Common use of Characterization of and Adjustments to Payments Clause in Contracts

Characterization of and Adjustments to Payments. (a) In the absence of a Final Determination to the contrary, for all Tax purposes, EFH and Reorganized TCEH shall treat or cause to be treated any payment required by this Agreement (other than any payment treated for Tax purposes as interest) as either a contribution by EFH to Reorganized TCEH or a distribution by Reorganized TCEH to EFH, as the case may be, occurring immediately prior to the Distribution. (b) Any indemnity payment pursuant to this Agreement shall be (A) increased to include (i) all reasonable accounting, legal, and other professional fees and court costs and damages incurred by the Indemnified Party in connection with such indemnity payment and (ii) any Tax Cost to such Indemnified Party or its Affiliates resulting from the receipt of (or entitlement to) such indemnity payment and (B) decreased to account for any Tax Benefit that the Indemnified Party or its Affiliates actually realizes by way of a Refund or a decrease in Taxes reported on a filed Tax Return (in or with respect to a taxable year that ends on or before December 31, 2021) in connection with the incurrence or the payment by the Indemnified Party of such fees or costs or indemnifiable amounts determined using a “with and without” methodology (treating any deductions attributable to such fees or costs or indemnifiable amounts as the last items claimed for any taxable year, including after the utilization of any available net operating loss carryovers). In the event that any Tax Cost or Tax Benefit is not actually realized at the time of the indemnity payment by the Indemnifying Party to the Indemnified Party, the payment related to such Tax Cost or Tax Benefit shall be paid at the time the Tax Cost or Tax Benefit is actually realized.

Characterization of and Adjustments to Payments. (a) In the absence of a Final Determination to the contrary, for For all Tax purposes, EFH Parent and Reorganized TCEH shall HY agree to treat or cause to be treated (i) any payment required by this Agreement (other than payments of expenses, interest pursuant to Section 8.3, and any item described in (ii) below) as a payment treated for Tax purposes of an assumed or retained liability, as interest) the case may be, or as either a contribution by EFH Parent to Reorganized TCEH HY or a distribution by Reorganized TCEH HY to EFHParent, as the case may be, occurring immediately prior to the DistributionDistribution Date and (ii) any payment (x) of Taxes to or Refunds received from a Taxing Authority which either gives rise to a tax deduction or taxable income, or (y) of interest, as tax deductible, or includible in, taxable income, as the case may be, to the Party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case, except as otherwise required by applicable Law. (b) Any indemnity payment pursuant to under this Article 3 or the Separation Agreement shall be (A) increased to include (i) all reasonable accounting, legal, and other professional fees and court costs and damages incurred by take into account any inclusion in income of the Indemnified Party in connection with arising from the receipt of such indemnity payment and (ii) any Tax Cost to such Indemnified Party or its Affiliates resulting from the receipt of (or entitlement to) such indemnity payment and (B) shall be decreased to take into account for any Tax Benefit that reduction in income of the Indemnified Party or its Affiliates actually realizes by way of a Refund or a decrease in Taxes reported on a filed Tax Return (in or with respect to a taxable year that ends on or before December 31, 2021) in connection with the incurrence or arising from the payment by the Indemnified Party of such fees indemnified liability. For purposes hereof, any inclusion or costs or indemnifiable amounts reduction shall be determined (i) using a “with and without” methodology (treating any deductions attributable to such fees or costs or indemnifiable amounts as the last items claimed for any taxable year, including after the utilization of any available net operating loss carryovers). In the event that any Tax Cost or Tax Benefit is not actually realized highest applicable marginal U.S. federal corporate income tax rate in effect at the time of the indemnity payment by the Indemnifying Party to determination (and excluding any state income tax effect of such inclusion or reduction) and (ii) assuming that the Indemnified PartyParty will be liable for Taxes at such rate, the payment related has sufficient taxable income to such use any tax deduction, and has no Tax Cost or Tax Benefit shall be paid Attributes at the time of the Tax Cost or Tax Benefit is actually realizeddetermination.

Characterization of and Adjustments to Payments. (a) In the absence of a Final Determination to the contrary, for all Tax purposes, EFH IP and Reorganized TCEH Spinco shall treat or cause to be treated any payment required by this Agreement (other than any payment treated for Tax purposes as interest) as either a contribution by EFH IP to Reorganized TCEH Spinco or a distribution by Reorganized TCEH Spinco to EFHIP, as the case may be, occurring immediately prior to the DistributionDistribution Date. (b) Any indemnity payment pursuant to this Agreement shall be (A) increased to include (i) all reasonable accounting, legal, legal and other professional fees and court costs and damages incurred by the Indemnified indemnified Party in connection with such indemnity payment and (ii) any Tax Cost to such Indemnified Party or its Affiliates resulting from the receipt of (or entitlement to) such indemnity payment. (c) Any indemnity payment and (B) under this Agreement shall be decreased to take into account for any an amount equal to the Tax Benefit that the Indemnified Party or its Affiliates benefit actually realizes by way of a Refund or a decrease in Taxes reported on a filed Tax Return (in or with respect to a taxable year that ends on or before December 31, 2021) in connection with the incurrence or the payment realized by the Indemnified Party (or its Affiliates) arising from the incurrence or payment of the relevant indemnified item, which Tax benefit would not have arisen or been allowable but for such fees indemnified liability. For purposes hereof, any Tax benefit actually realized by the Indemnified Party (or costs or indemnifiable amounts its Affiliates) shall be determined using a “with and without” methodology (treating any deductions or amortization attributable to such fees or costs or indemnifiable amounts indemnified liability as the last items claimed for any taxable year, including after the utilization of any available net operating loss carryoverscarryforwards). In the event that any Tax Cost or Tax Benefit is not actually realized at the time of the Any indemnity payment by the Indemnifying Party will initially be made without regard to this Section 3.04(c) and an adjusting payment will be made to reflect any applicable Tax benefit within 30 days after the Indemnified Party, the payment related to Party (or its Affiliates) actually realizes such Tax Cost benefit by way of a Refund or a decrease in Taxes reported on a filed Tax Benefit shall be paid at the time the Tax Cost or Tax Benefit is actually realizedReturn.