Document:

Exhibit

EXHIBIT 10.2

TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”), dated as of [_______ , 2017], is hereby entered into by and among Hamilton Lane Incorporated, a Delaware corporation (the “Corporation”), Hamilton Lane Advisors, L.L.C., a Pennsylvania limited liability company (“HLA”), and each of the HLA Members (as defined below).
RECITALS
WHEREAS, the HLA Members hold units of membership interest in HLA (“Units”), which is treated as a partnership for United States federal income tax purposes;
WHEREAS, certain persons are selling on the date hereof a portion of such Units (the “Initial Sale”) to the Corporation, pursuant to the transactions described in the registration statement on Form S-1 publicly filed with the Securities and Exchange Commission on [    ], 2017 (Registration No. 333-XXXXXX), as amended prior to the date hereof, including the initial public offering of shares of Class A common stock (the “Class A Shares”) by the Corporation (the “IPO”);
WHEREAS, the Corporation will become the managing member of, and will hold Units in, HLA;
WHEREAS, the Units other than those owned by the Corporation are exchangeable with the Corporation in certain circumstances for Class A Shares in the Corporation and/or cash pursuant to the Exchange Agreement;
WHEREAS, HLA and certain direct and indirect Subsidiaries treated as partnerships for United States federal income tax purposes will have in effect an election under section 754 of the Internal Revenue Code of 1986, as amended (the “Code”), for the Taxable Year of the IPO Date and for each other Taxable Year in which an exchange by a Partner of Units and Class B common stock of the Corporation (the “Class B Shares”), if any, for Class A Shares and/or cash occurs, which election is intended to result in an adjustment to the tax basis of the assets owned by HLA and such Subsidiaries, solely with respect to the Corporation, at the time of an exchange by a Partner of Units and Class B Shares, if any, for Class A Shares and/or cash (collectively, including the Initial Sale, an “Exchange”) (such time, the “Exchange Date”) (such assets and any asset whose tax basis is determined, in whole or in part, by reference to the adjusted basis of any such asset, the “Adjusted Assets”) by reason of such Exchange and the receipt of payments under this Agreement;
WHEREAS, (i) the allocations of income, gain, loss, expense and other Tax items of HLA and such Subsidiaries to the Corporation may be affected by the Basis Adjustment (defined below) with respect to the Adjusted Assets and (ii) the Tax items of the Corporation may be affected by the Imputed Interest (as defined below);

WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the effect of the Basis Adjustment and Imputed Interest on the actual liability for Taxes of the Corporation;
WHEREAS, the parties to this Agreement also desire to provide for a sharing of certain potential Tax benefits that the Corporation may receive if the remedial allocation method is elected with respect to certain HLA assets.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the undersigned parties agree as follows:
ARTICLE II 

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).
“Adjusted Asset” is defined in the recitals of this Agreement.
“Advisory Firm” means any accounting firm or any law firm, in each case, that is nationally recognized as being expert in Tax matters and that is agreed to by the Board.
 “Affiliate” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.
“Agreed Rate” means LIBOR plus 100 basis points.
“Agreement” is defined in the preamble of this Agreement.
“Amended Schedule” is defined in Section 2.04(b) of this Agreement.
“Amount Realized” means, in respect of an Exchange by an Applicable Partner, the amount that is deemed for purposes of this Agreement to be the amount realized by the Applicable Partner on the Exchange, which shall be the sum of (i) the Market Value of the Class A Shares, the amount of cash and the amount or fair market value of other consideration transferred to the Applicable Partner in the Exchange and (ii) the Share of Liabilities attributable to the Units Exchanged.
“Applicable Partner” means any Partner to whom any portion of a Realized Tax Benefit is Attributable hereunder.
“Assumed State and Local Tax Rate” means the Corporation’s tax rate calculated by taking the sum of the products of (i) the Corporation’s income and franchise tax 

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apportionment rate(s) for each state and local jurisdiction in which the Corporation files income or franchise tax returns for the relevant Taxable Year and (ii) the highest corporate income and franchise tax rate(s) for each such state and local jurisdiction.  In calculating the Assumed State and Local Tax Rate, such tax rate will be reduced by the assumed federal income tax benefit received by the Corporation from state and local jurisdiction income and franchise taxes (with such benefit calculated as the product of (a) such tax rate and (b) the Corporation’s marginal U.S. federal income tax rate for the relevant Taxable Year).
“Attributable”:  The portion of any Realized Tax Benefit of the Corporation that is “Attributable” to any Partner shall be determined by reference to the assets that give rise to the depreciation, amortization or other similar deductions for recovery of cost or basis (“Depreciation”) and increased basis upon a disposition of an asset or with respect to Imputed Interest that produce the Realized Tax Benefit, under the following principles:
(i)    Any Realized Tax Benefit arising from (A) a deduction to the Corporation with respect to a Taxable Year for Depreciation arising in respect of a Basis Adjustment to an Adjusted Asset, (B) a reduction in gain or increase in loss upon the disposition of an Adjusted Asset that arises in respect of a Basis Adjustment, or (C) a deduction of Imputed Interest with respect to payments under this Agreement, is Attributable to the Applicable Partner to the extent that the ratio of the aggregate amount of such items for such Taxable Year that are attributable to Exchanges by the Applicable Partner bears to the aggregate amount of all such items for such Taxable Year that are attributable to Exchanges by all Applicable Partners.
(ii)    For the avoidance of doubt, in the case of a Basis Adjustment arising with respect to an Exchange under section 734(b) of the Code, depreciation, amortization or other similar deductions for recovery of cost or basis shall constitute Depreciation only to the extent that such depreciation, amortization or other similar deductions may produce a Realized Tax Benefit (and not to the extent that such depreciation, amortization or other similar deductions may be for the benefit of a Person other than the Corporation), as reasonably determined by the Corporation.
“Available Cash” means all cash and cash equivalents of the Corporation on hand, less the amount of cash reserves reasonably established in good faith by the Corporation to (i) provide for the proper conduct of business of the Corporation, or (ii) comply with applicable law or any Senior Obligations.
“Basis Adjustment” means the adjustment to the Tax basis of an Adjusted Asset under Revenue Ruling 99-6 and sections 732 and 1012 of the Code (in situations where, as a result of one or more Exchanges, a partnership becomes an entity that is disregarded as separate from its owner for tax purposes) and under sections 734(b), 743(b) and section 754 of the Code (in situations where, following an Exchange, a partnership remains in existence as an entity for Tax purposes) as a result of an Exchange and the payments made pursuant to this Agreement.  Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from an Exchange of one or more Units shall be determined without regard to any Pre-Exchange Transfer of such Units and as if any such Pre-Exchange Transfer had not occurred.  For the avoidance of doubt, any adjustments under section 734(b) of the Code arising before the 

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Initial Sale or as a result of the transactions undertaken in connection therewith shall not be treated as resulting from Exchanges under this Agreement.  
“Beneficial Ownership” (including correlative terms) shall have the meaning ascribed to that term in Rule 13d-3 promulgated under the Exchange Act.
“Board” means the board of directors of the Corporation.
“Business Day” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of New York shall not be regarded as a Business Day.
“Change of Control” means the occurrence of any of the following events:
(i)    any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto, excluding any Permitted Transferee or any group of Permitted Transferees, becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation representing more than fifty percent (50%) of the combined voting power of the Corporation’s then outstanding voting securities; or
(ii)    the following individuals cease for any reason to constitute a majority of the number of directors of the Corporation then serving:  individuals who, on the IPO Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation) whose appointment or election by the Board or nomination for election by the Corporation’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the IPO Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (ii); or
(iii)    there is consummated a merger or consolidation of the Corporation or any direct or indirect Subsidiary of the Corporation with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a Subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of the Corporation immediately prior to such merger or consolidation do not Beneficially Own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the Person resulting from such merger or consolidation; or
(iv)    the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation, or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of 

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all or substantially all of the Corporation’s assets, other than the sale or other disposition by the Corporation of all or substantially all of the Corporation’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are Beneficially Owned by shareholders of the Corporation in substantially the same proportions as their Beneficial Ownership of such securities of the Corporation immediately prior to such sale.
“Class A Shares” is defined in the recitals of this Agreement.
“Class B Shares” is defined in the recitals of this Agreement.
“Code” is defined in the recitals of this Agreement.
“Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Corporate Entity” means any direct Subsidiary of the Corporation which is classified as a corporation for U.S. federal income tax purposes.
“Corporation” is defined in the preamble of this Agreement.
“Corporation Return” means the U.S. federal income Tax Return of the Corporation filed with respect to Taxes of any Taxable Year.
“Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporation, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period.  The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.
“Default Rate” means LIBOR plus 500 basis points.
“Determination” shall have the meaning ascribed to such term in section 1313(a) of the Code or similar provision of state or local tax law, as applicable, or any other event (including the execution of a Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.
“Dispute” has the meaning set forth in Section 7.08(c) of this Agreement.
“Early Termination Date” means the date of an Early Termination Notice for purposes of determining an Early Termination Payment or the date of an Individual Early Termination Notice for purposes of determining an Individual Early Termination Payment.
“Early Termination Notice” is defined in Section 4.02 of this Agreement.
“Early Termination Schedule” is defined in Section 4.02 of this Agreement.

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“Early Termination Payment” is defined in Section 4.03(b) of this Agreement.
“Early Termination Rate” means the lesser of (i) 6.5% and (ii) LIBOR plus 100 basis points.
“Exchange” is defined in the recitals of this Agreement, and “Exchanged” and “Exchanging” shall have correlative meanings.  
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Exchange Agreement” means the exchange agreement effective on or about the date hereof, among the Corporation, HLA and the Company Unitholders (as defined therein) from time to time party thereto, as amended.  
“Exchange Basis Schedule” is defined in Section 2.02 of this Agreement.
“Exchange Date” is defined in the recitals of this Agreement.
“Exchange Payment” is defined in Section 5.01 of this Agreement.
“Expert” is defined in Section 7.09 of this Agreement.
“HLA” is defined in the recitals of this Agreement.
“HLA Member” means each direct owner of a membership interest in HLA other than the Corporation.
“Hypothetical Tax Liability” means, with respect to any Taxable Year, the liability for Taxes of the Corporation (and/or HLA, but only with respect to Taxes imposed on HLA and allocable to the Corporation) using the same methods, elections, conventions and similar practices used on the relevant Corporation Return (and/or Tax Return of HLA) but using the Non-Stepped Up Tax Basis instead of the tax basis reflecting the Basis Adjustments of the Adjusted Assets and excluding any deduction attributable to Imputed Interest; provided, that for purposes of determining the Hypothetical Tax Liability, the combined tax rate for U.S. state and local Taxes shall be the Assumed State and Local Tax Rate.
“Imputed Interest” shall mean any interest imputed under section 1272, 1274 or 483 or other provision of the Code with respect to the Corporation’s payment obligations under this Agreement.
“Individual Early Termination Notice” is defined in Section 4.02 of this Agreement.
“Individual Early Termination Payment” is defined in Section 4.03(c) of this Agreement.

