Common use of Section 338(h)(10) Election Clause in Contracts

Section 338(h)(10) Election. (a) The Sellers and Investor shall jointly make a timely election pursuant to Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations and any comparable election under applicable state or local Law (collectively, the “Section 338(h)(10) Election”) with respect to the purchase by Investor of the Merger Shares. In addition, the Sellers, Investor and the Company shall, as promptly as practicable following the Closing Date, cooperate with each other to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Law) to effect and preserve a timely Section 338(h)(10) Election in accordance with any comparable provisions of applicable Law, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreement.

Section 338(h)(10) Election. (a) The Sellers and Investor Purchaser shall jointly make a timely election pursuant to Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations and Regulations, any comparable election under applicable state or local Law (collectively, the “Section 338(h)(10) Tax Treatment Election”) with respect to the purchase by Investor Purchaser of the Merger Shares. In addition, the Sellers, Investor Sellers and the Company Purchaser shall, as promptly as practicable following the Closing Date, cooperate with each other to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Law) to effect and preserve a timely Section 338(h)(10) Tax Treatment Election in accordance with any comparable provisions of applicable Law, and the parties Parties responsible for filing any such Section 338(h)(10) Tax Treatment Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Tax Treatment Election with the appropriate Taxing Authority authority and provide written evidence of such filing to the other partiesParties. The Sellers and Investor Purchaser shall report the purchase by Investor Purchaser of the Merger Shares consistent with the Section 338(h)(10) Tax Treatment Election and the allocation as set forth on Allocation of Purchase Price Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority Tax authority or otherwise. In the event that any Section 338(h)(10) Tax Treatment Election is disputed by any Taxing AuthorityTax authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any of the parties Parties hereto are parties (but only if the requirements of Section 8.04 10.03 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless Purchaser and the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Tax Treatment Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Tax Treatment Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Tax Treatment Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of fifteen percent (15% %) per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.058.01. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreement6.07.

Section 338(h)(10) Election. (a) The Sellers At the request and Investor direction of Purchaser, Seller shall jointly make a timely election pursuant to joint elections with Purchaser and file elections under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations (and any comparable election under applicable state provisions of state, local or local Law (collectively, the “Section 338(h)(10) Election”non-United States Tax law) with respect to the purchase by Investor of the Merger Shares. In additionCompanies and Transferred Subsidiaries and, at Closing, the Sellersparties shall execute a Form 8023 (or successor form), Investor and the Company shallwith all attachments, as promptly as practicable following the Closing Date, with respect to each such purchase. The parties shall cooperate with each other to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Lawrequired) to effect and preserve a each timely Section 338(h)(10) Election election in accordance with the provisions of Treasury Regulation § 1.338(h)(10)-1 (or any comparable provisions of applicable Lawstate, local or non-United States Tax law) or any successor provisions. In connection with each such election, Seller shall prepare a draft Form 8883 (or successor form) and provide such draft Form 8883 to Purchaser no later than ninety (90) days prior to the due date of such Form 8883. If, within thirty (30) days after the receipt of the draft Form 8883, Purchaser notifies Seller in writing that Purchaser disagrees with the draft Form 8883, then the parties responsible for filing shall attempt in good faith to resolve their disagreement within the twenty (20) days following Purchaser’s notification to Seller of such disagreement. If Purchaser does not so notify Seller within thirty (30) days of receipt of the draft Form 8883, or upon resolution of the disputed items by the parties the draft Form 8883 shall become the “Final Form 8883”. If the parties are unable to resolve their disagreement within the twenty (20) days following any such notification by Purchaser, then the parties shall submit all such disputed items for resolution to the Independent Accounting Firm, whose decision shall be final and binding upon all persons involved and whose fees and expenses shall be borne equally by the parties. The Form 8883 delivered by the Independent Accounting Firm shall be the “Final Form 8883”. The parties shall act in good faith to cause the Independent Accounting Firm to deliver the Final Form 8883 within twenty (20) days after such submission. Other than to the extent Purchaser’s purchase price, as determined for federal income tax purposes, differs from the amount shown on the Final Form 8883, the parties shall (i) be bound by each such Final Form 8883 for purposes of determining any Taxes and (ii) prepare and file their Tax Returns on a basis consistent with each such Final Form 8883. The Purchase Price allocation pursuant to the Final Form 8883 shall be appropriately adjusted if and when any purchase price adjustments are made pursuant to Section 338(h)(109.1(f) Election under applicable Law shall promptly file or cause of this Agreement. No later than fifteen (15) days prior to the date such Form 8883 and any related documentation are required to be filed such Section 338(h)(10) Election with under the appropriate Taxing Authority applicable laws, Seller shall execute and provide written evidence of such filing deliver to Purchaser the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such disputeFinal Form 8883. (b) If it is determined by a finding or order in connection If, at the request of Purchaser, Seller makes joint elections with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any Purchaser and files elections under Section 338(h)(10) of the parties hereto are parties Code (but only if the requirements and any comparable provisions of Section 8.04 have been satisfiedstate, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (prolocal or non-rata in accordance with their respective Ownership PercentagesUnited States Tax law) with respect to the purchase of the Companies and Transferred Subsidiaries, Purchaser and Seller (i) any and all Taxes imposed on shall report the Company due to such invalid election or pre-Closing termination acquisition of the Company’s S Corporation status Companies and Transferred Subsidiaries by Purchaser in a manner consistent with the making of the Section 338(h)(10) election and (ii)(aii) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to take a position in any Tax Return that is inconsistent with the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreement.)

