Common use of Applicable Principles Clause in Contracts

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are intended to reflect the decrease or increase in the Actual Tax Liability for such Covered Taxable Year attributable to Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. Carryovers or carrybacks of any Tax item attributable to Basis Adjustments or Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable to Basis Adjustments or Imputed Interest and another portion that is not, such portions shall be considered to be used or applied in the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable Year, the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable Exchanges.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed Subject to be increased as a result of an audit by a Taxing Authority of any Covered Taxable YearSection 3.3(a), the Actual Tax Liability shall not reflect such increase in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are each taxable year is intended to reflect measure the decrease or increase in the Actual Tax Liability actual liability for Taxes of Corporate Taxpayer and its consolidated Subsidiaries (and Holdings and its Subsidiaries, as applicable and without duplication) for such Covered Taxable Year taxable year (or portion thereof) attributable to the Basis Adjustments Adjustments, Common Basis, Former Limited Partner Tax Receivable Agreement Items and Imputed Interest, determined using a “with and without” methodology. For the avoidance of doubt, the actual liability for Taxes of Corporate Taxpayer and its consolidated Subsidiaries (and Holdings and its Subsidiaries, as applicable and without duplication) will take into account any deduction in respect of Imputed Interest. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments, Former Limited Partner Tax Receivable Agreement Basis Adjustments or and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If The parties agree that (i) all Tax Benefit Payments to a carryover or carryback of any Tax item includes a portion that is Partnership Interest Holder attributable to the Basis Adjustments and the Common Basis in respect of a taxable Exchange will be treated as subsequent upward purchase price adjustments that have the effect of creating additional Basis Adjustments in respect of such Partnership Interest Holder to Reference Assets for Corporate Taxpayer or its consolidated Subsidiaries, as applicable, in the year of payment and (ii) as a result, such additional Basis Adjustments in respect of such Partnership Interest Holder will be incorporated into the current year calculation and into future year calculations, as appropriate. The parties agree that (i) all Tax Benefit Payments (other than the portion of the Tax Benefit Payments treated as Imputed Interest thereon) attributable to Common Basis in connection with a Contribution will be treated as other property or money for purposes of Section 351 of the Code and another will not be treated as a dividend and (ii) the actual tax liability will take into account the deduction of the portion that is not, such portions shall be considered to be used or applied in of the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment Payment that must be accounted for any Covered Taxable Year, the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable Exchangesas Imputed Interest.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability Corporation’s actual liability for Taxes for such Covered Taxable Year (calculated using certain rules and assumptions, as set forth herein) that is attributable to the Basis Adjustments Adjustments, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, and Imputed Interest, determined using a “with and without” methodology. Carryovers For the avoidance of doubt, (i) such actual liability for Taxes will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by the Corporation, and (ii) in addition to using the Assumed State and Local Tax Rate for purposes of determining the state and local Hypothetical Tax Liability, the Corporation may use reasonable estimation methodologies for calculating the portion of any Realized Tax Benefit or Realized Tax Detriment attributable to U.S. state or local Taxes. For purposes of calculating the Realized Tax Benefit or Realized Tax Detriment for any Taxable Year, carryforwards or carrybacks of any Tax item (such as a net operating loss) attributable to the Basis Adjustments or Adjustments, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the rules of the Code and the Treasury Regulations and the corresponding provisions of state and local Tax Law laws, as applicable, governing the use, limitation limitation, and expiration of carryovers carryforwards or carrybacks of the relevant type. If a carryover carryforward or carryback of any Tax item includes a portion that is attributable to the Basis Adjustments Adjustment, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, or Imputed Interest (a “TRA Portion”) and another portion that is notnot so attributable (a “Non-TRA Portion”), such respective portions shall be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to so that: (i) the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable YearNon-TRA Portion is deemed utilized first, the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided followed by the amount of deductions attributable any TRA Portion; and (ii) in the case of a carryback of a Non-TRA Portion, such carryback shall not affect the original “with and without” calculation made in the applicable prior Taxable Year. For the avoidance of doubt, the TRA Portion of any Tax item when such item is incurred shall be determined using a marginal “with and without” methodology by calculating (i) the amount of such Tax item for all Tax purposes taking into account the Basis Adjustments, the Closing Date Basis, the Blocker NOLs, Guaranteed Payments, and Imputed Interest and (ii) the amount of such Tax item for all Tax purposes without taking into account the Basis Adjustments, the Closing Date Basis, the Blocker NOLs, Guaranteed Payments or Imputed Interest, with the TRA Portion equal to all the excess of the amount specified in clause (i) over the amount specified in clause (ii) (but only if such Taxable Exchangesexcess is greater than zero). The parties agree that (i) any payment under this Agreement to TOPCO (Series 1) or TOPCO (Series 2) (or their successors or assigns), including the Accrued Amount (other than amounts accounted for as Imputed Interest or as Guaranteed Payments) will be treated as a subsequent upward adjustment to the purchase price of the relevant Exchangeable Units and will have the effect of creating additional Basis Adjustments to Reference Assets for the Corporation in the year of payment, and (ii) as a result, such additional Basis Adjustments will be incorporated into the calculation for the year of payment and into future year calculations, as appropriate.

