Common use of Tax Effect Clause in Contracts

Tax Effect. The amount of any Losses for which indemnification is provided under Article 10 to an Indemnitee shall be (i) increased to take account of any net Tax cost incurred by such Indemnitee arising from the receipt or accrual of indemnity payments hereunder (grossed up for any such increase) and (ii) reduced to take account of any Tax benefit realized by such Indemnitee as a result of the deductibility of such Losses (or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be (a) increased to reflect any such net Tax cost (including gross-up) or (b) reduced (or give rise to a repayment by the Indemnitee in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefit. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and at such time as, the amount of Taxes payable by such Indemnitee is increased above or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losses. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises and in determining the amount of such benefit, any subsequent Tax detriment that will be 113 121 incurred because of the availability of the Tax benefit shall be taken into account.

Tax Effect. The amount of a Loss with respect to which the Indemnified Party is to be indemnified pursuant to Section 9.1 or 9.2 initially shall be determined without regard to any Tax benefit. However, to the extent that the Indemnified Party recognizes a Tax benefit with respect to payments made by the Indemnifying Party with respect to any payment for Losses made hereunder (a "NET TAX BENEFIT"), the Indemnifying Party shall be entitled to such Net Tax Benefit, and the Indemnified Party shall pay to the Indemnifying Party the amount of such Net Tax Benefit (but not in excess of the indemnification payment or payments actually received from the Indemnifying Party with respect to such Losses) at such time or times as and to the extent that the Indemnified Party or any Affiliate of Indemnified Party actually realizes such Net Tax Benefit through a refund of Tax or reduction in the actual amount of Taxes which the Indemnified Party or any Affiliate of Indemnified Party would otherwise have had to pay if such payment for Losses had not been made, calculated by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Losses for which indemnification is provided under Article 10 to an Indemnitee was made and treating such Tax items as the last items claimed for any taxable year; PROVIDED that, any such Net Tax Benefit shall be reduced by the amount of Tax detriment (iincluding the tax effect of any item of income or gain or other item (including the tax effect of any decrease in Tax basis) increased that increases any amounts paid or payable with respect to take account Taxes, any reduction in the amount of any refund of Tax which would otherwise have been available, the tax effect of the utilization of any net Tax cost incurred by such Indemnitee arising from operating loss or capital loss or the receipt or accrual tax effect of indemnity payments hereunder (grossed up for any such increase) and (ii) reduced to take account the utilization of any Tax benefit realized credits or other Tax attributes) that the Indemnified Party suffered as a result of any Losses (a "NET TAX DETRIMENT") calculating the amount of any such detriment by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Indemnitee Net Tax Detriment for which indemnification was made and treating such Tax items as the last items claimed for any taxable year. If any subsequent adjustments are made to any Tax Return relating to the Indemnified Party for any taxable period as a result of or in settlement of any audit, other administrative proceeding or judicial proceeding or as a result of the deductibility filing of such Losses (or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be (a) increased an amended return to reflect the consequences of any determination made in connection with any such net Tax cost (including gross-up) audit or (b) reduced (or give rise to a repayment by the Indemnitee proceeding and if such adjustment results in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefit. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and at such time as, change in the amount of Taxes payable by any Net Tax Benefit or Net Tax Detriment to the Indemnified Party, appropriate payments will be made between the Indemnifying Party and the Indemnified Party in accordance with the previous sentence to properly reflect such Indemnitee is increased above or reduced below, as adjustment amount. Upon the case may beIndemnifying Party's request, the Indemnified Party shall use its commercially reasonable efforts, and shall cause its Affiliates to use their commercially reasonable efforts, to realize any Net Tax Benefit and to avoid realizing any Net Tax Detriment. Buyer and Seller agree to provide the other or its designated representatives with assistance and such documents and records reasonably requested by them that are relevant to their ability to determine when an amount is payable to the other party pursuant to this Section 9.9, including copies of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losses. For purposes of this AgreementTax Returns, an Indemnitee shall be deemed to have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises estimated tax payments, schedules, and in determining the amount of such benefit, any subsequent Tax detriment that will be 113 121 incurred because of the availability of the Tax benefit shall be taken into accountrelated supporting documents.

