WHEREAS, if any portion of the Retained Shares has not been disposed of pursuant to a Subsequent Distribution within the 12-month period, Parent will dispose of such Retained Shares in all events within five years of the Distribution;
WHEREAS, following the Distribution, Parent shall transfer the SpinCo Securities to certain Persons (the Debt-for-Debt Exchange Parties) in exchange for certain debt obligations of Parent held by the Debt-for-Debt Exchange Parties as principals for their own account (the Debt-for-Debt Exchange);
WHEREAS, for U.S. federal income tax purposes, the Contribution, the Distribution, any Subsequent Distribution, the Debt-for-Debt Exchange, and any Debt-for-Equity Exchange, taken together, are intended to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355, 368(a)(1)(D) and 361(c) of the Code;
WHEREAS, SpinCo has been incorporated for these purposes but holds no assets and has engaged in no activities; and
WHEREAS, SpinCo and Parent have prepared, and SpinCo has filed with the U.S. Securities and Exchange Commission, the Form 10, which includes the Information Statement, and which sets forth disclosures concerning SpinCo, the Separation and the Distribution;
WHEREAS, the parties hereto wish to provide for the payment of Taxes and entitlement to Refunds thereof, allocate responsibility and provide for cooperation in connection with the filing of returns in respect of Taxes, and provide for certain other matters relating to Taxes.
WHEREAS, the Parties acknowledge that this Agreement, the Separation Agreement and the other Ancillary Agreements represent the integrated agreement of Parent and SpinCo relating to the Separation and the Distribution, are being entered into together and would not have been entered into independently.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Separation Agreement. For purposes of this Agreement, the following terms shall have the meanings set forth below:
Actually Realized or Actually Realizes shall mean, for purposes of determining the timing of the incurrence of any Spin-Off Tax Liability, Income Tax Liability or Other Tax Liability or the realization of a Refund (or any related Tax cost or Tax Benefit), whether by receipt or as a credit or other offset to Taxes payable, by a Person in respect of any payment, transaction, occurrence or event, the time at which the amount of Taxes paid (or Refund realized) by such Person is increased above (or reduced below) the amount of Taxes that such Person would have been required to pay (or Refund that such Person would have realized) but for such payment, transaction, occurrence or event.