PLR 1032017: Multi-step spin-offs and merger reorganized related business lines

View official IRS release (PDF)

Plain-English summary

A publicly traded holding company proposed separating several business lines through three internal spin-offs and two internal split-offs. It would then contribute the separated businesses to a subsidiary, receive a debt-funded special payment and possibly debt securities, distribute the subsidiary's stock to its shareholders, and merge that subsidiary into another company. The IRS ruled that the described contributions, distributions, debt exchange, and merger would qualify for the requested nonrecognition, basis, holding-period, earnings-and-profits, and related tax treatment, subject to the stated conditions. The ruling did not express an opinion on the business-purpose, device, or 50-percent acquisition requirements for the spin-offs, or on other tax consequences not specifically addressed.

Ruling snapshot

• Question: Will the proposed internal spin-offs, split-offs, external spin-off, debt exchange, and merger receive the requested federal tax treatment?
• Outcome: Approved
• Key authorities: IRC §§ 355, 357, 358, 361, 362, 368, 381; Treas. Reg. §§ 1.355-2, 1.355-7, 1.368-1, 1.368-2, 1.1502-13, 1.1502-19.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201032017 [Third Party Communication:
Release Date: 8/13/2010 Date of Communication: Month DD, YYYY]
Person To Contact:
Index Number: 355.01-00, 355.01-01, 355.09- -----------------------------, ID No. --------------
00, 368.01-00, 361.01-00, -----------------------------------------------------
Telephone Number:
361.02-00, 361.02-02
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Refer Reply To:
------------------------------ CC:CORP:05
-------------------------------- PLR-146296-09
------------------------------------------------- Date:
------------------------------------------- February 05, 2010

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LEGEND:

Distributing 1 = --------------------------

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Distributing 2 = -------------------------------

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Distributing 3 = --------------------------

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Distributing 4 = -------------------------

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Distributing 5 = -----------------------------------------

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Controlled 1 = -----------------------------------

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Controlled 2 = ------------------------------------------------------------
PLR-146296-09 2

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Controlled 3 = -----------------------------------------------------------

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Controlled 4 = ---------------------------------------------------------

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Controlled 5 = -------------------------------------------------

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Sub 1 = -----------------------------

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Sub 2 = -----------------------------------

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Sub 3 = ------------------------------------

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Sub 4 = ----------------------------------------------

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Sub 5 = --------------------------------

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Sub 6 = ---------------------------------

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Sub 7 = --------------------------------------------------------------------------------

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PLR-146296-09 3

Sub 8 = ------------------------------
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Merger Partner = ----------------------------------------------------

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Trust = ----------------------------------

Merger Agreement = ---------------------------------------------------------------------------------

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Business A = ---------------------------------------------------------------------------------

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Business B = ---------------------------------------------------------------------------------

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Business C = ---------------------------------------------------------------------------------

State A = --------

State B = ----------

State C = ------------

State D = ------

State E = ------------------

State F = --------------

State G = ----------

State H = -------------

State I = ----------

State J = ---------------------
PLR-146296-09 4

State K = --------------------

State L = ----------

State M = --------

State N = ----------

State O = ----------------

State P = ------------------

aa = -----------

bb = ------

cc = --------

dd = ------

ee = ------

ff = ----------------

gg = -----

hh = ----------

ii = ----

jj = --

kk = ----

ll = ----

mm = --

nn = ----

Date 1 = ------------------

Date 2 = --------------------------
PLR-146296-09 5

Dear ---- ----------------:

This letter responds to your October 9, 2009 request for rulings as to the federal tax
consequences of a series of proposed transactions (hereinafter, collectively, the
“Proposed Transactions”). The information submitted in that request and in later
correspondence is summarized below.

The rulings contained in this letter are based upon information and representations
submitted by the taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. This office has not verified any of the material submitted in
support of the request for rulings. Verification of the information, representations, and
other data may be required as part of the audit process. Moreover, this office has not
reviewed any information pertaining to, and has made no determination regarding
whether the First Internal Spin-Off, Second Internal Spin-Off, Third Internal Spin-Off,
First Internal Split-Off, Second Internal Split-Off and the External Spin-Off (each defined
herein): (i) satisfy the business purpose requirement of Treas. Reg. § 1.355-2(b), (ii) are
being used principally as a device for the distribution of earnings and profits of either
Distributing 5, Distributing 4, Distributing 3, Distributing 2, Distributing 1, Controlled 5,
Controlled 4, Controlled 3, Controlled 2 or Controlled 1 (see § 355(a)(1)(B)) of the
Internal Revenue Code and Treas. Reg. § 1.355-2(d)), or (iii) are part of a plan (or
series of related transactions) pursuant to which one or more persons will acquire
directly or indirectly stock representing a 50% or greater interest in Distributing 5,
Distributing 4, Distributing 3, Distributing 2, Distributing 1, Controlled 5, Controlled 4,
Controlled 3, Controlled 2, or Controlled 1 (see § 355(e) and Treas. Reg. § 1.355-7).

SUMMARY OF FACTS:

Distributing 5 is a publicly-traded holding company and the common parent of an
affiliated group of corporations that files a consolidated federal income tax return.
Distributing 5 has a single class of voting common stock outstanding (“Distributing 5
Common Stock”). Trust, which was established by Distributing 5 for the primary
purpose of providing special awards for heroic or other special meritorious service to the
company or the community at large, holds approximately aa shares of Distributing 5
Common Stock constituting less than bb% of the outstanding Distributing 5 Common
Stock (an amount representing less than 1% of the outstanding Distributing 5 Common
Stock). The Trust has been treated for federal income tax purposes as a grantor trust
pursuant to § 671 at all times since its formation by Distributing 5.

Distributing 5 directly owns all of the outstanding interests in Sub 8, a newly formed
limited liability company that is treated as an entity disregarded as separate from its
owner for U.S. federal income tax purposes under Treas. Reg. § 301.7701-3.
Distributing 5 also directly owns all of the outstanding stock of Controlled 5, Sub 1, Sub
PLR-146296-09 6

2, Sub 3, as well as cc% of the outstanding stock of Distributing 4. The remainder of
the outstanding stock of Distributing 4 is owned dd% by Sub 1 and ee% by Sub 4, a
wholly-owned subsidiary of Sub 2.
Distributing 4 has a single class of common stock outstanding (the “Distributing 4
Common Stock”). Distributing 4 directly owns all of the outstanding stock of Distributing
3, Distributing 2, Distributing 1, Controlled 4, Sub 5 and Sub 6. Controlled 5 directly
owns all of the outstanding stock of Sub 7. Distributing 1 owns all of the outstanding
stock of Controlled 1. Distributing 2 owns all of the outstanding stock of Controlled 2.
Distributing 3 owns all of the outstanding stock of Controlled 3.
In connection with the Proposed Transactions, Distributing 5 formed Controlled 5, which
has a single class of voting common stock (the “Controlled 5 Common Stock”). In
addition, Controlled 4, Controlled 3, Controlled 2, Controlled 1, Sub 7, and Sub 8 were
formed in order to facilitate the Proposed Transactions. Controlled 4 has a single class
of voting common stock (the “Controlled 4 Common Stock”). Controlled 3 has a single
class of voting common stock (the “Controlled 3 Common Stock”). Controlled 2 has a
single class of voting common stock (the “Controlled 2 Common Stock”). Controlled 1
has a single class of voting common stock (the “Controlled 1 Common Stock”).
Distributing 1 presently engages in Business A in State A, State B, State C, State D,
State E and State F. Following the Proposed Transactions, Distributing 1 will continue
to be engaged in Business A in State A, State B, State C, State D and State F (the
“Distributing 1 Business”). Distributing 1 has a single class of common stock
outstanding (the “Distributing 1 Common Stock”). Distributing 1 has outstanding
indebtedness including notes.
Distributing 2 presently engages in Business A in State G, State H and State I.
Following the Proposed Transactions, Distributing 2 will continue to be engaged in
Business A in State H (the “Distributing 2 Business”). Distributing 2 has a single class
of common stock outstanding (the “Distributing 2 Common Stock”). Distributing 2 has
outstanding indebtedness including notes.
Distributing 3 presently engages in Business A in State A, State J, State K and State L.
Following the Proposed Transactions, Distributing 3 will continue to be engaged in
Business A in State L (the “Distributing 3 Business”). Distributing 3 has a single class of
common stock outstanding (the “Distributing 3 Common Stock”). Distributing 3 has
outstanding indebtedness consisting of intercompany debt owed to other members of
Distributing 5’s affiliated group and/or one or more disregarded entities wholly owned,
directly or indirectly by Distributing 5.
Distributing 5 and members of its separate affiliated group (“SAG”), as defined in
section 355(b)(3)(B) (the “Distributing 5 SAG”) presently engage in Business A and
Business B. Distributing 5 has outstanding, with unrelated creditors, indebtedness
including notes, short-term commercial paper and bonds (the “Distributing 5 Debt”).
Distributing 4 and members of its separate affiliated group, as defined in section
355(b)(3)(B), including Distributing 2 and Distributing 3 (the “Distributing 4 SAG”), are
and following the Proposed Transactions will continue to be, engaged in Business A in
PLR-146296-09 7

State H and State L (the “Distributing 4 Business”). Distributing 4 has outstanding
indebtedness including notes.
Financial information has been submitted which indicates that Business A, as
conducted by each of Distributing 1, Distributing 2, Distributing 3, Distributing 4
(including its respective SAG) and Distributing 5 (including its respective SAG), has had
gross receipts and operating expenses representing the active conduct of a trade or
business for each of the past five years.
Distributing 5’s management believes that the separation of the Controlled 5 SAG (as
defined below) from Distributing 5’s other business segments will serve a number of
corporate business purposes. Merger Partner is interested in acquiring the Controlled 5
SAG and certain other assets related thereto. Merger Partner has a single class of
common stock (the “Merger Partner Common Stock”). On Date 1, Distributing 5,
Controlled 5 and Merger Partner entered into the Merger Agreement, agreeing to
undertake certain transactions described in further detail below.

Proposed Transactions

The following series of transactions has been proposed:

   (i)    Distributing 1 will contribute its Business A assets and liabilities used in
   State E (the “Controlled 1 Business”) as well as certain software, leasehold
   interests and other assets not relating to Distributing 1’s State E operations to
   Controlled 1 (the “First Contribution”).

   (ii)   Distributing 1 will distribute all of the Controlled 1 Common Stock to
   Distributing 4.

The transactions described in steps (i) and (ii) above are referred to herein as the “First
Internal Spin-Off.”

