Document:

Exhibit 10.7

 

AMENDED AND RESTATED TAX SHARING AGREEMENT

 

This Amended and Restated Tax Sharing Agreement (this “Agreement”) is made and entered into this 18th day of August, 2015 by and among ORIX USA Corporation, a Delaware corporation  (hereinafter referred to as “Parent”), HL Transitory Merger Company, Inc., a Delaware corporation (“NewCo”), and Houlihan Lokey, Inc., a Delaware corporation (“Houlihan Lokey”) and all corporations that are as of this date eligible to file a consolidated return as a member of the affiliated group of Parent within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “IRC”), including ORIX Commercial Alliance Corporation, a Delaware corporation (“OCAC”), ORIX Real Estate Capital, Inc., a Delaware corporation (“OREC”), and ORIX Capital Markets, LLC, a Delaware limited liability company that has elected to be treated as a C corporation for U.S. federal income tax purposes (“OCM”) (each hereinafter referred to as “Member” in the singular and/or plural, including Parent, as the context may require, and referred to as “Group” in the collective).  Signatories to this Agreement may also include any corporation that may join in the filing of a return filed on a combined, unitary or any other basis with any other Member, at the Parent’s sole discretion, and this Agreement shall apply to the extent appropriate.

 

RECITALS

 

WHEREAS, Parent, OCAC, OREC, OCM and Fram Holdings, Inc., a Delaware corporation (“Fram”) entered into an Agreement dated January 1, 2006, governing the filing of tax returns and allocation of tax liabilities and tax benefits among such parties (the “Prior Agreement”);

 

WHEREAS, the parties hereto wish to amend and restate the Prior Agreement in its entirety in the form of this Agreement;

 

WHEREAS, Houlihan Lokey, Inc., a California corporation, merged with and into Houlihan Lokey, with Houlihan Lokey as the surviving corporation and such merger intended to be treated as a reorganization within the meaning of IRC Section 368(a)(1)(F) (the “HL F Reorg”);

 

WHEREAS, Houlihan Lokey shall distribute (i) its interests in Hacienda Holdings Three, LLC, a Delaware limited liability company (collectively, the “Non-Operating Assets”), (ii) a subordinated promissory note issued by Houlihan Lokey with an initial principal amount of $45 million (the “HL Subordinated Note”) and (iii) a note issued by Houlihan Lokey with an initial principal amount of $197.2 million (the “HL Placeholder Note”) to HLHZ Holding Company, LLC (“HLHZ”), which thereafter shall distribute the Non-Operating Assets, HL Subordinated Note and HL Placeholder Note to Fram, which thereafter shall distribute the Non-Operating Assets, HL Subordinated Note and HL Placeholder Note to the holders of outstanding shares of Common Stock of Fram (collectively the “Pre-IPO Distribution”);

 

WHEREAS, the shareholders of Fram shall contribute all the outstanding equity interests of Fram to NewCo in exchange for shares of NewCo representing 100 percent of the outstanding shares of NewCo (the “NewCo Exchange”);

 

 

WHEREAS, immediately following the NewCo Exchange, Fram shall convert into Fram Holdings, LLC, a Delaware limited liability company (“Fram LLC”), with the NewCo Exchange and such conversion intended to be treated as a reorganization within the meaning of IRC Section 368(a)(1)(F) (the “Fram F Reorg”), and, immediately thereafter, HLHZ shall distribute all of the issued and outstanding shares of Houlihan Lokey to Fram LLC, which immediately thereafter shall distribute all such shares to NewCo (the “HL Distribution”);

 

WHEREAS, immediately following the HL Distribution, NewCo shall distribute all of the issued and outstanding limited liability company interests of Fram LLC to Parent or an affiliate thereof, to repurchase the Class A Preferred stock of NewCo held by Parent (the “OCC Distribution”);

 

WHEREAS, immediately following the OCC Distribution, NewCo shall merge with and into Houlihan Lokey, the separate corporate existence of NewCo shall cease and Houlihan Lokey shall continue as the surviving corporation in such merger (the “HL Merger”), with the HL Merger intended to be treated as a reorganization within the meaning of IRC Section 368(a)(1)(A);

 

WHEREAS, the transactions contemplated hereby shall occur immediately prior to the closing of the initial public offering of Houlihan Lokey;

 

WHEREAS, Parent, as of this date, owns 100 percent of the issued and outstanding capital stock of OCAC, OREC and OCM, and indirectly owns more than 80 percent of the capital stock of Fram, and each Member is willing to be included in the filing of a consolidated federal income tax return for the year ended March 31, 2006 and beyond provided that Parent is willing to undertake the responsibilities regarding the preparation of, filing of and accounting with respect to such consolidated federal income tax return; and

 

WHEREAS, Parent and the Members each desire to compensate the other fully for their individual share of the consolidated tax liability and/or any tax benefits provided by them in the filing of the consolidated federal income tax return. It is the intent and desire of the parties hereto that a method be established:

 

(1)                                 for allocating the consolidated “federal income tax liability” (as determined under Treasury Regulation Section 1.1502-2) of the Group among its Members (as required by IRC Section 1552(a));

 

(2)                                 for reimbursing Parent for payment of such tax liability;

 

(3)                                 for compensating any Member for use of its “net operating loss”, “net capital losses”, or “tax credits” in arriving at such consolidated tax liability;

 

(4)                                 to provide for the allocation and payment of any refund arising from a carryback of net operating losses, capital losses or tax credits from prior or subsequent taxable years; and

 

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(5)                                 to provide for the allocation and payment of taxes relating to (i) the Pre-IPO Distribution, (ii) the assets and businesses to be distributed to Parent in the OCC Distribution (the “OCC Business”), (iii) the OCC Distribution and (iv) all other assets and businesses of Houlihan Lokey and its subsidiaries not described in clauses (i) through (iii) (collectively, the “HL Business”).

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and undertakings hereinafter provided, Parent and each Member hereby agree as follows:

 

1.                                      CONSOLIDATED RETURN ELECTION

 

Each Member agrees to continue to join in the filing of a consolidated federal income tax return by Parent for the fiscal year ended March 31, 2006, and for any subsequent taxable periods for which the Group is required to file such a return, or is permitted to file such a return if Parent so deems it appropriate, provided that such Member is permitted by law to join in filing such a consolidated federal income tax return for such period.  Additionally, the Members agree that for fiscal years ending prior to March 31, 2006, the relevant provisions of this Agreement will be applied retroactively (i.e., in the event of tax adjustments as set forth in Paragraph 4).  It is recognized that in certain circumstances Parent may be allowed to terminate the filing of a consolidated income tax return; any termination decision may be made at the sole discretion of Parent.  The Members agree, to the extent not already done so, to execute and file such consents and Parent agrees to execute and file such consents, including for any Member’s newly acquired wholly-owned subsidiaries, elections and other documents and to take all such other actions as may be necessary or appropriate to carry out the purpose of this Agreement.  Any period for which the Members are included in a consolidated federal income tax return filed by Parent is referred to in this Agreement as a “Consolidated Return Year.”