Section 338(h)(10) Election. (a) The Sellers Upon Buyer’s request, Seller and Investor Buyer shall jointly make join in making a timely and irrevocable election pursuant to Section under Code §338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations (and any comparable election corresponding elections under applicable state or local Law Tax Law) (collectively, the “Section 338(h)(10) Election”) with respect to the purchase by Investor and sale of the Merger SharesShares of Company. In addition, the Sellers, Investor Buyer and the Company shall, as promptly as practicable following the Closing Date, Seller shall cooperate with each other to and take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returnsTax Returns, elections, schedules and other documents as may be required by applicable state or local Lawrequired) to effect and preserve a timely the Section 338(h)(10) 338 Election in accordance with any comparable the provisions of applicable Law, and the parties responsible for filing any such Treasury Regulation Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such dispute1.338(h)(10)-1. (b) If it is determined by Within one hundred twenty (120) calendar days after the Closing, Buyer shall prepare a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any determination of the parties hereto are parties Aggregate Deemed Sales Price (but only if “ADSP”) (as defined in the requirements applicable Treasury Regulations under Section 338) and a proposed allocation of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that ADSP among the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless assets of the Company (pro-rata the “Proposed Allocation”) and shall deliver the Proposed Allocation to Seller, together with a copy of any appraisals on which the Proposed Allocation is based. Buyer and Seller shall consult in accordance good faith with their respective Ownership Percentagesregard to the determination of the ADSP and the Proposed Allocation and shall agree on a final allocation (as finally agreed, the “Final Allocation”). As soon as practicable after determination of the Final Allocation, Buyer shall prepare consistently therewith Internal Revenue Service Form 8883 and any similar forms required by applicable state and local Tax Laws (collectively, the “Section 338 Allocation Forms”), and promptly deliver copies of the Section 338 Allocation Forms to Seller for Seller’s review and approval. (c) with respect to (i) any and all Taxes imposed on Buyer, the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and Seller shall file all Tax benefits, Returns (including, but not limited to, the disallowance Section 338 Election Forms and the Section 338 Allocation Forms) consistent with the Final Allocation. (d) Each Party shall bear its own costs and expenses of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) preparing the Section 338 Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow AgreementForms, the provisions Proposed and Final Allocations and the Section 338 Allocation Forms and the calculation of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this AgreementIncreased Taxes.

Section 338(h)(10) Election. (a) The Sellers Seller shall join with Buyer and Investor shall jointly make the Company in making a timely election pursuant to under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations (and any comparable corresponding election under applicable state or local Law (collectivelystate, the “Section 338(h)(10) Election”local, and foreign income Tax Law) with respect to the purchase by Investor and sale of the Merger Shares. In additionShares hereunder (collectively, the Sellers“Election”). Seller shall pay any Tax attributable to the making of the Election, Investor and Seller shall indemnify Buyer and the Company against any adverse consequences arising out of any failure to pay any such Taxes. (b) Prior to the Closing, Buyer shall prepare (with, if requested, Seller’s cooperation) and deliver to Seller a Form 8023 with respect to the Election (and any comparable state or local forms or reports Buyer deems necessary or appropriate) (collectively, the “Election Forms”). Seller and Buyer shall cooperate in the preparation and timely filing of, to the extent permissible by or required by Law, any corrections, amendments, or supplements (or additional forms or reports) to the Election Forms. To the extent necessary for the valid filing of any such corrections, amendments, supplements, forms or reports, Seller and Buyer shall cooperate in the timely execution thereof. Neither Seller nor Buyer shall, nor shall they permit any of their Affiliates to, take any action to modify any of the Election Forms (including any corrections, amendments, or supplements thereto) that are required for the making of the Elections or any comparable elections under state or local Tax Law after their execution, without the prior written consent of Buyer or Seller, as promptly as practicable following the case may be. (c) Within ninety (90) days after the Closing Date, cooperate with each other Seller shall deliver to take all actions necessary and appropriate Buyer an allocation of the “aggregate deemed sales price” (including filing Form 8883, Asset Allocation Statement Under as such term is defined in Treasury Regulations Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Law1.338-4) to effect and preserve a timely Section 338(h)(10) Election among the assets of the Company in accordance with Treasury Regulations Sections 1.338-6 and 1.338-7 (the “Allocation Statement”). No amount shall be allocated to any comparable provisions restrictive covenant binding Seller or any Affiliate or shareholder thereof (including pursuant to Section 6.05). Buyer shall have the right to review the Allocation Statement. Within thirty (30) days after the Buyer’s receipt of applicable Lawthe Allocation Statement, Buyer shall indicate its concurrence therewith, or propose to Seller any changes to the Allocation Statement. Should Buyer timely propose any reasonable change to the Allocation Statement, Seller will consider Buyer’s comments to the Allocation Statement in good faith. Thereafter, Seller shall prepare and deliver to Buyer from time to time a revised proposed Allocation Statement updated to reflect any adjustments to the “aggregate deemed sales price” requiring any adjustment to the Allocation Statement. In doing so, any adjustments to Purchase Price provided for in this Agreement shall be allocated among such assets in the same proportions as set forth in the Allocation