Common use of Tax and Other Returns and Reports Clause in Contracts

Tax and Other Returns and Reports. (a) Each of the Company or the Subsidiary has accurately prepared and timely filed all material required federal, state, local and foreign returns, estimated tax reports, information statements and reports ("Returns") relating to any and all Taxes of the Company or the Subsidiary as the case may be, and such Returns are true and correct in all material respects and have been completed in accordance with applicable law. For the purposes of this Agreement, "Tax" or, collectively, "Taxes," means any and all federal, state, local and foreign taxes, assessments and other similar governmental charges, duties, impositions and liabilities, including Taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts and any obligations of the Company or the Subsidiary as the case may be, under any agreements or arrangements with any other person with respect to such amounts to the extent relevant to determining the tax liability of the Company or the Subsidiary as the case may be. Each of the Company and the Subsidiary has timely paid all material Taxes required to be paid with respect to the periods covered by such Returns and has withheld with respect to its employees all material federal and state income taxes, FICA, FUTA and other Taxes the Company or the Subsidiary as the case may be, is required to withhold. The accruals for the Company's and the Subsidiary's Taxes reflected in the financial statements of the Company and the Subsidiary are sufficient to discharge the Company's and the Subsidiary's Taxes for all periods through the date of such financial statements. Each of the Company and the Subsidiary has properly paid or accrued on its books and records all Tax liabilities of the Company or the Subsidiary as the case may be, other than Taxes not yet due and payable. Neither the Company nor the Subsidiary is delinquent in the payment of any material Tax nor is there any material Tax deficiency outstanding, assessed or, to the Company's or the Subsidiary's knowledge, proposed against the Company or the Subsidiary as the case may be, nor has the Company or the Subsidiary executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. No audit or other examination of any Return of the Company or the Subsidiary is presently in progress. Neither the Company nor the subsidiary has any liabilities for unpaid federal, state, local and foreign Taxes, other than Taxes not yet due and payable and Taxes which are adequately reserved for on the Company's or the Subsidiary's financial statements whether asserted or unasserted, known or unknown. Neither the Company nor the Subsidiary is (nor has it ever been) required to join with any other entity in the filing of a consolidated tax return for federal tax purposes or a consolidated or combined return or report for state tax purposes. Neither the Company nor the Subsidiary is a party to or bound by any tax indemnity, tax sharing or tax allocation agreement. Each of the Company and the Subsidiary has provided, or made available, to Parent or its legal counsel copies of all federal and state income and all sales and all periods ending on or after December 31, 1997. There are no liens on the assets of the Company or the Subsidiary relating to or attributable to Taxes other than Taxes not yet due and payable. Except as disclosed in Section 2.8 of the Company Disclosure Letter, neither the Company nor the Subsidiary, has any property that would be treated as being owned by persons other than the Company or the Subsidiary as the case may be, pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954 as in effect immediately prior to the enactment of the Tax Reform Act of 1986, or any analogous provisions of any state law. None of the Company's or the Subsidiary's assets are treated as "tax-exempt use property" within the meaning of Section 168(h) of the Code. Except as disclosed in Section 2.8(a) of the Company Disclosure Letter, there is no contract, agreement, plan or arrangement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Company or the Subsidiary that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to Section 280G or 404 of the Code. (b) Neither the Company nor the Subsidiary is subject to any penalty by reason of a violation of any order, rule or regulation of, or a default with respect to any Return or any Governmental Entity to which it is subject with respect to Taxes, which violations or defaults, individually or in the aggregate, would have a Material Adverse Effect on the Company.

