Common use of Applicable Principles Clause in Contracts

Applicable Principles. Subject to Section 3.03, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of UCP, Inc. for such Taxable Year attributable to the Basis Adjustments and Imputed Interest. 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. for the PICO Membership Interests acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments and the Imputed Interest shall be considered to be subject to the 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 the Basis Adjustment or the Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. 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 Exchange Assets for UCP, Inc. and (B) have the effect of creating additional Basis Adjustments to Exchange Assets for UCP, Inc. in the year of payment, and, as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

Applicable Principles. Subject to Section 3.033.3(a), the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of UCP, Inc. the Corporate Taxpayer for such Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. The For the avoidance of doubt, 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. for the PICO Membership Interests acquired in an ExchangeCode. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments and the Imputed Interest shall be considered to be subject to the 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 the Basis Adjustment or the Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. All The parties agree that (i) all Tax Benefit Payments attributable to the Basis Adjustments in respect of a taxable Exchange (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 Exchange Assets for UCP, Inc. and (B) have the effect of creating additional Basis Adjustments to Exchange Reference Assets for UCP, Inc. the Corporate Taxpayer in the year of payment, and, and (ii) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

Applicable Principles. Subject to Section 3.03, the The Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of UCP, Inc. the Corporation for such Taxable Year attributable to the Exchange Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. The For the avoidance of doubt, 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. for the PICO Membership Interests acquired in an ExchangeCorporation. Carryovers or carrybacks of any Tax item attributable to the Exchange Basis Adjustments and the Imputed Interest shall be considered to be subject to the 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 The parties agree that (i) all Tax item includes a portion that is Benefit Payments attributable to the Exchange Basis Adjustment or the Imputed Interest and another portion that is notAdjustments, such portions shall be considered to be used in accordance with the “with and without” methodology. All Tax Benefit Payments (other than (x) amounts accounted for as interest under Imputed Interest or (y) Tax Benefit Payments payable to the Code) Parthenon Shareholders, will (A) be treated as subsequent upward purchase price adjustments that give rise to further Exchange Basis Adjustments to Exchange Assets for UCP, Inc. the Corporation and (B) have the effect of creating additional Exchange Basis Adjustments to Exchange Assets for UCP, Inc. the Corporation in the year of payment, and, and (ii) as a result, such additional Exchange Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

Applicable Principles. Subject to Section 3.03, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of UCP, Inc. HII for such Taxable Year attributable to the Basis Adjustments and Imputed Interest. 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. HII for the PICO Series B Membership Interests and Class B Shares acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments and the Imputed Interest shall be considered to be subject to the 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 the Basis Adjustment or the Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. 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 Exchange Assets for UCP, Inc. HII and (B) have the effect of creating additional Basis Adjustments to Exchange Assets for UCP, Inc. HII in the year of payment, and, as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

Applicable Principles. Subject to Section 3.03, the The Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes Actual Tax Liability of UCP, Inc. HoldCo for such 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. The actual liability for Taxes 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 the Code applicable tax law based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. HoldCo for the PICO Membership Interests LP Units acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to the any Basis Adjustments and the Adjustment or Imputed Interest shall will be considered to be subject to the 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 the a Basis Adjustment or the Imputed Interest and another portion that is not, such portions shall will be considered to be used in accordance with the “with and without” methodology. All The parties agree that: (i) all Tax Benefit Payments attributable to the 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 Exchange Reference Assets for UCPHoldCo, Inc. and (B) have the effect of creating additional Basis Adjustments to Exchange Reference Assets for UCPHoldCo, Inc. in each case in the year of payment, and, ; and (ii) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

Applicable Principles. Subject to Section 3.03, the The Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of UCP, Inc. the Corporation for such Taxable Year attributable to the Exchange Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. The For the avoidance of doubt, 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. for the PICO Membership Interests acquired in an ExchangeCorporation. Carryovers or carrybacks of any Tax item attributable to the Exchange Basis Adjustments and the Imputed Interest shall be considered to be subject to the 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 The parties agree that (i) all Tax item includes a portion that is Benefit Payments attributable to the Exchange Basis Adjustment or the Imputed Interest and another portion that is notAdjustments, such portions shall be considered to be used in accordance with the “with and without” methodology. All Tax Benefit Payments (other than (x) amounts accounted for as interest under Imputed Interest or (y) Tax Benefit Payments attributable to the Code) Step-Up TRA Rights received by the Parthenon Shareholders, will (A) be treated as subsequent upward purchase price adjustments that give rise to further Exchange Basis Adjustments to Exchange Assets for UCP, Inc. the Corporation and (B) have the effect of creating additional Exchange Basis Adjustments to Exchange Assets for UCP, Inc. the Corporation in the year of payment, and, and (ii) as a result, such additional Exchange Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.

Applicable Principles. Subject to Section 3.033.3, the Realized Tax Benefit (or the Realized Tax Detriment Detriment) for each Taxable Year is intended to measure the decrease (or increase increase) in the actual liability for Taxes of UCP, Inc. the Corporate Taxpayer for such Taxable Year attributable to the Basis Adjustments Tax Attributes, determined using a “with and Imputed Interest. 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. for the PICO Membership Interests acquired in an Exchangewithout” methodology. Carryovers or carrybacks of any Tax item attributable to any of the Basis Adjustments and the Imputed Interest Tax Attributes shall be considered to be subject to the 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 the Basis Adjustment or the Imputed Interest any Tax Attribute and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. All The parties agree that (A) all Tax Benefit Payments (other than amounts accounted for the portion of the Tax Benefit Payments treated as interest under Imputed Interest) attributable to the Code) Basis Adjustments will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments to Exchange Assets for UCP, Inc. and (B) have the effect of creating additional Basis Adjustments to Exchange Reference Assets for UCP, Inc. in the year of payment, and, (B) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate, and (C) the Actual Tax Liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest.

Applicable Principles. Subject to Section 3.03, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes of UCP, Inc. the Corporation for such Taxable Year attributable to the Basis Adjustments and Imputed InterestInterest 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 interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by UCP, Inc. the Corporation for the PICO Membership Interests Units acquired in an Exchange. Carryovers or carrybacks of any Tax item attributable to the Basis Adjustments and the Imputed Interest shall be considered to be subject to the 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 the Basis Adjustment or the Imputed Interest and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. 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 Exchange Assets for UCP, Inc. the Corporation and (B) have the effect of creating additional Basis Adjustments to Exchange Assets for UCP, Inc. the Corporation in the year of payment, and, as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate.