Common use of Administration and Control; Cooperation Clause in Contracts

Administration and Control; Cooperation. (i) Except as provided in Section 9.2(b)(ii), Fortune Brands shall have sole responsibility for administration and control (including settlement authority) over all Pre-Distribution U.S. Income Tax Audits; provided that H&S shall have the right to participate in such Audit pursuant to Section 9.2(c) and as otherwise contemplated by this Section 9.2(b), but only to the extent that such Audit relates to Taxes for which H&S would be liable under Section 9.3(a)(ii). (ii) In the case of a Pre-Distribution U.S. Income Tax Audit involving Taxes for which each of Fortune Brands and H&S would be liable pursuant to Section 9.3(a) of this Agreement, the Parties agree to use reasonable best efforts to separate the issues for resolution, in which case the Party that would be liable for any Tax relating to such issue shall have sole responsibility for the administration and control (including settlement authority) of the separated issue, provided that— (1) H&S shall only have sole responsibility for the settlement of the separated issue if (x) the issue, as asserted by the Taxing Authority, would cause an individual payment obligation for H&S of $75,000 (seventy-five thousand dollars) or greater (including tax, interest and penalties) under this Agreement (an “H&S Separated Issue”) and (y) all H&S Separated Issues and H&S Non-Separated Issues (as defined below) would cause an aggregate payment obligation for H&S of $750,000 (seven hundred and fifty thousand dollars) or greater under this Agreement. In addition to the conditions above, in the case of a Change of Control of H&S, H&S shall provide Fortune Brands an opinion from Qualified Counsel concluding that H&S more likely than not shall prevail on the H&S Separated Issues. (2) Fortune Brands shall have sole responsibility for the settlement of all separated issues, other than H&S Separated Issues for which H&S has sole settlement responsibility under Section 9.2(b)(ii)(1), except that Fortune Brands shall accept or enter into a settlement of such issues at the reasonable request of H&S unless: (x) the settlement relates to an issue the settlement of which would cause an individual payment obligation for Fortune Brands of $75,000 (seventy-five thousand dollars) or greater (including tax, interest and penalties) (a “Fortune Brands Separated Issue”) and (y) the settlement of all Fortune Brands Separated Issues and Fortune Brands Non-Separated Issues (as defined below) would cause an aggregate payment obligation for Fortune Brands of $750,000 (seven hundred and fifty thousand dollars) or greater. In addition to the conditions above, in the case of a Change of Control of Fortune Brands, Fortune Brands shall provide H&S an opinion from Qualified Counsel concluding that Fortune Brands more likely than not shall prevail on the Fortune Brands Separated Issues. (iii) To the extent that issues in a Pre-Distribution Income Tax Audit cannot be separated— (1) Fortune Brands shall not accept or enter into a settlement without the consent of H&S (which shall not be unreasonably withheld) if: (x) the settlement relates to an issue the settlement of which would cause an individual payment obligation for H&S of $75,000 (seventy-five thousand dollars) or greater (including tax, interest and penalties) under this Agreement (an “H&S Non-Separated Issue”); (y) H&S has provided Fortune Brands with H&S’s responses to all information document requests or similar requests from the Taxing Authority with respect to all H&S Non-Separated Issues and (z) all H&S Non-Separated Issues and H&S Separated Issues would cause an aggregate payment obligation for H&S of $750,000 (seven hundred and fifty thousand dollars) or greater under this Agreement. In addition to the conditions above, in the case of a Change of Control of H&S, H&S shall provide Fortune Brands an opinion from Qualified Counsel concluding that H&S more likely than not shall prevail on the H&S Non-Separated Issues. (2) Fortune Brands shall accept or enter into a settlement at the reasonable request of H&S unless: (x) the settlement relates to an issue the settlement of which would cause an individual payment obligation for Fortune Brands of $75,000 (seventy-five thousand dollars) or greater (including tax, interest and penalties) under this Agreement (a “Fortune Brands Non-Separated Issue”); (y) Fortune Brands has provided H&S with Fortune Brands’ responses to all information document requests or similar requests from the Taxing Authority with respect to all Fortune Brands Non-Separated Issues and (z) the settlement of all Fortune Brands Non-Separated Issues and Fortune Brands Separated Issues would cause an aggregate payment obligation for Fortune Brands of $750,000 (seven hundred and fifty thousand dollars) or greater. In addition to the conditions above, in the case of a Change of Control of Fortune Brands, Fortune Brands shall provide H&S an opinion from Qualified Counsel concluding that Fortune Brands more likely than not shall prevail on the Fortune Brands Non-Separated Issues.