Common use of S Corporation Status Clause in Contracts

S Corporation Status. (a) On or prior to the Closing Date, Seller shall not permit any of the holders of Seller Common Stock to revoke Seller’s election to be Taxed as an “S corporation,” or take or allow any action or fail to take any action that would result in the termination of Seller’s status as a validly electing “S corporation” within the meaning of Sections 1361 and 1362 of the Code, or the termination of any Seller Subsidiary’s status as a ‘‘qualified subchapter S subsidiary’’ within the meaning of Section 1361(b)(3)(B) of the Code. (b) If any Tax authority determines or proposes to determine that Seller did not have a valid election in effect under Section 1362(a) of the Code to be treated as an S corporation as of the Closing Date (without regard to the transfer of Seller Common Stock under this Agreement), Seller, on behalf of the holders of Seller Common Stock, shall cooperate with Buyer, and use commercially reasonable efforts, to obtain from the IRS a waiver of the termination and reinstatement of such S corporation status through the Closing Date pursuant to Section 1362(f) or any similar relief available with respect to state and local income taxation. In the event of such a challenge to the S corporation status of Seller, Seller, on behalf of the holders of Seller Common Stock, shall promptly take all steps pursuant to Section 1362(f)(3) of the Code, and shall make such adjustments as may be required by the IRS pursuant to Section 1362(f)(4) as a condition of obtaining such waiver and reinstating the S corporation status through the Closing Date (and any similar adjustments required under analogous state and local Tax provisions. The holders of Seller Common Stock shall bear the entire expense of procuring the waiver and reinstatement of the S status of the Company described above, including the legal, accounting, and Tax costs of taking such steps and of making such adjustments as may be required.

S Corporation Status. (a) On Except to the extent that any transfer of Seller Common Stock takes place pursuant to a Permitted Pledge as defined in the Shareholders Agreement to Preserve S Corporation Status dated as of October 31, 2007, Seller shall not, on or prior to the Closing Date, Seller shall not permit any of the holders of Seller Common Stock to revoke Seller’s election to be Taxed as an “S corporation,” or take or allow any action or fail to take any action that would result in the termination of Seller’s status as a validly electing “S corporation” within the meaning of Sections 1361 and 1362 of the Code, or the termination of any Seller Subsidiary’s status as a ‘‘qualified subchapter S subsidiary’’ within the meaning of Section 1361(b)(3)(B) of the Code. (b) If any Tax authority determines or proposes to determine that Seller did not have a valid election in effect under Section 1362(a) of the Code to be treated as an S corporation for the period starting on January 1, 2008 and ending as of the Closing Date date of this Agreement (without regard to the transfer of Seller Common Stock under this Agreement), Seller, on behalf of the holders of Seller Common Stock, shall cooperate with Buyer, and use commercially reasonable efforts, to obtain from the IRS a waiver of the termination and reinstatement of such S corporation status through the Closing Date for such period pursuant to Section 1362(f) or any similar relief available with respect to state and local income taxation. In the event of such a challenge to the S corporation status of Seller, Seller, on behalf of the holders of Seller Common Stock, shall promptly take all reasonable steps pursuant to Section 1362(f)(3) of the Code, and shall make such adjustments as may be required by the IRS pursuant to Section 1362(f)(4) as a condition of obtaining such waiver and reinstating the S corporation status through for the Closing Date applicable period (and any similar adjustments required under analogous state and local Tax provisions. The holders of Any reasonable expense incurred by the Seller Common Stock shall bear on or before the entire expense of Closing Date related to the procuring the waiver and reinstatement of the S status of the Company described above, including the legal, accounting, and Tax costs of taking such steps and of making such adjustments as may be requiredrequired shall be treated as a transaction expenses in the calculation of the Closing Net Worth, to the extent not previously paid or reflected in the calculation of Closing Net Worth. (c) To the extent not filed prior to the Closing Date, Buyer shall prepare and file, or cause to be prepared and filed, all S Corporation Tax Returns of each of the Seller Entities for any Tax period ending on or before the Closing Date in a manner consistent with past practice of the applicable Seller Entity except (i) such S Corporation Tax Returns shall reflect the deduction for any transaction expenses of the type described in Section 5.35 of the Seller Disclosure Memorandum to the extent permitted by applicable Law and (ii) as otherwise required by applicable Law. Buyer will use Wxxxxx LLP as the paid preparer for any such S Corporation Tax Returns. “S Corporation Tax Return” means any income or franchise Tax Return filed on IRS Form 1120S (or comparable state or local form) pursuant to which the underlying income, expense, loss, gain or similar characteristic is reported, directly or indirectly, on Schedule K-1 (or comparable state or local form) to the shareholders of Seller for the applicable Tax period.

S Corporation Status. (a) On or prior to the Closing Date, Seller shall not permit any of the holders of Seller Common Stock to revoke Seller’s election to be Taxed as an “S corporation,” or take or allow any action or fail to take any action that would result result, effective prior to the Closing Date, in the termination of Seller’s status as a validly electing “S corporation” within the meaning of Sections 1361 and 1362 of the Code, or the termination of any the Seller Subsidiary’s status as a ‘‘qualified subchapter S subsidiary’’ QSub within the meaning of Section 1361(b)(3)(B) of the Code. (b) If any Tax authority Authority determines or proposes to determine determine, or Seller is otherwise advised, that Seller did not have or may not have had a valid election in effect under Section 1362(a) of the Code Code, at any time prior to the Closing Date, to be treated as an S corporation as of corporation, or there was not in effect, at any time prior to the Closing Date (without regard Date, a valid election under Section 1361(b)(3)(B)(ii) for the Seller Subsidiary to be treated as a QSub, the transfer of Seller Common Stock under this Agreement), Seller, on behalf of the former holders of Seller Common Stock, shall cooperate with Buyer, and use commercially reasonable efforts, to obtain from the IRS a waiver of the termination and reinstatement of such S corporation or QSub status through the Closing Date pursuant to Section 1362(f) or any similar relief available with respect to state and local income taxation. In the event of such a challenge to any question regarding the S corporation status of Seller, Seller, on behalf Seller or the QSub status of the Seller Subsidiary, the former holders of Seller Common Stock, shall promptly take all steps pursuant to Section 1362(f)(3) of the Code, and shall make such adjustments as may be required by the IRS pursuant to Section 1362(f)(4) as a condition of obtaining such waiver and reinstating the S corporation status through the Closing Date (and any similar adjustments required under analogous state and local Tax provisions. The former holders of Seller Common Stock shall bear the entire expense of procuring the termination waiver and the reinstatement of the S status of the Company described aboveSeller or the QSub status of the Seller Subsidiary, including the legal, accounting, and Tax costs of taking such steps and of making such adjustments as may be required.