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“Individual Valuation Assumptions” shall mean, as of an Early Termination Date, the assumptions that (1) in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully utilize the deductions arising from the Basis Adjustment and the Imputed Interest during such Taxable Year, (2) the federal income tax rates and state and local income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other law as in effect on the Early Termination Date, (3) any loss carryovers generated by the Basis Adjustment or the Imputed Interest and available as of the date of the Early Termination Schedule will be utilized by the Corporation on a pro rata basis from the date of the Early Termination Schedule through the scheduled expiration date of such loss carryovers, and (4) any non-amortizable assets are deemed to be disposed of in a fully taxable transaction for U.S. federal income Tax purposes on the fifteenth anniversary of the earlier of the Basis Adjustment and the Early Termination Date.
“Initial Sale” is defined in the recitals of this Agreement.
“IPO” is defined in the recitals of this Agreement.
“IPO Date” means the date on which Class A Shares in the Corporation are sold in an initial public offering.
“LIBOR” means for each month (or portion thereof) during any period, an interest rate per annum equal to the rate per annum reported, on the date two days prior to the first day of such month, on the Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page “LIBO” or by any other publicly available source of such market rate) for London interbank offered rates for U.S. dollar deposits for such month (or portion thereof).
“LLC Agreement” means the Fourth Amended and Restated Limited Liability Company Agreement of HLA, as such is from time to time amended or restated.
“Market Value” shall mean the closing price of the Class A Shares on the applicable Exchange Date on the national securities exchange or interdealer quotation system on which such Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided that if the closing price is not reported by the Wall Street Journal for the applicable Exchange Date, then the Market Value shall mean the closing price of the Class A Shares on the Business Day immediately preceding such Exchange Date on the national securities exchange or interdealer quotation system on which such Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided, further, that if the Class A Shares are not then listed on a national securities exchange or interdealer quotation system, “Market Value” shall mean the cash consideration paid for Class A Shares, or the fair market value of the other property delivered for Class A Shares, as determined by the Board in good faith.
“Material Objection Notice” has the meaning set forth in Section 4.02 of this Agreement.
“Net Tax Benefit” has the meaning set forth in Section 3.01(b) of this Agreement.

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“Non-Stepped Up Tax Basis” means, with respect to any asset at any time, the tax basis that such asset would have had at such time if no Basis Adjustment had been made.
“Objection Notice” has the meaning set forth in Section 2.04(a) of this Agreement.
“Partner” means each HLA Member (other than the Corporation), each owner of an equity interest in an HLA Member and each other Person who from time to time executes a joinder to this Agreement in form and substance reasonably satisfactory to the Corporation.  For the avoidance of doubt, Schedule 1 hereto may provide limitations on the extent to which benefits of this Agreement may be available to a particular Partner.
“Payment Date” means any date on which a payment is required to be made pursuant to this Agreement.
“Permitted Transferee” has the meaning set forth in Section 4.1 of the Exchange Agreement.
“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
“Pre-Exchange Transfer” means any transfer (including upon the death of a Partner) of one or more Units (i) that occurs prior to an Exchange of such Units, and (ii) to which section 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 liability for Taxes of the Corporation (or HLA, but only with respect to Taxes imposed on HLA and allocable to the Corporation for such Taxable Year), such actual Tax liability to be computed with the adjustments described in this Agreement.  If all or a portion of the actual liability for Taxes of the Corporation, or HLA (but only with respect to Taxes imposed on HLA and allocable to the Corporation for such Taxable Year), for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.
“Realized Tax Detriment” means, for a Taxable Year, the excess, if any, of the actual liability for Taxes of the Corporation (or HLA, but only with respect to Taxes imposed on HLA and allocable to the Corporation for such Taxable Year) over the Hypothetical Tax Liability for such Taxable Year, such actual Tax liability to be computed with the adjustments described in this Agreement.  If all or a portion of the actual liability for Taxes of the Corporation, or HLA (but only with respect to Taxes imposed on HLA and allocable to the Corporation for such Taxable Year), for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.

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“Reconciliation Dispute” has the meaning set forth in Section 7.09 of this Agreement.
“Reconciliation Procedures” has the meaning set forth in Section 2.04(a) of this Agreement.
“Rules” has the meaning set forth in Section 7.08(c) of this Agreement.
“Schedule” means any Exchange Basis Schedule, Tax Benefit Schedule or Early Termination Schedule.
“Senior Obligations” has the meaning set forth in Section 5.01 of this Agreement.
“Share of Liabilities” means, as to any Unit at the time of an exchange, the portion of HLA partnership liabilities allocated to that Unit pursuant to section 752 of the Code and the applicable Treasury Regulations in the hands of the Applicable Partner immediately before the transfer to the Corporation.
“Specified Partner” means any Applicable Partner whose Individual Early Termination Payment will be greater than (i) an amount initially determined by the Board or (ii) a subsequent amount determined by the Board from time to time provided such subsequent amount is greater than the amount determined by the Board immediately preceding such subsequent amount.  
“Subsidiaries” means, with respect to any Person, as of any date of determination, any other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than 50% of the voting shares or other similar interests or the sole general partner interest or managing member or similar interest of such Person.
“Tax Benefit Payment” is defined in Section 3.01(b) of this Agreement.
“Tax Benefit Schedule” is defined in Section 2.03 of this Agreement.
“Tax Return” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return and declaration of estimated Tax.
“Taxable Year” means, for the Corporation or HLA, as the case may be, a taxable year as defined in section 441(b) of the Code or comparable section of state or local tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made) ending on or after an Exchange Date in which there is a Basis Adjustment due to an Exchange.
“Taxes” means any and all U.S. federal, state and local taxes, assessments or similar charges that are based on or measured with respect to net income or profits, whether on an exclusive or on an alternative basis, and any interest related to such Tax.

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“Taxing Authority” shall mean any domestic, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising Tax regulatory authority.
“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.
“Unit” is defined in the recitals of this Agreement.
“Valuation Assumptions” shall mean, as of an Early Termination Date, the assumptions that (1) in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully utilize the deductions arising from the Basis Adjustment and the Imputed Interest during such Taxable Year, (2) the federal income tax rates and state and local income tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other law as in effect on the Early Termination Date, (3) any loss carryovers generated by the Basis Adjustment or the Imputed Interest and available as of the date of the Early Termination Schedule will be utilized by the Corporation on a pro rata basis from the date of the Early Termination Schedule through the scheduled expiration date of such loss carryovers, (4) any non-amortizable assets are deemed to be disposed of in a fully taxable transaction for U.S. federal income Tax purposes on the fifteenth anniversary of the earlier of the Basis Adjustment and the Early Termination Date, and (5) if, at the Early Termination Date, there are Units that have not been Exchanged, then each such Unit shall be deemed to be Exchanged for the Market Value of the Class A Shares and the amount of cash that would be transferred if the Exchange occurred on the Early Termination Date.
ARTICLE II 
 
DETERMINATION OF REALIZED TAX BENEFIT
Section 2.01    Applicable Principles.  Subject to Section 3.03, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of the Corporation for such Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology.  The actual liability for Taxes will take into account the deduction of the portion of the Tax Benefit Payments that must be accounted for as Imputed Interest under the Code based upon the characterization of the entire amount of such Tax Benefit Payments as additional consideration payable by the Corporation for the Units acquired in an Exchange.  Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments and the Imputed Interest shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income Tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type.  If a carryover or carryback of any Tax item includes a portion that is attributable to the Basis Adjustment or the Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology.  All Tax Benefit Payments (other than 

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amounts accounted for as Imputed Interest under the Code) will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments to Adjusted Assets for the Corporation and (B) have the effect of creating additional Basis Adjustments to Adjusted Assets for the Corporation in the year of payment, and, as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.
Section 2.02    Exchange Basis Schedule.  Within 90 calendar days after the filing of the U.S. federal income Tax Return of HLA for each Taxable Year in which any Exchange has been effected, the Corporation shall deliver to the Applicable Partner a schedule (the “Exchange Basis Schedule”) that shows, in reasonable detail, for purposes of Taxes, (i) the actual unadjusted tax basis of the Adjusted Assets as of each applicable Exchange Date, (ii) the Basis Adjustment with respect to the Adjusted Assets as a result of the Exchanges effected in such Taxable Year and all prior Taxable Years, calculated (a) in the aggregate and (b) solely with respect to Exchanges by the Applicable Partner, (iii) the period or periods, if any, over which the Adjusted Assets are amortizable and/or depreciable and (iv) the period or periods, if any, over which each Basis Adjustment is amortizable and/or depreciable (which, for non-amortizable assets shall be based on the Valuation Assumptions).
Section 2.03    Tax Benefit Schedule.  Within 90 calendar days after the filing of the U.S. federal income Tax Return of the Corporation for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment, the Corporation shall provide to the Applicable Partner a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year (a “Tax Benefit Schedule”).  The Schedule will become final as provided in Section 2.04(a) of this Agreement and may be amended as provided in Section 2.04(b) of this Agreement (subject to the procedures set forth in Section 2.04(b)).
Section 2.04    Procedures, Amendments
(a)    Procedure.  Every time the Corporation delivers to the Applicable Partner an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.04(b), but excluding any Early Termination Schedule or amended Early Termination Schedule, the Corporation shall also (i) deliver to any Specified Partner schedules and work papers providing reasonable detail regarding the preparation of the Schedule and (ii) allow any Specified Partner reasonable access at no cost to the appropriate representatives at the Corporation and the Advisory Firm in connection with a review of such Schedule.  The applicable Schedule shall become final and binding on all parties unless the Applicable Partner, within 30 calendar days after receiving an Exchange Basis Schedule or amendment thereto or within 30 calendar days after receiving a Tax Benefit Schedule or amendment thereto, provides the Corporation with notice of a material objection to such Schedule (“Objection Notice”) made in good faith.  If the parties, for any reason, are unable to successfully resolve the issues raised in such notice within 30 calendar days of receipt by the Corporation of an Objection Notice, the Corporation and the Applicable Partner shall employ the reconciliation procedures as described in Section 7.09 of this Agreement (the “Reconciliation Procedures”).

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(b)    Amended Schedule.  An applicable Schedule for any Taxable Year shall be amended from time to time by the Corporation (i) in connection with a Determination affecting such Schedule, (ii) to correct material inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the Applicable Partner or the correction of computational errors set forth in such Schedule, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a material change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or other tax item to such Taxable Year, (v) to reflect a material change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year, or (vi) to adjust the Exchange Basis Schedule to take into account payments made pursuant to this Agreement (such Schedule, an “Amended Schedule”).  
ARTICLE III 
 
TAX BENEFIT PAYMENTS
Section 3.01    Payments
(a)    Within fifteen (15) calendar days of a Tax Benefit Schedule delivered to an Applicable Partner becoming final in accordance with Section 2.04(a), or earlier in the Corporation’s discretion, the Corporation shall pay to the Applicable Partner for such Taxable Year the Tax Benefit Payment determined pursuant to Section 3.01(b) in the amount Attributable to the Applicable Partner.  Each such Tax Benefit Payment shall be made by electronic payment to a bank account of the Applicable Partner previously designated by such Partner to the Corporation or, if no such account has been designated, by check.  For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including, without limitation, federal income tax payments.
(b)    A “Tax Benefit Payment” means an amount, not less than zero, equal to the sum of the Net Tax Benefit and the Interest Amount.  The “Net Tax Benefit” for each Taxable Year shall be an amount equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year over the total amount of payments previously made under this Section 3.01, excluding payments attributable to any Interest Amount; provided, however, that for the avoidance of doubt, no Partner shall be required to return any portion of any previously made Tax Benefit Payment.  The “Interest Amount” for a given Taxable Year shall equal the interest on the Net Tax Benefit for such Taxable Year calculated at the Agreed Rate from the due date (without extensions) for filing the Corporation Return with respect to Taxes for the most recently ended Taxable Year until the Payment Date.  In the case of a Tax Benefit Payment made in respect of an Amended Schedule, the “Interest Amount” shall equal the interest on the Net Tax Benefit for such Taxable Year calculated at the Agreed Rate from the date of such Amended Schedule becoming final in accordance with Section 2.04(a) until the Payment Date.  The Net Tax Benefit and the Interest Amount shall be determined separately with respect to each separate Exchange, on a Unit-by-Unit basis by reference to the Exchange of a Unit and the resulting Basis Adjustment to the Corporation.  