Tax and Other Returns and Reports. (a) Each of the Company or the Subsidiary Constituent Entity has accurately prepared and timely filed all material required federalTax Returns and has paid all Taxes (whether or not shown or required to be shown on any Tax Return) due for all Pre-Closing Tax Periods. Adequate reserves or accruals have been provided in the books of each Company Constituent Entity and in their financial statements referred to in Section 3.3 above, statein accordance with GAAP, local and foreign returns, estimated tax reports, information statements and reports ("Returns") relating for all Taxes with respect to any period for which Tax Returns have not been filed, or for which Taxes are not yet due and owing. No Company Constituent Entity has incurred any liability for Taxes since the Interim Balance Sheet Date other than in the Ordinary Course of Business. All required Tax Returns, including amendments to date, have been prepared in good faith in compliance with all Taxes of the Company or the Subsidiary as the case may be, applicable Laws and such Returns regulations and are true complete and correct accurate in all material respects and have been completed in accordance with applicable lawrespects. For To the purposes Knowledge of this AgreementSeller, "Tax" orno Governmental Entity has examined during the past three years, collectively, "Taxes," means any and all federal, state, local and foreign taxes, assessments and other similar governmental charges, duties, impositions and liabilities, including Taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts and any obligations of the Company or the Subsidiary as the case may be, under any agreements or arrangements with any other person with respect to such amounts to the extent relevant to determining the tax liability of the Company or the Subsidiary as the case may be. Each of the Company and the Subsidiary has timely paid all material Taxes required to be paid with respect to the periods covered by such Returns and has withheld with respect to its employees all material federal and state income taxes, FICA, FUTA and other Taxes the Company or the Subsidiary as the case may be, nor is required to withhold. The accruals for the Company's and the Subsidiary's Taxes reflected in the financial statements process of the examining, any Tax Returns of any Company and the Subsidiary Constituent Entity, except as set forth in Schedule 3.4(a) hereto. There are sufficient to discharge the Company's and the Subsidiary's no liens for Taxes for all periods through the date of such financial statements. Each of the Company and the Subsidiary has properly paid or accrued on its books and records all Tax liabilities of the Company or the Subsidiary as the case may be, (other than Taxes not yet due and payable. Neither ) upon any of the Company nor the Subsidiary is delinquent in the payment assets of any material Constituent Company Entity. (b) No Company Constituent Entity has been a member of an Affiliated Group filing a consolidated, combined, unitary or similar Tax nor is there Return (other than a group the parent of which was a Company Constituent Entity). No Company Constituent Entity has any material Tax deficiency outstanding, assessed or, to the Company's or the Subsidiary's knowledge, proposed against the Company or the Subsidiary as the case may be, nor has the Company or the Subsidiary executed any waiver liability for Taxes of any statute Person (other than another Company Constituent Entity) under Treasury Regulation Section 1.1502-6 (or any similar provision of limitations state, local or foreign law), as a transferee or successor, by contract, or otherwise. (c) Each Company Constituent Entity has withheld and paid all Taxes required to have been withheld and paid on or extending before the period Closing Date hereof in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, foreign Person, or other third party, except as set forth in Schedule 3.4(c) hereof. (d) There is no threatened or pending claim, action or proceeding with any Governmental Entity for the assessment or collection of any TaxTaxes against any Company Constituent Entity, as to which such Company Constituent Entity has received written notice or has Knowledge. No audit or other examination of any Return of the Company or the Subsidiary is presently in progress. Neither the Company nor the subsidiary has any liabilities for unpaid The Seller Disclosure Schedule lists all federal, state, local local, and foreign Taxesoriginal or amended Tax Returns filed with respect to each Company Constituent Entity on or after January 1, other than Taxes not yet due 2004, and payable indicates those Company Tax Returns that, to the Knowledge of Seller, have been audited and/or currently are the subject of audit. Seller has made available to Buyer complete copies of all portions of Tax Returns and Taxes examination reports which are adequately reserved for on the Company's or the Subsidiary's