TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (this Agreement), dated as of [●], 2021 is hereby entered into by and among PowerSchool Holdings, Inc., a Delaware corporation (the Corporation), VEPF VI AIV III Corp., a Delaware corporation (Vista Blocker I), Onex Pinnacle Holdings Corporation, a Delaware corporation (Onex Blocker), VEPF V AIV VI Corp., a Delaware corporation (Vista Blocker II), Severin Holdings, LLC, a Delaware limited liability company (the Company), [Severin Topco (Series 1), LLC, a series of a Delaware limited liability company (TOPCO (Series 1)), Severin Topco (Series 2), LLC, a series of a Delaware limited liability company (TOPCO (Series 2))]1, Pinnacle Holdings I L.P., a Delaware limited partnership (Pinnacle Holdings), Vista Equity Partners Fund VI, L.P., a Cayman Islands limited partnership, Vista Equity Partners Fund VI-A, L.P., a Cayman Islands limited partnership, VEPF V FAF, L.P., a Cayman Islands limited partnership, Onex Partners Holdings LLC, Onex Partners IV Select LP, Onex US Principals LP, Onex Partners IV LP, Onex Partners IV GP LP and Onex Partners IV PV LP (Onex), those other parties set forth on Schedule A hereto, and the Agent.
WHEREAS, the TRA Holders hold, directly or indirectly through Vista Blocker I, Onex Blocker, and Vista Blocker II, limited liability company interests (Units) in the Company, which is classified as a partnership for U.S. federal income tax purposes;
WHEREAS, after the Reorganization Transactions (defined below), a subsidiary of the Corporation will be the managing member of the Company;
WHEREAS, the Corporation will issue shares of its Class A Common Stock, to certain purchasers in an initial public offering of its Class A Common Stock (the IPO and the date on which the IPO is consummated is referred to herein as the Closing Date);
WHEREAS, on the Closing Date, the Corporation will, directly and indirectly, acquire Common Units of the Company (collectively, the Purchase);
WHEREAS, from and after the closing of the IPO, under certain circumstances, TOPCO (Series 1) and TOPCO (Series 2) may exchange their Units together with their shares of Class B Common Stock of the Corporation for a Cash Payment and/or Class A Common Stock (each such transaction an Exchange) pursuant to the terms of the Exchange Agreement and as a result of such Exchanges, the Corporation is expected to obtain or be entitled to certain Tax benefits as further described herein;
WHEREAS, the Company and each of its direct and indirect Subsidiaries that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Internal Revenue Code of 1986, as amended (the Code), and any corresponding provisions of state and local Tax law for the Taxable Year that includes the Closing Date and each Taxable Year in which an Exchange (as defined below) occurs, which election is
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Series names to be confirmed.