Common use of Tax Related Covenants Clause in Contracts

Tax Related Covenants. (a) BHC and B+L shall: (i) not, on or before the Effective Date, take or perform or fail to take or perform any act, including entering into any transaction or permitting any act or transaction within its control to be taken or performed or to occur, that, in each case, could reasonably be considered to interfere or be inconsistent with the Tax Ruling; (ii) not take or perform or fail to take or perform any act, including entering into any transaction or permitting any act or transaction within its control to be taken or performed or to occur, in each case, that would cause BHC to cease to be a Specified Corporation on or prior to the Effective Date, except as specifically contemplated by this Agreement and in the Tax Ruling; and (iii) fulfill all representations and undertakings provided by it (or by any of its subsidiaries), or on its behalf (or on behalf of any of its subsidiaries) with its knowledge and consent, in the Tax Ruling. (b) Each of BHC and B+L (for clarity, including Amalco 2 as its successor following the Effective Time) shall not (and, for clarity, shall cause each member of the BHC Group and B+L Group, as applicable, not to), for a period of three years after the Effective Date, take or perform or fail to take or perform any act, including entering into any transaction or permitting any act or transaction within its control to be taken or performed or to occur, that, in each case, could reasonably be expected to cause the Arrangement and/or any transaction contemplated by the Arrangement and/or this Agreement to be taxed in a manner inconsistent with that provided for in the Final Tax Ruling, in each case, without first: (i) obtaining at such Party’s expense a supplemental tax ruling from the CRA or an opinion of a nationally recognized accounting firm or law firm that is in form and substance satisfactory to B+L or BHC, as the case may be, acting reasonably (it being acknowledged that refusal by such Party to accept an opinion that is not at least at a “should” level will be considered to be reasonable), that the taking or performing of such act, or failure to take or perform such act or the entering into such transaction, as applicable, will not cause the Arrangement and/or any transaction contemplated by the Arrangement and/or this Agreement to be taxed in a manner inconsistent with that provided for in the Final Tax Ruling in respect of the other Party or any other member of that other Party’s Group (the B+L Group or BHC Group, as the case may be); and (ii) confirming in writing to the other Party that the obtaining of such a supplemental tax ruling or opinion shall not relieve such Party of any liability under Article 5 in respect of such act, failure to act or transaction. (c) Each Party shall: (i) file its tax returns and make all other filings, notifications, designations and elections, (including section 85 elections under the Tax Act, and the corresponding provisions of any applicable provincial tax legislation) pursuant to the Tax Act and/or applicable provincial or foreign tax legislation, that are contemplated in the Final Tax Ruling, the Arrangement and/or this Agreement, and (ii) make adjustments to its stated capital accounts in accordance with the terms of the Plan of Arrangement following the Effective Date. Where an agreed amount is to be included in any election referred to in this Section 3.3(c), such amount will be within the range contemplated by the Tax Act and/or applicable provincial or foreign tax legislation, as the case may be, and will be the amount, if any, contemplated by the Final Tax Ruling, the Plan of Arrangement and/or this Agreement. (d) Each Party shall cooperate in the preparation, execution and filing, in the form and within the time limits prescribed or otherwise contemplated in the Tax Act, of all Tax returns, filings, notifications, designations and elections under the Tax Act as contemplated in the Final Tax Ruling, the Plan of Arrangement and/or this Agreement (and any similar tax returns, elections, notifications or designations that may be required under applicable provincial or foreign tax legislation). (e) BHC and B+L shall cause each member of the BHC Group and B+L Group, respectively, and TC and TC Sub shall cause each of their respective subsidiaries, as applicable, to comply with the foregoing Sections 3.3(a) to 3.3(d). (f) Notwithstanding the forgoing, no acquisition of control of either of BHC or B+L that is or was not within the control of BHC or B+L, as applicable, and in respect of which the BHC Board or B+L Board, as applicable, did not agree, consent, support, encourage or otherwise acquiesce, shall constitute a breach by BHC or B+L, as applicable, of its obligations under the foregoing Sections 3.3(a) to 3.3(e). For purposes of this Section, the phrase “acquisition of control” shall be interpreted as it is interpreted for purposes of paragraph 55(3.1)(b) of the Tax Act. (g) Each Party shall cooperate and use all commercially reasonable efforts to obtain the Final Tax Ruling (and, if elected by BHC, a U.S. Tax Ruling), the U.S. Tax Opinion and in consenting to and agreeing to all such amendments to this Agreement and the Plan of Arrangement as may be necessary to obtain the Final Tax Ruling (and, if elected by BHC, a U.S. Tax Ruling) and the U.S. Tax Opinion and to implement the Plan of Arrangement in accordance with the Final Tax Ruling (and, if received by BHC, the U.S. Tax Ruling) and the U.S. Tax Opinion. (h) In the event that BHC determines, in its sole discretion: (i) at any time, whether before or after the Effective Date, that the transactions that have implemented or will implement the Arrangement will not be taxed in a manner that is consistent with their treatment for purposes of the Tax Act as a tax-deferred “butterfly reorganization” pursuant to paragraph 55(3)(b) of the Tax Act; and/or (ii) at any time prior to the Effective Date, not to proceed with a transaction or series of transactions to which BHC desires such “butterfly reorganization” rules to apply, BHC shall provide written notice to B+L reasonably promptly following the date on which BHC has definitively made such determination confirming that BHC has made such determination and, effective from the date on which such notice is provided, no Party shall be required to comply with the covenants contained in Sections 3.3(a), 3.3(b), 3.3(c) and 3.3(g); provided, for clarity, that each Party shall remain liable for any prior breaches of such Sections in accordance with this Agreement.