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Notwithstanding any provision of this Agreement to the contrary, any Partner may elect with respect to any Exchange to limit the aggregate Tax Benefit Payments made to such Partner in respect of any such Exchange to a specified dollar amount or specified percentage of the Amount Realized by such Partner with respect to such Exchange (or such other limitation selected by the Partner and consented to by the Corporation, which consent shall not be unreasonably withheld).  The Partner shall exercise its rights under the preceding sentence by notifying the Corporation of its desire to impose such a limit and the specified percentage (or such other limitation selected by the Partner) and such other details as may be necessary (including whether such limit includes the Interest Amounts in respect of any such Exchange) in the Exchange Notice delivered by such Partner with respect to such Exchange in accordance with Section 2.1(a)(ii) of the Exchange Agreement.  
(c)    The Corporation shall use commercially reasonable efforts to ensure that it has sufficient Available Cash to make all payments due under this Agreement without regard to the last sentence of Section 4.01(d), including using commercially reasonable efforts to cause HLA to make distributions to the Corporation to make such payments so long as there is not a continuing default or event of default under any credit agreement, loan agreement, note, indenture or other agreement governing indebtedness of HLA or any of its Subsidiaries or the Corporation and such distribution by HLA or payment by the Corporation would not give rise to a default under any such credit agreement, loan agreement, note, indenture or other agreement governing indebtedness of HLA or any of its Subsidiaries or the Corporation.  
Section 3.02    No Duplicative Payments.  It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement.  It is also intended that the provisions of this Agreement will result in 85% of the Cumulative Net Realized Tax Benefit, and the Interest Amount thereon, being paid to the Partners pursuant to this Agreement.  The provisions of this Agreement shall be construed in the appropriate manner so that these fundamental results are achieved.
Section 3.03    Pro Rata Payments.  For the avoidance of doubt, to the extent (i) the Corporation’s deductions with respect to any Basis Adjustment are limited in a particular Taxable Year or (ii) the Corporation lacks sufficient funds to satisfy its obligations to make all Tax Benefit Payments due in a particular Taxable Year, the limitation on the deductions, or the Tax Benefit Payments that may be made, as the case may be, shall be taken into account or made for the Partners in the same proportion as Tax Benefit Payments would have been made absent the limitations set forth in clauses (i) and (ii) of this paragraph, as applicable.
Section 3.04    Remedial Allocation Method. In the event that the remedial allocation method shall be elected with respect to the gain or loss on disposition of any HLA asset that is a partnership interest for U.S. federal income Tax purposes, then with respect to each item of loss allocated to the Corporation as a remedial item upon the disposition of such a partnership interest, the Corporation shall be required to pay to the HLA Members an aggregate amount of cash equal to 85% of the actually realized net tax savings for the Corporation that is attributable to such loss, calculated on a with and without basis as determined by the Corporation in its reasonable discretion, and such payment from the Corporation shall be divided among such 

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HLA Members in proportion to their respective Percentage Interests in HLA. Payments under this Section 3.04 shall be made within 90 calendar days after the filing of the U.S. federal income Tax Return of the Corporation for the relevant Taxable Year.
ARTICLE IV 
 
TERMINATION
Section 4.01    Early Termination and Breach of Agreement.
(a)    The Corporation may terminate this Agreement with respect to all of the Units held (or previously held and exchanged) by all Partners at any time by paying to all of the Partners the Early Termination Payment; provided, however, that this Agreement shall terminate only upon the receipt of the Early Termination Payment by all Partners, and provided, further, that the Corporation may withdraw any notice to execute its termination rights under this Section 4.01(a) prior to the time at which any Early Termination Payment has been paid.  Upon payment of the Early Termination Payments by the Corporation under this Section 4.01(a), neither the Applicable Partners nor the Corporation shall have any further payment obligations under this Agreement in respect of such Partners, other than for any (a) Tax Benefit Payment agreed to by the Corporation and an Applicable Partner as due and payable but unpaid as of the Early Termination Notice and (b) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Early Termination Notice (except to the extent that the amount described in clause (b) is included in the Early Termination Payment).  For the avoidance of doubt, if an Exchange occurs after the Corporation makes the Early Termination Payments with respect to all Partners, the Corporation shall have no obligations under this Agreement with respect to such Exchange, and its only obligations under this Agreement with respect to such Exchange in such case shall be its obligations to all Partners under Section 4.03(a).
(b)    The Corporation may terminate the rights under this Agreement of any Partner who is not a Specified Partner with respect to Exchanges occurring prior to the date thereof at any time by paying to such Partner an Individual Early Termination Payment as calculated with respect to such Partner (taking into account only those Exchanges that have occurred prior to the date thereof, and for the avoidance of doubt not taking into account Units not yet Exchanged, nor taking into account Units Exchanged in prior Exchanges for which Individual Early Termination Payments have already been received); provided, however, that the Corporation may withdraw any notice to execute its termination rights under this Section 4.01(b) prior to the time at which any Individual Early Termination Payment has been paid.  Upon payment of the Individual Early Termination Payment by the Corporation to such Partner, neither the Applicable Partner nor the Corporation shall have any further payment obligations under this Agreement in respect of such Exchanges by such Partner, other than for any (a) Tax Benefit Payment agreed to by the Corporation and such Partner as due and payable but unpaid as of the Individual Early Termination Notice and (b) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Individual Early Termination Notice (except to the extent that the amount described in clause (b) is included in the Individual Early Termination Payment).  For the avoidance of doubt, a termination pursuant to this Section 4.01(b) shall not impact the 

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rights or obligations of the Corporation and such Partner with respect to Exchanges occurring after the date of such termination.
(c)    In the event of a Change of Control, all obligations hereunder shall be accelerated and such obligations shall be calculated pursuant to this Article IV as if an Early Termination Notice had been delivered on the closing date of the Change of Control and utilizing the Valuation Assumptions by substituting the phrase “the closing date of a Change of Control” in each place where the phrase “Early Termination Date” appears. Such obligations shall include, but not be limited to, (1) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the closing date of the Change of Control, (2) any Tax Benefit Payments agreed to by the Corporation and the Partners as due and payable but unpaid as of the Early Termination Notice and (3) any Tax Benefit Payments due for any Taxable Year ending prior to, with or including the closing date of a Change of Control (except to the extent that any amounts described in clauses (2) or (3) are included in the Early Termination Payment). For the avoidance of doubt, Sections 4.02 and 4.03 shall apply to a Change of Control, mutadis mutandi.
(d)    In the event that the Corporation breaches any of its material obligations under this Agreement with respect to one or more Partners, whether as a result of failure to make any payment when due, failure to honor any other material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise, and does not cure such breach within ninety (90) days of receipt of notice of such breach from such Partner or Partners, then all obligations hereunder with respect to such Partner or Partners shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such breach and shall include, but not be limited to, (1) an Early Termination Payment calculated with respect to such Partner or Partners pursuant to Section 4.01(a) as if an Early Termination Notice had been delivered to such Partner or Partners on the date of the breach, (2) any Tax Benefit Payment agreed to by the Corporation and such Partner or Partners as due and payable but unpaid as of the date of a breach, and (3) any Tax Benefit Payment due to such Partner or Partners for the Taxable Year ending with or including the date of a breach (except to the extent that any amounts described in clauses (2) or (3) are included in the Early Termination Payment).  Notwithstanding the foregoing, in the event that the Corporation breaches any of its material obligations under this Agreement with respect to one or more Partners, such Partners shall be entitled to elect to receive the amounts set forth in clauses (1), (2) and (3), above or to seek specific performance of the terms hereof.  The parties agree that the Corporation’s failure to make any payment due pursuant to this Agreement within three months of the date such payment is due shall be deemed to be a breach of a material obligation under this Agreement for all purposes of this Agreement; provided, that it will not be considered to be a breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three months of the date such payment is due; provided, further, that the failure to make any payment due pursuant to this Agreement as a result of (a) a prohibition, restriction or covenant under any credit agreement, loan agreement, note, indenture or other agreement governing indebtedness of HLA or any of its Subsidiaries or the Corporation or (b) restrictions under applicable law shall not be considered to be a breach of a material obligation under this Agreement. 

15

(e)    The undersigned parties hereby acknowledge and agree that the timing, amounts and aggregate value of Tax Benefit Payments pursuant to this Agreement are not reasonably ascertainable.
Section 4.02    Early Termination Notice.  If the Corporation chooses to exercise its right of early termination under Section 4.01(a) or Section 4.01(b) above, the Corporation shall deliver to each Partner whose rights are being terminated notice of such intention to exercise such right (an “Early Termination Notice” in the case of an early termination under Section 4.01(a) or an “Individual Early Termination Notice” in the case of an early termination under Section 4.01(b)) and a schedule (the “Early Termination Schedule”) specifying the Corporation’s intention to exercise such right and showing in reasonable detail the calculation of the Early Termination Payment or Individual Early Termination Payment with respect to such Partner.  The applicable Early Termination Schedule shall become final and binding on the Corporation and such Partner unless such Partner, within 30 calendar days after receiving the Early Termination Schedule provides the Corporation with notice of a material objection to such Schedule made in good faith (“Material Objection Notice”).  If the parties, for any reason, are unable to successfully resolve the issues raised in such notice within 30 calendar days after receipt by the Corporation of the Material Objection Notice, the Corporation and the Partner shall employ the Reconciliation Procedures as described in Section 7.09 of this Agreement.
Section 4.03    Payment upon Early Termination.
(a)    Within fifteen (15) calendar days after agreement between the Applicable Partner and the Corporation of an Early Termination Schedule, the Corporation shall pay to the Applicable Partner an amount equal to the Early Termination Payment or the Individual Early Termination Payment, as the case may be.  Such payment shall be made by wire transfer of immediately available funds to a bank account designated by the Applicable Partner.
(b)    The “Early Termination Payment” as of the date of the delivery of an Early Termination Schedule shall equal with respect to the Applicable Partner the present value, discounted at the Early Termination Rate as of such date, of all Tax Benefit Payments that would be required to be paid by the Corporation to the Applicable Partner beginning from the Early Termination Date and assuming that the Valuation Assumptions are applied.
(c)    The “Individual Early Termination Payment” as of the date of the delivery of an Early Termination Schedule shall equal with respect to the Applicable Partner the present value, discounted at the Early Termination Rate as of such date, of all Tax Benefit Payments that would be required to be paid by the Corporation to the Applicable Partner beginning from the Early Termination Date and assuming that the Individual Valuation Assumptions are applied (taking into account only those Exchanges that have occurred prior to the date of the applicable Individual Early Termination Notice, and for the avoidance of doubt not taking into account Units not yet Exchanged, nor taking into account Units Exchanged in prior Exchanges for which Individual Early Termination Payments have already been received).

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ARTICLE V 
 
SUBORDINATION AND LATE PAYMENTS
Section 5.01    Subordination.  Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment, Early Termination Payment or Individual Early Termination Payment required to be made by the Corporation to a Partner or to the Partners under this Agreement (an “Exchange Payment”) shall rank subordinate and junior in right of payment to any principal, interest or other amounts due and payable in respect of any current or future obligations in respect of indebtedness for borrowed money of the Corporation and its Subsidiaries (“Senior Obligations”) and shall rank pari passu with all current or future unsecured obligations of the Corporation that are not Senior Obligations.
Section 5.02    Late Payments by the Corporation.  The amount of all or any portion of any Exchange Payment not made to any Partner when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing from the date on which such Exchange Payment was due and payable.
ARTICLE VI 
 
NO DISPUTES; CONSISTENCY; COOPERATION
Section 6.01    Partner Participation in the Corporation’s and HLA’s Tax Matters.  Except as otherwise provided herein, the Corporation shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporation and HLA, including without limitation the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes.  Notwithstanding the foregoing, the Corporation shall notify the Partners of, and keep the Partners reasonably informed with respect to the portion of any audit of the Corporation and HLA by a Taxing Authority the outcome of which is reasonably expected to affect the Partners’ rights and obligations under this Agreement, and shall provide to the Partners reasonable opportunity to provide information and other input to the Corporation, HLA and their respective advisors concerning the conduct of any such portion of such audit; provided, however, that the Corporation and HLA shall not be required to take any action that is inconsistent with any provision of the LLC Agreement.
Section 6.02    Consistency.  The Corporation and the Partners agree to report and cause to be reported for all purposes, including federal, state, local and foreign Tax purposes and financial reporting purposes, all Tax-related items (including without limitation the Basis Adjustment and each Tax Benefit Payment) in a manner consistent with that specified by the Corporation in any Schedule required to be provided by or on behalf of the Corporation under this Agreement unless the Corporation or a Partner receives a written opinion from an Advisory Firm that reporting in such manner is more likely than not to result in an imposition of penalties pursuant to the Code.  Any Dispute concerning such advice shall be subject to the terms of Section 7.09.

