Common use of Transaction Tax Deductions Clause in Contracts

Transaction Tax Deductions. (a) As promptly as possible, and in any event within twenty-one (21) calendar days following the date hereof, the Company shall prepare in good faith and provide Buyer with a draft schedule of the Transaction Tax Deductions that the Company proposes to be taken into account in the calculation of the Accrued Income Tax Amount (which schedule shall include the entity that is expected to be entitled to the deduction, and an estimate of the amount thereof) (the “Draft TTD Schedule”), together with any supporting documentation that Buyer may reasonably request. The parties agree that only items of expense or loss that are “more likely than not” deductible by Supreme Cabinetry Brands, Inc. or its Subsidiaries in a pre-Closing Tax period shall be included for this purpose. Buyer may, within five (5) Business Days after receipt of the Draft TTD Schedule, deliver written notice to the Company if it disagrees in good faith with any item thereon. In the event the Buyer delivers such written notice within such period, the disputed item(s) shall promptly be submitted to the Accounting Referee for resolution in accordance with the procedures set forth in Section 2.05, mutatis mutandis; provided that the parties shall simultaneously work together in good faith to reach agreement on the disputed items, and in the event the parties are able to reach such agreement within ten (10) days following Buyer’s delivery of notice, such agreement shall be binding (and the Accounting Referee shall not resolve such disputed item). The parties agree that only items of expense or loss that are agreed upon by the parties, or that the Accounting Referee has determined are deductible at a “more likely than not” standard by the applicable entity, shall be taken into account in calculating the Accrued Income Tax Amount for purposes of determining Indebtedness in the Closing Statement and the Final Purchase Price. To the extent a dispute is ongoing at the time the Estimated Closing Statement is delivered to Buyer pursuant to Section 2.05, the Company shall include an amount of estimated Indebtedness in the Estimated Closing Statement that reflects the amounts in the Draft TTD Schedule, adjusted as appropriate by the Company after taking into account any amounts of Transaction Tax Deductions actually agreed between Buyer and the Seller Representative in accordance with this Section 7.07 on or prior to that time. The parties hereto further agree that the amount of Transaction Tax Deductions shall be deemed to have been “finally determined” for purposes of this Section 7.07 (and for all other purposes where such phrase is used in this Agreement with respect to Section 7.07) once all items of expense or loss with respect to the calculation of Transaction Tax Deductions in accordance with Section 7.07 have either been (x) agreed upon by the parties or (y) determined by the Accounting Referee to be (or not to be, as the case may be) deductible at a “more likely than not” standard by the applicable entity (with any other items of expense or loss on the Draft TTD Schedule having been agreed by the parties not to meet this standard, if applicable, or determined by the Accounting Referee not to meet this standard, if applicable). The fees, costs and expenses of the Accounting Referee pursuant to this Section 7.07 shall be borne 100% by Buyer. (b) For the sake of clarity, if and to the extent that the amount of Transaction Tax Deductions has not been finally determined in accordance with Section 7.07 prior to the Closing Date, then the Escrow Amount shall be $4,500,000 for purposes of Closing. Thereafter, in such case, when the amount of Transaction Tax Deductions has been finally determined in accordance with Section 7.07, then promptly thereafter, but in any event within five (5) Business Days thereof, Buyer and Seller Representative shall provide a Joint Release Instruction (as defined in the Escrow Agreement) to the Escrow Agent (A) if the TTD Differential is a positive number, instructing the Escrow Agent to release to Seller Representative (for distribution for the benefit of Sellers) an amount in cash from the TTD Escrow Account that is equal to $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement), (B) if the TTD Differential is greater than negative $2,000,000 and less than zero, instructing the Escrow Agent to release to (x) Seller Representative (for distribution for the benefit of Sellers) as promptly as practicable thereafter and otherwise in accordance with the Escrow Agreement an amount in cash from the TTD Escrow Account that is equal to the excess of $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement) minus the TTD Differential (expressed as a positive number) and (y) Buyer an amount in cash equal to the remaining funds in the TTD Escrow Account; and (C) if the TTD Differential is equal to or less than negative $2,000,000, instructing the Escrow Account to release all funds in the TTD Escrow Account to Buyer. The “TTD Differential” shall equal the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as finally determined in accordance with this Section 7.07 minus the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as reflected on the Estimated Closing Statement (which difference may be positive or negative). All payments pursuant to this Section 7.07(b) shall be made as promptly as practicable and in accordance with the Escrow Agreement.