financial statements whether asserted or unasserted, known or unknown. Neither pertain to the Company nor the Subsidiary is (nor has it ever been) required Constituent Entities and statements of deficiencies assessed against or agreed to join with any other entity in the filing of a consolidated tax return for federal tax purposes or a consolidated or combined return or report for state tax purposes. Neither the Company nor the Subsidiary is a party to or bound by any tax indemnity, tax sharing or tax allocation agreement. Each of the Company and the Subsidiary has provided, or made available, to Parent or its legal counsel copies of all federal and state income and all sales and all periods ending on or after Constituent Entities since December 31, 1997. There are no liens on the assets 2003. (e) No Company Constituent Entity has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency which waiver or agreement is currently in effect, except as set forth in Schedule 3.4(e) hereof. (f) No power of attorney has been granted by any of the Company or the Subsidiary relating Constituent Entities with respect to or attributable to Taxes other than Taxes not yet due and payable. Except any tax matter which is currently in force, except as disclosed set forth in Section 2.8 of the Schedule 3.4(f) hereof. (g) No Company Disclosure Letter, neither the Company nor the Subsidiary, Constituent Entity has any been a United States real property that would be treated as being owned by persons other than the Company or the Subsidiary as the case may be, pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954 as in effect immediately prior to the enactment of the Tax Reform Act of 1986, or any analogous provisions of any state law. None of the Company's or the Subsidiary's assets are treated as "tax-exempt use property" holding corporation within the meaning of Section 168(h897(c)(2) of the Code. Except as disclosed Code during the applicable period specified in Section 2.8(a897(c)(1)(A)(ii) of the Company Disclosure Letter, there is no contract, agreement, plan or arrangement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Company or the Subsidiary that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to Section 280G or 404 of the Code. (bh) Neither Each Company Benefit Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) has been operated since January 1, 2005 in good faith compliance with Section 409A of the Code and Internal Revenue Service Notice 2005-1 and the proposed and final Treasury Regulations promulgated under Section 409A of the Code, to the extent applicable to such plan. No such plan has been “materially modified” (within the meaning of IRS Notice 2005-1 or Section 1.409A-6(a)(4) of the proposed or final regulations promulgated under Section 409A of the Code) at any time after October 3, 2004. (i) There are no tax sharing, allocation, indemnification or similar agreements or arrangements in effect between any of the Company nor Constituent Entities, or any predecessor or Affiliate thereof, and any other party under which any of the Subsidiary is subject Company Constituent Entities could be liable for any Taxes or other claims of any party, except as set forth in Schedule 3.4(i) hereof. (j) None of the Company Constituent Entities has applied for, been granted, or agreed in writing to any penalty by reason accounting method change for which it will be required to take into account any adjustment under Section 481 of a violation the Code or any similar provision of the Code or the corresponding Tax laws of any ordernation, rule state or regulation oflocality. (k) Except as set forth in Schedule 3.4(k), or each of GFC and JRJ Express has made a default with respect to any Return or any Governmental valid election, effective as of November 6, 1998 and May 1, 1996, respectively, for such Company Constituent Entity to be treated as an S corporation within the meaning of Section 1361(a) of the Code (and comparable provision of state or local law). For federal and applicable state and local income Tax purposes, each of GFC and JRJ Express has properly qualified as an S corporation since the effective date of its election through the date of this Agreement, and will properly qualify as an S corporation through and until the Closing Date in all applicable jurisdictions in which it is subject with respect to TaxesTax. Since the effective date of its election, neither GFC nor JRJ Express has ever been subject to income Tax as a C corporation within the meaning of Section 1361(a) of the Code (or comparable provision of state or local law). (l) Except as set forth in Schedule 3.4(l), neither GFC, JRJ Express, nor any qualified subchapter S subsidiary thereof has, in the past 10 years, (i) acquired assets from another corporation in a transaction in which violations or defaultsthe such Company Constituent Entity’s Tax basis for the acquired assets was determined, individually in whole or in part, by reference to the