\n Section 7.02 Interpretation…………………………………………………………. 20<\/p>\n Section 7.03 Amendments; No Waivers………………………………………………….. 21<\/p>\n
Section 7.04 Nonexclusive Remedies…………………………………………………… 21<\/p>\n
Section 7.05 Successor and Assigns…………………………………………………… 21<\/p>\n
Section 7.06 Third-Party Beneficiaries……………………………………………….. 21<\/p>\n
Section 7.07 Governing Law………………………………………………………….. 21<\/p>\n
Section 7.08 Counterparts; Effectiveness……………………………………………… 21<\/p>\n
Section 7.09 Entire Agreement……………………………………………………….. 21<\/p>\n
Section 7.10 Severability…………………………………………………………… 21<\/p>\n
Section 7.11 Termination……………………………………………………………. 21<\/p>\n
Section 7.12 Survival………………………………………………………………. 22
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
SCHEDULES<\/p>\n
Schedule 2.01(g) Tax Returns to be Filed by Non-Responsible Party
\nSchedule 2.03(c) Claims for Refund of Taxes<\/p>\n
ii<\/p>\n
TAX MATTERS ARRANGEMENTS<\/p>\n
Tax Matters Arrangements, dated as of May 31, 2002 (this
\n“AGREEMENT”), by and between Goodrich Corporation, a New York corporation
\n(“GOODRICH”), on its own behalf and on behalf of its subsidiaries, and EnPro
\nIndustries, Inc., a North Carolina corporation and, as of the date hereof, a
\nwholly owned subsidiary of Goodrich (“ENPRO”), on its own behalf and on behalf
\nof its subsidiaries.<\/p>\n
RECITALS<\/p>\n
A. The Board of Directors of Coltec (as hereinafter
\ndefined) has determined that it is appropriate and in the best interests of
\nColtec and its sole shareholder to distribute all of the common stock of GPEC
\n(as hereinafter defined) to Goodrich (the “AEROSPACE DISTRIBUTION”).<\/p>\n
B. The Board of Directors of Goodrich has determined
\nthat it is appropriate and in the best interests of Goodrich and the holders of
\nGoodrich Common Stock (as hereinafter defined) to distribute all of the EnPro
\nCommon Stock (as hereinafter defined) on a pro rata basis to the holders of
\nGoodrich Common Stock (the “DISTRIBUTION”).<\/p>\n
C. The Aerospace Distribution and the Distribution (as
\nhereinafter defined) are intended to qualify as tax-free transactions (except as
\nto payment of cash in lieu of fractional shares) to Coltec, Goodrich and their
\nrespective shareholders, as applicable, under Sections 361 and 355 of the Code
\n(as hereinafter defined); and<\/p>\n
D. Goodrich and EnPro desire to provide for and agree
\nupon the allocation between the Goodrich Tax Group (as hereinafter defined) and
\nthe EnPro Tax Group (as hereinafter defined) of all responsibilities,
\nliabilities and benefits relating to or affecting Taxes (as hereinafter defined)
\npaid or payable by either of them for all taxable periods, whether beginning
\nbefore, on or after the Distribution Date (as hereinafter defined).<\/p>\n
AGREEMENT<\/p>\n
NOW, THEREFORE, in consideration of the foregoing, the mutual
\ncovenants and undertakings contained in this Agreement, and other good and
\nvaluable consideration, the receipt and sufficiency of which are hereby
\nacknowledged, Goodrich, EnPro and Coltec hereby agree as follows:<\/p>\n
ARTICLE 1<\/p>\n
DEFINITIONS<\/p>\n
Section 1.01 General. As used in this Agreement, the following
\nterms shall have the following meanings (such meanings to be equally applicable
\nto both the singular and plural forms of the terms defined):<\/p>\n
“Actually Realized” shall mean, (i) for purposes of
\ndetermining the timing of any Taxes (or related Tax cost or benefit) relating to
\nany payment, transaction, occurrence or event, the time at which the amount of
\nTaxes (including estimated Taxes) due and payable by any person is increased
\nabove or reduced below, as the case may be, the amount of Taxes that such<\/p>\n
person would be required to pay but for the payment, transaction, occurrence or
\nevent or (ii) for purposes of determining the timing of any credit or refund of
\nTaxes, the time at which the amount thereof is received or credited.<\/p>\n
“Code” shall mean the Internal Revenue Code of 1986, as
\namended, or any successor legislation.<\/p>\n
“Coltec” shall mean Coltec Industries Inc, a Pennsylvania
\ncorporation.<\/p>\n
“Distribution” shall have the meaning ascribed thereto in the
\nrecitals.<\/p>\n
“Distribution Agreement” shall mean the Distribution
\nAgreement, dated as of May 31, 2002, by and among Goodrich, EnPro and Coltec.<\/p>\n
“Distribution Date” shall mean the date on which the
\nDistribution occurs (or, if different, the date on which the Distribution is
\ndeemed to occur for U.S. federal Income Tax purposes). For purposes of this
\nAgreement, the Distribution shall be deemed effective as of the end of the day
\non the Distribution Date.<\/p>\n
“Distribution Time” shall have the meaning ascribed thereto in
\nthe Distribution Agreement.<\/p>\n
“Distribution Transaction” shall mean any transaction
\nundertaken in connection with the Distribution and described in the Ruling
\nRequest or the Tax Opinion.<\/p>\n
“EnPro” shall have the meaning ascribed thereto in the
\npreamble.<\/p>\n
“EnPro Common Stock” shall mean the common stock, par value
\n$0.01 per share, of EnPro.<\/p>\n
“EnPro Tax Act” shall have the meaning set forth in Section
\n3.02(a).<\/p>\n
“EnPro Tax Group” shall mean (i) EnPro, (ii) any corporation
\nwhich, immediately following the Distribution, is a member of the affiliated
\ngroup within the meaning of Section 1504(a)(1) of the Code, but without regard
\nto Section 1504(b)(3) of the Code, of which EnPro is the common parent and (iii)
\nany other corporate or noncorporate legal entity in which, immediately following
\nthe Distribution, EnPro directly or indirectly owns an interest.<\/p>\n
“Foreign Income Tax” shall mean any Income Tax other than a
\nU.S. federal, state or local Income Tax.<\/p>\n
“Foreign Income Tax Return” shall mean any Income Tax Return
\nwhich is not a U.S. federal, state or local Income Tax Return.<\/p>\n
“Goodrich” shall have the meaning ascribed thereto in the
\npreamble.<\/p>\n
“Goodrich Common Stock” shall mean the common stock, par value
\n$5.00 per share, of Goodrich.<\/p>\n
2<\/p>\n
“Goodrich Tax Group” shall mean (i) Goodrich, (ii) any
\ncorporation which, immediately following the Distribution, is a member of the
\naffiliated group within the meaning of Section 1504(a)(1) of the Code, but
\nwithout regard to Section 1504(b)(3) of the Code, of which Goodrich is the
\ncommon parent, (iii) any other corporate or noncorporate legal entity in hich,
\nimmediately following the Distribution, Goodrich directly or indirectly owns an
\ninterest and (iv) any other corporate or noncorporate legal entity (other than a
\nmember of the EnPro Tax Group) in which, at any time prior to the Distribution,
\nGoodrich directly or indirectly owned an interest, but only with respect to the
\nperiod during which Goodrich so owned an interest.<\/p>\n
“GPEC” shall mean Goodrich Pump and Engine Control Systems,
\nInc., a Delaware corporation.<\/p>\n
“Income Tax” shall mean (a) any Tax based upon, measured by,
\nor calculated with respect to (i) net income or profits (including, but not
\nlimited to, any capital gains Tax, minimum Tax or any Tax on items of Tax
\npreference, but not including sales, use, real or personal property, gross or
\nnet receipts, transfer or similar Taxes) or (ii) multiple bases (including, but
\nnot limited to, corporate franchise, doing business or occupation Taxes) if one
\nor more of the bases which such Tax may be based upon, measured by, or
\ncalculated with respect to is described in (i) above, or (b) any U.S. state or
\nlocal franchise Tax, including in the case of each of (a) and (b) any related
\ninterest and any penalties, additions to such Tax or additional amounts imposed
\nwith respect thereto by any Tax Authority.<\/p>\n
“Income Tax Benefit” shall mean for any taxable period the
\nexcess of (i) the hypothetical Income Tax liability of the taxpayer for the
\ntaxable period calculated as if the Timing Difference or Reverse Timing
\nDifference, as the case may be, had not occurred but with all other facts
\nunchanged, over (ii) the actual Income Tax liability of the taxpayer for the
\ntaxable period, calculated taking into account the Timing Difference or Reverse
\nTiming Difference, as the case may be (treating an Income Tax refund or credit
\nas a negative Income Tax liability for purposes of such calculation).<\/p>\n
“Income Tax Detriment” shall mean for any taxable period the
\nexcess of (i) the actual Income Tax liability of the taxpayer for the taxable
