Common use of Allocation Conventions Clause in Contracts

Allocation Conventions. (a) All Taxes allocated pursuant to Section 2.02 of this Agreement shall be allocated in accordance with the Closing of the Books Method; provided, however, that if applicable Tax Law does not permit a Delphi Technologies Group member to close its Tax Period on the Distribution Date, the Tax attributable to the operations of the members of the Delphi Technologies Group for any Pre-Distribution Period shall be the Tax computed using the Closing of the Books Method. (b) Any Tax Item of Delphi Technologies or any member of the Delphi Technologies Group arising from a transaction engaged in outside of the ordinary course of business on the Distribution Date after the Effective Time shall be properly allocable to Delphi Technologies and any such transaction by or with respect to Delphi Technologies or any member of the Delphi Technologies Group occurring after the Effective Time 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 Regulation § 1.1502-76(b) or any similar provisions of state, local or foreign Law.