Exhibit 99(b)
INTERCO/CONVERSE
TAX SHARING AGREEMENT
AGREEMENT dated as of November 17, 1994, by and among
INTERCO INCORPORATED ("INTERCO"), a Delaware corporation,
Converse Inc. ("Converse"), a Delaware corporation, and
Converse's domestic affiliates that are signatories to this
Agreement (each a "Converse Subsidiary").
WHEREAS, INTERCO and Converse are parties to a
Distribution Agreement dated as of November 17, 1994 (the
"Distribution Agreement"), providing for the distribution by
INTERCO of the stock of Converse;
WHEREAS, INTERCO and Converse desire to set forth their
agreement on the proper allocation among INTERCO, Converse and
their Affiliates of foreign, federal, state and local Taxes
incurred in taxable periods beginning prior to (and in certain
respects, subsequent to) the Distribution Date and their
respective obligations in respect of same;
NOW, THEREFORE, in consideration of their mutual
promises, the parties hereby agree as follows:
1. Definitions.
(a) As used in this Agreement:
Capitalized terms not otherwise defined herein are
used as defined in the Distribution Agreement.
"Affiliate" of any person means any person,
corporation, partnership or other entity directly or indirectly
controlling, controlled by or under common control with such
person excluding any shareholder of INTERCO. References herein
to an Affiliate of INTERCO shall mean any Affiliate of INTERCO
excluding, on and after the Distribution Date, Converse and all
shareholders of Converse. References herein to an Affiliate of
Converse, on and after the Distribution Date, shall exclude
INTERCO and all shareholders of Converse.
"After-Tax Amount" means an amount that shall be equal
to the hypothetical after-Tax amount of the indemnity payment due
hereunder, taking into account the hypothetical Tax consequences
of the payments or accruals of the amounts which give rise to the
indemnity obligation. References to "after-Tax basis",
"hypothetical Tax consequences" and "hypothetical after-Tax
amount" refer to calculations of Tax at the maximum statutory
rate (or rates, in the case of an item that affects more than one
Tax) applicable to a INTERCO Indemnitee or a Converse Indemnitee,
as the case may be, for the relevant year.
"Applicable Rate" means the interest rate determined
under the provisions of sections 6621 and 6622 of the Code.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Consolidated State Tax" means, with respect to each
State, any income or franchise Tax payable to any such State in
which Converse or any of its Subsidiaries is or may be liable for
such Tax on a consolidated, combined or unitary basis with
INTERCO or any of its Affiliates.
"Federal Tax" means any United States Federal net
income, environmental, excise, alternative or add-on minimum Tax.
"Final Determination" means (i) with respect to Federal
Taxes, (A) a "determination" as defined in section 1313(a) of the
Code, or (B) the date of acceptance by or on behalf of the
Internal Revenue Service of Form 870-AD (or any successor form
thereto) as a final resolution of tax liability for any taxable
period, except that a Form 870-AD (or successor form thereto)
that reserves the right of the taxpayer to file a claim for
refund and/or the right of the Internal Revenue Service to assert
a further deficiency shall not constitute a Final Determination
with respect to the item or items so reserved; (ii) with respect
to Taxes other than Federal Taxes, any final determination of
liability in respect of a Tax provided for under applicable law;
(iii) any final disposition by reason of the expiration of the
applicable statute of limitations; and (iv) the payment of Tax by
INTERCO or Converse, or any of their Affiliates, whichever is
responsible for payment of such Tax under applicable law, with
respect to any item disallowed by a Taxing Authority, provided
that the provisions of Section 6(b) hereof have been complied
with, or, if such Section 6(b) is inapplicable, that the party
responsible under the terms of this Agreement for such Tax is
notified by the party paying such Tax that it has determined that
no action should be taken to recoup such disallowed item, and the
other party agrees with such determination.
"Converse Group" means Converse and each member, if
any, of the affiliated group of corporations of which Converse
(or any successor in interest by merger or otherwise) will be the
common parent (within the meaning of section 1504 of the Code).
"Converse Indemnitee" is defined in Section 2(f).
"Income Taxes" is defined as any Federal Tax, state or
local income or franchise tax or other tax measured by income and
all other taxes reported on returns which include federal, state
or local income or franchise taxes or other taxes measured by
income, together with any interest, penalties or additions to tax
imposed with respect thereto, but excluding therefrom any taxes
imposed by any foreign government or subdivision thereof.
"Income Tax Returns" is defined as any federal, state
or local consolidated or separate Tax Return which reports Income
Taxes of INTERCO, Converse or any Affiliate thereof.
