Common use of ADVERSE EFFECT ISSUES Clause in Contracts

ADVERSE EFFECT ISSUES. (a) The procedures set forth in Sections 6.03(c) through 6.06(f) shall apply if - (i) in an examination of a Federal income Tax Return of one of the Parties or any member of its Group (the "Examined Party"), the IRS raises one or more Adverse Effect Issues, or (ii) the Examined Party (whether or not in the course of any audit, examination or other proceeding relating to the determination of its liability for Federal income Taxes) files an amended Federal income Tax Return or claim for refund of Federal income Taxes or otherwise takes a position with the IRS inconsistent with a Federal income Tax Return already filed, if such amended Federal income Tax Return, claim or position is likely, itself or in combination with other issues, to be an Adverse Effect Issue. (b) One or more issues are "Adverse Effect Issues" if, in the reasonable judgment of the Examined Party, the aggregate effect of all such issues with respect to the Periods within an examination cycle or similar proceeding of the Examined Party is significantly likely to increase the liability for Federal income Taxes (less interest) of the Party that is not the Examined Party and the members of its Group (the "Affected Party") by at least $250,000. Only for purposes of determining whether an issue is an Adverse Effect Issue, the amount of such increase in liability for Federal income Taxes shall be measured under the following principles: (i) All increases (less any offsetting decreases resulting from the same or a related item) in the Affected Party's liability for Federal income Tax likely to result from such Adverse Effect Issue for all Periods shall be taken into account, provided, however, that any decrease in liability for Federal income Tax that may result from the sale or disposition of property not expected to be sold or disposed of (for example, stock of an operating subsidiary), or similar items, shall not be taken into account. (ii) Computations of liability for Federal income Tax shall be based on the highest marginal rate of Federal income Tax applicable to the Affected Party for each of the Periods involved. (iii) There shall be taken into account only increases in liability for Federal income Tax as compared with the return position taken by the Affected Party. (c) In each case, the Parties shall use their reasonable best efforts to identify issues that are, or in combination with other issues could become, Adverse Effect Issues. (i) Promptly upon becoming aware that any Adverse Effect Issue has been raised as described in Section 6.06(a)(i), the Examined Party shall provide notice of such event to the Affected Party. Such notice shall include a description of the Adverse Effect Issue, a computation (as described in Section 6.06(b)(ii) showing the expected increase in the Affected Party's liability for Federal income Tax resulting therefrom, and copies of all correspondence between the Examined Party and the IRS (including information document requests, responses thereto and notices of proposed adjustment). (ii) No less than 30 days before filing any amended return or claim for refund or taking any action described in Section 6.06(a)(ii), the Examined Party shall (x) provide notice to the Affected Party (such Notice to include the information and material listed with respect to the notice provided in Section 6.06(c)(i) and copies of all amended returns, claims for refund or other documents proposed to be filed with the IRS with respect to such Adverse Effect Issue) and (y) consult with the Affected Party regarding such action. (d) Within 30 days after the notice provided in Section 6.06(c)(i) or Section 6.06(c)(ii), the Affected Party may notify the Examined Party that the Affected Party wishes to participate in proceedings relating to the disposition of any or all of the Adverse Effect Issues. If the Affected Party provides such notice, the procedures for Joint Contest set forth in Section 6.06(b) shall apply, with the Examined Party being in control of the proceeding. Provided, however, that (i) if the Affected Party does not provide such notice within such time period, the proceeding shall continue without participation of the Affected Party and without regard to Sections 6.06(e) and 6.06(f) and (ii) the Affected Party's right to participate in the proceedings shall terminate if the Examined Party makes a reasonable determination, after consultation with the Affected Party, that, notwithstanding the Adverse Effect Items, the total net increase in the Affected Party's liability for Taxes (determined as set forth in Section 6.06(b)) from all adjustments relating to the Period or Periods in the examination cycle or similar proceeding is less than the amount set forth in Section 6.06(b). (e) Subject to Section 6.06(f), the Examined Party shall settle any Adverse Effect Issue with the IRS only with the prior consent of the Affected Party. The Parties shall attempt in good faith to agree as to the terms of a proposed settlement. If the Parties are unable to agree, the procedures set forth in Section 6.03(b) or Section 6.03(c) as the case may be, shall apply to such Adverse Effect Issue. (f) Notwithstanding Section 6.06(e), the Examined Party may settle with the IRS any Adverse Effect Issue without consent of the Affected Party, if, after consultation with the Affected Party, the Examined Party reasonably determines that (i) a settlement of such Adverse Effect Issue is desirable to the Examined Party; (ii) in light of all the circumstances (including the likelihood of various positions of the Parties being sustained in further proceedings, the cost of such proceedings and the impact of settlement on other issues), the overall terms of the settlement do not discriminate against the Affected Party; and (iii) other