Transaction Tax Deductions. Buyer will pay to Sellers’ Representative (aon behalf of Sellers) As promptly (to the account (or allocated among accounts) as possibledesignated by the Seller’s Representative in writing) the amount of any federal and state income Tax benefit actually realized in a Post-Closing Tax Period or Post-Closing Straddle Period by the consolidated group that includes the Company or its Subsidiaries attributable to any Transaction Tax Deduction NOL within forty-five (45) days after the date the final U.S. federal income tax return for such taxable period is filed for each applicable year (the “Report Date”). A Tax benefit will be deemed actually realized in a taxable period for purposes of this Section 6(d)(viii) if there is an actual reduction in the U.S. federal income Tax liability of the consolidated group that includes the Company or its Subsidiaries in such taxable period attributable to the Transaction Tax Deduction NOL (determined on a “with and without basis”); provided that the Company and its Subsidiaries shall be deemed to recognize all other items of income, gain, loss, deduction or credit that the Company and its Subsidiaries are entitled to use under applicable Law before recognizing any Transaction Tax Deduction NOL; provided further that for purposes of this Section 6(d)(viii), the amount of Tax benefit actually realized by the Company or its Subsidiaries for state Tax purposes in any event within twenty-one (21) calendar days following Tax year shall be deemed to equal 3.5% times the date hereof, the Company shall prepare in good faith and provide Buyer with a draft schedule amount of the Transaction Tax Deductions Deduction NOL utilized in such Tax year. Notwithstanding anything in this Agreement to the contrary, no payments will be required to be made pursuant to this Section 6(d)(viii) with respect to any income Tax benefit attributable to the Transaction Tax Deduction NOL that is actually realized after the fifth anniversary of the Closing Date. For the avoidance of doubt, no payments shall be required to be made pursuant to this Section 6(d)(viii) with respect to any Tax benefit that is actually realized in, or reduces a Tax liability with respect to, a Pre-Closing Tax Period or a Pre-Closing Straddle Period. On each Report Date (whether or not a payment is due), Buyer shall submit to the Sellers’ Representative a summary of the federal and state taxable income of the consolidated group that includes the Company proposes to be taken or its Subsidiaries with and without taking into account in the calculation of the Accrued Income Transaction Tax Amount (which schedule shall include the entity that is expected to be entitled to the deduction, and an estimate of the amount thereof) (the “Draft TTD Schedule”)Deduction NOL, together with any supporting documentation a written statement by a senior tax officer of Buyer that Buyer may reasonably request. The parties agree that only items of expense or loss that are “more likely than not” deductible by Supreme Cabinetry Brands, Inc. or its Subsidiaries such calculation is accurate and correct and in a pre-Closing Tax period shall be included for accordance with this purpose. Buyer may, within five (5) Business Days after receipt of the Draft TTD Schedule, deliver written notice to the Company if it disagrees in good faith with any item thereonsection. In the event the Sellers’ Representative disagrees with any of the calculations included in such summary, and such disagreements cannot be resolved by the Sellers’ Representative and the Buyer delivers such written notice within such periodthrough direct good faith negotiation, the disputed item(s) shall promptly be submitted to the Accounting Referee for resolution in accordance with the procedures set forth in Section 2.05, mutatis mutandis; provided that the parties shall simultaneously work together in good faith to reach agreement on the disputed items, and in the event the parties are able to reach such agreement within ten (10) days following Buyer’s delivery of notice, such agreement Sellers’ Representative shall be binding (permitted, at its sole cost and the Accounting Referee shall not resolve expense, to submit such disputed item). The parties agree that only items of expense or loss that are agreed upon by the parties, or that the Accounting Referee has determined are deductible at a “more likely than not” standard by the applicable entity, shall be taken into account in calculating the Accrued Income Tax Amount for purposes of determining Indebtedness in the Closing Statement and the Final Purchase Price. To the extent a dispute is ongoing at the time the Estimated Closing Statement