   (iii) Distributing 2 will contribute its Business A assets and liabilities used in
   State G, State I and a portion of State H (the “Controlled 2 Business”) to
   Controlled 2 (the “Second Contribution”).

   (iv)   Distributing 2 will distribute all of the Controlled 2 Common Stock to
   Distributing 4.

The transactions described in steps (iii) and (iv) above are referred to herein as the
“Second Internal Spin-Off.”

   (v)    Distributing 3 will contribute its Business A assets and liabilities used in
   State A, State J and State K (the “Controlled 3 Business”) to Controlled 3 (the
   “Third Contribution”).

   (vi)   Distributing 3 will distribute all of the Controlled 3 Common Stock to
   Distributing 4.

PLR-146296-09 8

The transactions described in steps (v) and (vi) above are referred to herein as the
“Third Internal Spin-Off.”

   (vii) Distributing 4 will contribute the Distributing 1 Common Stock, Controlled
   2 Common Stock, Controlled 3 Common Stock, and all the common stock of Sub
   5 and Sub 6 to Controlled 4 (the “Fourth Contribution”). As a result of this
   contribution, Controlled 4 and members of its separate affiliated group, as
   defined in section 355(b)(3)(B) (the “Controlled 4 SAG”) will be engaged in
   Business A in State A, State B, State C, State D, State F, State G, State H, State
   I, State J, State K, State M, State N and State O (the “Controlled 4 Business”).

   (viii) Distributing 4 will distribute all of the Controlled 4 Common Stock to
   Distributing 5 in exchange for a portion of Distributing 4 Common Stock held by
   Distributing 5 of approximately equivalent value to all of the Controlled 4
   Common Stock.

The transactions described in steps (vii) and (viii) above are referred to herein as the
“First Internal Split-Off.”

   (ix)   Distributing 4 will distribute all of the Controlled 1 Common Stock to
   Distributing 5 in exchange for a portion of the Distributing 4 Common Stock held
   by Distributing 5 of approximately equivalent value to all of the Controlled 1
   Common Stock (the “Second Internal Split-Off”).

   (x)    Immediately following the Second Internal Split-Off, Controlled 1 will
   merge with and into Sub 8, with Sub 8 surviving the merger (the “Controlled 1
   Merger”). Distributing 5 represents that it will treat the Controlled 1 Merger as a
   reorganization within section 368(a)(1)(A). Following the Controlled 1 Merger,
   Sub 8 will contribute interests in certain software and related assets received by
   Controlled 1 in the First Contribution that are not used in the Controlled 1
   Business and that will be used by other members of Distributing 5’s affiliated
   group to such members of Distributing 5’s affiliated group.

   (xi)     Distributing 5 will contribute to Controlled 5 all of the common stock of (i)
   Controlled 4 and (ii) Sub 3, and Distributing 5 will also cause to be contributed to
   Sub 7 certain additional assets relating to the Controlled 5 SAG (as defined
   below) and certain related liabilities (collectively, the “Fifth Contribution”). In
   exchange for the Fifth Contribution, Distributing 5 will receive (i) additional shares
   of Controlled 5 Common Stock, (ii) the Special Payment (as described in step
   (xii) below) and (iii) if applicable, the Controlled 5 Securities (as described in step
   (xiii) below). As a result of the Fifth Contribution, Controlled 5 and members of its
   separate affiliated group, as defined in section 355(b)(3)(B) (the “Controlled 5
   SAG”), will be engaged in Business A in State A, State B, State C, State D, State
   F, State G, State H, State I, State J, State K, State M, State N, State O and State
   P (the “Controlled 5 Business”).

PLR-146296-09 9

 (xii) Controlled 5 will borrow from unrelated financial institutions or through
 capital markets transactions (the “Special Payment Financing”) and will distribute
 the proceeds to Distributing 5 (the “Special Payment”). The amount of the
 Special Payment will not exceed the lesser of (i) $ff minus the amount of certain
 debt of Controlled 5’s subsidiaries (the “Distribution Date Spinco Indebtedness”)
 or (ii) the amount of Distributing 5’s tax basis in the assets contributed to
 Controlled 5 or Sub 7 (reduced by any liabilities assumed, within the meaning of
 § 357(d)) in the Fifth Contribution. Distributing 5 intends to use the cash
 proceeds of the Special Payment to (i) pay dividends to its shareholders, (ii)
 repurchase outstanding Distributing 5 Common Stock or (iii) repay debt owed by
 Distributing 5 (including any disregarded entity of Distributing 5) to unrelated third
 parties (the “External Debt”), in each case within gg days following the Proposed
 Transactions and pursuant to the plan of reorganization. The Special Payment
 proceeds will be held in one or more segregated accounts until they are used as
 described above. All or a portion of the Special Payment Financing may be
 consummated prior to the closing of the Proposed Transactions, with the funds
 held in escrow pending the closing.

 (xiii) In the event that the amount of the Special Payment is less than $ff minus
 the Distribution Date Spinco Indebtedness, Controlled 5 will issue debt securities
 to Distributing 5 with a face amount approximately equal to such shortfall and a
 term of years not less than hh (the “Controlled 5 Securities”). Distributing 5 will
 subsequently dispose of the Controlled 5 Securities as quickly as practicable,
 and no later than gg days following the Proposed Transactions. Distributing 5
 intends to distribute the Controlled 5 Securities in pursuance of the plan of
 reorganization to Distributing 5’s third party creditors (the “Debt Exchange”). To
 effectuate the Debt Exchange, Distributing 5 will transfer all of the Controlled 5
 Securities received by it to an investment bank or a commercial bank or a group
 of investment banks or commercial banks (the “Investment Banks”) in exchange
 for Distributing 5 Debt, which is expected to consist of commercial paper or other
 debt acquired by the Investment Banks as principals for their own account (either
 in a direct issuance by Distributing 5 to the Investment Banks for cash or by
 purchases in the secondary market) at least ii days prior to the date of the Debt
 Exchange. Distributing 5 expects to consummate the Debt Exchange in
 accordance with an exchange agreement entered into by Distributing 5 and the
 Investment Banks no sooner than jj days after the Investment Banks acquire the
 Distributing 5 Debt, pursuant to which the parties will agree to exchange an
 amount of Distributing 5 Debt for Controlled 5 Securities. Following the Debt
 Exchange, Distributing 5 anticipates that the Investment Banks will sell the
 Controlled 5 Securities they receive in the Debt Exchange to unrelated third
 parties. In the event that Distributing 5 is unable to consummate the Debt
 Exchange, Distributing 5 will dispose of the Controlled 5 Securities in another
 manner no later than gg days following the closing of the Proposed Transactions

 (xiv) Distributing 5 will distribute all of the Controlled 5 Common Stock pro rata
 to the holders of the Distributing 5 Common Stock (the “External Spin-Off”).

PLR-146296-09 10

  Distributing 5 will effect the External Spin-Off by delivering to an exchange agent
  on behalf of the Distributing 5 shareholders all of the outstanding shares of
  Controlled 5 Common Stock, which the agent will hold on behalf of the
  Distributing 5 shareholders for conversion into shares of Merger Partner
  Common Stock pursuant to the Merger described in step (xv) below. As a
  shareholder of Distributing 5, Trust will receive shares of Controlled 5 Common
  Stock in the External Spin-Off.

  (xv) Immediately following the External Spin-Off, Controlled 5 will merge with
  and into Merger Partner in a transaction qualifying as a statutory merger under
  applicable state law, with Merger Partner surviving the statutory merger (the
  “Merger”). Except for cash received in lieu of fractional shares, if any, the
  shareholders of Controlled 5 will receive solely Merger Partner Common Stock in
  exchange for their Controlled 5 Common Stock. Any fractional shares of Merger
  Partner Common Stock will be aggregated by the exchange agent and sold in the
  open market at then prevailing prices. The proceeds from such sales will then be
  delivered to the Controlled 5 shareholders who would otherwise have received
  the fractional shares. After the Merger, the former Controlled 5 shareholders will
  own between approximately kk% and ll% of the outstanding Merger Partner
  Common Stock, and will own more than 50% of the total combined voting power
  of all classes of stock of Merger Partner entitled to vote and more than 50% of
  the total value of shares of all classes of stock of Merger Partner. Pursuant to
  the Merger, Trust will receive shares of Merger Partner Common Stock in
  exchange for its shares of Controlled 5 Common Stock (such stock, the
  “Retained Trust Common Stock” and the receipt of such stock by the Trust, the
  “Retention”).

  (xvi) As a result of the Merger, Merger Partner will become the obligor with
  respect to all outstanding debt of Controlled 5, including the Special Payment
  Financing and the Controlled 5 Securities, if any.

In connection with the Proposed Transactions, Distributing 5, Controlled 5, and Merger
Partner have entered, and will enter, into several agreements relating to the separation
of the Controlled 5 SAG from Distributing 5 and its affiliated group and certain
continuing transactions between the companies, including certain transitional
agreements and a tax sharing agreement (collectively with the Merger Agreement, the
“Agreements”).
PLR-146296-09 11

    In addition, except for certain provisions included in the Merger Agreement

allocating transfer expenses and other transaction costs, Distributing 5 and Merger
Partner will pay their respective expenses incurred in connection with the Merger, and if
either Distributing 5 or Merger Partner pays an amount that is the responsibility of the
other party, the paying party will be promptly reimbursed for such amount.

REPRESENTATIONS:

The First Internal Spin-Off

Distributing 5 makes the following representations with respect to the First Internal Spin-
Off:

   (a)            Indebtedness owed by Controlled 1 to Distributing 1, if any, after
   the First Internal Spin-Off will not constitute stock or securities.

   (b)            No part of the consideration to be distributed by Distributing 1 will
   be received by Distributing 4 as a creditor, employee, or in any capacity other
   than that of a shareholder of Distributing 1.

   (c)            The five years of financial information submitted on behalf of
   Distributing 1 is representative of the present operations of the Distributing 1
   Business, and with regard to Distributing 1, there have been no substantial
   operational changes since the date of the last financial statements submitted.

   (d)           The five years of financial information submitted on behalf of the
   business contributed to Controlled 1 is representative of the present operations
   of the Controlled 1 Business, and with regard to such business, there have been
   no substantial operational changes since the date of the last financial statements
   submitted.

   (e)           Following the First Internal Spin-Off, Distributing 1 and Controlled 1
   will each continue the active conduct of their respective businesses,
   independently and with their separate employees.

   (f)          The First Internal Spin-Off is being carried out for the corporate
   business purpose of making possible the External Spin-Off and is motivated, in
   whole or substantial part, by this corporate business purpose.

