Common use of Section 338 Elections Clause in Contracts

Section 338 Elections. The Seller, as the sole “S corporation shareholder” (within the meaning of Treasury Regulations Section 1.338(h)(10)-1(b)(5)) will cooperate and join with Buyer (at Buyer’s option) in making an election under Section 338(h)(10) of the Code, and any comparable provision of other applicable Law (collectively, the “Section 338 Elections”) with respect to the purchase and sale of the Shares hereunder. Seller will execute 2 IRS Forms 8023 (and any comparable forms under other applicable Law) at the Closing or at such other time as Buyer may reasonably request or as required by the Code in order to effectuate the Section 338 Elections. In connection with making the Section 338 Elections, Buyer will prepare and deliver to Seller a reasonable allocation of the “aggregate deemed sale price” within the meaning of Treasury Regulations Section 1.338-4, and the “adjusted grossed-up basis,” within the meaning of Treasury Regulations Section 1.338-5, based on reasonable market values, among the assets of the Company on IRS Form 8883 in accordance with Treasury Regulations Section 1.338-6 and 1.338-7 (the “Section 338 Allocation”) at least 30 days before the filing of such Section 338 Allocation, which Section 338 Allocation shall be acceptable to Seller (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Seller disagrees with the proposed Section 338 Allocation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of fifteen (15) days. If the disagreement cannot be resolved within such thirty-day period, then the Section 338 Allocation shall be finally determined by an nationally recognized accounting firm that is mutually acceptable to Buyer and Seller and any final Section 338 Allocation shall be final and binding on Buyer and Seller. Seller agrees to cooperate with Buyer, and to furnish Buyer with such information as Buyer reasonably requests, for purposes of determining such allocation. If Buyer determines to make the Section 338(h)(10) Elections, Seller will file all Tax Returns in a manner consistent with the Section 338 Elections and the Section 338 Allocation. Seller will pay any Tax attributable to the purchase and sale of the Shares hereunder and the making of the Section 338 Elections (including any Taxes imposed under Section 1374 of the Code and any comparable forms under other applicable Law). Neither the Company nor Seller will take or allow to be taken any action that could result in the inability of Seller or Buyer to make valid Section 338 Elections. In connection with the Section 338 Elections, Buyer shall pay to Seller the amount by which Taxes incurred by Seller with respect to the sale of Shares exceed the Taxes which the Seller would have incurred from the sale of Shares if the Section 338 Election had not been made (the “Gross-up Payment”). The Gross-up Payment shall be computed using an assumed tax rate on long-term capital gains of Twenty Percent (20.00%) (the “Assumed Capital Gains Rate”) and an assumed Tax rate on income or gains other than long-term capital gains of Thirty-Seven Percent (37.00%) (the “Assumed Non-Capital Gains Rate”), and shall be equal to the sum of (i) the increased tax Liability of Seller resulting from the deemed sale of assets and liquidation of the Company for Tax purposes based on the Section 338 Elections (as opposed to a sale of the stock if the Section 338 Elections had not been made), and (ii) the increased Tax liability of Seller as a result of receipt of the amounts described in the immediately foregoing clause (i) of this clause (ii). For the purpose of determining the Gross-up Payment, (v) it will be assumed that the Seller has a long-term holding period in the Shares, (w) no tax items of Seller other than such Seller’s tax basis in the Shares and the Tax items allocated to such Seller from the Company (or recognized by such Seller) as a result of the deemed sale of assets and liquidation of the Company pursuant to the Section 338 Elections will be considered in the determination, (x) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller upon the sale of the Shares if the Section 338 Elections had not been made, (y) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller on any gain allocated to such Seller from the deemed sale of assets qualifying for long-term capital gain upon the deemed sale of assets of the Company pursuant to the Section 338 Elections and any gain recognized by such Seller on such Seller’s Shares resulting from the deemed liquidation of the Company pursuant to the Section 338 Elections and (z) the Assumed Non-Capital Gain Rate shall be used to determine the Tax liability of Seller on any income or non-long-term capital gains allocated to such Seller from the deemed sale of assets pursuant to the Section 338 Elections. Seller shall deliver a schedule showing the computation of the Gross-up Payment (the “Gross-Up Calculation”) to Buyer within thirty (30) days of Seller’s acceptance of the Section 338 Allocation which Gross-Up Calculation shall be acceptable to Buyer (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Buyer disagrees with the proposed Gross-Up Calculation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of thirty (30) days. If the disagreement cannot be resolved within such thirty-day period, then the Gross-Up Calculation shall be finally determined by the Accounting Firm and, absent manifest error, any final Gross-Up Calculation shall be final and binding on Buyer and Seller. The payment of the Gross-up Payment by Buyer to Seller shall be made within ten (10) days following Buyer’s and Seller’s finalization of the Gross-Up Calculation pursuant to this paragraph.