Tax Effect. The If the amount of any Losses payment required to be made by the Indemnifying Party to Methanex (an “Indemnity Payment”) would result in an increase in the income for which indemnification is provided under Article 10 to an Indemnitee shall be tax purposes of Methanex (i) increased to take account net of any deduction available to Methanex in respect of the Loss being indemnified), the Indemnifying Parties shall pay a Tax Gross Up (as defined below) to Methanex at the same time as the Indemnity Payment is paid. For purposes of this Section 2.7 “Tax Gross Up” shall mean, with respect to any Indemnity Payment, such additional amount (calculated in accordance with the Calculation Method, as defined below) as is necessary to place Methanex in the same after tax position as it would have been in had such Indemnity Payment (net Tax cost incurred of the treatment of the Loss) been received tax free, and the transactions contemplated by such Indemnitee arising from this Agreement, including any Indemnity Payments, had no impact upon the receipt or accrual tax position of indemnity payments hereunder (grossed up for any such increase) Methanex; and (ii) reduced “Calculation Method”, with respect to take account the calculation of any Tax benefit realized Gross Up on any Indemnity Payments, shall mean that such Tax Gross Up shall be calculated by using the combined federal and provincial income tax rate applicable to Methanex and without regard to any losses, credits, refunds or deductions that Methanex may have or had which affected or could affect the amount of any Taxes so required to be paid by Methanex and payable on any such Indemnitee Indemnity Payment. If the Tax Gross-Up is required to be made to the Indemnified Parties in respect of a taxation year and such Indemnified Parties will not be required to make a cash payment on account of Taxes under Part I of the Tax Act and the equivalent provisions of applicable provincial legislation in respect of such year, as a result of the deductibility availability of tax losses, credits, or other deductions to the Indemnified Parties for such Losses (or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and year, the Indemnifying Party shall be (a) increased entitled to reflect any such net defer paying the Tax cost (including grossGross-up) or (b) reduced (or give rise to a repayment by the Indemnitee in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefit. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit Up to the extent thatIndemnified Parties and the provisions of section 2.6 shall apply, and at such time as, the amount of Taxes payable by such Indemnitee is increased above or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losses. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises and in determining the amount of such benefit, any subsequent Tax detriment that will be 113 121 incurred because of the availability of the Tax benefit shall be taken into accountmutatis mutandis.

Tax Effect. If any payment received by an Indemnified Party hereunder (an "Indemnity Payment") would constitute income for tax purposes to such Indemnified Party, the Indemnifying Party shall pay a Tax Gross Up to the Indemnified Party at the same time and on the same terms, as to interest and otherwise, as the Indemnity Payment. The amount of any Losses Loss for which indemnification is provided under Article 10 to an Indemnitee shall be (i) increased adjusted to take into account of any net Tax cost incurred by such Indemnitee arising from the receipt or accrual of indemnity payments hereunder (grossed up for any such increase) and (ii) reduced to take account of any Tax tax benefit realized by such Indemnitee as a result the Indemnified Party or any of its affiliates by reason of the deductibility of such Losses (Loss for which indemnification is so provided or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be (a) increased to reflect any such net Tax cost (including gross-up) or (b) reduced (or give the circumstances giving rise to a repayment by the Indemnitee in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefitLoss. For purposes of this Agreementparagraph (f), an Indemnitee any tax benefit shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and taken into account at such time asas it is received by the Indemnified Party or its affiliate. Notwithstanding the foregoing provisions of this paragraph (f), if an Indemnity Payment is included in the Indemnified Party's income pursuant to paragraph 12(1)(x) of the Canadian Tax Act (or an equivalent provision of any relevant provincial legislation), the Indemnified Party covenants and agrees to make an election pursuant to subsection 12(2.2) of the Canadian Tax Act (and the equivalent provision of any applicable provincial legislation) with respect to the Indemnity Payment to the maximum extent possible such that the amount of Taxes payable by such Indemnitee the Indemnity Payment included in the Indemnified Party's income for tax purposes is increased above minimized or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losseseliminated. For purposes of this Agreementparagraph (f), an Indemnitee "Tax Gross Up" shall mean, with respect to any Indemnity Payment, such additional amount (calculated in accordance with the Calculation Method) as is necessary to place the Indemnified Party in the same after tax position as it would have been in had such Indemnity Payment been received tax free; and "Calculation Method" with respect to the calculation of any Tax Gross Up on any Indemnity Payments, shall mean that such Tax Gross Up shall be deemed calculated by using the combined federal and provincial income tax rate applicable to the Indemnified Party and, except as provided in this paragraph (f), without regard to any losses, credits, refunds or deductions that the Indemnified Party may have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises and in determining could affect