\nperiod, calculated taking into account the Timing Difference or Reverse Timing
\nDifference, as the case may be, over (ii) the hypothetical Income Tax liability
\nof the taxpayer for the taxable period, calculated as if the Timing Difference
\nor Reverse Timing Difference, as the case may be, had not occurred but with all
\nother facts unchanged (treating an Income Tax refund or credit as a negative
\nIncome Tax liability for purposes of such calculation).<\/p>\n
“Income Tax Return” shall mean any Tax Return that relates to
\nIncome Taxes.<\/p>\n
“Indemnitee” shall have the meaning set forth in Section 3.03.<\/p>\n
“Indemnitor” shall have the meaning set forth in Section 3.03.<\/p>\n
“Indemnity Issue” shall have the meaning set forth in Section
\n3.03.<\/p>\n
“Intragroup Transaction” shall mean any transfer of
\nintellectual property between members of the Goodrich Tax Group or members of
\nthe EnPro Tax Group or between a member<\/p>\n
3<\/p>\n
of the Goodrich Tax Group and a member of the EnPro Tax Group which occurs on or
\nbefore the Distribution Date.<\/p>\n
“IRS” shall mean the Internal Revenue Service.<\/p>\n
“Non-Income Tax” shall mean any Tax which is not an Income
\nTax.<\/p>\n
“Non-Income Tax Return” shall mean any Tax Return that relates
\nto Non-Income Taxes.<\/p>\n
“Pending Coltec Litigation” shall mean (i) the lawsuit
\ncommenced by Coltec against the United States by the filing of a complaint in
\nthe United States Court of Federal Claims on or about February 8, 2001, and (ii)
\nany controversy relating to one or more of the same issues for any
\nPre-Distribution Taxable Period subsequent to the taxable periods involved in
\nsuch lawsuit.<\/p>\n
“Person” shall have the meaning ascribed thereto in the
\nDistribution Agreement.<\/p>\n
“Post-Distribution Tax Act” shall have the meaning set forth
\nin Section 3.01(a).<\/p>\n
“Post-Distribution Taxable Period” shall mean a taxable period
\nbeginning after the Distribution Date.<\/p>\n
“Post-Tax Indemnification Period” shall mean any
\nPost-Distribution Taxable Period and that portion of any Straddle Period that
\nbegins on the day after the Distribution Date.<\/p>\n
“Pre-Distribution Taxable Period” shall mean a taxable period
\nending on or before the Distribution Date.<\/p>\n
“Responsible Party” shall have the meaning set forth in
\nSection 3.05.<\/p>\n
“Reverse Timing Difference” shall mean an increase in income,
\ngain or recapture, or a decrease in deduction, loss or credit, as calculated for
\nIncome Tax purposes, of the taxpayer for any Tax Indemnification Period coupled
\nwith an increase in deduction, loss or credit, or a decrease in income, gain or
\nrecapture, of the taxpayer for any Post-Tax Indemnification Period.<\/p>\n
“Ruling” shall mean the private letter ruling, including any
\namendment or supplement thereto, issued by the IRS in response to the Ruling
\nRequest.<\/p>\n
“Ruling Request” shall mean the private letter ruling request
\ndated July 25, 2001, filed by Goodrich with the IRS (as modified or supplemented
\nby any materials subsequently submitted to the IRS), seeking a ruling under
\nTreasury Regulation Section 1.355-6(d)(5)(ii).<\/p>\n
“Straddle Period” shall mean a taxable period that includes
\nbut does not end on the Distribution Date.<\/p>\n
“Tax” and “Taxes” shall mean all forms of taxation, whenever
\ncreated or imposed, and whether of the United States or elsewhere, and whether
\nimposed by a federal, state, municipal, governmental, territorial, local,
\nforeign or other body, and, without limiting the<\/p>\n
4<\/p>\n
generality of the foregoing, shall include net income, gross income, gross
\nreceipts, sales, use, value added, ad valorem, transfer, recording, franchise,
\nprofits, license, lease, service, service use, payroll, wage, withholding,
\nemployment, unemployment insurance, workers compensation, social security,
\nexcise, severance, stamp, business license, business organization, occupation,
\npremium, property, environmental, windfall profits, customs, duties, alternative
\nminimum, estimated or other taxes, fees, premiums, assessments or charges of any
\nkind whatever imposed or collected by any governmental entity or political
\nsubdivision thereof, together with any related interest and any penalties,
\nadditions to such Tax or additional amounts imposed with respect thereto by any
\nTax Authority.<\/p>\n
“Tax Authority” shall mean, with respect to any Tax, any
\ngovernmental entity, quasi-governmental body or political subdivision thereof
\nthat imposes such Tax and the agency (if any) charged with the determination or
\ncollection of such Tax for such entity, body or subdivision.<\/p>\n
“Tax Group” shall mean the Goodrich Tax Group or the EnPro Tax
\nGroup, as the case may be.<\/p>\n
“Tax Indemnification Period” shall mean any Pre-Distribution
\nTaxable Period and that portion of any Straddle Period that ends on the
\nDistribution Date.<\/p>\n
“Tax Opinion” shall mean the opinions of Kronish Lieb Weiner & Hellman LLP rendered in connection with the Distribution and certain related
\ntransactions.<\/p>\n
“Tax Return” shall mean any return, filing, questionnaire,
\ninformation return, election or other document required or permitted to be
\nfiled, including requests for extensions of time, filings made with respect to
\nestimated tax payments, claims for refund and amended returns that may be filed,
\nfor any period with any Tax Authority (whether domestic or foreign) in
\nconnection with any Tax (whether or not a payment is required to be made with
\nrespect to such filing).<\/p>\n
“Timing Difference” shall mean an increase in income, gain or
\nrecapture, or a decrease in deduction, loss or credit, as calculated for Income
\nTax purposes, of the taxpayer for any Post-Tax Indemnification Period coupled
\nwith an increase in deduction, loss or credit, or a decrease in income, gain or
\nrecapture, of the taxpayer for any Tax Indemnification Period.<\/p>\n
“Transaction Agreements” shall mean all agreements and other
\nwritten arrangements (other than this Agreement) entered into in connection with
\nany Distribution Transaction.
\n Any capitalized term not otherwise defined in this Agreement
\nshall have the meaning ascribed to it in the Distribution Agreement.<\/p>\n
Section 1.02 Schedules, etc. References to a “Schedule” are,
\nunless otherwise specified, to one of the Schedules attached to this Agreement;
\nreferences to “Section” or “Article” are, unless otherwise specified, to one of
\nthe Sections or Articles of this Agreement; and references to this Agreement
\ninclude the Schedules.<\/p>\n
5<\/p>\n
ARTICLE 2<\/p>\n
FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS<\/p>\n
Section 2.01 Preparation of Tax Returns.<\/p>\n
(a) UNITED STATES FEDERAL INCOME TAX RETURNS. Goodrich
\nshall prepare and timely file or cause to be prepared and timely filed all U.S.
\nfederal Income Tax Returns (including amendments thereto) which include a member
\nof the Goodrich Tax Group and are required to be filed for any Pre-Distribution
\nTaxable Period or Straddle Period. EnPro hereby irrevocably designates, and
\nagrees to cause each of its affiliates to so designate, Goodrich as its agent to
\ntake any and all actions necessary or incidental to the preparation and filing
\nof such U.S. federal Income Tax Returns.<\/p>\n
(b) UNITED STATES STATE AND LOCAL INCOME TAX RETURNS. (i)
\nGoodrich shall prepare and timely file or cause to be prepared and timely filed
\nall U.S. state and local Income Tax Returns (including amendments thereto) which
\n(A) are required to be filed for any Pre-Distribution Taxable Period and include
\na member of the Goodrich Tax Group or a member of the EnPro Tax Group or (B) are
\nrequired to be filed for any Straddle Period and (I) relate to a member or
\nmembers of the Goodrich Tax Group or their respective businesses, assets or
\nactivities, (II) relate to members of both the Goodrich Tax Group and the EnPro
\nTax Group or their respective businesses, assets or activities but include any
\nmember of the EnPro Tax Group only for the period of time up to and including
\nthe Distribution Date or (III) relate to a member of the EnPro Tax Group for a
\nperiod in which such member conducts or has conducted both an EnPro business and
\na non-EnPro business. EnPro hereby irrevocably designates, and agrees to cause
\neach of its affiliates to so designate, Goodrich as its agent to take any and
\nall actions necessary or incidental to the preparation and filing of such U.S.