is delivered calculation to Buyer pursuant to Section 2.05, the Company shall include an amount of estimated Indebtedness in the Estimated Closing Statement that reflects the amounts in the Draft TTD Schedule, adjusted as appropriate by the Company after taking into account any amounts of Transaction Tax Deductions actually agreed between Buyer and the Seller Representative in accordance with this Section 7.07 on or prior to that time. The parties hereto further agree that the amount of Transaction Tax Deductions shall be deemed to have been “finally determined” for purposes of this Section 7.07 (and for all other purposes where such phrase is used in this Agreement with respect to Section 7.07) once all items of expense or loss with respect to the calculation of Transaction Tax Deductions in accordance with Section 7.07 have either been (x) agreed upon by the parties or (y) determined by the Accounting Referee to be (or not to be, as the case may be) deductible at a “more likely than not” standard by the applicable entity (with any other items of expense or loss on the Draft TTD Schedule having been agreed by the parties not to meet this standard, if applicable, or determined by the Accounting Referee not to meet this standard, if applicable). The fees, costs and expenses tax experts of the Accounting Referee pursuant to this Section 7.07 shall be borne 100% by Buyer. (b) For the sake of clarity, if and to the extent that the amount of Transaction Tax Deductions has not been finally determined in accordance with Section 7.07 prior to the Closing Date, then the Escrow Amount shall be $4,500,000 Independent Accountants for purposes of Closing. Thereafter, in such case, when the amount of Transaction Tax Deductions has been finally determined in accordance with Section 7.07, then promptly thereafter, but in any event within five (5) Business Days thereof, Buyer and Seller Representative shall provide a Joint Release Instruction (verification as defined in the Escrow Agreement) to the Escrow Agent (A) if the TTD Differential is a positive number, instructing the Escrow Agent to release to Seller Representative (for distribution for the benefit of Sellers) an amount in cash from the TTD Escrow Account that is equal to $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement), (B) if the TTD Differential is greater than negative $2,000,000 and less than zero, instructing the Escrow Agent to release to (x) Seller Representative (for distribution for the benefit of Sellers) as promptly as practicable thereafter and otherwise in accordance with the Escrow Agreement an amount in cash from the TTD Escrow Account that is equal to the excess of $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement) minus the TTD Differential (expressed as a positive number) and (y) Buyer an amount in cash equal to the remaining funds in the TTD Escrow Account; and (C) if the TTD Differential is equal to or less than negative $2,000,000, instructing the Escrow Account to release all funds in the TTD Escrow Account to Buyer. The “TTD Differential” shall equal the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as finally determined in accordance with this Agreement. Sellers’ Representative and Buyer shall cooperate with the Independent Accountants in verifying such calculations and the determination of the Independent Accountants shall be conclusive and binding on the Parties only to the extent of the requirements of this Section 7.07 minus 6(d), absent fraud or manifest error. Notwithstanding anything in this Agreement to the contrary (i) in the event that the Company and its Subsidiaries utilize in a Tax year the maximum amount of the Transaction Tax Deductions (Deduction NOL that is permitted to be utilized in such Tax year for clarityU.S. federal income tax purposes taking into account the application of Section 382 of the Code, expressed as a positive number) as reflected on then the Estimated Closing Statement (which difference may Buyer shall not be positive or negative). All payments required to provide any information to any Person pursuant to this Section 7.07(b6(d)(viii) with respect to such Tax year other than its determination of the annual limitation pursuant to Section 382 of the Code for U.S. federal income tax purposes and (ii) the Buyer shall not be made as promptly as practicable required by this Agreement to make available to any Person any Tax Return of the consolidated group that includes the Company and in accordance with its Subsidiaries following the Escrow AgreementClosing or any related workpapers or other Tax information that reflects the income of any Affiliate of Buyer other than the Company and its Subsidiaries.