 

2.                                      LIABILITIES FOR CONSOLIDATED RETURN YEARS

 

The tax liability of the Group for any tax return filed on a consolidated, combined, unitary or similar basis shall be apportioned among the Members of the group in accordance with the ratio that the portion of the consolidated, combined, unitary or similar taxable income attributable to each Member of the group having taxable income bears to the consolidated, combined, unitary or similar Group taxable income; provided, however, that, for purposes of this Paragraph 2:

 

(a)                                 any income related to the OCC Business and the OCC Distribution, including, for the avoidance of doubt, any gain recognized under IRC Section 311(b) and similar provisions of state and local tax law, shall not be treated as the taxable income of Fram, NewCo, Houlihan Lokey or any of their respective subsidiaries, but shall instead be treated as the taxable income of Parent;

 

(b)                                 (i) any income related to the Pre-IPO Distribution, including, for the avoidance of doubt, any gain recognized under IRC Section 311(b) and similar provisions of state and local tax law, (ii) any income of Houlihan Lokey, Fram and NewCo resulting from (x) the HL F Reorg, (y) the Fram F Reorg and (z) the HL Merger (except, in

 

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each case of (x), (y) and (z), any such income attributable to the OCC Business and the OCC Distribution, which income shall be allocated as described under Paragraph 2(a) hereof), and (iii) any income recognized upon the HL Distribution (except any such income recognized as a result of either HLHZ or Fram LLC, at the time of the HL Distribution, being classified as a corporation for United States federal income tax purposes) shall, in each case of (i), (ii) and (iii), be allocated to Houlihan Lokey; and

 

(c)                                  any liability for amounts that are required to be withheld as a result of the Pre-IPO Distribution under applicable law shall be allocated to Houlihan Lokey.

 

The Members each agree to make quarterly estimated income tax payments to Parent for consolidated federal or state income taxes based on the manner in which the quarterly tax liability of the consolidated Group is apportioned among the members of the group in accordance with the ratio which that portion of the consolidated taxable income attributable to each member of the Group having taxable income bears to the consolidated taxable income.  For federal income tax purposes, the Group will apply IRC Section 1552(a)(1).

 

The Members further agree to remit to Parent any tentative balance due on account of their federal income tax liability no later than the unextended due date of the income tax return (i.e., the fifteenth day of the third month following the close of the tax year).  At the time of filing of the consolidated federal (or state) tax returns (i.e., no later than the 15th day of the ninth month following year end, including extensions), Members agree to remit to Parent any final balance due for the year.  All remittances to Parent will be delivered so as to be received by Parent no less than 5 business days before Parent’s required due date to pay amounts to the appropriate tax authorities, whether or not Parent has any actual liability to a particular tax authority.  Parent agrees to refund Members any tax overpayment for the year (less any amount agreed to be applied to the subsequent years estimated tax) within 45 days of the filing of the consolidated federal return for the year.  Additionally, if a Member is entitled to a payment with respect to its net operating loss, etc. (as set forth in Paragraph 3), Parent agrees to pay this amount within 45 days of the filing of the consolidated federal return for the year or, in the case of a carryback claim, within 15 days from the receipt of the applicable tax refund.  Parent further agrees to indemnify and hold harmless Houlihan Lokey and its subsidiaries, Fram and NewCo  for (i) any taxes imposed on or measured by income that is treated as allocable to Parent pursuant to this Paragraph 2 or Paragraph 5 below, (ii) any taxes imposed on or measured by income that is otherwise related to the OCC Business or the OCC Distribution and (iii) any taxes imposed on or measured by income that is not treated as allocable to Houlihan Lokey or its subsidiaries, Fram or NewCo pursuant to this Paragraph 2 or Paragraph 5 below.  Houlihan Lokey agrees to indemnify and hold harmless Parent, OCAC, OREC, OCM, Fram LLC, HLHZ and their respective subsidiaries for (x) any taxes imposed on or measured by income that is treated as allocable to Fram, NewCo, Houlihan Lokey or any of their respective subsidiaries pursuant to this Paragraph 2 or Paragraph 5 below and (y) any taxes that are allocated to Houlihan Lokey pursuant to Paragraph 2(c).

 

3.                                      TAX BENEFITS

 

If for any consolidated return year, any Member has a net operating loss, net capital loss, or generates a tax credit that reduces the consolidated federal tax liability of the Group (either

 

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for the current year or for a prior year in the case of a carryback) below the amount that would have been payable if that Member had not incurred such loss or generated such a tax credit, Parent agrees to give the member full federal tax benefit for the amount of such reduction.  Parent will pay such tax benefit to the Member no later than the time provided for in Paragraph 2.

 

If part or all of an unused consolidated net operating loss, net capital loss, tax credit, or similar type item, is allocated to a Member of the Group pursuant to Treasury Regulations Section 1.1502-79, and it is carried back, if utilized, or it is carried forward, whether or not utilized, to a year in which such Member filed a separate income tax return or a consolidated federal income tax return with another group, any refund or reduction in tax liability arising from the carryback or carryforward shall be retained by such Member and such item shall not enter into the calculation of liability to or from Parent in Paragraph 2 above or this Paragraph 3.  (If such refund or reduction goes to some entity other than the Member, then it is the responsibility of such other entity to have such amount paid over to the Member.)  Notwithstanding the above, Parent shall determine whether an election shall be made not to carry back any consolidated net operating loss arising in a consolidated return year (including any portion allocated to a Member under Treasury Regulations Section 1.1502-79) in accordance with IRC Section 172(b)(3).

 

4.                                      TAX ADJUSTMENTS

 

In the event of any adjustment to the consolidated federal income tax returns which include Parent and the Members as filed (whether by reason of an amended return, claim for refund, and audit or adjustment by the Internal Revenue Service or any taxing authority, or by proper judicial action), the liability of Parent and the Members under Paragraphs 2 and 3 shall be redetermined to give effect to any such adjustment as if it had been made as part of the original computation of tax liability, and any payment thereby required under Paragraphs 2 and 3, by Parent to the Members or by the Members to Parent, as the case may be, shall be made within a reasonable time after assessment or agreement for payments of additional tax liability is made or refunds of taxes paid are received.  Such reasonable time shall generally be five days before the payment due date or expected payment date, or five days after refunds are received and each Member’s share has been determined.

 

If any interest is to be paid or received as a result of a consolidated tax deficiency or refund for a taxable year, such interest shall be allocated to the parties in the ratio each party’s change in tax liability bears to the total change in tax liability.  Any penalty shall be allocated upon the basis as Parent deems just and proper in view of all applicable circumstances.

 

The following additional provisions shall apply in the event of an examination by the Internal Revenue Service or any other foreign, state or local tax authority (hereinafter referred to collectively as “IRS”) with respect to any tax period for which such Member filed a consolidated tax return with Parent:

 

(a)                                 It is agreed that Parent shall have the responsibility for conducting any IRS examination, provided, however, that if any such examination could adversely affect Houlihan Lokey or its subsidiaries, Parent shall (i) promptly inform Houlihan Lokey

 

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regarding such examination, (ii) provide Houlihan Lokey with a reasonable opportunity to participate in such examination, and (iii) not effect a settlement or compromise of such matter that could adversely affect Houlihan Lokey or its subsidiaries without the consent of Houlihan Lokey, which consent shall not be unreasonably withheld.