\nstate and local Income Tax Returns.<\/p>\n
(ii) EnPro shall prepare and timely file or cause to be
\nprepared and timely filed all U.S. state and local Income Tax Returns (including
\namendments thereto) which are required to be filed for any Straddle Period,
\nrelate to a member or members of the EnPro Tax Group or their respective
\nbusinesses, assets or activities and are not the responsibility of Goodrich.<\/p>\n
(c) FOREIGN INCOME TAX RETURNS. (i) EnPro shall prepare
\nand timely file or cause to be prepared and timely filed all Foreign Income Tax
\nReturns which are required to be filed for any Straddle Period and relate to a
\nmember or members of the EnPro Tax Group. Goodrich hereby irrevocably
\ndesignates, and agrees to cause each of its affiliates to so designate, EnPro as
\nits agent to take any and all actions necessary or incidental to the preparation
\nand filing of such Foreign Income Tax Returns.<\/p>\n
(ii) Goodrich shall prepare and timely file or cause to be
\nprepared and timely filed all Foreign Income Tax Returns (including amendments
\nthereto) which (A) are required to be filed for any Pre-Distribution Taxable
\nPeriod and include a member of the Goodrich Tax Group or the EnPro Tax Group or
\n(B) are required to be filed for any Straddle Period, include a member of the
\nGoodrich Tax Group and are not the responsibility of EnPro. EnPro hereby
\nirrevocably designates, and agrees to cause each of its affiliates to so
\ndesignate, Goodrich as its<\/p>\n
6<\/p>\n
agent to take any and all actions necessary or incidental to the preparation and
\nfiling of such Foreign Income Tax Returns.<\/p>\n
(d) NON-INCOME TAX RETURNS. (i) All Non-Income Tax
\nReturns (including amendments thereto) for all Pre-Distribution Taxable Periods
\nand Straddle Periods which relate to a member of members of the Goodrich Tax
\nGroup or their respective businesses, assets or activities shall be the
\nresponsibility of the Goodrich Tax Group. EnPro hereby irrevocably designates,
\nand agrees to cause each of its affiliates to so designate, Goodrich as its
\nagent to take any and all actions necessary or incidental to the preparation and
\nfiling of such Non-Income Tax Returns.<\/p>\n
(ii) All Non-Income Tax Returns (including amendments
\nthereto) for all Pre-Distribution Taxable Periods and Straddle Periods which
\nrelate to a member or members of the EnPro Tax Group or their respective
\nbusinesses, assets or activities and are not the responsibility of the Goodrich
\nTax Group shall be the responsibility of the EnPro Tax Group.<\/p>\n
(e) POST-DISTRIBUTION TAX RETURNS. All Tax Returns
\n(including amendments thereto) for all Post-Distribution Taxable Periods shall
\nbe the responsibility of the Goodrich Tax Group if such Tax Returns relate to a
\nmember or members of the Goodrich Tax Group or their respective businesses,
\nassets or activities and shall be the responsibility of the EnPro Tax Group if
\nsuch Tax Returns relate to a member or members of the EnPro Tax Group or their
\nrespective businesses, assets or activities.<\/p>\n
(f) CONSISTENT WITH PAST PRACTICE; REVIEW BY
\nNON-RESPONSIBLE PARTY. Unless Goodrich and EnPro agree otherwise in writing, all
\nTax Returns (including amendments thereto) described in this Section 2.01 filed
\nafter the date of this Agreement for Pre-Distribution Taxable Periods or
\nStraddle Periods shall, in the absence of a change in controlling law or
\ncircumstances, be prepared on a basis consistent with the elections, accounting
\nmethods, conventions and principles of taxation used for the most recent taxable
\nperiods for which Tax Returns involving similar matters have been filed. Upon
\nthe request of the party not responsible under this Section 2.01 for preparation
\nof a particular Tax Return for any Pre-Distribution Taxable Period or Straddle
\nPeriod, the responsible party shall make available a draft of such Tax Return
\n(or relevant portions thereof) for review and comment by such non-responsible
\nparty. Subject to the provisions of this Agreement, all decisions relating to
\nthe preparation of Tax Returns shall be made in the sole discretion of the party
\nresponsible under this Agreement for such preparation.<\/p>\n
(g) RESPONSIBILITY FOR FILING. Notwithstanding that,
\npursuant to this Agreement, Goodrich or EnPro may be responsible for filing a
\nparticular Tax Return, Goodrich and EnPro have agreed that the actual
\npreparation and filing of certain Tax Returns will be done by the
\nnon-responsible party. Schedule 2.01(g) attached hereto sets forth a schedule
\nspecifying such Tax Returns. Goodrich and EnPro may agree from time to time to
\nadditions to or deletions from Schedule 2.01(g).<\/p>\n
Section 2.02 Payment of Taxes.<\/p>\n
(a) UNITED STATES FEDERAL INCOME TAXES. Except as
\notherwise provided in this Agreement, Goodrich shall pay or cause to be paid, on
\na timely basis, all Taxes<\/p>\n
7<\/p>\n
due with respect to the U.S. federal Income Tax liability for (A) all
\nPre-Distribution Taxable Periods of all members of the Goodrich Tax Group and
\nthe EnPro Tax Group and (B) the Straddle Period, the Tax Return for which
\nincludes members of the Goodrich Tax Group.<\/p>\n
(b) UNITED STATES STATE AND LOCAL INCOME TAXES. Except as
\notherwise provided in this Agreement:<\/p>\n
(i) Goodrich shall pay or cause to be paid, on a
\n timely basis, all Taxes due with respect to the U.S. state and local
\n Income Tax liability (A) for all Pre-Distribution Taxable Periods of
\n all members of the Goodrich Tax Group and the EnPro Tax Group and (B)
\n for all Straddle Periods which relate to (I) a member or members of the
\n Goodrich Tax Group or their respective businesses, assets or
\n activities, (II) members of both the Goodrich Tax Group and the EnPro
\n Tax Group or their respective businesses, assets or activities, or
\n (III) a member of the EnPro Tax Group for a period in which such member
\n conducts or has conducted both an EnPro business and a non-EnPro
\n business; provided, however, that EnPro, on behalf of the EnPro Tax
\n Group, hereby agrees to pay directly to or at the direction of
\n Goodrich, at least two days prior to the date payment (including
\n estimated payment) thereof is due, the portion of such U.S. state and
\n local Income Taxes which relates to a member or members of the EnPro
\n Tax Group or their respective businesses, assets or activities for the
\n portion of any Straddle Period which begins on the day after the
\n Distribution Date, which Taxes for such portion shall be computed in
\n the manner specified in Section 2.04; and<\/p>\n
(ii) EnPro shall pay or cause to be paid, on a
\n timely basis, all Taxes due with respect to the U.S. state and local
\n Income Tax liability for all Straddle Periods which relate to a member
\n or members of the EnPro Tax Group or their respective businesses,
\n assets or activities and are not the responsibility of Goodrich;
\n provided, however, that Goodrich hereby agrees to pay directly to or at
\n the direction of EnPro, at least two days prior to the date payment
\n (including estimated payment) thereof is due, the portion of such U.S.