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Section 6.03    Cooperation.  The Partners shall each (a) furnish to the Corporation in a timely manner such information, documents and other materials as the Corporation may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself available to the Corporation and its representatives to provide explanations of documents and materials and such other information as the Corporation or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and the Corporation shall reimburse each Partner for any reasonable third-party costs and expenses incurred pursuant to this Section.
ARTICLE VII 
 
MISCELLANEOUS
Section 7.01    Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given and received (a) on the date of delivery if delivered personally, or by facsimile upon confirmation of transmission by the sender’s fax machine if sent on a Business Day (or otherwise on the next Business Day) or (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
if to the Corporation, to:
One Presidential Blvd., 4th Floor
Bala Cynwyd, PA 19004
Phone: (610) 617-6076
Fax: (610) 617-9854
Attention: General Counsel

with a copy to:

Drinker Biddle &Reath LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103-6996
Phone:  (215) 988-2700
Fax:  (215) 988-2757
Attention:  H. John Michel, Jr., Esq.
    

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if to HLA, to:
One Presidential Blvd., 4th Floor
Bala Cynwyd, PA 19004
Phone: (610) 617-6076
Fax: (610) 617-9854
Attention: General Counsel

with a copy to:
Drinker Biddle &Reath LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103-6996
Phone:  (215) 988-2700
Fax:  (215) 988-2757
Attention:  H. John Michel, Jr., Esq.

if to the Partners or any Partner, to:
the address and facsimile number set forth for such Partner in the records of HLA.
Any party may change its address or fax number by giving the other party written notice of its new address or fax number in the manner set forth above.
Section 7.02    Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.  Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 7.03    Entire Agreement.  This Agreement, the Exchange Agreement and the LLC 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 members, successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 7.04    Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the Commonwealth of Pennsylvania (and, to the extent applicable, federal law), without regard to the conflicts of laws principles thereof that would mandate the application of the laws of another jurisdiction.

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Section 7.05    Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 7.06    Successors; Assignment; Amendments; Waivers.  No Partner may assign its rights under this Agreement to any person without the prior written consent of the Corporation; provided, however, (i) that, to the extent Units are effectively transferred in accordance with the terms of the LLC Agreement, the transferring Partner shall assign to the transferee of such Units the transferring Partner’s rights under this Agreement with respect to such transferred Units, as long as such transferee has executed and delivered, or, in connection with such transfer, executes and delivers, a joinder to this Agreement, in form and substance reasonably satisfactory to the Corporation, agreeing to become a “Partner” for all purposes of this Agreement, except as otherwise provided in such joinder, and (ii) that, once an Exchange has occurred, any and all payments that may become payable to a Partner pursuant to this Agreement with respect to such Exchange may be assigned to any Person or Persons, as long as any such Person has executed and delivered, or, in connection with such assignment, executes and delivers, a joinder to this Agreement, in form and substance reasonably satisfactory to the Corporation, agreeing to be bound by Section 7.12 and acknowledging specifically the last sentence of the next paragraph.  For the avoidance of doubt, to the extent a Partner or other Person transfers Units to a Partner as may be permitted by the LLC Agreement, the Partner receiving such Units shall have all rights under this Agreement with respect to such transferred Units as such Partner has, under this Agreement, with respect to the other Units held by him.
No provision of this Agreement may be amended unless such amendment is approved in writing by each of the Corporation and HLA, and by Partners who would be entitled to receive at least two-thirds of the Early Termination Payments payable to all Partners hereunder if the Corporation had exercised its right of early termination under Section 4.01(a) on the date of the most recent Exchange prior to such amendment (excluding, for purposes of this sentence, all payments made to any Partner pursuant to this Agreement since the date of such most recent Exchange); provided, that no such amendment shall be effective if such amendment will have a disproportionate effect on the payments certain Partners will or may receive under this Agreement unless at least two-thirds of such Partners disproportionately effected (with such two-thirds threshold being measured by the entitlement to Early Termination Payments as set forth in the preceding portion of this sentence) consent in writing to such amendment.  No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.
All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by, the parties hereto and their respective 

20

successors, assigns, heirs, executors, administrators and legal representatives.  The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.
Section 7.07    Titles and Subtitles.  The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
Section 7.08    Submission to Jurisdiction; Dispute Resolution.
(a)    Except as provided in Section 7.09, any Dispute as to the interpretation of this Agreement shall be resolved by the Corporation in its sole discretion, provided that such resolution shall reflect a reasonable interpretation of the provisions of this Agreement and that such resolution shall not be inconsistent with the fundamental results described in Section 3.02 of this Agreement.
(b)    The remainder of this Section 7.08 shall not apply with respect to claims of a Specified Partner arising out of, relating to or in connection with the validity, negotiation, execution, performance or non-performance of this Agreement.
(c)    Except as otherwise expressly provided by Section 7.08(a) or Section 7.09, any dispute, controversy or claim arising out of or in connection with this Agreement, or the interpretation, breach, termination or validity thereof (“Dispute”) shall be finally resolved by arbitration in accordance with the Comprehensive Arbitration Rules and Procedures of JAMS then in effect (the “Rules”), except as modified herein and such arbitration shall be administered by JAMS.  The place of arbitration shall be Philadelphia, PA.
(d)    There shall be one arbitrator who shall be agreed upon by the parties within twenty (20) days of receipt by respondent of a copy of the demand for arbitration.  If any arbitrator is not appointed within the time limit provided herein, such arbitrator shall be appointed by JAMS in accordance with the listing, striking and ranking procedure in the Rules, with each party being given a limited number of strikes, except for cause.  Any arbitrator appointed by JAMS shall be a retired judge or a practicing attorney with no less than fifteen years of experience with corporate and partnership matters and an experienced arbitrator.  In rendering an award, the arbitrator shall be required to follow the laws of the state of Pennsylvania.
(e)    The award shall be in writing and shall briefly state the findings of fact and conclusions of law on which it is based.  The arbitrator shall not be permitted to award punitive, multiple or other non-compensatory damages.  The award shall be final and binding upon the parties and shall be the sole and exclusive remedy between the parties regarding any claims, counterclaims, issues or accounting presented to the arbitrator.  Judgment upon the award may be entered in any court having jurisdiction over any party or any of its assets.  Any costs or 

21

fees (including attorneys’ fees and expenses) incident to enforcing the award shall be charged against the party resisting such enforcement.
(f)    All Disputes shall be resolved in a confidential manner.  The arbitrator shall agree to hold any information received during the arbitration in the strictest of confidence and shall not disclose to any non-party the existence, contents or results of the arbitration or any other information about such arbitration.  The parties to the arbitration shall not disclose any information about the evidence adduced or the documents produced by the other party in the arbitration proceedings or about the existence, contents or results of the proceeding except as may be required by law, regulatory or governmental authority or as may be necessary in an action in aid of arbitration or for enforcement of an arbitral award.  Before making any disclosure permitted by the preceding sentence (other than private disclosure to financial regulatory authorities), the party intending to make such disclosure shall use reasonable efforts to give the other party reasonable written notice of the intended disclosure and afford the other party a reasonable opportunity to protect its interests.
(g)    Barring extraordinary circumstances (as determined in the sole discretion of the arbitrator), discovery shall be limited to pre-hearing disclosure of documents that each side will present in support of its case, and non-privileged documents essential to a matter of import in the proceeding for which a party has demonstrated a substantial need.  The parties agree that they will produce to each other all such requested non-privileged documents, except documents objected to and with respect to which a ruling has been or shall be sought from the arbitrator.  There will be no depositions.
Section 7.09    Reconciliation.  In the event that the Corporation and an Applicable Partner are unable to resolve a disagreement with respect to the matters governed by Section 2.04, 4.02 or 6.02 within the relevant period designated in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “Expert”) in the particular area of disagreement mutually acceptable to both parties.  The Expert shall be a partner in a nationally recognized accounting firm or a law firm (other than the Advisory Firm), and the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with either the Corporation or the Applicable Partner or other actual or potential conflict of interest.  If the parties are unable to agree on an Expert within fifteen (15) days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by JAMS.  The Expert shall resolve any matter relating to the Exchange Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within 30 calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within 15 calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution.  Notwithstanding the preceding sentence, if the matter is not resolved before the date any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, such payment shall be paid on the date such payment would be due and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution.  The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be 

22

borne jointly by the Corporation and the Applicable Partner, with each party bearing one-half of such costs.  The Corporation and each Applicable Partner shall bear their own costs and expenses of such proceeding.  Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.09 shall be decided by the Expert.  The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.09 shall be binding on the Corporation and the Applicable Partner and may be entered and enforced in any court having jurisdiction.
Section 7.10    Withholding.  The Corporation shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts, if any, as the Corporation is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law.  To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporation, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Applicable Partner.
Section 7.11    Admission of the Corporation into a Consolidated Group.  If the Corporation becomes a member of an affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to sections 1501 et seq. of the Code or any corresponding provisions of state, local or foreign law, then:  (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments, Individual Early Termination Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.
Section 7.12    Confidentiality.  Each Partner and assignee acknowledges and agrees that the information of the Corporation is confidential and, except in the course of performing any duties as necessary for the Corporation and its Affiliates, as required by law or legal process or to enforce the terms of this Agreement, shall keep and retain in the strictest confidence and not disclose to any Person any confidential matters, acquired pursuant to this Agreement, of the Corporation, its Affiliates and successors and the other Partners, confidential information concerning the Corporation, its Affiliates and successors and the other Partners, including marketing, investment, performance data, credit and financial information, and other business affairs of the Corporation, its Affiliates and successors and the other Partners learned of by the Partner heretofore or hereafter.  This Section 7.12 shall not apply to (i) any information that has been made publicly available by the Corporation or any of its Affiliates, becomes public knowledge (except as a result of an act of such Partner in violation of this Agreement) or is generally known to the business community and (ii) the disclosure of information to the extent necessary for a Partner to prepare and file his or her Tax Returns, to respond to any inquiries regarding such Tax Returns 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 Partner and assignee (and each employee, representative or other agent of such Partner or assignee, as applicable) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of (x) the Corporation, HLA, the Partners and their Affiliates and (y) any of their transactions, and all materials of any kind 

23

(including opinions or other tax analyses) that are provided to the Partners relating to such tax treatment and tax structure.
If a Partner or assignee commits a breach, or threatens to commit a breach, of any of the provisions of this Section 7.12, the Corporation shall have the right and remedy to have the provisions of this Section 7.12 specifically enforced by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Corporation or any of its Affiliates or the other Partners and that money damages alone shall not provide an adequate remedy to such Persons.  Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at law or in equity.
Section 7.13    Partnership Agreement.  To the extent this Agreement imposes obligations upon HLA or a member of HLA, this Agreement shall be treated as part of the partnership agreement of HLA as described in section 761(c) of the Code and sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.
Section 7.14    Joinder.  HLA shall have the power and authority (but not the obligation) to permit any Person who becomes a member of HLA to execute and deliver a joinder to this Agreement promptly upon acquisition of membership interests in HLA by such Person, and such Person shall be treated as a “Partner” for all purposes of this Agreement.
[Signature pages follow]

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IN WITNESS WHEREOF, the Corporation, HLA and each HLA Member have duly executed this Agreement as of the date first written above.
	
		
	HAMILTON LANE INCORPORATED

	 
	 

	By:
	 

	 
	Name:

	 
	Title:

	 
	 

	HAMILTON LANE ADVISORS, INC.

	 
	 

	By:
	 

	 
	Name:

	 
	Title:

	 
	 

	HAMILTON LANE ADVISORS, INC.

