Common use of Earnout Tax Treatment Clause in Contracts

Earnout Tax Treatment. The parties agree that for income tax purposes, the payments to the Sellers of the Earnout Consideration, are intended to be payments in exchange for the Seller Shares, and Buyer and the Sellers agree to prepare and file all Tax Returns in a manner consistent with the foregoing, except as required by a Taxing Authority. Buyer and its Affiliates (including the Company after the Closing, but excluding the Sellers for avoidance of doubt) shall be indemnified and held harmless against any Taxes imposed by a Taxing Authority in connection with payments of the Earnout Consideration and any related Damages, excluding the employer portion of any payroll or employment Taxes, which shall remain the sole obligation of Buyer. Buyer may assert its right to indemnification pursuant to the preceding sentence (i) in accordance with Article VIII or Article IX or (ii) directly against the Person to whom such amounts were paid or issued. The parties agree that Earnout Consideration paid in exchange for cancelled Options shall be treated for income and employment tax purposes as compensation for services.