Common use of Separate Federal Liability Computation Clause in Contracts

Separate Federal Liability Computation. For all tax periods beginning after December 31, 1995, for which CI Consolidated Returns have not been filed by Corning as of the Distribution Date and in respect of which Corning is required to file a CI Consolidated Return, CCL and CPS respectively shall compute the CCL Separate Liability and the CPS Separate Liability for the portion of such periods in which the CCL Domestic Companies and the CPS Domestic Companies respectively are members of the CI Group. "CCL Separate Liability" in respect of any CI Consolidated Return Period means the federal income tax liability (including CCL's share of Corning's alternative minimum tax if Corning is subject to alternative minimum tax for such CI Consolidated Return Period, not to exceed Corning's consolidated alternative minimum tax for such period) computed as of December 31, 1996, as if CCL had filed a consolidated federal income tax return for the CCL Group in respect of such CI Consolidated Return Period. "CPS Separate Liability" in respect of any CI Consolidated Return Period means the federal income tax liability (including CPS's share of Corning's alternative minimum tax if Corning is subject to alternative minimum tax for such CI Consolidated Return Period, not to exceed Corning's consolidated alternative minimum tax for such period) computed as of December 31, 1996, as if CPS had filed a consolidated federal income tax return for the CPS Group in respect of such CI Consolidated Return Period. If, in computing the CCL Separate Liability or the CPS Separate Liability, CCL or CPS calculates that the CCL Group or the CPS Group, respectively, would experience a net operating loss resulting in no federal income tax liability as of December 31, 1996, the CCL Separate Liability or the CPS Separate Liability, as the case may be, shall be equal to a credit amount calculated by Corning and equal to the reduction in the Federal income tax liability of the CI Group by reason of the use of such net operating loss of the CCL Group or the CPS Group, as the case may be, in the CI Consolidated Return that Corning projects to be filed in respect of such period. Except as may otherwise be required by the Spin-Off Tax Indemnification Agreements, computations in respect of the CCL Separate Liability and the CPS Separate Liability shall be consistent with prior CI Group returns, shall follow the tax elections and other tax positions adopted or prescribed by Corning and shall take into account the adjustments and modifications set forth in Section 4.03; provided, however, that the Tax Director and/or General Counsel of each of Corning and CCL or CPS, as the case may be, shall negotiate reasonable modifications or alternatives to such requirements in the event that either CCL or CPS, as the case may be, reasonably determines that such elections, positions, adjustments or modifications would have a materially detrimental effect on the tax obligations of CCL or CPS, as the case may be, in respect of the current or any subsequent tax period.

Separate Federal Liability Computation. For all tax periods beginning after December 31, 1995, for which CI Consolidated Returns have not been filed by Corning as of the Distribution Date and in respect of which Corning is required to file a CI Consolidated Return, CCL and CPS Covance respectively shall compute the CCL Separate Liability and the CPS Covance Separate Liability for the portion of such periods in which the CCL Domestic Companies and the CPS Covance Domestic Companies respectively are members of the CI Group. "CCL Separate Liability" in respect of any CI Consolidated Return Period means the federal income tax liability (including CCL's share of Corning's alternative minimum tax if Corning is subject to alternative minimum tax for such CI Consolidated Return Period, not to exceed Corning's consolidated alternative minimum tax for such period) computed as of December 31, 1996, as if CCL had filed a consolidated federal income tax return for the CCL Group in respect of such CI Consolidated Return Period. "CPS Covance Separate Liability" in respect of any CI Consolidated Return Period means the federal income tax liability (including CPSCovance's share of Corning's alternative minimum tax if Corning is subject to alternative minimum tax for such CI Consolidated Return Period, not to exceed Corning's consolidated alternative minimum tax for such period) computed as of December 31, 1996, as if CPS Covance had filed a consolidated federal income tax return for the CPS Covance Group in respect of such CI Consolidated Return Period. If, in computing the CCL Separate Liability or the CPS Covance Separate Liability, CCL or CPS Covance calculates that the CCL Group or the CPS Covance Group, respectively, would experience a net operating loss resulting in no federal income tax liability as of December 31, 1996, the CCL Separate Liability or the CPS Covance Separate Liability, as the case may be, shall be equal to a credit amount calculated by Corning and equal to the reduction in the Federal income tax liability of the CI Group by reason of the use of such net operating loss of the CCL Group or the CPS Covance Group, as the case may be, in the CI Consolidated Return that Corning projects to be filed in respect of such period. Except as may otherwise be required by the Spin-Off Tax Indemnification Agreements, computations in respect of the CCL Separate Liability and the CPS Covance Separate Liability shall be consistent with prior CI Group returns, shall follow the tax elections and other tax positions adopted or prescribed by Corning and shall take into account the adjustments and modifications set forth in Section 4.03; provided, however, that the Tax Director and/or General Counsel of each of Corning and CCL or CPSCovance, as the case may be, shall negotiate reasonable modifications or alternatives to such requirements in the event that either CCL or CPSCovance, as the case may be, reasonably determines that such elections, positions, adjustments or modifications would have a materially detrimental effect on the tax obligations of CCL or CPSCovance, as the case may be, in respect of the current or any subsequent tax period.