Common use of Allocation Conventions Clause in Contracts

Allocation Conventions. (i) All Taxes allocated pursuant to Section 3(a) shall be allocated between the Pre-IPO Period and the Post-IPO Period in accordance with the Closing of the Books Method; provided, however, that if Applicable Tax Law does not permit a Solta Group member to close its Taxable year on the IPO Date, the Tax attributable to the operations of the members of the Solta Group for any Post-IPO Period shall be the Tax computed using a hypothetical closing of the books consistent with the Closing of the Books Method (except to the extent otherwise agreed upon by Parent and Solta). (ii) For purposes of Section 3(a)(i), the amount of Taxes attributable to the member(s) of the Solta Group or the Solta Business, as applicable, shall be determined by Parent on a pro forma basis prepared (A) assuming that such member(s) were not included in the group of companies filing the applicable Joint Tax Return, but rather filed a separate Joint Tax Return that includes only such member(s), (B) including only Tax Items of such member(s), (C) except as provided in clause (E) hereof, using all elections, accounting methods and conventions used on such Joint Tax Return for such period, (D) applying the highest statutory marginal Tax rate in effect for such period, (E) assuming that such member(s) elect not to carry back any net operating losses and (F) assuming that such member(s) utilization of any Tax Attribute carryforward or carryback is limited to the Tax Attributes of such member(s) arising in Post-IPO Periods determined in accordance with this Section 3(b)(ii); provided that the amount of Taxes so determined shall not be less than zero. (iii) Any Tax Item of Solta or any member of the Solta Group arising from a transaction engaged in outside the ordinary course of business on the IPO Date shall be allocable to Solta; provided that the foregoing shall not include any action that is undertaken pursuant to the Separation or the Contribution.

Allocation Conventions. (a) For purposes of determining the amount of any Twin Hospitality Separate Tax Liability following the Separation Date: (i) All Taxes allocated pursuant to except as provided in Section 3(a2.2(a)(iii), all elections, accounting methods and conventions used on the Parent Federal Consolidated Income Tax Return (or applicable state law Combined Return in which a member of the Parent Group is the taxpayer of record) shall be used; (ii) the highest statutory marginal corporate income Tax rate in effect for such taxable period shall be applied; and (iii) it shall be assumed that the Twin Group elects not to carry back any Tax Attributes. (b) In the case of any Straddle Period in which there is a Deconsolidation, the following conventions shall apply (in addition to those conventions in clause (a)): (i) all Taxes shall be allocated between the Pre-IPO Period and the Post-IPO Period in accordance with the Closing of the Books Method; provided, however, that that, if Applicable Tax Law any Twin Group member does not permit a Solta Group member to close its Taxable taxable year on the IPO Deconsolidation Date, the Tax Taxes attributable to the operations of the members of the Solta Group for any Post-IPO Deconsolidation Period shall be the Tax computed using a hypothetical closing of the books consistent with the Closing of the Books Method (except to the extent otherwise agreed upon by Parent and Solta).Method; (ii) For any Tax Item of any Twin Group member arising from a transaction engaged in outside of the ordinary course of business on the Deconsolidation Date shall be allocable to Twin Hospitality and any such transaction by or with respect to any Twin Group member occurring on the Deconsolidation Date shall be treated for all Tax purposes (to the extent permitted by applicable Tax Law) as occurring at the beginning of the day following the Deconsolidation Date in accordance with the principles of Treasury Regulations Section 3(a)(i1.1502-76(b) (assuming no election is made under Treasury Regulations Section 1.1502-76(b)(2)(ii) (relating to a ratable allocation of a year’s Tax Items), the amount of Taxes ) or any similar state or local Tax Law; and (iii) any deferred Tax liability that is attributable to the member(s) Twin Hospitality Business and that is accelerated or otherwise required to be reported on any Joint Return as a result of the Solta Group or the Solta Business, as applicable, Deconsolidation shall be determined by Parent on a pro forma basis prepared (A) assuming that such member(s) were not included treated as arising in the group of companies filing the applicable Joint Tax Return, but rather filed a separate Joint Tax Return that includes only such member(s), Post-Deconsolidation Period. (Bc) including only Tax Items of such member(s), (C) except as provided in clause (E) hereof, using all elections, accounting methods and conventions used on such Joint Tax Return for such period, (D) applying the highest statutory marginal Tax rate in effect for such period, (E) assuming that such member(s) elect not to carry back any net operating losses and (F) assuming that such member(s) utilization The amount of any Twin Hospitality Separate Tax Attribute carryforward or carryback is limited to the Tax Attributes of such member(s) arising in Post-IPO Periods determined in accordance with this Section 3(b)(ii); provided that the amount of Taxes so determined Liability shall not be less than zero. (iiid) Any Twin Hospitality shall reimburse Parent for all reasonable costs and expenses paid or incurred by the Parent Group in connection with determining the amount of any Twin Hospitality Separate Tax Item Liability. (e) In the event of Solta any redetermination of a Tax liability in respect of any Joint Return, the Twin Hospitality Separate Tax Asset or any member of the Solta Group arising from a transaction engaged in outside the ordinary course of business on the IPO Date Twin Hospitality Separate Tax Liability applicable to such Joint Return shall be allocable to Solta; provided that the foregoing shall not include any action that is undertaken recomputed. If, as a result of such recalculation, Twin Hospitality would be allocated additional Taxes pursuant to the Separation or the ContributionSection 2.1, Twin Hospitality shall promptly pay over to Parent such amounts in accordance with Section 3.8. If, as a result of such recalculation, Twin Hospitality would be allocated less Taxes pursuant to Section 2.1 than it previously paid, Parent shall promptly pay over to Twin Hospitality such amounts in accordance with Section 3.8.