Transaction Tax Deductions. To the extent permitted by applicable Tax law, Parent will cause the Company and its Subsidiaries to (i) claim any Transaction Tax Deductions in its Pre-Closing Taxable Period ending on the Closing Date and (ii) elect to carry back any net operating loss for such period. The Securityholders shall be entitled to (1) any refund or credit of Income Taxes actually paid by the Company or its Subsidiaries prior to the Closing Date for any Pre-Closing Taxable Period to the extent that such refund or credit is attributable to the Transaction Tax Deductions or the carryback of a net operating loss attributable to such Transaction Tax Deductions (with such Transaction Tax Deductions treated as the last deductionsclaimed in such Pre-Closing Taxable Period for this purpose) and (2) the amount by which (x) the Income Tax Reserve exceeds (y) the amount of Income Taxes for any Pre-Closing Taxable Period that are required to be paid after the Closing by the Surviving Corporation, to the extent such difference results from the Transaction Tax Deductions (with such Transaction Tax Deductions treated as the last deductions claimed in any Pre-Closing Taxable Period for this purpose). Parent shall file such Tax Returns (or other requests for refunds, but not any refund claims pursuant to IRS Form 1139 or any similar state processes) for the Pre-Closing Taxable Period as are reasonably requested by the Seller Representative to obtain or secure any amounts to which the Securityholders may be entitled pursuant to the preceding sentence, and Parent shall afford the Seller Representative and its Representatives reasonable access to the books and records and management of the Company and its Subsidiaries in furtherance of the foregoing. The Surviving Corporation shall deliver and pay over to the Paying Agent (on behalf of the Securityholders) any amounts described in the second sentence of this Section 4.13(i) as soon as reasonably practicable after receipt or actual realization thereof (which, in the case of a Tax described in clause (2) of the second sentence of this Section 4.13(i), shall be when such Tax would have been payable to the relevant Tax authority in the absence of Transaction Tax Deductions), net of (a) As promptly as possibleany Taxes imposed with respect to the receipt or payment of such refund or credit, and (b) the amount of any Closing Tax Refund Payments (as defined below) actually paid to the Optionholders. The Securityholders shall not be entitled to any refund or credit attributable to (i) the carryback ofnet operating losses or other Tax attributes economically generated after the Closing Date or the carryback of losses sustained by the Company or its Subsidiaries after December 31, 2016 and prior to the Closing Date other than in respect of Transaction Tax Deductions or (ii) the use of any event within twentynet operating loss of the Company attributable to Transaction Tax Deductions in a Post-one Closing Taxable Period. At least three (213) calendar business days following the date hereofprior to Closing, the Company shall prepare in good faith and provide Buyer with a draft schedule of the Transaction Tax Deductions that the Company proposes to be taken into account in the calculation of the Accrued Income Tax Amount (which schedule shall include the entity that is expected to be entitled to the deduction, and an estimate of the aggregate amounts -68- **MSPSC Electronic Copy ** 2016-UA-186 Filed on 09/23/2016 ** that would reasonably be expected to be paid to the Securityholders pursuant to this Section 4.13(ik which calculation shall be reasonably acceptable to Parent (the "Estimated Tax Refund Amount"). At Closing, Parent shall pay to the Company, for payment to each of the Optionholders set forth on Section 4.13(j) of the Disclosure Schedule, an amount thereoffor each such Optionholder equal to the portion of the Estimated Tax Refund Amount that would be allocable to such Optionholder under Section 1.6(c) (Effect on Company Options) and Section 1.6(e) (Post-Closing Payments) if the entire Estimated Tax Refund Amount were to be paid to all Securityholders at Closing (the "Closing Tax Refund Payments"). Thereafter, any payments payable to the Seller Representative after the Closing pursuant to this Section 4.13(i) (which for the avoidance of doubt shall be determined net of the Closing Tax Refund Payments) (the “Draft TTD Schedule”), together with any supporting documentation that Buyer may reasonably request. The parties agree that only items of expense or loss that are “more likely than not” deductible by Supreme Cabinetry Brands, Inc. or its Subsidiaries in a pre-"Post- Closing Tax period Refund Payments") shall be included for this purpose. Buyer may, within five allocated by the Seller Representative among the Securityholders (5other than the Optionholders set forth on Section 4.13(†) Business Days after receipt of the Draft TTD Disclosure Schedule, deliver written notice to the Company if it disagrees in good faith with any item thereon. In the event the Buyer delivers such written notice within such period, the disputed item(s) shall promptly be submitted to the Accounting Referee for resolution in accordance with the procedures relative Pro Rata Portions of such other Securityholders (the "Per Share Tax Refund Amounts"), provided, that if the aggregate Per Share Tax Refund Amount exceeds the portion of the Closing Tax Refund Payments that each Optionholder set forth on Section 4.13(i) of the Disclosure Schedule received in respect of each share of Company Capital Stock underlying such Company Options, then the Post-Closing Tax Refund Payments shall be allocated by the Seller Representative among all of the Securityholders (including the Optionholders set forth on Section 2.054.13(i) of the Disclosure Schedule), mutatis mutandis; provided such that all Securityholders, on a cumulative basis, receive their Pro Rata Portion of the parties full amount due to Securityholders under this Section 4.13(j) (it being understood that, post-Closing, the Optionholders set forth on Section 4.13(i) of the Disclosure Schedule shall simultaneously work together only receive amounts that are in good faith excess of their applicable portion of the Closing Tax Refund Payments) and the Per Share Tax Refund Amount shall be appropriately adjusted. Notwithstanding anything to reach agreement the contrary herein, in calculating the Estimated Tax Refund Amount, .the Closing Tax Refund Payments or the Per Share Tax Refund Amounts, any deductions of the Company or its Subsidiaries resulting from or attributable to (i) any expenses incurred or assumed by Parent, MergerSub or their Affiliates (other than the Company and its Subsidiaries), (ii) any activities or transactions on the disputed itemsClosing Date after the Closing outside of the ordinary course of business or (iii) any expenses of Parent, and in the event the parties are able to reach such agreement within ten (10) days following Buyer’s delivery of notice, such agreement shall be binding (and the Accounting Referee shall not resolve such disputed item). The parties agree that only items of expense Merger Sub or loss their Affiliates that are agreed upon assumed by the partiesCompany or its Subsidiaries at or after the Closing, or that the Accounting Referee has determined are deductible at a “more likely than not” standard by the applicable entitythat, in each case, do not constitute Transaction Tax Deductions, shall be taken into account in calculating after the Accrued Income Tax Amount for purposes of determining Indebtedness in the Closing Statement and the Final Purchase Price. To the extent a dispute is ongoing at the time the Estimated Closing Statement is delivered to Buyer pursuant to Section 2.05, the Company shall include an amount of estimated Indebtedness in the Estimated Closing Statement that reflects the amounts in the Draft TTD Schedule, adjusted as appropriate by the Company after taking into account any amounts of Transaction Tax Deductions actually agreed between Buyer and the Seller Representative in accordance with this Section 7.07 on or prior to that time. The parties hereto further agree that the amount of Transaction Tax Deductions shall be deemed to have been “finally determined” for purposes of this Section 7.07 (and for all other purposes where such phrase is used in this Agreement with respect to Section 7.07) once all items of expense or loss with respect to the calculation of Transaction Tax Deductions in accordance with Section 7.07 have either been (x) agreed upon by the parties or (y) determined by the Accounting Referee to be (or not to be, as the case may be) deductible at a “more likely than not” standard by the applicable entity (with any other items of expense or loss on the Draft TTD Schedule having been agreed by the parties not to meet this standard, if applicable, or determined by the Accounting Referee not to meet this standard, if applicable). The fees, costs and expenses of the Accounting Referee pursuant to this Section 7.07 shall be borne 100% by BuyerDeductions. (b) For the sake of clarity, if and to the extent that the amount of Transaction Tax Deductions has not been finally determined in accordance with Section 7.07 prior to the Closing Date, then the Escrow Amount shall be $4,500,000 for purposes of Closing. Thereafter, in such case, when the amount of Transaction Tax Deductions has been finally determined in accordance with Section 7.07, then promptly thereafter, but in any event within five (5) Business Days thereof, Buyer