Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "Actual Tax Liability" means, with respect to any Taxable Year, the actual aggregate liability for Covered Taxes of the Corporate Taxpayer and its subsidiaries for such Taxable Year, computed in accordance with applicable law and taking into account all Tax Benefit Payments actually made under this Agre

Section 1.2 — Interpretive Provisions The following rules of construction shall apply to this Agreement unless the context otherwise requires: (a) References herein to "including" (and correlative terms such as "include" and "includes") shall mean "including, without limitation," and shall not be construed to limit any general statement that precedes such term to the specific or similar items or matters immediately f

ARTICLE II — DETERMINATION OF REALIZED TAX BENEFITS

Section 2.1 — Basis Adjustment (a) Section 754 Election. The Corporate Taxpayer shall cause Pinnacle to file (or confirm the filing of) an election under Section 754 of the Code with Pinnacle's federal partnership income tax return (Form 1065) for the taxable year ending December 31, 2024. The Section 754 Election shall be made in the manner and form prescribed by applicable Treasury Regulations, and shall be attache

Section 2.2 — Determination of Net Tax Benefit (a) Computation of Hypothetical and Actual Tax Liability. For each Taxable Year beginning with the Taxable Year ending December 31, 2024, the Corporate Taxpayer shall compute (i) the Hypothetical Tax Liability for such Taxable Year and (ii) the Actual Tax Liability for such Taxable Year. The Hypothetical Tax Liability shall be computed as though no Basis Adjustment exist

Section 2.3 — Realized Tax Benefit (a) Determination of Realized Tax Benefit. A Realized Tax Benefit for any Taxable Year shall equal the portion of the Net Tax Benefit for such Taxable Year that is actually utilized to reduce Covered Taxes payable by the Corporate Taxpayer and its subsidiaries in such Taxable Year. A Net Tax Benefit shall be deemed actually utilized in a Taxable Year to the extent that the amortizat

Section 2.4 — Tax Benefit Schedule (a) Delivery. Within ninety (90) days after the date on which the Corporate Taxpayer files (or causes to be filed) its federal income tax return for each Taxable Year, the Corporate Taxpayer shall prepare and deliver (or cause to be prepared and delivered) to the TRA Representative a Tax Benefit Schedule for such Taxable Year, substantially in the form set forth in Exhibit C attache

ARTICLE III — TAX BENEFIT PAYMENTS

Section 3.1 — Timing of Payments (a) Payment Date. Tax Benefit Payments with respect to each Taxable Year shall be made by the Corporate Taxpayer on or before the applicable Payment Date, which shall be the later of (i) the date that is ninety (90) days after the date on which the Corporate Taxpayer files (or causes to be filed) its federal income tax return for such Taxable Year and (ii) the date that is thirty (30)

Section 3.2 — Amount of Tax Benefit Payments (a) Calculation. For each Taxable Year, the aggregate Tax Benefit Payment shall equal the product of (i) the Sharing Percentage (85%) and (ii) the Realized Tax Benefit for such Taxable Year, as determined in accordance with Article II. (b) Estimated Payments. Based on the estimates set forth in Section 2.2, the estimated aggregate annual Tax Benefit Payment for each full T

Section 3.3 — Late Payments; Interest (a) Accrual of Interest. Any Tax Benefit Payment not made by the Corporate Taxpayer on or before the applicable Payment Date shall accrue interest at the Agreed Rate (SOFR plus 100 basis points per annum), compounded quarterly, from and including the Payment Date through and including the date on which actual payment is made in full. (b) Compounding. Interest on any overdue Tax B

Section 3.4 — Pro Rata Allocation Among TRA Holders All Tax Benefit Payments made under this Agreement shall be allocated among the TRA Holders in accordance with each TRA Holder's TRA Holder Percentage as set forth in Exhibit B attached hereto. No TRA Holder shall have any claim or right to a greater or lesser share of any Tax Benefit Payment than such TRA Holder's TRA Holder Percentage, except as may be adjusted to

Section 3.5 — No Duplicative Payments (a) General. No TRA Holder shall receive duplicative payments with respect to the same Realized Tax Benefit. For the avoidance of doubt, if the same Realized Tax Benefit is attributable to more than one Taxable Year (e.g., due to carry-forward or carry-back of deductions), the Corporate Taxpayer shall ensure that Tax Benefit Payments are calculated so as to avoid double-counting

ARTICLE IV — PROCEDURES; DISPUTES

Section 4.1 — Cooperation; Information Rights (a) Access to Information. The Corporate Taxpayer shall provide the TRA Representative with reasonable access to relevant tax return information, work papers, schedules, computations, and other documentation reasonably necessary to verify the accuracy of each Tax Benefit Schedule, including (i) copies of filed federal and state income tax returns of the Corporate Taxpayer

Section 4.2 — Objection Process (a) Objection Period. The TRA Representative shall have thirty (30) days following receipt of a Tax Benefit Schedule for any Taxable Year to deliver a written objection to the Corporate Taxpayer setting forth in reasonable detail the nature of the objection, the specific items or computations to which the TRA Representative objects, and the TRA Representative's proposed alternative com

Section 4.3 — Tax Return Filing; Section 754 Election (a) Partnership Return Filing. The Corporate Taxpayer shall cause Pinnacle to timely file all required federal and state partnership income tax returns, including (i) IRS Form 1065 (U.S. Return of Partnership Income) for each taxable year of Pinnacle, and (ii) all applicable state partnership income tax returns and information returns. (b) Section 754 Election Fil

Section 4.4 — Consistency The Parties agree that the purchase price allocation schedule set forth in Exhibit A and the TRA Holder Percentages set forth in Exhibit B shall be consistently used for all federal, state, and local income tax reporting purposes related to the Merger and the transactions contemplated hereby, including, without limitation, (a) the reporting of the Basis Adjustment on Pinnacle's federal partn

Section 5.1 — Early Termination by Corporate Taxpayer (a) Election to Terminate. The Corporate Taxpayer may, at any time following the second anniversary of the Closing Date, elect to terminate this Agreement by delivering a written notice of early termination (the "Early Termination Notice") to the TRA Representative, specifying the proposed Early Termination Date and setting forth in reasonable detail the computati

Section 5.2 — Early Termination upon Change of Control (a) No Automatic Termination. Upon a Change of Control, this Agreement shall not terminate automatically. The obligations of the Corporate Taxpayer under this Agreement, including the obligation to make Tax Benefit Payments, shall be binding on the successor entity or acquiror in such Change of Control, to the same extent as if such successor entity or acquiror w

Section 5.3 — Material Breach (a) Acceleration upon Material Breach. If the Corporate Taxpayer materially breaches this Agreement, including, without limitation, (i) the failure to make any Tax Benefit Payment when due under Section 3.1 (and the continuation of such failure for a period of thirty (30) days following written notice from the TRA Representative), (ii) the failure to file the Section 754 Election in acco