Common use of Gross-Up Amount Clause in Contracts

Gross-Up Amount. (a) As used in this Agreement the "GROSS-UP AMOUNT" shall mean the amount equal to the sum of: (i) the additional state and federal income taxes that will become payable by the Shareholders by reason of the making by PHI and the Shareholders of an election to have the purchase and sale of the Purchased Shares treated as an asset sale under Section 338(h)(10) of the Code (the "338(h)(10) Election"), rather than a purchase of equity, over and above the taxes that would have been payable by the Shareholders as a result of such sale in the absence of the 338(h)(10) Election, (2) an amount equal to the additional federal and state income taxes payable as a result of the payment of the Gross-Up Amount; and (3) an amount equal to any incremental state franchise or income taxes payable by the Company as a result of the 338(h)