Allocation Conventions. (i) All Taxes allocated pursuant to Section 3(a4(a) shall be allocated between the Pre-IPO Period and the Post-IPO Period in accordance with the Closing of the Books Method; provided, however, that if Applicable Tax Law does not permit a Solta SpinCo Group member to close its Taxable year on the IPO Distribution Date, the Tax attributable to the operations of the members of the Solta SpinCo Group for any PostPre-IPO Distribution Period shall be the Tax computed using a hypothetical closing of the books consistent with the Closing of the Books Method (except Method; provided, further, that any and all Taxes reported, or required to be reported, on a SpinCo Separate Tax Return, or a Tax Return of a member of the Parent Group to the extent otherwise agreed upon by Parent attributable to a member of the SpinCo Group, under Section 951(a), Section 951A(a) or Section 965(a) of the Code (“SpinCo Subpart F Taxes”) that, in each case, are attributable to Tax Items for a Pre-Distribution Period (determined as though the Taxable year of each specified foreign corporation (within the meaning of Section 965(e) of the Code) giving rise to Tax Items ended on the Distribution Date) shall be allocated to the Company, and Solta)that any SpinCo Subpart F Taxes that, in each case, are attributable to Tax Items for a Post-Distribution Period (determined as though the Taxable year of each specified foreign corporation (within the meaning of Section 965(e) of the Code) giving rise to Tax Items ended on the Distribution Date) shall be allocated to SpinCo; provided, further, that for purposes of determining the amount of SpinCo Subpart F Taxes allocated to the Company pursuant to the preceding proviso, (i) the portion of any Subpart F Taxes under Section 951A and Section 965(a) of the Code, respectively, allocated to the Company shall not exceed the amount of Taxes that the SpinCo Group would have been required to pay (for the avoidance of doubt, taking into account all items of deduction and credit which would have been allowed to members of the SpinCo Group) in respect of inclusions under Section 951A and Section 965 of the Code, respectively, if (x) the SpinCo Group were a stand-alone affiliated group of corporations the domestic members of which joined in the filing of a consolidated U.S. federal income tax return and (y) the Taxable year of each member of SpinCo Group ended on the Distribution Date, and (ii) the “qualified business asset investment” (as such term is used in Section 951A(d) of the Code) of each relevant controlled foreign corporation (within the meaning of Section 957 of the Code) for a Pre-Distribution Period shall be deemed to be the Distribution Date QBAI of such specified foreign corporation. (ii) For purposes of Section 3(a)(i), the amount of Taxes attributable to the member(s) of the Solta Group or the Solta Business, as applicable, shall be determined by Parent on a pro forma basis prepared (A) assuming that such member(s) were not included in the group of companies filing the applicable Joint Tax Return, but rather filed a separate Joint Tax Return that includes only such member(s), (B) including only Tax Items of such member(s), (C) except as provided in clause (E) hereof, using all elections, accounting methods and conventions used on such Joint Tax Return for such period, (D) applying the highest statutory marginal Tax rate in effect for such period, (E) assuming that such member(s) elect not to carry back any net operating losses and (F) assuming that such member(s) utilization of any Tax Attribute carryforward or carryback is limited to the Tax Attributes of such member(s) arising in Post-IPO Periods determined in accordance with this Section 3(b)(ii); provided that the amount of Taxes so determined shall not be less than zero. (iii) Any Tax Item of Solta SpinCo, Parent, or any member of the Solta Group their respective Groups arising from a transaction engaged in outside the ordinary course of business on the IPO Distribution Date after the Distribution Effective Time shall be properly allocable to SoltaSpinCo and any such transaction by or with respect to SpinCo, Parent, or any member of their respective Groups occurring after the Distribution Effective Time (including the Merger) shall be treated for all Tax purposes (to the extent permitted by Applicable Tax Law) as occurring at the beginning of the day following the Distribution Date in accordance with the principles of Treasury Regulations Section 1.1502-76(b); provided that the foregoing shall not include any action that is undertaken pursuant to the Separation Internal Reorganization, the SpinCo Transfer or the ContributionDistribution.