the amount of tax payable on any such benefit, any subsequent Tax detriment Indemnity Payment. SCHEDULE D ALTERNATIVE TRANSACTION/ALTERNATIVE OFFER Plan of Arrangement The Offeror acknowledges and agrees that will be 113 121 incurred because it is the intention of the availability parties that the acquisition of Common Shares by the Offeror (the "Acquisition") be effected in a manner that permits both Canadian and United States Shareholders to dispose of their Common Shares on a tax-deferred rollover basis (a "Tax Deferred Basis"). In order to achieve the foregoing objective, it is proposed that the Acquisition be effected pursuant to a Plan of Arrangement (the "Plan of Arrangement") under section 192 of the Canada Business Corporations Act ("CBCA") in a manner to permit Shareholders to obtain a rollover for Canadian income tax purposes under section 85.1, or, where the Shareholder elects, under section 85, of the Income Tax benefit shall Act (Canada) (the "Canadian Income Tax Act") and any applicable provincial tax legislation (collectively, "Canadian Income Tax Legislation") and to permit Shareholders to obtain a tax-free rollover for United States tax purposes pursuant to section 368(a)(1)(B) of the United States Internal Revenue Code. The Offeror and the Sirois Group agree to cooperate to consummate the Plan of Arrangement xx x Tax Deferred Basis for Canadian tax purposes. Proposed Steps Pursuant to the Plan of Arrangement, the following steps would be taken into account.undertaken:

Tax Effect. If any payment received by an Indemnified Party hereunder (an "Indemnity Payment") would constitute income for tax purposes to such Indemnified Party, the Indemnifying Party shall pay a Tax Gross Up to the Indemnified Party at the same time and on the same terms, as to interest and otherwise as the Indemnity Payment. The amount of any Losses Loss for which indemnification is provided under Article 10 to an Indemnitee shall be (i) increased adjusted to take into account of any net Tax cost incurred by such Indemnitee arising from the receipt or accrual of indemnity payments hereunder (grossed up for any such increase) and (ii) reduced to take account of any Tax tax benefit realized by such Indemnitee as a result in the Indemnified Party or any of its affiliates by reason of the deductibility of such Losses (Loss for which indemnification is so provided or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be (a) increased to reflect any such net Tax cost (including gross-up) or (b) reduced (or give the circumstances giving rise to a repayment by the Indemnitee in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefitLoss. For purposes of this Agreementparagraph (f), an Indemnitee any tax benefit shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and taken into account at such time asas it is received by the Indemnified Party or its affiliate. Notwithstanding the foregoing provisions of this paragraph (f), if an Indemnity Payment is included in the Indemnified Party's income pursuant to paragraph 12(1)(x) of the Canadian Income Tax Act (or an equivalent provision of any relevant provincial legislation), the Indemnified Party covenants and agrees to make an election pursuant to subsection 12(2.2) of the Canadian Income Tax Act (and the equivalent provision of any applicable provincial legislation) with respect to the Indemnity Payment to the maximum extent possible such that the amount of Taxes payable by such Indemnitee the Indemnity Payment included the Indemnified Party's income for tax purposes is increased above minimized or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losseseliminated. For purposes of this Agreementparagraph (f), an Indemnitee "Tax Gross Up" shall mean, with respect to any Indemnity Payment, such additional amount (calculated in accordance with the Calculation Method) as is necessary to place the Indemnified Party in the same after tax position as it would have been in had such Indemnity Payment been received tax free; and "Calculation Method" with respect to the calculation of any Tax Gross Up on any Indemnity Payments, shall mean that such Tax Gross Up shall be deemed calculated by using the combined federal and provincial income tax rate applicable to the Indemnified Party and, except as provided in this paragraph (f), without regard to any losses, credits, refunds or deductions that the Indemnified Party may have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises and in determining could affect the amount of tax payable on any such benefit, any subsequent Tax detriment Indemnity Payment. SCHEDULE C ALTERNATIVE TRANSACTIONS Plan of Arrangement The parties acknowledge and agree that will be 113 121 incurred because it is the intention of the availability parties that the acquisition of Common Shares by the Offeror (the "Acquisition") be effected in a manner that permits both Canadian and United States Shareholders to dispose of their Common Shares on a tax-deferred rollover basis (a "Tax Deferred Basis"). In order to achieve the foregoing objective, it is proposed that the Acquisition be effected pursuant to a Plan of Arrangement (the "Plan of Arrangement") under section 192 of the Canada Business Corporations Act ("CBCA") in a manner to permit Shareholders to obtain a rollover for Canadian income tax purposes under section 85.1, or, where the Shareholder elects, under section 85, of the Canadian Income Tax benefit shall be taken into accountAct and any applicable provincial tax legislation (collectively, "Canadian Income Tax Legislation") and to permit Shareholders to obtain a tax-free rollover for United States Tax Legislation") and to permit Shareholders to obtain a tax-free rollover for United States tax purposes pursuant to section 368(a)(1)(B) of the United States Internal Revenue Code (a "B Reorganization"). The parties agree to cooperate to consummate the Plan of Arrangement pursuant to a B Reorganization for the United States tax purposes.