	 
	 

	By:
	 

	 
	Name: Mario L. Giannini

	 
	Title:   President

	 
	 

	HLA INVESTMENTS, LLC

	 
	 

	By
	HRHLA, LLC, its managing member

	 
	 

	By:
	 

	 
	Name: Hartley Rogers

	 
	Title:   Manager

	 
	 

	HL MANAGEMENT INVESTORS, LLC.

	 
	 

	By:
	 

	 
	Name: Robert W. Cleveland

	 
	Title:   Secretary

	 
	 

	 

	Mario Giannini

	 
	 

	 

	Paul WallerExhibit

EXHIBIT 10.3

FORM OF 
 
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this “Agreement”), dated as of [__________], 2017, is hereby entered into by and among Hamilton Lane Incorporated, a Delaware corporation (the “Corporation”), Hamilton Lane Advisors, L.L.C., a Pennsylvania limited liability company (the “Company”), and the Company Unitholders (as defined herein).
RECITALS
WHEREAS, in connection with the closing of its initial public offering (the “IPO”) of Class A Common Stock (as defined herein), the Corporation intends to consummate the transactions described in the Registration Statement on Form S-1, as amended (Registration No. 333-[_____]); and
WHEREAS, the parties hereto desire to provide for the exchange of Company Exchangeable Units (as defined herein) for cash or shares of Class A Common Stock, on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1    Definitions. The following capitalized terms shall have the meanings specified in this Section 1.1. Other terms are defined in the text of this Agreement and those terms shall have the meanings respectively ascribed to them.
“Advisory Firm” means any accounting firm or law firm, in each case that is nationally recognized as being expert in tax matters and that is agreed to by the Board.
“Agreement” has the meaning set forth in the Preamble.
“Beneficial Ownership” (including correlative terms) shall have the meaning ascribed to that term in Rule 13d-3 promulgated under the Exchange Act.
“Board” means the board of directors of the Corporation.
“Business Day” means any day, other than a Saturday, Sunday or any other day on which commercial banks located in New York City, New York or Philadelphia, Pennsylvania are authorized or required to close.
“Cash Settlement” means immediately available funds in U.S. dollars in an amount equal to the product of (x) the number of shares of Class A Common Stock that would otherwise 

be delivered to a Company Unitholder in an Exchange pursuant to Section 2.1, multiplied by (y) the arithmetic average of the volume weighted average prices for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system on which the Class A Common Stock trades, as reported by The Wall Street Journal or its successor, for each of the three (3) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the Exchange Date, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock. If the Class A Common Stock no longer trades on a securities exchange or automated or electronic quotation system, then the amount specified in clause (y) shall be determined in good faith by a majority of the directors of the Corporation that do not have an interest in the Company Exchangeable Units and shares of Class B Common Stock being Exchanged.
A “Change of Control” means the occurrence of any of the following events:
(i)    any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto, excluding any Permitted Transferee or any group of Permitted Transferees, becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation representing more than fifty percent (50%) of the combined voting power of the Corporation’s then outstanding voting securities; or
(ii)    the following individuals cease for any reason to constitute a majority of the number of directors of the Corporation then serving: individuals who, on the IPO Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation) whose appointment or election by the Board or nomination for election by the Corporation’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the IPO Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (ii); or
(iii)    there is consummated a merger or consolidation of the Corporation or any direct or indirect subsidiary of the Corporation with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of the Corporation immediately prior to such merger or consolidation do not Beneficially Own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the Person resulting from such merger or consolidation; or
(iv)    the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation, or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets, other than the sale or other disposition by the 

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Corporation of all or substantially all of the Corporation’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are Beneficially Owned by shareholders of the Corporation in substantially the same proportions as their Beneficial Ownership of such securities of the Corporation immediately prior to such sale.
“Change of Control Exchange” has the meaning set forth in Section 2.1(c)(i).
“Change of Control Exchange Date” has the meaning set forth in Section 2.1(c)(iii).
“Class A Common Stock” means the Class A Common Stock, par value $0.001 per share, of the Corporation.
“Class B Common Stock” means the Class B Common Stock, par value $0.001 per share, of the Corporation.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in the Preamble.
“Company Class B Unit” means (i) each Class B Unit (as such term is defined in the LLC Agreement) issued as of the date hereof after giving effect to all transactions contemplated to occur by Section 3.2 of the LLC Agreement and (ii) each Class B Unit or other interest in the Company that may be issued by the Company in the future that is designated by the Company as a “Company Class B Unit,” including any interest converted into or exchanged for a Company Class B Unit.
“Company Class C Unit” means (i) each Class C Unit (as such term is defined in the LLC Agreement) issued as of the date hereof after giving effect to all transactions contemplated to occur by Section 3.2 of the LLC Agreement and (ii) each Class C Unit or other interest in the Company that may be issued by the Company in the future that is designated by the Company as a “Company Class C Unit,” including any interest converted into or exchanged for a Company Class C Unit.
“Company Exchangeable Unit” means each Company Class B Unit and each Company Class C Unit.
“Company Units” means all units, including Class A Units (as such term is defined in the LLC Agreement), Company Class B Units and Company Class C Units, issued by the Company and outstanding from time to time.
“Company Unitholder” means each holder of one or more Company Exchangeable Units that is a party hereto as of the date hereof or that becomes a party to this Agreement pursuant to Section 4.1.
“Contribution Notice” has the meaning set forth in Section 2.1(a)(v).
“Corporation” has the meaning set forth in the Preamble.

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“Exchange” has the meaning set forth in Section 2.1(a)(i).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Consideration” shall mean: in the case of any Exchange, the number of shares of Class A Common Stock that is equal to the product of the number of Company Exchangeable Units surrendered in the Exchange multiplied by the Exchange Rate, or the Cash Settlement, plus, in the case of an Exchange of Class B Units (except an Exchange in connection with a Change of Control pursuant to Section 2.1(c)), the amount that is equal to $0.001 multiplied by the number of Class B shares of Common Stock included in the Exchange.
“Exchange Date” has the meaning set forth in Section 2.1(a)(ii).
“Exchange Notice” has the meaning set forth in Section 2.1(a)(ii).
“Exchange Rate” means, in respect of any Exchange, a ratio, the numerator of which shall be the number of shares of Class A Common Stock outstanding immediately prior to the Exchange and the denominator of which shall be the number of Company Units owned by the Corporation immediately prior to the Exchange. On the date of this Agreement, the Exchange Rate shall be 1, subject to adjustment pursuant to Section 2.2.
“HLAI” means HLA Investments, LLC, a Delaware limited liability company.
“IPO” has the meaning set forth in the Recitals.
“IPO Date” means the effective date of the registration statement pursuant to which the Class A Common Stock of the Corporation is sold in an IPO.
“Liquidity Period” means a period established from time to time by the Board (or a committee to which the Board has delegated such authority) during which Exchanges are permitted to take place. A Liquidity Period may apply to all Company Unitholders or may differentiate between Company Unitholders based on the number of Units owned, employment status or other factor, at the discretion of the Board (or a committee to which the Board has delegated such authority).
“LLC Agreement” means the Fourth Amended and Restated Limited Liability Company Agreement of the Company, dated as of the date hereof, as the same may be further amended or restated from time to time in accordance with the terms thereof.
“Management LLC” has the meaning set forth in the LLC Agreement.
“Management LLC Member” has the meaning set forth in the LLC Agreement.
“Managing Member” has the meaning set forth in the LLC Agreement.
“Notice” has the meaning set forth in Section 4.2.

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“Open Window Period” mean any period when there is not a Company-wide prohibition in trading of Class A Common Stock pursuant to the Corporation’s insider trading policy.
“Permitted Transferee” has the meaning set forth in Section 4.1.
“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
“Post-IPO Company Units” means the number of Company Units outstanding after giving effect to the completion of the IPO (after taking into account the delivery of shares of Class A Common Stock to the underwriters in respect of any overallotment option) and the related issuance of Company Units to the Corporation by the Company in exchange for a portion of the proceeds therefrom, as such number of Company Units may be equitably adjusted to reflect any dividend, split, subdivision or combination of shares, or reclassification, recapitalization, merger, consolidation or other reorganization of or with respect to the Company Units occurring subsequent to such time.
“Retraction Notice” has the meaning set forth in Section 2.1(a)(vi).
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Takeover Laws” has the meaning set forth in Section 3.1.
“Tax Receivable Agreement” means that certain Tax Receivable Agreement, dated on or about the date hereof, among the Corporation, the Company and the HLA Members (as defined therein), as the same may be further amended or restated from time to time in accordance with the terms thereof.
“Trading Day” means a day on which the principal U.S. securities exchange on which the Class A Common Stock is listed or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire day).
ARTICLE II
EXCHANGES
Section 2.1    Exchange of Company Exchangeable Units for Class A Common Stock.
(a)    Elective Exchanges.
(i)    Subject to Section 2.1(d), and otherwise upon the terms and subject to the conditions hereof and of the LLC Agreement, each Company Unitholder shall have the right during any Liquidity Period to surrender Company Exchangeable Units, and, for each Company Class B Unit surrendered, a corresponding share of Class B Common Stock (in each case, 

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free and clear of all liens, encumbrances, rights of first refusal and similar restrictions, except for those arising under this Agreement and the LLC Agreement) to the Company and to thereby cause the Company to deliver to that Company Unitholder (or its designee) the Exchange Consideration as set forth herein (an “Exchange”).
(ii)    For the avoidance of doubt, and notwithstanding anything else in this Agreement or the LLC Agreement to the contrary: (A) no Exchange of Class B Units may be made without a concurrent Exchange of an equivalent number of shares of Class B Common Stock; (B) the Corporation may elect to settle an Exchange, in whole or in part, by delivery of the Cash Settlement as to all or any portion of the total number of Company Exchangeable Units being surrendered and delivery of Class A Common Stock as to any remaining portion not satisfied by the Cash Settlement; (C) the Board (or a committee to which the Board has delegated such authority) may, in its sole discretion, deny or limit, in whole or in part, any Exchange that it determines to be detrimental to the Corporation, the Company, or their respective businesses, or that fails to comply with any requirements therefor that the Corporation, the Company, or the Board may have established.
(iii)    The Corporation and the Company may from time to time, upon the consent of a majority of the Board (or a committee to which the Board has delegated such authority), provide notice to each holder of one or more Company Exchangeable Units of a Liquidity Period.
(iv)    A Company Unitholder shall exercise its right to an Exchange of Company Exchangeable Units and, in the case of Company Class B Units, a corresponding number of shares of Class B Common Stock, as set forth in Section 2.1(a) by delivering to the Company, with a contemporaneous copy delivered to the Corporation, in each case during normal business hours at the principal executive offices of the Company and the Corporation, respectively, (A) a written election of exchange in respect of the Company Exchangeable Units to be exchanged substantially in the form of Exhibit A hereto (an “Exchange Notice”), duly executed by such Company Unitholder, (B) any certificates in such Company Unitholder’s possession representing such Company Exchangeable Units, (C) if applicable, any stock certificates in such Company Unitholder’s possession representing the shares of Class B Common Stock required to be surrendered in connection with an Exchange of Class B Units, and (D) such other information, documents or instruments as either the Company or the Corporation may reasonably require in connection with the Exchange. Provided that the items specified in clauses (A)-(D) of the first sentence of this Section 2.1(a)(iv) have been delivered to the Company during a Liquidity Period, and unless such Company Unitholder timely has delivered a Retraction Notice pursuant to Section 2.1(a)(vi) or the Company has refused to honor the request in full pursuant to Section 2.1(a)(ii), an Exchange pursuant to this Section 2.1(a) shall be effected on the last day of such Liquidity Period, or such other date as the Corporation and the Company may determine (the “Exchange Date”). On the Exchange Date, all rights of the exchanging Company Unitholder as a holder of the Company Exchangeable Units and shares of Class B Common Stock that are subject to the Exchange shall cease, and unless the Corporation has elected Cash Settlement as to all Company Exchangeable Units tendered, such Company Unitholder (or its designee) shall be treated for all purposes as having become the record holder of the shares of Class A Common Stock to be received by the exchanging Company Unitholder in respect of such Exchange. 