   (g)            The First Internal Spin-Off is not used principally as a device for the
   distribution of the earnings and profits of Distributing 1 or Controlled 1 or both.

   (h)          For purposes of § 355(d), immediately after the First Internal Spin-
   Off, no person (determined after applying § 355(d)(7)) will hold stock possessing
   50% or more of the total combined voting power of all classes of Distributing 1

PLR-146296-09 12

 stock entitled to vote, or 50% or more of the total value of shares of all classes of
 Distributing 1 stock, that was acquired by purchase (as defined in § 355(d)(5)
 and (8)) during the five-year period (determined after applying § 355(d)(6))
 ending on the date of the First Internal Spin-Off.

 (i)            For purposes of § 355(d), immediately after the First Internal Spin-
 Off, no person (determined after applying § 355(d)(7)) will hold stock possessing
 50% or more of the total combined voting power of all classes of Controlled 1
 stock entitled to vote, or 50% or more of the total value of shares of all classes of
 Controlled 1 stock, that was either (1) acquired by purchase (as defined in §
 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the First Internal Spin-Off, or (2) attributable to
 distributions on Distributing 1 stock that was acquired by purchase (as defined in
 § 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the First Internal Spin-Off.

 (j)            The total adjusted bases and the fair market value of the assets
 transferred to Controlled 1 by Distributing 1 in the First Contribution each will
 equal or exceed the sum of (i) the amount of any liabilities assumed (within the
 meaning of § 357(d)) by Controlled 1 in the exchange and (ii) the total of any
 money and the fair market value of any other property (within the meaning of §
 361(b)) transferred by Controlled 1 to Distributing 1 that is to be distributed to the
 shareholders of Distributing 1 or transferred to creditors of Distributing 1 pursuant
 to the plan of reorganization.

 (k)             The fair market value of the assets transferred to Controlled 1 by
 Distributing 1 in the First Contribution will exceed the sum of (i) the amount of
 any liabilities assumed (within the meaning of § 357(d)) by Controlled 1 in
 connection with the exchange, (ii) the amount of any liabilities owed to Controlled
 1 by Distributing 1 that are discharged or extinguished in connection with the
 exchange and (iii) the amount of the cash and fair market value of any other
 property (other than stock and securities permitted to be received under § 361(a)
 without recognition of gain) received by Distributing 1 from Controlled 1 in
 connection with the exchange. The fair market value of the assets of Controlled
 1 will exceed the amount of its liabilities immediately after the exchange.

 (l)           Any liabilities assumed (within the meaning of § 357(d)) by
 Controlled 1 in the First Contribution were incurred in the ordinary course of
 business and are associated with the assets being transferred.

 (m)           The income tax liability for the taxable year in which investment
 credit property (including any building to which § 47(d) applies) is transferred will
 be adjusted pursuant to § 50(a)(1) or (a)(2) (or § 47, as in effect before
 amendment by Public Law 101-508, Title 11, 104 Stat. 1388, 536 (1990), if
 applicable) to reflect an early disposition of property.

PLR-146296-09 13

  (n)           Distributing 1 neither accumulated its receivables nor made any
  extraordinary payment of its payables in anticipation of the First Internal Spin-Off.

  (o)           No intercorporate debt will exist between Distributing 1 and
  Controlled 1 at the time of, or subsequent to, the First Internal Spin-Off, except
  for payables arising under transitional agreements or otherwise in the ordinary
  course of business

  (p)           No indebtedness between Distributing 1 and Controlled 1 has been
  or will be cancelled in connection with the First Internal Spin-Off other than the
  settlement of open intercompany account balances and other intercompany
  loans attributable to normal business operations of Distributing 1 and its
  subsidiaries prior to the First Internal Spin-Off.

  (q)           Immediately before the First Internal Spin-Off, items of income,
  gain, loss, deduction and credit will be taken into account as required by the
  applicable intercompany transaction regulations (see § 1.1502-13 and § 1.1502-
  14 as in effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13
  as published by T.D. 8597, and as currently in effect). Further, Distributing 1's
  excess loss account, if any, with respect to its Controlled 1 Common Stock will
  be included in income immediately before the First Internal Spin-Off to the extent
  required by applicable regulations. (See § 1.1502-19.)

  (r)            Payments made in connection with all continuing transactions, if
  any, between Distributing 1 and Controlled 1 will be for fair market value based
  on terms and conditions arrived at by the parties bargaining at arm’s length,
  except (i) in the case of certain transitional services which will be charged at cost
  or at cost-plus, (ii) for the sublease of certain real property which payments are
  expected to be on terms similar to those contained in the primary lease
  agreement for such real property, and (iii) in connection with the tax sharing
  agreement which will be charged as described in such agreement.

  (s)         No two parties to the First Internal Spin-Off are investment
  companies as defined in § 368(a)(2)(F)(iii) and (iv).

  (t)            The First Internal Spin-Off is not part of a plan or series of related
  transactions (within the meaning of § 1.355-7) pursuant to which one or more
  persons will acquire directly or indirectly stock representing a 50% or greater
  interest (within the meaning of § 355(d)(4)) in Distributing 1 or Controlled 1
  (including any predecessor or successor of any such corporation).

  (u)           Immediately after the First Internal Spin-Off, neither Distributing 1
  nor Controlled 1 will be a “disqualified investment corporation” as defined in §
  355(g)(2)(A).

The Second Internal Spin-Off
PLR-146296-09 14

Distributing 5 makes the following representations with respect to the Second Internal
Spin-Off:

  (v)          Indebtedness owed by Controlled 2 to Distributing 2, if any, after
  the Second Internal Spin-Off will not constitute stock or securities.

  (w)            No part of the consideration to be distributed by Distributing 2 will
  be received by Distributing 4 as a creditor, employee, or in any capacity other
  than that of a shareholder of Distributing 2.

  (x)            The five years of financial information submitted on behalf of
  Distributing 2 is representative of the present operations of the Distributing 2
  Business, and with regard to Distributing 2, there have been no substantial
  operational changes since the date of the last financial statements submitted.

  (y)           The five years of financial information submitted on behalf of the
  business contributed to Controlled 2 is representative of the present operations
  of the Controlled 2 Business, and with regard to such business, there have been
  no substantial operational changes since the date of the last financial statements
  submitted.

  (z)          Following the Second Internal Spin-Off, Distributing 2 and
  Controlled 2 will each continue the active conduct of their respective businesses,
  independently and with their separate employees.

  (aa)         The Second Internal Spin-Off is being carried out for the corporate
  business purpose of making possible the External Spin-Off and is motivated, in
  whole or substantial part, by this corporate business purpose.

  (bb)           The Second Internal Spin-Off is not used principally as a device for
  the distribution of the earnings and profits of Distributing 2 or Controlled 2 or
  both.

  (cc)           For purposes of § 355(d), immediately after the Second Internal
  Spin-Off, no person (determined after applying § 355(d)(7)) will hold stock
  possessing 50% or more of the total combined voting power of all classes of
  Distributing 2 stock entitled to vote, or 50% or more of the total value of shares of
  all classes of Distributing 2 stock, that was acquired by purchase (as defined in §
  355(d)(5) and (8)) during the five-year period (determined after applying §
  355(d)(6)) ending on the date of the Second Internal Spin-Off.

  (dd)           For purposes of § 355(d), immediately after the Second Internal
  Spin-Off, no person (determined after applying § 355(d)(7)) will hold stock
  possessing 50% or more of the total combined voting power of all classes of
  Controlled 2 stock entitled to vote, or 50% or more of the total value of shares of
  all classes of Controlled 2 stock, that was either (1) acquired by purchase (as
  defined in § 355(d)(5) and (8)) during the five-year period (determined after

PLR-146296-09 15

 applying § 355(d)(6)) ending on the date of the Second Internal Spin-Off, or (2)
 attributable to distributions on Distributing 2 stock that was acquired by purchase
 (as defined in § 355(d)(5) and (8)) during the five-year period (determined after
 applying § 355(d)(6)) ending on the date of the Second Internal Spin-Off.

 (ee)           The total adjusted bases and the fair market value of the assets
 transferred to Controlled 2 by Distributing 2 in the Second Contribution each will
 equal or exceed the sum of (i) the amount of any liabilities assumed (within the
 meaning of § 357(d)) by Controlled 2 in the exchange and (ii) the total of any
 money and the fair market value of any other property (within the meaning of §
 361(b)) transferred by Controlled 2 to Distributing 2 that is to be distributed to the
 shareholders of Distributing 2 or transferred to creditors of Distributing 2 pursuant
 to the plan of reorganization.

 (ff)            The fair market value of the assets transferred to Controlled 2 by
 Distributing 2 in the Second Contribution will exceed the sum of (i) the amount of
 any liabilities assumed (within the meaning of § 357(d)) by Controlled 2 in
 connection with the exchange, (ii) the amount of any liabilities owed to Controlled
 2 by Distributing 2 that are discharged or extinguished in connection with the
 exchange and (iii) the amount of the cash and fair market value of any other
 property (other than stock and securities permitted to be received under § 361(a)
 without recognition of gain) received by Distributing 2 from Controlled 2 in
 connection with the exchange. The fair market value of the assets of Controlled
 2 will exceed the amount of its liabilities immediately after the exchange.

 (gg)          Any liabilities assumed (within the meaning of § 357(d)) by
 Controlled 2 in the Second Contribution were incurred in the ordinary course of
 business and are associated with the assets being transferred.

 (hh)          The income tax liability for the taxable year in which investment
 credit property (including any building to which § 47(d) applies) is transferred will
 be adjusted pursuant to § 50(a)(1) or (a)(2) (or § 47, as in effect before
 amendment by Public Law 101-508, Title 11, 104 Stat. 1388, 536 (1990), if
 applicable) to reflect an early disposition of property.

 (ii)          Distributing 2 neither accumulated its receivables nor made any
 extraordinary payment of its payables in anticipation of the Second Internal Spin-
 Off.

 (jj)          No intercorporate debt will exist between Distributing 2 and
 Controlled 2 at the time of, or subsequent to, the Second Internal Spin-Off,
 except for payables arising under transitional agreements or otherwise in the
 ordinary course of business

 (kk)          No indebtedness between Distributing 2 and Controlled 2 has been
 or will be cancelled in connection with the Second Internal Spin-Off other than

PLR-146296-09 16

  the settlement of open intercompany account balances and other intercompany
  loans attributable to normal business operations of Distributing 2 and its
  subsidiaries prior to the Second Internal Spin-Off.