Tax Effect. The amount of a Loss with respect to which the Indemnified Party is to be indemnified pursuant to Section 9.1 or 9.2 initially shall be determined without regard to any Tax benefit. However, to the extent that the Indemnified Party recognizes a Tax benefit with respect to payments made by the Indemnifying Party with respect to any payment for Losses made hereunder (a "NET TAX BENEFIT"), the Indemnifying Party shall be entitled to such Net Tax Benefit, and the Indemnified Party shall pay to the Indemnifying Party the amount of such Net Tax Benefit (but not in excess of the indemnification payment or payments actually received from the Indemnifying Party with respect to such Losses) at such time or times as and to the extent that the Indemnified Party or any Affiliate of Indemnified Party actually realizes such Net Tax Benefit through a refund of Tax or reduction in the actual amount of Taxes which the Indemnified Party or any Affiliate of Indemnified Party would otherwise have had to pay if such payment for Losses had not been made, calculated by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Losses for which indemnification is provided under Article 10 to an Indemnitee was made and treating such Tax items as the last items claimed for any taxable year; PROVIDED that, any such Net Tax Benefit shall be reduced by the amount of Tax detriment (iincluding the tax effect of any item of income or gain or other item (including the tax effect of any decrease in Tax basis) increased that increases any amounts paid or payable with respect to take account Taxes, any reduction in the amount of any refund of Tax which would otherwise have been available, the tax effect of the utilization of any net Tax cost incurred by such Indemnitee arising from operating loss or capital loss or the receipt or accrual tax effect of indemnity payments hereunder (grossed up for any such increase) and (ii) reduced to take account the utilization of any Tax benefit realized credits or other Tax attributes) that the Indemnified Party suffered as a result of any Losses (a "NET TAX DETRIMENT") calculating the amount of any such detriment by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Indemnitee Net Tax Detriment for which indemnification was made and treating such Tax items as the last items claimed for any taxable year. If any subsequent adjustments are made to any Tax Return relating to the Indemnified Party for any taxable period as a result of or in settlement of any audit, other administrative proceeding or judicial proceeding or as a result of the deductibility filing of such Losses (or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be (a) increased an amended return to reflect the consequences of any determination made in connection with any such net Tax cost (including gross-up) audit or (b) reduced (or give rise to a repayment by the Indemnitee proceeding and if such adjustment results in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefit. For purposes of this Agreement, an Indemnitee shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and at such time as, change in the amount of Taxes payable by any Net Tax Benefit or Net Tax Detriment to the Indemnified Party, appropriate payments will be made between the Indemnifying Party and the Indemnified Party in accordance with the previous sentence to properly reflect such Indemnitee is increased above or reduced below, as adjustment amount. Upon the case may beIndemnifying Party's request, the Indemnified Party shall use its commercially reasonable efforts, and shall cause its Affiliates to use their commercially reasonable efforts, to realize any Net Tax Benefit and to avoid realizing any Net Tax Detriment. Buyer and the Surviving Corporation (as successor to the Company), on the one hand, and Seller, on the other hand, agree to provide the other or its designated representatives with assistance and such documents and records reasonably requested by them that are relevant to their ability to determine when an amount is payable to the other party pursuant to this Section 9.9, including copies of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losses. For purposes of this AgreementTax Returns, an Indemnitee shall be deemed to have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises estimated tax payments, schedules, and in determining the amount of such benefit, any subsequent Tax detriment that will be 113 121 incurred because of the availability of the Tax benefit shall be taken into accountrelated supporting documents.