aggregateTax basis of the acquired assets (or any other property) in the hands of the transferor or (ii) acquired the stock of any corporation from another corporation that is a qualified subchapter S subsidiary. (m) Schedule 3.4(m) identifies each Subsidiary of GFC and JRJ Express, would and each such Subsidiary that is a “qualified subchapter S subsidiary” within the meaning Section 1361(b)(3)(B) of the Code (and comparable provision of state or local law). For federal and applicable state and local income Tax purposes, each Subsidiary identified as a “qualified subchapter S subsidiary” has properly qualified as a qualified subchapter S subsidiary at all times since the date shown on such schedule, and will properly qualify as a qualified subchapter S subsidiary through and until the Closing Date in all United States jurisdictions in which it is subject to Tax. Each Subsidiary not identified as a “qualified subchapter S subsidiary,” for United States federal and applicable state and local income Tax purposes, has properly been classified as a “disregarded entity” or a partnership for United States income tax purposes at all times since its inception through the date of this Agreement, and will properly qualify as a “disregarded entity” from the date hereof through the Closing Date. (n) For United States federal and applicable state and local income Tax purposes, Kimeco has properly been classified as a “disregarded entity” or a partnership for United States income tax purposes at all times since its inception through the date of this Agreement, and will properly qualify as a “disregarded entity” from the date hereof through the Closing Date. (o) Each Company Constituent Entity is in compliance with all terms and conditions of any Tax exemption, Tax holiday or other Tax reduction agreement or order and the consummation of the transactions contemplated by this Agreement will not have a Material Adverse Effect any material adverse effect on the Companycontinued validity and effectiveness of any such Tax exemption, holiday or reduction agreement. (p) No Company Constituent Entity is subject to Tax in any jurisdiction other than its country of incorporation or formation by reason of having a permanent establishment or other place of business or material source of income in that jurisdiction. The prices for any property or services (or for the use of any property) provided by a Company Constituent Entity to another Company Constituent Entity or Affiliate thereof are arm’s length prices for purposes of the relevant transfer pricing laws, including Treasury Regulations promulgated under Section 482 of the Code, or in accordance with a written third-party transfer pricing study. (q) No Company Constituent Entity has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code.

Tax and Other Returns and Reports. Except as set forth on Schedule 3.24 and except for such matters that would not, individually or in the aggregate, have a Material Adverse Effect, and to the Knowledge of Seller for periods prior to June 30, 2000: (a) Each each of the Company or Companies as of the Subsidiary has accurately Closing Date will have prepared and timely filed or made a timely request for extension for all material required federal, state, local and foreign returns, estimated tax reportsestimates, information statements and reports ("collectively the “Returns"”) relating to any and all Taxes of the concerning or attributable to such Company or the Subsidiary as the case may be, its operations and such Returns are true and correct in all material respects and have been completed in accordance with applicable law. For the purposes of this Agreement, "Tax" or, collectively, "Taxes," means any and all federal, state, local and foreign taxes, assessments and other similar governmental charges, duties, impositions and liabilities, including Taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts and any obligations Law; (b) each of the Company or the Subsidiary Companies as the case may be, under any agreements or arrangements with any other person with respect to such amounts to the extent relevant to determining the tax liability of the Company Closing Date: (i) will have paid or the Subsidiary as the case may be. Each of the Company and the Subsidiary has timely paid accrued all material Taxes it is required to be paid with respect to the periods covered by such Returns pay or accrue and has (ii) will have withheld and timely remitted with respect to its employees all material federal and state income taxes, FICA, FUTA and other Taxes the Company or the Subsidiary as the case may be, is required to withhold. The accruals for be withheld and remitted and (iii) will have made all required current estimated payments of Taxes sufficient to avoid any understatement penalties; (c) there are no Liens on the Company's and the Subsidiary's Taxes reflected in the financial statements assets of any of the Company Companies relating to or attributable to