Common use of Seller Tax Indemnity Clause in Contracts

Seller Tax Indemnity. Seller shall indemnify and hold Purchaser Indemnified Parties harmless from and against Losses arising out of or relating to the following, but only to the extent such Losses exceed the related reserve, if any, set forth on Section 7.8(a) of the Seller Disclosure Letter: (i) any Loss incurred by reason of a breach of the representations set forth in Section 2.6; (ii) Taxes of any member of a consolidated, combined or unitary group of which the Company or any Subsidiary is or was a member on or prior to the Closing Date by reason of the liability of the Company or any Subsidiary pursuant to Treasury Regulations section 1.1502-6(a) (or any analogous or similar state, local or foreign law or regulation); (iii) Taxes imposed on the Company or any Subsidiary for any periods ending on or before the Closing Date (or any portion of any period up through the Closing Date to the extent any period does not close on such date); (iv) the disallowance, in whole or in part, of the use of the tax credits (other than as a result of there being insufficient tax to use the credits) described in Section 1.3(e) by Purchaser or any of its Affiliates (including the Company and the Subsidiaries) in any taxable period beginning after the Closing Date, but only in the ratio that the amount of such credits were paid to Seller as Additional Purchase Price; and (v) the recovery by a Tax authority, in whole or in part, of any refund described in Section 1.3(f) from Purchaser or any of its Affiliates (including the Company and the Subsidiaries) previously paid to Seller, but only in the proportion that the refund was paid to Seller as Additional Purchase Price, and, with respect of the New Jersey Business Employment Incentive Program regardless of whether such Loss resulted from any action taken by the Purchaser or its Affiliates (including the Company and the Subsidiaries) after the Closing Date. For purposes of this Section 7.8(a), (i) reserves set forth on Section 7.8(a) of the Seller Disclosure Letter shall be taken into account only after such reserves have been reduced by the amount of any payment made to Seller pursuant to Section 1.3 and (ii) no reserves set forth in Section 7.8(a) of the Seller Disclosure Letter shall be taken into account for purposes of Sections 7.8(a)(iv) and 7.8(a)(v). Any Losses incurred shall be reduced by the amount of any Tax savings, whenever realized, arising from any increased deductions, losses or credits, whenever realized, or by decreases in income, gains or recapture of Tax credits. If any payment made pursuant to this Section 7.8(a) is required by any relevant Tax authority to be treated in a manner different from the treatment described in Section 7.9, then any such payment shall be increased by the Tax liability resulting or arising from the receipt of such payment (including any payment made pursuant to this sentence). The indemnity set forth in this Section 7.8(a) shall survive until the expiration of the statute of limitations applicable to the matters covered hereby (giving effect to any waiver, mitigation or extension thereof).

Seller Tax Indemnity. From and after the Closing Date, Seller shall protect, defend, indemnify and hold Purchaser Indemnified Parties harmless Buyers and the Acquired Companies from any and against Losses arising out of or relating to the followingall Taxes (other than from any and all Taxes described in Section 7.7, which shall be borne in accordance with Section 7.7, and from any and all Post-Effective Date Taxes), but only to the extent such Losses exceed the related reserveof Seller’s ultimate pro rata ownership interest in any relevant Acquired Companies, if any, set forth on Section 7.8(a) of the Seller Disclosure Letter: which are (i) imposed on any Loss incurred by reason of a the Acquired Companies in respect of their income, business, property or operations or for which they may otherwise be liable (A) for any taxable period of any Acquired Company or portion thereof ending prior to the Closing Date as provided in this Article 