes among the parties hereto and their Subsidiaries shall be governed exclusively by the Tax Sharing Agreement).

 

“Indemnified Person” means any HL Indemnified Persons or any ORIX Indemnified Persons, as applicable.

 

“Indemnifying Party” means HL or ORIX, as applicable.

 

“ORIX” has the meaning set forth in the preamble hereto, and shall include any successor thereto.

 

“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint venture, a governmental entity, a trust or other entity or organization.

 

“Registration Statement” means the Form S-1 Registration Statement relating to the offering and sale of shares of Class A common stock of HL in the IPO, initially filed with the United States Securities and Exchange Commission on July 10, 2015, including any and all amendments thereto and any and all preliminary or final prospectuses and free-writing prospectuses (and amendments or supplements thereto) relating to such offering.

 

“Reorganization” means the corporate reorganization to be effected prior to the IPO, as described in the Registration Statement.

 

“Representatives” means, with respect to any Person, any officer, director, employee, advisor, agent or representative of such Person, or anyone acting on behalf of them or such Person.

 

“Series E Holder” means any current or former employee of HL or a Subsidiary of HL who is a former holder of shares of Series E common stock of Fram.

 

“Subsidiary” means, with respect to any specified Person, any corporation, partnership. trust, limited liability company or other entity at least a majority of the ownership interests (whether economic, voting, beneficial or otherwise) in which are owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); provided that, without limiting the foregoing, a partnership or trust shall be a Subsidiary of any Person that (alone or together with one or more other Subsidiaries of such Person) owns or controls, directly or indirectly, or is, a general partner or trustee of such entity.

 

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“Tax Sharing Agreement” means that certain Amended and Restated Tax Sharing Agreement by and among ORIX, HL Transitory Merger Company, Inc., a Delaware corporation, Houlihan Lokey, Inc., a Delaware corporation, and all corporations that are as of August 18, 2015 eligible to file a consolidated return as a member of the affiliated group of ORIX within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended, including ORIX Commercial Alliance Corporation, a Delaware corporation, ORIX Real Estate Capital, Inc., a Delaware corporation, and ORIX Capital Markets, LLC, a Delaware limited liability company, dated as of August 18, 2015.

 

2.             Assignment and Assumption of Fram Promissory Notes.

 

(a)           Upon the terms and subject to the conditions set forth in this Agreement, Fram hereby assigns to HL, free and clear of any encumbrances, all of Fram’s right, title and interest in and to the Fram Promissory Notes.

 

(b)                           Upon the terms and subject to the conditions set forth in this Agreement, HL hereby assumes from Fram, and agrees to pay, perform and discharge when due, all of the obligations and liabilities of Fram accruing, arising out of, or relating to the Fram Promissory Notes.

 

(c)                           In connection with the IPO and the assignment and assumption of the Fram Promissory Notes, on the date hereof ORIX shall pay to HL, by wire transfer in immediately available funds $18,294,410.44, which represents the aggregate amount of all accrued and unpaid interest and principal under the Fram Promissory Notes.

 

3.             Indemnification by HL.  Upon the terms and conditions set forth in this Agreement, HL shall indemnify, hold harmless and reimburse each of ORIX, its Affiliates and its and their Representatives (collectively, the “ORIX Indemnified Persons”) from and against any and all Indemnifiable Losses of such Persons to the extent relating to, arising out of or resulting from (without duplication):

 

(a)           claims by any Holder related to the Reorganization, including the Drag-Along Notice (as defined in the Fram Stockholders’ Agreement) or Amendment No. 3 to the Fram Stockholders’ Agreement;

 

(b)           claims by (i) any Series E Holder related to the issuance, redemption or repurchase by Fram of shares of Series E common stock of Fram or options, derivatives or other securities in respect thereof pursuant to the Fram Holdings, Inc. 2006 Incentive Compensation Plan, as amended from time to time or the Fram Stockholders’ Agreement, or (ii) any Holder in respect of any other compensation paid by Fram to such Holder;

 

(c)           the assets, liabilities, operations, business, affairs or other activities (including any acts or omissions) of, on behalf of or relating to the HL Business;

 

(d)           the Fram Promissory Notes; and

 

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(e)           any breach of any covenant or agreement of HL made in this Agreement;

 

together with, in each case (a) through (e) above, any Action in respect of the foregoing matters.