  (ll)          Immediately before the Second Internal Spin-Off, items of income,
  gain, loss, deduction and credit will be taken into account as required by the
  applicable intercompany transaction regulations (see § 1.1502-13 and § 1.1502-
  14 as in effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13
  as published by T.D. 8597, and as currently in effect). Further, Distributing 2's
  excess loss account, if any, with respect to its Controlled 2 Common Stock will
  be included in income immediately before the Second Internal Spin-Off to the
  extent required by applicable regulations. (See § 1.1502-19.)

  (mm)           Payments made in connection with all continuing transactions, if
  any, between Distributing 2 and Controlled 2 will be for fair market value based
  on terms and conditions arrived at by the parties bargaining at arm’s length,
  except (i) in the case of certain transitional services which will be charged at cost
  or at cost-plus, (ii) for the sublease of certain real property which payments are
  expected to be on terms similar to those contained in the primary lease
  agreement for such real property, and (iii) in connection with the tax sharing
  agreement which will be charged as described in such agreement.

  (nn)        No two parties to the Second Internal Spin-Off are investment
  companies as defined in § 368(a)(2)(F)(iii) and (iv).

  (oo)          The Second Internal Spin-Off is not part of a plan or series of
  related transactions (within the meaning of § 1.355-7) pursuant to which one or
  more persons will acquire directly or indirectly stock representing a 50% or
  greater interest (within the meaning of § 355(d)(4)) in Distributing 2 or Controlled
  2 (including any predecessor or successor of any such corporation).

  (pp)          Immediately after the Second Internal Spin-Off, neither Distributing
  2 nor Controlled 2 will be a “disqualified investment corporation” as defined in §
  355(g)(2)(A).

The Third Internal Spin-Off

Distributing 5 makes the following representations with respect to the Third Internal
Spin-Off:

  (qq)          Indebtedness owed by Controlled 3 to Distributing 3, if any, after
  the Third Internal Spin-Off will not constitute stock or securities.

  (rr)           No part of the consideration to be distributed by Distributing 3 will
  be received by Distributing 4 as a creditor, employee, or in any capacity other
  than that of a shareholder of Distributing 3.

PLR-146296-09 17

 (ss)           The five years of financial information submitted on behalf of
 Distributing 3 is representative of the present operations of the Distributing 3
 Business, and with regard to Distributing 3, there have been no substantial
 operational changes since the date of the last financial statements submitted.

 (tt)          The five years of financial information submitted on behalf of the
 business contributed to Controlled 3 is representative of the present operations
 of the Controlled 3 Business, and with regard to such business, there have been
 no substantial operational changes since the date of the last financial statements
 submitted.

 (uu)          Following the Third Internal Spin-Off, Distributing 3 and Controlled
 3 will each continue the active conduct of their respective businesses,
 independently and with their separate employees.

 (vv)         The Third Internal Spin-Off is being carried out for the corporate
 business purpose of making possible the External Spin-Off and is motivated, in
 whole or substantial part, by this corporate business purpose.

 (ww)           The Third Internal Spin-Off is not used principally as a device for
 the distribution of the earnings and profits of Distributing 3 or Controlled 3 or
 both.

 (xx)           For purposes of § 355(d), immediately after the Third Internal Spin-
 Off, no person (determined after applying § 355(d)(7)) will hold stock possessing
 50% or more of the total combined voting power of all classes of Distributing 3
 stock entitled to vote, or 50% or more of the total value of shares of all classes of
 Distributing 3 stock, that was acquired by purchase (as defined in § 355(d)(5)
 and (8)) during the five-year period (determined after applying § 355(d)(6))
 ending on the date of the Third Internal Spin-Off.

 (yy)           For purposes of § 355(d), immediately after the Third Internal Spin-
 Off, no person (determined after applying § 355(d)(7)) will hold stock possessing
 50% or more of the total combined voting power of all classes of Controlled 3
 stock entitled to vote, or 50% or more of the total value of shares of all classes of
 Controlled 3 stock, that was either (1) acquired by purchase (as defined in §
 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the Third Internal Spin-Off, or (2) attributable to
 distributions on Distributing 3 stock that was acquired by purchase (as defined in
 § 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the Third Internal Spin-Off.

 (zz)          The total adjusted bases and the fair market value of the assets
 transferred to Controlled 3 by Distributing 3 in the Third Contribution each will
 equal or exceed the sum of (i) the amount of any liabilities assumed (within the
 meaning of § 357(d)) by Controlled 3 in the exchange and (ii) the total of any

PLR-146296-09 18

 money and the fair market value of any other property (within the meaning of §
 361(b)) transferred by Controlled 3 to Distributing 3 that is to be distributed to the
 shareholders of Distributing 3 or transferred to creditors of Distributing 3 pursuant
 to the plan of reorganization.

 (aaa)           The fair market value of the assets transferred to Controlled 3 by
 Distributing 3 in the Third Contribution will exceed the sum of (i) the amount of
 any liabilities assumed (within the meaning of § 357(d)) by Controlled 3 in
 connection with the exchange, (ii) the amount of any liabilities owed to Controlled
 3 by Distributing 3 that are discharged or extinguished in connection with the
 exchange and (iii) the amount of the cash and fair market value of any other
 property (other than stock and securities permitted to be received under § 361(a)
 without recognition of gain) received by Distributing 3 from Controlled 3 in
 connection with the exchange. The fair market value of the assets of Controlled
 3 will exceed the amount of its liabilities immediately after the exchange.

 (bbb)         Any liabilities assumed (within the meaning of § 357(d)) by
 Controlled 3 in the Third Contribution were incurred in the ordinary course of
 business and are associated with the assets being transferred.

 (ccc)         The income tax liability for the taxable year in which investment
 credit property (including any building to which § 47(d) applies) is transferred will
 be adjusted pursuant to § 50(a)(1) or (a)(2) (or § 47, as in effect before
 amendment by Public Law 101-508, Title 11, 104 Stat. 1388, 536 (1990), if
 applicable) to reflect an early disposition of property.

 (ddd)         Distributing 3 neither accumulated its receivables nor made any
 extraordinary payment of its payables in anticipation of the Third Internal Spin-
 Off.

 (eee)         No intercorporate debt will exist between Distributing 3 and
 Controlled 3 at the time of, or subsequent to, the Third Internal Spin-Off, except
 for payables arising under transitional agreements or otherwise in the ordinary
 course of business.

 (fff)         No indebtedness between Distributing 3 and Controlled 3 has been
 or will be cancelled in connection with the Third Internal Spin-Off other than the
 settlement of open intercompany account balances and other intercompany
 loans attributable to normal business operations of Distributing 3 and its
 subsidiaries prior to the Third Internal Spin-Off.

 (ggg)         Immediately before the Third Internal Spin-Off, items of income,
 gain, loss, deduction and credit will be taken into account as required by the
 applicable intercompany transaction regulations (see § 1.1502-13 and § 1.1502-
 14 as in effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13
 as published by T.D. 8597, and as currently in effect). Further, Distributing 3's

PLR-146296-09 19

   excess loss account, if any, with respect to its Controlled 3 Common Stock will
   be included in income immediately before the Third Internal Spin-Off to the extent
   required by applicable regulations. (See § 1.1502-19.)

   (hhh)          Payments made in connection with all continuing transactions, if
   any, between Distributing 3 and Controlled 3 will be for fair market value based
   on terms and conditions arrived at by the parties bargaining at arm’s length,
   except (i) in the case of certain transitional services which will be charged at cost
   or at cost-plus, (ii) for the sublease of certain real property which payments are
   expected to be on terms similar to those contained in the primary lease
   agreement for such real property, and (iii) in connection with the tax sharing
   agreement which will be charged as described in such agreement.

   (iii)       No two parties to the Third Internal Spin-Off are investment
   companies as defined in § 368(a)(2)(F)(iii) and (iv).

   (jjj)          The Third Internal Spin-Off is not part of a plan or series of related
   transactions (within the meaning of § 1.355-7) pursuant to which one or more
   persons will acquire directly or indirectly stock representing a 50% or greater
   interest (within the meaning of § 355(d)(4)) in Distributing 3 or Controlled 3
   (including any predecessor or successor of any such corporation).

   (kkk)         Immediately after the Third Internal Spin-Off, neither Distributing 3
   nor Controlled 3 will be a “disqualified investment corporation” as defined in §
   355(g)(2)(A).

The First Internal Split-Off

Distributing 5 makes the following representations with respect to the First Internal Split-
Off:

   (lll)          Indebtedness, if any, owed by Controlled 4 to Distributing 4 after
   the First Internal Split-Off will not constitute stock or securities.

   (mmm)         The fair market value of Controlled 4 Common Stock and other
   consideration to be received by Distributing 5 will be approximately equal to the
   fair market value of Distributing 4 Common Stock surrendered by Distributing 5 in
   the exchange.

   (nnn)          No part of the consideration to be distributed by Distributing 4 will
   be received by Distributing 5 as a creditor, employee, or in any capacity other
   than that of a shareholder of Distributing 4.

   (ooo)          Distributing 4 and Controlled 4 will each treat all members of its
   respective SAG (as defined in § 355(b)(3)(B)) as one corporation in determining
   whether it meets the requirements of § 355(b)(2)(A) regarding the active conduct
   of a trade or business.

PLR-146296-09 20

 (ppp)          The five years of financial information submitted on behalf of the
 Distributing 4 SAG is representative of the present operations of the Distributing
 4 Business, and with regard to such business, there have been no substantial
 operational changes since the date of the last financial statements submitted.

 (qqq)         The five years of financial information submitted on behalf of the
 Controlled 4 SAG is representative of the present operations of the Controlled 4
 Business, and with regard to the Controlled 4 SAG, there have been no
 substantial operational changes since the date of the last financial statements
 submitted.

 (rrr)        Following the First Internal Split-Off, the Distributing 4 SAG and
 Controlled 4 SAG will each continue the active conduct of their respective
 businesses, independently and with their separate employees.

 (sss)        The First Internal Split-Off is being carried out for the corporate
 business purpose of making possible the External Spin-Off and is motivated, in
 whole or substantial part, by this corporate business purpose.

 (ttt)          The First Internal Split-Off is not used principally as a device for the
 distribution of the earnings and profits of Distributing 4 or Controlled 4 or both.

 (uuu)          For purposes of § 355(d), immediately after the First Internal Split-
 Off, no person (determined after applying § 355(d)(7)) will hold stock possessing
 50% or more of the total combined voting power of all classes of Distributing 4
 stock entitled to vote, or 50% or more of the total value of shares of all classes of
 Distributing 4 stock, that was acquired by purchase (as defined in § 355(d)(5)
 and (8)) during the five-year period (determined after applying § 355(d)(6))
 ending on the date of the First Internal Split-Off.