\n state and local Income Taxes imposed in connection with the
\n transactions contemplated by the Transaction Agreements or any other
\n agreement entered into for the purpose of implementing the
\n Distribution.<\/p>\n
(c) FOREIGN INCOME TAXES. Except as otherwise provided in
\nthis Agreement:<\/p>\n
(i) EnPro shall pay or cause to be paid, on a
\n timely basis, all Foreign Income Taxes due with respect to the Foreign
\n Income Tax liability of all members of the EnPro Tax Group for all
\n Pre-Distribution Taxable Periods and all Straddle Periods; provided,
\n however, that Goodrich hereby agrees to pay directly to or at the
\n direction of EnPro, at least two day prior to the date payment
\n (including estimated payment) thereof is due, the portion of such
\n Foreign Income Taxes imposed in connection with the transactions
\n contemplated by the Transaction Agreements or any other agreement
\n entered into for the purpose of implementing the Distribution.<\/p>\n
(ii) Goodrich shall pay or cause to be paid, on a
\n timely basis, all Foreign Income Taxes due with respect to the Foreign
\n Income Tax liability of all<\/p>\n
8<\/p>\n
members of the Goodrich Tax Group for all Pre-Distribution Taxable
\n Periods and Straddle Periods.<\/p>\n
(d) NON-INCOME TAXES. Except as otherwise provided in
\nthis Agreement:<\/p>\n
(i) Goodrich shall pay or cause to be paid, on a
\n timely basis, all Taxes due with respect to the Non-Income Tax
\n liability for all Pre-Distribution Taxable Periods and Straddle Periods
\n which relate to a member or members of the Goodrich Tax Group or their
\n respective businesses, assets or activities;<\/p>\n
(ii) EnPro shall pay or cause to be paid, on a
\n timely basis, all Taxes due with respect to the Non-Income Tax
\n liability for all Pre-Distribution Taxable Periods and Straddle Periods
\n which relate to a member of the EnPro Tax Group for a period in which
\n such member conducts or has conducted both an EnPro business and a
\n non-EnPro business; provided, however, that Goodrich, on behalf of the
\n Goodrich Tax Group, hereby agrees to pay directly to or at the
\n direction of EnPro, at least two days prior to the date payment
\n (including estimated payment) thereof is due, the portion of such
\n Non-Income Taxes which (A) relates to a member or members of the
\n Goodrich Tax Group or their respective businesses, assets or activities
\n for such Pre-Distribution Taxable Periods and Straddle Periods or (B)
\n results from any Distribution Transaction or Intragroup Transaction;
\n and<\/p>\n
(iii) EnPro shall pay or cause to be paid, on a
\n timely basis, all Non-Income Taxes for all Pre-Distribution Taxable
\n Periods and Straddle Periods which relate to the EnPro Tax Group’s
\n businesses, assets or activities and are neither the responsibility of
\n Goodrich nor provided for in Section 2.01(d)(ii) above; provided,
\n however, that Goodrich hereby agrees to pay directly to or at the
\n direction of EnPro, at least two day prior to the date payment
\n (including estimated payment) thereof is due, the portion of such
\n Non-Income Taxes imposed in connection with any Intragroup Transaction
\n or the transactions contemplated by the Transaction Agreements or any
\n other agreement entered into for the purpose of implementing the
\n Distribution.<\/p>\n
(e) POST-DISTRIBUTION TAXES. Except as otherwise provided
\nin this Agreement, all Taxes for all Post-Distribution Taxable Periods shall be
\npaid or caused to be paid by the party responsible under this Agreement for
\nfiling the Tax Return pursuant to which such Taxes are due or, if no Tax Return
\nis required to be filed, by the party liable for such Taxes under applicable
\nlaw.<\/p>\n
(f) CREDIT FOR PRIOR TAX PAYMENTS. To the extent any
\nmember of a Tax Group has made a payment of Taxes (including estimated Taxes) on
\nor before the Distribution Date, the party liable for paying such Taxes under
\nthis Agreement shall be entitled to treat the payment as having been paid or
\ncaused to be paid by such party, and such party shall not be required to
\nreimburse the party which actually paid such Taxes.<\/p>\n
(g) RESPONSIBILITY FOR PAYMENT; NOTICE OF PAYMENT DUE.
\nNotwithstanding that, pursuant to this Agreement, Goodrich or EnPro may be
\nresponsible for paying a particular Tax liability, Goodrich and EnPro may agree
\nthat the actual payment to a<\/p>\n
9<\/p>\n
Taxing Authority of certain Tax liabilities will be made by the non-responsible
\nparty. Goodrich and EnPro may agree to prepare a schedule setting forth such Tax
\nliabilities and may agree from time to time to additions to or deletions from
\nsuch schedule. In each case where Goodrich or EnPro, as the case may be, is
\nrequired to make a payment of Taxes to or at the direction of the other party,
\nEnPro or Goodrich, as the case may be, shall notify the other party as to the
\namount of Taxes due from the other party at least five days prior to the date
\npayment (including estimated payment) is due.<\/p>\n
Section 2.03 Tax Refunds and Carrybacks.<\/p>\n
(a) RETENTION AND PAYMENT OF TAX REFUNDS. Except as
\notherwise provided in this Agreement, Goodrich shall be entitled to retain, or
\nto receive within three days after Actually Realized by the EnPro Tax Group, the
\nportion of all refunds or credits of Taxes for which the Goodrich Tax Group is
\nliable pursuant to Section 2.02 or Section 3.01(a) or which the Goodrich Tax
\nGroup is treated as having paid or caused to be paid pursuant to Section
\n2.02(f), including, without limitation, all refunds or credits of Taxes
\nresulting from the Pending Coltec Litigation. EnPro shall be entitled to retain,
\nor to receive within three days after Actually Realized by the Goodrich Tax
\nGroup, the portion of all refunds or credits of Taxes for which the EnPro Tax
\nGroup is liable pursuant to Section 2.02 or Section 3.01(b) (including all
\nNon-Income Taxes for which EnPro would have been liable pursuant to Section
\n2.02(d) had such Non-Income Taxes been due and not paid) or which the EnPro Tax
\nGroup is treated as having paid or caused to be paid pursuant to Section
\n2.02(f). The amount of any refund or credit of Taxes which Goodrich or EnPro is
\nentitled to retain or receive pursuant to this Section 2.03(a) shall be reduced
\nto take account of any Taxes incurred by the EnPro Tax Group, in the case of a
\nrefund or credit to which Goodrich is entitled, or the Goodrich Tax Group, in
\nthe case of a refund or credit to which EnPro is entitled, upon the receipt of
\nsuch refund or credit.<\/p>\n
(b) CARRYBACKS. EnPro shall be entitled, where permitted
\nby law, to (i) elect to carry back to a Pre-Distribution Taxable Period or
\nPeriods any net operating loss, net capital loss, charitable contribution or
\nother Tax item attributable to the EnPro Tax Group arising after the
\nDistribution Date or (ii) elect to carry forward any such Tax item. Except as
\notherwise provided in this Agreement, notwithstanding the provisions of Section
\n2.03(a), any refund or credit of Taxes resulting from the carryback to a Tax
\nIndemnification Period of any Tax item attributable to the Goodrich Tax Group or
\nthe EnPro Tax Group arising in a Post-Tax Indemnification Period shall be for
\nthe account and benefit of the Goodrich Tax Group; provided, however, that (i)
\nif the Goodrich Tax Group Actually Realizes a Tax benefit that would not have
\nbeen realized but for the carryback of an EnPro Tax item (whether for the
\ncarryback year or any other year), Goodrich shall pay to EnPro, within ten days
\nafter such Tax benefit has been Actually Realized, an amount equal to 50% of
\nsuch Tax benefit and (ii) if a Tax audit or amendment of a Tax Return results in
\nan increase or decrease in the amount of any Tax benefit Actually Realized by
\nthe Goodrich Tax Group on account of the carryback of an EnPro Tax item,
\nGoodrich or EnPro, as the case may be, shall pay to the other party, within ten
\ndays after such an increase has been Actually Realized, or within ten days after
\nGoodrich has notified EnPro that such a decrease has been Actually Realized, an
\namount equal to 50% of such increase or decrease, as the case may be.<\/p>\n
(c) REFUND CLAIMS. Goodrich shall be permitted to file at
\nGoodrich’s sole expense, and EnPro shall reasonably cooperate with Goodrich in
\nconnection with, any<\/p>\n
10<\/p>\n
claims for refund of Taxes to which Goodrich is or would be entitled pursuant to
\nthis Section 2.03 or any other provision of this Agreement, including those
\ndescribed on Schedule 2.03(c). Goodrich shall reimburse EnPro for any reasonable
\nout-of-pocket costs and expenses incurred by any member of the EnPro Tax Group
\nin connection with such cooperation. EnPro shall be permitted to file at EnPro’s
\nsole expense, and Goodrich shall reasonably cooperate with EnPro in connection
\nwith, any claims for refunds of Taxes to which EnPro is or would be entitled
\npursuant to this Section 2.03 or any other provision of this Agreement. EnPro
\nshall reimburse Goodrich for any reasonable out-of-pocket costs and expenses
\nincurred by any member of the Goodrich Tax Group in connection with such
\ncooperation.<\/p>\n
Section 2.04 Allocation of Straddle Period Taxes. In the case of
\nany Straddle Period:<\/p>\n
(a) PERIODIC TAXES. (i) The periodic Taxes of a member of
\nthe Goodrich Tax Group or the EnPro Tax Group or its business, assets or
\nactivities that are not based on income or receipts (e.g., property Taxes) for
\nthe portion of any Straddle Period ending on the Distribution Date shall be
