Common use of Section 338(g) Election Clause in Contracts

Section 338(g) Election. The parties to this Agreement agree that Buyer may make an election under Section 338(g) of the U.S. Internal Revenue Code (the “338(g) Election”) with respect to the acquisition of the shares of China SNS Group Limited and Fanstang (Shanghai) Entertainment after the close of the acquisition. If Buyer makes such an election with respect to either company, Buyer shall inform Sellers in writing within thirty (30) days of having made such election. If and to the extent it is shown that the 338(g) Election by the Buyer shall increase the U.S. taxes owed by Seller, the Buyer will reimburse Seller the amount of such increase up to a maximum of Twenty Thousand U.S. Dollars (US$20,000.00). Moreover, each of Buyer and Parent agrees that, notwithstanding anything to the contrary in this Agreement, any increased U.S. tax attributable to any of the Target Entities as a result of the 338(g) Election shall not constitute any of (i) the breach of any representation and warranty of the Seller Management or Target Entities contained in this Agreement, (ii) the breach of any agreement of the Seller or the Target Entities contained in this Agreement or (iii) a “Seller Tax Obligation” as defined herein.

Section 338(g) Election. The parties to this Agreement agree that Buyer may make an election under Section 338(g) of the U.S. Internal Revenue Code (the “338(g) Election”) with respect to the acquisition of the shares of China SNS Group Limited and Fanstang (Shanghai) Entertainment after the close of the acquisition. If Buyer Xxxxx makes such an election with respect to either company, Buyer Xxxxx shall inform Sellers Xxxxxxx in writing within thirty (30) days of having made such election. If and to the extent it is shown that the 338(g) Election by the Buyer shall increase the U.S. taxes owed by SellerXxxxxx, the Buyer will reimburse Seller the amount of such increase up to a maximum of Twenty Thousand U.S. Dollars (US$20,000.00). Moreover, each of Buyer and Parent agrees that, notwithstanding anything to the contrary in this Agreement, any increased U.S. tax attributable to any of the Target Entities as a result of the 338(g) Election shall not constitute any of (i) the breach of any representation and warranty of the Seller Management or Target Entities contained in this Agreement, (ii) the breach of any agreement of the Seller or the Target Entities contained in this Agreement or (iii) a “Seller Tax Obligation” as defined herein.