TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (this Agreement), dated as of February 7, 2020, is hereby entered into by and between Vertiv Holding Co, a Delaware corporation formerly known as GS Acquisition Holdings Corp (the Corporate Taxpayer), and VPE Holdings, LLC, a Delaware limited liability company (the Stockholder and, together with the Corporate Taxpayer and the Stockholder, collectively, the Parties).
WHEREAS, the Stockholder is the historic owner of Vertiv Holdings, LLC, a Delaware limited liability company (the Company);
WHEREAS, on December 10, 2019, the Corporate Taxpayer (as GS Acquisition Holdings Corp, a Delaware corporation), Crew Merger Sub I LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Corporate Taxpayer (First Merger Sub), Crew Merger Sub II LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Corporate Taxpayer (Second Merger Sub), the Stockholder and the Company entered into the certain Agreement and Plan of Merger (the Merger Agreement), pursuant to which First Merger Sub will merge with and into the Company, the separate corporate existence of First Merger Sub will cease (the First Merger) and, as part of an integrated transaction, immediately following the First Merger, the Company will merge with and into Second Merger Sub, the separate corporate existence of the Company will cease and Second Merger Sub as the surviving company will continue as a wholly-owned subsidiary of the Corporate Taxpayer;
WHEREAS, the acquisition of the Company by Vertiv JV Holdings, LLC, a Delaware limited liability company formerly known as Cortes NP JV Holdings, LLC, and the parent entity of Stockholder, pursuant to the certain transaction agreement, dated July 29, 2016, as well as historical acquisition activities of the Group Companies, including without limitation pursuant to that certain asset purchase agreement dated January 19, 2018 to which the Companys subsidiaries Vertiv Corporation (formerly known as Liebert Corporation), Vertiv Tech Co., Ltd. and Chloride Group Ltd are party, resulted in an increase to the tax basis of certain intangible assets of the Company (together, the Additional Basis Recovery, as defined below);
WHEREAS, the Company is entitled to the use of that certain Tax credit for increasing research activities (the R&D Credit, as defined below);
WHEREAS, the payment by the Group Companies of certain expenses in connection with the Transactions will generate certain income tax deductions for the Group Companies (the Seller Expense Deductions, as defined below);
WHEREAS, the income, gain, loss, deduction and other Tax items of the Corporate Taxpayer and its Subsidiaries (as defined below) may be affected by the Additional Basis Recovery and the R&D Credit and the Seller Expense Deductions (collectively, the Tax Assets); and