11, (B) resulting from the breach of Seller’s covenants set forth in this Article 11 and/or breach of the representations and warranties set forth in Section 2.6; 4.10 or (iiC) Taxes relating to any reorganization of any member of a consolidated, combined or unitary group of which the Company or any Subsidiary is or was a member Acquired Companies done on or prior to the Closing Date Date. Seller shall have no liability under this Section 11.3 to the extent that such liability would not have been incurred but for (y) conduct of Buyers or their Affiliates that conflict with this Agreement or (z) failures by reason Buyers or their Affiliates to make filings or take other actions required to be taken by Buyers or their Affiliates under this Agreement (in each case, including the Acquired Companies as Affiliates of the liability of the Company or any Subsidiary pursuant to Treasury Regulations section 1.1502-6(a) (or any analogous or similar state, local or foreign law or regulation); (iii) Taxes imposed on the Company or any Subsidiary for any periods ending on or before Buyers from and after the Closing Date (or any portion of any period up through the Closing Date to the extent any period does not close on such date); (iv) the disallowanceand, in whole or in parteach case, of the use of the tax credits (other than as a result matters resulting from or arising out of there being insufficient tax actions taken or failed to use be taken at the credits) described in direction of Seller). Indemnification for Taxes pursuant to this Section 1.3(e) 11.3 shall also include any reasonable professional fees, accounting fees and other out of pocket costs incurred by Purchaser or any of its Affiliates (including the Company Buyers and the Subsidiaries) in any taxable period beginning after the Closing Date, but only in the ratio that the amount of such credits were paid to Seller as Additional Purchase Price; and (v) the recovery by a Tax authority, in whole or in part, of any refund described in Section 1.3(f) from Purchaser or any of its Affiliates (including the Company and the Subsidiaries) previously paid to Seller, but only in the proportion that the refund was paid to Seller as Additional Purchase Price, and, with respect of the New Jersey Business Employment Incentive Program regardless of whether such Loss resulted from any action taken by the Purchaser or its Affiliates (including the Company and the Subsidiaries) after the Closing Date. For purposes of this Section 7.8(a), Acquired Companies (i) reserves set forth on Section 7.8(a) of relating to the Seller Disclosure Letter shall be taken into account only after Tax liability for which indemnification is provided with any such reserves have been fees or costs being reduced by the amount of any payment made to 50% so that Buyers and Seller pursuant to Section 1.3 and share such fees or costs equally, or (ii) no reserves set forth in enforcing this indemnity against Seller. The indemnification for Taxes pursuant to this Section 7.8(a) of the Seller Disclosure Letter 11.3 shall be taken take into account for purposes of Sections 7.8(a)(iv) and 7.8(a)(v)any Tax Benefit arising from such indemnification. Any Losses incurred shall be reduced by If the amount of any Tax savings, whenever realized, arising from any increased deductions, losses or credits, whenever realized, or by decreases in income, gains or recapture of Tax credits. If any payment made an indemnitee is reduced as a result of indemnification for Taxes pursuant to this Section 7.8(a) is required by any relevant Tax authority to 11.3, such amount shall promptly be treated in a manner different from the treatment described in Section 7.9, then any such payment shall be increased paid by the Tax liability resulting or arising from the receipt of such payment (including any payment made pursuant to this sentence). The indemnity set forth in this Section 7.8(a) shall survive until the expiration of the statute of limitations applicable indemnitee to the matters covered hereby (giving effect to any waiver, mitigation or extension thereof)indemnitor.

