Common use of OID Clause in Contracts

OID. The Borrower and the Lenders agree that: (i) the Loans are debt for federal income tax purposes; (ii) the Loans of each Lender constitute a single debt instrument for purposes of Sections 1271 through 1275 of the Code and the Treasury Regulations thereunder (pursuant to Treasury Regulations Section 1.1275-2(c)), such debt instrument is treated as issued with original issue discount (“OID”) solely as a result of the PIK Interest, and such debt instrument is described in Treasury Regulations Section 1.1272-1(c)(2) and therefore is governed by the rules set out in Treasury Regulations Section 1.1272-1(c), including Section 1.1272-1(c)(5), and is not governed by the rules set out in Treasury Regulations Section 1.1275-4; (iii) any calculation by the Borrower regarding the amount of OID for any accrual period on the Loans shall be subject to the review and approval of the Lenders; and (iv) they will adhere to this Agreement for federal income tax purposes and not take any action or file any tax return, report or declaration inconsistent herewith unless otherwise required due to a change in law. The inclusion of this Section 2.21 is not an admission by any Lender that it is subject to United States taxation.

OID. The Borrower and the Lenders agree that: (i) the Term Loans are debt for federal income tax purposes; (ii) the Term Loans of each Lender constitute a CONFIDENTIAL TREATMENT REQUESTED BY CINEDIGM DIGITAL CINEMA CORP. OF CERTAIN PORTIONS OF THIS AGREEMENT IN ACCORDANCE WITH RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. single debt instrument for purposes of Sections 1271 through 1275 of the Code and the Treasury Regulations thereunder (pursuant to Treasury Regulations Section 1.1275-2(c)), such debt instrument is treated as issued with original issue discount (“OID”) solely as a result of the PIK Interest, and such debt instrument is described in Treasury Regulations Section 1.1272-1(c)(2) and therefore is governed by the rules set out in Treasury Regulations Section 1.1272-1(c), including Section 1.1272-1(c)(5), and is not governed by the rules set out in Treasury Regulations Section 1.1275-4; (iii) any calculation by the Borrower regarding the amount of OID for any accrual period on the Term Loans shall be subject to the review and approval of the Lenders; and (iv) they will adhere to this Agreement for federal income tax purposes and not take any action or file any tax return, report or declaration inconsistent herewith unless otherwise required due to a change in law. The inclusion of this Section 2.21 4.08 is not an admission by any Lender that it is subject to United States taxation.