Statement, unless such Purchase Price adjustment is attributable to a specific class of assets, in which event the adjustment shall be allocated to such specific class; and in no event will an upward adjustment of Purchase Price be allocated to any asset to the extent that immediately following such allocation, the total amount allocated to such asset exceeds the fair market value of such asset. Such revised allocation statement shall become the Allocation Statement. The final Allocation Statement as prepared by Seller shall be binding on the parties hereto, and all Tax Returns filed by Buyer, Seller, the parties responsible Company and their respective Affiliates shall be prepared consistently with such Allocation Statement, and none of them shall take a position on any Tax Return or other form or statement or before any Governmental Entity contrary to such allocation. (d) Except to the extent otherwise required by a “determination” within the meaning of Code Section 1313(a), Seller, Buyer, and their respective Affiliates, (i) shall be bound by the Allocation Statement for filing purposes of determining any such Section 338(h)(10Taxes; (ii) Election under applicable Law shall promptly prepare and file or cause all Tax Returns to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares any Tax authority in a manner consistent with the Section 338(h)(10) Election Allocation Statement and the allocation as set forth on Schedule 2.04(aElection; and (iii) and no party shall take (and prior to no position inconsistent with the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) Allocation Statement or any position contrary thereto Election in any Tax Return, any proceeding Proceeding before any Taxing Authority Tax authority or otherwise. Neither Seller nor Buyer shall revoke or modify any Election. In the event that any Section 338(h)(10) Election the Allocation Statement is disputed by any Taxing AuthorityTax authority, the party receiving notice of such dispute shall promptly notify and consult with the other party hereto concerning resolution of such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreement.

Section 338(h)(10) Election. (a) The Sellers Buyer and Investor Seller shall jointly timely make a timely joint election pursuant to Section 338(h)(10) of the Code Code, and Treasury Regulation Section 1.338(h)(10)-1 of the United States Treasury Regulations 1.338(h)(10)-1, and any comparable election under applicable state or local Law Tax law (collectively, the “Section 338(h)(10) ElectionElections”) with respect to the purchase by Investor deemed sale of the Merger SharesShares pursuant to this Agreement. As promptly as reasonably practicable after the Effective Time and in all events within 150 days after the Closing Date, with respect to the federal Election, Buyer and Seller shall mutually prepare a Form 8023 (with all attachments), and Buyer and Seller shall execute such Form 8023 which shall be given to Buyer for filing on behalf of itself and the Seller. In addition, Buyer and Seller shall duly and timely file their respective Forms 8883 in Stock Purchase Execution Version connection with the Sellers, Investor sale of the Shares pursuant to this Agreement (including for the year of the sale) and shall promptly furnish a copy of each such Form 8883 to the Company other party promptly after filing. Buyer and Seller shall, as promptly as practicable following the Closing Date, cooperate with each other to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Lawrequired) to effect and preserve a timely Elections in accordance with the provisions of Section 338(h)(10) Election in accordance with of the Code and Treasury Regulations Section 1.338(h)(10)-1 and any comparable provisions provision of applicable Lawstate or local law. Fiserv, Buyer and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor Seller shall report the purchase by Investor of the Merger Shares sale consistent with the Elections and this Agreement, and none of Fiserv, Buyer or Seller shall take any position inconsistent therewith in any Tax Return (as hereinafter defined), any proceeding before any Taxing authority or otherwise. (b) In connection with the Elections, Buyer and Seller shall mutually determine, as promptly as reasonably practicable following the Closing Date (and in all events within 60 days after the Closing Date), the Aggregate Deemed Sales Price and Adjusted Grossed-Up Basis (in each case, as defined under the applicable U.S. Treasury Regulations), or other amounts required under applicable law. After thorough analysis and arms’ length negotiations between the parties, the parties agree that the Aggregate Deemed Sales Price and Adjusted Grossed-Up Basis (any other amount required to be determined under applicable law) shall be allocated as follows: (i) any amount required to be treated as interest pursuant to Section 338(h)(101274 of the Code shall be treated as interest; (ii) Election and an amount equal to the allocation net book value as set forth on Schedule 2.04(athe Closing Balance Sheet as finally determined of each item of cash, accounts receivable, prepaid items, fixed assets and other assets (other than Section 197 intangibles, as defined in the Code) shall be allocated to such item; and no party shall take (and prior iii) an amount equal to the net book value as set forth on the Closing Balance Sheet as finally determined of capitalized software shall be allocated to such item; and any remaining amount to the Sellers extent not required to be treated as interest, shall be allocated to goodwill. Buyer and Seller (A) shall be bound by the allocations described in this Section for all purposes, including determining any Taxes; (B) shall prepare and file all Tax Returns to be filed with any Taxing authority in a manner consistent with such allocations; and (C) shall not permit the Company to take, and after the Closing the Company shall not take) take any position contrary thereto inconsistent with such allocation, in any Tax Return, any proceeding before any Taxing Authority authority or otherwise. In the event that any Section 338(h)(10) Election the allocation is disputed by any Taxing Authorityauthority, the party receiving notice of such dispute shall promptly notify and consult with the other party parties concerning resolution of such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement and shall keep the other parties apprised of the status of such a proceeding to which any of dispute and the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreementresolution thereof.