Tax Related Covenants. (a) BHC Each Party covenants and B+L shallagrees with and in favour of each other Party that: (i) it and any successor thereto will not, on or before the Effective Date, take or perform or fail to take or perform any act, including entering act or enter into any transaction or permitting permit any act or transaction within its control to be taken or performed or to occur, that, in each case, occur that could reasonably be considered to interfere or be inconsistent with the Tax RulingRulings; (ii) not take or perform or fail to take or neither it nor any successor thereto will perform any act, including entering act or enter into any transaction or permitting permit any act or transaction transaction, in each such case, within its control to be taken or performed or to occur, in each case, occur that would cause BHC EnCana or any Affiliate of EnCana that is a corporation to cease to be a Specified Corporation on or prior to the Effective Date, except as specifically contemplated by this Agreement and herein or in the Tax RulingRulings or Rulings Applications; and (iii) fulfill it and any successor thereto will fulfill, and will cause any Person Controlled, after the Effective Date, by it, to fulfill, all representations and or undertakings provided by it (or by any of its subsidiaries)it, or on its behalf (or on behalf of any of its subsidiaries) and made with its knowledge and consent, in the Rulings Applications or otherwise provided in writing to the CRA, the IRS or tax counsel in connection with the Tax RulingRulings. (b) Each Party covenants and agrees with and in favour of BHC and B+L (for clarity, including Amalco 2 as its successor following the Effective Time) shall each other Party that it will not (andand that it will cause its Subsidiaries to not) take any actions, for clarity, shall cause each member of the BHC Group and B+L Group, as applicable, not to), for a period of three years after the Effective Date, take or perform or fail omit to take any action, or perform any act, including entering enter into any transaction or permitting any act or transaction within its control to be taken or performed or to occur, that, in each case, that could reasonably be expected to cause the Arrangement and/or or any related transaction contemplated by the Arrangement and/or this Agreement to be taxed in a manner inconsistent with that provided for in the Final Tax Ruling, in each case, without firstRulings without: (i) obtaining at such Party’s expense a supplemental supplementary tax ruling from the CRA or an opinion of a nationally recognized accounting firm or law firm that is in form and substance satisfactory to B+L such actions, omissions or BHC, as the case may be, acting reasonably (it being acknowledged that refusal by such Party to accept an opinion that is not at least at a “should” level will be considered to be reasonable), that the taking or performing of such act, or failure to take or perform such act or the entering into such transaction, as applicable, transactions will not cause the Arrangement and/or any transaction contemplated by the Arrangement and/or this Agreement to be taxed in a manner inconsistent with that provided for in the Final Tax Ruling have such effect in respect of the other Party or any other member of that other Party’s Group (the B+L Group or BHC Group, as the case may be)Tax Rulings; and (ii) confirming in writing for a period of three years after the Effective Date, obtaining the consent of EnCana and Cenovus, such consent not to the other Party that the obtaining of such a supplemental tax ruling be unreasonably withheld or opinion shall not relieve such Party of any liability under Article 5 in respect of such act, failure to act or transactiondelayed. (c) Each Party shall: (i) covenants and agrees with and in favour of each other Party to file its tax returns and make all other filings, notifications, designations and elections, (including section Section 85 elections under the Tax Actelections, and the corresponding provisions of any applicable provincial tax legislation) pursuant to the Tax Act and/or applicable provincial or foreign tax legislation, that are contemplated in the Final Tax Ruling, the Arrangement and/or this Agreement, and (ii) to make adjustments to its stated capital accounts in accordance with the terms of the Plan of Arrangement following the Effective Date. Where an agreed amount is to be included in any election referred to in this Section 3.3(c)such election, such amount will be within the range contemplated by the Tax Act and/or (or applicable provincial or foreign tax legislation, as the case may be, ) and will be the amount, if any, amount contemplated by the Final Tax RulingRulings, the Plan of Arrangement and/or and this Agreement. (d) Each Party shall covenants and agrees with and in favour of each other Party to cooperate in the preparation, execution preparation and filing, in the form and within the time limits prescribed or otherwise contemplated in the Tax Act, of all Tax tax returns, filings, notifications, designations and elections under the Tax Act as contemplated in the Final Rulings Application, Tax