Section 338 Elections. The SellerIf requested by the Buyer, as the sole “S corporation shareholder” (within Buyer and the meaning of Treasury Regulations Section 1.338(h)(10)-1(b)(5)) will cooperate and --------------------- Seller shall join with Buyer (at Buyer’s option) in making an election under Section 338(h)(10to have the provisions of (S)338(h)(10) of the CodeInternal Revenue Code and similar provisions of state law ("SECTION 338 ELECTIONS") apply to the acquisition of the Target and, and any comparable provision of other applicable Law (collectivelywhere permitted by law, the “Section 338 Elections”) with respect INTOOL Subsidiary. The Buyer shall be responsible for and control the preparation and filing of such elections, provided that the Seller shall be entitled to the purchase review and sale of the Shares hereunderapprove such election. Seller will execute 2 IRS Forms 8023 (and any comparable forms under other applicable Law) at the Closing or at such other time as Buyer may reasonably request or as required by the Code in order to effectuate the Section 338 Elections. In connection with making the Section 338 Elections, Buyer will prepare and deliver to Seller a reasonable The allocation of the “aggregate deemed sale price” within the meaning of Treasury Regulations Section 1.338-4, and the “adjusted grossed-up basis,” within the meaning of Treasury Regulations Section 1.338-5, based on reasonable market values, Purchase Price among the assets of the Company Target, the INTOOL Subsidiary, the INTOOL Divisions, and the Intellectual Property of the Business held by the Seller or its Affiliates, shall be as set forth on IRS Form 8883 Schedule 5.4 hereto. Any changes in accordance with Treasury Regulations Section 1.338-6 the Purchase Price resulting from the Purchase Price Adjustment shall be allocated among the assets of the Target, the INTOOL Subsidiary and 1.338-7 the INTOOL Divisions on a prorated basis, unless readily allocable to a particular asset or as otherwise required by Law. Subject to the Seller's right to review and approve, the Seller shall execute and deliver to the Buyer such documents or forms (the “including Section 338 Allocation”Forms, as defined below) at least 30 days before as the filing of such Buyer shall reasonably request or as are required by applicable Law for an effective Section 338 Allocation, which Election. In the event that the Seller does not approve the Buyer's Section 338 Allocation Forms, the Buyer and the Seller shall be acceptable use their best efforts to Seller (reach agreement on changes to such acceptance not to be unreasonably withheld, conditioned, or delayed)Forms. If Seller disagrees with the proposed Section 338 Allocation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of fifteen (15) days. If the disagreement such an agreement cannot be resolved within such thirty-day periodreached, then the Buyer and the Seller shall nevertheless execute and submit the Section 338 Allocation Forms, provided that the Forms shall be finally determined by an nationally recognized accounting firm that is mutually acceptable to Buyer and Seller and any final Section 338 Allocation shall be final and binding silent on Buyer and Seller. Seller agrees to cooperate with Buyer, and to furnish Buyer with such information as Buyer reasonably requests, for purposes of determining such allocation. If Buyer determines to make the Section 338(h)(10) Elections, Seller will file all Tax Returns in a manner consistent with the Section 338 Elections and the Section 338 Allocation. Seller will pay any Tax attributable to the purchase and sale allocation of the Shares hereunder and the making of the Section 338 Elections (including any Taxes imposed under Section 1374 of the Code and any comparable forms under Purchase Price or other applicable Law). Neither the Company nor Seller will take or allow to be taken any action that could result in the inability of Seller or Buyer to make valid Section 338 Elections. In connection with the Section 338 Elections, Buyer shall pay to Seller the amount by items on which Taxes incurred by Seller with respect to the sale of Shares exceed the Taxes which the Seller would have incurred from the sale of Shares if the Section 338 Election had not been made (the “Gross-up Payment”). The Gross-up Payment shall be computed using an assumed tax rate on long-term capital gains of Twenty Percent (20.00%) (the “Assumed Capital Gains Rate”) and an assumed Tax rate on income or gains other than long-term capital gains of Thirty-Seven Percent (37.00%) (the “Assumed Non-Capital Gains Rate”), and shall be equal to the sum of (i) the increased tax Liability of Seller resulting from the deemed sale of assets and liquidation of the Company for Tax purposes based on the Section 338 Elections (as opposed to a sale of the stock if the Section 338 Elections had not been made), and (ii) the increased Tax liability of Seller as a result of receipt of the amounts described in the immediately foregoing clause (i) of this clause (ii). For the purpose of determining the Gross-up Payment, (v) it will be assumed that the Seller has a long-term holding period in the Shares, (w) no tax items of Seller other than such Seller’s tax basis in the Shares and the Tax items allocated to such Seller from the Company (or recognized by such Seller) as a result of the deemed sale of assets and liquidation of the Company pursuant to the Section 338 Elections will be considered in the determination, (x) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller upon the sale of the Shares if the Section 338 Elections had not been made, (y) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller on any gain allocated to such Seller from the deemed sale of assets qualifying for long-term capital gain upon the deemed sale of assets of the Company pursuant to the Section 338 Elections and any gain recognized by such Seller on such Seller’s Shares resulting from the deemed liquidation of the Company pursuant to the Section 338 Elections and (z) the Assumed Non-Capital Gain Rate shall be used to determine the Tax liability of Seller on any income or non-long-term capital gains allocated to such Seller from the deemed sale of assets pursuant to the Section 338 Elections. Seller shall deliver a schedule showing the computation of the Gross-up Payment (the “Gross-Up Calculation”) to Buyer within thirty (30) days of Seller’s acceptance of the Section 338 Allocation which Gross-Up Calculation shall be acceptable to Buyer (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Buyer disagrees with the proposed Gross-Up Calculation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of thirty (30) days. If the disagreement agreement cannot be resolved within such thirty-day periodreached. "Section 338 Forms" shall mean all returns, then the Gross-Up Calculation shall documents, statements, and other forms that are required to be finally determined by the Accounting Firm andsubmitted to any federal, absent manifest errorstate, county or other local taxing authority in connection with a Section 338 Election, including, without limitation, any final Gross-Up Calculation shall be final "statement of Section 338 Election" and binding on Buyer and Seller. The payment of the Gross-up Payment by Buyer to Seller shall be made within ten IRS Form 8023 (10together with any schedules or attachments thereto) days following Buyer’s and Seller’s finalization of the Gross-Up Calculation that are required pursuant to this paragraphTreasury Regulations.