 (vvv)          For purposes of § 355(d), immediately after the First Internal Split-
 Off, no person (determined after applying § 355(d)(7)) will hold stock possessing
 50% or more of the total combined voting power of all classes of Controlled 4
 stock entitled to vote, or 50% or more of the total value of shares of all classes of
 Controlled 4 stock, that was either (1) acquired by purchase (as defined in §
 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the First Internal Split-Off, or (2) attributable to
 distributions on Distributing 4 stock that was acquired by purchase (as defined in
 § 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the First Internal Split-Off.

 (www)         The total adjusted bases and the fair market value of the assets
 transferred to Controlled 4 by Distributing 4 in the Fourth Contribution each will
 equal or exceed the sum of (i) the amount of any liabilities assumed (within the
 meaning of § 357(d)) by Controlled 4 in the exchange and (ii) the total of any
 money and the fair market value of any other property (within the meaning of §

PLR-146296-09 21

 361(b)) transferred by Controlled 4 to Distributing 1 that is to be distributed to the
 shareholders of Distributing 4 or transferred to creditors of Distributing 4 pursuant
 to the plan of reorganization.

 (xxx)           The fair market value of the assets transferred to Controlled 4 by
 Distributing 4 in the Fourth Contribution will exceed the sum of (i) the amount of
 any liabilities assumed (within the meaning of § 357(d)) by Controlled 4 in
 connection with the exchange, (ii) the amount of any liabilities owed to Controlled
 4 by Distributing 4 that are discharged or extinguished in connection with the
 exchange and (iii) the amount of the cash and fair market value of any other
 property (other than stock and securities permitted to be received under § 361(a)
 without recognition of gain) received by Distributing 4 from Controlled 4 in
 connection with the exchange. The fair market value of the assets of Controlled
 4 will exceed the amount of its liabilities immediately after the exchange.

 (yyy)         Any liabilities assumed (within the meaning of § 357(d)) by
 Controlled 4 in the Fourth Contribution were incurred in the ordinary course of
 business and are associated with the assets being transferred.

 (zzz)         The income tax liability for the taxable year in which investment
 credit property (including any building to which § 47(d) applies) is transferred will
 be adjusted pursuant to § 50(a)(1) or (a)(2) (or § 47, as in effect before
 amendment by Public Law 101-508, Title 11, 104 Stat. 1388, 536 (1990), if
 applicable) to reflect an early disposition of property.

 (aaaa)        Distributing 4 neither accumulated its receivables nor made any
 extraordinary payment of its payables in anticipation of the First Internal Split-Off.

 (bbbb)         No indebtedness between Distributing 4 (and its subsidiaries) and
 Controlled 4 (and its subsidiaries) has been or will be cancelled in connection
 with the First Internal Split-Off other than the settlement of open intercompany
 account balances and other intercompany loans attributable to normal business
 operations of Distributing 4 and its subsidiaries prior to the First Internal Split-Off.

 (cccc)        No intercorporate debt will exist between Distributing 4 and
 Controlled 4 at the time of, or subsequent to, the First Internal Split-Off, except
 for payables arising under transitional agreements or otherwise in the ordinary
 course of business.

 (dddd)        Immediately before the First Internal Split-Off, items of income,
 gain, loss, deduction and credit will be taken into account as required by the
 applicable intercompany transaction regulations (see § 1.1502-13 and § 1.1502-
 14 as in effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13
 as published by T.D. 8597, and as currently in effect).

PLR-146296-09 22

  (eeee)        Immediately before the First Internal Split-Off, Distributing 4 will not
  have an excess loss account (within the meaning of § 1.1502-19(a)(2)) in
  Controlled 4’s stock.

  (ffff)         Payments made in connection with all continuing transactions, if
  any, between Distributing 4 and Controlled 4 will be for fair market value based
  on terms and conditions arrived at by the parties bargaining at arm’s length,
  except (i) in the case of certain transitional services which will be charged at cost
  or at cost-plus, (ii) for the sublease of certain real property which payments are
  expected to be on terms similar to those contained in the primary lease
  agreement for such real property, and (iii) in connection with the tax sharing
  agreement which will be charged as described in such agreement.

  (gggg)      No two parties to the First Internal Split-Off are investment
  companies as defined in § 368(a)(2)(F)(iii) and (iv).

  (hhhh)         The First Internal Split-Off is not part of a plan or series of related
  transactions (within the meaning of § 1.355-7) pursuant to which one or more
  persons will acquire directly or indirectly stock representing a 50% or greater
  interest (within the meaning of § 355(d)(4)) in Distributing 4 or Controlled 4
  (including any predecessor or successor of any such corporation).

  (iiii)        Immediately after the First Internal Split-Off, neither Distributing 4
  nor Controlled 4 will be a “disqualified investment corporation” as defined in §
  355(g)(2)(A).

The Second Internal Split-Off

Distributing 5 makes the following representations with respect to the Second Internal
Split-Off:

  (jjjj)       Indebtedness, if any, owed by Controlled 1 to Distributing 4 after
  the Second Internal Split-Off will not constitute stock or securities.

  (kkkk)        The fair market value of Controlled 1 Common Stock and other
  consideration to be received by Distributing 5 will be approximately equal to the
  fair market value of Distributing 4 Common Stock surrendered by Distributing 5 in
  the exchange.

  (llll)         No part of the consideration to be distributed by Distributing 4 will
  be received by Distributing 5 as a creditor, employee, or in any capacity other
  than that of a shareholder of Distributing 4.

  (mmmm)        Distributing 4 will treat all members of its SAG (as defined in §
  355(b)(3)(B)) as one corporation in determining whether it meets the
  requirements of § 355(b)(2)(A) regarding the active conduct of a trade or
  business.

PLR-146296-09 23

 (nnnn)         The five years of financial information submitted on behalf of the
 Distributing 4 SAG is representative of the present operations of the Distributing
 4 Business, and with regard to such business, there have been no substantial
 operational changes since the date of the last financial statements submitted.

 (oooo)        The five years of financial information submitted on behalf of the
 business contributed to Controlled 1 is representative of the present operations
 of the Controlled 1 Business, and with regard to such business, there have been
 no substantial operational changes since the date of the last financial statements
 submitted.

 (pppp)        Following the Second Internal Split-Off, the Distributing 4 SAG and
 Controlled 1 (or its successor) will each continue the active conduct of their
 respective businesses, independently and with their separate employees.

 (qqqq)         The Second Internal Split-Off is being carried out for the corporate
 business purpose of facilitating the realignment of certain software and related
 assets in a manner consistent with future use by members of Distributing 5’s
 affiliated group and is motivated, in whole or substantial part, by this corporate
 business purpose.

 (rrrr)         The Second Internal Split-Off is not used principally as a device for
 the distribution of the earnings and profits of Distributing 4 or Controlled 1 or
 both.

 (ssss)         For purposes of § 355(d), immediately after the Second Internal
 Split-Off, no person (determined after applying § 355(d)(7)) will hold stock
 possessing 50% or more of the total combined voting power of all classes of
 Distributing 4 stock entitled to vote, or 50% or more of the total value of shares of
 all classes of Distributing 4 stock, that was acquired by purchase (as defined in §
 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the Second Internal Split-Off.

 (tttt)         For purposes of § 355(d), immediately after the Second Internal
 Split-Off, no person (determined after applying § 355(d)(7)) will hold stock
 possessing 50% or more of the total combined voting power of all classes of
 Controlled 1 stock entitled to vote, or 50% or more of the total value of shares of
 all classes of Controlled 1 stock, that was either (1) acquired by purchase (as
 defined in § 355(d)(5) and (8)) during the five-year period (determined after
 applying § 355(d)(6)) ending on the date of the Second Internal Split-Off, or (2)
 attributable to distributions on Distributing 4 stock that was acquired by purchase
 (as defined in § 355(d)(5) and (8)) during the five-year period (determined after
 applying § 355(d)(6)) ending on the date of the Second Internal Split-Off.

PLR-146296-09 24

 (uuuu)        Distributing 4 neither accumulated its receivables nor made any
 extraordinary payment of its payables in anticipation of the Second Internal Split-
 Off.

 (vvvv)         No indebtedness between Distributing 4 (and its subsidiaries) and
 Controlled 1 has been or will be cancelled in connection with the Second Internal
 Split-Off other than the settlement of open intercompany account balances and
 other intercompany loans attributable to normal business operations of
 Distributing 4 and its subsidiaries prior to the Second Internal Split-Off.

 (wwww)        No intercorporate debt will exist between Distributing 4 and
 Controlled 1 at the time of, or subsequent to, the Second Internal Split-Off,
 except for payables arising under transitional agreements or otherwise in the
 ordinary course of business.

 (xxxx)        Immediately before the Second Internal Split-Off, items of income,
 gain, loss, deduction and credit will be taken into account as required by the
 applicable intercompany transaction regulations (see § 1.1502-13 and § 1.1502-
 14 as in effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13
 as published by T.D. 8597, and as currently in effect).

 (yyyy)        Immediately before the Second Internal Split-Off, items of income,
 gain, loss, deduction and credit will be taken into account as required by the
 applicable intercompany transaction regulations (see § 1.1502-13 and § 1.1502-
 14 as in effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13
 as published by T.D. 8597, and as currently in effect). Further, Distributing 4's
 excess loss account, if any, with respect to its Controlled 1 Common Stock will
 be included in income immediately before the Second Internal Split-Off to the
 extent required by applicable regulations (see § 1.1502-19).

 (zzzz)         Payments made in connection with all continuing transactions, if
 any, between Distributing 4 (and its subsidiaries) and Controlled 1 will be for fair
 market value based on terms and conditions comparable to those that would be
 arrived at by the parties bargaining at arm’s length.

 (aaaaa)     No two parties to the Second Internal Split-Off are investment
 companies as defined in § 368(a)(2)(F)(iii) and (iv).

 (bbbbb)       The Second Internal Split-Off is not part of a plan or series of
 related transactions (within the meaning of § 1.355-7) pursuant to which one or
 more persons will acquire directly or indirectly stock representing a 50% or
 greater interest (within the meaning of § 355(d)(4)) in Distributing 4 or Controlled
 1 (including any predecessor or successor of any such corporation).

 (ccccc)       Immediately after the Second Internal Split-Off, neither Distributing
 4 nor Controlled 1 will be a “disqualified investment corporation” as defined in §
 355(g)(2)(A).

PLR-146296-09 25

The Fifth Contribution, the External Spin-Off and the Debt Exchange
Distributing 5 makes the following representations with respect to the Fifth Contribution,
the External Spin-Off and the Debt Exchange:

  (ddddd)      Distributing 5 will cause Trust to dispose of the Retained Trust
  Common Stock received in the Merger as soon as practicable after the External
  Spin-Off, and in any event, not later than mm months after the External Spin-Off.

