Common use of Timing Adjustments Clause in Contracts

Timing Adjustments. If a final determination (which shall include the execution of a Form 870-AD or successor form) results (1) in a timing difference (e.g., an acceleration of income or delay of deductions) that would increase a Seller’s liability for Taxes in a Pre-Closing Period but would provide a Tax deduction or otherwise decrease Purchaser’s or the Company’s liability for Taxes in the same or a subsequent Tax period or results (2) in a timing difference (e.g., an acceleration of deductions or delay of income) that would increase Purchaser’s liability for Taxes but would reduce the Company’s income or otherwise decrease Sellers’ liability for Taxes in a Pre-Closing Period, then the party (Purchaser or the Sellers’ Committee) which will obtain a future Tax benefit (the “Benefitted Party”) shall promptly pay to the other an amount equal to the foreign, federal, state and/or local Income Tax benefits inuring to the Benefitted Party. For purposes of this section, the amount of any Income Tax benefits shall be computed on a present value basis using a discount rate equal to the mid-term applicable federal rate in effect on the date the final determination occurs and shall assume a Tax rate equal to the maximum combined statutory federal and applicable state and local Income Tax rate applicable to the Benefitted Party in the year in which the final determination occurs.