ADVERSE EFFECT ISSUES. (a) The procedures set forth in Sections 6.03(c6.06(c) through 6.06(f) shall apply if - (i) in an examination of a Federal income Tax Return of one of the Parties or any member of its Group (the "Examined Party"), the IRS raises one or more Adverse Effect Issues, or (ii) the Examined Party (whether or not in the course of any audit, examination or other proceeding relating to the determination of its liability for Federal income Taxes) files an amended Federal income Tax Return or claim for refund of Federal income Taxes or otherwise takes a position with the IRS inconsistent with a Federal income Tax Return already filed, if such amended Federal income Tax Return, claim or position is likely, itself or in combination with other issues, to be an Adverse Effect Issue. (b) One or more issues are "Adverse Effect Issues" if, in the reasonable judgment of the Examined Party, the aggregate effect of all such issues with respect to the Periods within an examination cycle or similar proceeding of the Examined Party is significantly likely to increase the liability for Federal income Taxes (less interest) of the Party that is not the Examined Party and the members of its Group (the "Affected Party") by at least $250,000. Only for purposes of determining whether an issue is an Adverse Effect Issue, the amount of such increase in liability for Federal income Taxes shall be measured under the following principles: (i) All increases (less any offsetting decreases resulting from the same or a related item) in the Affected Party's liability for Federal income Tax likely to result from such Adverse Effect Issue for all Periods shall be taken into account, provided, however, that any decrease in liability for Federal income Tax that may result from the sale or disposition of property not expected to be sold or disposed of (for example, stock of an operating subsidiary), or similar items, shall not be taken into account. (ii) Computations of liability for Federal income Tax shall be based on the highest marginal rate of Federal income Tax applicable to the Affected Party for each of the Periods involved. (iii) There shall be taken into account only increases in liability for Federal income Tax as compared with the return position taken by the Affected Party. (c) In each case, the Parties shall use their reasonable best efforts to identify issues that are, or in combination with other issues could become, Adverse Effect Issues. (i) Promptly upon becoming aware that any Adverse Effect Issue has been raised as described in Section 6.06(a)(i), the Examined Party shall provide notice of such event to the Affected Party. Such notice shall include a description of the Adverse Effect Issue, a computation (as described in Section 6.06(b)(ii)) showing the expected increase in the Affected Party's liability for Federal income Tax resulting therefrom, and copies of all correspondence between the Examined Party and the IRS (including information document requests, responses thereto and notices of proposed adjustment). (ii) No less than 30 days before filing any amended return or claim for refund or taking any action described in Section 6.06(a)(ii), the Examined Party shall (x) provide notice to the Affected Party (such Notice to include the information and material listed with respect to the notice provided in Section 6.06(c)(i) and copies of all amended returns, claims for refund or other documents proposed to be filed with the IRS with respect to such Adverse Effect Issue) and (y) consult with the Affected Party regarding such action. (d) Within 30 days after the notice provided in Section 6.06(c)(i) or Section 6.06(c)(ii), the Affected Party may notify the Examined Party that the Affected Party wishes to participate in proceedings relating to the disposition of any or all of the Adverse Effect Issues. If the Affected Party provides such notice, the procedures for Joint Contest set forth in Section 6.06(b6.02(b) shall apply, with the Examined Party being in control of the proceeding. Provided, however, that (i) if the Affected Party does not provide such notice within such time period, the proceeding shall continue without participation of the Affected Party and without regard to Sections 6.06(e) and 6.06(f) ), and (ii) the Affected Party's right to participate in the proceedings shall terminate if the Examined Party makes a reasonable determination, after consultation with the Affected Party, that, notwithstanding the Adverse Effect Items, the total net increase in the Affected Party's liability for Taxes (determined as set forth in Section 6.06(b)) from all adjustments relating to the Period or Periods in the examination cycle or similar proceeding is less than the amount set forth in Section 6.06(b). (e) Subject to Section 6.06(f), the Examined Party shall settle any Adverse Effect Issue with the IRS only with the prior consent of the Affected Party. The Parties shall attempt in good faith to agree as to the terms of a proposed settlement. If the Parties are unable to agree, the procedures set forth in Section 6.03(b) or Section 6.03(c) ), as the case may be, shall apply to such Adverse Effect Issue. (f) Notwithstanding Section 6.06(e), the Examined Party may settle with the IRS any Adverse Effect Issue without consent of the Affected Party, if, after consultation with the Affected Party, the Examined Party reasonably determines that (i) a settlement of such Adverse Effect Issue is desirable to the Examined Party; (ii) in light of all the circumstances (including the likelihood of various positions of the Parties being sustained in further proceedings, the cost of such proceedings and the impact of settlement on other issues), the overall terms of the settlement do not discriminate against the Affected Party; and (iii) other