  (eeeee)      The Retained Trust Common Stock will be voted in proportion to
  the votes cast by other shareholders of Merger Partner.

  (fffff)      Other than the Controlled 5 Securities, indebtedness, if any, owed
  by Controlled 5 to Distributing 5 after the External Spin-Off will not constitute
  stock or securities.

  (ggggg)        Except for the receipt of Controlled 5 Common Stock by holders of
  restricted Distributing 5 Common Stock who have not made a valid election
  under § 83(b), no part of the consideration to be distributed by Distributing 5 with
  respect to the Distributing 5 Common Stock will be received by any shareholder
  of Distributing 5 as a creditor, employee, or in any capacity other than that of a
  shareholder of Distributing 5.

  (hhhhh)       No part of the consideration to be distributed by Distributing 5 will
  be received by a security holder as an employee or in any capacity other than
  that of a security holder of Distributing 5.

  (iiiii)        Distributing 5 and Controlled 5 will each treat all members of its
  respective SAG (as defined in § 355(b)(3)(B)) as one corporation in determining
  whether it meets the requirements of § 355(b)(2)(A) regarding the active conduct
  of a trade or business.

  (jjjjj)        The five years of financial information submitted on behalf of the
  Distributing 5 SAG is representative of the present operations of the Distributing
  4 Business, and with regard to such business, there have been no substantial
  operational changes since the date of the last financial statements submitted.

  (kkkkk)       The five years of financial information submitted on behalf of the
  business contributed to the Controlled 5 SAG is representative of the present
  operations of the Controlled 5 Business, and with regard to such business, there
  have been no substantial operational changes since the date of the last financial
  statements submitted.

  (lllll)        Following the External Spin-Off, Distributing 5 and Controlled 5,
  directly or through their respective SAGs, will each continue the active conduct of
  their respective businesses, independently and with their separate employees.

PLR-146296-09 26

 (mmmmm) The External Spin-Off is being carried out for the corporate
 business purposes listed below and is motivated, in whole or substantial part, by
 one or more of these corporate business purposes: (1) to enhance each of
 Distributing 5’s and Controlled 5’s competitive positioning by allowing each to
 focus on its respective core business; (2) to optimize the capital structure of
 Controlled 5; (3) to facilitate the Merger; and (4) to enhance the effectiveness of
 Controlled 5’s equity-linked compensation.

 (nnnnn)        The External Spin-Off is not used principally as a device for the
 distribution of the earnings and profits of Distributing 5 or Controlled 5 or both.

 (ooooo)        For purposes of § 355(d), immediately after the External Spin-Off,
 no person (determined after applying § 355(d)(7)) will hold stock possessing 50%
 or more of the total combined voting power of all classes of Distributing 5 stock
 entitled to vote, or 50% or more of the total value of shares of all classes of
 Distributing 5 stock, that was acquired by purchase (as defined in § 355(d)(5)
 and (8)) during the five-year period (determined after applying § 355(d)(6))
 ending on the date of the External Spin-Off.

 (ppppp)        For purposes of § 355(d), immediately after the External Spin-Off,
 no person (determined after applying § 355(d)(7)) will hold stock possessing 50%
 or more of the total combined voting power of all classes of Controlled 5 stock
 entitled to vote, or 50% or more of the total value of shares of all classes of
 Controlled 5 stock, that was either (1) acquired by purchase (as defined in §
 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the External Spin-Off, or (2) attributable to
 distributions on Distributing 5 stock that was acquired by purchase (as defined in
 § 355(d)(5) and (8)) during the five-year period (determined after applying §
 355(d)(6)) ending on the date of the External Spin-Off.

 (qqqqq)       The total adjusted bases and the fair market value of the assets
 transferred to Controlled 5 by Distributing 5 in the Fifth Contribution each will
 equal or exceed the sum of (i) the amount of any liabilities assumed (within the
 meaning of § 357(d)) by Controlled 5 in the exchange and (ii) the total of any
 money and the fair market value of any other property (within the meaning of §
 361(b)) received by Distributing 5 and transferred to its creditors and/or
 shareholders in connection with the reorganization.

 (rrrrr)       Any liabilities assumed (within the meaning of § 357(d)) by
 Controlled 5 in the Fifth Contribution were incurred in the ordinary course of
 business and are associated with the assets being transferred.

 (sssss)         The fair market value of the assets transferred to Controlled 5 by
 Distributing 5 in the Fifth Contribution will exceed the sum of (i) the amount of
 any liabilities assumed (within the meaning of § 357(d)) by Controlled 5 in
 connection with the exchange, (ii) the amount of any liabilities owed to Controlled

PLR-146296-09 27

 5 by Distributing 5 that are discharged or extinguished in connection with the
 exchange and (iii) the amount of the cash and fair market value of any other
 property (other than stock and securities permitted to be received under § 361(a)
 without recognition of gain) received by Distributing 5 from Controlled 5 in
 connection with the exchange. The fair market value of the assets of Controlled
 5 will exceed the amount of its liabilities immediately after the exchange.

 (ttttt)      Any Controlled 5 Securities issued to Distributing 5 in the Fifth
 Contribution will qualify as “securities” within the meaning of § 361(a).

 (uuuuu)        Within gg days following the Proposed Transactions, Distributing 5
 will use the Special Payment proceeds distributed to it by Controlled 5 to repay
 External Debt and/or to repurchase shares of Distributing 5 Common Stock
 and/or to pay a dividend to Distributing 5’s shareholders pursuant to the plan of
 reorganization, provided that (i) if such proceeds are used to repurchase shares
 of Distributing 5 Common Stock, such share repurchase will be authorized by a
 special action of Distributing 5’s Board of Directors and will be in addition to any
 share repurchases of Distributing 5 Common Stock occurring in the ordinary
 course and (ii) if such proceeds are used to pay a dividend to Distributing 5’s
 shareholders, such dividend will be a special dividend declared by Distributing
 5’s Board of Directors and will be in addition to any regularly occurring dividends
 distributed to Distributing 5’s shareholders in the ordinary course. Such
 proceeds will be held in a segregated account until they are used as described
 above.

 (vvvvv)        Distributing 5 will use the Controlled 5 Securities distributed to it by
 Controlled 5, if any, to consummate the Debt Exchange; however, in the event
 that Distributing 5 is unable to consummate the Debt Exchange, Distributing 5
 will use commercially reasonable efforts to use the Controlled 5 Securities to
 repurchase shares of Distributing 5 Common Stock and/or to pay a dividend to
 Distributing 5’s shareholders pursuant to the plan of reorganization. Distributing
 5 will in any event dispose of the Controlled 5 Securities no later than gg days
 following the Proposed Transactions.

 (wwwww)         The sum of the Distributing 5 Debt (i) exchanged for Controlled 5
 Securities in the Debt Exchange, if any, and (ii) repaid with the proceeds of the
 Special Payment will not exceed the weighted quarterly average of the External
 Debt for the twelve-month period ending on the close of business on Date 2, the
 last business day before the date on which Distributing 5’s Board of Directors
 initially discussed the potential disposition of the Controlled 5 Business.

 (xxxxx)       The income tax liability for the taxable year in which investment
 credit property (including any building to which § 47(d) applies) is transferred will
 be adjusted pursuant to § 50(a)(1) or (a)(2) (or § 47, as in effect before
 amendment by Public Law 101-508, Title 11, 104 Stat. 1388, 536 (1990), if
 applicable) to reflect an early disposition of property.

PLR-146296-09 28

 (yyyyy)       Distributing 5 neither accumulated its receivables nor made any
 extraordinary payment of its payables in anticipation of the External Spin-Off.

 (zzzzz)        No indebtedness between Distributing 5 (and its subsidiaries, after
 giving effect to the Proposed Transactions) and Controlled 5 (and its
 subsidiaries, after giving effect to the Proposed Transactions) has been or will be
 cancelled in connection with the External Spin-Off other than the settlement of
 open intercompany account balances and other intercompany loans attributable
 to normal business operations of Distributing 5 and its subsidiaries prior to the
 External Spin-Off.

 (aaaaaa)      No intercorporate debt will exist between Distributing 5 and
 Controlled 5 at the time of, or subsequent to, the External Spin-Off, except for
 any Controlled 5 Securities and payables arising under transitional agreements
 or otherwise in the ordinary course of business.

 (bbbbbb)       Immediately before the External Spin-Off, items of income, gain,
 loss, deduction and credit will be taken into account as required by the applicable
 intercompany transaction regulations (see § 1.1502-13 and § 1.1502-14 as in
 effect before the publication of T.D. 8597, 1995-32 I.R.B. 6; § 1.1502-13 as
 published by T.D. 8597, and as currently in effect).

 (cccccc)      Immediately before the External Spin-Off, Distributing 5 will not
 have an excess loss account (within the meaning of § 1.1502-19(a)(2)) in
 Controlled 5’s stock.

 (dddddd)       Any excess loss account of Controlled 5 or any other member of
 the Distributing 5 affiliated group in the stock of another member of such group
 that is required to be taken into account by applicable regulations (see § 1.1502-
 19) will be included in income immediately before the External Spin-Off.

 (eeeeee)        Payments made in connection with all continuing transactions, if
 any, between Distributing 5 (and its subsidiaries) and Controlled 5 (and its
 subsidiaries) will be for fair market value based on terms and conditions arrived
 at by the parties bargaining at arm’s length, except (i) in the case of certain
 transitional services which will be charged at cost or at cost-plus, (ii) for the
 sublease of certain real property which payments are expected to be on terms
 similar to those contained in the primary lease agreement for such real property,
 and (iii) in connection with the tax sharing agreement which will be charged as
 described in such agreement.

 (ffffff)      No two parties to the External Spin-Off are investment companies
 as defined in § 368(a)(2)(F)(iii) and (iv).

 (gggggg)      The External Spin-Off is not part of a plan or series of related
 transactions (within the meaning of § 1.355-7) pursuant to which one or more
 persons will acquire directly or indirectly stock representing a 50% or greater

PLR-146296-09 29

  interest (within the meaning of § 355(d)(4)) in Distributing 5 or Controlled 5
  (including any predecessor or successor of any such corporation).

  (hhhhhh)      Immediately after the External Spin-Off, neither Distributing 5 nor
  Controlled 5 will be a “disqualified investment corporation” as defined in §
  355(g)(2)(A).