and Seller Representative shall provide a Joint Release Instruction (as defined in the Escrow Agreement) to the Escrow Agent (A) if the TTD Differential is a positive number, instructing the Escrow Agent to release to Seller Representative (for distribution for the benefit of Sellers) an amount in cash from the TTD Escrow Account that is equal to $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement), (B) if the TTD Differential is greater than negative $2,000,000 and less than zero, instructing the Escrow Agent to release to (x) Seller Representative (for distribution for the benefit of Sellers) as promptly as practicable thereafter and otherwise in accordance with the Escrow Agreement an amount in cash from the TTD Escrow Account that is equal to the excess of $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement) minus the TTD Differential (expressed as a positive number) and (y) Buyer an amount in cash equal to the remaining funds in the TTD Escrow Account; and (C) if the TTD Differential is equal to or less than negative $2,000,000, instructing the Escrow Account to release all funds in the TTD Escrow Account to Buyer. The “TTD Differential” shall equal the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as finally determined in accordance with this Section 7.07 minus the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as reflected on the Estimated Closing Statement (which difference may be positive or negative). All payments pursuant to this Section 7.07(b) shall be made as promptly as practicable and in accordance with the Escrow Agreement.

Transaction Tax Deductions. (a) As promptly In connection with the preparation of Tax Returns under Section 11G, any Transaction Tax Deductions, to the extent “more likely than not” deductible under applicable Tax law for the Pre-Closing Tax Period, shall be treated as possibleproperly allocable to the Tax period ending on the Closing Date and such Tax Returns shall include such applicable Transaction Tax Deductions as deductions in the Tax Returns of the Company, any Subsidiary of the Company, or any Blocker, as applicable, for the Pre-Closing Tax Period that ends on the Closing Date. After the Closing, the Representative shall cause the Company, any Subsidiary of the Company, and in the Blockers to make a timely election to apply Rev. Proc. 2011-29 with respect to any event success based fees within twenty-one (21) calendar days following the date hereofscope of such Rev. Proc. paid by or on behalf of the Sellers, the Company Company, any Subsidiary of the Company, or any Blocker. Sellers shall prepare be responsible for all costs and expenses with respect to making such election. Without limiting the generality of the foregoing, in good faith and connection with preparing the Tax Returns described in Section 11G, within sixty (60) days after Closing, in consultation with its tax counsel, Representative shall provide written notice (including any supporting work papers, schedules, memoranda or documents) to the Buyer with a draft schedule respect to its view (consistent with the “more likely than not” standard set forth in this Section 11G(xii) as to (A) the amount of the Transaction Tax Deductions that the Company proposes to be taken into account in the calculation of the Accrued Income Tax Amount are “more likely than not” deductible, (which schedule shall include the entity that is expected to be entitled to the deduction, and an estimate of B) the amount thereofand description of any deduction that would be a Transaction Tax Deduction if it were “more likely than not” deductible but that does not meet that standard and (C) (the “Draft TTD Schedule”), together with any supporting documentation that Buyer may reasonably request. The parties agree that only items of expense or loss taxable period in which the various Transaction Tax Deductions that are “more likely than not” deductible by Supreme Cabinetry Brandswould be deductible) (collectively, Inc. or its Subsidiaries the “Deduction Statement”). If Buyer has any objections to the Deduction Statement, it shall inform the Representative, in a pre-Closing Tax period shall be included for this purpose. Buyer maywriting, within five sixty (560) Business Days days after receipt of receiving the Draft TTD Schedule, deliver written notice to the Company if it disagrees in good faith with any item thereonDeduction Statement. In the event the Representative and Buyer delivers such written notice within such period, the disputed item(s) shall promptly be submitted to the Accounting Referee for resolution in accordance with the procedures set forth in Section 2.05, mutatis mutandis; provided that the parties shall simultaneously work together negotiate in good faith to resolve such dispute and the Deduction