Common use of Section 338 Clause in Contracts

Section 338. (a) Buyer will, or will cause its applicable Affiliate to, join with the applicable Sellers, and the applicable Sellers shall join with Buyer or its applicable Affiliate, in jointly making a timely and irrevocable election under Section 338(h)(10) of the Code with respect to Buyer’s acquisition (or the acquisition by an Affiliate of Buyer) of the Equity Interests of ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. pursuant to this Agreement and, if permissible, similar elections under any applicable state and local Tax Laws (collectively, the “Section 338(h)(10) Elections”). Sellers and Buyer shall each deliver completed and executed copies of IRS Form 8023, required schedules thereto, and any similar state and foreign forms at the Closing in accordance with Section 2.09(a)(vii) and Section 2.09(b)(vii). If any changes are required in these forms as a result of information which is first available after these forms are prepared, the parties will promptly make such changes. (b) Within thirty (30) days following the completion of the Purchase Price Allocation pursuant to Section 2.12, Buyer shall deliver to Sapphire a schedule (the “Preliminary Allocation Schedule”) allocating the ADSP (as such term is defined in Reg. §1.338-4) among the assets of each of ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. (taking into account and in accordance with the Purchase Price Allocation among the Equity Interests pursuant to Section 2.12). The Preliminary Allocation Schedule shall be reasonable and shall be prepared in accordance with Section 338(h)(10) of the Code and the Treasury Regulations thereunder. If, within thirty (30) days following delivery of the Preliminary Allocation Schedule, Sapphire has not notified Buyer in writing of its disagreement with the Preliminary Allocation Schedule, the Preliminary Allocation Schedule shall be final and binding. If within such 30-day period Sapphire so notifies Buyer, Sapphire and Buyer shall endeavor to resolve such disagreement in accordance with the procedures of Section 2.12. Once resolved, the Preliminary Allocation Schedule (as revised, if applicable) shall be final and binding. Each of Buyer and Sellers agree that neither it nor any of its Affiliates shall file any federal, state, local and foreign Tax Returns in a manner that is inconsistent with such Preliminary Allocation Schedule unless otherwise required pursuant to a final “determination” as defined in Section 1313(a) of the Code by a Tax Authority; provided, however, that nothing contained herein shall prevent the Parties from reasonably settling any proposed deficiency or adjustment by any Tax Authority based upon or arising out of the Preliminary Allocation Schedule, and the Parties shall not be required to litigate before any court any proposed deficiency or adjustment by any Tax Authority challenging such proposed deficiency or adjustment by any Tax Authority. (c) Sellers and Buyer intend for U.S. federal income tax purposes that any distribution of stock or other assets by ▇▇▇▇▇▇ Re Inc. or by ▇▇▇▇▇▇ Securities Inc. pursuant to the Restructuring constitute one of a series of distributions in complete liquidation pursuant to Section 332 of the Code of ▇▇▇▇▇▇ Re Inc. or ▇▇▇▇▇▇ Securities Inc., as applicable, in connection with the deemed liquidations of ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. pursuant to the Section 338(h)(10) Elections. In order to effect such distributions, Sellers shall cause each of ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. to adopt a plan of complete liquidation under Section 332 of the Code. Such plan shall provide for liquidating distributions consisting of the distributions identified on Schedule 6.03(c), followed by a deemed complete liquidation of ▇▇▇▇▇▇ Re. Inc. or ▇▇▇▇▇▇ Securities Inc., as applicable, pursuant to the Section 338(h)(10) Elections provided for in Section 6.03(a). (d) Buyer and Sellers agree that neither it nor any of its Affiliates will take any action that could cause the Section 338(h)(10) Elections to be invalid or take any position contrary thereto unless required pursuant to a determination as defined in Section 1313(a) of the Code or any similar provision of any state, non-U.S. or local Law. (e) Buyer shall be permitted to make or cause to be made any election under Section 338(g) of the Code (or any analogous provisions of state or local or U.S. Tax Law) for any Transferred Entity which is not a U.S. Transferred Entity (collectively, the “Non-U.S. Section 338 Elections”) with respect to the transactions contemplated under this Agreement. Buyer shall provide reasonable advance written notice to Sellers prior to making any such election. Sellers shall cooperate in good faith with Buyer and its Affiliates (including, after the Relevant Closing, the Transferred Entities) with any assistance reasonably requested by Buyer in connection with making such elections, and Buyer shall promptly reimburse Seller for any costs incurred by Seller in providing such cooperation. Notwithstanding anything to the contrary in this Agreement, including for the avoidance of doubt notwithstanding anything to the contrary in Section 9.02 of this Agreement, Sapphire shall have no liability to Buyer or its Affiliates for any Section 338(g) Taxes. (f) In the event that the Parties identify in writing following the date hereof and prior to the Relevant Closing Date a U.S. Transferred Entity for which a timely and irrevocable election under Section 338(h)(10) of the Code with respect to Buyer’s acquisition (or the acquisition by an Affiliate of Buyer) of the Equity Interests of such Transferred Entity is permitted by Law, Sections 6.03(a) – (d) shall apply mutatis mutandis with respect to such Transferred Entity.