Section 338 Elections. The Seller, as the sole “S corporation shareholder” (within the meaning of Treasury Regulations Section 1.338(h)(10)-1(b)(5)) will Seller shall cooperate and join with Buyer (to cause an election to be made, at Buyer’s option) in making an election written request (each such request to be made within 90 days following the Closing Date), under Section 338(h)(10) of the Code, and any comparable provision of other applicable Law (collectively, the “Section 338 Elections”) Code with respect to the purchase and sale any or all of the Shares hereunderAcquired Entities, as designated by Buyer. Seller will execute 2 IRS Forms 8023 also shall cooperate with Buyer to cause elections, at Buyer’s written request (and any comparable forms under other applicable Law) at each such request to be made within 90 days following the Closing Date), with respect to any or at such other time all of the Acquired Entities, as Buyer may reasonably request designated by Buyer, under any state or as required by local Law equivalent of Section 338(h)(10); provided that no election shall be made under Section 338(g) of the Code in order with respect to effectuate any Acquired Entity that is a Domestic Corporation within the meaning of Section 338 Elections7701(a)(4) of the Code. In connection with making Within 120 days after the Section 338 ElectionsClosing, the Buyer will prepare and shall deliver to Seller a reasonable schedule (the “Proposed Section 338 Allocation Statement”) showing a proposed allocation for purposes of Section 338 of the Code (and the state and local equivalents thereof) of the “aggregate deemed sale sales price” within of the meaning assets of Treasury Regulations the Acquired Entities for which Section 1.338-4, and the “adjusted grossed-up basis,” within the meaning of Treasury Regulations Section 1.338-5, based on reasonable market values, 338 Elections are made among the assets of the Company on IRS Form 8883 Acquired Entities, in accordance with applicable Treasury Regulations Section 1.338-6 and 1.338-7 (the “Section 338 Allocation”) at least Regulations. The Seller shall have 30 days before following receipt of the filing of such Section 338 Allocation, which Proposed Section 338 Allocation Schedule to provide comments thereron and the parties shall be acceptable to Seller (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Seller disagrees with the proposed Section 338 Allocation, then Buyer and Seller will meet and negotiate work in good faith to resolve reach agreement on any matters in dispute. In the disagreement for a period of fifteen (15) days. If event the disagreement dispute cannot be resolved within such thirty-day period, then the Section 338 Allocation it shall be finally determined by an nationally recognized accounting firm that is mutually acceptable referred to Buyer and the Tax Arbitrator. Each of Seller and any final Section 338 Allocation Buyer shall present its position to the Tax Arbitrator, which shall decide which position shall be adopted. The decision of the Tax Arbitrator shall be final and binding on Buyer binding, and Sellerits fees and costs shall be paid one-half by Seller and one-half by Buyer. The Proposed Section 338 Allocation Statement as amended to reflect agreed or resolved changes, shall become the “Final Section 338 Allocation Statement”. The Final Section 338 Allocation Statement shall be amended to reflect any adjustment to the Purchase Price hereunder. Seller agrees and Buyer shall prepare and file, or cause to cooperate with Buyerbe prepared and filed, and to furnish Buyer with such information as Buyer reasonably requests, for purposes of determining such allocation. If Buyer determines to make the Section 338(h)(10) Elections, Seller will file all Tax Returns in a manner consistent with the Section 338 Elections and the Section 338 Allocation. Seller will pay any Tax attributable to the purchase and sale of the Shares hereunder and the making of the Section 338 Elections (including any Taxes imposed under Section 1374 of the Code and any comparable forms under other applicable Law). Neither the Company nor Seller will take or allow to be taken any action that could result in the inability of Seller or Buyer to make valid Section 338 Elections. In connection with the Section 338 Elections, Buyer shall pay to Seller the amount by which Taxes incurred by Seller with respect to the sale of Shares exceed the Taxes which the Seller would have incurred from the sale of Shares if the Section 338 Election had not been made (the “Gross-up Payment”). The Gross-up Payment shall be computed using an assumed tax rate on long-term capital gains of Twenty Percent (20.00%) (the “Assumed Capital Gains Rate”) and an assumed Tax rate on income or gains other than long-term capital gains of Thirty-Seven Percent (37.00%) (the “Assumed Non-Capital Gains Rate”)consistent, and shall not take, or permit to be equal to taken, any position in a Tax Proceeding inconsistent, with the sum of (i) the increased tax Liability of Seller resulting from the deemed sale of assets and liquidation of the Company for Tax purposes based on the Final Section 338 Elections (Allocation Statement as opposed to a sale of the stock if the Section 338 Elections had not been made), and (ii) the increased Tax liability of Seller as a result of receipt of the amounts described in the immediately foregoing clause (i) of this