Seller Tax Indemnity. Seller Domtar shall indemnify and hold Purchaser Indemnified Parties harmless Buyer from and against any and all Losses attributable to or arising out of, without duplication, (i) Consolidated Income Tax Liabilities of the Transferred Companies or relating their respective Subsidiaries attributable to any Pre-Closing Tax Period or arising under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or non-U.S. Law by virtue of any of the Transferred Companies or any of their respective Subsidiaries having been a member prior to the followingClosing of a consolidated, but only to the extent such Losses exceed the related reservecombined, if anyaffiliated, set forth on Section 7.8(a) unitary or other similar tax group that includes a member of the Seller Disclosure Letter: (i) any Loss incurred by reason of a breach of the representations set forth in Section 2.6; Group, (ii) Taxes for which any of the Transferred Companies or any member of a consolidatedtheir respective Subsidiaries are liable for any Pre-Closing Tax Period, combined (iii) any Liabilities incurred by any of the Subject Companies pursuant to any Tax allocation, Tax indemnity or unitary group Tax sharing agreement (in each case, other than those contained in agreements entered into in the ordinary course of business the principal purpose of which the Company or any Subsidiary is or was a member does not relate to Taxes) entered into on or prior to the Closing Date by reason of Closing, and in effect after the liability of the Company or any Subsidiary pursuant to Treasury Regulations section 1.1502-6(a) (or any analogous or similar stateClosing, local or foreign law or regulation); (iii) Taxes imposed on the Company or any Subsidiary for any periods ending on or before the Closing Date (or any portion of any period up through the Closing Date to the extent any period does not close on such date); and (iv) the disallowance, in whole or in part, employer portion of any payroll Taxes of the use of Subject Companies deferred from a Pre-Closing Tax Period to a Tax period or a portion thereof beginning after the tax credits Closing Date under the CARES Act. Notwithstanding the foregoing, Domtar shall not be responsible for and shall have no obligation to indemnify Buyer against Taxes (other than w) imposed as a result of there being insufficient tax any transaction outside of the ordinary course of business that occurs on the Closing Date after the Closing and that is not contemplated by this Agreement, (x) arising as a result of Buyer’s making or causing to use be made, without the creditsprior written consent of the Sellers, any election under Section 338 of the Code (or any similar provision of U.S. state or local Law) described in Section 1.3(e) by Purchaser respect of any of the Transferred Companies or any of its Affiliates their respective Subsidiaries, (including y) to the Company and extent they were included as (1) current liabilities in the Subsidiariescalculation of Closing Working Capital or (2) in any taxable period beginning after the calculation of Closing DateIndebtedness, but only in the ratio that the amount of such credits were paid to Seller as Additional Purchase Price; and (v) the recovery by a Tax authorityClosing Transaction Expenses or Closing Retention Payments, in whole or in part, each case of any refund described in Section 1.3(f(1) from Purchaser or any of its Affiliates and (including the Company and the Subsidiaries) previously paid to Seller, but only in the proportion that the refund was paid to Seller as Additional Purchase Price, and, with respect of the New Jersey Business Employment Incentive Program regardless of whether such Loss resulted from any action taken by the Purchaser or its Affiliates (including the Company and the Subsidiaries) after the Closing Date. For purposes of this Section 7.8(a2), (i) reserves set forth on as finally determined in accordance with Section 7.8(a) of the Seller Disclosure Letter shall be taken into account only after such reserves have been reduced by the amount of any payment made to Seller pursuant to Section 1.3 and (ii) no reserves set forth in Section 7.8(a) of the Seller Disclosure Letter shall be taken into account for purposes of Sections 7.8(a)(iv) and 7.8(a)(v). Any Losses incurred shall be reduced by the amount of any Tax savings, whenever realized, arising from any increased deductions, losses or credits, whenever realized1.3, or by decreases in income, gains or recapture of Tax credits(z) that are Transfer Taxes the portion for which Buyer is responsible under Section 5.8. If any payment made Domtar’s obligation to indemnify Buyer pursuant to this Section 7.8(a5.2 shall apply only if and to the extent that (A) is required by any relevant Buyer or its Affiliates have used commercially reasonable efforts to pursue recovery, if potentially available, under the R&W Policy in good faith with respect to such Tax authority to be treated in a manner different from liability and (B) the treatment described in Section 7.9, then any such payment shall be increased by net recovery amount (taking into account Tax and other reasonable out-of-pocket expenses) under the R&W Policy and the Tax liability resulting or arising from Insurance Policy (other than any recovery under the receipt of such payment (including any payment made pursuant to this sentence). The indemnity set forth Tax Insurance Policy that is treated as a “refund” in this accordance with Section 7.8(a) shall survive until the expiration of the statute of limitations applicable 5.12 to the matters covered hereby (giving effect extent Buyer actually pays over such recovery under such Tax Insurance Policy to Domtar) with respect to such Tax liability is insufficient to indemnify Buyer for such Tax liability. Domtar or its designee shall have the sole right to control the pursuit of any waiver, mitigation or extension thereof)recovery under the Tax Insurance Policy.