Common use of Adjustments for Taxes Clause in Contracts

Adjustments for Taxes. The amount of any Indemnifiable Loss shall be --------------------- appropriately adjusted so that the amount of such Indemnifiable Loss is (i) increased by the amount of all Income Taxes payable with respect to any payments received from the Indemnifying Party or Indemnifying Parties, and (ii) reduced by the amount of all Income Tax benefits from the incurrence or payment of any such Indemnifiable Loss by the Indemnitee, as determined pursuant to the next paragraph. In computing the amount of Income Taxes payable or Income Tax benefit, (i) in the absence of any change in treatment under the Code or applicable Tax Law, payments with respect to contingent Liabilities attributable to periods before the Distribution Date shall be treated for income tax purposes by the Indemnitee and the Indemnifying Parties (and if Varian is neither the Indemnitee nor the Indemnifying Party, by Varian) as distributions or capital contributions, as appropriate, occurring immediately before the Distributions on the Distribution Date, (ii) it shall be assumed that the highest marginal Tax rates in effect are applicable to the Indemnitee, and (iii) such determination shall be made without regard to whether any actual increase or decrease in Tax is realized by the Indemnitee. If, notwithstanding the manner in which indemnity payments are reported, there is an adjustment to the Tax Liability of a party as a result of its receipt of an indemnity payment pursuant to this Agreement, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof, shall equal the amount of the payment which the Indemnitee would otherwise be entitled to receive pursuant to this Agreement.

Adjustments for Taxes. The (a) (i) Except as provided in Section 11.04(a)(ii) in respect of an ANC Loss, the amount of any Indemnifiable Loss shall be --------------------- appropriately adjusted so that the amount of such Indemnifiable Loss is be: (i) increased to take into account any net Tax cost actually incurred by the amount of all Income Taxes payable with respect to Indemnitee arising from any payments received by the indemnifying party (grossed up to take into account the net Tax cost actually incurred by the Indemnitee arising from the Indemnifying Party or Indemnifying Partiessuch increase), and (ii) reduced to take account of any net Tax benefit actually realized by the amount of all Income Tax benefits Indemnitee arising from the incurrence or payment of any such Indemnifiable Loss by the Indemnitee, as determined pursuant to the next paragraphLoss. In computing the amount of Income Taxes payable such Tax cost or Income Tax benefit, (i) in the absence Indemnitee shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt or accrual of any change in treatment under the Code or applicable Tax Law, payments indemnity payment hereunder with respect to contingent Liabilities attributable to periods before a Loss or the Distribution Date incurrence or payment of any amount indemnified against in respect of a Loss, except that, in the case of an ANC Loss, ANC shall be treated deemed to recognize any Tax deduction or other Tax benefit arising from the incurrence or payment of any such ANC Loss before recognizing any other items of loss, deduction (including, without limitation, carryforwards of net operating losses from prior periods) or credit or other Tax benefit for income tax years or portions thereof starting in 2004 and thereafter. For purposes of this Agreement, the Indemnitee shall be deemed to have "actually incurred" or "actually realized" a net Tax cost or a net Tax benefit to the extent that and at such time as, the amount of Taxes payable (including Taxes payable on estimated basis) by such Indemnitee is increased above or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay, but for the receipt or accrual of the indemnity payment or the incurrence or payment of such indemnified amount, as the case may be. Any indemnity payment made hereunder shall be increased or reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit and payment shall be made to reflect such increase or reduction between the Indemnitee and the Indemnifying Parties (and if Varian is neither indemnifying party within 30 days after the Indemnitee nor the Indemnifying Partyhas actually realized such Tax cost or benefit. For purposes of this Section 11.04(a)(i), by Varian) as distributions references to an Indemnitee shall include any subsidiary of such Indemnitee and any group which has such Indemnitee or capital contributions, as appropriate, occurring immediately before the Distributions on the Distribution Date, (ii) it shall be assumed that the highest marginal Tax rates in effect are applicable to the Indemnitee, and (iii) any such determination shall be made without regard to whether any actual increase or decrease in Tax is realized by the Indemnitee. If, notwithstanding the manner in which indemnity payments are reported, there is an adjustment to the Tax Liability of a party subsidiary as a result of its receipt of an indemnity payment pursuant to this Agreementmember and that files a Tax return on a combined, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof, shall equal the amount of the payment which the Indemnitee would otherwise be entitled to receive pursuant to this Agreementconsolidated or unitary basis.