Section 382 Study Clause Samples

Section 382 Study. On or prior to the Closing Date, the Company shall cause an independent tax accounting firm of national standing to prepare, at the Company’s expense, an analysis of any limitation existing under Sections 382 or 383 of the Code with respect to the Company and its subsidiaries’ ability to utilize net operating losses or other tax attributes of the Company and its subsidiaries to offset taxable income or taxes, as applicable, on Tax Returns filed by the Company or its subsidiaries in the Pre-Closing Tax Period (such analysis, the “Section 382 Study”). If the Section 382 Study concludes that such a limitation existed for any Pre-Closing Tax Period, the Company shall cause to be computed the amount of additional Taxes, if any, that would have been shown as due on any Tax Returns filed by the Company or its subsidiaries in the Pre-Closing Tax Period if such limitation had been reflected in the preparation of such Tax Returns (such additional Taxes, if any, the “Section 382 Tax Amount”).

Section 382 Study. From the date of this Agreement, Seller shall cooperate to enable Buyer to expeditiously conduct, at Buyer’s expense, a study to determine whether prior to Closing there have been any limitations imposed on the utilization of the net operating losses, built-in losses, capital losses, tax credits or other similar items of KUED or the Indian Company under Section 382, 383, or 384 of the Code (or any corresponding or similar provision of state, local or foreign Tax Law). Such study shall be conducted by Ernst & Young under the supervision of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or his successor as Seller’s primary Ernst & Young contact), a report of such study shall be delivered by Ernst & Young to Buyer in written form with all owners’ identifying information redacted or omitted, and a copy of such written report shall be provided to Seller reasonably promptly after the completion of such study, provided, that in the event that a Governmental Entity requires Buyer to disclose such redacted or omitted information as part of a Tax Contest, (A) Buyer shall, in its sole discretion, either (i) diligently contest the disclosure of such information in good faith or (ii) provide Seller with limited power to contest the disclosure of such information, and (B) in the event efforts to contest the disclosure of such information are unsuccessful, Seller shall provide the redacted or omitted information to the requesting Governmental Entity. Without limiting the applicability of Section 6.02(d) to this Section 6.02(o), Seller shall provide Buyer with such additional information as may be necessary for Buyer to conduct such study.

Section 382 Study. (a) The parties agree that the benchmark value of the annual limitation on the usage of NOLs under Code Sections 382 and 383 shall be set at $1,868,000 (the “Benchmark Annual Limitation“) which Benchmark Annual Limitation produces an NOL value of $2,974,000 (the “Benchmark NOL Value“), which Benchmark NOL Value was calculated in accordance with the methodology set forth on Exhibit 4.12 to this Agreement. (b) Not later than two (2) months following the Closing Date, the Sellers shall furnish the Buyer with a study (the “Study“), performed by Deloitte & Touche, LLP opining on the application of Code Sections 382 and 383 to the NOLs of the Company and its Subsidiaries. Deloitte & Touche LLP will arrive to at least a “more likely than not” level of comfort in its opinion on the application of Code Sections 382 and 383 to the NOLs of the Ricon Companies. The parties agree that, to the extent that the Study results in a determination that the annual usage limitation on NOLs under Code Sections 382 and 383 (the “Actual Usage Limitation“) is less than the Benchmark Annual Limitation, an impairment to the value of the Benchmark NOL Value exists (an “NOL Impairment“). The parties further agree that the actual value of such NOL Impairment (the “NOL Impairment Value“) shall be determined by recalculating the NOL value by applying the Actual Usage Limitation according to the methodology set forth on Exhibit 4.12 to this Agreement and subtracting it from the Benchmark NOL Value. The difference between the Benchmark NOL Value and the recalculated NOL value will be the NOL Impairment Value. The parties further agree that the amount of the NOL Impairment Value shall constitute a “Loss” with respect to which Buyer shall be entitled to indemnification pursuant to Article VI of this Agreement. (c) For purposes of this Section 4.12, all references to “NOLs” shall be deemed to include all U.S. federal, state and local Tax net operating losses and credit carryforwards. (d) With respect to any Tax Returns of the Ricon Companies that have not been filed prior to the conclusion of the Study, the Buyer shall prepare or cause to be prepared and file or cause to be filed such Tax Returns consistent with the results of the Study and subject to the proviso in Section 4.7(e)(i). To the extent past Tax Returns have not been filed consistent with the results of the Study, the Buyer shall prepare and file or cause to be prepared and filed amended Tax Returns of the applicable Ricon Companie...

Section 382 Study. The Company shall have provided Parent with the Section 382 Study in form and substance reasonably acceptable to Parent.

Section 382 Study. The Company will engage Ernst & Young LLP to conduct, and will use its commercially reasonable efforts to cause Ernst & Young LLP to complete prior to the Closing, a written study to assess (a) whether the Company or any of its domestic Subsidiaries has undergone an ownership change (as such term is defined by section 382(g) of the Code), and (b) if one or more ownership changes has occurred, (i) the dates of the ownership changes, (ii) the section 382 limitations (as such term is defined by Code section 382(b)) applicable to the ownership changes and (iii) the amounts and expiration dates for any net operating losses or credits that are subject to the section 382 limitations. Notwithstanding anything in this Agreement to the contrary (including Section 7.1), satisfaction of the obligations set forth in this Section 6.21 shall not be a condition precedent to the obligation of any Party to consummate the transactions contemplated by this Agreement, and any delay in the completion of the study for any reason shall not be a basis for any Party to delay consummating the transactions contemplated by this Agreement.

Section 382 Study. Within sixty (60) days following the Closing Date, the Purchaser shall cause the Section 382 Accounting Firm, at the Purchaser’s expense, to prepare a report that concludes whether the Company has undergone an “ownership change” prior to the Agreement Date within the meaning of Section 382(g) of the Code (a “Section 382 Ownership Change”) and whether there currently are limitations on the utilization of the net operating losses, built-in losses, capital losses, tax credits or other similar items of the Company under Sections 382, 383 or 384 of the Code (a “Section 382 Study”) and to provide the Section 382 Study to the Purchaser and the Equityholder Representative. Each of the Equityholder Representative and the Company shall cooperate with the Section 382 Accounting Firm in connection with the preparation of such Section 382 Study. Each of the Purchaser, the Equityholder Representative and the Company Equityholders shall (i) be bound by the Section 382 Study, (ii) with respect to the Purchaser, prepare and file, and cause its Affiliates to prepare and file, their Tax Returns on a basis consistent with the Section 382 Study, and (iii) not take any position, or cause their respective Affiliates to take any position, inconsistent with the Section 382 Study on any Tax Return, in any audit or proceeding before any Governmental Authority or in any report made for Tax purposes; provided that, notwithstanding anything in this Section 5.13 to the contrary, the parties shall be permitted to take a position inconsistent with that set forth in this Section 5.13 if required to do so by a final and nonappealable decision, judgment, decree or other order by any court of competent jurisdiction or other Governmental Authority. In the event (x) the Section 382 Study concludes that the Company has undergone a Section 382 Ownership Change, and (y) such Section 382 Ownership Change has resulted in a Tax liability for the Company for fiscal year 2016 or 2017 (a “Section 382 Liability”), the Section 382 Escrow Fund shall be available to satisfy any indemnity obligations of the Company Equityholders for such Section 382 Liability pursuant to Section 7.1(a). For the avoidance of doubt, no amounts may be withdrawn from the Section 382 Escrow Fund for any purpose other than to satisfy any indemnity obligations of the Company Equityholders for a Section 382 Liability.