clause (ii). For the purpose of determining the Gross-up Payment, (v) it will be assumed that the Seller has a long-term holding period in the Shares, (w) no tax items of Seller other than such Seller’s tax basis in the Shares and the Tax items allocated to such Seller from the Company (or recognized by such Seller) as a result of the deemed sale of assets and liquidation of the Company amended pursuant to the Section 338 Elections will be considered in the determination, (x) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller upon the sale of the Shares if the Section 338 Elections had not been made, (y) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller on any gain allocated to such Seller from the deemed sale of assets qualifying for long-term capital gain upon the deemed sale of assets of the Company pursuant to the Section 338 Elections and any gain recognized by such Seller on such Seller’s Shares resulting from the deemed liquidation of the Company pursuant to the Section 338 Elections and (z) the Assumed Non-Capital Gain Rate shall be used to determine the Tax liability of Seller on any income or non-long-term capital gains allocated to such Seller from the deemed sale of assets pursuant to the Section 338 Elections. Seller shall deliver a schedule showing the computation of the Gross-up Payment (the “Gross-Up Calculation”) to Buyer within thirty (30) days of Seller’s acceptance of the Section 338 Allocation which Gross-Up Calculation shall be acceptable to Buyer (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Buyer disagrees with the proposed Gross-Up Calculation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of thirty (30) days. If the disagreement cannot be resolved within such thirty-day period, then the Gross-Up Calculation shall be finally determined by the Accounting Firm and, absent manifest error, any final Gross-Up Calculation shall be final and binding on Buyer and Seller. The payment of the Gross-up Payment by Buyer to Seller shall be made within ten (10) days following Buyer’s and Seller’s finalization of the Gross-Up Calculation pursuant to this paragraphpreceding sentence.

Section 338 Elections. The Seller(a) As soon as practicable after the Closing, as the sole “S corporation shareholder” (within the meaning of Treasury Regulations Section 1.338(h)(10)-1(b)(5)) will cooperate Purchaser and join with Buyer (at Buyer’s option) in making an Seller shall make a joint election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulation Section 1.338(h)(10)-1 (and any comparable provision of other applicable Law (collectively, the “Section 338 Elections”election under state or local law) with respect to the purchase Purchase (each, an "Election"). At the Closing, Purchaser and sale Seller will jointly complete (to the extent possible) and execute, or cause to be completed (to the extent possible) and executed, two copies of Form 8023. Also, Purchaser and Seller will cooperate with each other to take all actions necessary and appropriate (including executing and filing such additional forms, returns, elections, schedules and other documents as may be required) to effect and preserve a timely Election in accordance with the provisions of Treasury Regulation Section 1.338(h)(10)-1 (or any comparable provisions of state or local law) or any successor provisions. Purchaser and Seller shall report the Purchase pursuant to this Agreement consistent with the Elections and shall take no position inconsistent therewith in any tax return or any proceeding before any taxing authority or otherwise. (b) In connection with the Elections, Purchaser and Seller shall act together in good faith to determine and agree upon a "Modified Aggregate Deemed Sales Price" of the Shares hereunder. Seller will execute 2 IRS Forms 8023 (and any comparable forms under other applicable Law) at the Closing or at such other time as Buyer may reasonably request or as required by the Code in order to effectuate the Section 338 Elections. In connection with making the Section 338 Elections, Buyer will prepare and deliver to Seller a reasonable allocation of the “aggregate deemed sale price” within the meaning of Treasury Regulations Section 1.338-4of, and the “adjusted grossed-up basis,” within the meaning of in accordance with, Treasury Regulations Regulation Section 1.338-5, based on reasonable market values, 1.338(h)(10)-1(f)). The "Modified Aggregate Deemed Sales Price" shall be allocated among the respective assets of the Company on IRS Form 8883 in accordance with Section 338(b)(5) of the Code and Treasury Regulations Section 1.338-6 and 1.338-7 regulations promulgated thereunder (the “Section 338 Allocation”"Allocations") at least based on the appraised fair market value of such assets. Purchaser shall select and instruct the appraiser, and the fees and costs of the appraiser shall be paid by Purchaser. Upon the determination of the "Modified Aggregate Deemed Sales Price" and the receipt of the appraisal (which will be completed no later than 30 days before following the filing Closing Date or ten days following the Determination Date, whichever is later), Purchaser and Seller shall each complete the attachments and schedules to the Form 8023. If, after completion of the appraisal contemplated by Section 1.5(b), either Purchaser or Seller reasonably concludes that a revised Form 8023 is necessary, Purchaser and Seller shall promptly