EFTA01204468.pdf

From: Richard Joslin To: Jeffrey Epstein CC: Eileen Alexanderson Subject: FW: APO - Exchange Agreement Date: Thu, 06 Mar 2014 15:56:15 +0000 Attachments: APOn (execution_version)_Second_Amended_and_Restated_Exchange_Agreement....doc; Change-Pro_Redline.pdf; Change-Pro_Redlinen AR_Exchange_Agreement- vl_and_AR Exchange_Agreement_-v23.pdf Marc is selling a portion and donating a portion to charity of his AGM interest (BRH) at the current quarterly opening date. The initial exchange agreement did not look at the potential for a concurrent sale and donation. Tax issue is as follow: BRH distributes lower tier entities to Founder and Founder transfers to APO entity (if sale — to APO Corp so that APO Corp can purchase to get step up; if donation — to AMH — the publicly traded partnership). If sale/donation take place simultaneously, the gain on sale is added to tax basis of entire partnership interest (there is unified tax basis in partnership interest), a portion of the gain on sale would need to be allocated to the basis of the partnership interest transferred to charity. To avoid this gain contaminating the basis of property donated, the revised agreement puts an 11 business day separation from sale and charity. Sale first, then charity. Any IRS challenge i.e. step transaction , would be to the Founder not Apollo. Also should have no impact on TRA given how it is structured — APO buys only managemtn companies. I need to follow up on mechanics as KG indicated they have made a change in that APO Corp buys all vs two entities (carry partnership by credit/ PE funds and APO Corp buys AMH/management company entities). I don't see a issue (to LDB) and I let Katie Gregory know Changes initiated by PF who is counsel for MR and agreement changes by PW. From: Katie Gregory Newman [mailto Sent: Wednesday, March 05, 2014 5:10 PM To: Richard Joslin; Eileen Alexanderson Subject: FW: APO - Exchange Agreement Richard and Eileen, Following our conversation today, please see below and attached. Happy to get on the phone again and discuss at your convenience (or else arrange for a discussion with others if that is of interest). We hope to give the green light to folks tomorrow. Appreciate your help on this! Katie From: Grieve, Brian 5 rmallto Sent: Wednesday, March 05, 2014 4:59 PM To: Katie Gregory Newman Cc: Okun, Brad R Subject: FW: APO - Exchange Agreement EFTA01204468 Katie, The attached should be the final form of the Second A&R Exchange Agreement (along with a redline against the First A&R Exchange Agreement from May 2013). Also attached is a redline of the First A&R Exchange Agreement against the original Exchange Agreement. Let me know if you need anything else. Thanks Brian IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Click Here for More Information Brian S. Grieve I Associate Paul, Weiss, Rifkind, Wharton & Garrison LIP 1285 Avenue of the Americas 19-6064 ne) (Direct Fax) www.pau weiss.corn This message is intended only for the use of the Addressee and may contain information that is privileged and confidential. If you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error, please erase all copies of the message and its attachments and notify us immediately. This email and any files transmitted with it are confidential and intended solely for the person or entity to whom they are addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you have received this email in error please contact the sender and delete the material from any computer. Apollo Global Management, LLC EFTA01204469