Contract analysis

ARTICLE I — DEFINITIONS The following terms shall have the meanings set forth below for purposes of this Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement. "Actual Tax Liability" means, for any Taxable Year, the actual aggregate liability of the Corporate Taxpayer for federal, state, and local income taxes, as reflected on the Cor

ARTICLE II — DETERMINATION OF REALIZED TAX BENEFIT

Section 2.1 — Basis Adjustments. (a) The parties acknowledge and agree that, as a result of the Section 754 election made (or to be made) by Pinnacle for its taxable year ending December 31, 2024, Intermediate is entitled to a Basis Adjustment under Section 743(b) of the Code with respect to the assets of Pinnacle. The Basis Adjustment represents the excess of the amount paid for the Pinnacle membership interests (wh

Section 2.2 — Computation of Realized Tax Benefits. (a) For each Taxable Year, the Corporate Taxpayer shall compute the Realized Tax Benefit as the excess, if any, of (i) the Hypothetical Tax Liability (i.e., the income tax liability of the Corporate Taxpayer computed without regard to amortization or depreciation deductions attributable to the Basis Adjustments) over (ii) the Actual Tax Liability (i.e., the actual i

Section 2.3 — Carryforwards and Carrybacks. (a) If, for any Taxable Year, the amortization or depreciation deductions attributable to the Basis Adjustments generate or increase a net operating loss ("NOL") of the Corporate Taxpayer (or would generate or increase an NOL if such deductions were the last deductions taken into account), the Realized Tax Benefit for such Taxable Year shall be zero with respect to the port

Section 2.4 — Amended Returns and Audit Adjustments. (a) If any amended Tax Return filed by the Corporate Taxpayer, or any audit adjustment, Determination, or other change, results in an increase or decrease in the Realized Tax Benefit for any prior Taxable Year, the Tax Benefit Payment for the current Taxable Year (or, if no payment is otherwise due in the current Taxable Year, the next Taxable Year in which a payme

Section 2.5 — Imputed Interest. (a) To the extent that any Tax Benefit Payment (or any portion thereof) is treated as imputed interest for federal income tax purposes under Section 483 or Section 1274 of the Code or any similar provision of state or local tax law, the Corporate Taxpayer and the TRA Holders shall report such amount consistently as interest income to the recipient and as an interest deduction to the Co

ARTICLE III — TAX BENEFIT PAYMENTS

Section 3.1 — Payments. (a) Within ninety (90) days following the filing of the Corporate Taxpayer's federal income Tax Return for each Taxable Year (or, if earlier, the extended due date thereof, taking into account any valid extensions of time to file), the Corporate Taxpayer shall prepare and deliver to each TRA Holder and to the TRA Holder Representative a Tax Benefit Schedule setting forth in reasonable detail t

Section 3.2 — Timing of Payments. (a) Tax Benefit Payments shall be due and payable within five (5) business days following the later of (i) the date of delivery of the Tax Benefit Schedule for the applicable Taxable Year and (ii) the date that is ninety (90) days after the filing of the Corporate Taxpayer's federal income Tax Return for such Taxable Year (taking into account any valid extensions). (b) All Tax Benefi

Section 3.3 — Late Payments. If any Tax Benefit Payment is not made when due, interest shall accrue on the unpaid amount at the Agreed Rate (SOFR plus one hundred (100) basis points, compounded annually) from the original due date until the date such amount is paid in full. Such interest shall be payable in cash at the time the overdue Tax Benefit Payment is made and shall be in addition to, and not in lieu of, any o

Section 3.4 — Pro Rata Allocation. The aggregate Tax Benefit Payment for each Taxable Year shall be allocated among the TRA Holders in proportion to their respective TRA Holder Percentages, as follows: (a) Dr. Raymond Carvallo: 38.2% of the aggregate Tax Benefit Payment; (b) Dr. Nadia Ostrowski: 28.5% of the aggregate Tax Benefit Payment; (c) Jonathan Farnsworth: 5.8% of the aggregate Tax Benefit Payment; and (d) The

Section 3.5 — No Duplication. No TRA Holder shall be entitled to receive duplicative Tax Benefit Payments for the same Basis Adjustment, amortization deduction, or Realized Tax Benefit. In the event that any Basis Adjustment or Realized Tax Benefit is attributable to more than one Exchange Date or more than one transaction, the Corporate Taxpayer shall allocate such Basis Adjustment or Realized Tax Benefit in a manne

ARTICLE IV — TAX BENEFIT SCHEDULE; PROCEDURES

Section 4.1 — Tax Benefit Schedule. (a) For each Taxable Year during the term of this Agreement, the Corporate Taxpayer shall prepare and deliver to the TRA Holder Representative a Tax Benefit Schedule showing in reasonable detail the following information: (i) the Basis Adjustment amounts amortized or depreciated during the Taxable Year, broken down by asset class (payor contracts, assembled workforce, trade name, n

Section 4.2 — TRA Holder Representative Review. (a) The TRA Holder Representative (initially Dr. Raymond Carvallo) shall be entitled to review the Tax Benefit Schedule within thirty (30) calendar days of receipt thereof (the "Review Period"). During the Review Period, the Corporate Taxpayer shall provide the TRA Holder Representative with reasonable access to the supporting workpapers, computations, and relevant port

Section 4.3 — Consistency. (a) The Corporate Taxpayer covenants and agrees that it shall file (and shall cause Pinnacle and all other relevant entities to file) all Tax Returns consistently with the Basis Adjustments, the Purchase Price Allocation set forth on Schedule A hereto, and the Section 754 election made by Pinnacle, in each case as contemplated by this Agreement. (b) The Corporate Taxpayer shall not take any

