Common use of Liability and Indemnification for Taxes Clause in Contracts

Liability and Indemnification for Taxes. (a) Parent shall indemnify the Buyer Indemnified Parties against (i) all Losses for Taxes of the Company Entities and Brazil NewCo that are attributable to any Pre-Closing Period, which shall include any Losses for Taxes as a result of any Company Entity having been on or before the Closing Date a member of an affiliated, consolidated, combined or unitary group (for purposes of any federal, state, local or foreign law, and including any arrangement providing for group Tax relief or any similar arrangement within any jurisdiction) that includes any person other than the Company Entities, (ii) all Losses for Taxes (W) imposed on the Restructuring, (X) of Brazil NewCo as a result of Brazil NewCo having been on or before the BRT Date a member of an affiliated, consolidated, combined or unitary group (for purposes of any federal, state, local or foreign law, and including any arrangement providing for group Tax relief or any similar arrangement within any jurisdiction), (Y) of Brazil NewCo imposed on Brazil NewCo as a successor entity of Parent Brazil relating to any Liabilities between Parent Brazil and Parent or its other subsidiaries, and (Z) of Brazil NewCo relating to the termination of any Brazil Intercompany Liabilities prior to the BRT Date, (iii) all Losses for Taxes attributable to any breach of a representation, warranty or covenant relating to Taxes; provided, however, that Parent shall not be required to indemnify the Buyer Indemnified Parties for any Losses for Taxes as a result of a breach of Section 2.9(o) except to the extent that such breach results in a limitation under Section 382 of the Code on the lesser of the Transferred NOL (assuming the NOL Payment has been made) or the NOL Target, (iv) all Losses for Taxes resulting from the application of Section 280G of the Code to any payment made pursuant to this Agreement or to any payment made as a result of, or in connection with, any transaction contemplated by this Agreement, (v) all Losses for Taxes of any Company Entity or Brazil NewCo resulting from a termination of any Tax sharing agreement pursuant to Section 8.6, (vi) all Losses relating to any amount required to be reimbursed or repaid pursuant to the Special Incentives Contract entered into by and between Puerto Rico Industrial Fund, Inc. and Company PR and/or Solectron de Puerto Rico, Inc. and all other Losses relating to any subsidy, grant or incentive that was provided to Parent, the Company Entities, or any of their respective Affiliates during a Pre-Closing Period (other than Losses to the extent attributable to actions taken by any of the Buyer Indemnified Parties after the Closing (other than as expressly contemplated by this Agreement)), including without limitation, any amount required to be reimbursed or repaid by SMART Modular Technologies (Europe) Ltd. or any of its Affiliates pursuant to the Grant Agreement dated September 13, 1996, and (vii) all Losses resulting from the net operating loss carryforward attributable to the Company Entities other than SMART Modular Technologies (MA), Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Company MA”) pursuant to the Treasury regulations under Section 1502 of the Code as of the end of the day on the Closing Date as determined in (and on the due date (the “NOL Date”) for) the federal income tax return of the Company for the period ending on the Closing Date (taking into account any adjustment to such carryforward arising as a result of audits or otherwise) (the “Transferred NOL”) being less than $15 million (without regard to whether such carryforward is limited by Section 382 of the Code as a result of the transactions contemplated by this Agreement) (the “NOL Target”), except in each case to the extent that such Taxes are attributable to (x) actions taken by the Buyer Indemnified Parties outside the Ordinary Course of Business after the Closing on the Closing Date or (y) any breach of any of the obligations of the Buyer Indemnified Parties under this Article VIII. In the event that the Transferred NOL is less than the NOL Targe t, Parent shall pay to the Buyer Indemnified Parties on the NOL Date the present value of the shortfall calculated (i) using a discount rate of five percent (5%) and (ii) assuming the shortfall would be fully utilized to offset income that would otherwise have been taxed at the highest marginal federal tax rate (such payment, the “NOL Payment”). In the event that the NOL Payment has been made and subsequently there is a Final Determination that the Transferred NOL either was not less than the NOL Target or was less than the NOL Target in an amount less than originally determined, the Buyer Indemnified Parties will repay the appropriate portion of the NOL Payment to Parent.

