Investment Unit. The Company and the Holder acknowledge and agree that the Term Loan (as defined in the Financing Agreement) made on the Effective Date (as defined in the Financing Agreement) and the Warrant, taken together, comprise an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), and agree that the issue price of such investment unit shall be allocated between the Term Loan (as defined in the Financing Agreement) and the Warrant based on their relative fair market values as of the Original Issue Date, in accordance with Treasury Regulation Section 1.1273-2(h). For this purpose, the Company and the Holder agree that, as of the Effective Date (as defined in the Financing Agreement), the fair market value of the Warrant is $0. The Company and the Holder agree to file all applicable tax returns in a manner consistent with such allocation and not to take any position on any tax return or in any tax proceeding that is inconsistent with such allocation, unless otherwise required by a contrary “determination” within the meaning of Section 1313 of the Code.
Investment Unit. Borrower, Agent and Lenders agree, unless otherwise required by a change in law, or as required by the Internal Revenue Service or other taxing authority following an audit or examination, (i) to treat the Loans as indebtedness for U.S. federal income tax purposes and (ii) to treat the Loans and the Warrants as having been issued as an “investment unit” within the meaning of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended, and, correspondingly, the Loans as having been issued with original issue discount for U.S. federal income tax purposes to the extent required.
Investment Unit. The Borrower and the applicable Lenders agree, for U.S. federal income (and applicable U.S. state and local and non-U.S.) tax purposes, that (i) each of the Loans issued pursuant to this Agreement, together with the Parent common stock issued pursuant to Section 6.01(s) (the “Parent Stock”) constitute an “investment unit” under Section 1273(c)(2) of the Code and United States Treasury Regulations Section 1.1273-2(h), (ii) the “issue price” of the Loans under Section 1273(b) of the Code shall be determined by taking into account the aggregate purchase price allocated to such Parent Stock pursuant to this Section 5.03(h), and (iii) if the difference between the aggregate principal amount of the Loans and the aggregate “issue price” of the Loans is more than “de minimis,” the difference shall be reported as “original issue discount”. Within thirty (30) days of the issuance of the Parent Stock hereunder, the parties shall cooperate in good faith to agree on the value of such Parent Stock, which the parties acknowledge and agree shall be equal to the fair market value of the Parent Stock as of the date of issuance. No party shall take any position inconsistent with the tax treatment set forth in this Section 5.03(h) on any U.S. federal (or applicable U.S. state or local or non-U.S.) tax return or for any other U.S. federal income (or applicable U.S. state or local or non-U.S.) tax purpose, except as required pursuant to a “determination” within the meaning of Section 1313(a) of the Code or pursuant to a good faith settlement of an audit by any tax authority.
Investment Unit. For federal income tax purposes, pursuant to Treasury Regulations § 1.1273-2(h), the Company and the Investors acknowledge that the “issue price” of the Notes at Closing is 100% of the stated principal amount of the Notes minus the fair market value and purchase price of the Warrants; and the aggregate fair market value and purchase price of the Warrants is eight million Dollars ($8,000,000) if one hundred million Dollars ($100,000,000) stated principal amount of Notes are purchased and sixteen million Dollars ($16,000,000) if two hundred million Dollars ($200,000,000) stated principal amount of Notes are purchased. Each of the Obligors and the Investors agree to use the foregoing issue price, fair market value and purchase price for U.S. federal income tax purposes with respect to the transactions contemplated hereby (unless otherwise required by a final determination by the IRS or a court of competent jurisdiction).
Investment Unit. The Company, the Issuer and the Holder acknowledge and agree that the Class A Notes (as defined in the Indenture) made on the Effective Date (as defined in the Indenture) and the Warrant, taken together, comprise an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), and agree that the issue price of such investment unit shall be allocated between the Class A Notes (as defined in the Indenture) and the Warrant based on their relative fair market values as of the Effective Date, in accordance with Treasury Regulation Section 1.1273-2(h). For this purpose, the Company, the Issuer and the Holder agree that, as of the Effective Date (as defined in the Indenture), the fair market value of the Warrant is $0. The Company, the Issuer and the Holder agree to file all applicable tax returns in a manner consistent with such allocation and not to take any position on any tax return or in any tax proceeding that is inconsistent with such allocation, unless otherwise required by a contrary “determination” within the meaning of Section 1313 of the Code.