\ncomputed based on the ratio of the number of days in such portion of the
\nStraddle Period and the number of days in the entire taxable period; and (ii)
\nthe periodic Taxes of a member of the Goodrich Tax Group or the EnPro Tax Group
\nor its business, assets or activities that are not based on income or receipts
\nfor the portion of any Straddle Period beginning on the day after the
\nDistribution Date shall be computed based on the ratio of the number of days in
\nsuch portion of the Straddle Period and the number of days in the entire taxable
\nperiod.<\/p>\n
(b) NON-PERIODIC TAXES. (i) The Taxes of a member of the
\nGoodrich Tax Group or the EnPro Tax Group or its business, assets or activities
\n(other than Taxes described in Section 2.04(a) above) for the portion of any
\nStraddle Period ending on the Distribution Date shall be computed on a
\n“closing-of-the-books” basis as if such taxable period ended as of the close of
\nbusiness on the Distribution Date, and, in the case of any Taxes of a member of
\nthe Goodrich Tax Group or the EnPro Tax Group or its business, assets or
\nactivities with respect to any equity interest in any partnership or other
\n“flowthrough” entity, as if the taxable period of such partnership or other
\n“flowthrough” entity ended on the Distribution Date; and (ii) the Taxes of a
\nmember of the Goodrich Tax Group or the EnPro Tax Group or its business, assets
\nor activities (other than Taxes described in Section 2.04(a) above) for the
\nportion of any Straddle Period beginning after the Distribution Date shall be
\ncomputed on a “closing-of-the-books” basis as if such taxable period began on
\nthe day after the Distribution Date, and, in the case of any Taxes of a member
\nof the Goodrich Tax Group or the EnPro Tax Group or its business, assets or
\nactivities with respect to any equity interest in any partnership or other
\n“flowthrough” entity, as if the taxable period of such partnership or other
\n“flowthrough” entity began as of the day after the Distribution Date.<\/p>\n
(c) The Taxes of the Goodrich Tax Group and the EnPro Tax
\nGroup with respect to any Straddle Period for which the Tax Return includes a
\nmember, or the respective business, assets, or activities of a member, of each
\nof the Goodrich Tax Group and the EnPro Tax Group shall be allocated between the
\nGoodrich Tax Group and the EnPro Tax Group in a manner analogous to that set
\nforth in Treasury Regulation Section 1.1552-1(a)(2).<\/p>\n
11<\/p>\n
ARTICLE 3<\/p>\n
TAX INDEMNIFICATION; TAX CONTESTS<\/p>\n
Section 3.01 Indemnification.<\/p>\n
(a) GOODRICH INDEMNIFICATION. Subject to Section 3.01(b)
\nand Section 3.02, Goodrich shall indemnify, defend and hold harmless each member
\nof the EnPro Tax Group and each of their respective shareowners, directors,
\nofficers, employees and agents and each of the heirs, executors, successors and
\nassigns of any of the foregoing from and against:<\/p>\n
(i) all Taxes of the Goodrich Tax Group;<\/p>\n
(ii) all Taxes of the EnPro Tax Group for (A) all
\n Pre-Distribution Taxable Periods and (B) the portion of all Straddle
\n Periods prior to and including the Distribution Date, which Taxes for
\n such portion shall be computed in the manner specified in Section 2.04;<\/p>\n
(iii) all liability as a result of Treasury
\n Regulation Section 1.1502-6(a) (which imposes several liability on
\n members of an affiliated group that files a U.S. federal consolidated
\n Income Tax return), or any comparable U.S. state or local provision,
\n for Income Taxes of any person which is or has ever been affiliated
\n with any member of the Goodrich Tax Group or with which any member of
\n the Goodrich Tax Group joins or has ever joined (or is or has ever been
\n required to join) in filing any consolidated, combined or unitary
\n Income Tax Return for any Pre-Distribution Taxable Period or Straddle
\n Period, but only for the period during which such person is or was
\n affiliated with a member of the Goodrich Tax Group or joins or joined
\n (or is or was required to join) with a member of the Goodrich Tax Group
\n in filing any consolidated, combined or unitary Income Tax Return;<\/p>\n
(iv) all Taxes for any Tax period (whether
\n beginning before, on or after the Distribution Date) that would not
\n have been payable but for the breach by any member of the Goodrich Tax
\n Group of any representation, warranty, covenant or obligation under
\n this Agreement;<\/p>\n
(v) all liability for a breach by any member of
\n the Goodrich Tax Group of any representation, warranty, covenant or
\n obligation under this Agreement;<\/p>\n
(vi) all Income Taxes and Non-Income Taxes
\n imposed in connection with the transactions contemplated by the
\n Transaction Agreements or any other agreement entered into for the
\n purpose of implementing the Distribution;<\/p>\n
(vii) all Taxes for which Goodrich is liable
\n pursuant to Section 3.02; and<\/p>\n
(viii) all liability for any reasonable legal,
\n accounting, appraisal, consulting or similar fees and expenses relating
\n to the foregoing.<\/p>\n
12<\/p>\n
Notwithstanding the foregoing and subject to Section 3.01(b) and Section 3.02,
\nGoodrich shall not indemnify, defend or hold harmless any member of the EnPro
\nTax Group from any liability for Taxes attributable to any action (including the
\nmaking of an election under Section 338 of the Code) taken by any member of the
\nEnPro Tax Group after the Distribution (other than any such action expressly
\nrequired or otherwise expressly contemplated by the Transaction Agreements or
\nany other agreement entered into for the purpose of implementing the
\nDistribution or taken in the ordinary course of business) (hereinafter a
\n“POST-DISTRIBUTION TAX ACT”).<\/p>\n
(b) ENPRO INDEMNIFICATION. EnPro shall be liable for, and
\nshall indemnify, defend and hold harmless each member of the Goodrich Tax Group
\nand each of their respective shareowners, directors, officers, employees and
\nagents and each of the heirs, executors, successors and assigns of any of the
\nforegoing from and against:<\/p>\n
(i) all Taxes of any member of the EnPro Tax
\n Group (other than Taxes for which Goodrich provides indemnification
\n pursuant to Section 3.01(a));<\/p>\n
(ii) all Taxes for any Tax period (whether
\n beginning before, on or after the Distribution Date) that would not
\n have been payable but for the breach by any member of the EnPro Tax
\n Group of any representation, warranty, covenant or obligation under
\n this Agreement;<\/p>\n
(iii) all liability for a breach by any member of
\n the EnPro Tax Group of any representation, warranty, covenant or
\n obligation under this Agreement;<\/p>\n
(iv) all Taxes for which EnPro is liable pursuant
\n to Section 3.02;<\/p>\n
(v) all Taxes attributable to a
\n Post-Distribution Tax Act; and<\/p>\n
(vi) all liability for any reasonable legal,
\n accounting, appraisal, consulting or similar fees and expenses relating
\n to the foregoing.<\/p>\n
SECTION 3.02 EnPro Tax Acts.<\/p>\n
(a) Notwithstanding anything to the contrary in Section
\n3.01, EnPro agrees to indemnify, defend and hold harmless each member of the
\nGoodrich Tax Group and each of their respective shareowners, directors,
\nofficers, employees and agents and each of the heirs, executors, successors and
\nassigns of any of the foregoing from and against any Taxes resulting from any
\naction or failure to act by any member of the EnPro Tax Group which causes (i)
\nthe Distribution to fail to qualify as tax-free to Goodrich under Section 361(c)
\nof the Code or (ii) any pre-Distribution transaction undertaken in connection
\nwith the Distribution to become taxable (hereinafter an “ENPRO TAX ACT”).<\/p>\n
(b) EnPro shall, and shall cause each member of the EnPro
\nTax Group to, comply with and take no action inconsistent with the
\nrepresentation letter delivered by EnPro in connection with the Tax Opinion,
\nunless, pursuant to a favorable ruling letter obtained from the IRS which is
\nsatisfactory to Goodrich or the advice of Kronish Lieb Weiner & Hellman LLP or
\nother nationally recognized tax counsel to Goodrich, which advice shall be
\nsatisfactory to Goodrich, such act or omission would not adversely affect the
\nU.S. federal Income Tax consequences of the Distribution to Goodrich or the
\nshareowners of Goodrich. Notwithstanding <\/p>\n
13<\/p>\n
Section 3.01(b)(iii), 3.01(b)(iv) and 3.01(b)(vi), the parties intend that the
\nsole remedy for breach of the covenants contained in this Section 3.02(b) shall
\nbe as set forth in Section 3.02(a).<\/p>\n
(c) Notwithstanding the foregoing, an EnPro Tax Act shall
\nnot include any transaction or action specifically disclosed or specifically
\ndescribed in any of the Transaction Agreements or any action taken on or prior
\nto the Distribution Date. An EnPro Tax Act shall not include any action on the
\npart of any member of the Goodrich Tax Group. Goodrich agrees to indemnify and
\nhold each member of the EnPro Tax Group harmless from and against any Taxes
\nresulting from the failure of the Distribution to qualify as tax-free to
\nGoodrich under Section 361(c) of the Code, except where such failure is
\nattributable to an EnPro Tax Act.<\/p>\n
Section 3.03 Notice of Indemnity. Whenever a party hereto
\n(hereinafter an “INDEMNITEE”) becomes aware of the existence of an issue raised
\nby any Tax Authority which could reasonably be expected to result in a
\ndetermination that would increase the liability for any Tax of the other party
\nhereto or any member of its Tax Group for any Tax period or require a payment