Liability and Indemnification for Taxes. Except to the extent treated as a liability in the calculation of Current Liabilities for purposes of determining the Acquisition Consideration, Seller shall indemnify the Company, Purchaser and its Affiliates and hold them harmless from and against (a) Parent shall indemnify the Buyer Indemnified Parties against any Damages attributable to any breach of or inaccuracy in any representation or warranty made in Section 2.12; (ib) any Damages attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in this Section 7; (c) all Losses for Taxes of the Company Entities and Brazil NewCo that are attributable to any for all Pre-Closing Period, which shall include any Losses Tax Periods; (d) all of Seller’s obligation for Transfer Taxes as a result under Section 1.8; (e) all Taxes of any Company Entity having been on or before the Closing Date a member of an affiliated, consolidated, combined combined, or unitary group of which the Company (for purposes or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state or local Legal Requirement; and (f) any and all Taxes of any federal, state, local or foreign law, and including any arrangement providing for group Tax relief or any similar arrangement within any jurisdiction) that includes any person other than the Company Entities, (ii) all Losses for Taxes (W) Person imposed on the RestructuringCompany arising under the principles of transferee or successor liability or by Contract (other than Contracts entered into in the ordinary course of business the primary purpose of which is unrelated to Taxes), (X) of Brazil NewCo as a result of Brazil NewCo having been on relating to an event or transaction occurring before the BRT Date a member of an affiliated, consolidated, combined or unitary group (for purposes of any federal, state, local or foreign law, and including any arrangement providing for group Tax relief or any similar arrangement within any jurisdiction), (Y) of Brazil NewCo imposed on Brazil NewCo as a successor entity of Parent Brazil relating to any Liabilities between Parent Brazil and Parent or its other subsidiaries, and (Z) of Brazil NewCo relating to the termination of any Brazil Intercompany Liabilities prior to the BRT Closing Date, in each of the above cases, together with any out-of-pocket fees and expenses (iiiincluding attorneys’ and accountants’ fees) all Losses for Taxes attributable to any breach of a representation, warranty or covenant relating to Taxesincurred in connection therewith; provided, however, that Parent Seller shall not be required have no indemnity obligations with respect to indemnify the Buyer Indemnified Parties for (i) any Losses for Taxes as a result of a breach of Section 2.9(o) except to the extent that such breach results in a limitation under Section 382 of the Code on the lesser of the Transferred NOL (assuming the NOL Payment has been made) or the NOL Target, (iv) all Losses for Taxes resulting from the application of Section 280G of the Code incurred with respect to any payment made pursuant to transaction not contemplated by this Agreement or to any payment made as a result of, or in connection with, any transaction contemplated by this Agreement, (v) all Losses for Taxes outside the ordinary course of any Company Entity or Brazil NewCo resulting from a termination of any Tax sharing agreement pursuant to Section 8.6, (vi) all Losses relating to any amount required to be reimbursed or repaid pursuant to the Special Incentives Contract entered into by and between Puerto Rico Industrial Fund, Inc. and Company PR and/or Solectron de Puerto Rico, Inc. and all other Losses relating to any subsidy, grant or incentive that was provided to Parent, the Company Entities, or any of their respective Affiliates during a Pre-Closing Period (other than Losses to the extent attributable to actions taken by any of the Buyer Indemnified Parties after the Closing (other than as expressly contemplated by this Agreement)), including without limitation, any amount required to be reimbursed or repaid by SMART Modular Technologies (Europe) Ltd. or any of its Affiliates pursuant to the Grant Agreement dated September 13, 1996, and (vii) all Losses resulting from the net operating loss carryforward attributable to the Company Entities other than SMART Modular Technologies (MA), Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Company MA”) pursuant to the Treasury regulations under Section 1502 of the Code as of the end of the day business on the Closing Date as determined in (and on the due date (the “NOL Date”) for) the federal income tax return of the Company for the period ending on the Closing Date (taking into account any adjustment to such carryforward arising as a result of audits or otherwise) (the “Transferred NOL”) being less than $15 million (without regard to whether such carryforward is limited by Section 382 of the Code as a result of the transactions contemplated by this Agreement) (the “NOL Target”), except in each case to the extent that such Taxes are attributable to (x) actions taken by the Buyer Indemnified Parties outside the Ordinary Course of Business after the Closing on the Closing Date or (y) any breach of any of the obligations of the Buyer Indemnified Parties under this Article VIII. In the event that the Transferred NOL is less than the NOL Targe tClosing, Parent shall pay to the Buyer Indemnified Parties on the NOL Date the present value of the shortfall calculated (i) using a discount rate of five percent (5%) and (ii) assuming the shortfall would be fully utilized Transfer Taxes borne by Purchaser pursuant to offset income Section 1.8 or (iii) any Taxes that would otherwise have been taxed at the highest marginal federal tax rate (such payment, the “NOL Payment”). In the event that the NOL Payment has been made and subsequently there is arise out of or relate to a Final Determination that the Transferred NOL either was not less than the NOL Target or was less than the NOL Target in an amount less than originally determined, the Buyer Indemnified Parties will repay the appropriate portion breach of the NOL Payment Purchaser’s breach or violation of, or failure to Parentfully perform, any covenant, agreement, undertaking or obligation in this Section 7.

