SECTION 351
UNLESS BOTH PARTIES AGREE TO AN ALTERNATIVE CHARACTERIZATION.
(C)
ALLOCATION OF TAXES FOR PRE-CLOSING AND POST-CLOSING PERIODS.
(I)
LMINT MUST PROMPTLY PAY ANY AND ALL TAXES OF LIBERTY CHILE OR ITS
SUBSIDIARIES ALLOCABLE TO ANY PRE-CLOSING PERIOD OR
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PORTION THEREOF, WHETHER SUCH TAXES ARE DUE BEFORE OR AFTER THE EXCHANGE
CLOSING, AND ALL TAXES SPECIFICALLY ATTRIBUTABLE TO LIBERTY CHILE OR ANY OF ITS
SUBSIDIARIES CEASING TO BE A MEMBER OF LMI'S CONSOLIDATED GROUP.
SUBJECT TO THE
PROVISIONS BELOW, THE TAXES ALLOCABLE TO A PRE-CLOSING PERIOD WILL BE DETERMINED
ON THE ACCRUAL ACCOUNTING METHOD AND ON THE BASIS OF A CLOSING OF THE BOOKS OF
LIBERTY CHILE AND ITS SUBSIDIARIES AS OF THE END OF THE EXCHANGE CLOSING DATE.
FOR THE AVOIDANCE OF DOUBT, ANY TAXES ATTRIBUTABLE TO ANY "DUAL CONSOLIDATED
LOSSES" (AS DEFINED IN U.S. TREASURY REGULATION SECTION 1.1503-2(C)(5)) THAT
HAVE BEEN OR THAT ARE INCURRED BY LIBERTY CHILE OR ANY OF ITS SUBSIDIARIES OR BY
CORDILLERA COMUNICACIONES HOLDING LIMITADA OR CORDILLERA COMUNICACIONES LIMITADA
DURING THE PRE-CLOSING PERIOD (EXCLUDING ANY DUAL CONSOLIDATED LOSSES THAT MAY
BE INCURRED BY UNO AS A RESULT OF VTR'S ISSUANCE OF THE EQUITY DPP OBLIGATION TO
UNO PURSUANT TO THE PURCHASE AND CONTRIBUTION AGREEMENT) SHALL BE THE OBLIGATION
OF LMINT.
UGC MUST PROMPTLY PAY OR CAUSE TO BE PAID ANY AND ALL TAXES OF
LIBERTY CHILE OR ITS SUBSIDIARIES ALLOCABLE TO ANY POST-CLOSING PERIOD OR
PORTION THEREOF.
(II)
WITH RESPECT TO TRANSACTIONS ON THE EXCHANGE CLOSING DATE BUT
AFTER THE EXCHANGE CLOSING, UGC MUST CAUSE LIBERTY CHILE AND ITS SUBSIDIARIES TO
ENGAGE ONLY IN TRANSACTIONS THAT ARE IN THE ORDINARY COURSE OF BUSINESS (AND FOR
THIS PURPOSE DIVIDEND OR REDEMPTION TRANSACTIONS WILL NOT BE CONSIDERED TO BE
TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS).
(III)
NEITHER LMINT NOR ANY MEMBER OF THE LMINT GROUP WILL MAKE ANY
ELECTION UNDER U.S. TREASURY REGULATION SECTION 1.1502-20(G) (OR ANY SIMILAR
PROVISION) WITH RESPECT TO THE REATTRIBUTION OF NET OPERATING LOSSES OF LIBERTY
CHILE OR ANY OF ITS SUBSIDIARIES.
(IV)
FOR U.S. FEDERAL AND STATE INCOME TAX PURPOSES, LMINT MUST INCLUDE
ALL INCOME OF LIBERTY CHILE AND ITS SUBSIDIARIES FOR ALL PRE-CLOSING PERIODS IN
THE CONSOLIDATED U.S. FEDERAL INCOME TAX RETURNS OF LMINT'S CONSOLIDATED GROUP
AND ANY STATE CONSOLIDATED, UNITARY OR COMBINED INCOME TAX RETURN THAT INCLUDES
LIBERTY CHILE AND MUST PAY ANY TAXES ATTRIBUTABLE TO SUCH INCOME.
ANY POSITION
ON SUCH TAX RETURNS THAT RELATES TO LIBERTY CHILE OR ANY OF ITS SUBSIDIARIES
MUST COMPLY WITH THE TAX RETURN PREPARATION STANDARD.
(V)
IF, FOR ANY POST-CLOSING PERIOD, LIBERTY CHILE OR ANY OF ITS
SUBSIDIARIES EARNS ANY CREDIT OR RECOGNIZES ANY LOSS THAT
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CANNOT BE APPLIED AGAINST ITS TAX LIABILITY OR THE TAX LIABILITY OF ANOTHER
MEMBER OF UGC'S CONSOLIDATED GROUP FOR SUCH PERIOD, AND IS PERMITTED BY LAW TO
CARRYBACK SUCH CREDIT OR LOSS TO A PERIOD ENDING ON OR PRIOR TO THE EXCHANGE
CLOSING DATE AND USED THEREIN, THEN LMINT IN ITS SOLE DISCRETION WILL DECIDE
WHETHER SUCH LOSS OR CREDIT