RulingRulings, the Plan of Arrangement and/or and this Agreement (and any similar tax returns, elections, notifications or designations that may be required under applicable provincial or foreign tax legislation). (e) BHC and B+L shall cause each member of the BHC Group and B+L Group, respectively, and TC and TC Sub shall cause each of their respective subsidiaries, as applicable, to comply with the foregoing Sections 3.3(a) to 3.3(d). (f) Notwithstanding the forgoing, no acquisition of control of either of BHC or B+L that is or was not within the control of BHC or B+L, as applicable, and in respect of which the BHC Board or B+L Board, as applicable, did not agree, consent, support, encourage or otherwise acquiesce, shall constitute a breach by BHC or B+L, as applicable, of its obligations under the foregoing Sections 3.3(a) to 3.3(e). For purposes of this Section, the phrase “acquisition of control” shall be interpreted as it is interpreted for purposes of paragraph 55(3.1)(b) of the Tax Act. (g) Each Party shall cooperate and use all commercially reasonable efforts to obtain the Final Tax Ruling (and, if elected by BHC, a U.S. Tax Ruling), the U.S. Tax Opinion and in consenting to and agreeing to all such amendments to this Agreement and the Plan of Arrangement as may be necessary to obtain the Final Tax Ruling (and, if elected by BHC, a U.S. Tax Ruling) and the U.S. Tax Opinion and to implement the Plan of Arrangement in accordance with the Final Tax Ruling (and, if received by BHC, the U.S. Tax Ruling) and the U.S. Tax Opinion. (h) In the event that BHC determines, in its sole discretion: (i) at any time, whether before or after the Effective Date, that the transactions that have implemented or will implement the Arrangement will not be taxed in a manner that is consistent with their treatment for purposes of the Tax Act as a tax-deferred “butterfly reorganization” pursuant to paragraph 55(3)(b) of the Tax Act; and/or (ii) at any time prior to the Effective Date, not to proceed with a transaction or series of transactions to which BHC desires such “butterfly reorganization” rules to apply, BHC shall provide written notice to B+L reasonably promptly following the date on which BHC has definitively made such determination confirming that BHC has made such determination and, effective from the date on which such notice is provided, no Party shall be required to comply with the covenants contained in Sections 3.3(a), 3.3(b), 3.3(c) and 3.3(g); provided, for clarity, that each Party shall remain liable for any prior breaches of such Sections in accordance with this Agreement.

Tax Related Covenants. (a) BHC Each Party covenants and B+L shallagrees with and in favour of each other Party that: (i) it and any successor thereto will not, on or before the Effective Date, take or perform or fail to take or perform any act, including entering act or enter into any transaction or permitting permit any act or transaction within its control to be taken or performed or to occur, that, in each case, occur that could reasonably be considered to interfere or be inconsistent with the Tax RulingRuling and Opinion; (ii) not take or perform or fail to take or neither it nor any successor thereto will perform any act, including entering act or enter into any transaction or permitting permit any act or transaction transaction, in each such case, within its control to be taken or performed or to occur, in each case, occur that would cause BHC FirstService or any Affiliate of FirstService that is a corporation to cease to be a Specified Corporation on or prior to the Effective Date, except as specifically contemplated by this Agreement and herein or in the Tax RulingRuling and Opinion or the Canadian Tax Ruling Application; and (iii) fulfill it and any successor thereto will fulfill, and will cause any Person Controlled, after the Effective Date, by it, to fulfill, all representations and or undertakings provided by it (or by any of its subsidiaries)it, or on its behalf (or on behalf of any of its subsidiaries) and made with its knowledge and consent, in the Canadian Tax RulingRuling Application or otherwise provided in writing to the CRA or tax counsel in connection with the Tax Ruling and Opinion. (b) Each of BHC FirstService and B+L (for clarity, including Amalco 2 as its successor following the Effective Time) shall not (and, for clarity, shall cause New FSV covenants and agrees with and in favour of each member of the BHC Group and B+L Group, as applicable, not to)other that, for a period of three years after the Effective Date, it will not (and that it will cause its Subsidiaries to not) take or perform or fail any action, omit to take any action or perform any act, including entering enter into any transaction or permitting any act or transaction within its control to be taken or performed or to occur, that, in each case, that could reasonably be expected to cause the Arrangement and/or or any transaction contemplated by the Arrangement and/or this Agreement to be taxed in a manner inconsistent with that provided for in the Final Tax Ruling, in each case, Ruling and Opinion without first: (i) obtaining at such Party’s expense a