 

(b)                                 Each Member agrees that it will inform Parent promptly of all questions raised by the IRS conducting an examination of tax returns and shall cooperate with Parent’s accountants, tax advisors and counsel in working with the IRS in response to adjustments proposed by the IRS.

 

(c)                                  Each Member agrees that any adjustment to its tax liability out of an examination by the IRS shall be computed on the basis of agreements reached by Parent and the IRS.

 

(d)                                 Each Member hereby waives any and all present and future claims against Parent relating to any compromise, arrangement or agreement between Parent and the IRS based upon an allegation that such compromise, arrangement or agreement improperly causes an overstatement of its liability to Parent or that such Member could have reached a more favorable agreement with the IRS on a separate company basis, unless such overstatement results from gross negligence or fraudulent conduct on the part of Parent, its agents or representatives.

 

5.                                      STATE, LOCAL AND FOREIGN TAXES

 

To the extent that Members file a state, local or foreign consolidated, combined, unitary or similar type returns with Parent and which combine Members’ items, or that the filing position of one Member may affect another Member’s tax liability, Parent may extend the provisions of this Agreement to apply to such filings when it otherwise would not apply, or choose not so to extend the provisions of this agreement, in either case when it deems reasonable after considering the effects on the Members as a whole. If such authority is undertaken by Parent, it is agreed that the concepts set forth in this Agreement will apply for purposes of allocating and determining such tax liabilities and benefits. It is understood that such authority may apply to income and franchise taxes, as well as other types of taxes that include in their determination of tax an amount representing a tax based on income. The Members understand that the treatment of items on returns requires the consistent application of tax principles. In the case of consolidated, combined or separate state or local income or franchise tax filings, Members agree to fund tax payments at the direction of Parent and may do so a manner similar to that provided for funding the consolidated federal tax payments. Parent may also fund payments on behalf of Members and seek reimbursement through normal intercompany settlements. Members agree to inform Parent promptly regarding any inquiries they receive from state, local, or foreign tax authorities.

 

6.                                      PARENT’S RESPONSIBILITIES

 

Parent agrees that it will prepare and file timely (including any properly obtained extensions of time) all returns which are required by the IRC and Treasury Regulations (or applicable state or foreign authorities) promulgated thereunder to be filed by members of groups filing consolidated federal, foreign or state income tax returns for which both Parent and one or

 

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more Members is a member. Parent will pay all liabilities for federal income taxes reflected thereon and may pay certain liabilities for state or foreign income tax purposes, provided, however, that quarterly tax estimates established by the Members for the purpose of paying income taxes for any tax year and any final income tax liabilities computed under the standards set forth in this agreement shall be transferred to Parent pursuant to the provisions of Paragraph 2 herein, permitting Parent to have funds to satisfy any income taxes for which the Members would be liable.  Parent may with reasonable notice delegate this responsibility to the Members as appropriate (particularly in the case of foreign taxes or subsidiaries).

 

7.                                      BOOKS AND RECORDS

 

Each of Parent and each Member agrees that it will prepare and maintain all books, records and accounts which are required by the IRC and Treasury Regulations promulgated thereunder (and appropriate state and foreign authorities) to be prepared or maintained by members of groups filing income tax returns with Parent including, but not limited to, all books, records and accounts with regard to intercompany transactions and earnings and profits.  For this purpose books and records include records on electronic media such as computer disks, other magnetic or electronic media, microfiche or any other storage medium.

 

8.                                      SUBSIDIARIES OF MEMBERS

 

The determination of the pro-rata tax liability or benefit allocated to a Member for a consolidated return year will include the activity of the Member’s wholly-owned subsidiaries on the subgroup basis. Additions to or deletions from a subgroup will be made as deemed appropriate by Parent.

 

9.                                      TAX LAW CHANGES

 

Any alteration, modification, addition, deletion, or other change in the consolidated income tax return provisions of the IRC or the Treasury Regulations thereunder shall automatically be applicable to this Agreement mutatis mutandis.

 

10.                               AVAILABILITY OF DOCUMENTS

 

All material, to the extent appropriate, including, but not limited to returns, supporting schedules, work papers, correspondence, and other documents relating to the consolidated federal income tax returns filed for a taxable year during which this Agreement was in effect and including Parent as a member shall be made available to any party to this Agreement during regular business hours for a minimum period equal to applicable federal record retention requirements (but in no event shall records be destroyed less than 10 years after the end of the fiscal year).

 

11.                               NEW MEMBERS

 

The Members hereto specifically recognize that from time to time other entities may become Members of the Group and hereby agree that such new Members may become parties to this

 

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Agreement by executing the master copy of this Agreement, or duplicate copies thereof, or by joining in the filing of the consolidated return for the year.

 

12.                               CONTINUITY OF AGREEMENT

 

Failure of one or more parties hereto to qualify by meeting the definition of Member of the Group shall not operate to terminate this Agreement with respect to the other parties as long as two or more parties hereto continue so to qualify.  Any Member which leaves the Group shall continue to be bound by this Agreement with respect to tax years for which it was a Member, to the extent appropriate.

 

13.                               ATTRIBUTES AND BENEFITS OF MEMBERS THAT HAVE LEFT THE GROUP

 

If a Member has left the Group and has a carryback to a tax year during which it was a Member, no liability shall exist under Paragraph 3 above nor any payment be made to the former member and any benefit shall be the property of Parent, except to the extent the carryback actually reduces the consolidated federal tax liability of the Group for any year below the amount that would have been payable if that former Member did not have such a carryback.  Furthermore, Parent and each Member agree that upon leaving the group, the Member will receive no allocation of tax attributes (i.e., net operating loss carryovers, etc.) except to the extent agreeable by Parent or required to be allocated to the Member under the IRC or Treasury Regulations.  Similarly, no allocation of state tax attributes shall be made to departing Members upon leaving the Group, except to the extent agreeable by Parent or required to be allocated to the Member under state tax rules and regulations.

 

14.                               TAX TREATMENT OF REORGANIZATIONS

 

The parties hereto intend that (i) the HL F reorg be treated as a reorganization within the meaning of IRC Section 368(a)(1)(F), (ii) the Fram F Reorg be treated as a reorganization within the meaning of IRC Section 368(a)(1)(F), and (iii) the HL Merger be treated as a reorganization within the meaning of IRC Section 368(a)(1)(A).  No party hereto shall take any action, or fail to take any action, which is inconsistent with such treatment, unless required by a final “determination” within the meaning of IRC Section 1313(a).  In pursuance of the foregoing, and except as provided in the preceding sentence, the parties will report the HL F Reorg as a reorganization within the meaning of IRC Section 368(a)(1)(F), the Fram F Reorg as a reorganization within the meaning of IRC Section 368(a)(1)(F), and the HL Merger as a reorganization within the meaning of IRC Section 368(a)(1)(A), and in each case will comply with all reporting and recordkeeping obligations of such reorganization as set forth in the IRC and the Treasury Regulations promulgated thereunder, including the recordkeeping and information filing requirements of Treasury Regulation Section 1.368-3.

