WHEREAS, on and after the date hereof, pursuant to Section 10.01 of the LLC Agreement, certain TRA Parties have the right, in their sole discretion, from time to time to require OpCo to redeem (a Redemption) all or a portion of such TRA Partys Common Units for cash or, at the Corporate Taxpayers option, shares of Class A common stock, $0.01 par value per share, of the Corporate Taxpayer (the Class A Common Stock); provided that, pursuant to Section 10.03 of the LLC Agreement and at the election of the Corporate Taxpayer, the Corporate Taxpayer may effect a direct exchange of such cash or shares of Class A Common Stock for such Common Units (a Direct Exchange, and together with a Redemption, each IPO Contribution and each IPO Exchange, an Exchange);
WHEREAS, OpCo and each of its direct and indirect subsidiaries 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), for each Taxable Year (as defined below) in which an Exchange occurs, which elections are intended generally to result in an adjustment to the tax basis of the assets owned by OpCo (which adjustment will be allocable wholly or, in the case of an adjustment under Section 734(b) of the Code, in part, to the Corporate Taxpayer) at the time of an Exchange (such time, the Exchange Date) by reason of such Exchange and at the time of receipt of certain payments under this Agreement;
WHEREAS, the income, gain, loss, expense and other Tax (as defined below) items of the Corporate Taxpayer may be affected by the Tax Attributes (as defined below); and
WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the effect of the Tax Attributes on the actual liability for Taxes of the Corporate Taxpayer.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1.01 Definitions.
(a) The following terms shall have the following meanings for the purposes of this Agreement:
Actual Tax Liability means, with respect to any Taxable Year, the actual liability for U.S. federal, state and local income Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo and allocable to the Corporate Taxpayer for such Taxable Year.
Affiliate means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.
Agreed Rate means a per annum rate of [LIBOR plus 100 basis points].