Applicable Principles. To Subject to the extent any amount provisions of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Yearthis Agreement, the Actual Tax Liability shall not reflect such increase in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability of Parent for such Covered Taxable Year attributable to the Basis Adjustments Adjustments, Imputed Interest and Imputed Extension Rate Interest, and the Inherited Tax Attributes as determined using a “with and without” methodologymethodology described in Section 2.6(a). For the avoidance of doubt, the actual Covered Tax liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest under the Code based upon the characterization of the Tax Benefit Payment as additional consideration payable by the Company for the Company Common Units acquired in the Sale or an Exchange, or payable by Parent for the assets acquired pursuant to the Blocker Merger, as the case may be. Carryovers or carrybacks of any Tax tax item attributable to any Basis Adjustments or Adjustment, Imputed Interest (determined using such “with and without” methodology) or Extension Rate Interest or the Inherited Tax Attributes shall be considered to be subject to the Tax Law rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local and foreign tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Covered Tax item includes a portion that is attributable to the Basis Adjustments Adjustment, Imputed Interest, or Imputed Interest the Inherited Tax Attributes and another portion that is not, such portions shall be considered to be used or applied in the order provided under applicable Tax Law determined using such “with and without” methodology or, if applicable methodology. The Parties agree that all Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion Benefit Payments attributable to the amount Sale or an Exchange will be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments for Parent beginning in the Taxable Year of each type payment, and as a result, such additional Basis Adjustments will be incorporated into such Taxable Year continuing for future Taxable Years until any incremental Basis Adjustment benefits with respect to a Tax Benefit Payment equals a de minimis amount. For the avoidance of doubt, the treatment of Tax attribute. When there has been one or more Taxable Exchanges that affect Benefit Payments pursuant to the Realized preceding sentence shall not apply to Tax Benefit or Realized Tax Detriment for any Covered Taxable Year, the resulting decrease in the Actual Tax liability Payments attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable ExchangesBlocker Corporation Owner.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability actual liability for Taxes of the Company for such Covered Taxable Year attributable to Basis Adjustments and Imputed Interestthe Tax Assets, determined using a “with and without” methodology. The actual liability for Taxes will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable for the Class B Units or other equity acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to Basis Adjustments or Imputed Interest (determined using such “with and without” methodology) the Tax Assets shall be considered to be subject to the Tax Law rules of the Code and the Treasury Regulations governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable to Basis Adjustments or Imputed Interest the Tax Assets (a “TRA Portion”) and another portion that is notnot (a “Non-TRA Portion”), such respective portions shall be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to so that: (i) the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable YearNon-TRA Portion is deemed utilized first, the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided followed by the amount of deductions any TRA Portion; and (ii) in the case of a carryback of a Non-TRA Portion, such carryback shall not affect the original “with and without” calculation made in the prior Taxable Year. The parties agree that (i) to the extent permitted by law, all payments under this Agreement attributable to all Basis Adjustments (other than amounts accounted for as Imputed Interest under the Code) and other Tax Benefit Payments will (A) be treated as upward purchase price adjustments that give rise to Basis Adjustments to Reference Assets for the Company and (B) have the effect of creating Basis Adjustments to Reference Assets for the Company in the year of payment, and (ii) as a result, such Taxable ExchangesBasis Adjustments will be incorporated into the then-current year calculation and into future year calculations, as appropriate. The parties further agree that amounts accounted for as Imputed Interest may give rise to additional Tax Benefit Payments in the then-current and/or future years.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability Corporation’s actual liability for Taxes for such Covered Taxable Year (calculated using certain rules and assumptions, as set forth herein) that is attributable to the Basis Adjustments Adjustments, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, and Imputed Interest, determined using a “with and without” methodology. Carryovers For the avoidance of doubt, (i) such actual liability for Taxes will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by the Corporation, and (ii) in addition to using the Assumed State and Local Tax Rate for purposes of determining the state and local Hypothetical Tax Liability, the Corporation may use reasonable estimation methodologies for calculating the portion of any Realized Tax Benefit or Realized Tax Detriment attributable to U.S. state or local Taxes. For purposes of calculating the Realized Tax Benefit or Realized Tax Detriment for any Taxable Year, carryforwards or carrybacks of any Tax item (such as a net operating loss) attributable to the Basis Adjustments or Adjustments, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the rules of the Code and the Treasury Regulations and the corresponding provisions of state and local Tax Law laws, as applicable, governing the use, limitation limitation, and expiration of carryovers carryforwards or carrybacks of the relevant type. If a carryover carryforward or carryback of any Tax item includes a portion that is attributable to the Basis Adjustments Adjustment, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, or Imputed Interest (a “TRA Portion”) and another portion that is notnot so attributable (a “Non-TRA Portion”), such respective portions shall be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to so that: (i) the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable YearNon-TRA Portion is deemed utilized first, the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided followed by the amount of deductions attributable any TRA Portion; and (ii) in the case of a carryback of a Non-TRA Portion, such carryback shall not affect the original “with and without” calculation made in the applicable prior Taxable Year. For the avoidance of doubt, the TRA Portion of any Tax item when such item is incurred shall be determined using a marginal “with and without” methodology by calculating (i) the amount of such Tax item for all Tax purposes taking into account the Basis Adjustments, the Closing Date Basis, the Blocker NOLs, Guaranteed Payments, and Imputed Interest and (ii) the amount of such Tax item for all Tax purposes without taking into account the Basis Adjustments, the Closing Date Basis, the Blocker NOLs, Guaranteed Payments or Imputed Interest, with the TRA Portion equal to all the excess of the amount specified in clause (i) over the amount specified in clause (ii) (but only if such Taxable Exchangesexcess is greater than zero). The parties agree that (i) any payment under this Agreement to Unblocked Holdings (or its successors or assigns), including the Accrued Amount (other than amounts accounted for as Imputed Interest or as Guaranteed Payments) will be treated as a subsequent upward adjustment to the purchase price of the relevant Exchangeable Units and will have the effect of creating additional Basis Adjustments to Reference Assets for the Corporation in the year of payment, and (ii) as a result, such additional Basis Adjustments will be incorporated into the calculation for the year of payment and into future year calculations, as appropriate.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed Subject to be increased as a result of an audit by a Taxing Authority of any Covered Taxable YearSections 3.3 and 3.4, the Actual Tax Liability shall not reflect such increase in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability actual cash liability for Taxes of Parent (on a consolidated basis, as relevant) for such Covered Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. In preparing the Tax Returns upon which the Realized Tax Benefit or Detriment are prepared, and in calculating the Hypothetical Tax Liability, Parent will not take any positions that are not more likely than not to be sustained if challenged by a Tax authority. For the avoidance of doubt, the actual liability for Taxes will take into account the deduction of the portion of each Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by Parent for the Units acquired in an Exchange, and any tax items of any member of the consolidated tax return of Parent, including, for example, net operating losses of Camelot that are deductible in a year after the Closing Date. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments or Adjustment and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law rules of Code and the Treasury Regulation or the appropriate provisions of foreign, state and local income and franchise tax law, as applicable, governing the use, limitation limitation, and expiration of carryovers or carrybacks of the relevant relevant-type. If a carryover or carryback of any Tax item includes a portion that is attributable to the Basis Adjustments Adjustment or Imputed Interest and another portion that is not, such portions shall be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology ormethodology, if applicable recognizing that the Hypothetical Tax Law does Liability for the year would not specify the order include any such carryover or carryback, but such amount would be taken into account in which the applicable Tax attributes are to be used or applied, then in proportion to the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect calculating the Realized Tax Benefit for the year, if it is actually utilized in such year. For the avoidance of doubt, if there is a carryover or carryback of any Tax item that is not attributable to the Basis Adjustment or Imputed Interest, it will be utilized in the calculation of the Hypothetical Tax Liability and the Realized Tax Detriment Benefit and Realized Tax Detriments for any Covered Taxable Yearthe year to which it is carried, to the resulting decrease extent possible. The parties agree that (1) all Tax Benefit Payments (other than amounts accounted for as interest under the Code) will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments to Reference Assets for Parent and (B) have the effect of creating additional Basis Adjustments to Reference Assets for Parent in the Actual Tax liability attributable to each Taxable Exchange shall year of payment, and (2) as a result, such additional Basis Adjustments will be determined on a pro rata basis proportionate to incorporated into the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable Exchangescurrent year calculation and into future year calculations, as appropriate.