complete and execute or cause to be completed and executed two copies of a revised Form 8023 that is consistent with the results of such Section 338 Allocationappraisal. Once the Form 8023 has been completed, which Section 338 Allocation Purchaser and Seller shall be acceptable to Seller (file such acceptance not to be unreasonably withheldform, conditioned, or delayed). If Seller disagrees attachments and schedules with the proposed Section 338 Allocation, then Buyer Internal Revenue Service and provide a copy thereof to the other party. Purchaser and Seller will meet shall (1) be bound by such determinations and negotiate in good faith to resolve the disagreement for a period of fifteen (15) days. If the disagreement cannot be resolved within such thirty-day period, then the Section 338 Allocation shall be finally determined by an nationally recognized accounting firm that is mutually acceptable to Buyer and Seller and any final Section 338 Allocation shall be final and binding on Buyer and Seller. Seller agrees to cooperate with Buyer, and to furnish Buyer with such information as Buyer reasonably requests, Allocations for purposes of determining such allocation. If Buyer determines to make the Section 338(h)(10any taxes, (2) Elections, Seller will prepare and file all Tax Returns in their tax returns on a manner basis consistent with such determinations and Allocations and (3) take no position inconsistent with such determinations and Allocations on any applicable tax return, in any proceeding before any taxing authority or otherwise. In the Section 338 Elections and event that any such Allocation is disputed by any taxing authority, the Section 338 Allocation. Seller will pay any Tax attributable to the purchase and sale party receiving notice of the Shares hereunder and dispute shall promptly notify the making other party hereto concerning resolution of the Section 338 Elections (including any Taxes imposed under Section 1374 of the Code and any comparable forms under other applicable Law)dispute. Neither Any liability for taxes assessable against Seller or the Company nor Seller will take or allow to be taken any action that could result in the inability of Seller or Buyer to make valid Section 338 Elections. In connection with the Section 338 Elections, Buyer shall pay to Seller the amount by which Taxes incurred by Seller with respect to the sale of Shares exceed the Taxes which the Seller would have incurred arising from the sale of Shares if the Section 338 Election had not been made (the “Gross-up Payment”). The Gross-up Payment Purchase shall be computed using an assumed tax rate on long-term capital gains of Twenty Percent (20.00%) (the “Assumed Capital Gains Rate”) and an assumed Tax rate on income or gains other than long-term capital gains of Thirty-Seven Percent (37.00%) (the “Assumed Non-Capital Gains Rate”), and shall be equal to the sum of (i) the increased tax Liability of Seller resulting from the deemed sale of assets and liquidation of the Company for Tax purposes based on the Section 338 Elections (as opposed to a sale of the stock if the Section 338 Elections had not been made), and (ii) the increased Tax liability of Seller as a result of receipt of the amounts described in the immediately foregoing clause (i) of this clause (ii). For the purpose of determining the Gross-up Payment, (v) it will be assumed that the Seller has a long-term holding period in the Shares, (w) no tax items of Seller other than such borne by Seller’s tax basis in the Shares and the Tax items allocated to such Seller from the Company (or recognized by such Seller) as a result of the deemed sale of assets and liquidation of the Company pursuant to the Section 338 Elections will be considered in the determination, (x) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller upon the sale of the Shares if the Section 338 Elections had not been made, (y) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller on any gain allocated to such Seller from the deemed sale of assets qualifying for long-term capital gain upon the deemed sale of assets of the Company pursuant to the Section 338 Elections and any gain recognized by such Seller on such Seller’s Shares resulting from the deemed liquidation of the Company pursuant to the Section 338 Elections and (z) the Assumed Non-Capital Gain Rate shall be used to determine the Tax liability of Seller on any income or non-long-term capital gains allocated to such Seller from the deemed sale of assets pursuant to the Section 338 Elections. Seller shall deliver a schedule showing the computation of the Gross-up Payment (the “Gross-Up Calculation”) to Buyer within thirty (30) days of Seller’s acceptance of the Section 338 Allocation which Gross-Up Calculation shall be acceptable to Buyer (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Buyer disagrees with the proposed Gross-Up Calculation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of thirty (30) days. If the disagreement cannot be resolved within such thirty-day period, then the Gross-Up Calculation shall be finally determined by the Accounting Firm and, absent manifest error, any final Gross-Up Calculation shall be final and binding on Buyer and Seller. The payment of the Gross-up Payment by Buyer to Seller shall be made within ten (10) days following Buyer’s and Seller’s finalization of the Gross-Up Calculation pursuant to this paragraph.