ADVERSE EFFECT ISSUES. (a) The procedures set forth in Sections 6.03(c6.06(c) through 6.06(f) shall apply if - (i) in an examination of a Federal income Tax Return of one of the Parties or any member of its Group (the "Examined Party"), the IRS raises one or more Adverse Effect Issues, or (ii) the Examined Party (whether or not in the course of any audit, examination or other proceeding relating to the determination of its liability for Federal income Taxes) files an amended Federal income Tax Return or claim for refund of Federal federal income Taxes or otherwise takes a position with the IRS inconsistent with a Federal income Tax Return already filed, if such amended Federal income Tax Return, claim or position is likely, itself or in combination with other issues, to be an Adverse Effect Issue. (b) One or more issues are "Adverse Effect Issues" if, in the reasonable judgment of the Examined Party, the aggregate effect of all such issues with respect to the Periods within an examination cycle or similar proceeding of the Examined Party is significantly likely to increase the liability for Federal income Taxes (less interest) of the Party that is not the Examined Other Party and the members of its Group (the "Affected Party") by at least $250,000. Only for purposes of determining whether an issue is an Adverse Effect Issue, the amount of such increase in liability for Federal income Taxes shall be measured under the following principles: (i) All increases (less any offsetting decreases resulting from the same or a related item) in the Affected Party's liability for Federal income Tax likely to result from such Adverse Effect Issue for all Periods shall be taken into account, provided, however, that any decrease in liability for Federal income Tax that may result from the sale or disposition of property not expected to be sold or disposed of (for example, stock of an operating subsidiary), or similar items, shall not be taken into account. (ii) Computations of liability for Federal income Tax shall be based on the highest marginal rate of Federal income Tax applicable to the Affected Party for each of the Periods involved. (iii) There shall be taken into account only increases in liability for Federal income Tax as compared with the return position taken by the Affected Party. (c) In each case, the Parties shall use their best reasonable best efforts to identify issues that are, or in combination with other issues could become, Adverse Effect Issues. (i) Promptly upon becoming aware that any Adverse Effect Issue has been raised as described in Section 6.06(a)(i), the Examined Party shall provide notice of such event to the Affected Party. Such notice shall include a description of the Adverse Effect Issue, a computation (as described in Section 6.06(b)(ii)) showing the expected increase in the Affected Party's liability for Federal income Tax resulting therefrom, and copies of all correspondence between the Examined Party and the IRS (including information document requests, responses thereto and notices of proposed adjustment). (ii) No less than 30 days before filing any amended return or claim for refund or taking any action described in Section 6.06(a)(ii), the Examined Party shall (x) provide notice to the Affected Party (such Notice to include the information and material listed with respect to the notice provided in Section 6.06(c)(i) and copies of all amended returns, claims for refund or other documents proposed to be filed with the IRS with respect to such Adverse Effect Issue) and (y) consult with the Affected Party regarding such action. (d) Within 30 days after the notice provided in Section 6.06(c)(i) or Section 6.06(c)(ii), the Affected Party may notify the Examined Party that the Affected Party wishes to participate in proceedings relating to the disposition of any or all of the Adverse Effect Issues. If the Affected Party provides such notice, the procedures for Joint Contest set forth in Section 6.06(b6.02(b) shall apply, with the Examined Party being in control of the proceeding. Provided, however, that (i) if the Affected Party does not provide such notice within such time period, the proceeding shall continue without participation of the Affected Party and without regard to Sections 6.06(e) and 6.06(f) ), and (ii) the Affected Party's right to participate in the proceedings shall terminate if the Examined Party makes a reasonable determination, after consultation with the Affected Party, that, notwithstanding the Adverse Effect Items, the total net increase in the Affected Party's liability for Taxes (determined as set forth in Section 6.06(b)) from all adjustments relating to the Period or Periods in the examination cycle or similar proceeding is less than the amount set forth in Section 6.06(b). (e) Subject to Section 6.06(f), the Examined Party shall settle any Adverse Effect Issue with the IRS only with the prior consent of the Affected Party. The Parties shall attempt in good faith to agree as to the terms of a proposed settlement. If the Parties are unable to agree, the procedures set forth in Section 6.03(b) or Section 6.03(c) ), as the case may be, shall apply to such Adverse Effect Issue. (f) Notwithstanding Section 6.06(e), the Examined Party may settle with the IRS any Adverse Effect Issue without consent of the Affected Party, if, after consultation with the Affected Party, the Examined Party reasonably determines that (i) a settlement of such Adverse Effect Issue is desirable to the Examined Party; (ii) in light of all the circumstances (including the likelihood of various positions of the Parties being sustained in further proceedings, the cost of such proceedings and the impact of settlement on other issues), the overall terms of the settlement do not discriminate against the Affected Party; and (iii) otherother issues (which may or may not be Adverse Effect Issues) will be settled, and it is not practical to settle such other issues on the proposed terms without a settlement of the Adverse Effect Issue. Before determining that a proposed settlement of other issues is not practical without a settlement of the Adverse Effect Issue, the Examined Party will use its reasonable best efforts to secure a settlement of the other issues while leaving the Adverse Effect Issue open for further proceedings (for example, by entering into an agreement on IRS Form 870AD or similar form to close proceedings relating to one or more Periods but reserving the Adverse Effect Issue for further proceedings).