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed Subject to be increased as a result of an audit by a Taxing Authority of any Covered Taxable YearSection 3.3(a), the Actual Tax Liability shall not reflect such increase in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are each taxable year is intended to reflect measure the decrease or increase in the Actual Tax Liability actual liability for Taxes of Corporate Taxpayer and its consolidated Subsidiaries (and US LBM LLC and its Subsidiaries, as applicable and without duplication) for such Covered Taxable Year taxable year (or portion thereof) attributable to the Basis Adjustments, Former LLC Owner TRA Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. For the avoidance of doubt, the actual liability for Taxes of Corporate Taxpayer and its consolidated Subsidiaries (and US LBM LLC and its Subsidiaries, as applicable and without duplication) will take into account any deduction in respect of Imputed Interest. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments, Former LLC Owner TRA Basis Adjustments or and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If The parties agree that (i) all Tax Benefit Payments to an LLC Unit Holder attributable to the Basis Adjustments in respect of a carryover taxable Exchange will be treated as subsequent upward purchase price adjustments that have the effect of creating additional Basis Adjustments in respect of such LLC Unit Holder to Reference Assets for the Corporate Taxpayer or carryback its consolidated Subsidiaries, as applicable, in the year of payment and (ii) as a result, such additional Basis Adjustments in respect of such LLC Unit Holder will be incorporated into the current year calculation and into future year calculations, as appropriate. Notwithstanding anything herein to the contrary, unless (i) the Parties agree otherwise in writing upon the request of the Xxxxx Representative or (ii) the Kelso Representative provides timely written notice to Holdings that any recipient of any Tax item includes a Benefit Payment will elect out of the installment method under Section 453 for any Exchange, in no event shall the sum of (i) the excess of (x) the gross Tax Benefit Payments over (y) the portion that is attributable to Basis Adjustments or Imputed Interest of such Tax Benefit Payments treated as interest under Section 453 of the Code and another portion that is notthe regulations thereunder plus (ii) the initial consideration received for U.S. federal income tax purposes exceed 140% of the initial consideration received for U.S. federal income tax purposes (which, such portions for the avoidance of doubt, shall be considered to be used or applied in the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to include the amount of each type any cash and the fair market value of Tax attribute. When there has been one or more Taxable Exchanges that affect any Class A Shares to be received, and exclude the Realized fair market value of any Tax Benefit or Realized Tax Detriment for any Covered Taxable YearPayments). Further, notwithstanding anything to the resulting decrease in the Actual Tax liability attributable contrary, all calculations made pursuant to each Taxable Exchange this agreement shall be determined on as if US LBM LLC has not made an election pursuant to New Hampshire Rev. State. Section 77-A:4 XIV(b) (and any successor provision) to recognize a pro rata basis proportionate to Basis Adjustment for purposes of the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable ExchangesNew Hampshire Business Profits Tax.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability for Taxes of HoldCo for such Covered Taxable Year attributable to the Basis Adjustments and the Imputed Interest, determined using a “with and without” methodology, and for the avoidance of doubt, is not intended to take into account, and shall be interpreted in a manner that avoids taking into account, any Basis Adjustment or Imputed Interest more than once. For the avoidance of doubt, the Actual Tax Liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under applicable Tax law based upon the characterization of Tax Benefit Payments as additional consideration payable by HoldCo for the LP Units acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to any Basis Adjustments Adjustment or Imputed Interest (determined using such “with and without” methodology) shall will be considered to be subject to the Tax Law rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable to a Basis Adjustments Adjustment or Imputed Interest and another portion that is not, such portions shall will be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology or, if applicable methodology. The parties agree that: (i) all Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion Benefit Payments attributable to the amount Basis Adjustments (other than amounts accounted for as interest under the Code) will (A) be treated as subsequent upward purchase price adjustments in respect of the relevant Exchange that give rise to further Basis Adjustments to Reference Assets for HoldCo, and (B) have the effect of creating additional Basis Adjustments to Reference Assets for HoldCo, in each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable Year, the resulting decrease case in the Actual Tax liability attributable to each Taxable Exchange shall year of payment; and (ii) as a result, such additional Basis Adjustments will be determined on a pro rata basis proportionate to incorporated into the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable Exchangescurrent year calculation and into future year calculations, as appropriate.