Taxes, other than Liens for taxes not yet due and the Subsidiary are sufficient to discharge the Company's and the Subsidiary's Taxes payable; (d) for all periods through the date of such financial statements. Each each of the Company Companies, the tax basis in its assets for purposes of determining its future amortization, depreciation and other federal income tax deductions is properly reflected on such Company’s tax books and records; (e) each of the Subsidiary Companies has properly paid or accrued established (and until the Closing will establish) on its respective books and records reserves (to be specifically designated as an increase to current liabilities) that are adequate for the payment of all Tax liabilities of the Company or the Subsidiary as the case may be, other than Taxes not yet due and payable. Neither payable and each reserve item with respect to any of the Company nor the Subsidiary is delinquent Companies as set forth in the payment Returns for the taxable periods ended December 31, 2001 and December 31, 2002 was determined correctly in accordance with the requirements of any material Tax nor is there any material Tax deficiency outstandingSections 807, assessed or811 and 846 of the Code, and has been consistently and corrected applied with respect to the Company's filing of all Returns of or which include any of the Subsidiary's knowledge, proposed against Companies for all taxable years for which the Company or the Subsidiary as the case may be, nor has the Company or the Subsidiary executed any waiver of any applicable statute of limitations on has not expired; (f) no federal, state, local or extending foreign audits or other administrative proceedings or court proceedings are presently pending with regard to any Taxes or Returns in respect of any of the Companies. No tax authority has threatened or has any reasonable basis to assert against any of the Companies any deficiency or claim for additional Taxes and there are no outstanding written requests, agreements, consents or waivers to extend the statutory period for of limitations applicable to the assessment or collection of any Tax. No audit Taxes or other examination deficiencies against any of the Companies or the filing of any Return Returns; (g) no claim has been made by a taxing authority in a jurisdiction where any of the Company Companies do not file Returns to the effect that any of the Companies is or may be subject to taxation by that jurisdiction; (h) none of the Subsidiary Companies is presently a party to or owes any amount under any tax-sharing or allocation agreement and are not otherwise liable or obligated to indemnify any Person with respect to any Taxes; (i) each of the Companies has previously delivered to Buyer true and complete copies of (i) any audit reports issued in progress. Neither the Company nor five years prior to the subsidiary has any liabilities for unpaid date of this Agreement relating to Taxes due from or with respect to each the Companies; and (ii) all federal, state, local and foreign Taxesincome or franchise Returns of each of the Companies relating to the taxable periods ending in 2000, 2001 and 2002; (j) none of the Companies is subject to any private letter ruling of the Internal Revenue Service or comparable rulings of other than Taxes not yet due and payable and Taxes which are adequately reserved for taxing authorities; (k) none of the Companies, nor Seller (on any of the Company's Companies behalf) has (i) agreed to, is required to make, or has any application pending requesting permission for, any changes in accounting methods or adjustments pursuant to Section 446(e), 481(a), 807(f) of the Subsidiary's financial statements whether asserted Code (or unassertedany predecessor provision) or any similar provision of state, known local or unknown. Neither foreign law, nor has any Knowledge that any taxing authority has proposed in writing any such change in accounting method or an adjustment, (ii) executed or entered into a closing agreement pursuant to Section 7121 of the Company nor Code (or any predecessor provision) or any similar provision of state, local or foreign law, (iii) filed a consent pursuant to Section 341(f) of the Subsidiary Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code owned by any of the Companies, or (iv) granted to any party any power of attorney that is currently in force with respect to any tax matter; (l) no property owned by any of the Companies is (nor has it ever beeni) property required to join with any other entity in the filing of a consolidated tax return for federal tax purposes or a consolidated or combined return or report for state tax purposes. Neither the Company nor the Subsidiary is a party to or bound by any tax indemnity, tax sharing or tax allocation agreement. Each of the Company and the Subsidiary has provided, or made available, to Parent or its legal counsel copies of all federal and state income and all sales and all periods ending