Section 338(h)(10) Election. (a) The Sellers and Investor Xxxxxxxxxxx shall jointly make a timely join with Purchaser in making an election pursuant to under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations (and any comparable corresponding election under applicable state or state, local Law and foreign tax law) (collectively, the a “Section 338(h)(10) Election”) with respect to the purchase CHP Shares to be acquired by Investor of Purchaser under this Agreement. Purchaser will be responsible for preparing and timely filing any forms used to make the Merger SharesSection 338(h)(10) Election. In addition, the Sellers, Investor Xxxxxxxxxxx shall sign at or prior to Closing all federal and the Company shall, as promptly as practicable following the Closing Date, cooperate with each other state forms used to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Law) to effect and preserve make a timely Section 338(h)(10) Election in accordance with requiring his signature as contemplated by Section 7.10. Xxxxxxxxxxx shall include any comparable provisions of applicable Lawincome, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file gain, loss, deduction, or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with tax item resulting from the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior his Tax Return to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed extent required by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such disputeapplicable law. (b) If it is The CHP Purchase Price and the liabilities of CHP (plus other relevant items) shall be allocated to the assets of CHP for all purposes (including Tax and financial accounting), as determined by Purchaser. Purchaser and Xxxxxxxxxxx shall file all Tax Returns (including amended returns and claims for refund) and information reports in a finding or order in connection manner consistent with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any values. (c) To the extent that the making of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused results in Xxxxxxxxxxx realizing after-tax proceeds (the “Section 338 After-Tax Proceeds”) that are less than the after-tax proceeds that would have been realized by the invalid election or the pre-Closing termination Xxxxxxxxxxx on a sale of the Company’s S status resulting in CHP Shares without the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result making of a valid Section 338(h)(10) Election (with the “Stock Sale After-Tax Proceeds”), Purchaser shall pay to Xxxxxxxxxxx an amount (which amount shall constitute additional CHP Purchase Price, and which amount may be satisfied, at Purchaser’s sole discretion, either by a payment in cash or the issuance to Xxxxxxxxxxx of common shares of PAE), not to exceed US$500,000, which, after taking into account the payment of any additional tax liability that Xxxxxxxxxxx would incur as a result of his receipt of such expectation additional CHP Purchase Price (in the aggregate, the “Additional After-Tax Amount”), would result in the Section 338 After-Tax Proceeds plus the Additional After-Tax Amount to be measured based on circumstances as equal the Stock Sale After-Tax Proceeds. The computation of the Closing Date)amount of the Section 338 After-Tax Proceeds shall include, using a discount rate of 15% per annum from without limitation, any payments made by Xxxxxxxxxxx to the date upon which such Tax benefits were disallowed Internal Revenue Service or any other tax authority. (d) If and to the extent Purchaser elects to satisfies its obligation to Xxxxxxxxxxx pursuant to Section 9.11(c) through the date the Company could reasonably have expected issuance of common shares of PAE, Purchaser shall cause PAE to realize use its reasonable best efforts to register and list for trading such Tax benefits (with such expectation common shares pursuant to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything and subject to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreement9.5.

Section 338(h)(10) Election. (a) The Sellers At the request of Parent, Northrop Grumman and Investor the Company shall jointly make a timely and irrevocable election pursuant to Section under section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations and any comparable election under applicable state or local Law (collectively, the “Section 338(h)(10) 338 Election”) with respect to the purchase by Investor stock of the Merger Shares. In addition, Company or its Subsidiaries (other than the Sellers, Investor and stock of Ruling Newco or the Company shall, as promptly as practicable following the Closing Date, cooperate with each other to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Law) to effect and preserve a timely Section 338(h)(10) Election in accordance with any comparable provisions of applicable Law, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as Subsidiaries set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such dispute11.5(a)). (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceedingTo the extent possible, including any settlement Northrop Grumman (on behalf of such a proceeding to which any of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that itself and the Company’s S election was not validly in effect for ) and Parent agree to execute at the Closing any period after such election was purportedly made and all forms necessary to effectuate the Section 338 Election (including Internal Revenue Service Form 8023 (the period ending on “Section 338 Forms”)). In the Closing Dateevent, but excluding however, any periods commencing with completed Section 338 Forms are not executed at the Closing), then Sellers Northrop Grumman and Parent agree to prepare and complete each such Section 338 Form no later than 15 days prior to the date such Section 338 Form is required to be filed. Northrop Grumman and Parent shall each cause the Section 338 Forms to be obligatedduly executed by an authorized person, jointly and severally, to indemnify shall duly and hold harmless timely file the Company (pro-rata Section 338 Forms in accordance with their respective Ownership Percentages) with respect to (i) any applicable tax laws and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach terms of this Agreement. (c) With respect to the consideration allocated to the Company and the Subsidiaries listed on the Purchase Price Allocation Schedule pursuant to Section 3.1, Parent shall reasonably determine the fair market value of the assets of each Subsidiary for which a Section 338 Election is made and shall allocate the relevant portion of the Purchase Price (as required pursuant to section 338(h)(10) of the Code and regulations promulgated thereunder), together with applicable Liabilities, among such assets (the “Section 338 Allocation”). Parent shall provide the Section 338 Allocation to Northrop Grumman at least 60 days prior to the filing date required therefor and Northrop Grumman shall provide reasonable comments thereon to Parent within 30 days of receipt thereof. The parties shall attempt in good faith to resolve any unagreed items with respect to the Section 338 Allocation and if they are unable to do so, such unagreed items will be resolved (within a reasonable time, taking into account the deadline for filing the Section 338 Allocation) by an internationally recognized independent accounting firm chosen by both Northrop Grumman and Parent. Northrop Grumman, the Company and Parent shall file all Tax Returns consistently with the Section 338 Allocation schedule as agreed to under this Section 11.5(c).

