Parent TRA Sample Clauses
The Parent TRA (Tax Receivable Agreement) clause establishes the terms under which a parent company agrees to share certain tax benefits with other parties, typically in the context of a corporate restructuring or initial public offering. This clause outlines how tax attributes, such as net operating losses or step-ups in tax basis, are calculated and how the resulting tax savings are allocated between the parent and other stakeholders. By clearly defining the mechanics for sharing tax benefits, the Parent TRA clause ensures transparency and fairness in the distribution of tax-related value, thereby reducing disputes and aligning incentives among the parties involved.
Parent TRA. If and to the extent that there is a Disqualifying Action and the resulting Taxes (including any Taxes attributable to the Section 336(e) Election) are allocated to Parent pursuant to Section 4, (i) Parent shall be entitled to periodic payments from SpinCo equal to the product of (x) 85% of the tax savings arising from the step-up in tax basis resulting from the Section 336(e) Election and (y) the percentage of such Taxes that are allocated to Parent pursuant to Section 4, and (ii) the Parties shall negotiate in good faith the terms of a tax receivable agreement to govern the calculation of such payments, with it being agreed that the terms of such agreement shall be substantially similar to the terms of the MCK Tax Receivable Agreement; provided that any such tax saving in clause (i) shall be determined using a “with and without” methodology (treating any deductions or amortization attributable to the step-up in tax basis resulting from the Section 336(e) Election as the last items claimed for any taxable year, including after the utilization of any carryforwards).
Parent TRA. If and to the extent that there is a Disqualifying Action and the resulting Taxes (including any Taxes attributable to the Section 336(e) Election) are allocated to Parent pursuant to Section 4, (i) Parent shall be entitled to periodic payments from SpinCo equal 5 NTD: Amount equal to 5% of the equity value of SpinCo. to the product of (x) 85% of the tax savings arising from the step-up in tax basis resulting from the Section 336(e) Election and (y) the percentage of such Taxes that are allocated to Parent pursuant to Section 4, and (ii) the Parties shall negotiate in good faith the terms of a tax receivable agreement to govern the calculation of such payments, with it being agreed that the terms of such agreement shall be substantially similar to the terms of the MCK Tax Receivable Agreement; provided that any such tax saving in clause (i) shall be determined using a “with and without” methodology (treating any deductions or amortization attributable to the step-up in tax basis resulting from the Section 336(e) Election as the last items claimed for any taxable year, including after the utilization of any carryforwards).6
Parent TRA. If any failure of the Intended Tax-Free Treatment of the Contribution, the Distribution or the Separation Payment results in Taxes (including any Taxes attributable to the Section 336(e) Election) that are not allocated to Livent pursuant to Section 3, (i) Parent shall be entitled to periodic payments from Livent equal to the product of (x) 85% of the Tax savings arising from the step-up in Tax basis resulting from the Section 336(e) Election and (y) the percentage of Taxes arising from such failure that are not allocated to Livent pursuant to Section 3, and (ii) the parties shall negotiate in good faith the terms of a tax receivable agreement to govern the calculation of such payments; provided, that any such tax savings in clause (i) shall be determined using a “with and without” methodology (treating any deductions or amortization attributable to the step-up in tax basis resulting from the Section 336(e) Election as the last items claimed for any taxable year, including after the utilization of any carryforwards). Notwithstanding the foregoing, Parent may, at its sole discretion, waive its right to receive any and all payments pursuant to this Section 10(b).