\nhereunder by the other party (hereinafter an “INDEMNITY ISSUE”), the Indemnitee
\nshall in good faith promptly give notice to such other party (hereinafter the
\n“INDEMNITOR”) of such Indemnity Issue. The failure of the Indemnitee to give
\nsuch notice shall not relieve the Indemnitor of its obligations under this
\nAgreement, except to the extent such Indemnitor or a member of its Tax Group is
\nactually prejudiced by such failure to give notice.<\/p>\n
Section 3.04 Payments.<\/p>\n
(a) TIMING ADJUSTMENTS. Timing Differences. If a Tax
\naudit proceeding or an amendment of a Tax Return results in a Timing Difference,
\nand such Timing Difference results in an Income Tax Benefit to the Goodrich Tax
\nGroup, then in each Post-Tax Indemnification Period in which the EnPro Tax Group
\nActually Realizes an Income Tax Detriment, Goodrich shall pay to EnPro an amount
\nequal to such Income Tax Detriment; provided, however, that the aggregate
\npayments which Goodrich shall be required to make under this Section 3.04(a)(i)
\nwith respect to any Timing Difference shall not exceed the aggregate amount of
\nthe Income Tax Benefits realized by the Goodrich Tax Group for all taxable
\nperiods and the EnPro Tax Group for all Tax Indemnification Periods as a result
\nof such Timing Difference. Goodrich shall make all such payments within ten days
\nafter EnPro notifies Goodrich that the relevant Income Tax Detriment has been
\nActually Realized.<\/p>\n
(ii) Reverse Timing Differences. If a Tax audit proceeding
\nor an amendment of a Tax Return results in a Reverse Timing Difference, and,
\nsuch Reverse Timing Difference results in an Income Tax Detriment to the
\nGoodrich Tax Group, then in each Post-Tax Indemnification Period in which the
\nEnPro Tax Group Actually Realizes an Income Tax Benefit, EnPro shall pay to
\nGoodrich within ten days after EnPro has Actually Realized such Income Tax
\nBenefit an amount equal to such Income Tax Benefit; provided, however, that the
\naggregate payments which EnPro shall be required to make under this Section
\n3.04(a)(ii) with respect to any Reverse Timing Difference shall not exceed the
\naggregate amount of the Income Tax Detriments suffered by the EnPro Tax Group
\nand the Goodrich Tax Group for all Tax Indemnification Periods as a result of
\nsuch Reverse Timing Difference.<\/p>\n
(b) TIME FOR PAYMENT. Except as otherwise provided in
\nthis Section 3.04(b), any indemnity payment required to be made pursuant to this
\nAgreement shall be paid<\/p>\n
14<\/p>\n
within thirty days after the Indemnitee makes written demand upon the
\nIndemnitor, provided that in no event shall such payment be required to be made
\nearlier than five business days prior to the date on which the relevant Taxes
\n(including estimated Taxes) are required to be paid (or would be required to be
\npaid if no such Taxes are due) to the relevant Tax Authority. Notwithstanding
\nany other provision in this Agreement, to simplify the administration of this
\nAgreement, the payment of any amount less than $100,000 required to be made
\npursuant to this Agreement by one party hereto to the other party hereto need
\nnot be made to such other party prior to thirty days following the later of (i)
\nthe close of the calendar quarter during which such payment obligation arose and
\n(ii) the day during such calendar quarter when the aggregate amount of all such
\nless than $100,000 payment obligations arising during such calendar quarter
\nexceeds $500,000. Unless otherwise specified by the recipient for items
\nexceeding $250,000, any such payment may be made on a net Tax basis (i.e.,
\nreduced to take account of any net Tax benefit to be realized by the recipient
\n(computed at the effective Tax rate set forth in Section 3.04(c)) to the extent
\nsuch recipient is entitled to a corresponding deduction.<\/p>\n
(c) PAYMENTS NET OF TAXES AND TAX BENEFITS. The amount of
\nany payment under this Agreement shall be (i) reduced to take into account any
\nnet Tax benefit realized by the recipient’s Tax Group arising from the
\nincurrence or payment by such Tax Group of any amount in respect of which such
\npayment is made and (ii) increased to take into account any net Tax cost
\nincurred by the Tax Group as a result of the receipt or accrual of payments
\nhereunder (grossed-up for such increase), in each case determined by treating
\nthe recipient as recognizing all other items of income, gain, loss, deduction or
\ncredit before recognizing any item arising from the receipt or accrual of any
\npayment hereunder. In determining the amount of any such Tax benefit or Tax
\ncost, the recipient’s Tax Group shall be deemed to be subject to (A) U.S.
\nfederal Income Taxes and Foreign Income Taxes at the maximum statutory rate then
\nin effect and (B) U.S. state and local Income Taxes at an assumed rate of five
\npercent (tax effected at such maximum statutory U.S. federal Income Tax rate).
\nExcept as otherwise provided in this Agreement or unless the parties otherwise
\nagree to an alternative method for determining the present value of any such
\nanticipated Tax benefit or Tax cost, any payment hereunder shall initially be
\nmade without regard to this Section and shall be increased or reduced to reflect
\nany such net Tax cost (including gross-up) or net Tax benefit only after the
\nrecipient’s Tax Group has Actually Realized such Tax cost or Tax benefit.<\/p>\n
(d) RIGHT TO OFFSET. Any party making a payment under
\nthis Agreement shall have the right to reduce any such payment by any undisputed
\namounts owed to it by the other party to this Agreement.<\/p>\n
(e) CHARACTERIZATION OF PAYMENTS. This Agreement defines
\ncertain obligations undertaken by Goodrich and Coltec, which will be a member of
\nthe EnPro Tax Group, in connection with certain pre-Distribution transactions
\nbetween (i) Coltec and GPEC, which will be a member of the Goodrich Tax Group,
\nand (ii) Goodrich and EnPro. Notwithstanding that this Agreement provides for
\npayments relating to Taxes and refunds or credits of Taxes to be made by EnPro
\nto or at the direction of Goodrich, the actual payment obligation is an
\nobligation of Coltec to GPEC, and such payments relating to Taxes and refunds or
\ncredits of Taxes shall be made by Coltec to or at the direction of GPEC. It is
\nthe intention of the parties to this Agreement that payments made pursuant to
\nthis Agreement be treated as relating back to the pre-Distribution transactions
\nbetween Coltec and GPEC and between Goodrich and EnPro as adjustments to capital
\n(i.e., capital contributions to GPEC or EnPro, as<\/p>\n
15<\/p>\n
the case may be), and the parties shall not take any position inconsistent with
\nsuch intention before any Tax Authority, except to the extent that a final
\ndetermination (as defined in Section 1313 of the Code) with respect to the
\nrecipient party causes any such payment not to be so treated.<\/p>\n
Section 3.05 Tax Contests. The Indemnitor and its representatives,
\nat the Indemnitor’s expense, shall be entitled to participate (a) in all
\nconferences, meetings and proceedings with any Tax Authority, the subject matter
\nof which is or includes an Indemnity Issue, and (b) in all appearances before
\nany court, the subject matter of which is or includes an Indemnity Issue. The
\nparty which has responsibility for filing the Tax Return under this Agreement
\n(hereinafter the “RESPONSIBLE PARTY”) with respect to which there could be an
\nincrease in liability for any Tax or with respect to which a payment could be
\nrequired hereunder shall have the right to decide as between the parties hereto
\nhow such matter is to be dealt with and finally resolved with the appropriate
\nTax Authority and shall control all audits and similar proceedings; provided,
\nhowever, that Goodrich shall be treated as the Responsible Party with respect to
\nany Tax Return filed by any member of the EnPro Tax Group for any
\nPre-Distribution Taxable Period ending on or before the acquisition of Coltec by
\nGoodrich. If no Tax Return is or was required to be filed in respect of an
\nIndemnity Issue, the Indemnitor shall be treated as the Responsible Party with
\nrespect thereto. The Responsible Party agrees to cooperate with the other party
\nin the settlement of any Indemnity Issue and to take such other party’s
\ninterests into account. Notwithstanding any other provision of this Agreement,
\nif Goodrich has materially satisfied its obligations under this Agreement and
\nEnPro fails to permit Goodrich to control any audit or proceeding regarding any
\nIndemnity Issue relating to (a) the qualification of the Distribution as
\ntax-free to Goodrich under Section 361(c) of the Code or (b) the qualification
\nof any transaction undertaken pursuant to the Transaction Agreements or
\ndescribed in the Ruling Request or the Tax Opinion as a transaction described in
\nSection 355 of the Code, a “reorganization” within the meaning of Section
\n368(a)(1)(D) of the Code, or an otherwise tax-free transaction, then Goodrich
\nshall not be liable for and shall not indemnify the EnPro Tax Group for any Tax
\ndeficiency resulting from an adverse determination of such Indemnity Issue.<\/p>\n
Section 3.06 Pending Coltec Litigation. Notwithstanding anything
\nin this Agreement to the contrary, Goodrich shall have the right to control all
\ndecisions (including, without limitation, the choice of counsel, the decision
\nwhether or not to settle and the decision whether or not to appeal), and shall
\nbear the burden of all expenses, relating to the Pending Coltec Litigation.