Section 338(h)(10) Election. (a) The If requested in writing by the Buyer no later than thirty (30) days prior to the election deadline, Sellers shall cooperate with Buyer in making and Investor shall jointly make a timely filing an election pursuant to on Internal Revenue Service Form 8023 under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations and any comparable election under applicable state or local Law (collectively, the “Section 338(h)(10) Election”) with respect to the sale and purchase by Investor of shares pursuant to this Agreement and any similar state law provisions in all states in which such elections are legally permitted to be made in connection with the sale and purchase of the Merger Sharesshares pursuant to this Agreement, and each party shall provide the others with all necessary information reasonably requested in writing by the other party to permit such elections to be made (referred to as the “338 Election”). In additionIf timely requested in writing by the Buyer, the SellersSellers shall, Investor and the Company shallat Xxxxx’s expense, as promptly as practicable following the Closing Date, cooperate with each other to Buyer as reasonably requested in writing by Buyer so that Buyer can take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Lawrequired) to effect and preserve a timely Code Section 338(h)(10) Election in accordance with any comparable provisions of applicable Law, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused transactions contemplated by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that (i) Buyer shall be the party responsible for preparing Internal Revenue Service Form 8023 and any other forms, returns, schedules and other documents necessary for making an effective and timely Code Section 338(h)(10) election with respect to the transactions contemplated by this Agreement and (ii) any such forms, returns, schedules and other documents shall be prepared and filed at Buyer’s expense and shall be subject to Sellers’ review and approval (not to be unreasonably withheld, conditioned or delayed). Without limiting the foregoing: within forty five (45) days after the final determination of the Closing Working Capital, Buyer shall deliver to the Seller an allocation of the “aggregate deemed sales price” (as such term is defined in Treasury Regulations Section 1.338- 4) among the assets of Company in accordance with Treasury Regulations Sections 1.338-6 and 1.338-7 (the “Allocation Statement”), including any work papers, schedules and other information used in connection with preparing the Allocation Statement. The parties agree that no portion of the aggregate deemed sales price will be allocated to any non-solicitation, non-compete or other restrictive covenants provided in this Agreement, and that the allocation to depreciable assets will be based on each such asset’s adjusted basis for U.S. federal income Tax purposes immediately prior to the Closing Date. The allocation of the aggregate deemed sales price shall be in accordance with the fair market value of the acquired assets as provided in Section 1060 of the Code. The Sellers shall not be required have the right to indemnify review the Company and/or Allocation Statement. Within forty-five (45) days after the Investor under both Article X and this Section 8.02(b) for Sellers’ receipt of the same Losses Allocation Statement, the Sellers shall indicate its concurrence therewith, or claimpropose to Buyer any changes to the Allocation Statement. The Sellers’ obligation failure to indemnify notify Buyer of any objection to the Allocation Statement within forty-five (45) days after receipt thereof shall constitute the Sellers’ concurrence therewith. Should the Sellers propose any change to the Allocation Statement, Buyer and the Sellers shall cooperate to resolve any disagreement regarding the Allocation Statement. If Buyer and the Sellers are unable to reach an agreement, any dispute arising under this Section 12.14 shall be referred to the Independent Accountants for resolution in a manner similar to Section 2.4.3. The Final Allocation Statement shall be binding on the parties, and all Tax Returns filed by Buyer, Company and the Seller shall not apply to issues regarding allocation be prepared consistently with the Final Allocation Statement, and none of purchase price, depreciable life of acquired assets them shall take a position on any Tax Return or other matters that relate form or statement contrary to such allocation, unless otherwise required by applicable Law. Any adjustments to the Tax benefits realized from Purchase Price pursuant to this Agreement shall be allocated by the Buyer in a manner consistent with the Allocation Statement, and shall be subject to the procedures and dispute resolution mechanisms set forth in this Section. (b) To the extent any election under Code Section 338(h)(10) Election(or similar provision of state or local Law) is made in connection with the transactions contemplated by this Agreement, but which are not caused specifically by the disallowance this Section 12.14(b) shall apply. Buyer shall be responsible for all Taxes imposed on Company or Sellers as a result of the 338(h)(10) Election by reason making of the Company’s failure elections contemplated by Section 12.14(a). Within thirty (30) days following the determination of the Final Allocation Schedule pursuant to qualify as an S Corporation or by Sellers’ breach 12.14(a), Xxxxx shall prepare and deliver to the Sellers a calculation of the Gross-Up Amount. For purposes of this Agreement, the “Gross-Up Amount” is an amount equal to the sum of (a) the excess of (i) the aggregate U.S. federal, state and local Taxes payable by the Seller and Company as a result of receipt from Buyer of the Purchase Price (and any other amounts properly treated as consideration in respect of the purchase and sale of the Shares pursuant to this Agreement) over (ii) the hypothetical aggregate amount of U.S. federal, state and local Taxes that would have been payable by Sellers if no election under Code Section 338(h)(10) (or similar provision of state or local Law) were made in connection with the transactions contemplated by this Agreement, and assuming all other facts and circumstances applicable to the determination of the amount of Taxes incurred on such proceeds remain unchanged) and (b) any incremental U.S. state and federal income Taxes imposed on the Sellers or Company attributable to any payments made by Buyer pursuant to this Section 12.14(b). The Sellers will provide to Buyer any comments to Xxxxx’s calculation of the Gross-Up Amount in writing within forty-five (45) days of receipt thereof, setting forth in reasonable detail the basis for any disputed items. If the Sellers do not provide written notice to Buyer of the basis of its disagreement with Xxxxx’s calculation of the Gross-Up Amount within such forty-five (45) day period, the Gross-Up Amount as calculated by Buyer shall be final and binding upon the parties. If Sellers do provide such written notice within such forty- five (45) day period, and the parties are unable to agree on any item with respect to the calculation of the Gross-Up Amount set forth in such written notice, the parties shall refer the disputed item to the Independent Accountants for resolution in accordance with the provisions set forth in Section 2.4.3. The Independent Accountant’s resolution of any issue with respect to the Gross-Up Amount shall be final and binding on the parties. To the extent any true-up payments become due and payable to Sellers pursuant to the terms of this Agreement, the Gross-Up Amount shall be recalculated by Buyer in accordance with the terms of this Section 12.14(b) (including the notice and dispute resolutions mechanisms herein). Payment in respect of the Gross-Up Amount shall be made by Buyer to Sellers in cash within five (5) days following the determination of the Gross-Up Amount.