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such each Covered Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability actual liability for Covered Taxes of the Corporation for such Covered Taxable Year attributable to the Basis Adjustments Adjustment and Imputed Interest, determined using a “with and without” methodologymethodology (but disregarding any income or gain realized as a direct result of the Distribution and Election). For the avoidance of doubt, the actual liability for Covered Taxes will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest under the Code based upon the characterization of the Tax Benefit Payment as additional consideration. Carryovers or carrybacks of any Covered Tax item attributable to the Basis Adjustments or Adjustment and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Covered Tax item includes a portion that is attributable to the Basis Adjustments Adjustment or Imputed Interest and another portion that is not, such portions shall be considered to be used or applied in the order provided under applicable Tax Law determined using such “with and without” methodology ormethodology. In the event there is an adjustment in the liability for a Covered Tax as a result of an Audit for which an amended Tax Return is not filed, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to parties shall determine the amount of each type any such Income Tax on a basis consistent with the principles in this Exhibit. The parties acknowledge that the Exhibit A Effective Date may occur many years following the Distribution Date and that, notwithstanding the delayed effectiveness of Tax attribute. When there has been one or more Taxable Exchanges that affect this Exhibit, the provisions herein are intended to capture the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable Yearfrom the Distribution Date whether recognized pursuant to an amended Tax Return, an Audit or otherwise, and the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange provisions of this Exhibit shall be determined on interpreted in a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all manner consistent with such Taxable Exchangesintent.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such each Covered Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect the decrease or increase in the Actual actual Covered Tax Liability liability of HFF for such Covered Taxable Year attributable to Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. Carryovers or carrybacks of any Tax tax item attributable to Basis Adjustments or Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax tax item includes a portion that is attributable to Basis Adjustments or Imputed Interest and another portion that is not, such portions shall be considered to be used or applied in the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax tax attributes are to be used or applied, then in proportion to the amount of each type of Tax tax attribute. When there has been one or more Taxable Exchanges in addition to the Original Sale that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable Year, the resulting decrease in the Actual actual Covered Tax liability of HFF attributable to each Taxable Exchange and the Original Sale shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange and the Original Sale divided by the amount of deductions attributable to the Original Sale and all such Taxable Exchanges.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed Subject to be increased as a result of an audit by a Taxing Authority of any Covered Taxable YearSections 3.3 and 3.4, the Actual Tax Liability shall not reflect such increase in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability actual cash liability for Taxes of Parent (on a consolidated basis, as relevant) for such Covered Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. In preparing the Tax Returns upon which the Realized Tax Benefit or Detriment are prepared, and in calculating the Hypothetical Tax Liability, Parent will not take any positions that are not more likely than not to be sustained if challenged by a Tax authority. For the avoidance of doubt, the actual liability for Taxes will take into account the deduction of the portion of each Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by Parent for the Class B Units acquired in an Exchange, and any tax items of Parent or any member of the consolidated tax return of Parent that are deductible in a year after the Closing Date. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments or Adjustment and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the Tax Law rules of Code and the Treasury Regulation or the appropriate provisions of foreign, state and local income and franchise tax law, as applicable, governing the use, limitation limitation, and expiration of carryovers or carrybacks of the relevant relevant-type. If a carryover or carryback of any Tax item includes a portion that is attributable to the Basis Adjustments Adjustment or Imputed Interest and another portion that is not, such portions shall be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology ormethodology, if applicable recognizing that the Hypothetical Tax Law does Liability for the year would not specify the order include any such carryover or carryback, but such amount would be taken into account in which the applicable Tax attributes are to be used or applied, then in proportion to the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect calculating the Realized Tax Benefit for the year, if it is actually utilized in such year. For the avoidance of doubt, if there is a carryover or carryback of any Tax item that is not attributable to the Basis Adjustment or Imputed Interest, it will be utilized in the calculation of the Hypothetical Tax Liability and the Realized Tax Detriment Benefit and Realized Tax Detriments for any Covered Taxable Yearthe year to which it is carried, to the resulting decrease extent possible. The parties agree that (1) all Tax Benefit Payments (other than amounts accounted for as interest under the Code) will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments to Reference Assets for Parent and (B) have the effect of creating additional Basis Adjustments to Reference Assets for Parent in the Actual year of payment, and (2) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate. The parties further agree that all Tax liability attributable to each Taxable Exchange Benefit Payments shall be determined on a pro rata basis proportionate shared among the Class B Unitholders in proportion to the amount of deductions attributable to each Taxable Exchange divided by the amount of deductions attributable to all such Taxable Exchangestheir Participation Percentages.