Statement shall be modified accordingly. If the Representative and Buyer do not reach agreement on the disputed items, and in the event the parties are able to reach such agreement a final resolution within ten thirty (1030) days following Buyer’s after delivery of noticethe Deduction Statement, such agreement Representative and Buyer shall be binding promptly submit any unresolved items regarding the Deduction Statement to the mutually agreed third-party accountant for resolution (and shall execute any customary engagement letter and agree to any other customary terms and conditions of the Accounting Referee shall not resolve such disputed item)engagement) for prompt resolution. The parties agree that only items of expense or loss that are agreed upon by the parties, or that the Accounting Referee has determined are deductible at third-party accountant in resolving such dispute shall apply a “more likely than not” standard by as to whether a Transaction Tax Deduction is deductible and the applicable entity, appropriate Tax period in which such deduction shall be taken into account in calculating the Accrued Income Tax Amount for purposes of determining Indebtedness in the Closing Statement and the Final Purchase Price. To the extent a dispute is ongoing at the time the Estimated Closing Statement is delivered to Buyer pursuant to Section 2.05, the Company shall include an amount of estimated Indebtedness in the Estimated Closing Statement that reflects the amounts in the Draft TTD Schedule, adjusted as appropriate by the Company after taking into account any amounts of Transaction Tax Deductions actually agreed between Buyer and the Seller Representative in accordance with this Section 7.07 on or prior to that time. The parties hereto further agree that the amount of Transaction Tax Deductions shall be deemed to have been “finally determined” for purposes of this Section 7.07 (and for all other purposes where such phrase is used in this Agreement with respect to Section 7.07) once all items of expense or loss with respect to the calculation of Transaction Tax Deductions in accordance with Section 7.07 have either been (x) agreed upon by the parties or (y) determined by the Accounting Referee to be (or not to be, as the case may be) deductible at a “more likely than not” standard by the applicable entity (with any other items of expense or loss on the Draft TTD Schedule having been agreed by the parties not to meet this standard, if applicable, or determined by the Accounting Referee not to meet this standard, if applicable). The fees, costs and expenses of the Accounting Referee pursuant to this Section 7.07 shall be borne 100% by Buyerallocable. (b) For the sake of clarity, if and to the extent that the amount of Transaction Tax Deductions has not been finally determined in accordance with Section 7.07 prior to the Closing Date, then the Escrow Amount shall be $4,500,000 for purposes of Closing. Thereafter, in such case, when the amount of Transaction Tax Deductions has been finally determined in accordance with Section 7.07, then promptly thereafter, but in any event within five (5) Business Days thereof, Buyer and Seller Representative shall provide a Joint Release Instruction (as defined in the Escrow Agreement) to the Escrow Agent (A) if the TTD Differential is a positive number, instructing the Escrow Agent to release to Seller Representative (for distribution for the benefit of Sellers) an amount in cash from the TTD Escrow Account that is equal to $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement), (B) if the TTD Differential is greater than negative $2,000,000 and less than zero, instructing the Escrow Agent to release to (x) Seller Representative (for distribution for the benefit of Sellers) as promptly as practicable thereafter and otherwise in accordance with the Escrow Agreement an amount in cash from the TTD Escrow Account that is equal to the excess of $2,000,000 (plus all interest thereon earned pursuant to the Escrow Agreement) minus the TTD Differential (expressed as a positive number) and (y) Buyer an amount in cash equal to the remaining funds in the TTD Escrow Account; and (C) if the TTD Differential is equal to or less than negative $2,000,000, instructing the Escrow Account to release all funds in the TTD Escrow Account to Buyer. The “TTD Differential” shall equal the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as finally determined in accordance with this Section 7.07 minus the amount of Transaction Tax Deductions (for clarity, expressed as a positive number) as reflected on the Estimated Closing Statement (which difference may be positive or negative). All payments pursuant to this Section 7.07(b) shall be made as promptly as practicable and in accordance with the Escrow Agreement.