\nEnPro shall reasonably cooperate, and shall cause all members of the EnPro Tax
\nGroup to reasonably cooperate, with Goodrich in connection with the Pending
\nColtec Litigation. Goodrich shall reimburse EnPro for any reasonable
\nout-of-pocket costs and expenses incurred by any member of the EnPro Tax Group
\nin connection with such cooperation.<\/p>\n
ARTICLE 4<\/p>\n
INTEREST CHARGE FOR LATE PAYMENTS;
\n CURRENCY CALCULATIONS; EFFECTIVE
\n TIME OF TRANSACTIONS<\/p>\n
Section 4.01 Interest Charge for Late Payments. Any amount due and
\nowing by one party to the other party pursuant to this Agreement that is not
\npaid when due shall bear interest from the due date thereof until paid at a rate
\nequal to the rate(s) of interest per annum<\/p>\n
16<\/p>\n
announced from time to time by Citibank N.A. (or its successor) as its U.S.
\nprime rate, plus one percent.<\/p>\n
Section 4.02 Currency Calculations. All currency calculations
\nshall be made in accordance with standard accounting procedures of the Goodrich
\nTax Group.<\/p>\n
Section 4.03 Effective Time of Transactions. Goodrich and EnPro
\nagree that any transaction which, pursuant to the Distribution Agreement, is
\nexpressly effective immediately after the Distribution Time shall be treated for
\nfederal Income Tax purposes as occurring at the beginning of the day following
\nthe Distribution Date.<\/p>\n
ARTICLE 5<\/p>\n
COOPERATION AND EXCHANGE OF INFORMATION<\/p>\n
Section 5.01 Inconsistent Actions. Each party to this Agreement
\nagrees (i) to, and to cause each of the relevant members of its Tax Group to,
\nreport the Distribution as a transaction described in Section 355 of the Code
\nundertaken pursuant to the plan relating to a “reorganization” described in
\nSection 368(a)(1)(D) of the Code on all Tax Returns and other filings, (ii) to
\nuse its best efforts to ensure that the Distribution receives such treatment for
\nU.S. federal Tax purposes and (iii) that, unless it has obtained the prior
\nwritten consent of the other party, it (and the members of its Tax Group) shall
\nnot take any action inconsistent with, or fail to take any action required by,
\nthe Transaction Agreements.<\/p>\n
Section 5.02 Ruling Request and Tax Opinion. Each party hereto
\nrepresents that neither it nor any of the members of its Tax Group has taken, or
\nhas any plan or intention to take, any action which is inconsistent with any
\nfactual statements, representations or other similar conditions contained in the
\nRuling Request, the Ruling or the Tax Opinion.<\/p>\n
Section 5.03 Cooperation and Information Exchange. Each party
\nhereto agrees to provide, and to cause each member of its Tax Group to provide,
\nsuch cooperation and information as the other party hereto shall request, on a
\ntimely basis, in connection with the preparation or filing of any Tax Return or
\nclaim for Tax refund not inconsistent with this Agreement or in conducting any
\nTax audit, Tax dispute, or otherwise in respect of Taxes or to carry out the
\nprovisions of this Agreement. To the extent necessary to carry out the purposes
\nof this Agreement and subject to the other provisions of this Agreement, such
\ncooperation and information shall include, without limitation, promptly
\nforwarding copies of appropriate notices and forms or other communications
\nreceived from or sent to any Tax Authority which relate to the EnPro Tax Group
\nfor the Tax Indemnification Period and providing copies of all relevant Tax
\nReturns for the Tax Indemnification Period, together with accompanying schedules
\nand related workpapers, documents relating to rulings or other determinations by
\nTax Authorities, including, without limitation, foreign Tax Authorities, and
\nrecords concerning the ownership and Tax basis of property, which either party
\nmay possess. Each party to this Agreement shall make, or shall cause its
\naffiliates to make, employees and facilities available on a mutually convenient
\nbasis to provide an explanation of any documents or information provided
\nhereunder.<\/p>\n
17<\/p>\n
Section 5.04 Tax Records.<\/p>\n
(a) Goodrich and EnPro agree to (and to cause each member
\nof their respective Tax Groups to) (i) retain all Tax Returns, related schedules
\nand workpapers, and all material records and other documents relating thereto as
\nrequired under Section 6001 of the Code and the regulations promulgated
\nthereunder which exist on the date hereof or are created through the
\nDistribution Date, for a period of at least ten years following the Distribution
\nDate and (ii) allow the other party to this Agreement, at times and dates
\nreasonably acceptable to the retaining party, to inspect, review and make copies
\nof such records, as Goodrich and EnPro may reasonably deem necessary or
\nappropriate from time to time. In addition, after the expiration of such
\nten-year period, such Tax Returns, related schedules and workpapers, and
\nmaterial records shall not be destroyed or otherwise disposed of at any time,
\nunless the party proposing to destroy or otherwise dispose of such records shall
\nhave provided no less than 30 days’ prior written notice to the other party,
\nspecifying in reasonable detail the records proposed to be destroyed or disposed
\nof. If a recipient of such notice requests in writing prior to the scheduled
\ndate for such destruction or disposal that any of the records proposed to be
\ndestroyed or disposed of be delivered to such requesting party, the party
\nproposing the destruction or disposal shall promptly arrange for the delivery of
\nsuch requested records at the expense of the party requesting such records.<\/p>\n
(b) Notwithstanding anything in this Agreement to the
\ncontrary, if any party fails to comply with the requirements of Section 5.04(a)
\nhereof, the party failing so to comply shall be liable for, and shall hold the
\nother party harmless from, any Taxes (including, without limitation, penalties
\nfor failure to comply with the record retention requirements of the Code) and
\nother costs resulting from such party’s failure to comply.<\/p>\n
ARTICLE 6<\/p>\n
DISPUTE RESOLUTION<\/p>\n
Section 6.01 Initial Discussions. Any dispute arising under or
\nrelating to this Agreement shall be first discussed by the parties hereto.