on or after December 31, 1997. There are no liens on the assets of the Company or the Subsidiary relating to or attributable to Taxes other than Taxes not yet due and payable. Except as disclosed in Section 2.8 of the Company Disclosure Letter, neither the Company nor the Subsidiary, has any property that would be treated as being owned by persons other than the Company or the Subsidiary as the case may be, another person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986, or any analogous provisions of any state law. None of the Company's or the Subsidiary's assets are treated as "(ii) “tax-exempt use property" ” within the meaning of Section 168(h168(h)(1) of the Code. Except as disclosed in , (iii) “tax-exempt bond financed property” within the meaning of Section 2.8(a168(g) of the Company Disclosure LetterCode, there is no contract, agreement, plan or arrangement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Company or the Subsidiary that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant (iv) subject to Section 280G or 404 168(g)(1)(A) of the Code; (v) “limited use property” within the meaning of Rev. Proc. 76-30, or (vi) subject to any provision of state, local or foreign law comparable to any of the provisions listed above; (m) none of the Companies has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in (i) the two years prior to the date of this Agreement or (ii) a distribution which could otherwise constitute part of a “plan” or “series of related transaction” (which the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement; (n) each of the Companies is a “United States Person” within the meaning of Section 7701(a)(30) of the Code; (o) Schedule 3.24 accurately sets forth the amount of the shareholder surplus account, as of December 31, 2001, and the existing policyholders surplus account, as of December 31, 2002 (as defined in Section 815 of the Code); (p) AFL and Laurel are and have been taxable as life insurance companies within the meaning of Section 816 of the Code for the taxable period ending on or including the Closing Date and for all prior taxable periods for which the statute of limitations has not expired; (q) all life insurance contracts issued by AFL or Laurel (whether developed or administered by or reinsured with any unrelated party) that are subject to Section 7702 of the Code qualify as “life insurance contracts” within the meaning of Section 7702(a) of the Code; (r) any life insurance contracts issued by AFL or Laurel (whether developed or administered or reinsured with any unrelated party) which is a modified endowment contract under Section 7702A of the Code (each, a “MEC”) has been marketed as such at all relevant times or the policyholder otherwise has consented to such MEC status; (s) all contracts issued by AFL or Laurel (whether developed or administered by or reinsured with any unrelated party) that are subject to Section 817 of the Code and the Treasury Regulations promulgated thereunder have met the diversification requirements applicable thereof since the issuance of the contracts; (t) all annuity contracts issued by AFL or Laurel (whether developed or administered by or reinsured with any unrelated party) that are subject to Section 72(s) of the Code contain all of the necessary provisions of Section 72(s) of the Code; (u) the tax treatment under the Code of all insurance or annuity policies, plans or contracts; all financial products, individual retirement accounts or annuities; or any similar or related policy, contract, plan, or product, whether individual, group, or otherwise, if any, issued or sold by AFL or Laurel on or before the Closing Date is and at all times has been in all material respects the same as or more favorable to the purchaser, policyholder or intended beneficiaries thereof than the tax treatment under the Code for which such policies, plans or contracts qualified or purported to qualify at the time of their issuance or purchase, except for changes resulting from changes to the Code which do not affect policies, plans or contracts due to the effective date thereof; and (v) all annuity contracts issued by AFL or Laurel (whether developed or administered by or reinsured with any unrelated party) that are provided under or connected with a plan described in Section 401(a), 403(a) or 403(b) of the Code or that is an individual retirement annuity or provided under an individual retirement account or annuity, satisfies the federal income Tax laws applicable to such annuity contract. (bw) Neither the tax liability of the Holding Company nor under the Subsidiary tax sharing agreement set forth on Schedule 3.18 is subject to any penalty by reason of a violation of any order, rule or regulation of, or a default with respect to any Return or any Governmental Entity to which it is subject with respect to Taxes, which violations or defaults, individually or in the aggregate, would have a Material Adverse Effect on the Companyless than $25,000.