 

4.             Indemnification by ORIX.  Upon the terms and conditions set forth in this Agreement, ORIX shall indemnify, hold harmless and reimburse each of HL, its Affiliates and its and their Representatives (collectively, the “HL Indemnified Persons”) from and against any and all Indemnifiable Losses of such Persons to the extent relating to, arising out of or resulting from (without duplication):

 

(a)           the assets, liabilities, operations, business, affairs or other activities (including any acts or omissions) of, on behalf of or relating to the Fram Business; and

 

(b)           any breach of any covenant or agreement of ORIX and/or Fram made in this Agreement;

 

together with, in each case (a) and (b) above, any Action in respect of the foregoing matters.

 

5.             Notice of Indemnity Claim.  Any Indemnified Person entitled to indemnification under this Agreement may seek indemnification for any Indemnifiable Loss (other than in respect of a Third-Party Claim) by providing written notice to the Indemnifying Party, specifying (a) the basis for such indemnification claim and (b) if known, the aggregate amount of Indemnifiable Loss for which a claim is being made under this Agreement. Written notice to such Indemnifying Party of the existence of such claim shall be given by the Indemnified Person as soon as practicable after the Indemnified Person first receives notice of the potential claim; provided, however, that any failure to provide such prompt notice of the event giving rise to such claim to the Indemnifying Party shall not affect the Indemnified Person’s right to indemnification or relieve the Indemnifying Party of its obligations under this Agreement except to the extent such Indemnifying Party has been materially prejudiced as a result of such delay.

 

6.             Third-Party Claims.

 

(a)           If an Indemnified Person shall receive notice of the assertion by a third-party of any claim, or of the commencement by any such Person of any Action, with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnified Person pursuant to this Agreement (collectively, a “Third-Party Claim”), such Indemnified Person shall give such Indemnifying Party prompt written notice thereof; provided, however, that any failure to provide such prompt notice of the event giving rise to such claim to the Indemnifying Party shall not affect the Indemnified Person’s right to indemnification pursuant to this Agreement or relieve the Indemnifying Party of its obligations hereunder except to the extent the Indemnifying Party has been materially prejudiced as a result of such delay. Any such notice shall describe the Third-Party Claim in reasonable detail, including, if known, the amount of the Indemnifiable Loss for which indemnification may be available or a good faith estimate thereof.

 

(b)           An Indemnifying Party may elect (but is not required) to assume the defense of and defend, at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel (provided such counsel is reasonably acceptable to the indemnified party),

 

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any Third-Party Claim; provided, that Indemnifying Party shall not have the right to assume the defense of and defend any such Third-Party Claim that (i) seeks an injunction or other equitable relief against the Indemnified Person, (ii) under applicable standards of professional conduct, a conflict of interest (other than one that is of a monetary nature) exists between the Indemnified Person and the Indemnifying Party in respect of the Third-Party Claim, or (iii) the Indemnified Person has available to it one or more defenses or counterclaims that are inconsistent with or different from those that may be available to the Indemnifying Party with respect to such Third-Party Claim. Within 30 days after the receipt of notice from an Indemnified Person in accordance with Section 6(a), the Indemnifying Party shall notify the Indemnified Person of its election whether the Indemnifying Party will assume responsibility for defending such Third-Party Claim. After notice from an Indemnifying Party to an Indemnified Person of its election to assume the defense of a Third-Party Claim, such Indemnified Person shall have the right to participate in the defense, compromise, or settlement thereof, but, for as long as the Indemnifying Party pursues such defense, compromise or settlement with reasonable diligence, the fees and expenses of such Indemnified Person incurred in participating in such defense shall be paid by the Indemnified Person.