The Merger

  Distributing 5 makes the following representations with respect to the Merger:

  (iiiiii)      Other than the Controlled 5 Securities and the Special Payment
  Financing, the liabilities of Controlled 5 assumed (within the meaning of § 357(d))
  by Merger Partner will have been incurred in the ordinary course of business and
  will be associated with the assets being transferred.

  (jjjjjj)      Controlled 5 will not be an investment company as defined in §
  368(a)(2)(F)(iii) and (iv).

  (kkkkkk)      Controlled 5 will not be under the jurisdiction of a court in a title 11
  or similar case under § 368(a)(3)(A).

Distributing 5 and Merger Partner make the following representations with respect to the
Merger:

  (llllll)       The fair market value of the Merger Partner Common Stock and
  cash in lieu of fractional shares, if any, received by each Controlled 5
  shareholder will be approximately equal to the fair market value of the Controlled
  5 Common Stock surrendered in the exchange thereof.

  (mmmmmm) At least 50% of the proprietary interest in Controlled 5 will be
  exchanged for Merger Partner Common Stock and will be preserved within the
  meaning of § 1.368-1(e).

  (nnnnnn)      Neither Merger Partner nor any person related to Merger Partner
  (within the meaning of § 1.368-1(e)(3)) has any plan or intention, directly or
  through any subsidiary corporation, to purchase any Merger Partner Common
  Stock after the Merger, other than through stock purchases meeting the
  requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B.
  696 (see Rev. Rul. 99-58, 1999-2 C.B. 701).

  (oooooo)      Merger Partner has no plan or intention to sell or otherwise dispose
  of any of the assets of Controlled 5 acquired in the Merger, except for
  dispositions made in the ordinary course of business or transfers described in §
  368(a)(2)(C) or § 1.368-2(k).

PLR-146296-09 30

   (pppppp)      Following the Merger, Merger Partner (through its controlled
   subsidiaries) will continue the active conduct of the Controlled 5 Business.

   (qqqqqq)       Except for certain customary provisions of the Merger Agreement
   allocating transfer expenses and certain other transaction costs, Merger Partner,
   Controlled 5 and the Controlled 5 shareholders will pay their respective
   expenses, if any, incurred in connection with the Merger.

   (rrrrrr)      There is no intercorporate indebtedness existing between
   Controlled 5 and Merger Partner that was issued, acquired or will be settled at a
   discount.

   (ssssss)      Merger Partner is not an investment company as defined in §
   368(a)(2)(F)(iii) and (iv).

   (tttttt)     The fair market value of the Controlled 5 assets to be transferred to
   Merger Partner will equal or exceed the sum of the liabilities assumed (within the
   meaning of § 357(d)) by Merger Partner.

   (uuuuuu)      The Merger will qualify as a statutory merger under applicable state
   law.

   (vvvvvv)       The payment of cash in lieu of fractional shares, if any, of Merger
   Partner Common Stock will be solely for the purpose of avoiding the expense
   and inconvenience to Merger Partner of issuing fractional shares and will not
   represent separately bargained-for consideration. It is expected that the total
   cash consideration that will be paid by the distribution agent to the shareholders
   of record of Controlled 5 pursuant to the Merger Agreement instead of issuing
   fractional shares will not exceed nn% of the total consideration that will be issued
   in the transaction to the Controlled 5 shareholders in exchange for their shares of
   Controlled 5 Common Stock. It is intended that no Controlled 5 shareholder of
   record will receive cash in an amount equal to or greater than the value of one
   full share of Merger Partner Common Stock.

RULINGS:

Based on the information submitted and the representations made, we rule as follows
on the Proposed Transactions:

The First Internal Spin-Off

   (1)          The First Contribution, together with the distribution of the
   Controlled 1 Common Stock in the First Internal Spin-Off, will qualify as a
   reorganization within the meaning of § 368(a)(1)(D). Distributing 1 and
   Controlled 1 will each be “a party to the reorganization” within the meaning of §
   368(b).

PLR-146296-09 31

  (2)           Distributing 1 will not recognize any gain or loss on the First
  Contribution. (§§ 357(a) and 361(a), (b)).

  (3)           Controlled 1 will not recognize any gain or loss on the First
  Contribution. (§ 1032(a)).

  (4)            Controlled 1’s basis in each asset received in the First Contribution
  will equal the basis of that asset in the hands of Distributing 1 immediately before
  the transfer. (§ 362(b)).

  (5)          Controlled 1’s holding period in each asset received in the First
  Contribution will include the period during which Distributing 1 held that asset. (§
  1223(2)).

  (6)           Distributing 1 will not recognize any gain or loss on the distribution
  of the Controlled 1 Common Stock in the First Internal Spin-Off. (§ 361(c)(1)).

  (7)           Distributing 4 will not recognize any gain or loss (and will not
  otherwise include any amount in income) upon the receipt of the Controlled 1
  Common Stock in the First Internal Spin-Off. (§ 355(a)).

  (8)            Distributing 4’s holding period in the Controlled 1 Common Stock
  received will include Distributing 4’s holding period for the Distributing 1 Common
  Stock, provided that the Distributing 1 Common Stock is held as a capital asset
  on the date of the First Internal Spin-Off. (§ 1223(1)).

  (9)          Earnings and profits, if any, will be allocated between Distributing 1
  and Controlled 1 in accordance with § 312(h), § 1.312-10(a) and § 1.1502-
  33(e)(3).

The Second Internal Spin-Off

  (10)         The Second Contribution, together with the distribution of the
  Controlled 2 Common Stock in the Second Internal Spin-Off, will qualify as a
  reorganization within the meaning of § 368(a)(1)(D). Distributing 2 and
  Controlled 2 will each be “a party to the reorganization” within the meaning of §
  368(b).

  (11)          Distributing 2 will not recognize any gain or loss on the Second
  Contribution. (§§ 357(a) and 361(a), (b)).

  (12)          Controlled 2 will not recognize any gain or loss on the Second
  Contribution. (§ 1032(a)).

  (13)         Controlled 2’s basis in each asset received in the Second
  Contribution will equal the basis of that asset in the hands of Distributing 2
  immediately before the transfer. (§ 362(b)).

PLR-146296-09 32

  (14)         Controlled 2’s holding period in each asset received in the Second
  Contribution will include the period during which Distributing 2 held that asset. (§
  1223(2)).

  (15)          Distributing 2 will not recognize any gain or loss on the distribution
  of the Controlled 2 Common Stock in the Second Internal Spin-Off. (§ 361(c)(1)).

  (16)          Distributing 4 will not recognize any gain or loss (and will not
  otherwise include any amount in income) upon the receipt of the Controlled 2
  Common Stock in the Second Internal Spin-Off. (§ 355(a)).

  (17)           Distributing 4’s holding period in the Controlled 2 Common Stock
  received will include Distributing 4’s holding period for the Distributing 2 Common
  Stock, provided that the Distributing 2 Common Stock is held as a capital asset
  on the date of the Second Internal Spin-Off. (§ 1223(1)).

  (18)         Earnings and profits, if any, will be allocated between Distributing 2
  and Controlled 2 in accordance with § 312(h), § 1.312-10(a) and § 1.1502-
  33(e)(3).

The Third Internal Spin-Off

  (19)         The Third Contribution, together with the distribution of the
  Controlled 3 Common Stock in the Third Internal Spin-Off, will qualify as a
  reorganization within the meaning of § 368(a)(1)(D). Distributing 3 and
  Controlled 3 will each be “a party to the reorganization” within the meaning of §
  368(b).

  (20)          Distributing 3 will not recognize any gain or loss on the Third
  Contribution. (§§ 357(a) and 361(a), (b)).

  (21)          Controlled 3 will not recognize any gain or loss on the Third
  Contribution. (§ 1032(a)).

  (22)           Controlled 3’s basis in each asset received in the Third Contribution
  will equal the basis of that asset in the hands of Distributing 3 immediately before
  the transfer. (§ 362(b)).

  (23)         Controlled 3’s holding period in each asset received in the Third
  Contribution will include the period during which Distributing 3 held that asset. (§
  1223(2)).

  (24)          Distributing 3 will not recognize any gain or loss on the distribution
  of the Controlled 3 Common Stock in the Third Internal Spin-Off. (§ 361(c)(1)).

PLR-146296-09 33

   (25)          Distributing 4 will not recognize any gain or loss (and will not
   otherwise include any amount in income) upon the receipt of the Controlled 3
   Common Stock in the Third Internal Spin-Off. (§ 355(a)).

   (26)           Distributing 4’s holding period in the Controlled 3 Common Stock
   received will include Distributing 4’s holding period for the Distributing 3 Common
   Stock, provided that the Distributing 3 Common Stock is held as a capital asset
   on the date of the Third Internal Spin-Off. (§ 1223(1)).

   (27)         Earnings and profits, if any, will be allocated between Distributing 3
   and Controlled 3 in accordance with § 312(h), § 1.312-10(a) and § 1.1502-
   33(e)(3).

The First Internal Split-Off

   (28)         The Fourth Contribution, together with the distribution of the
   Controlled 4 Common Stock in the First Internal Split-Off, will qualify as a
   reorganization within the meaning of § 368(a)(1)(D). Distributing 4 and
   Controlled 4 will each be “a party to the reorganization” within the meaning of §
   368(b).

   (29)          Distributing 4 will not recognize any gain or loss on the Fourth
   Contribution. (§§ 357(a) and 361(a), (b)).

   (30)          Controlled 4 will not recognize any gain or loss on the Fourth
   Contribution. (§ 1032(a)).

   (31)         Controlled 4’s basis in each asset received in the Fourth
   Contribution will equal the basis of that asset in the hands of Distributing 4
   immediately before the transfer. (§ 362(b)).

   (32)         Controlled 4’s holding period in each asset received in the Fourth
   Contribution will include Distributing 4’s holding period in such asset. (§
   1223(2)).

   (33)          Distributing 4 will not recognize any gain or loss on the distribution
   of the Controlled 4 Common Stock in the First Internal Split-Off. (§ 361(c)).

   (34)          Distributing 5 will not recognize any gain or loss (and will not
   otherwise include any amount in income) upon the receipt of the Controlled 4
   Common Stock in the First Internal Split-Off. (§ 355(a)).

   (35)           Distributing 5’s aggregate basis in the Distributing 4 Common Stock
   and Controlled 4 Common Stock immediately following the First Internal Split-Off
   will equal the basis of the Distributing 4 Common Stock held by Distributing 5
   immediately prior to the First Internal Split-Off and will be allocated between the

PLR-146296-09 34

  Distributing 4 Common Stock and Controlled 4 Common Stock in proportion to
  the fair market value of each. (§ 358(b)).

