Common use of Conditions Precedent to Distribution Clause in Contracts

Conditions Precedent to Distribution. The following are conditions that must take place prior to the consummation of the Distribution. The conditions are for the sole benefit of 3Com and shall not give rise to or create any duty on the part of 3Com or the 3Com Board of Directors to waive or not waive any such condition. (a) IRS Ruling. 3Com shall have obtained a private letter ruling from the Internal Revenue Service in form and substance satisfactory to 3Com (in its sole discretion), and such ruling shall remain in effect as of the Distribution Date, to the effect that (i) the transfer by the 3Com Group to the Palm Group of the property, subject to liabilities, held by 3Com of the Palm Business, and Palm's assumption of liabilities held by 3Com related to the Palm Business, followed by the distribution by 3Com of all of its Palm stock to the stockholders of 3Com, will qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code; (ii) no gain or loss will be recognized by 3Com on its transfer of property of the Palm Business to Palm; (iii) no gain or loss will be recognized by Palm on its receipt of property of the Palm Business from 3Com; and (iv) no gain or loss will be recognized by (and no amount will otherwise be included in the income of) the stockholders of 3Com upon their receipt of Palm common stock pursuant to the Distribution.