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(v)    At least two Business Days before the Exchange Date, the Corporation shall give written notice (the “Contribution Notice”) to the Company (with a copy to the exchanging Company Unitholders) of its intended settlement method; provided that if the Corporation does not timely deliver a Contribution Notice, the Corporation shall be deemed not to have elected the Cash Settlement method.
(vi)    Notwithstanding anything herein to the contrary, (x) a Company Unitholder may withdraw or amend its Exchange Notice, in whole or in part, at any time prior to 5:00 p.m. New York City time, on the Business Day immediately prior to the Exchange Date by giving written notice (the “Retraction Notice”) to the Company (with a copy to the Corporation) specifying (A) the number and class of withdrawn Company Exchangeable Units and, as to Company Class B Units, the corresponding number of shares of Class B Common Stock and (B) if any, the number and class of Company Exchangeable Units and, as to Company Class B Units, the corresponding number of shares of Class B Common Stock, as to which the Exchange Notice remains in effect, and (y) a Company Unitholder may specify, in an applicable Exchange Notice, that the Exchange is to be contingent (including as to timing) upon the occurrence of any transaction or event, including the consummation of a purchase by another Person (whether in a tender or exchange offer, an underwritten offering, Change of Control transaction or otherwise) of shares of Class A Common Stock or any merger, consolidation or other business combination. The timely delivery of a Retraction Notice indicating an entire withdrawal of the Exchange Notice pursuant to clause (x) above and, in respect of clause (y) above, the termination of the transaction or event prior to the consummation thereof, shall, in either case, terminate all of the exchanging Company Unitholder’s, Company’s and Corporation’s rights and obligations under this Section 2.1(a) arising from that particular Exchange Notice.
(b)    Liquidity Periods.
(i)    After the expiration of any applicable lock-up agreements entered into in connection with the IPO, but subject to Section 2.1(a)(ii) and Section 2.1(b)(iii) a Liquidity Period during each Open Window Period shall exist for each Company Unitholder who (i) is not a member of the Board, an executive officer of the Company, an employee of the Company or HLA with the title of Managing Director or Principal (or their equivalents), and (ii) would be able to sell     % or more of such Company Unitholders’ Beneficially Owned Class A Common Stock in compliance with Rule 144 without reaching the volume limitation of Rule 144 (as measured as of the first day of the Open Window Period).
(ii)    After the first anniversary of the Effective Date, the Board (or a committee to which the Board has delegated such authority) shall establish a Liquidity Period at least annually for all Company Unitholders, in which Company Unitholders who are members of the Board, executive officers of the Company, and employees of the Company and HLA with the title of Managing Director or Principal (or their equivalents) may each Exchange up to one third of their Company Units (calculated based on the number of Company Units held on the date hereof) annually. 
(iii)    Notwithstanding anything in this Agreement to the contrary, (A) the Company may from time to time impose on any individual or group of Company Unitholders 

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prohibitions on Exchanges when, and (B) nothing in this Agreement shall require the establishment of a Liquidity Period at any time when, in either case (A) or (B), in the reasonable judgment of the Board (or a committee to which the Board has delegated such authority) of the Corporation, permitting such Exchange or sale would cause a detriment to the Corporation or the Company or such prohibition is advisable to comply with, and avoid the appearance of non-compliance with, applicable laws governing the trading of securities by Corporation and Company insiders. 
(c)    Change of Control. In connection with a Change of Control, and subject to any approval of the Change of Control by the holders of Class A Common Stock and Class B Common Stock that may be required under the terms of the relevant agreement or applicable law:
(i)    The Corporation shall have the right to require any Company Unitholder to Exchange some or all of that Company Unitholder’s Company Exchangeable Units and, in the case of Class B Units, a corresponding number of shares of Class B Common Stock (in each case, free and clear of all liens, encumbrances, rights of first refusal and the like) with the Corporation in exchange for the delivery to the exchanging Company Unitholder (or its designee) of a number of shares of Class A Common Stock that is equal to the product of the number of Company Exchangeable Units surrendered multiplied by the Exchange Rate (a “Change of Control Exchange”); provided that, if the Corporation requires the Company Unitholders to Exchange fewer than all of their outstanding Company Exchangeable Units and, as to Company Class B Units, Class B Common Stock, each Company Unitholder’s participation in the required Exchange shall be reduced pro rata. For the avoidance of doubt, any Company Exchangeable Units and, as to Company Class B Units, Class B Common Stock held by a Company Unitholder that are not Exchanged pursuant to a Change of Control Exchange may thereafter be Exchanged by such Company Unitholder pursuant to Section 2.1(a) subject to and in accordance with the terms thereof.
(ii)    The election of the Corporation pursuant to this Section 2.1(b) shall be at the sole discretion of the Corporation upon the approval thereof by a majority of the Board (or a committee to which the Board has delegated such authority).
(iii)    Any Exchange pursuant to this Section 2.1(b) shall be effective immediately prior to the consummation of the Change of Control (and, for the avoidance of doubt, shall not be effective if such Change of Control is not consummated) (the “Change of Control Exchange Date”). From and after the Change of Control Exchange Date, (x) the Company Exchangeable Units and, as to Company Class B Units, shares of Class B Common Stock Exchanged pursuant to this Section 2.1(b) shall be deemed to be transferred to the Corporation on the Change of Control Exchange Date and (y) the exchanging Company Unitholder shall cease to have any rights with respect to the Company Exchangeable Units and, as to Company Class B Units, shares of Class B Common Stock Exchanged pursuant to this Section 2.1(c) (other than the right to receive shares of Class A Common Stock pursuant to Section 2.1(c)(i) upon compliance with its obligations under Section 2.1(c)(v)).
(iv)    The Corporation shall provide written notice of an expected Change of Control to all Company Unitholders within the earlier of (x) five Business Days following the execution of the agreement with respect to such Change of Control and (y) ten Business Days 

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before the proposed date upon which the contemplated Change of Control is to be effected, indicating in such notice such information as may reasonably describe the Change of Control transaction, subject to applicable law, including the date of execution of such agreement or such proposed effective date, as applicable, the amount and types of consideration to be paid for Company Units and shares of Class B Common Stock or shares of Class A Common Stock, as applicable, in the Change of Control (which consideration shall be the same whether paid for (x) Company Units and shares of Class B Common Stock or (y) shares of Class A Common Stock), any election with respect to types of consideration that a holder of Company Exchangeable Units and shares of Class B Common Stock or shares of Class A Common Stock, as applicable, shall be entitled to make in connection with the Change of Control, the percentage of total Company Exchangeable Units and shares of Class B Common Stock or shares of Class A Common Stock, as applicable, to be transferred to the acquirer by all shareholders in the Change of Control, and the number of Company Exchangeable Units and shares of Class B Common Stock held by each Company Unitholder that the Corporation intends to require to be Exchanged for shares of Class A Common Stock in connection with the Change of Control. The Corporation shall update such notice from time to time to reflect any material changes to the information contained in it. The Corporation may satisfy any such notice and update requirements described in the preceding two sentences by providing such information on a Form 8-K, Schedule TO, Schedule 14D-9 or similar form filed with the SEC. 
(v)    On or prior to the Change of Control Exchange Date, the Company Unitholder shall deliver to the Corporation with a contemporaneous copy delivered to the Company, in each case during normal business hours at the principal executive offices of the Company and the Corporation, respectively:  (A) an Exchange Notice, duly executed by such Company Unitholder, (B) any certificates in such Company Unitholder’s possession representing all Company Exchangeable Units being surrendered by the Company Unitholder, (C) if applicable, any stock certificates in such Company Unitholder’s possession representing all shares of Class B Common Stock being surrendered by the Company Unitholder, and (D) such other information, documents, and instruments as the Corporation or the Company may require.
(d)    Exchange Consideration. On the Exchange Date or Change of Control Exchange Date, as applicable, provided the Company Unitholder has satisfied its obligations under Section 2.1(a)(ii) or Section 2.1(c)(v), as applicable, the Company or the Corporation, as applicable, shall deliver or cause to be delivered to such Company Unitholder (or its designee), at the address set forth on the applicable Exchange Notice, either certificates representing the number of shares of Class A Common Stock deliverable upon the applicable Exchange, registered in the name of the relevant exchanging Company Unitholder (or its designee) or, if the Corporation has so elected, the Cash Settlement, as applicable. Notwithstanding the foregoing, the Corporation shall have the right but not the obligation (in lieu of the Company) to have the Corporation acquire the Company Exchangeable Units and, as to Company Class B Units, Class B Common Stock any Company Unitholder is requesting to be exchanged pursuant to Section 2.1(a) or the Corporation is requiring to be exchanged pursuant to Section 2.1(b) directly from such Company Unitholder in exchange for shares of Class A Common Stock or, in the case of an exchange pursuant to Section 2.1(a), at the option of the Corporation, the Cash Settlement. If an exchanging Company Unitholder receives the shares of Class A Common Stock or the Cash Settlement that such Company Unitholder is entitled to receive in connection with an Exchange pursuant to Section 2.1(a) from the Corporation 

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pursuant to this Section 2.1(d), the Company Unitholder shall have no further right to receive shares of Class A Common Stock from the Company in connection with that Exchange. Notwithstanding anything set forth in this Section 2.1(d) to the contrary, to the extent the Class A Common Stock is settled through the facilities of The Depository Trust Company, the Company or the Corporation will, upon the written instruction of an exchanging Company Unitholder, deliver the shares of Class A Common Stock deliverable to such exchanging Company Unitholder through the facilities of The Depository Trust Company to the account of the participant of The Depository Trust Company designated by such exchanging Company Unitholder in the Exchange Notice. Upon a Company Unitholder exercising its right to Exchange or the occurrence of a Change of Control Exchange, the Company or the Corporation, as applicable, shall take such actions as (A) may be required to ensure that such Company Unitholder receives the shares of Class A Common Stock or the Cash Settlement that such exchanging Company Unitholder is entitled to receive in connection with such Exchange pursuant to this Section 2.1, and (B) may be reasonably within its control that would cause such Exchange to be treated for purposes of the Tax Receivable Agreement as an “Exchange” (as such term is defined in the Tax Receivable Agreement).
(e)    Cancellation of Class B Common Stock. For clarity, any Exchange of Company Class B Units shall be accompanied by and conditioned on the surrender to the Company of an equal number of shares of Class B Common Stock. Any shares of Class B Common Stock surrendered in an Exchange shall automatically be deemed cancelled without any action on the part of any Person, including the Corporation. Any such cancelled shares of Class B Common Stock shall no longer be outstanding, and all rights with respect to such shares shall automatically cease and terminate, other than the right to receive from the Corporation a cash payment equal to the aggregate par value of such shares.
(f)    Expenses. Subject to any other arrangement or agreement among the Company and an applicable Company Unitholder, the Corporation, the Company, and each exchanging Company Unitholder shall bear their own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that the Corporation shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided, however, that if any shares of Class A Common Stock are to be delivered in a name other than that of the Company Unitholder that requested the Exchange (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such Company Unitholder) or the Cash Settlement is to be paid to a Person other than the Company Unitholder that requested the Exchange, then such Company Unitholder or the Person in whose name such shares are to be delivered or to whom the Cash Settlement is to be paid shall pay to the Corporation the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of the Corporation that such tax has been paid or is not payable.
(g)    Publicly Traded Partnership. Notwithstanding anything to the contrary herein, if the Board or the Managing Member of the Company, as applicable, obtains a written opinion from an Advisory Firm that interests in the Company do not meet the requirements of Treasury Regulation Section 1.7704-1(h), the Corporation or the Company, as applicable, will impose such restrictions on Exchanges as the Corporation or the Company, as applicable, may 