\nEither party may initiate such discussions by giving the other party written
\nnotice specifying in detail the nature of the dispute. Within 15 days after
\ndelivery of the notice, the party receiving the notice shall submit a written
\nresponse, which shall include a statement of such party’s position, to the other
\nparty. Within ten days after delivery of the response, the parties shall meet at
\na mutually acceptable time and place, and thereafter as often as they reasonably
\ndeem necessary, to attempt to resolve the dispute. All reasonable requests for
\ninformation made by either party to the other party shall be honored.<\/p>\n
Section 6.02 Mediation. If the dispute is not resolved within 30
\nbusiness days (or such other period as agreed upon by the parties) following the
\nsubmission of the dispute to the chief executive officers, the parties shall
\nattempt to resolve the dispute employing non-binding mediation under the
\nthen-current CPR Mediation Procedure. If within ten business days (or any other
\nperiod agreed upon by the parties) after the commencement of such mediation the
\ndispute still has not been resolved, each of the parties may pursue any
\navailable legal or equitable remedy.<\/p>\n
18<\/p>\n
Section 6.03 Consent to Jurisdiction. Any suit, action or other
\nproceeding seeking to enforce any provision of, or based on any matter arising
\nout of or in connection with, this Agreement or the transactions contemplated
\nhereby may be brought only in a court of competent jurisdiction sitting in the
\nState of New York, and each of the parties hereby (a) agrees not to commence any
\nsuch suit, action or other proceeding except in such a court, (b) consents to
\nthe jurisdiction of any such court (and of the appropriate appellate courts
\ntherefrom) in such suit, action or other proceeding and (c) irrevocably waives,
\nto the fullest extent permitted by law, any objection which it may now or
\nhereafter have the right to claim (i) to the laying of the venue of any such
\nsuit, action or other proceeding in any such court or (ii) that any such suit,
\naction or other proceeding which is brought in any such court has been brought
\nin an inconvenient forum. Notwithstanding the foregoing, each party agrees that
\na final judgment in any such suit, action or other proceeding shall be
\nconclusive and may be enforced by suit on the judgment in any jurisdiction or in
\nany other manner provided at law or in equity. Process in any such suit, action
\nor other proceeding may be served on either party anywhere in the world, whether
\nwithin or without the jurisdiction of any such court. Without limiting the
\nforegoing, each party agrees that service of any process on such party hand
\ndelivered or sent by U.S. registered mail to such party’s address set forth in
\nSection 7.01 shall be deemed effective service of process on such party.<\/p>\n
ARTICLE 7<\/p>\n
MISCELLANEOUS<\/p>\n
Section 7.01 Notices. All notices, requests, consents and other
\ncommunications hereunder must be in writing and will be deemed to have been duly
\ngiven (a) when received if personally delivered or sent by facsimile, (b) one
\nbusiness day after being sent by nationally recognized overnight delivery
\nservice or (c) five business days after being sent by nationally registered or
\ncertified mail, return receipt requested, postage prepaid, and in each case
\naddressed as follows (any party by written notice to the other party in the
\nmanner prescribed by this section may change the address or the persons to whom
\nnotices thereof shall be directed):<\/p>\n
(a) If to Goodrich:<\/p>\n
Goodrich Corporation
\n Four Coliseum Centre
\n 2730 W. Tyvola Road
\n Charlotte, North Carolina 28217
\n Attention: Paul V. Cappiello
\n Director, Tax
\n Telecopy: (704) 423-7139
\n E-mail: paul.cappiello@goodrich.com<\/p>\n
with a copy to:<\/p>\n
Goodrich Corporation
\n Four Coliseum Centre
\n 2730 W. Tyvola Road
\n Charlotte, North Carolina 28217<\/p>\n
19<\/p>\n
Attention: Terrence Linnert
\n Senior Vice President, Human Resources
\n and Administration, General Counsel and
\n Secretary
\n Telecopy: (704) 423-7011
\n E-mail: terry.linnert@goodrich.com<\/p>\n
(b) If to EnPro:<\/p>\n
EnPro Industries, Inc.
\n 5605 Carnegie Boulevard, Suite 500
\n Charlotte, North Carolina 28209-4674
\n Attention: Nathaniel E. Standing
\n Director, Tax
\n Telecopy: (704) 731-1531
\n E-mail: nat.standing@enproindustries.com<\/p>\n
with a copy to:<\/p>\n
EnPro Industries, Inc.
\n 5605 Carnegie Boulevard, Suite 500
\n Charlotte, North Carolina 28209-4674
\n Attention: Richard L. Magee
\n Senior Vice President,
\n General Counsel and
\n Secretary
\n Telecopy: (704) 731-1531
\n E-mail: rick.magee@enproindustries.com<\/p>\n
Section 7.02 Interpretation. The headings contained in
\nthis Agreement are solely for convenience of reference and shall not be given
\nany effect in the construction or interpretation of this Agreement. Whenever the
\nword “including” is used in this Agreement, it shall be deemed to be followed by
\nthe words “without limitation.” Whenever a reference is made in this Agreement
\nto a “party” or “parties,” such reference shall be to a party or parties to this
\nAgreement unless otherwise indicated. The use of any gender herein shall be
\ndeemed to be or include the other genders and the use of the singular herein
\nshall be deemed to include the plural (and vice versa), wherever appropriate.
\nWhenever a reference is made in this Agreement to an Article, Section, or
\nSchedule, such reference shall be to an Article or Section of, or a Schedule to,
\nthis Agreement unless otherwise indicated. The use of the words “hereof” and
\n“herein” and words of similar import shall refer to this entire Agreement and
\nnot to any particular article, or section of this Agreement, unless the context
\nclearly indicates otherwise. Each party stipulates and agrees that the rule of
\nconstruction to the effect that any ambiguities are to be resolved against the
\ndrafting party shall not be employed in the interpretation of this Agreement to
\nfavor any party against the other, and that no party, including any drafting
\nparty, shall have the benefit of any legal presumption (including “meaning of
\nthe authors”) or the detriment of any burden of proof by reason of any ambiguity
\nor uncertain meaning contained in this Agreement.<\/p>\n
20<\/p>\n
Section 7.03 Amendments; No Waivers.<\/p>\n
(a) Any provision of this Agreement may be amended or
\nwaived if, and only if, such amendment or waiver is in writing and signed, in
\nthe case of an amendment, by each party, or in the case of a waiver, by the
\nparty against whom the waiver is to be effective.<\/p>\n
(b) No failure or delay by any party in exercising any
\nright, power or privilege hereunder shall operate as a waiver thereof nor shall
\nany single or partial exercise thereof preclude any other further exercise
\nthereof or the exercise of any other right, power or privilege.<\/p>\n
Section 7.04 Nonexclusive Remedies. The rights and remedies
\nherein provided shall be cumulative and not exclusive of any rights or remedies
\nprovided by law.<\/p>\n
Section 7.05 Successor and Assigns. The provisions of this
\nAgreement shall be binding upon and inure to the benefit of the parties hereto
\nand their respective successors and assigns; provided that neither party may
\nassign, delegate or otherwise transfer any of its rights or obligations under
\nthis Agreement without the prior written consent of the other party, which
\nconsent shall not be unreasonably withheld.<\/p>\n
Section 7.06 Third-Party Beneficiaries. Except for the provisions
\nof Article 3 relating to Tax indemnification, nothing contained in this
\nAgreement is intended nor shall it confer upon any person or entity, other than
\nthe parties hereto and the members of their respective Tax Groups, successors
\nand permitted assigns, any benefit, right or remedies under or by reason of this
\nAgreement.<\/p>\n
Section 7.07 Governing Law. This Agreement shall be construed in
\naccordance with and governed by the law of the State of New York, without regard
\nto the conflict of laws principles thereof.<\/p>\n
Section 7.08 Counterparts; Effectiveness. This Agreement may be
\nsigned in any number of counterparts, each of which shall be an original, with
\nthe same effect as if the signatures thereto and hereto were upon the same
\ninstrument.<\/p>\n
Section 7.09 Entire Agreement. This Agreement constitutes the
\nentire understanding of the parties with respect to the subject matter hereof
\nand supersedes all prior agreements, understandings and negotiations, both
\nwritten and oral, between the parties with respect to the subject matter hereof.<\/p>\n
Section 7.10 Severability. If any one or more of the provisions
\ncontained in this Agreement should be declared invalid, illegal or unenforceable
\nin any respect, the validity, legality and enforceability of the remaining
\nprovisions contained in this Agreement shall not in any way be affected or
\nimpaired thereby so long as the economic or legal substance of the transactions
\ncontemplated hereby is not affected in any manner materially adverse to any
\nparty. Upon such a declaration, the parties shall modify this Agreement so as to
\neffect the original intent of the parties as closely as possible in an
\nacceptable manner so that the transactions contemplated hereby are consummated
\nas originally contemplated to the fullest extent possible.<\/p>\n
Section 7.11 Termination. Notwithstanding any provision in this
\nAgreement to the contrary, this Agreement may be terminated at any time prior to
\nthe Distribution, without<\/p>\n
21<\/p>\n
penalty or liability, by and in the sole and absolute discretion of Goodrich by
\nwritten notice to EnPro and without the approval of EnPro.<\/p>\n
Section 7.12 Survival. All covenants and agreements of the
\nparties contained in this Agreement shall survive the Distribution Date.<\/p>\n
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]<\/p>\n
22<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this
\nAgreement to be duly executed by their respective authorized officers as of the
\ndate first above written.<\/p>\n
GOODRICH CORPORATION<\/p>\n
By: \/s\/ Kenneth L. Wagner
\n ——————————————-
\n Name: Kenneth L. Wagner
\n Title: Assistant Secretary<\/p>\n
ENPRO INDUSTRIES, INC.<\/p>\n
By: \/s\/ Richard L. Magee
\n ——————————————-
\n Name: Richard L. Magee
\n Title: Senior Vice President, Secretary and
\n General Counsel<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7453,7661],"corporate_contracts_industries":[9459,9476],"corporate_contracts_types":[9622,9628],"class_list":["post-43751","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-enpro-industries-inc","corporate_contracts_companies-goodrich-corp","corporate_contracts_industries-manufacturing__rubber","corporate_contracts_industries-aerospace__space","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43751"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43751"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43751"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}