Section 338 Elections. (i) The SellerSeller and the Buyer agree to jointly make, as or cause to be made, in an appropriate and timely manner the sole “S corporation shareholder” elections provided for by Section 338(h)(10) of the Code (within and, to the meaning of Treasury Regulations Section 1.338(h)(10)-1(b)(5)) will cooperate and join with Buyer (at Buyer’s option) in making extent necessary to allow for an election under Section 338(h)(10) of the Code, the elections provided for by Section 338(g) of the Code) and any comparable provision of other applicable Law corresponding election under state, local, or foreign law (collectively, the “"Section 338 Elections”") with --------------------- respect to the purchase of the Company Shares. (ii) The Seller and the Buyer shall cooperate with each other to take all actions necessary or appropriate to effect and preserve timely Section 338 Elections, including, but not limited to, preparing the IRS Form 8023-A (Corporate Qualified Stock Purchase Agreement) and any related and comparable forms for state, local, or foreign law (collectively, "Section 338 Election Forms"). -------------------------- (iii) As reasonably requested from time to time by the Seller (whether before, at, or after the Closing), the Buyer shall assist the Seller in, and shall provide the necessary information to the Seller, in connection with the preparation of any Section 338 Election Form. The Buyer also agrees on or before the Closing to cause each Section 338 Election Form reasonably requested by the Seller to be duly executed by the Buyer or any Affiliate of the Buyer, as appropriate, and delivered to the Seller at the Closing. If the Seller reasonably determines that a change is required to any Section 338 Election Form previously executed by the Buyer or an Affiliate of the Buyer, the Seller may prepare a new Section 338 Election Form and deliver it to the Buyer and the Buyer shall cause such form to be duly executed by the Buyer or an Affiliate of the Buyer, as appropriate, and promptly delivered to the Seller. Anything contained in this (S)8(b) to the contrary notwithstanding, the Buyer shall have the right to approve all Section 338 Election Forms prior to filing, such approval not to be unreasonably withheld or delayed. (iv) The Seller shall file, or cause to be filed, all Section 338 Election Forms and shall provide the Buyer with notice of such filings. (v) The Seller, the Buyer, and the Company agree to report, or cause to be reported, the purchase by the Buyer of the Company consistent with Section 338 Elections and shall take no position on any Tax return, or in any audit, examination, investigation, or other proceeding that is inconsistent with such elections. (vi) The Buyer, the Company, and the Seller shall cooperate and consult with each other in good faith in order to reach a mutually acceptable agreement with respect to the purchase and sale of the Shares hereunder. Seller will execute 2 IRS Forms 8023 (and any comparable forms under other applicable Law) at the Closing or at such other time as Buyer may reasonably request or as required by the Code in order to effectuate the Section 338 Elections. In connection with making the Section 338 Elections, Buyer will prepare and deliver to Seller a reasonable allocation of the “aggregate deemed sale price” within the meaning of Modified Aggregate Sales Price (as defined in Treasury Regulations Section 1.338-4, and the “adjusted grossed-up basis,” within the meaning of Treasury Regulations Section 1.338-5, based on reasonable market values, Regulation section 1. 338(h)(10)-1(e)(5)) among the assets of the Company on IRS Form 8883 in accordance that complies with Treasury Regulations Section 1.338-6 and 1.338-7 (the “applicable treasury regulations promulgated under Section 338 Allocation”) at least 30 days before the filing of such Section 338 Allocation, which Section 338 Allocation shall be acceptable to Seller (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Seller disagrees with the proposed Section 338 Allocation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of fifteen (15) days. If the disagreement cannot be resolved within such thirty-day period, then the Section 338 Allocation shall be finally determined by an nationally recognized accounting firm that is mutually acceptable to Buyer and Seller and any final Section 338 Allocation shall be final and binding on Buyer and Seller. Seller agrees to cooperate with Buyer, and to furnish Buyer with such information as Buyer reasonably requests, for purposes of determining such allocation. If Buyer determines to make the Section 338(h)(10) Elections, Seller will file all Tax Returns in a manner consistent with the Section 338 Elections and the Section 338 Allocation. Seller will pay any Tax attributable to the purchase and sale of the Shares hereunder and the making of the Section 338 Elections (including any Taxes imposed under Section 1374 of the Code and any comparable forms under other applicable Law). Neither the Company nor Seller will take or allow to be taken any action that could result in the inability of Seller or Buyer to make valid Section 338 Elections. In connection with the Section 338 Elections, Buyer shall pay to Seller the amount by which Taxes incurred by Seller with respect to the sale of Shares exceed the Taxes which the Seller would have incurred from the sale of Shares if the Section 338 Election had not been made (the “Gross-up Payment”). The Gross-up Payment shall be computed using an assumed tax rate on long-term capital gains of Twenty Percent (20.00%) (the “Assumed Capital Gains Rate”) and an assumed Tax rate on income or gains other than