supplemental tax ruling from the CRA or an opinion of a nationally recognized accounting firm or law firm that is in form and substance satisfactory to B+L such action, omission or BHC, as the case may be, acting reasonably (it being acknowledged that refusal by such Party to accept an opinion that is not at least at a “should” level will be considered to be reasonable), that the taking or performing of such act, or failure to take or perform such act or the entering into such transaction, as applicable, transaction will not cause the Arrangement and/or any transaction contemplated by the Arrangement and/or this Agreement to be taxed in a manner inconsistent with that provided for in the Final Tax Ruling in respect of the other Party or any other member of that other Party’s Group (the B+L Group or BHC Group, as the case may be); and (ii) confirming in writing to the other Party that the obtaining of have such a supplemental tax ruling or opinion shall not relieve such Party of any liability under Article 5 in respect of such act, failure to act or transactioneffect. (c) Each Party shallof FirstService and New FSV covenants and agrees with and in favour of each other to: (i) file its tax Tax returns and make all other filings, notifications, designations and elections, elections (including section 85 elections under the Tax Act, and the corresponding provisions of any applicable provincial tax legislation) ), pursuant to the Tax Act and/or applicable provincial or foreign tax legislation, that are contemplated in the Final Tax RulingRuling and Opinion, the Plan of Arrangement and/or or this Agreement, and (ii) to make adjustments to its stated capital accounts in accordance with the terms of the Plan of Arrangement following the Effective Date. Where an agreed amount is to be included in any election referred to in this Section 3.3(cparagraph 4.4(c)(i), such amount will be within the range contemplated by the Tax Act and/or applicable provincial or foreign tax legislation, as the case may be, and will be the amount, if any, contemplated by the Final Tax RulingRuling and Opinion, the Plan of Arrangement and/or and this Agreement. (d) Each Party shall of FirstService and New FSV covenants and agrees with and in favour of each other to cooperate in the preparation, execution and filing, in the form and within the time limits prescribed or otherwise contemplated in the Tax Act, of all Tax returns, filings, notifications, designations and elections under the Tax Act as contemplated in the Final Canadian Tax RulingRuling Application, Tax Ruling and Opinion, the Plan of Arrangement and/or and this Agreement (and any similar tax Tax returns, elections, notifications or designations that may be required under applicable provincial or foreign tax legislation). (e) BHC and B+L shall cause each member of the BHC Group and B+L Group, respectively, and TC and TC Sub shall cause each of their respective subsidiaries, as applicable, to comply with the foregoing Sections 3.3(a) to 3.3(d). (f) Notwithstanding the forgoing, no acquisition of control of either of BHC or B+L that is or was not within the control of BHC or B+L, as applicable, and in respect of which the BHC Board or B+L Board, as applicable, did not agree, consent, support, encourage or otherwise acquiesce, shall constitute a breach by BHC or B+L, as applicable, of its obligations under the foregoing Sections 3.3(a) to 3.3(e). For purposes of this Section, the phrase “acquisition of control” shall be interpreted as it is interpreted for purposes of paragraph 55(3.1)(b) of the Tax Act. (g) Each Party shall cooperate and use all commercially reasonable efforts to obtain the Final Tax Ruling (and, if elected by BHC, a U.S. Tax Ruling), the U.S. Tax Opinion and in consenting to and agreeing to all such amendments to this Agreement and the Plan of Arrangement as may be necessary to obtain the Final Tax Ruling (and, if elected by BHC, a U.S. Tax Ruling) and the U.S. Tax Opinion and to implement the Plan of Arrangement in accordance with the Final Tax Ruling (and, if received by BHC, the U.S. Tax Ruling) and the U.S. Tax Opinion. (h) In the event that BHC determines, in its sole discretion: (i) at any time, whether before or after the Effective Date, that the transactions that have implemented or will implement the Arrangement will not be taxed in a manner that is consistent with their treatment for purposes of the Tax Act as a tax-deferred “butterfly reorganization” pursuant to paragraph 55(3)(b) of the Tax Act; and/or (ii) at any time prior to the Effective Date, not to proceed with a transaction or series of transactions to which BHC desires such “butterfly reorganization” rules to apply, BHC shall provide written notice to B+L reasonably promptly following the date on which BHC has definitively made such determination confirming that BHC has made such determination and, effective from the date on which such notice is provided, no Party shall be required to comply with the covenants contained in Sections 3.3(a), 3.3(b), 3.3(c) and 3.3(g); provided, for clarity, that each Party shall remain liable for any prior breaches of such Sections in accordance with this Agreement.