 

(c)           If an Indemnifying Party elects not to assume responsibility for defending a Third-Party Claim, or fails to notify an Indemnified Person of its election as provided in Section 6(b), such Indemnified Person shall have the right to settle or compromise such Third-Party Claim, and any such settlement or compromise made or caused to be made of such Third-Party Claim in accordance with this Section 6 shall be binding on the Indemnifying Party (to the extent representing Indemnifiable Losses), in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise. Notwithstanding the foregoing sentence, the Indemnified Person shall not compromise or settle a Third-Party Claim without the express prior written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed).

 

(d)           The Indemnifying Party shall have the right to compromise or settle a Third-Party Claim the defense of which it shall have assumed pursuant to Section 6(b) and any such settlement or compromise made or caused to be made of a Third-Party Claim in accordance with this Section 6 shall be binding on the Indemnified Person, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise. Notwithstanding the foregoing sentence, the Indemnifying Party shall not have the right to admit liability on behalf of the Indemnified Person and shall not compromise or settle a Third-Party Claim in each case without the express prior written consent of the Indemnified Person (not to be unreasonably withheld, conditioned or delayed); provided, however, that such prior written consent shall not be required in the case of any such compromise or settlement if and only if the compromise or settlement includes, as part thereof, a full and unconditional release by the plaintiff or claimant of the Indemnified Person and the Indemnifying Party from all liability with respect to such Third-Party Claim and does not require the Indemnifying Party to be subject to any non-monetary remedy.

 

7.             Contribution and Share Purchase Agreement.

 

(a)           Each of ORIX, on behalf of itself and the ORIX Indemnified Parties (as defined in the Contribution and Share Purchase Agreement), and HL hereby releases the HLHZ

 

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Security Holders (as defined in the Contribution and Share Purchase Agreement) from any further obligation that the HLHZ Security Holders may have to indemnify any ORIX Indemnified Party or HL under the Contribution and Share Purchase Agreement and, each of ORIX, on behalf of itself and the ORIX Indemnified Parties, and HL hereby waives any right to seek indemnification from the HLHZ Security Holders under the Contribution and Share Purchase Agreement. Each of ORIX, HL, the Shareholder Representative (as defined in the Contribution and Share Purchase Agreement), on behalf of himself and the HLHZ Security Holders, and Fram, acknowledges and agrees that the HLHZ Security Holders shall have no further obligation under the Contribution and Share Purchase Agreement to indemnify the ORIX Indemnified Parties.  Notwithstanding the foregoing, the release in this Section 7(a) by ORIX shall not apply with respect to any holder whose release in Section 7(b) below is not effective with respect to ORIX.

 

(b)           The Shareholder Representative, on behalf of himself and the HLHZ Security Holders, hereby releases ORIX from any further obligation that ORIX may have to indemnify the HLHZ Security Holders under the Contribution and Share Purchase Agreement and, the Shareholder Representative, on behalf of himself and the HLHZ Security Holders, hereby waives any right to seek indemnification from ORIX under the Contribution and Share Purchase Agreement.

 

(c)           For the avoidance of doubt, nothing in Section 7(a) or Section 7(b) shall be deemed to limit, restrict or otherwise affect in any way any obligations of HL or ORIX set forth elsewhere in this Agreement, including their respective obligations under Section 3 and Section 4 hereof.

 

8.             Mitigation.  Each Indemnified Person claiming a right to indemnification under this Agreement shall make commercially reasonable efforts to mitigate any claim or liability that such Indemnified Person asserts under Section 6.

 

9.             Amendments and Waivers.

 

(a)           No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed, in the case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective.

 

(b)           No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

10.          Entire Agreement.  This Agreement, including the Schedule hereto, constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and fully supersedes any and all prior or contemporaneous agreements or understandings between the parties hereto pertaining to the subject matter hereof.  This Agreement is not intended to confer upon any Person, other than the parties hereto, any rights or remedies hereunder.

