Income Tax Liability. With respect to each SHLP Taxpayer and each taxable year, an amount equal to: (a) the aggregate net taxable income attributable to "net capital gains" (as reduced under the Code (or comparable provision of state tax law) by the total amount of net ordinary loss, if any) allocated to such SHLP Taxpayer in the current and all preceding taxable years beginning on or after the Effective Date on account of its direct or indirect ownership interests in the Company (taking into account any
... allocations to such SHLP Taxpayer pursuant to the Determination of any Proceeding in respect of a taxable year beginning on or after the Effective Date), multiplied by the Applicable Rate on such net capital gains, plus (b) the aggregate net taxable income attributable to "ordinary income" allocated to such SHLP Taxpayer in the current and all preceding taxable years beginning on or after the Effective Date on account of its direct or indirect ownership interests in the Company (taking into account any allocations to such SHLP Taxpayer pursuant to the Determination of any Proceeding in respect of a taxable year beginning on or after the Effective Date), multiplied by the Applicable Rate on such net capital gains, minus (c) the amount of tax credits that is allocated to any SHLP Taxpayer on account of its direct or indirect ownership interest in SHLP for such taxable year. For purposes of calculating the Income Tax Liability of each SHLP Taxpayer under this Agreement, the aggregate net taxable income (or loss) of each SHLP Taxpayer shall be assumed to consist solely of items of income or loss allocated to such SHLP Taxpayer by the Company. For the sake of clarity, in each case set forth in clauses (a) and (b) above, all or any portion of any net operating losses or capital losses of an SHLP Taxpayer that arises in any taxable year beginning on or after the Effective Date and may be carried forward and used to offset income allocated to such SHLP Taxpayer by the Company for a subsequent taxable year under the Code (or comparable provision of state tax law) shall be taken into account for purposes of calculating the aggregate net taxable income attributable to "net capital gains" and the aggregate net taxable income attributable to "ordinary income" for such subsequent taxable year.
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