Section 4.4 — Tax Return Filing Cooperation. (a) Each TRA Holder shall cooperate reasonably and in good faith with the Corporate Taxpayer in the preparation and filing of Tax Returns and in connection with any tax proceedings, audits, examinations, or litigation relating to the Basis Adjustments or the Realized Tax Benefits, including by providing information, executing documents, and making representatives available

Section 5.1 — Early Termination Election. (a) The Corporate Taxpayer may, at any time, irrevocably elect to terminate this Agreement with respect to all remaining obligations to all TRA Holders by delivering an Early Termination Notice to the TRA Holder Representative. Upon delivery of such notice, the Corporate Taxpayer shall pay each TRA Holder an Early Termination Payment. (b) The Early Termination Payment shall e

Section 5.2 — Mandatory Early Termination Upon Change of Control. (a) Upon the occurrence of a Change of Control of Holdings or the Corporate Taxpayer, the obligations of the Corporate Taxpayer under this Agreement shall automatically accelerate, and the Corporate Taxpayer (or its successor-in-interest) shall be obligated to pay each TRA Holder the Early Termination Payment within fifteen (15) business days following

Section 5.3 — Material Breach. If the Corporate Taxpayer materially breaches any of its obligations under this Agreement (including the obligation to prepare and deliver Tax Benefit Schedules, the obligation to make Tax Benefit Payments when due, or the covenant of consistency under Section 4.3) and fails to cure such breach within sixty (60) calendar days following receipt of written notice from the TRA Holder Repre

Section 5.4 — Payment Mechanics. (a) All Early Termination Payments shall be made in cash by wire transfer of immediately available funds to the bank accounts designated by the applicable TRA Holders in accordance with Section 3.2(b) hereof. (b) Partial early termination shall not be permitted. Any election to terminate this Agreement under Section 5.1 or Section 5.3, and any mandatory acceleration under Section 5.2,

ARTICLE VI — TAX MATTERS; COOPERATION

Section 6.1 — Tax Treatment of Payments. (a) The parties hereto agree to treat Tax Benefit Payments (and Early Termination Payments) as additional purchase price paid by the Corporate Taxpayer for the Pinnacle membership interests acquired in the Merger for federal, state, and local income tax purposes, to the maximum extent permitted by applicable law. The parties shall file all Tax Returns consistently with such tr

Section 6.2 — Section 754 Election. (a) Holdings shall cause Pinnacle to file (or maintain in effect) the election under Section 754 of the Code with Pinnacle's partnership federal income tax return (IRS Form 1065, filed under EIN: 82-1947632) for the taxable year ending December 31, 2024, and for all subsequent taxable years of Pinnacle during the term of this Agreement. (b) Neither Holdings, the Corporate Taxpayer,

Section 6.3 — Tax Proceedings. (a) The Corporate Taxpayer shall provide prompt written notice (and in no event later than fifteen (15) business days) to the TRA Holder Representative of any tax proceeding, audit, examination, investigation, or litigation (or notice thereof) by any federal, state, or local taxing authority that relates to or could reasonably be expected to affect the Basis Adjustments, the Purchase Pr

Section 6.4 — Coordination with Tax Indemnity. (a) This Agreement is independent of, and shall not be construed as modifying, supplementing, or superseding, the tax indemnification provisions of the Merger Agreement (including the tax indemnity escrow of Four Million One Hundred Twenty Thousand Dollars ($4,120,000) held at Ironbridge Trust Company, N.A. (reference: ITC-ESC-2024-05312)). (b) Payments made under this A

ARTICLE VII — REPRESENTATIONS AND WARRANTIES

Section 7.1 — Representations and Warranties of the Corporate Taxpayer and Holdings. Each of the Corporate Taxpayer and Holdings hereby represents and warrants to each TRA Holder as follows: (a) Organization and Good Standing. Each of the Corporate Taxpayer and Holdings is duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate or limited liabilit

Section 7.2 — Representations and Warranties of the TRA Holders. Each TRA Holder, severally and not jointly, hereby represents and warrants to the Corporate Taxpayer and Holdings as follows: (a) Capacity and Authority. Such TRA Holder has the legal capacity and authority to execute, deliver, and perform its obligations under this Agreement. If such TRA Holder is a natural person, such TRA Holder has reached the age o

ARTICLE VIII — DISPUTE RESOLUTION

Section 8.1 — Dispute Notice. Any party desiring to submit a dispute relating to the computation of Realized Tax Benefits, Tax Benefit Payments, Early Termination Payments, or any other matter arising under this Agreement shall deliver a written notice (a "Dispute Notice") to each other party, setting forth in reasonable detail the nature of the dispute, the specific provisions of this Agreement to which the dispute

Section 8.2 — Independent Accounting Firm. (a) If the parties are unable to resolve any dispute within thirty (30) calendar days following delivery of the Dispute Notice, the dispute shall be referred to a nationally recognized independent accounting firm (the "Independent Firm") mutually agreed upon by the Corporate Taxpayer and the TRA Holder Representative. The Independent Firm shall not be Caldwell Pratt & Mooreh

Section 8.3 — Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Section 8.4 — Jurisdiction and Venue. (a) Each party hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any particular matter, the Superior Court of the State of Delaware, or, if jurisdiction is not available in the state courts of Delaware, the United

Section 9.1 — Assignment. (a) No TRA Holder may transfer, assign, or otherwise dispose of all or any portion of its rights under this Agreement except in connection with a transfer of all or a portion of such TRA Holder's membership interests in Holdings (including Class B Units) to a permitted transferee as defined in the Amended and Restated Limited Liability Company Agreement of Holdings, dated as of the Closing D