Tax and Other Returns and Reports. To Seller's Knowledge: (ai) Each of the Company or the Subsidiary has accurately prepared and timely filed all material required federal, state, local and foreign returns, estimated tax reports, information statements and reports ("Returns") relating to any and all Taxes of the Company or the Subsidiary as the case may be, and such Returns are true and correct in all material respects and have been completed in accordance with applicable law. For the purposes of this Agreement, "Tax" or, collectively, "Taxes," means any and --------------------------------- all federal, state, local and foreign taxestax returns, assessments statements and other similar filings required to have been filed by Seller (the "Tax Returns") with respect to any federal, state or local taxes, assessments, interest, penalties, deficiencies, fees and other governmental chargescharges (including, dutieswithout limitation, impositions all income tax, unemployment compensation, social security, payroll, sales and liabilitiesuse, including Taxes based upon or measured by gross receiptsexcise, incomeprivilege, profits, sales, use and occupation, and value addedproperty, ad valorem, transfer, franchise, withholdinglicense, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts and any obligations other tax or similar governmental charge under laws of the Company United States or any state or municipal or political subdivision thereof) (the Subsidiary as "Taxes") have been (or if not yet due, will be) filed with the case may beappropriate governmental agencies in all jurisdictions in which such Tax Returns are required to be filed, under any agreements and all such Tax Returns properly reflect the liabilities of Seller for Taxes for the periods, property or arrangements with any other person with respect to such amounts events covered thereby, except to the extent relevant failure to determining file or properly reflect liabilities would not have a materially adverse effect on the tax liability of Restaurants or Assets; (ii) all Taxes, including, without limitation, those which are called for by the Company Tax Returns, or the Subsidiary as the case may be. Each of the Company and the Subsidiary has timely paid all material Taxes required heretofore claimed to be due by any taxing authority from Seller, have been properly accrued or paid except to the extent that failure to pay or accrue such Taxes would not have a material adverse effect on the Restaurants or Assets; (iii) except as set forth on Schedule 3.1.8, Seller has not received any written notice of assessment or -------------- proposed assessment and there are not pending tax examinations of or tax claims asserted against the Seller with respect to the periods covered by such Returns and has withheld with respect to its employees all material federal and state income taxes, FICA, FUTA and other Taxes the Company Restaurants or the Subsidiary as the case may be, is required to withhold. The accruals for the Company's and the Subsidiary's Taxes reflected in the financial statements any of the Company and the Subsidiary Assets; (iv) there are sufficient to discharge the Company's and the Subsidiary's Taxes for all periods through the date of such financial statements. Each of the Company and the Subsidiary has properly paid or accrued on its books and records all Tax liabilities of the Company or the Subsidiary as the case may be, no valid tax liens (other than Taxes not yet due and payable. Neither the Company nor the Subsidiary is delinquent in the payment of any material Tax nor is there any material Tax deficiency outstanding, assessed or, to the Company's or the Subsidiary's knowledge, proposed against the Company or the Subsidiary as the case may be, nor has the Company or the Subsidiary executed any waiver of any statute of limitations on or extending the period lien for the assessment or collection of any Tax. No audit or other examination of any Return of the Company or the Subsidiary is presently in progress. Neither the Company nor the subsidiary has any liabilities for unpaid federal, state, local and foreign Taxes, other than Taxes current taxes not yet due and payable and Taxes which are adequately reserved for Permitted Liens) on the Company's or the Subsidiary's financial statements whether asserted or unasserted, known or unknown. Neither the Company nor the Subsidiary is (nor has it ever been) required to join with any other entity in the filing of a consolidated tax return for federal tax purposes or a consolidated or combined return or report for state tax purposes. Neither the Company nor the Subsidiary is a party to or bound by any tax indemnity, tax sharing or tax allocation agreement. Each of the Company and the Subsidiary has providedAssets; and, or made available, to Parent or its legal counsel copies of all federal and state income and all sales and all periods ending on or after December 31, 1997. There are no liens on the assets of the Company or the Subsidiary relating to or attributable to Taxes other than Taxes not yet due and payable. Except as disclosed in Section 2.8 of the Company Disclosure Letter, neither the Company nor the Subsidiary, has any property that would be treated as being owned by persons other than the Company or the Subsidiary as the case may be, pursuant to Section 168(f)(8(v) of the Internal Revenue Code of 1954 as in effect immediately prior to the enactment of the Tax Reform Act of 1986, or any analogous provisions of any state law. None of the Company's or the Subsidiary's assets are treated as "tax-exempt use property" within the meaning of Section 168(h) of the Code. Except as disclosed in Section 2.8(a) of the Company Disclosure Letter, there is no contract, agreement, plan or arrangement, including but not limited to the provisions of this Agreement, covering basis for any employee or former employee of the Company or the Subsidiary that, individually or collectively, could give rise to the payment additional assessment of any amount that would not be deductible pursuant to Section 280G or 404 of the Code. (b) Neither the Company nor the Subsidiary is subject to any penalty by reason of a violation of any order, rule or regulation of, or a default Taxes with respect to any Return the Restaurants or any Governmental Entity to which it is subject with respect to Taxes, which violations or defaults, individually or in the aggregate, would have a Material Adverse Effect on the CompanyAssets.