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reasonably determine to be necessary or advisable so that the Company is not treated as a “publicly traded partnership” under Section 7704 of the Code. Notwithstanding anything to the contrary herein, no Exchange shall be permitted (and, if attempted, shall be void ab initio) if the Corporation or the Company obtains a written opinion from an Advisory Firm that such an Exchange would pose a material risk that the Company would be a “publicly traded partnership” under Section 7704 of the Code.
(h)    Other Exchanges. For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement or any other agreement to which any Company Unitholder may from time to time be a party, no Exchange shall be consummated outside of any duly authorized Liquidity Period (or on a date other than an Exchange Date established pursuant to Section 2.1(a)(ii)) without the prior approval of a majority of the Board (or a committee to which the Board has delegated such authority).
Section 2.2    Adjustment. To the extent not reflected in an adjustment to the Exchange Rate, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed or exchanged into or for another security, securities or other property, then upon any subsequent Exchange, an exchanging Company Unitholder shall be entitled to receive the amount of such security, securities or other property that such exchanging Company Unitholder would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed or exchanged into or for another security, securities or other property, this Section 2.2 shall continue to be applicable, mutatis mutandis, with respect to such security or other property.
Section 2.3    Class A Common Stock to be Issued. 
(a)    The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, such number of shares of Class A Common Stock as shall be deliverable upon all such Exchanges; provided, however, that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of any such Exchange by delivery of unencumbered purchased shares of Class A Common Stock (which may or may not be held in the treasury of the Corporation or any subsidiary thereof).
(b)    The Corporation has taken and will take all such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions or dispositions of equity securities of the Corporation (including derivative securities with respect thereto) and any securities that may be deemed to be equity securities or derivative securities of the 

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Corporation for such purposes that result from the transactions contemplated by this Agreement, by each director or officer of the Corporation (including directors-by-deputization) who may reasonably be expected to be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Corporation upon the registration of any class of equity security of the Corporation pursuant to Section 12 of the Exchange Act.
(c)    If any Takeover Law or other similar law or regulation becomes or is deemed to become applicable to this Agreement or any of the transactions contemplated hereby, the Corporation shall use its reasonable best efforts to render such law or regulation inapplicable to all of the foregoing.
(d)    The Corporation covenants that all shares of Class A Common Stock issued upon an Exchange will, upon issuance, be validly issued, fully paid and non-assessable and not subject to any preemptive right of stockholders of the Corporation or to any right of first refusal or other right in favor of any Person.
Section 2.4    Withholding. 
(a)    If the Corporation or the Company shall be required to withhold any amounts by reason of any federal, state, local or foreign tax laws or regulations in respect of any Exchange, the Corporation or the Company, as the case may be, shall be entitled to take such action as it deems appropriate in order to ensure compliance with such withholding requirements, including, at its option, withholding shares of Class A Common Stock with a fair market value equal to the minimum amount of any taxes that the Corporation or the Company, as the case may be, may be required to withhold with respect to such Exchange. To the extent that amounts are (or property is) so withheld and paid over to the appropriate taxing authority, such withheld amounts (or property) shall be treated for all purposes of this Agreement as having been paid (or delivered) to the applicable Company Unitholder.
(b)    If the Corporation or the Company determines that any amounts by reason of any federal, state, local or foreign tax laws or regulations are required to be withheld in respect of any Exchange, the Corporation or the Company, as the case may be, shall use commercially reasonable efforts to promptly notify the exchanging Company Unitholder and shall consider in good faith any theories, positions or alternative arrangements that such Company Unitholder raises (reasonably in advance of the date on which the Corporation or the Company believes withholding is required) as to why withholding is not required or that may avoid the need for such withholding, provided that none of the Corporation or the Company is required to incur additional costs as a result of such obligation and this Section 2.4(b) shall not in any manner limit the authority of the Corporation or the Company to withhold taxes with respect to an exchanging Company Unitholder pursuant to Section 2.4(a).
Section 2.5    Tax Treatment. Unless otherwise required by applicable law, the parties hereto acknowledge and agree that an Exchange with the Company or the Corporation shall be treated as a direct exchange between the Corporation and the Company Unitholder for U.S. federal and applicable state and local income tax purposes. The parties hereto intend to treat any Exchange consummated hereunder as a taxable exchange for U.S. federal and applicable state and local income tax purposes except as otherwise agreed to in writing by the exchanging Company 

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Unitholder and the Corporation. This Agreement shall be treated as part of the partnership agreement of the Company 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 promulgated thereunder.
Section 2.6    Contribution of the Corporation. In connection with any Exchange between a Company Unitholder and the Company, the Corporation shall contribute to the Company the shares of Class A Common Stock or Cash Settlement that the Company Unitholder is entitled to receive in such Exchange. Unless the Company Unitholder has timely delivered a Retraction Notice as provided in Section 2.1(a)(v), on the Exchange Date (to be effective immediately prior to the close of business on the Exchange Date) (i) the Corporation shall make a capital contribution to the Company (in the form of the shares of Class A Common Stock or the Cash Settlement that the Company Unitholder is entitled to receive in such Exchange) required under this Section 2.6 and (ii) the Company shall issue to the Corporation a number of Company Class A Units equal to the number of Company Exchangeable Units surrendered by the Company Unitholder. The timely delivery of a Retraction Notice shall terminate all of the Company’s and the Corporation’s rights and obligations under this Section 2.6 arising from the Exchange Notice.
Section 2.7    Distributions. No Exchange will impair the right of an exchanging Company Unitholder to receive any distribution for periods ending on or prior to the Exchange Date for such Exchange (but for which payment had not yet been made with respect to the Company Exchangeable Units in question at the time the Exchange is consummated), in which case such exchanging Company Unitholder will retain, with respect to the Company Exchangeable Units so Exchanged, only the right to be paid such earned but unpaid distribution at the time it is paid to other Company Unitholders; provided that, for purposes of this Section 2.7, the exchanging Company Unitholder’s right to receive its pro rata portion of any distribution by the Company in respect of such periods shall not be deemed impaired to the extent that the Company has not paid the Corporation its pro rata portion of such distribution prior to the consummation of the applicable Exchange.
Section 2.8    Conclusive Nature of Determinations. All determinations, interpretations, calculations, adjustments and other actions of the Company, the Corporation, the Board (or a committee to which the Board has delegated such authority), the Managing Member or a designee of any of the foregoing that are within such Person’s authority hereunder shall be binding and conclusive on a Company Unitholder absent manifest error. In connection with any such determination, interpretation, calculation, adjustment or other action, the Company, the Corporation, the Board (or a committee to which the Board has delegated such authority), the Managing Member or the designee of any of the foregoing shall be entitled to resolve any ambiguity with respect to the manner in which such determination, interpretation, calculation, adjustment or other action is to be made or taken, and shall be entitled to interpret the provisions of this Agreement, in such a manner as it determines to be fair and equitable, and such resolution or interpretation shall be binding and conclusive on a Company Unitholder absent manifest error. 

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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1    Representations and Warranties of the Corporation. The Corporation represents and warrants that (i) it is a corporation duly incorporated and is existing and in good standing under the laws of the State of Delaware, (ii) it has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and to issue the Class A Common Stock in accordance with the terms hereof, (iii) the execution and delivery of this Agreement by the Corporation and the consummation by it of the transactions contemplated hereby (including the issuance of the Class A Common Stock) have been duly authorized by all necessary corporate action on the part of the Corporation, including all actions determined by the Board to be reasonably necessary to ensure that the acquisition of shares of Class A Common Stock pursuant to an Exchange shall not be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws and regulations of any United States jurisdiction that may purport to be applicable to this Agreement or the transactions contemplated hereby (collectively, “Takeover Laws”) to the extent permitted by applicable law, (iv) this Agreement constitutes a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally, and (v) the execution, delivery and performance of this Agreement by the Corporation and the consummation by the Corporation of the transactions contemplated hereby will not (A) result in a violation of the certificate of incorporation of the Corporation or the bylaws of the Corporation or (B) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Corporation is a party, or (C) based on the representations to be made by each Company Unitholder pursuant to the written election in the form of Exhibit A attached hereto in connection with Exchanges made pursuant to the terms of the Agreement, result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Corporation or by which any property or asset of the Corporation is bound or affected, except with respect to clause (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations that would not reasonably be expected to have a material adverse effect on the Corporation or its business, financial condition or results of operations.
Section 3.2    Representations and Warranties of the Company. The Company represents and warrants that (i) it is a limited liability company duly formed and is existing and in good standing under the laws of the Commonwealth of Pennsylvania, (ii) it has all requisite power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company, (iv) this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally, and (v) the execution, delivery and performance of this Agreement by the Company and the 

14

consummation by the Company of the transactions contemplated hereby will not (A) result in a violation of the certificate of formation of the Company or the LLC Agreement or (B) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Company or by which any property or asset of the Company is bound or affected, except with respect to clause (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations that would not reasonably be expected to have a material adverse effect on the Company or its business, financial condition or results of operations.
Section 3.3    Representations and Warranties of the Company Unitholders. Each Company Unitholder, severally and not jointly, represents and warrants that (i) if it is not a natural person, that it is duly incorporated or formed and, to the extent such concept exists in its jurisdiction of organization, is existing and in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) if it is not a natural person, the execution and delivery of this Agreement by it and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action on the part of such Company Unitholder, (iv) this Agreement constitutes a legal, valid and binding obligation of such Company Unitholder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally and (v) the execution, delivery and performance of this Agreement by such Company Unitholder and the consummation by such Company Unitholder of the transactions contemplated hereby will not (A) if it is not a natural person, result in a violation of the certificate of incorporation, bylaws or other organizational documents of such Company Unitholder, (B) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Company Unitholder is a party or by which any property or asset of such Company Unitholder is bound or affected, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable to such Company Unitholder, except with respect to clause (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations that would not in any material respect result in the unenforceability against such Company Unitholder of this Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.1    Additional Company Unitholders. If a Company Unitholder validly transfers any or all of such holder’s Company Class B Units and shares of Class B Common Stock or Company Class C Units to another Person in a transaction in accordance with, and not in contravention of, the LLC Agreement, then such transferee (each, a “Permitted Transferee”) shall be required to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Company Unitholder hereunder. To the extent the Company issues Company Exchangeable Units in the future, then the Company shall require each holder of such Company Exchangeable Units to execute and deliver a joinder to 

15

this Agreement, substantially in the form of Exhibit B hereto, whereupon such holder shall become a Company Unitholder hereunder. Except as set forth in this Section 4.1, a Company Unitholder may not assign or transfer any of its rights or obligations under this Agreement. No Person shall have any rights hereunder until he, she, or it has executed this Agreement.
Section 4.2    Term; Termination. This Agreement shall remain in effect (i) as to the Company and the Corporation, until the date on which no Company Class B Units or Company Class C Units remain outstanding and there exist no rights to acquire Company Exchangeable Units; and (ii) as to any Company Unitholder, until the date such Company Unitholder no longer holds or has any right to acquire Company Exchangeable Units. 
Section 4.3    Notifications. Any notice, demand, consent, election, approval, request, or other communication (collectively, a “notice”) required or permitted under this Agreement must be in writing or electronic form and either delivered personally, sent by certified or registered mail, postage prepaid, return receipt requested or sent by recognized overnight delivery service, electronically or by facsimile transmittal. A notice must be addressed:
If to the Corporation or the Company at:
One Presidential Boulevard, 4th Floor 
Bala Cynwyd, Pennsylvania  19004  
Telephone:  (610) 617-6076 
Facsimile:  (610) 617-9854 
Attention:  General Counsel
with a copy (which shall not constitute notice to the Corporation or the Company) to:
Drinker Biddle & Reath LLP 
One Logan Square, Suite 2000 
Philadelphia, Pennsylvania 19103-6996 
Telephone:  (215) 988-2515 
Facsimile:  (215) 988-2757 
Attention:  H. John Michel, Jr.
If to any Company Unitholder, to the address and other contact information set forth in the records of the Company from time to time.
A notice delivered personally will be deemed given only when accepted or refused by the Person to whom it is delivered. A notice that is sent by mail will be deemed given:  (i) three Business Days after such notice is mailed to an address within the United States of America or (ii) seven Business Days after such notice is mailed to an address outside of the United States of America. A notice sent by recognized overnight delivery service will be deemed given when received or refused. A notice sent electronically or by facsimile shall be deemed given upon receipt of a confirmation of such transmission, unless such receipt occurs after normal business hours, in which case such notice shall be deemed given as of the next Business Day. The Company or the Corporation may designate, by notice to all of the Company Unitholders, substitute addresses or addressees for notices; thereafter, 