 

Parent represents that HLHZ is treated as an entity that is disregarded as separate from its owner for all applicable income tax purposes.  Parent shall cause Fram to convert into Fram LLC pursuant to Section 18-214 of the Delaware Limited Liability Company Act, effective after the NewCo Exchange but prior to the HL Distribution, and represents that upon the effectiveness of such conversion, Fram LLC is treated as an entity that is disregarded as

 

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separate from its owner for all applicable income tax purposes.  No party hereto shall take any action, or fail to take any action, which is inconsistent with such treatment of HLHZ and Fram LLC, unless required by a final “determination” within the meaning of IRC Section 1313(a).

 

15.                               BINDING EFFECT

 

This Agreement shall be binding on and inure to the benefit of any successor, by merger, acquisition of assets or otherwise, to any of the parties thereto to the same extent as if such successor had been an original party to this Agreement; but no assignment shall relieve any party’s obligations hereunder without the written consent of the other parties to this Agreement.  Although it is intended that this agreement have as signatories all Members that are eligible to be signatories, any omission shall not have any effect on the binding nature of this Agreement as to the signatories thereto.

 

16.                               CONSTRUCTION

 

This agreement is to be construed in furtherance of the concepts embodied herein and if in the administration of it any provision is inconsistent therewith, then it shall be administered consistent with such concepts.  The Controller of Parent shall make determinations and apply the provisions of this Agreement in a manner that results in its appropriate application.  Any ambiguities shall be resolved without regard to which party drafted the Agreement.

 

17.                               DISPUTES

 

A dispute or difference between the Members with respect to the operation or interpretation of this Agreement shall be decided by Parent in a reasonable manner based upon a good faith interpretation of this Agreement and after giving consideration to the benefits and burdens of any such decision on the affected Members.  Any decision so made by Parent shall be final and binding to all Members to this Agreement.

 

18.                               GOVERNANCE LAW

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

19.                               AMENDMENTS

 

This Agreement may be amended by the Parent without the consent of any Member if the effect of the amendment is to increase the tax payments to any Member (other than Parent) under this Agreement.

 

20.                               TAX TREATMENT OF PAYMENTS

 

All payments made hereunder by Parent to NewCo, Houlihan Lokey or their subsidiaries, on the one hand, and all payments made by NewCo, Houlihan Lokey or their subsidiaries to Parent, on the other hand, in each case when made after NewCo, Houlihan Lokey or their subsidiaries, as applicable, have ceased to be Members, shall be treated as having been made

 

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immediately prior to when NewCo, Houlihan Lokey or their subsidiaries, as applicable, ceased to be Members.

 

21.                               ENTIRE AGREEMENT

 

This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersede and terminate all prior agreements and understandings, both written and oral.

 

22.                               SEVERABILITY

 

In the event any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions hereof without including any of such which may hereafter be declared invalid, void or unenforceable.  In the event that any such term, provision, covenant or restriction is hereafter held to be invalid, void or unenforceable, the parties hereto agree to use their best efforts to find and employ an alternate means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.

 

23.                               WAIVER

 

Neither the failure nor any delay on the part of any party to exercise any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise of the same or any other right, nor shall any waiver of any right with respect to any occurrence be construed as a waiver of such right with respect to any other occurrence.

 

24.                               SUCCESSORS AND ASSIGNS

 

All provisions of the Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

 

25.                               NO THIRD-PARTY BENEFICIARIES

 

This Agreement is solely for the benefit of the parties to this Agreement and their respective affiliates and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without this Agreement.

 

26.                               HEADINGS; REFERENCES

 

The paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  All references herein to “Paragraphs” shall be deemed to be references to Paragraphs hereof unless otherwise indicated.

 

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27.                               COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument, and all such counterparts shall together constitute one and the same instrument.

 

28.                               PREDECESSORS AND SUCCESSORS

 

To the extent necessary to give effect to the purposes of this Agreement, any reference to any corporation or other entity shall also include any predecessors or successors thereto, by operation of law or otherwise.

 

29.                               SPECIFIC PERFORMANCE

 

The parties hereto acknowledge and agree that irreparable damages will result if this Agreement is not performed in accordance with its terms, and each party agrees that any damages available at law for a breach of this Agreement would not be an adequate remedy.  Therefore, to the full extent permitted by applicable law, the provisions hereof and the obligations of the parties hereunder shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection therewith.

 

30.                               FURTHER ASSURANCES

 

Subject to the provisions hereof, the parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.  Subject to the provisions hereof, each party shall, in connection with entering into this Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental authority (including any regulatory or administrative agency, commission or similar authority) and promptly provide the other party with all such information as it may reasonably request in order to be able to comply with the provisions of this sentence.

 

31.                               SETOFF

 

All payments to be made by any party under this Agreement shall be made without setoff, counterclaim or withholding, all of which are expressly waived.

 

32.                               EXPENSES

 

Except as specifically provided in this Agreement, each party agrees to pay its own costs and expenses resulting from the fulfillment of its respective obligations hereunder.

 

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

 

	
 
    	
ORIX   USA Corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul E. Wilson
    
	
 
    	
Name:   Paul E. Wilson
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
HL   Transitory Merger Company, Inc. and subsidiaries
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. Lindsey Alley
    
	
 
    	
Name:   J. Lindsey Alley
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Houlihan   Lokey, Inc. and subsidiaries
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. Lindsey Alley
    
	
 
    	
Name:   J. Lindsey Alley
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ORIX   Capital Markets, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul E. Wilson
    
	
 
    	
Name:   Paul E. Wilson
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ORIX   Commercial Alliance Corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul E. Wilson
    
	
 
    	
Name:   Paul E. Wilson
    
	
 
    	
Title:   President and Treasurer
    
	
 
    	
 
    
	
 
    	
ORIX   Real Estate Capital, Inc.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul E. Wilson
    
	
 
    	
Name:   Paul E. Wilson
    
	
 
    	
Title:   Chief Financial OfficerExhibit 10.8

 

CASH MANAGEMENT AGREEMENT

 

THIS CASH MANAGEMENT AGREEMENT (this “Agreement”) is entered into on August 18, 2015, by and between Houlihan Lokey Capital (Holdings) Ltd., a UK private limited company (“HL UK”), and ORIX Global Capital, Ltd., a UK private limited company (“OGC”).

 

WITNESSETH:

 

WHEREAS, HL UK desires to from time to time advance its cash to OGC, and may demand repayment of some or all of the balance of such advanced amounts as necessary for cash management purposes; and

 

WHEREAS, in furtherance thereof HL UK and OGC desire to enter into this Agreement whereby HL UK may from time to time advance funds to OGC in the amount of up to USD $150 million on the terms and conditions set forth in this Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants, undertakings, representations and warranties set forth herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby mutually acknowledged, the parties hereto agree as follows:

 

ARTICLE 1  — DEFINED TERMS

 

Certain capitalized terms used but not otherwise defined in this Agreement are defined in the Glossary of Defined Terms attached as Exhibit A. Unless otherwise expressly provided or unless the context otherwise requires, such defined terms shall have the meaning specified in the Glossary of Defined Terms or in this Agreement and in any other document related to this transaction which expressly incorporates such Glossary or this Agreement by reference.