Tax Effect. If any payment received by an Indemnified Party hereunder (an "Indemnity Payment") would constitute income for tax purposes to such Indemnified Party, the Indemnifying Party shall pay a Tax Gross Up to the Indemnified Party at the same time and on the same terms, as to interest and otherwise, as the Indemnity Payment. The amount of any Losses Loss for which indemnification is provided under Article 10 to an Indemnitee shall be (i) increased adjusted to take into account of any net Tax cost incurred by such Indemnitee arising from the receipt or accrual of indemnity payments hereunder (grossed up for any such increase) and (ii) reduced to take account of any Tax tax benefit realized by such Indemnitee as a result the Indemnified Party or any of its affiliates by reason of the deductibility of such Losses (Loss for which indemnification is so provided or payments with respect thereto). Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be (a) increased to reflect any such net Tax cost (including gross-up) or (b) reduced (or give the circumstances giving rise to a repayment by the Indemnitee in lieu of such reduction) for any net Tax benefit only after such Indemnitee has "actually realized" such cost or benefitLoss. For purposes of this Agreementparagraph (f), an Indemnitee any tax benefit shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and taken into account at such time asas it is received by the Indemnified Party or its affiliate. Notwithstanding the foregoing provisions of this paragraph (f), if an Indemnity Payment is included in the Indemnified Party's income pursuant to paragraph 12(1)(x) of the Canadian Income Tax Act (or an equivalent provision of any relevant provincial legislation), the Indemnified Party covenants and agrees to make an election pursuant to subsection 12(2.2) of the Canadian Income Tax Act (and the equivalent provision of any applicable provincial legislation) with respect to the Indemnity Payment to the maximum extent possible such that the amount of Taxes payable by such Indemnitee the Indemnity Payment included in the Indemnified Party's income for tax purposes is increased above minimized or reduced below, as the case may be, the amount of Taxes that such Indemnitee would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Losseseliminated. For purposes of this Agreementparagraph (f), an Indemnitee "Tax Gross Up" shall mean, with respect to any Indemnity Payment, such additional amount (calculated in accordance with the Calculation Method) as is necessary to place the Indemnified Party in the same after tax position as it would have been in had such Indemnity Payment been received tax free; and "Calculation Method" with respect to the calculation of any Tax Gross Up on any Indemnity Payments, shall mean that such Tax Gross Up shall be deemed calculated by using the combined federal and provincial income tax rate applicable to the Indemnified Party and, except as provided in this paragraph (f), without regard to any losses, credits, refunds or deductions that the Indemnified Party may have "actually realized" a net Tax benefit only as of the end of the taxable year in which such benefit arises and in determining could affect the amount of tax payable on any such benefit, any subsequent Tax detriment Indemnity Payment. SCHEDULE C ALTERNATIVE TRANSACTIONS Plan of Arrangement The parties acknowledge and agree that will be 113 121 incurred because it is the intention of the availability parties that the acquisition of Common Shares by the Offeror (the "Acquisition") be effected in a manner that permits both Canadian and United States Shareholders to dispose of their Common Shares on a tax-deferred rollover basis (a "Tax Deferred Basis"). In order to achieve the foregoing objective, it is proposed that the Acquisition be effected pursuant to a Plan of Arrangement (the "Plan of Arrangement") under section 192 of the Canada Business Corporations Act ("CBCA") in a manner to permit Shareholders to obtain a rollover for Canadian income tax purposes under section 85.1, or, where the Shareholder elects, under section 85, of the Canadian Income Tax benefit shall be taken into accountAct and any applicable provincial tax legislation (collectively, "Canadian Income Tax Legislation") and to permit Shareholders to obtain a tax-free rollover for United States tax purposes pursuant to section 368(a)(1)(B) of the United States Internal Revenue Code (a "B Reorganization"). The parties agree to cooperate to consummate the Plan of Arrangement pursuant to a B Reorganization for United States tax purposes.