Section 338(h)(10) Election. (a) The Sellers Buyer and Investor shall jointly make a timely election Shareholder agree, with respect to the acquisition of the Shares pursuant to this Agreement, to prepare, execute, and file the election provided by Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations and any comparable election under applicable state state, county, or local Law law (collectively, collectively and separately the “Section 338(h)(10) Election”) with respect ). Each party shall provide to the purchase by Investor other all information reasonably necessary to permit the making of the Merger SharesElection. In addition, the Sellers, Investor and the Company Buyer shall, as promptly as practicable following no later than thirty (30) days prior to the Closing Datelast date for filing a timely Election, cooperate with each execute and file Internal Revenue Service Form 8023 and all other to take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules schedules, and other documents as may be required by applicable state or local Law) to effect and preserve a timely Section 338(h)(10) Election in accordance with any comparable provisions of applicable Law, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such disputeElection. (b) If it is determined by a finding or order in In connection with any governmental or judicial audit or proceedingthe Election and no later than thirty (30) days prior to the last date for filing a timely Election, including any settlement of such a proceeding to which any of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly Buyer shall in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to good faith (i) any and all Taxes imposed on determine the Company due to such invalid election or preamount of the “adjusted grossed-Closing termination up basis” of the Company’s S Corporation status and assets (ii)(a) any and all Taxes imposed on within the Company due to an invalid meaning of Treasury Regulations adopted under Section 338(h)(10) Election caused by and pursuant to Section 6.6, (ii) allocate the invalid election or the preadjusted grossed-Closing termination of up basis among the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made assets in accordance with Section 8.05the Code and the Treasury Regulations promulgated thereunder (the “Allocation”), and (iii) permit Shareholder to review and comment on the Allocation. Notwithstanding anything to The Shareholder and Buyer will not take any position inconsistent with the contrary contained in this Agreement or in the Escrow AgreementElection, the provisions of this Section shall survive Allocation, or the termination amount of the Escrow Agreement, shall remain adjusted grossed-up basis in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06any tax return or otherwise; provided, however, that Sellers Shareholder shall be entitled to take into account his Transaction Expenses when calculating such gain or loss; and provided further, however, that if, in any audit of any Tax Return of the Shareholder, Company or Buyer by a Taxing Authority, the fair market values are finally determined to be different from the Allocation, Buyer, Company and Shareholder may take any position or action consistent with the fair market values as finally determined in such audit, but shall not be required obligated to indemnify do so if such audit is not binding on such Person. Subject to the Company and/or preceding sentence, Buyer shall allocate the Investor under both Article X adjusted grossed-up basis among the Company’s assets in a manner consistent with the Allocation and will not take any position inconsistent with the Election, the Allocation or the amount of the adjusted grossed-up basis in any tax return or otherwise. (c) Notwithstanding any other provision contained in this Section 8.02(b) for the same Losses or claim. The Sellers’ obligation to indemnify Agreement, the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets pay all state corporate income and franchise taxes imposed on the Company generated by or other matters that relate to the Tax benefits realized from the 338(h)(10) Election, but which are not caused specifically by the disallowance arising as a consequence of the 338(h)(10) Election by reason of (which tax amounts shall be accrued on the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this AgreementClosing Balance Sheet).