Liability and Indemnification for Taxes. (a) Parent Subject to this Article X, Seller shall indemnify be liable for and shall pay and indemnify, defend, save and hold harmless the Buyer Indemnified Parties against from and against, without duplication, (i) all Losses for Taxes of the Company Entities and Brazil NewCo that are attributable to any Pre-Closing Period, which shall include any Losses for Tax Periods; (ii) all Income Taxes imposed on the Company under Treasury Regulation 1.1502-6 (or comparable provisions of state or local law or regulation) solely as a result of any the Company Entity having been on or filed Tax Returns before the Closing Date on a member of an affiliated, consolidated, combined or unitary group (for purposes of any federal, state, local or foreign law, and including any arrangement providing for group Tax relief basis with Seller or any similar arrangement within other Person; (iii) any jurisdiction) that includes any person other than the Company Entities, (ii) all Losses liability for Taxes resulting directly from making the Section 338(h)(10) Election; (Wiv) imposed on any liability for Taxes resulting from a conveyance of the Restructuring, (X) of Brazil NewCo as a result of Brazil NewCo having been on Excluded Property or before the BRT Date a member of an affiliated, consolidated, combined or unitary group (for purposes of any federal, state, local or foreign law, and including any arrangement providing for group Tax relief or any similar arrangement within any jurisdiction), (Y) of Brazil NewCo imposed on Brazil NewCo as a successor entity of Parent Brazil relating to any Liabilities between Parent Brazil and Parent or its other subsidiaries, and (Z) of Brazil NewCo relating to the termination TPH Spinoff pursuant to Section 5.4(c) or, subject to Section 10.3(f), the conveyance to the Company of any Brazil Intercompany Liabilities prior Owned Real Property pursuant to the BRT Date, Section 6.5(i); and (iiiv) any and all Losses for Taxes attributable to incurred by Buyer arising out of or resulting from any misrepresentation or breach of a representationwarranty given by Seller pursuant to Section 3.18, warranty or covenant relating except to Taxesthe extent such Losses are otherwise indemnified pursuant to the foregoing clauses (i) - (iv); provided, however, that Parent Seller shall not be required to indemnify the liable for or pay, and shall not indemnify, defend, save or hold harmless Buyer Indemnified Parties for for, any Losses for Taxes as a result of a breach of Section 2.9(o(collectively, "Excluded Taxes") except to the extent that such breach results in a limitation under Section 382 of the Code imposed on the lesser of the Transferred NOL (assuming the NOL Payment has been made) or the NOL Target, (iv) all Losses for Taxes resulting from the application of Section 280G of the Code to any payment made pursuant to this Agreement or to any payment made as a result of, or in connection with, any transaction contemplated by this Agreement, (v) all Losses for Taxes of any Company Entity or Brazil NewCo resulting from a termination of any Tax sharing agreement pursuant to Section 8.6, (vi) all Losses relating to any amount required to be reimbursed or repaid pursuant to the Special Incentives Contract entered into by and between Puerto Rico Industrial Fund, Inc. and Company PR and/or Solectron de Puerto Rico, Inc. and all other Losses relating to any subsidy, grant or incentive that was provided to Parent, the Company Entities, or any of their respective Affiliates during a Pre-Closing Period (other than Losses to the extent attributable to actions taken by any of the Buyer Indemnified Parties after the Closing (other than as expressly contemplated by this Agreement)), including without limitation, any amount required to be reimbursed or repaid by SMART Modular Technologies (Europe) Ltd. or any of its Affiliates pursuant to the Grant Agreement dated September 13, 1996, and (vii) all Losses resulting from the net operating loss carryforward attributable to the Company Entities other than SMART Modular Technologies (MA), Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Company MA”) pursuant to the Treasury regulations under Section 1502 of the Code as of the end of the day on the Closing Date as determined in (and on the due date (the “NOL Date”) for) the federal income tax return of the Company for the period ending on the Closing Date (taking into account any adjustment to such carryforward arising as a result of audits or otherwise) (the “Transferred NOL”) being less than $15 million (without regard to whether such carryforward is limited by Section 382 of the Code as a result of the transactions contemplated by this Agreement) (the “NOL Target”), except in each case to the extent that such Taxes are attributable to (x) actions taken by the Buyer Indemnified Parties outside the Ordinary Course of Business after the Closing occurring on the Closing Date or that are properly allocable (ybased on Treasury Regulation 1.338-1(d) any breach of any of to periods after the Closing Date. Seller's indemnity obligations of the Buyer Indemnified Parties under this Article VIII. In Section 10.3(a) for Taxes shall be reduced by the event that the Transferred NOL is less than the NOL Targe t, Parent shall pay to the Buyer Indemnified Parties amount of liabilities therefor on the NOL Date the present value Closing Balance Sheet. Seller shall be entitled to any refund of the shortfall calculated (ior credit for) using a discount rate of five percent (5%) and (ii) assuming the shortfall would be fully utilized Taxes allocable to offset income that would otherwise have been taxed at the highest marginal federal tax rate (such payment, the “NOL Payment”). In the event that the NOL Payment has been made and subsequently there is a Final Determination that the Transferred NOL either was not less than the NOL Target or was less than the NOL Target in an amount less than originally determined, the Buyer Indemnified Parties will repay the appropriate portion of the NOL Payment to Parentany Pre-Closing Tax Period.