 

ARTICLE 2  — COMMITMENT

 

2.1                               Commitment and Use. Subject to the terms and conditions of this Agreement, during the term of this Agreement, HL UK may advance funds to OGC (each an “Advance”, and collectively, the “Advances”), and OGC may accept such Advances in an aggregate amount not to exceed USD $150 million at any time outstanding (“Commitment”).

 

2.2                               Terms.

 

All Advances under the Commitment shall be subject to the following conditions:

 

(a)                                 at any time HL UK may deliver to OGC a request to accept an Advance hereunder in any amount (subject to Section 2.2(d) below), which request  must be delivered at least three (3) Business Days prior to the date of the intended Advance;

 

(b)                                 the intended Advance shall be made by HL UK only if OGC agrees to accept such Advance;

 

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(c)                                  no Advance shall be made to the extent that an Event of Default shall exist and be continuing (which, to the extent it may be remedied, has not been remedied to the satisfaction of the parties hereto) on the date of the intended Advance;

 

(d)                                 such Advance shall only be in a multiple of USD $100,000;

 

(e)                                  no Advance, when aggregated with all previous Advances still outstanding, shall cause the total outstanding aggregate amount of all Advances to exceed the Commitment.

 

2.3                               Term of this Agreement. The term of this Agreement shall run from the date hereof until the earliest of (i) the Maturity Date, and (ii) the date on which obligations under this Agreement become due and payable pursuant to Section 5.6(a) or otherwise.

 

ARTICLE 3  — THE ADVANCES

 

3.1                               The Advances. Subject to the provisions of Section 2.2, HL UK shall make Advances under the Note. OGC’s obligations with respect to the Advances will be evidenced and established by this Agreement and the Note; however, in the event of any conflict or inconsistency between the terms of this Agreement and the Note, the terms of the Note shall prevail. Monies representing Advances made under this Agreement may be advanced, withdrawn and re-advanced (where offered by HL UK), provided that the aggregate outstanding amount of the Advances shall be paid in full on or before the Termination Date.

 

3.2                               Note. The obligation of OGC to repay the Advances shall be evidenced by the Note, which Note shall: (a) be dated as of even date herewith; (b) be in the original aggregate amount not to exceed the Commitment; (c) bear interest in respect of amounts outstanding under any Advance for the period from the date of the making of the relevant Advance until the Advance is repaid in full at the rate(s) set forth in Section 3.3; (d) be payable as to interest on each Payment Date; (e) be payable as to the Advance balances as set forth in Section 3.5; (f) be entitled to the benefits of this Agreement; and (g) be substantially in the form of Exhibit B attached hereto, with blanks appropriately completed in conformity herewith.

 

3.3                               Interest. Subject to Section 3.4 below, with respect to each Advance, the Advances shall bear interest on the outstanding balance at a per annum rate equal to the monthly London Interbank Offer Rate as published in the Wall Street Journal two (2) Business Days prior to the commencement of the applicable Interest Period (“LIBOR Rate”) plus 165 basis points (any such rate, subject to the terms hereof, the “Interest Rate”). The Interest Rate shall be reset on the first Business Day of each calendar month. OGC will make interest payments on the outstanding aggregate amount of the Advances either (a) one month in arrears on each Payment Date and upon payment in full of the outstanding aggregate amount (whether by acceleration, stated maturity or otherwise), or (b) if the total aggregate amount of all Advances (plus interest accrued and added to the aggregate amount outstanding in accordance with this Section 3.3(b)) outstanding would not exceed the Commitment, OGC may elect to add interest accruing on the Advances on any given

 

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Payment Date to the aggregate amount outstanding thereunder. Interest will be calculated daily on the basis of a 360 day year on aggregate amounts outstanding under the Advances for the actual number of days elapsed.

 

3.4                               Default Interest Rate. If any payment of any amount payable hereunder or under any other Cash Management Document is not paid when due, whether on the scheduled Payment Date, the Termination Date, or any other date including as a result of acceleration of the Advances upon an Event of Default, then the amount then due and unpaid shall thereafter bear interest until paid at a rate (“Default Interest Rate”) per annum (based on a 360 day year, actual days elapsed) equal to the applicable Interest Rate plus two percent (2%) per annum, and such accrued interest at the Default Interest Rate shall be due and payable by OGC on demand by HL UK.

 

3.5                               Repayment.

 

(a)                                 All outstanding Advances shall be repaid in full on the Termination Date.

 

(b)                                 Notwithstanding the provisions of sub-clause (a) above, HL UK may require prepayment of all or any portion of the outstanding Advances (and for partial prepayment, in integral multiples of USD $100,000) at any time and from time to time by sending to OGC notice of prepayment at least five (5) Business Days prior to the date of prepayment. Any amounts prepaid may be re-advanced (where monies representing prepaid Advances are so offered by HL UK) during the term of this Agreement.

 

(c)                                  OGC may optionally prepay any outstanding Advances in whole or in part (in integral multiples of USD $100,000 each in part) at any time and from time to time by sending to HL UK notice of optional prepayment. Any notice of optional prepayment shall (i) specify the proposed prepayment amount, (ii) specify the proposed prepayment date, which shall be a Business Day, and (iii) be delivered to HL UK at least five (5) Business Days prior to the proposed prepayment date. Any amounts prepaid may be re-advanced (where monies representing prepaid Advances are so offered by HL UK) during the term of this Agreement.

 

(d)                                 If at any time the balance of Advances outstanding hereunder exceeds the Commitment, OGC shall immediately repay the amount of such excess as a prepayment of the Advances after providing notice to HL UK.

 

3.6                               Payment Procedure. Except as specifically set forth in this Agreement, all payments made by OGC under the Note or this Agreement relative to the Advances shall be made by wire transfer to a bank account specified by HL UK. Provided that no Event of Default shall have occurred and be continuing, the amount of all such payments received by HL UK from OGC shall be applied by HL UK, first, against all costs and expenses incurred by HL UK under this Agreement; second, against accrued but unpaid interest on the outstanding Advances; and third, against the unpaid balance of the outstanding Advances. If an Event of Default shall have occurred and be continuing, payments received by HL UK shall be applied in HL UK’s sole discretion.

 

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ARTICLE 4  — COVENANTS AND REPRESENTATIONS

 

4.1                               Payment and Performance of Obligations. OGC covenants and agrees that, from the date of this Agreement until its payment and performance in full of all of the Obligations, OGC shall, unless HL UK shall otherwise consent in writing, pay and perform all Obligations arising under, and in accordance with, the terms of this Agreement, the Note and the other Cash Management Documents.

 

4.2                               Representations and Warranties. OGC represents and warrants, on the date of this Agreement and on each date an Advance is made:

 

(a)                                 all necessary corporate and other action has been taken to authorize it to enter into this Agreement, the Note and the Cash Management Documents and to perform the transactions contemplated in them;

 

(b)                                 no limit on its powers or those of its directors will be exceeded as a result of any Advance made pursuant to this Agreement;

 

(c)                                  it has materially complied with the terms of this Agreement and no Event of Default has occurred and is continuing; and

 

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

 

ARTICLE 5  — DEFAULTS AND REMEDIES

 

The occurrence of any of the events specified in Sections 5.1 to 5.5 (inclusive) hereof shall constitute an “Event of Default”.