Section 338(h)(10) Election. (a) The Sellers Buyer and Investor shall jointly make a timely Seller agree that an election pursuant to under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations promulgated thereunder and any comparable election elections available under applicable U.S. state or local Law Tax law in respect of the purchase of the Shares under this Agreement (collectively, the “Section 338(h)(10) Election”) with respect to the purchase shall be jointly made by Investor of the Merger Sharesthem or their applicable Affiliates. In addition, the Sellers, Investor and the Company Buyer shall, as promptly as practicable following with the Closing Datereasonable assistance and cooperation of Seller, cooperate with each other to take all actions necessary prepare Internal Revenue Service Form 8023 and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable any similar U.S. state or local LawTax forms (together with any schedules or attachments thereto) that are required by Section 338 of the Code and the underlying Treasury Regulations (or any comparable applicable provision of state or local law) to effect and preserve a timely Section 338(h)(10) Election in accordance with any comparable provisions of applicable Law, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with make the Section 338(h)(10) Election (collectively, the “Section 338 Forms”) in accordance with applicable U.S. Tax laws. Subject to Section 10.8(b), (i) Buyer shall deliver the Section 338 Forms to Seller for its review, comment and the allocation as set forth on Schedule 2.04(aconsent (such consent not to be unreasonably withheld) and no party shall take (and at least 60 calendar days prior to the Closing due date of filing and (ii) upon its approval (but no later than 30 calendar days prior to the Sellers due date of filing) Seller shall deliver to Buyer signed and completed Section 338 Forms. Seller and Buyer shall each adopt and abide by the Section 338 Forms for purposes of all income Tax Returns filed by them and shall not permit the Company to take, and after the Closing the Company shall not take) take any position contrary thereto inconsistent therewith in connection with any examination of any such Tax Return, any refund claim, or any judicial litigation proceeding before unless there has been a final determination of a Governmental Authority which finally and conclusively establishes the amount of any Taxing Authority or otherwiseliability for Taxes. In the event that any the Section 338(h)(10) Election or the Purchase Price Allocation described in Section 10.8(b) is disputed by any Taxing Authoritytaxing authority, the party receiving notice of such the dispute shall promptly notify and consult with the other party parties hereto in writing of such dispute (including a copy of such notice in the notification) and the parties hereto shall reasonably consult and cooperate with each other concerning resolution of such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any of the parties hereto are parties No later than ninety (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period 90) calendar days after such election was purportedly made (including the period ending on the Closing Date, but excluding Buyer shall prepare and deliver to Seller for its review, comment and consent (such consent not to be unreasonably withheld) a statement (together with all supporting documentation) setting forth the allocation of the sum of the Purchase Price, plus any periods commencing with related assumed liabilities, plus any other amounts as required by applicable Tax law among the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination assets of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment allocation shall be made in accordance with Sections 338 and 1060 of the Code and any applicable Treasury Regulations (the “Purchase Price Allocation”). Seller shall notify Buyer in writing within thirty (30) calendar days after receipt of the Purchase Price Allocation of any disagreement or objections Seller may have with the Purchase Price Allocation, in which case Buyer and Seller shall use their good faith efforts to reach agreement thereon. In the event Buyer and Seller fail to so agree within fifteen (15) calendar days after Seller’s notice of disagreement or objections has been delivered, then Buyer and Seller shall promptly engage an Arbitrating Accountant in accordance with the procedures described in Section 8.051.7, to be applied mutatis mutandis, to resolve the dispute within fifteen (15) calendar days of the engagement and resolution shall be final and binding on the parties as described in Section 1.7. Notwithstanding anything The Purchase Price Allocation finally determined pursuant to this Section 10.8(b) shall be used by Seller and Buyer for all applicable Tax purposes, including preparation and filing of Internal Revenue Service Form 8883 and any other applicable U.S. income Tax Returns with respect to the contrary contained in transaction contemplated by this Agreement or in the Escrow Agreement, and no party hereto shall take or assert any position inconsistent therewith, except as otherwise required by a final determination of a Governmental Authority. Any subsequent adjustments to Purchase Price required pursuant to the provisions of Agreement shall also be allocated in accordance with the Purchase Price Allocation finally determined pursuant to this Section shall survive the termination of the Escrow Agreement, shall remain in effect 10.8(b). (c) Except as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations otherwise set forth in Section 10.06; provided, however, that Sellers shall not be required to indemnify the Company and/or the Investor under both Article X and this Section 8.02(b10.8, none of Seller, the Company, Buyer, or any of their respective Affiliates shall file an election under Section 338 of the Code (or any similar or corresponding provision of U.S. state, local or foreign law) for the same Losses or claim. The Sellers’ obligation to indemnify the Company shall not apply to issues regarding allocation of purchase price, depreciable life of acquired assets or other matters that relate with respect to the Tax benefits realized from the 338(h)(10) sale and purchase of Shares under this Agreement (any such excluded election, a “Section 338 Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of this Agreement”).