long-term capital gains of Thirty-Seven Percent (37.00%) (the “Assumed Non-Capital Gains Rate”), and shall be equal to the sum of (i) the increased tax Liability of Seller resulting from the deemed sale of assets and liquidation of the Company for Tax purposes based on the Section 338 Elections (as opposed to a sale of the stock if the Section 338 Elections had not been made), and (ii) the increased Tax liability of Seller as a result of receipt of the amounts described in the immediately foregoing clause (i) of this clause (ii). For the purpose of determining the Gross-up Payment, (v) it will be assumed that the Seller has a long-term holding period in the Shares, (w) no tax items of Seller other than such Seller’s tax basis in the Shares and the Tax items allocated to such Seller from the Company (or recognized by such Seller) as a result of the deemed sale of assets and liquidation of the Company pursuant to the Section 338 Elections will be considered in the determination, (x) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller upon the sale of the Shares if the Section 338 Elections had not been made, (y) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller on any gain allocated to such Seller from the deemed sale of assets qualifying for long-term capital gain upon the deemed sale of assets of the Company pursuant to the Section 338 Elections and any gain recognized by such Seller on such Seller’s Shares resulting from the deemed liquidation of the Company pursuant to the Section 338 Elections and (z) the Assumed Non-Capital Gain Rate shall be used to determine the Tax liability of Seller on any income or non-long-term capital gains allocated to such Seller from the deemed sale of assets pursuant to the Section 338 Elections. Seller shall deliver a schedule showing the computation of the Gross-up Payment (the “Gross-Up Calculation”) to Buyer within thirty (30) days of Seller’s acceptance of the Section 338 Allocation which Gross-Up Calculation shall be acceptable to Buyer (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Buyer disagrees with the proposed Gross-Up Calculation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of thirty (30) days. If the disagreement cannot be resolved within such thirty-day period, then the Gross-Up Calculation shall be finally determined by the Accounting Firm and, absent manifest error, any final Gross-Up Calculation shall be final and binding on Buyer and Seller. The payment of the Gross-up Payment by Buyer to Seller shall be made within ten (10) days following Buyer’s and Seller’s finalization of the Gross-Up Calculation pursuant to this paragraphCode.

Section 338 Elections. The Seller(a) Seller and Buyer shall make, as the sole “S corporation shareholder” (within the meaning of Treasury Regulations Section 1.338(h)(10)-1(b)(5)) will cooperate or cause to be made, joint elections for AMLIC and join with Buyer (at Buyer’s option) in making an election USIC under Section section 338(h)(10) of the Code, Code and under any comparable provision applicable similar provisions of other applicable Law state or local law in connection with the purchase of the New Holdco Units (collectively, the all such elections being referred to collectively as “Section 338 Elections”) with respect ). Each of Seller and Buyer shall duly execute, or cause to the purchase and sale of the Shares hereunder. Seller will execute 2 be executed, IRS Forms Form 8023 (and any comparable form required for purposes of making such elections under state or local law) and such forms under shall be delivered to the other applicable Law) party at or prior to the Closing Date. Buyer shall file, or at cause to be filed, such other time as forms promptly after the Closing (and with respect to which, Buyer may reasonably request or as required by shall provide proof of mailing to Seller). Buyer shall not make an election made under Section 338(g) of the Code in order for ALOC Holdings without the consent of Seller. (b) Within 60 days following the final determination of the Purchase Price pursuant to effectuate the Section 338 Elections. In connection with making the Section 338 Elections1.05, Buyer will Seller shall prepare and deliver to Seller Buyer a reasonable allocation of schedule (the “Proposed Allocation Schedule”) allocating the “aggregate deemed sale sales price”, as defined in Treasury Regulations section 1.338-4 and the “aggregate grossed up basis”, as defined in Treasury Regulation section 1.338-5, for AMLIC and USIC, in compliance with Treasury Regulations sections 1.338-6, 1.338-7 and 1.338-11, as applicable. If Buyer and Seller are unable to agree on the Section 338 allocation within sixty (60) days after Seller provides the Proposed Allocation Schedule, Buyer shall provide Seller written notice of the items in dispute, and the parties shall request the Independent Accountant to decide any disputed items within thirty (30) days; provided that (i) the dollar amount of each item in dispute shall be determined within the range of dollar amounts proposed by Buyer in its written notice, on the one hand, and the amount proposed by Seller, on the other hand; (ii) the review by and determinations of the Independent Accountant shall be limited to, and only to, the unresolved item or items specified in Buyer’s written notice; and (iii) the determinations by the Independent Accountant shall be based solely on such reports submitted by Seller and Buyer and the information and documents (including work papers) provided to the Independent Accountant which form the basis for Seller’s and Buyer’s respective positions, and applicable U.S. federal income tax principles. The Proposed Allocation Schedule, as