 

5.1                               Payment Hereunder. OGC shall fail to make payment of any amount when due under the Note, or a default shall be made in the payment of any other part of the Obligations as and when the same shall be due and payable, and five (5) Business Days have expired following OGC’s receipt of written notice of such default from HL UK.

 

5.2                               Observance of Terms Hereunder. (i) A default in the due observance or performance of any term, covenant, condition or agreement on the part of OGC to be observed or performed pursuant to the terms of this Agreement, the Note, or any other Cash Management Document if such default (other than a default with respect to the payment of any amount due to HL UK under Section 5.1) shall have occurred and continued for thirty (30) days, or (ii) any representation or warranty set out herein or in the Note or other Cash Management Document proves to have been untrue in any material respect when made, repeated or deemed made.

 

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5.3                               Voluntary Actions. OGC shall:

 

(a)                                 apply for or consent to the appointment of an administrator, receiver, trustee or liquidator for itself or any of its properties or assets;

 

(b)                                 admit in writing the inability to pay its debts as they fall due;

 

(c)                                  make a general assignment for the benefit of creditors or enter into any composition, compromise, assignment or arrangement, with one or more of its creditors to reschedule any of its indebtedness (because of actual or anticipated financial difficulties);

 

(d)                                 suffer an order for relief to be entered against it or be declared to be insolvent; or

 

(e)                                  file a voluntary petition in bankruptcy, or a petition seeking reorganization or take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution, insolvency or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law or if action shall be taken by OGC for the purpose of effecting any of the foregoing.

 

5.4                               Involuntary Actions. Upon the expiration of sixty (60) days after the filing of any involuntary petition against OGC for its winding-up or the appointment of an administrator, receiver, trustee, liquidator or similar relief in respect thereof, in either case without the petition being dismissed prior to that time, or an order, judgment or decree shall be entered, without the application, approval or consent of OGC by any court of competent jurisdiction approving a petition seeking a reorganization of OGC or of all or a substantial part of the properties or assets of OGC or appointing an administrator, receiver, trustee or liquidator or similar official for OGC and such order, judgment or decree shall continue unstayed and in effect for a period of sixty (60) days or more.

 

5.5                               Invalidity of Guaranty.  The Guaranty shall for any reason (other than pursuant to the terms thereof) cease to be valid and binding on or enforceable against Guarantor, or Guarantor shall so state in writing or Guarantor shall so assert in any pleading filed in any court.

 

5.6                               Remedies.

 

(a)                                 Subject to Section 5.6(b) below, if an Event of Default occurs, all amounts outstanding under the Note and all other Obligations shall become immediately due and payable, both as to the Advance balances and the interest thereon, in each case without any action by HL UK and without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, notwithstanding anything to the contrary contained herein or in any other Cash Management Document.

 

(b)                                 If an Event of Default occurs, then at any time thereafter during the continuance of such Event of Default, HL UK may, by written notice to OGC, waive its rights

 

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to immediate repayment and declare the Note not to be immediately due and payable, notwithstanding anything to the contrary contained herein or in any other Cash Management Document, at which point the Event of Default shall be deemed waived.

 

5.7                               Notification. OGC shall promptly notify HL UK of any circumstances which constitute or which given the elapse of time are likely to result in an Event of Default hereunder.

 

ARTICLE 6  — MISCELLANEOUS

 

6.1                               Notices. Any notice or other communication required or permitted under this Agreement or any other Cash Management Document shall be in writing via certified, registered or expedited mail or via e-mail, and shall be delivered or transmitted to the appropriate address as set forth below.

 

If to HL UK:

 

Houlihan Lokey Capital (Holdings) Ltd.

10250 Constellation Boulevard, 5th floor

Los Angeles, CA 90067

Attention: Vice President of Finance

E-mail: etaniguchi@HL.com

 

If to OGC:

 

ORIX Global Capital, Ltd.

20-22 Bedford Row

London WC1R 4JS

United Kingdom

Attention: Secretary

E-mail:                                                        ron.barger@orix.com

ryan.farha@orix.com

treasury@orix.com

 

In each case with a copy to:

 

Houlihan Lokey, Inc.

10250 Constellation Boulevard, 5th floor

Los Angeles, CA 90067

Attention: General Counsel

E-mail: ccrain@HL.com

 

6.2                               Survival of Covenants, Etc. All covenants, agreements, representations and warranties made herein, the Note and the other Cash Management Documents, and all certificates delivered and to be delivered pursuant hereto, shall survive the making by HL UK of the Advances and the execution and delivery to HL UK of the Cash Management Documents, and the termination date of this Agreement, and shall continue in full force and effect so long as any part of the Obligations is outstanding, unpaid or unperformed.

 

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Whenever in this Agreement any of the parties hereto are referred to, such reference shall be deemed to include the successors and assigns of such party, and all covenants, promises and agreements by or on behalf of OGC which are contained in this Agreement shall bind and inure to the benefit of the successors and assigns of HL UK.

 

6.3                               Law Governing and Consent to Venue. This Agreement and the Note (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales and the parties irrevocably submit for all purposes to the exclusive jurisdiction of the English Courts in connection with any dispute or claim arising out of or in connection with this Agreement and the Note or their subject matter or formation (including non-contractual disputes or claims).

 

6.4                               Non-Waiver. Neither any failure nor any delay on the part of HL UK in exercising any right, power or privilege hereunder, under the Note or under any of the other Cash Management Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege, nor shall any course of dealing between OGC and HL UK operate as a waiver of any right or rights of HL UK.

 

6.5                               Modification, Amendment, Etc. No modification or amendment of any provision of this Agreement, the Note, or any of the other Cash Management Documents shall in any event be effective unless the same shall be in writing and signed by HL UK and OGC. No waiver or consent to any departure by a party hereto of any provision of this Agreement, the Note or any of the other Cash Management Documents shall in any event be effective unless the same shall be in writing and signed by the other party and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice or demand on a party in any case shall entitle the other party to any other or further notice or demand in the same, similar or other circumstance.

 

6.6                               Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute but one agreement. This Agreement shall be effective when counterparts which, when taken together, bear the signature (including execution by facsimile or electronic means (including a pdf)) of all parties hereto, shall have been delivered to and received by HL UK and OGC.

 

6.7                               Entirety and Headings. This Agreement, the Note and the other Cash Management Documents contain the entire agreement between OGC and HL UK with respect to the subject matter hereof and replace any prior or contemporaneous understandings and agreements, oral or written, between the parties. No representation, warranty, modification, alteration or agreement shall affect this Agreement, unless made in writing and executed with the same formalities as this Agreement. The paragraph headings do not form a part of this Agreement, but are for convenience only and shall not limit or affect in any way the meaning of its provisions.

 

6.8                               Right to Defend. HL UK shall have the right, at OGC’s sole cost and expense, to appear in or defend any action or proceeding in which HL UK is named or joined or that otherwise purports to affect the rights or duties of the parties hereunder and in connection

 

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therewith pay out of the proceeds of the Advances and/or recover from OGC all necessary costs and expenses (including reasonable attorneys’ fees), with counsel reasonably satisfactory to HL UK.

