Common use of Income Taxes in Respect of Joint Returns for Post-2017, Pre-Deconsolidation Periods Clause in Contracts

Income Taxes in Respect of Joint Returns for Post-2017, Pre-Deconsolidation Periods. For purposes of this Agreement, with respect to any Joint Income Tax Return for any Post-2016 Period that ends on or before the Deconsolidation Date, Income Taxes that are attributable to the Newmark Business shall be the hypothetical stand-alone Tax Liability of the Newmark Group (and/or any of its members) for such Tax Period with respect to a pro forma Tax Return of members of the Newmark Group that takes into account only the relevant operations, assets and liabilities (and relevant Tax Items (including, for the avoidance of doubt, deductions pursuant to the New York City Unincorporated Business Tax) attributable to or arising out of such relevant operations, assets and liabilities) of the Newmark Business and prepared on the following basis, as determined by BGC Partners in its sole good faith discretion: (a) the Separation (including the Partnership Divisions and the Contribution) shall be assumed to have occurred immediately before January 1, 2017, such that all of the operations, assets and liabilities of the Newmark Business held by members of the Newmark Group as of immediately before the IPO are deemed to have been held by such members of the Newmark Group (and that all such members of the Newmark Group had been in existence) during the period beginning on (and including) January 1, 2017 and ending at the IPO; (b) to the extent that members of the Newmark Group would be (or would have been (x) but for their inclusion in a Joint Return or (y) had they been in existence) entitled to file the relevant Tax Return on a consolidated, combined, unitary or similar basis, as applicable, solely with other members of the Newmark Group, such Tax Liability shall be determined as though such members of the Newmark Group filed on a consolidated, combined, unitary or similar basis, as applicable, solely with such other members of the Newmark Group; (c) except as provided in Section 3.02(d), the same elections, accounting methods and conventions used on the relevant Joint Income Tax Return, to the extent applicable, shall be used; (d) taxable income of the Newmark Group and/or any of its members shall be calculated by taking into account losses, credits, and other Tax Attributes of Newmark and the relevant members of the Newmark Group, in each case, solely to the extent arising after December 31, 2016 and on or before the Deconsolidation Date, and treating all such Tax Attributes as being subject to the limitations under applicable Tax Law (including limitations on carrybacks and carryforwards) that would apply if the relevant members of the Newmark Group had filed Tax Returns on the basis set forth in this Section 3.02 for all Tax Periods (or portions thereof) relevant to the computation; provided, that the Newmark Group and/or its members shall be deemed to have relinquished, waived or otherwise foregone any carrybacks to any taxable period (or portion thereof) beginning prior to January 1, 2017, and if any such Tax Attribute would, under applicable Tax Law be required to be carried back to such a period (or portion thereof), such Tax Attribute shall be deemed to be available to the Newmark Group on a carryforward basis (subject to the limitations under applicable Tax Law on such carryforwards). For the avoidance of doubt, for purposes of calculating any available carryforward or carryback of Tax Attributes pursuant to this clause (d), the utilization of any such Tax Attributes by members of the BGC Group shall be disregarded; (e) any Income Tax deductions in respect of Compensatory Equity Interests shall be allocated in accordance with the principles set forth in Section 6.02(a); and (f) calculations pursuant to the foregoing provisions of this Section 3.02 shall not be deemed to result in a Refund to the Newmark Group (and/or any of its members) unless the Newmark Group or the Newmark Business generates a Tax Attribute for a Post-2016 Period determined under the principles of this Section 3.02 and a member of the BGC Group Actually Realizes a Tax Benefit as a result of the utilization of such Tax Attribute, as determined by BGC Partners in its sole good faith discretion (any Refund to the Newmark Group (and/or any of its members) determined pursuant to this Section 3.02 (after application of the limitations set forth in this Section 3.02(f)), a “Hypothetical Newmark Refund”). For the avoidance of doubt, the BGC Entities shall not be required to pay any amounts to Newmark or any member of the Newmark Group except as required under Section 6.