finally determined pursuant to this Section 5.06(b), shall become the “Final Allocation Schedule” and shall be binding upon the parties and each of Buyer and Seller shall file and cause their respective Affiliates to file all federal, state, and local Tax Returns in accordance with the Final Allocation Schedule unless otherwise required by a “determination” within the meaning of Treasury Regulations Section 1.338-4, and the “adjusted grossed-up basis,” within the meaning of Treasury Regulations Section 1.338-5, based on reasonable market values, among the assets of the Company on IRS Form 8883 in accordance with Treasury Regulations Section 1.338-6 and 1.338-7 (the “Section 338 Allocation”) at least 30 days before the filing of such Section 338 Allocation, which Section 338 Allocation shall be acceptable to Seller (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Seller disagrees with the proposed Section 338 Allocation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of fifteen (15) days. If the disagreement cannot be resolved within such thirty-day period, then the Section 338 Allocation shall be finally determined by an nationally recognized accounting firm that is mutually acceptable to Buyer and Seller and any final Section 338 Allocation shall be final and binding on Buyer and Seller. Seller agrees to cooperate with Buyer, and to furnish Buyer with such information as Buyer reasonably requests, for purposes of determining such allocation. If Buyer determines to make the Section 338(h)(10) Elections, Seller will file all Tax Returns in a manner consistent with the Section 338 Elections and the Section 338 Allocation. Seller will pay any Tax attributable to the purchase and sale of the Shares hereunder and the making of the Section 338 Elections (including any Taxes imposed under Section 1374 1313 of the Code and any comparable forms under other applicable Law). Neither the Company nor Seller will take (or allow to be taken any action that could result in the inability of Seller or Buyer to make valid Section 338 Elections. In connection with the Section 338 Elections, Buyer shall pay to Seller the amount by which Taxes incurred by Seller with respect similar state law) to the sale of Shares exceed the Taxes which the Seller would have incurred from the sale of Shares if the Section 338 Election had not been made (the “Gross-up Payment”). The Gross-up Payment shall be computed using an assumed tax rate on long-term capital gains of Twenty Percent (20.00%) (the “Assumed Capital Gains Rate”) and an assumed Tax rate on income or gains other than long-term capital gains of Thirty-Seven Percent (37.00%) (the “Assumed Non-Capital Gains Rate”)contrary; provided, and shall be equal to the sum of however, that (i) the increased tax Liability of Seller resulting from the deemed sale of assets and liquidation purchase prices of the Company for Tax purposes based assets may differ from amounts shown on the Section 338 Elections (as opposed Final Allocation Schedule in order to a sale of reflect Buyer’s transaction costs not included in the stock if the Section 338 Elections had not been made), Final Allocation Schedule and (ii) the increased Tax liability of Seller as a result of receipt of the amounts described in the immediately foregoing clause (i) of this clause (ii). For the purpose of determining the Gross-up Payment, (v) it will be assumed that the Seller has a long-term holding period in the Shares, (w) no tax items of Seller other than such Seller’s tax basis in the Shares and the Tax items allocated to such Seller from the Company (or recognized by such Seller) as a result of realized on the deemed sale sales of assets and liquidation of the Company pursuant to the Section 338 Elections will be considered in the determination, (x) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller upon the sale of the Shares if the Section 338 Elections had not been made, (y) the Assumed Capital Gains Rate shall be used to determine the Tax liability of Seller on any gain allocated to such Seller may differ from the deemed sale of assets qualifying sales prices shown on the Final Allocation Schedule in order to reflect transaction costs that reduce the amounts realized for long-term capital gain upon the deemed sale of assets of the Company pursuant to the Section 338 Elections and any gain recognized by such Seller on such Seller’s Shares resulting from the deemed liquidation of the Company pursuant to the Section 338 Elections and (z) the Assumed Non-Capital Gain Rate shall be used to determine the federal income Tax liability of Seller on any income or non-long-term capital gains allocated to such Seller from the deemed sale of assets pursuant to the Section 338 Elections. Seller shall deliver a schedule showing the computation of the Gross-up Payment (the “Gross-Up Calculation”) to Buyer within thirty (30) days of Seller’s acceptance of the Section 338 Allocation which Gross-Up Calculation shall be acceptable to Buyer (such acceptance not to be unreasonably withheld, conditioned, or delayed). If Buyer disagrees with the proposed Gross-Up Calculation, then Buyer and Seller will meet and negotiate in good faith to resolve the disagreement for a period of thirty (30) days. If the disagreement cannot be resolved within such thirty-day period, then the Gross-Up Calculation shall be finally determined by the Accounting Firm and, absent manifest error, any final Gross-Up Calculation shall be final and binding on Buyer and Seller. The payment of the Gross-up Payment by Buyer to Seller shall be made within ten (10) days following Buyer’s and Seller’s finalization of the Gross-Up Calculation pursuant to this paragraphpurposes.