 

6.9                               Indemnification. OGC hereby agrees to protect, indemnify, defend and hold harmless HL UK from and against any and all liability, expense or damage of any kind or nature from any third party suits, claims or demands, including reasonable lawyers’ fees and expenses, on account of any matter or thing, whether in suit or not, arising out of any breach by it of this Agreement, the Note or the other Cash Management Documents, other than taxes (which shall be governed exclusively by Section 6.12 hereof).

 

6.10                        No Obligation to Third Parties. Any term, provision or condition of this Agreement to the contrary notwithstanding, HL UK has not, and by the execution and acceptance of this Agreement hereby expressly disclaims, any obligation or responsibility for the management, conduct or operation of the business and affairs of OGC. Any term or condition hereof permitting HL UK to disburse funds, whether from the proceeds of the Note or otherwise, or to take or refrain from taking any action with respect to OGC, shall be deemed to be solely for the benefit of HL UK and may not be relied upon by any other Person. A Person who is not a party to this agreement cannot enforce, or enjoy the benefit of, any term of this agreement under the Contracts (Rights of Third Parties) Act 1999.

 

6.11                        No Fiduciary Obligations.  For the avoidance of doubt, OGC is not, and shall not be deemed to be, acting as an agent or fiduciary of HL UK under the Cash Management Policy or otherwise, and shall have no fiduciary or other obligations to HL UK with regard to the use of amounts advanced under this Agreement, other than the obligation to repay upon demand pursuant to Section 3.5 hereof.

 

6.12                        Tax Matters.

 

(a)                                 If OGC shall be required by law to deduct any Covered Taxes from or in respect of any sum payable under this Agreement or the Note such sum shall be increased as may be necessary so that, after making all such deductions, HL UK receive an amount equal to the sum they would have received had no such deduction for Covered Taxes been made.  If OGC shall be required by law to deduct or withhold any taxes other than Covered Taxes from or in respect of any sum payable hereunder, HL UK shall be treated for all purposes of this Agreement and the Note as having received any such amounts so deducted or withheld.

 

(b)                                 If HL UK is entitled to an exemption from or reduction of withholding tax with respect to payments made under this Agreement or the Note, HL UK shall deliver to OGC, at the time or times reasonably requested by OGC, such properly completed and executed documentation reasonably requested by OGC as will permit such payments to be made without withholding or at a reduced rate of withholding or to determine whether or not HL UK is subject to backup withholding or information reporting requirements, including, without limitation, an appropriate Internal Revenue Service Form W-8.

 

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(c)                                  If a payment made to HL UK under this Agreement or the Note would be subject to U.S. federal withholding tax imposed by FATCA if HL UK were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), HL UK shall deliver to OGC at the time or times prescribed by law and at such time or times reasonably requested by OGC such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by OGC as may be necessary for OGC to comply with its obligations under FATCA and to determine that HL UK has complied with HL UK’s obligations under FATCA or to determine the amount to deduct and withholding from such payment.

 

[The remainder of this page was intentionally left blank]

 

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IN WITNESS WHEREOF, HL UK and OGC have executed this Agreement as of the date first written above.

 

	
 
    	
HOULIHAN LOKEY CAPITAL   (HOLDINGS) LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott. L. Beiser
    
	
 
    	
Name:
    	
Scott. L. Beiser
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ORIX GLOBAL CAPITAL, LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul E. Wilson
    
	
 
    	
Name:
    	
Paul E. Wilson
    
	
 
    	
Title:
    	
Director
    

 

 

EXHIBIT A

 

GLOSSARY OF DEFINED TERMS

 

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in London, England are authorized or required by law to close.

 

“Cash Management Documents” means this Agreement, together with all Exhibits and Schedules hereto and all other documents and instruments, now or hereafter executed by or on behalf of OGC or the Guarantor in favour of HL UK in connection with this Agreement, including any and all promissory notes (including the Note), security agreements, financing statements, or other documents or instruments, and any and all modifications or extensions or supplements to or replacements for, in whole or in part, any of the foregoing.

 

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

 

“Covered Taxes” means any tax of any kind, but excluding (a) franchise taxes, branch profits and taxes imposed on or measured by the net income or receipts of HL UK under the law of any jurisdiction, (b) any such withholding tax that is in effect and would apply to a payment to HL UK at the time HL UK becomes a party to this Agreement, (c) taxes attributable to HL UK’s failure to comply with Section 6.12(b) or Section 6.12(c) and (d) any amounts required to be withheld under FATCA.

 

“Event of Default” means any of the events specified in Sections 5.1 to 5.5 hereof inclusive, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement between a non-U.S. jurisdiction and the United States of America with respect to the foregoing and any law, regulation or practice adopted pursuant to any such intergovernmental agreement.

 

“Guarantor” means ORIX USA Corporation.

 

“Guaranty” means the Guaranty, dated as of the date hereof, executed by Guarantor in favor of HL UK, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“Interest Period” means (a) initially, the period commencing on the date hereof and ending on the last day of the immediately following calendar month; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the following calendar month; provided that, in each of the case of clauses (a) and (b), (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a

 

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calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (iii) no Interest Period shall extend beyond the date on which Advances hereunder are repaid in full.

 

“Maturity Date” means the date two years after the date of this Agreement.

 

“Note” means that certain Promissory Note executed by OGC for the benefit of HL UK, a copy of which is attached hereto as Exhibit B.

 

“Obligations” means all indebtedness, obligations and liabilities (including extensions and renewals thereof) of OGC to HL UK of every kind and description, direct or indirect, now existing or hereafter arising, due or to become due, absolute or contingent, arising under, and in accordance with, the terms of this Agreement, the Note and the other Cash Management Documents, including all costs and expenses incurred in the collection of the same.

 

“Payment Date” means the first Business Day of each calendar month, commencing on the first day of the month following the date of this Agreement, and continuing monthly until the full amount of the Advances are repaid in accordance with this Agreement and the Note (whether by acceleration or otherwise).

 

“Person” means an individual, a partnership, a limited liability company, a corporation, a business trust, a joint stock company, a trust, an unincorporated association, a joint venture, a governmental authority or any other entity.

 

“Termination Date” means the earliest of (a) the Maturity Date, (b) date of the termination of the Agreement by either party upon notice pursuant to Section 2.3 and (c) the date on which obligations under this Agreement become due and payable pursuant to Section 5.6(a) or otherwise.