16

notices are to be directed to those substitute addresses or addressees. Company Unitholders may designate, by notice to the Company and the Corporation, substitute addresses or addressees for notices; thereafter, notices are to be directed to those substitute addresses or addressees.
Section 4.4    Complete Agreement. This Agreement, together with the LLC Agreement and the Tax Receivable Agreement, constitutes the entire agreement and understanding among the parties with respect to the subject matter hereof and thereof, and supersedes all prior agreements or arrangements (written and oral), including any prior representation, statement, condition or warranty between the parties relating to the subject matter hereof and thereof.
Section 4.5    Applicable Law; Venue; Waiver of Jury Trial. 
(a)    The parties hereto hereby agree that all questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule, notwithstanding that public policy in Delaware or any other forum jurisdiction might indicate that the laws of that or any other jurisdiction should otherwise apply based on contacts with such state or otherwise.
(b)    Each of the parties hereto submits to the exclusive jurisdiction of the Court of Chancery in the State of Delaware in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each party hereto also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each of the parties hereto waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other party hereto with respect thereto. The parties hereto each agree that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding on it and may be enforced in any court to the jurisdiction of which it is subject by a suit upon such judgment.
(c)    EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) 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 ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO 

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THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.5.
Section 4.6    References to this Agreement; Headings. Unless otherwise indicated, “Sections,” “clauses” and “Exhibits” mean and refer to designated Sections, clauses, and Exhibits of this Agreement. Words such as “herein,” “hereby,” “hereinafter,” “hereof,” “hereto,” and “hereunder” refer to this Agreement as a whole, unless the context indicates otherwise. All headings in this Agreement are for convenience of reference only and are not intended to define or limit the scope or intent of this Agreement. All exhibits and schedules referred to herein, and as the same may be amended from time to time, are by this reference made a part hereof as though fully set forth herein.
Section 4.7    Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective personal and legal representatives, heirs, executors, successors and Permitted Transferees.
Section 4.8    Construction. Common nouns and pronouns and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person, Persons or other reference in the context requires. Every covenant, term and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any party hereto. Any reference to any statute, law, or regulation, form or schedule shall include any amendments, modifications, or replacements thereof. Any reference to any agreement, contract or schedule, unless otherwise stated, shall include any amendments, modifications, or replacements thereof. Whenever used herein, “or” shall include both the conjunctive and disjunctive unless the context requires otherwise, “any” shall mean “one or more,” and “including” shall mean “including, without limitation.”
Section 4.9    Severability. It is expressly understood and agreed that if any provision of this Agreement or the application of any such provision to any party or circumstance shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to any party or circumstance other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law so long as the economic or legal substance of the matters contemplated by this Agreement is not affected in any manner materially adverse to any party. If the final judgment of a court of competent jurisdiction declares or finds that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or portion of the term or provision, or to delete specific words or phrases, and to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. If such court of competent jurisdiction does not so replace an invalid or unenforceable term or provision, the parties hereto will 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 to the end that the matters contemplated hereby are fulfilled to the fullest extent possible.

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Section 4.10    Counterparts. This Agreement and any amendments may be executed simultaneously in two or more counterparts and delivered via facsimile or .pdf, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same document. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.
Section 4.11    No Third-Party Beneficiaries. This Agreement is not intended to, and does not, provide or create any rights or benefits of any Person other than the parties specified in Section 4.7 .
Section 4.12    Mutual Drafting. The parties hereto are sophisticated and have been advised by attorneys throughout the transactions contemplated hereby who have carefully negotiated the provisions hereof. As a consequence, the parties do not intend that the presumptions of laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied to this Agreement or any agreement or instrument executed in connection herewith, and therefore waive their effects.
Section 4.13    Rights and Remedies Cumulative. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Such rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.
Section 4.14    Amendment. The provisions of this Agreement may be amended only by the affirmative vote or written or electronic consent of each of (i) the Corporation, (ii) the Company, (iii) Company Unitholders holding a majority of the then outstanding Company Class B Units and (iv) as long as HLA Investments, LLC holds a number of Company Units that is equal to or greater than ten percent (10%) of the Post-IPO Company Units, the consent of HLA Investments, LLC, as applicable; provided that no amendment may disproportionately and adversely affect the rights of a Company Unitholder (compared to Company Unitholders of Company Units of the same class) without the consent of such Company Unitholder; provided further that no amendment may disproportionately and adversely affect the rights of the Company Unitholders holding Company Class C Units (compared to Company Unitholders of Company Units generally) without the affirmative vote or written or electronic consent of Company Unitholders holding a majority of the then outstanding Company Class C Units. 
Section 4.15    Specific Performance. The parties recognize that irreparable injury will result from a breach of any provision of this Agreement and that money damages would be inadequate to fully remedy the injury. Accordingly, in the event of a breach or threatened breach of one or more of the provisions of this Agreement, any party that may be injured (in addition to any other remedies that may be available to that party) shall be entitled (without the need to post any bond, surety, or other security) to one or more preliminary or permanent orders (a) restraining and enjoining any act that would constitute a breach or (b) compelling the performance of any obligation that, if not performed, would constitute a breach.

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Section 4.16    Independent Nature of Company Unitholders’ Rights and Obligations. The obligations of each Company Unitholder hereunder are several and not joint with the obligations of any other Company Unitholder, and no Company Unitholder shall be responsible in any way for the performance of, or failure to perform, the obligations of any other Company Unitholder hereunder. The decision of each Company Unitholder to enter into this Agreement has been made by such Company Unitholder independently of any other Company Unitholder. Nothing contained herein, and no action taken by any Company Unitholder pursuant hereto, shall be deemed to constitute the Company Unitholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Company Unitholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby and the Corporation acknowledges that the Company Unitholders are not acting in concert or as a group, and the Corporation will not assert any such claim, with respect to such obligations or the transactions contemplated hereby.
*                    *                    *

20

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.

	
		
	HAMILTON LANE INCORPORATED 

	 
	 

	 
	 

	By:
	 

	Name:   
	 

	Title:     
	 

	 
	 

	 
	 

	HAMILTON LANE ADVISORS, L.L.C. 

	 
	 

	 
	 

	By:
	 

	Name:   
	 

	Title:     
	 

	 
	 

	 
	 

	[Company Unitholders]

	 
	 

	 
	 

	By:
	 

	Name:   
	 

	Title:    
	 

[Signature Page to Exchange Agreement]

EXHIBIT A
FORM OF 
EXCHANGE NOTICE
Hamilton Lane Incorporated 
One Presidential Boulevard, 4th Floor 
Bala Cynwyd, Pennsylvania  19004  
Telephone:  (610) 617-6076 
Facsimile:  (610) 617-9854 
Attention:  General Counsel
Hamilton Lane Advisors, L.L.C. 
One Presidential Boulevard, 4th Floor 
Bala Cynwyd, Pennsylvania  19004  
Telephone:  (610) 617-6076 
Facsimile:  (610) 617-9854 
Attention:  General Counsel
Reference is hereby made to the Exchange Agreement, dated as of _________, 2017 (the “Exchange Agreement”), among Hamilton Lane Incorporated, a Delaware corporation (the “Corporation”), Hamilton Lane Advisors, L.L.C., a Pennsylvania limited liability company (the “Company”), and the Company Unitholders (as defined therein) from time to time party thereto. Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.
The undersigned Company Unitholder hereby transfers to the Company or the Corporation, as applicable, the number of Company Exchangeable Units and, as applicable, shares of Class B Common Stock set forth below in Exchange for either shares of Class A Common Stock to be issued in its name (or the name of its designee) as set forth below or, at the option of the Corporation, the Cash Settlement payable to the account set forth below, in accordance with the terms of the Exchange Agreement.
	
		
	Legal Name of Company Unitholder:
	 

	Maximum Number of Company Class B Units and shares of Class B Common Stock to be Exchanged:
	 

	Maximum Number of Company Class C Units to be Exchanged:
	 

	Limitation on Tax Benefit Payments under Section 3.01(b) of Tax Receivable Agreement:
	 

If the Company Unitholder desires the shares of Class A Common Stock be settled through the facilities of The Depositary Trust Company (“DTC”), please indicate the account of the DTC participant below.
If the Company Unitholder desires the shares of Class A Common Stock be settled through the delivery of certificates to the Company Unitholder or its designee, please indicate the following:
	
		
	Legal Name for Certificates:
	 

	Address for Delivery of Certificates:
	 

	If the Corporation elects Cash Settlement:
	 

	Account Number:
	 

	Legal Name of Account Holder:
	 

The undersigned Company Unitholder hereby represents and warrants that (i) the Company Unitholder has all requisite legal capacity and authority to execute and deliver this Exchange Notice and to perform the undersigned’s obligations hereunder; (ii) the execution and delivery of this Exchange Notice and the consummation of the Exchange have been duly authorized by all necessary corporate or other entity action on the part of the Company Unitholder; (iii) this Exchange Notice constitutes a legal, valid and binding obligation of the undersigned Company Unitholder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally; (iv) the Company Exchangeable Units and, as to Company Class B Units, shares of Class B Common Stock subject to this Exchange Notice are being transferred to the Company or the Corporation, as applicable, free and clear of any pledge, lien, security interest, encumbrance, equities or claim; (v) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Company Exchangeable Units and, as to Company Class B Units, shares of Class B Common Stock subject to this Exchange Notice is required to be obtained by the undersigned for the transfer of such Company Exchangeable Units and, as to Company Class B Units, shares of Class B Common Stock to the Company or the Corporation, as applicable; and (vi) the Company Unitholder is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act, and is not acquiring the shares of Class A Common Stock with the intent to distribute them in violation of the Securities Act.
The undersigned hereby irrevocably constitutes and appoints any officer of the Company as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer the Company Units subject to this Exchange Notice and to deliver to the undersigned the shares of Class A Common Stock or the Cash Settlement to be delivered in Exchange therefor.

A-2

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Exchange Notice to be executed and delivered by the undersigned or by its duly authorized attorney.
Name:                        
Dated:                

A-3

EXHIBIT B
FORM OF 
JOINDER
This Joinder (“Joinder”) is a joinder to the Exchange Agreement, dated as of [ ], 2017 (the “Agreement”), among Hamilton Lane Incorporated, a Delaware corporation (the “Corporation”), Hamilton Lane Advisors, L.L.C., a Pennsylvania limited liability company (the “Company”), and each of the Company Unitholders from time to time party thereto. Capitalized terms used but not defined in this Joinder shall have the meanings given to them in the Agreement. The Company, the Corporation and the undersigned agree that all questions concerning the construction, validity and interpretation of this Joinder shall be governed by, and construed in accordance with, the law of the State of Delaware, without giving effect to any choice or conflict of law provision or rule, notwithstanding that public policy in Delaware or any other forum jurisdiction might indicate that the laws of that or any other jurisdiction should otherwise apply based on contacts with such state or otherwise. In the event of any conflict between this Joinder and the Agreement, the terms of this Joinder shall control.
The undersigned, having acquired shares of (i) Class B Common Stock and Company Class B Units, and/or (ii) Company Class C Units, hereby joins and enters into the Agreement. By signing and returning this Joinder to the Company and the Corporation, the undersigned (A) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Company Unitholder contained in the Agreement, with all attendant rights, duties and obligations of a Company Unitholder thereunder and (B) makes each of the representations and warranties of a Company Unitholder set forth in Section 3.3 of the Agreement as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder by the Company and the Corporation, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.
Unitholder Name: 

By:                     
Name:    
Title:     
Address for notices:

Copies to:

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