  (36)           Distributing 5’s holding period in the Controlled 4 Common Stock
  received will include Distributing 5’s holding period for the Distributing 4 Common
  Stock, provided that the Distributing 4 Common Stock is held as a capital asset
  on the date of the First Internal Split-Off. (§ 1223(1)).

  (37)         Earnings and profits, if any, will be allocated between Distributing 4
  and Controlled 4 in accordance with § 312(h), § 1.312-10(a) and § 1.1502-
  33(e)(3).

The Second Internal Split-Off

  (38)          Distributing 4 will not recognize any gain or loss on the distribution
  of the Controlled 1 Common Stock in the Second Internal Split-Off. (§ 355(c)).

  (39)          Distributing 5 will not recognize any gain or loss (and will not
  otherwise include any amount in income) upon the receipt of the Controlled 1
  Common Stock in the Second Internal Split-Off. (§ 355(a)).



  (40)           Distributing 5’s holding period in the Controlled 1 Common Stock
  received will include Distributing 5’s holding period for the Distributing 4 Common
  Stock, provided that the Distributing 4 Common Stock is held as a capital asset
  on the date of the Second Internal Split-Off. (§ 1223(1)).

  (41)         Earnings and profits, if any, will be allocated between Distributing 4
  and Controlled 1 in accordance with § 312(h), § 1.312-10(a) and § 1.1502-
  33(e)(3).

The Fifth Contribution, the External Spin-Off and the Debt Exchange

  (42)          The Fifth Contribution (including the receipt by Distributing 5 of any
  Controlled 5 Securities and the Special Payment), together with the distribution of
  the Controlled 5 Common Stock in the External Spin-Off, will qualify as a
  reorganization within the meaning of § 368(a)(1)(D). Distributing 5 and
  Controlled 5 will each be “a party to a reorganization” within the meaning of §
  368(b).

  (43)          Provided any Controlled 5 Securities and the Special Payment
  received by Distributing 5 are distributed in pursuance of the plan of
  reorganization, Distributing 5 will not recognize any gain or loss on the Fifth
  Contribution (including the receipt by Distributing 5 of any Controlled 5 Securities
  and the Special Payment). (§§ 357(a) and 361(a), (b)).

PLR-146296-09 35

 (44)          Controlled 5 will not recognize any gain or loss on the Fifth
 Contribution. (§ 1032(a)).

 (45)           Controlled 5’s basis in each asset received in the Fifth Contribution
 will equal the basis of that asset in the hands of Distributing 5 immediately before
 the transfer. (§ 362(b)).

 (46)         Controlled 5’s holding period in each asset received in the Fifth
 Contribution will include Distributing 5’s holding period in such asset. (§
 1223(2)).

 (47)          Distributing 5 will not recognize any gain or loss on the External
 Spin-Off. (§ 361(c)).

 (48)           The Distributing 5 shareholders will not recognize any gain or loss
 (and will not otherwise include any amount in income) upon the receipt of the
 Controlled 5 Common Stock in the External Spin-Off, except for holders of
 restricted Distributing 5 Common Stock who have not made a valid election
 under § 83(b). (§ 355(a)).

 (49)           Each Distributing 5 shareholder’s basis in a share of Distributing 5
 Common Stock (as adjusted under § 1.358-1) shall be allocated between the
 share of Distributing 5 Common Stock with respect to which the External Spin-Off
 is made and the share of Controlled 5 Common Stock (or allocable portions
 thereof) received with respect to the share of Distributing 5 Common Stock in
 proportion to their fair market values. If one share of Controlled 5 Common
 Stock is received in respect of more than one share of Distributing 5 Common
 Stock, the basis of each share of Distributing 5 Common Stock must be allocated
 to the shares of Controlled 5 Common Stock received in a manner that reflects
 that, to the extent possible, a share of Controlled 5 Common Stock is received in
 respect of shares of Distributing 5 Common Stock acquired on the same date
 and at the same price. If a Distributing 5 shareholder that purchased or acquired
 shares of Distributing 5 Common Stock on different dates or at different prices is
 not able to identify which particular share of Controlled 5 Common Stock (or
 portion thereof) is received with respect to a particular share of Distributing 5
 Common Stock, the shareholder may designate which particular share of
 Controlled 5 Common Stock (or portion thereof) is received with respect to a
 particular share of Distributing 5 Common Stock, provided the designation is
 consistent with the terms of the External Spin-Off. (§ 358(b); § 1.358-2(a)).

 (50)          Each Distributing 5 shareholder’s holding period in the Controlled 5
 Common Stock received will include the holding period of the Distributing 5
 Common Stock with respect to which the distribution of the Controlled 5 Common
 Stock is made, provided that the Distributing 5 Common Stock is held as a
 capital asset on the date of the External Spin-Off. (§ 1223(1)).

PLR-146296-09 36

 (51)         Earnings and profits, if any, will be allocated between Distributing 5
 and Controlled 5 in accordance with § 312(h), § 1.312-10(a) and § 1.1502-
 33(e)(3).

 (52)          The Retention is not in pursuance of a plan having as one of its
 principal purposes the avoidance of federal income tax. (§ 355(a)(1)(D)(ii)).

 (53)           Provided that the Controlled 5 Securities are transferred in the Debt
 Exchange or distributed to Distributing 5’s shareholders in pursuance of the plan
 of reorganization, Distributing 5 will not recognize any income, gain, loss, or
 deduction with respect to the Controlled 5 Securities, other than any (i)
 deductions attributable to the fact that Distributing 5 Debt may be redeemed at a
 premium, (ii) income attributable to the fact that Distributing 5 Debt may be
 redeemed at a discount and (iii) interest expense accrued with respect to
 Distributing 5 Debt. (§ 361(c)).

 (54)          The External Spin-Off and the Merger will not cause a significant
 modification of either the Special Payment Financing or the Controlled 5
 Securities under section 1.1001-3(e).

The Merger

 (55)          The Merger will qualify as a reorganization under § 368(a)(1)(A).
 Controlled 5 and Merger Partner will each be “a party to the reorganization”
 under § 368(b).

 (56)          Controlled 5 will not recognize gain or loss on the transfer of its
 assets to Merger Partner and the assumption by Merger Partner of the liabilities
 of Controlled 5, including any Controlled 5 Securities and the Special Payment
 Financing. (§ 361(a) and § 357(a)).

 (57)          Merger Partner will not recognize gain or loss on the receipt of
 Controlled 5 assets in exchange for Merger Partner Common Stock. (§ 1032(a)).

 (58)          Merger Partner’s basis in each asset received in the Merger will
 equal the basis of that asset in the hands of Controlled 5 immediately before its
 transfer. (§ 362(b)).

 (59)          Merger Partner's holding period in each asset received in the
 Merger will include Controlled 5’s holding period in such asset. (§ 1223(2)).

 (60)           Merger Partner will succeed to and take into account those
 attributes of Controlled 5 described in § 381(c). (§ 381(a) and § 1.381(a)-1).
 These items will be taken into account by Merger Partner subject to the
 conditions and limitations specified in §§ 381, 382, 383 and 384 and the
 regulations thereunder.

PLR-146296-09 37

   (61)          No gain or loss will be recognized by shareholders of Controlled 5
   on the receipt of Merger Partner stock in exchange for Controlled 5 stock. (§
   354(a)(1)).

   (62)           A Controlled 5 shareholder who receives cash in lieu of a fractional
   share will recognize gain or loss measured by the difference between the basis
   allocated to the fractional share transferred, as determined below, and the
   amount of cash received. (§ 1001). Any gain or loss will be treated as capital
   gain or loss, provided such fractional share will be held as a capital asset on the
   date of the External Spin-Off. (§§ 1221 and 1222).

   (63)          Each Controlled 5 shareholder's basis in the Merger Partner
   Common Stock received in the Merger will be the same as the basis of the share
   or shares (or allocable portions thereof) of Controlled 5 Common Stock
   exchanged therefor, allocated in the manner described in § 1.358-2.

   (64)          Each Controlled 5 shareholder's holding period in the Merger
   Partner Common Stock received in the Merger will include the holding period in
   the Controlled 5 Common Stock exchanged therefor, provided the Controlled 5
   Common Stock is held as a capital asset on the date of the Merger. (§ 1223(1)).

   (65)           Payments made between Distributing 5 and Merger Partner under
   the Agreements that (i) have arisen or will arise based on facts existing during a
   taxable period ending on or before the date of the Merger or a taxable period
   beginning before and ending after the date of the Merger and (ii) will not become
   ascertainable until after the Merger, will be treated as occurring between
   Distributing 5 and Controlled 5 immediately before the External Spin-Off. (Rev.
   Rul. 83-73, 1983-1 C.B. 84; Arrowsmith v. Comm’r, 344 U.S. 6, 73 S. Ct. 71, 97
   L. Ed. 6, 1952-2 C.B. 136 (1952)).

CAVEATS

Except as expressly provided herein, no opinion is expressed or implied concerning the
tax consequences of any aspect of any matter or item discussed or referenced in this
letter. Moreover, no opinion is expressed about the tax treatment of the transactions or
of any other matter under other provisions of the Code or regulations or about the tax
treatment of any conditions existing at the time of, or effects resulting from, the
Proposed Transactions not specifically covered by the above rulings.

In particular, no opinion is expressed regarding whether the First Internal Spin-Off,
Second Internal Spin-Off, Third Internal Spin-Off, First Internal Split-Off, Second Internal
Split-Off and External Spin-Off: (i) satisfy the business purpose requirement of § 1.355-
2(b), (ii) are being used principally as a device for the distribution of earnings and profits
of Distributing 5, Distributing 4, Distributing 3, Distributing 2, Distributing 1, Controlled 5,
Controlled 4, Controlled 3, Controlled 2 or Controlled 1 or any combination thereof (see
PLR-146296-09 38

§ 355(a)(1)(B) and § 1.355-2(d)), or (iii) are part of a plan (or series of related
transactions) pursuant to which one or more persons will acquire directly or indirectly
stock representing a 50% or greater interest in Distributing 5, Distributing 4, Distributing
3, Distributing 2, Distributing 1, Controlled 5, Controlled 4, Controlled 3, Controlled 2 or
Controlled 1 (see § 355(e) and § 1.355-7).

PROCEDURAL MATTERS

This ruling letter is directed only to the taxpayer requesting it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.

A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, any taxpayer filing its return electronically may satisfy this requirement by
attaching a statement to the return that provides the date and control number of this
letter ruling.

In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representatives.

                                   Sincerely,



                                   Douglas C. Bates
                                   Assistant to the Branch Chief, Branch 5
                                   (Corporate)

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