Common use of NOL Carrybacks Clause in Contracts

NOL Carrybacks. (a) Notwithstanding Section 3.2 of the Tax Sharing Agreement, EchoStar and/or other members of the EchoStar Group shall be permitted to carry back U.S. $466,755,038 EchoStar/DISH Tax Sharing Letter (August 2018) in net operating losses attributable to EchoStar’s 2009 taxable year (“SATS 2009 NOLs”) to offset Taxes attributable to DISH’s U.S. federal Income Tax Return for the year ended December 31, 2008. For the avoidance of doubt, Section 3.2 of the Tax Sharing Agreement shall continue in full force and effect and without modification with respect to any carry back losses, credits or other Tax Attributes other than the SATS 2009 NOLs. (b) Subject to paragraph 1(e) of this letter, to the extent EchoStar does not receive a Tax Refund attributable to the SATS 2009 NOLs that it would have Otherwise Utilized in a given taxable year after 2009, then DISH shall owe to EchoStar an amount equal to the Adjusted Utilization Amount for each such year at the time such SATS 2009 NOLs would have been Otherwise Utilized. (c) The DISH Notional Amount will accrue interest monthly at a rate per annum equal to the Interest Rate beginning on the date that DISH receives payment from the IRS for any applicable portion of the SATS 2009 NOLs, until the DISH Notional Amount is reduced to zero. For the avoidance of doubt: (i) no amount accrued under this paragraph 1(c) is due and payable except in accordance with paragraph 1(d); (ii) it is understood that the DISH Notional Amount is not an obligation payable by DISH but is merely a notional amount for calculating other amounts that may be payable; (iii) in the event that the Applicable Tax Rate changes at any time from the Effective Date until the DISH Notional Amount is reduced to zero, the amount of interest accrued will be based upon the then current DISH Notional Amount as of the effective date of the newly enacted Applicable Tax Rate; and (iv) any interest accrued and not already paid prior to any such newly enacted Applicable Tax Rate shall be recalculated (either up or down) for the entire period based upon the then current DISH Notional Amount as of the effective date of the newly enacted Applicable Tax Rate. (d) The DISH Notional Amount shall be reduced (but not below zero) by the amounts payable by DISH pursuant to paragraph 1(b) of this letter at the time such amounts are paid pursuant to paragraph 1(e) of this letter. To the extent that the DISH Notional Amount is reduced pursuant to the previous sentence, DISH shall owe to EchoStar at the time of such reduction the interest that has accrued (in accordance with paragraph 1(c)) on the amount of the relevant Adjusted Utilization Amount. (e) No earlier than December 15 of each calendar year (each such year, the “Applicable Year”), EchoStar shall provide DISH with a written itemized summary and supporting documentation (in sufficient detail to, among other things, apprise DISH of any tax planning and/or tax deferral strategies being implemented by EchoStar), of all amounts that arise pursuant to paragraphs 1(b) and 1(d) of this letter with EchoStar/DISH Tax Sharing Letter (August 2018) respect to such Applicable Year (the “EchoStar Notice”). Such amounts for each Applicable Year shall be paid by DISH to EchoStar within sixty (60) days following the later of (i) the day upon which DISH receives the EchoStar Notice for such Applicable Year and (ii) the day upon which DISH has received any payment from the IRS related to the SATS 2009 NOLs (in either case, the applicable “Payment Date”), in immediately available funds via wire transfer; provided, however, that if any applicable Payment Date falls on a weekend or a legal holiday in New York, New York, or any other day on which commercial banks in that location are authorized by law or governmental decree to close, such payments shall be made on the first business day following the Payment Date. For the avoidance of doubt, no amounts shall be due and payable by DISH under this letter unless: (i) DISH has received a payment from the IRS related to the SATS 2009 NOLs (and in any event, only to the extent thereof); and (ii) the obligations under section 5(b) of the First Tax Addendum have been fully satisfied; provided that in the Applicable Year in which DISH’s obligations under section 5(b) of the First Tax Addendum are required to be fully paid and satisfied with no additional amounts thereafter being due and payable, DISH shall be obligated to pay EchoStar in such Applicable Year any amounts owed with respect to the prior Applicable Year under this letter pursuant to the payment terms contained in this paragraph 1(e) (i.e., no later than the applicable Payment Date regardless of whether and/or when the amounts payable under section 5(b) of the First Tax Addendum are actually paid or are required to be paid). For illustrative purposes only, assuming: (i) EchoStar has a tax liability of $50 million for a particular Applicable Year; and (ii) the remaining amount DISH is obligated to pay under section 5(b) of the First Tax Addendum is $30 million, then the $20 million that DISH is obligated to pay pursuant to this paragraph 1(e) for such Applicable Year would be paid pursuant to the payment terms contained in this paragraph 1(e) (i.e., no later than the applicable Payment Date regardless of whether and/or when the amounts payable under section 5(b) of the First Tax Addendum are actually paid or are required to be paid). (f) If a Final Determination results in the amount of SATS 2009 NOLs that DISH can carry back to offset Taxes attributable to its U.S. federal Income Tax Return for the year ended December 31, 2008 being less than U.S. $466,755,038 (such lower amount being the “Reduced SATS 2009 NOLs”), then paragraph 1(b) shall be applied by substituting the Reduced SATS 2009 NOLs for the SATS 2009 NOLs in any determinations under paragraph 1(b), and the DISH Notional Amount shall be automatically decreased by an amount equal to the difference between the SATS 2009 NOLs and the Reduced SATS 2009 NOLs. If the application of this paragraph 1(f) results in a reduction in the amount of any payments previously EchoStar/DISH Tax Sharing Letter (August 2018) determined under paragraph 1(b) and paid by DISH to EchoStar pursuant to paragraph 1(e), then EchoStar shall pay to DISH the difference between the originally determined and paid amount and the re-determined amount within sixty (60) days of the date of the Final Determination, it being understood that present value or time value or similar concepts shall be disregarded in calculating any such payments to DISH under this paragraph 1(f). (g) If a Final Determination results in the amount of SATS 2009 NOLs that DISH can carry back to offset Taxes attributable to its U.S. federal Income Tax Return for the year ended December 31, 2008 being greater than U.S. $466,755,038 (such higher amount being the “Increased SATS 2009 NOLs”), then paragraph 1(b) shall be applied by substituting the Increased SATS 2009 NOLs for the SATS 2009 NOLs in any determinations under paragraph 1(b), and the DISH Notional Amount shall be automatically increased by an amount equal to the difference between the Increased SATS 2009 NOLs and the SATS 2009 NOLs. If the application of this paragraph 1(g) results in an increase in the amount of any payments previously determined under paragraph 1(b) and paid by DISH to EchoStar pursuant to paragraph 1(e), then DISH shall pay to EchoStar the difference between the originally determined and paid amount and the re-determined amount within sixty (60) days of the date of the Final Determination, it being understood that present value or time value or similar concepts shall be disregarded in calculating any such payments to EchoStar under this paragraph 1(g).