Investment Unit. The Note Purchaser and the Company hereby acknowledge and agree that the Notes are part of an “investment unit” within the meaning of Section 1273(c)(2) of the Code, which includes the Warrants. Notwithstanding anything to the contrary contained herein or in the Warrant Agreement, the Note Purchaser and the Company hereby further acknowledge and agree that solely for United States federal income tax purposes the aggregate “issue price” of the Notes and the Warrants allocated to the Notes pursuant to Schedule 2.2 to the Warrant Agreement under Section 1273(b) of the Code (and for purposes of comparable state and local income tax laws) shall equal $7,465,170.34 and $534,829.66, respectively. The Note Purchaser and the Company agree to use the foregoing issue prices for all income tax purposes with respect to this transaction.
Investment Unit. Borrower and Lender hereby acknowledge and agree that the Warrant is part of an investment unit within the meaning of Section 1273(c)(2) of the U.S. Internal Revenue Code which includes the Loans. Borrower and Lender further agree as between Borrower and Lender, that the fair market value of the Warrant is Cdn. $394,526 and that, pursuant to U.S. Treas. Reg. § 1.1273-2(h), Cdn. $394,526 of the issue price of the investment unit will be allocable to the Warrant and the balance shall be allocable to the Loans. Borrower and Lender agree to prepare their federal income tax returns in a manner consistent with the foregoing agreement.
Investment Unit. The parties hereto agree and. intend that the Second Amendment Term Loan and the Specified Shares are being issued as an investment unit within the meaning of Section 1273(c)(2) of the Code. The parties further agree that the issue price of the Second Amendment Term Loan for the purposes of the Code is $2,747,863.24 and the purchase price of the Specified Shares is $900,000.
Investment Unit. For U.S. federal, state and local income tax purposes, the Loan Parties and the Lenders shall, unless otherwise required by a change in law (including regulations, judicial rulings or published administrative determinations with respect to Taxes) or by any Governmental Authority following an audit or examination, (i) treat the Loans as indebtedness, (ii) treat the Loans and the Warrants as having been issued as an “investment unit” within the meaning of Section 1273(c)(2) of the Code, (iii) treat the Loans as having an “issue price” within the meaning of Section 1273(b) of the Code that is determined by subtracting the value of the Warrants as of the Closing Date (as determined by the initial Lender in a manner consistent with the spreadsheet entitled “Cadiz Warrant Valuation” that was previously provided by the initial Lender to the Borrower) and the amount of the upfront fee from the original principal amount of the Loans, which determination the initial Lender shall provide to the Borrower promptly following the Closing Date and (iv) treat the Loans as having been issued with original issue discount (“OID”) to the extent required as a result of their issuance as part of an investment unit and the payment of the upfront fee. The Loan Parties and the Lenders shall prepare and file all U.S. federal, state and local income tax returns in a manner consistent with the foregoing. The Borrower shall provide any information reasonably requested from time to time by the Agent or any Lender regarding the OID associated with the Loans for U.S. federal, state and local income tax purposes. The Lenders shall also provide or cause to be provided to the Agent all information necessary to allow the Agent to comply with any applicable cost basis reporting obligations. The Agent may rely on the cost basis information provided to it and shall have no responsibility to verify or ensure the accuracy of the cost basis information provided to it.
Investment Unit. The Loan Parties and the Lenders acknowledge and agree that for U.S. federal income tax purposes, the Term Loan funded on the Closing Date is part of an “investment unit” (within the meaning of Treasury Regulations Section 1.1273-2(h)), consisting of the Term Loan and the Warrant. For purposes of allocating the aggregate issue price of the unit between the respective fair market values of the Term Loan and the Warrant, the Loan Parties and the Lenders agree that the fair market value and purchase price of the Warrant is de minimis. The Loan Parties and the Lenders shall file all income tax returns consistent with the foregoing tax treatment, including the issue price and purchase price as agreed upon pursuant to the preceding sentence.
