Audits and Other Tax Proceedings. With regard to audits or other examinations, or judicial or administrative proceedings relating to Taxes (“Tax Proceedings”): (a) Each of Lennar and SpinCo shall notify the other Party in writing of any communication with respect to any pending or threatened Tax Proceeding in connection with any Tax liability (or any issue related thereto) of Lennar or its subsidiaries, or SpinCo or its subsidiaries, respectively, for which the other Party may be responsible pursuant to this Agreement within ten (10) days of receipt. Each of Lennar and SpinCo shall include with such notification a true, correct and complete copy of any written communication, and an accurate and complete written summary of any oral communication, received by Lennar or its subsidiaries, or SpinCo or its subsidiaries, respectively. The failure of Lennar or SpinCo timely to forward such notification in accordance with the immediately preceding sentence shall not relieve SpinCo or Lennar, respectively, of any obligation to pay such Tax liability or indemnify Lennar and its subsidiaries, or SpinCo and the Transferred Entities, respectively under this Article IV, except to the extent that the failure timely to forward such notification actually prejudices the ability of SpinCo or Lennar to contest such Tax liability or increases the amount of such Tax liability. (b) Lennar will control any Tax Proceedings relating to Consolidated Returns. If any Tax Proceeding would reasonably be expected to affect any Tax liability of SpinCo or any of its subsidiaries with respect to all or portions of any taxable periods ending after the Distribution Date, Lennar will keep SpinCo reasonably informed as to the status and resolution of the relevant aspects of such Tax Proceedings. (c) With regard to Tax Proceedings not relating to Consolidated Returns, Xxxxxx will control any Tax Proceeding relating to SpinCo or any of its subsidiaries (including any of the Transferred Entities) for a taxable period that ends on or prior to the Distribution Date (a “Pre-Distribution Tax Proceeding”). SpinCo may, at its own cost, participate in a Pre-Distribution Tax Proceeding. In relation to any Pre-Distribution Tax Proceeding, Lennar shall (A) consult with SpinCo reasonably in advance of taking any significant action in connection with such Tax Proceeding, (B) consult with SpinCo and offer SpinCo a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Proceeding, (C) defend such Tax Proceeding diligently and in good faith as if it were the only party in interest in connection with such Tax Proceeding, and (D) provide SpinCo copies of any written materials relating to such Tax Proceeding received from the relevant tax authority. Notwithstanding anything in the preceding sentence to the contrary, the final determination of the positions taken, including with respect to settlement or other disposition, in (i) any Pre-Distribution Tax Proceeding or (ii) any Tax Proceeding relating to a Consolidated Return shall be made in the sole discretion of Lennar and shall be final. (d) SpinCo will control all Tax Proceedings relating to SpinCo or any of its subsidiaries that are not described in Sections 4.6(b) and 4.6(c). With respect to a Tax Proceeding not described in Sections 4.6(b) and 4.6(c) and relating to a period that begins on or before the Distribution Date and ends after the Distribution Date (a “Straddle Period”), SpinCo shall (A) consult with Lennar reasonably in advance of taking any significant action in connection with such Tax Proceeding, (B) consult with Xxxxxx and offer Lennar a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Proceeding, (C) defend such Tax Proceeding diligently and in good faith as if it were the only party in interest in connection with such Tax Proceeding, and (D) provide Lennar copies of any written materials relating to such Tax Proceeding received from the relevant tax authority. With respect to any Straddle Period Tax Proceeding that could reasonably be expected to result in a material liability for additional Taxes for a single Tax year of Lennar or its Subsidiaries, Lennar shall be entitled to participate in such Tax Proceeding, and SpinCo shall not settle, compromise, or abandon any such Tax Proceeding without obtaining the prior written consent of Lennar, which consent shall not be unreasonably withheld.
Appears in 1 contract
