Common use of Debt Treatment and Warrants Clause in Contracts

Debt Treatment and Warrants. The Borrowers and the Lenders agree, unless otherwise required by a change in law (including a change in existing or issuance of new laws, regulations, judicial rulings or published administrative determinations with respect to Taxes), or as required by the Internal Revenue Service or other taxing authority following a good faith resolution of an audit or examination, (i) to treat the Term Loans, as of before and after the Restatement Effective Date, as indebtedness of the Borrowers for U.S. federal income Tax purposes and (ii) to treat the Term Loans and the warrants to purchase shares of Smart Global Holdings Inc. (the “Warrants”) that are issued to the Lenders as a condition to the effectiveness of the Fourth Amendment as having been issued as an “investment unit” within the meaning of Section 1273(c)(2) of the Code, and, correspondingly, the Term Loans as having been issued with OID for U.S. federal income tax purposes to the extent required and as determined pursuant to Section 2.24(b) and (iii) in each case, to not take any Tax position inconsistent with such Tax characterization. For the avoidance of doubt, the description of change in law in this Section 2.24 shall not affect the interpretation of law or Requirement of Law or change in law or Requirement of Law in any other provision of this Agreement and any such reference elsewhere in this Agreement shall be interpreted without regard to this Section 2.24. The inclusion of this Section 2.24 is not an admission by any Lender that it is subject to taxation in the United States.