 

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11.          Further Assurances.  Each of the parties hereto does hereby covenant and agree on behalf of itself, its successors, and its assigns, without further consideration, to prepare, execute, acknowledge, file, record, publish, and deliver such other instruments, documents and statements, and to take such other action as may be required by law or reasonably necessary to effectively carry out the purposes of this Agreement.

 

12.          Governing Law; Arbitration.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware (without giving effect to conflict of laws principles thereof).  It is understood and agreed between the parties hereto that any and all claims, grievances, demands, controversies, causes of action or disputes of any nature whatsoever, arising out of, in connection with, or in relation to (a) the interpretation, performance or breach of this Agreement or (b) the arbitrability of any claims under this Agreement shall be subject to the provisions of Section 6.5 of the HL Stockholders’ Agreement, which is incorporated herein by reference mutatis mutandis.

 

13.          Notices.  Any notice, consent, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be subject to Section 6.4 of the HL Stockholders’ Agreement, which is incorporated herein by reference mutatis mutandis.

 

14.          Certain Rules of Construction.  To the fullest extent permitted by law, the parties hereto intend that any ambiguities shall be resolved without reference to which party may have drafted this Agreement.  All Section titles or other captions in this Agreement are for convenience only, and they shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof.  Unless the context otherwise requires:  (a) a term has the meaning assigned to it; (b) “or” is not exclusive; (c) words in the singular include the plural, and words in the plural include the singular; (d) provisions apply to successive events and transactions; (e) “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision; (f) “include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrases or words of like import; (g) all references to “Sections” refer to Sections of this Agreement unless otherwise noted; and (h) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms.

 

15.          Binding Effect.  Except as otherwise expressly provided herein, this Agreement shall be binding on and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors and all other Persons hereafter that become a party hereto.

 

16.          Severability.  In the event that any provision of this Agreement as applied to any party or to any circumstance, shall be adjudged by a court to be void, unenforceable or inoperative as a matter of law, then the same shall in no way affect any other provision in this Agreement, the application of such provision in any other circumstance or with respect to any other party, or the validity or enforceability of this Agreement as a whole.

 

17.          Successors and Assigns.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns, but neither this Agreement nor any rights, interests or obligations hereunder shall be

 

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assigned by any party hereto without the prior written consent of the other parties, which consent shall not be unreasonably withheld, conditioned or delayed.

 

18.          Counterparts.  This Agreement may be executed in any number of multiple counterparts, each of which shall be deemed to be an original copy and all of which shall constitute one agreement, binding on all parties hereto.

 

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If the foregoing accurately sets forth the agreement among HL, Fram and ORIX and, solely with respect to Section 7 hereof, the Shareholder Representative, regarding the subject matter hereof, please execute and return a copy of this Agreement to HL, from which time it shall constitute a binding agreement among HL, Fram and ORIX and, solely with respect to Section 7 hereof, the Shareholder Representative, effective as of the date first written above.

 

	
 
    	
HOULIHAN LOKEY, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Lindsey Alley
    
	
 
    	
Name: J. Lindsey Alley
    
	
 
    	
Title: Chief Financial   Officer
    

 

 

	
Acknowledged and agreed   effective as of
    	
 
    
	
date first written   above:
    	
 
    
	
 
    	
 
    
	
ORIX USA CORPORATION
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Paul E. Wilson
    	
 
    
	
Name:
    	
Paul E. Wilson
    	
 
    
	
Title:
    	
Chief Financial Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Acknowledged   and agreed effective as of
    	
 
    
	
date   first written above:
    	
 
    
	
 
    	
 
    
	
FRAM HOLDINGS, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Paul E. Wilson
    	
 
    
	
Name:
    	
Paul E. Wilson
    	
 
    
	
Title:
    	
Chief   Financial Officer
    	
 
    
	
 
    	
 
    
	
Acknowledged   and agreed effective as of
    	
 
    
	
date   first written above:
    	
 
    
	
 
    	
 
    
	
SHAREHOLDER REPRESENTATIVE,
    	
 
    
	
solely with respect to Section   7 hereof
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Irwin Gold
    	
 
    
	
Name:
    	
Irwin Gold

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