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 MRV and shall not give rise to or create any duty on the part of MRV or the MRV Board of Directors to waive or not waive any such condition. (a) IRS Ruling. MRV shall have obtained a private letter ruling from the Internal Revenue Service in form and substance satisfactory to MRV (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 MRV Group to the Luminent Group of the property, subject to liabilities, held by MRV of the Luminent Business, and Luminent's assumption of liabilities held by MRV related to the Luminent Business, followed by the distribution by MRV of all of its Luminent stock to the stockholders of MRV, 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 MRV on its transfer of property of the Luminent Business to Luminent; (iii) no gain or loss will be recognized by Luminent on its receipt of property of the Luminent Business from MRV; and (iv) no gain or loss will be recognized by (and no amount will otherwise be included in the income of) the stockholders of MRV upon their receipt of Luminent common stock pursuant to the Distribution.