Section 338(h)(10) Election. (a) The If timely requested in writing by the Buyer and conditioned on the advanced payment by Buyer to Sellers of the Gross Up Amount, Sellers shall cooperate with Buyer in making and Investor shall jointly make a timely filing an election pursuant to on Internal Revenue Service Form 8023 under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the United States Treasury Regulations and any comparable election under applicable state or local Law (collectively, the “Section 338(h)(10) Election”) with respect to the sale and purchase by Investor of Shares pursuant to this Agreement and any similar state law provisions in all states in which such elections are legally permitted to be made in connection with the sale and purchase of the Merger SharesMembership Interests pursuant to this Agreement, and each party shall provide the others with all necessary information reasonably requested in writing by the other party to permit such elections to be made (referred to as the “338 Election”). In additionIf timely requested in writing by the Buyer, the SellersSellers shall, Investor and the Company shallat Buyer’s expense, as promptly as practicable following the Closing Date, cooperate with each other to Buyer as reasonably requested in writing by Buyer so that Buyer can take all actions necessary and appropriate (including filing Form 8883, Asset Allocation Statement Under Section 338, and such additional forms, returns, elections, schedules and other documents as may be required by applicable state or local Lawrequired) to effect and preserve a timely Code Section 338(h)(10) Election in accordance with any comparable provisions of applicable Law, and the parties responsible for filing any such Section 338(h)(10) Election under applicable Law shall promptly file or cause to be filed such Section 338(h)(10) Election with the appropriate Taxing Authority and provide written evidence of such filing to the other parties. The Sellers and Investor shall report the purchase by Investor of the Merger Shares consistent with the Section 338(h)(10) Election and the allocation as set forth on Schedule 2.04(a) and no party shall take (and prior to the Closing the Sellers shall not permit the Company to take, and after the Closing the Company shall not take) any position contrary thereto in any Tax Return, any proceeding before any Taxing Authority or otherwise. In the event that any Section 338(h)(10) Election is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify and consult with the other party concerning such dispute. (b) If it is determined by a finding or order in connection with any governmental or judicial audit or proceeding, including any settlement of such a proceeding to which any of the parties hereto are parties (but only if the requirements of Section 8.04 have been satisfied, unless the failure to satisfy such requirements is not materially prejudicial to Sellers), that the Company’s S election was not validly in effect for any period after such election was purportedly made (including the period ending on the Closing Date, but excluding any periods commencing with the Closing), then Sellers shall be obligated, jointly and severally, to indemnify and hold harmless the Company (pro-rata in accordance with their respective Ownership Percentages) with respect to (i) any and all Taxes imposed on the Company due to such invalid election or pre-Closing termination of the Company’s S Corporation status and (ii)(a) any and all Taxes imposed on the Company due to an invalid 338(h)(10) Election caused transactions contemplated by the invalid election or the pre-Closing termination of the Company’s S status resulting in the disallowance of any and all Tax benefits, including, but not limited to, the disallowance of deductions and losses that otherwise could have been available pursuant to a valid 338(h)(10) Election and (b) the net present value of any and all future Tax benefits, including, but not limited to, deductions and losses that were disallowed that the Company could reasonably have expected to realize in subsequent periods as the result of a valid 338(h)(10) Election (with such expectation to be measured based on circumstances as of the Closing Date), using a discount rate of 15% per annum from the date upon which such Tax benefits were disallowed through the date the Company could reasonably have expected to realize such Tax benefits (with such expectation to be measured based on circumstances as of the Closing Date). Such payment shall be made in accordance with Section 8.05. Notwithstanding anything to the contrary contained in this Agreement or in the Escrow Agreement, the provisions of this Section shall survive the termination of the Escrow Agreement, shall remain in effect as personal obligations of Sellers on a joint and several basis until the applicable statutes of limitations shall have expired and shall not be subject to the limitations set forth in Section 10.06; provided, however, that (i) Buyer shall be the party responsible for preparing Internal Revenue Service Form 8023 and any other forms, returns, schedules and other documents necessary for making an effective and timely Code Section 338(h)(10) election with respect to the transactions contemplated by this Agreement and (ii) any such forms, returns, schedules and other documents shall be prepared and filed at Buyer’s expense and shall be subject to Sellers’ review and approval (not to be unreasonably withheld, conditioned or delayed). Without limiting the foregoing: within forty five (45) days after the final determination of the Closing Working Capital pursuant to Section 2.4.4, Buyer shall deliver to the Seller an allocation of the “aggregate deemed sales price” (as such term is defined in Treasury Regulations Section 1.338-4) among the assets of Company in accordance with Treasury Regulations Sections 1.338-6 and 1.338-7 (the “Allocation Statement”), including any work papers, schedules and other information used in connection with preparing the Allocation Statement. The parties agree that no portion of the aggregate deemed sales price will be allocated to any non-solicitation, non-compete or other restrictive covenants provided in this Agreement, and that the allocation to depreciable assets will be based on each such asset’s adjusted basis for U.S. federal income Tax purposes immediately prior to the Closing Date. The allocation of the aggregate deemed sales price shall be in accordance with the fair market value of the acquired assets as provided in Section 1060 of the Code. The Sellers shall not be required have the right to indemnify review the Company and/or Allocation Statement. Within forty-five (45) days after the Investor under both Article X and this Section 8.02(b) for Sellers’ receipt of the same Losses Allocation Statement, the Sellers shall indicate its concurrence therewith, or claimpropose to Buyer any changes to the Allocation Statement. The Sellers’ obligation failure to indemnify the Company shall not apply to issues regarding allocation notify Buyer of purchase price, depreciable life of acquired assets or other matters that relate any objection to the Tax benefits realized from Allocation Statement within forty-five (45) days after receipt thereof shall constitute the 338(h)(10) Election, but which are not caused specifically by the disallowance of the 338(h)(10) Election by reason of the Company’s failure to qualify as an S Corporation or by Sellers’ breach of concurrence therewith. Should the Sellers propose any change to the Allocation Statement, Buyer and the Sellers shall cooperate to resolve any disagreement regarding the Allocation Statement. If Buyer and the Sellers are unable to reach an agreement, any dispute arising under this AgreementSection 12.16 shall be referred to the Independent Accountants for resolution in a manner similar to Section 2.4.