Section 338. (a) Buyer will, or will cause its applicable Affiliate to, join with the applicable Sellers, and the applicable Sellers shall join with Buyer or its applicable Affiliate, in jointly making a timely and irrevocable election under Section 338(h)(10) of the Code with respect to Buyer’s acquisition (or the acquisition by an Affiliate of Buyer) of the Equity Interests of ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. pursuant to this Agreement and, if permissible, similar elections under any applicable state and local Tax Laws laws (collectively, the “Section 338(h)(10) Elections”). Sellers and Buyer shall each deliver completed and executed copies of IRS Form 8023, required schedules thereto, and any similar state and foreign forms at the Closing in accordance with Section 2.09(a)(vii2.09(a)(ix) and Section 2.09(b)(vii2.09(b)(ix). If any changes are required in these forms as a result of information which is first available after these forms are prepared, the parties will promptly make such changes. (b) Within thirty (30) days following the completion of the Purchase Price Allocation pursuant to Section 2.12, Buyer shall deliver to Sapphire a schedule (the “Preliminary Allocation Schedule”) allocating the ADSP (as such term is defined in Reg. §1.338-4) among the assets of each of ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. (taking into account and in accordance with the Purchase Price Allocation among the Equity Interests pursuant to Section 2.12). The Preliminary Allocation Schedule shall be reasonable and shall be prepared in accordance with Section 338(h)(10) of the Code and the Treasury Regulations thereunder. If, within thirty (30) days following delivery of the Preliminary Allocation Schedule, Sapphire has not notified Buyer in writing of its disagreement with the Preliminary Allocation Schedule, the Preliminary Allocation Schedule shall be final and binding. If within such 30-day period Sapphire so notifies Buyer, Sapphire and Buyer shall endeavor to resolve such disagreement in accordance with the procedures of Section 2.12. Once resolved, the Preliminary Allocation Schedule (as revised, if applicable) shall be final and binding. Each of Buyer and Sellers agree that neither it nor any of its Affiliates shall file any federal, state, local and foreign Tax Returns in a manner that is inconsistent with such Preliminary Allocation Schedule unless otherwise required pursuant to a final “determination” as defined in Section 1313(a) of the Code by a Tax Authority; provided, however, that nothing contained herein shall prevent the Parties from reasonably settling any proposed deficiency or adjustment by any Tax Authority based upon or arising out of the Preliminary Allocation Schedule, and the Parties shall not be required to litigate before any court any proposed deficiency or adjustment by any Tax Authority challenging such proposed deficiency or adjustment by any Tax Authority. (c) Sellers and Buyer intend for U.S. federal income tax purposes that any distribution of stock or other assets by ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re Inc. or by ▇▇▇▇▇▇ Securities Inc. pursuant to the Restructuring constitute one of a series of distributions in complete liquidation pursuant to Section 332 of the Code of ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re Inc. or ▇▇▇▇▇▇ Securities Inc., as applicable, in connection with the deemed liquidations of ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. pursuant to the Section 338(h)(10) Elections. In order to effect such distributions, Sellers and Buyer shall cause each of ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re Inc. and ▇▇▇▇▇▇ Securities Inc. to adopt a plan of complete liquidation under Section 332 of the Code. Such plan shall provide for liquidating distributions consisting of the distributions identified on Schedule 6.03(c), followed by a deemed complete liquidation of ▇▇▇▇▇▇ Administrative Services Corporation, ▇▇▇▇▇▇ Re. Inc. or ▇▇▇▇▇▇ Securities Inc., as applicable, pursuant to the Section 338(h)(10) Elections provided for in Section 6.03(a). (d) Buyer and Sellers agree that neither it nor any of its Affiliates will take any action that could cause the Section 338(h)(10) Elections to be invalid or take any position contrary thereto unless required pursuant to a determination as defined in Section 1313(a) of the Code or any similar provision of any state, non-U.S. or local Law. (e) Buyer shall be permitted to make or cause to be made any election under Section 338(g) of the Code (or any analogous provisions of state or local or U.S. Tax Law) for any Transferred Entity which is not a U.S. Transferred Entity (collectively, the “Non-U.S. Section 338 Elections”” ) with respect to the transactions contemplated under this Agreement. Buyer shall provide reasonable advance written notice to Sellers prior to making any such election. Sellers shall cooperate in good faith with Buyer and its Affiliates (including, after the Relevant Closing, the Transferred Entities) with any assistance reasonably requested by Buyer in connection with making such elections, and Buyer shall promptly reimburse Seller for any costs incurred by Seller in providing such cooperation. Notwithstanding anything to the contrary in this Agreement, including for the avoidance of doubt notwithstanding anything to the contrary in Section 9.02 of this Agreement, Sapphire shall have no liability to Buyer or its Affiliates for any Section 338(g) Taxes. (f) In the event that the Parties identify in writing following the date hereof and prior to the Relevant Closing Date a U.S. Transferred Entity for which a timely and irrevocable election under Section 338(h)(10) of the Code with respect to Buyer’s acquisition (or the acquisition by an Affiliate of Buyer) of the Equity Interests of such Transferred Entity is permitted by Law, Sections 6.03(a) – (d) shall apply mutatis mutandis with respect to such Transferred Entity.