 

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EXHIBIT B

 

PROMISSORY NOTE

 

London, England

 

Section 1.                                          FUNDAMENTAL PROVISIONS

 

The following terms will be used as defined terms in this Promissory Note (as it may be amended, modified, extended and renewed from time to time, the “Note”):

 

	
Promissee:
    	
 
    	
Houlihan Lokey Capital (Holdings) Ltd., a company   incorporated in England. (“HL UK”)
    
	
 
    	
 
    	
 
    
	
Promissor:
    	
 
    	
ORIX Global Capital, Ltd., a company incorporated in   England. (“OGC”)
    
	
 
    	
 
    	
 
    
	
Credit Balance:
    	
 
    	
Up to an aggregate of USD one hundred and fifty   million dollars
    
	
 
    	
 
    	
 
    
	
Amount:
    	
 
    	
($150,000,000).
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
Each Advance shall bear interest on the outstanding   principal balance at a per annum rate equal to LIBOR Rate plus 165 basis   points (any such rate, subject to the terms hereof, the “Interest   Rate”). The Interest Rate shall be reset on the first Business Day   of each calendar month. OGC will make interest payments on the aggregate   outstanding amount of the Advances either (a) one month in arrears on each   Payment Date and upon payment in full of the outstanding amount (whether by   acceleration, stated maturity or otherwise) on the Termination Date, or (b) if   the total amount of all Advances (plus interest accrued and added to the   amount outstanding in accordance with Section 3.3(b) of the Cash   Management Agreement) outstanding would not exceed the Commitment, OGC may   elect to add interest accruing on such Advances on any given Payment Date to   the balance outstanding thereunder. Interest will be calculated daily on the   basis of a 360 day year on balance outstanding under the Advances for the   actual number of days elapsed.
    
	
 
    	
 
    	
 
    
	
Maturity Date:
    	
 
    	
The date two years after the date of the Cash   Management Agreement.
    
	
 
    	
 
    	
 
    
	
Termination Date:
    	
 
    	
The earliest of (a) the Maturity Date, (b) date of   the termination of the Cash Management Agreement by either party upon notice   pursuant to Section 2.3 of the Cash Management Agreement and (c) the   date on which obligations under the Cash Management Agreement and this Note   become due and payable pursuant to Section 5.6(a) of the Cash   Management Agreement or otherwise.
    

 

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Business Day:
    	
 
    	
Any day of the year other than Saturdays, Sundays   and legal holidays on which commercial banks in London, England are   authorized or required to be closed.
    
	
 
    	
 
    	
 
    
	
Cash Management Documents:
    	
 
    	
The Cash Management Agreement, the Guaranty, this   Note and any other documents securing the repayment of the Note.
    
	
 
    	
 
    	
 
    
	
Advances:
    	
 
    	
The Advances from HL UK to OGC in the aggregate   amount and evidenced by this Note.
    
	
 
    	
 
    	
 
    
	
Cash Management Agreement:
    	
 
    	
The Cash Management Agreement of even date herewith   by and between OGC and HL UK.
    
	
 
    	
 
    	
 
    
	
Defined Terms:
    	
 
    	
Defined terms used but not otherwise defined in this   Note shall have the meanings ascribed to such terms in the Cash Management   Agreement.
    

 

Section 2.                                          PROMISE TO PAY.

 

For value received, OGC promises to pay to the order of HL UK, in accordance with the payment procedure set forth in Section 3.6 of the Cash Management Agreement, the outstanding aggregate amount of the outstanding Advances, together with accrued interest from the date of disbursement of an Advance on the unpaid balance at the applicable Interest Rate for such Advance.

 

Section 3.                                          INTEREST; PAYMENTS.

 

(a)         Subject to Section 3(d) below, from the date hereof, interest shall accrue on the unpaid balance of this Note at the applicable Interest Rate (“Interest”).

 

(b)         Subject to Section 3.3(b) of the Cash Management Agreement, all accrued but unpaid Interest on the unpaid Advance balances shall be payable one month in arrears on or before the first Business Day of each month, commencing on the first day of the month following the date of this Note and continuing through and including the final payment in full of the aggregate amount of the Advances (“Payment Date”).

 

(c)          OGC shall make payment of all unpaid Advance balances, interest, and any other amounts due hereunder on the Termination Date, in same day funds, not later than 4:00 p.m. (London time). If any payment of Advance balances and interest to be made by OGC hereunder shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing the interest in such payment.

 

(d)         If any payment of Advance balances or interest or any other amount payable hereunder or under any other Cash Management Document is not paid when due, whether on the scheduled Payment Date, the Termination Date or any earlier date as a result of acceleration of this Note after an Event of Default, then the amount then due and unpaid shall thereafter bear interest until paid at a rate (“Default Interest Rate”)

 

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per annum (based on a 360 day year, actual days elapsed) equal to the applicable Interest Rate plus two percent (2%) per annum, and such accrued interest at the Default Interest Rate shall be due and payable by OGC on demand by HL UK.

 

Section 4.                                          PREPAYMENTS.

 

OGC may prepay the outstanding balance of the Advances (or any part thereof), as provided for in the Cash Management Agreement.

 

Section 5.                                          LAWFUL MONEY.

 

The aggregate amount of the Advances and interest thereon are payable in lawful money of the United States.

 

Section 6.                                          APPLICATION OF PAYMENTS.

 

Provided that no Event of Default shall have occurred and be continuing, the amount of all such payments received by HL UK hereunder from OGC shall be applied by HL UK, first, against all costs and expenses incurred by HL UK hereunder; second, against accrued but unpaid interest on the outstanding Advances; and third, against the unpaid balance of the Advances. If an Event of Default shall have occurred and be continuing any payments received by HL UK after the occurrence of an Event of Default, shall be applied to the amounts specified in this Section 6 in such order as HL UK may, in its sole discretion, elect.

 

Section 7.                                          WAIVER.

 

OGC hereby waives demand for payment, presentment for payment, protest, notice of nonpayment, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonour, and notice of nonpayment, and all other notices or demands of any kind (except notices specifically provided for in the Cash Management Documents and agreed to in writing by HL UK) and expressly agrees that, without in any way affecting the liability of OGC, the holder hereof may by notice in writing extend any maturity date or the time for payment of any installment due hereunder, otherwise modify the Cash Management Documents, accept additional security, release any Person liable, and release any security or guaranty. OGC waives, to the full extent permitted by law, the right to plead any and all statutes of limitations as a defence.

 

Section 8.                                          LAWYERS’ FEES.

 

If this Note is not paid when due or if any Event of Default occurs, OGC promises to pay all costs of enforcement and collection and preparation therefor, including but not limited to, reasonable lawyers’ fees, whether or not any action or proceeding is brought to enforce the provisions hereof (including without limitation, all such costs incurred in connection with any bankruptcy, receivership or other court proceedings (whether at the trial or appellate level).

 

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Section 9.                                          SEVERABILITY.

 

If any provision of this Note is unenforceable, the enforceability of the other provisions shall not be affected and they shall remain in full force and effect.

 

Section 10.                                   HEADINGS.

 

Headings at the beginning of each numbered Section of this Note are intended solely for convenience and are not part of this Note.

 

Section 11.                                   APPLICABLE LAW.

 

Any dispute of claim relating to this Note (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales and the parties irrevocably submit for all purposes to the exclusive jurisdiction of the English Courts in connection with any dispute or claim arising out of or in connection with this Note or its subject matter or formation (including non-contractual disputes or claims).

 

Section 12.                                   INTEGRATION.

 

The Cash Management Documents contain the complete understanding and agreement of the holder hereof and OGC and supersede all prior representations, warranties, agreements, arrangements, understandings and negotiations.

 

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Executed and delivered as a Deed this    day of        , 2015.

 

	
 
    	
ORIX GLOBAL CAPITAL, LTD.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Witnessed by:

 

Name:

 

Address:

 

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