Applicable Principles. To the extent any amount of the Actual Tax Liability for any Covered Taxable Year is increased or proposed to be increased as a result of an audit by a Taxing Authority of any Covered Taxable Year, the Actual Tax Liability shall not reflect such increase in determining the The Realized Tax Benefit or Realized Tax Detriment for such Covered each Taxable Year unless and until there has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement), at which time the liability for Covered Taxes (including interest with respect thereto under applicable law) for such Covered Taxable Year in accordance with such Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.03(b) of this Agreement) shall be the amount of Actual Tax Liability for such Covered Taxable Year included in determining the Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year. Realized Tax Benefit and Realized Tax Detriment for any Covered Taxable Year are is intended to reflect measure the decrease or increase in the Actual Tax Liability Corporation’s actual liability for Taxes for such Covered Taxable Year (calculated using certain rules and assumptions, as set forth herein) that is attributable to the Basis Adjustments Adjustments, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, and Imputed Interest, determined using a “with and without” methodology. Carryovers For the avoidance of doubt, (i) such actual liability for Taxes will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by the Corporation, and (ii) in addition to using the Assumed State and Local Tax Rate for purposes of determining the state and local Hypothetical Tax Liability, the Corporation may use reasonable estimation methodologies for calculating the portion of any Realized Tax Benefit or Realized Tax Detriment attributable to U.S. state or local Taxes. For purposes of calculating the Realized Tax Benefit or Realized Tax Detriment for any Taxable Year, carryforwards or carrybacks of any Tax item (such as a net operating loss) attributable to the Basis Adjustments or Adjustments, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the rules of the Code and the Treasury Regulations and the corresponding provisions of state and local Tax Law laws, as applicable, governing the use, limitation limitation, and expiration of carryovers carryforwards or carrybacks of the relevant type. If a carryover carryforward or carryback of any Tax item includes a portion that is attributable to the Basis Adjustments Adjustment, the Blocker NOLs, the Closing Date Basis, Guaranteed Payments, or Imputed Interest (a “TRA Portion”) and another portion that is notnot so attributable (a “Non-TRA Portion”), such respective portions shall be considered to be used or applied in accordance with the order provided under applicable Tax Law using such “with and without” methodology or, if applicable Tax Law does not specify the order in which the applicable Tax attributes are to be used or applied, then in proportion to so that: (i) the amount of each type of Tax attribute. When there has been one or more Taxable Exchanges that affect the Realized Tax Benefit or Realized Tax Detriment for any Covered Taxable YearNon-TRA Portion is deemed utilized first, the resulting decrease in the Actual Tax liability attributable to each Taxable Exchange shall be determined on a pro rata basis proportionate to the amount of deductions attributable to each Taxable Exchange divided followed by the amount of deductions attributable any TRA Portion; and (ii) in the case of a carryback of a Non-TRA Portion, such carryback shall not affect the original “with and without” calculation made in the applicable prior Taxable Year. For the avoidance of doubt, the TRA Portion of any Tax item when such item is incurred shall be determined using a marginal “with and without” methodology by calculating (i) the amount of such Tax item for all Tax purposes taking into account the Basis Adjustments, the Closing Date Basis, the Blocker NOLs, Guaranteed Payments, and Imputed Interest and (ii) the amount of such Tax item for all Tax purposes without taking into account the Basis Adjustments, the Closing Date Basis, the Blocker NOLs, Guaranteed Payments or Imputed Interest, with the TRA Portion equal to all the excess of the amount specified in clause (i) over the amount specified in clause (ii) (but only if such Taxable Exchangesexcess is greater than zero). The parties agree that (i) any payment under this Agreement to TOPCO (or its successors or assigns), including the Accrued Amount (other than amounts accounted for as Imputed Interest or as Guaranteed Payments) will be treated as a subsequent upward adjustment to the purchase price of the relevant Exchangeable Units and will have the effect of creating additional Basis Adjustments to Reference Assets for the Corporation in the year of payment, and (ii) as a result, such additional Basis Adjustments will be incorporated into the calculation for the year of payment and into future year calculations, as appropriate.