Common use of Restructuring Taxes Clause in Contracts

Restructuring Taxes. (i) Notwithstanding any other provision of this Agreement to the contrary, and except as otherwise provided in this Section 3.03(a) or in Section 9.03 of the Distribution Agreement, New Xxxxxx shall pay or cause to be paid, and shall fully indemnify and hold harmless the Company from and against, all Restructuring Taxes, including all liability, costs and expenses associated with claims with respect to such Restructuring Taxes asserted by third parties against any member of the Company Group. New Xxxxxx hereby assumes and agrees to pay prior to the due date thereof all such Restructuring Taxes, which payment may be made either directly to the appropriate taxing authority by New Xxxxxx (provided that New Xxxxxx shall provide the Company with written notice of such payment at least ten business days prior to the due date of the corresponding Tax Return and provide proof of such payment within five business days of making such payment) or to the Company which shall then forward such New Xxxxxx payment to the appropriate taxing authority. (ii) Anything in this Section 3.03(a) to the contrary notwithstanding, Section 3.03(a) hereof shall not apply to any Restructuring Taxes to the extent that all or any portion of such Restructuring Taxes would not have resulted but for an act or omission of the Company or any of its affiliates, a misrepresentation on the part of the Company made in connection with the opinions of counsel described in Section 6.03 of the Distribution Agreement, or any other post Distribution Date transaction involving either the stock or assets of the Company or any of its affiliates. (b) If the Company is otherwise required to recognize gain pursuant to Code Section 311 with respect to the Distribution, then, to the extent permitted by law or regulation, the Company, if so requested by New Xxxxxx, shall elect pursuant to Code Section 336(e) to treat the Distribution as a disposition of all the assets of New Xxxxxx; provided, that the Company shall not be required to make any such election if the Company determines in good faith that such election would cause a material Tax Detriment or other material adverse effect to any member of the Company Group.

Restructuring Taxes. (i) Notwithstanding any other provision of this ------------------- Agreement to the contrary, and except as otherwise provided in this Section 3.03(a) or in Section 9.03 of the Distribution Agreement, New Xxxxxx shall pay or cause to be paid, and shall fully indemnify and hold harmless the Company from and against, all Restructuring Taxes, including all liability, costs and expenses associated with claims any liability with respect to such Restructuring Taxes asserted by third parties shall be allocated as follows: (a) Liability Resulting from a New GranCare Tainting Act. In the event that ---------------------------------------------------- GCI is liable for Restructuring Taxes because the Distribution failed to meet the requirements of Sections 368(a)(1)(D) and 355 of the Code for nonrecognition of gain or loss due solely to a New GranCare (1) the Restructuring Taxes; (2) any claim against GCI or any member of the Company Group. New Xxxxxx hereby assumes and agrees Post- Distribution GCI Group for liability to pay prior to the due date thereof all such Restructuring Taxes, which payment may be made either directly to the appropriate taxing authority by New Xxxxxx (provided that New Xxxxxx shall provide the Company with written notice shareholders of such payment at least ten business days prior to the due date GCI arising out of the corresponding Tax Return determination that the Distribution failed to meet the requirements of Section 355 of the Code for nonrecognition of gain or loss; and provide proof (3) any and all other liability that arises as a direct consequence of, or would not have otherwise arisen but for, the determination that GCI is liable for the Restructuring Taxes as a result of the New GranCare Tainting Act. For purposes of this Section 4.1, any failure of the Distribution to meet the requirements of Code Sections 368(a)(1)(D) and 355 shall be treated as due solely to a New GranCare Tainting Act if any of the following items shall have occurred; provided, however, that none of the items set forth in 4.1(c)(i)-(v) shall have occurred first: (i) A merger or liquidation of New GranCare, or an acquisition of the outstanding stock of New GranCare which acquisition the New GranCare Board of Directors consents or otherwise agrees to, or a contract or option for such payment a merger, liquidation, or acquisition, within five business days two years of making such payment) or to the Company which shall then forward such New Xxxxxx payment to the appropriate taxing authority.Distribution Date; (ii) Anything A failure by New GranCare and its subsidiaries to continue the active conduct of their businesses for at least two years after the Distribution Date; (iii) A failure by New GranCare to satisfy the active business requirement of Code Section 355(b); (iv) A failure by GCI to satisfy the active business requirement of Code Section 355(b), but only if such failure is not the result of GCI's failure to satisfy the conditions set forth in this Section 3.03(a4.1(c)(ii)-(iv); (v) to The sale, exchange, or other disposition (in one or more transactions) of more than fifty percent of New GranCare' assets (taking into account the contrary notwithstanding, Section 3.03(astock of its subsidiaries) hereof shall not apply to any Restructuring Taxes to the extent that all or any portion of such Restructuring Taxes would not have resulted but for an act or omission within two years of the Company or Distribution Date; and (vi) A repurchase by New GranCare of any of its affiliates, a misrepresentation on the part of the Company made in connection with the opinions of counsel described in Section 6.03 outstanding stock within two years of the Distribution Agreement, or any Date other post Distribution Date transaction involving either than stock repurchases meeting the stock or assets requirements of the Company or any Section 4.05(1)(b) of its affiliatesRev. Proc. 96-30. (b) If Multiple Tainting Acts or an Absence of Tainting Acts. In the Company is otherwise required to recognize gain pursuant to Code Section 311 with respect to the Distribution, then, to the extent permitted by law or regulation, the Company, if so requested by New Xxxxxx, shall elect pursuant to Code Section 336(e) to treat event of ----------------------------------------------------- a determination that the Distribution as failed to meet the requirements of Sections 368(a)(1)(D) and 355 of the Code for nonrecognition of gain or loss due to (1) any combination of a disposition of all the assets New GranCare Tainting Act and a GCI Tainting Act, or (2) a complete absence of New XxxxxxGranCare Tainting Acts and GCI Tainting Acts, then all liability for: (i) the Restructuring Taxes; provided, that the Company shall not be required to make (ii) any such election if the Company determines in good faith that such election would cause a material Tax Detriment claim against GCI or other material adverse effect to any member of the Company GroupPost-Distribution GCI Group for liability to shareholders of GCI arising out of the determination that the Distribution failed to meet the requirements of Section 355 of the Code for nonrecognition of gain or loss; and (iii) any and all other liability that arises as a direct consequence of, or would not have otherwise arisen, but for the determination that GCI or any member of the GCI Group is liable for the Restructuring Taxes, shall be borne one-half (1/2) by GCI and one-half (1/2) by New GranCare; provided, however, that the maximum liability that shall be borne by GCI under this Section 4.1(b) shall be $10 million. Notwithstanding the foregoing, if there is a complete absence of New GranCare Tainting Acts and GCI Tainting Acts, and the liability under this Section 4.1(b) arises as the result of a retroactive change in the tax laws, then all liability under this Section 4.1(b) shall be borne one-half (1/2) by GCI and one-half (1/2) by New GranCare.