"Indemnitee" is defined in Section 6(b).
"Other Taxes" are defined in Section 4.
"INTERCO Consolidated Group" means, with respect to any
taxable period, the corporations which are members of the
affiliated group of corporations of which INTERCO is the common
parent (within the meaning of section 1504) of the Code.
"INTERCO Group" means, with respect to any taxable
period, the corporations which are members of the INTERCO
Consolidated Group during such period, excluding the corporations
which are included in the Converse Group.
"INTERCO Indemnitee" is defined in Section 2(g).
"Post-Distribution Tax Period" is defined in Section
3(a).
"Pre-Distribution Tax Liability" means (i) the Federal
Tax liability of INTERCO and each corporation included in the
INTERCO Consolidated Group for any period as to which a
consolidated Federal Tax return was or will be filed by INTERCO
for such group, (ii) the Consolidated State Tax liability of any
consolidated, combined or unitary group which includes both
INTERCO or any of its Affiliates (excluding Converse and its
Affiliates) and Converse and its Affiliates (each a "State
Consolidated Group") and (iii) any other Income Taxes of INTERCO
or any of its Affiliates or of Converse and its Affiliates for
any taxable period ending prior to the Distribution Date or
allocated to any such party pursuant to Section 2(d) of this
Agreement for any taxable period ending prior to the Distribution
Date regardless of whether any such liability has been previously
assessed in whole or in part or is assessed in whole or in part
after the date hereof, or whether such liability is or was
imposed on the INTERCO Consolidated Group or a State Consolidated
Group collectively or on any corporation included within any such
Group separately, but excluding therefrom any taxes imposed by
any foreign government or subdivision thereof.
"Pre-Distribution Tax Period" is defined in Section
3(a).
"Tax" means (A) any net income, alternative or add-on
minimum, gross income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment,
excise, transfer, recording, severance, stamp, occupation,
premium, property, environmental, custom duty, or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest and any penalty, addition
to tax or additional amount imposed by any governmental authority
responsible for the imposition of any such domestic or foreign
tax (a "Taxing Authority"); and (B) any liability of Converse,
INTERCO or any Affiliate (or, in each case, any successor in
interest thereto by merger or otherwise), as the case may be, for
the payment of any amounts of the type described in clause (A)
for any taxable period resulting from the application of Treasury
Regulation Section 1.1502-6 or, in the case of any Consolidated
State Tax, any similar provision applicable under State law.
"Tax Affiliate" shall mean, with respect to a company,
any member of an affiliated group as defined in section 1504 of
the Code, or member of a combined or unitary group of which such
company is or was a member.
"Tax Counsel" means a nationally recognized,
independent Tax counsel selected by INTERCO and approved (which
approval may not be unreasonably withheld) by Converse.
"Tax Reserves" means the reserves for any current Tax
liability (not including any deferred or prepaid income tax
accounts), as shown on the unaudited, consolidated and combined
balance sheet of Converse and its Affiliates prepared by INTERCO
as of the day preceding the Distribution Date, and in the case of
any such reserves for any taxable period including the date
immediately preceding the Distribution Date, as such reserves may
be adjusted on or after the Distribution Date for adjustments in
or to the deferred income tax accounts (including both deferred
and prepaid items) in accordance with INTERCO's customary
procedures for adjusting such reserves in connection with the
preparation and filing of INTERCO's tax returns.
"Tax Return" means all reports, estimates, extensions,
information statements and returns relating to or required by law
to be filed by Converse and its Affiliates in connection with any
Taxes and in the case of consolidated or combined tax returns, by
INTERCO on behalf of Converse and its Affiliates, and all
information returns (e.g., Form W-2, Form 1099) and reports
relating to Taxes and employee benefit plans of Converse and its
Affiliates.
(b) Any term used in this Agreement which is not
defined in this Agreement or in the Distribution Agreement shall,
to the extent the context requires, have the meaning assigned to
it in the Code or applicable Treasury Regulations thereunder.
2. Income Taxes.
(a) Applicable Agreements. Except as provided in
this Agreement, all tax-sharing agreements or similar agreements
with respect to or involving Converse or any of its Affiliates
shall be terminated effective on the day preceding the
Distribution Date and, on and after the Distribution Date,
neither Converse nor any of its Affiliates shall be bound thereby
or have any liability thereunder on amounts due in respect of
periods prior to the Distribution Date. On and after the
Distribution Date, this Agreement shall constitute the sole Tax
sharing agreement between (i) INTERCO and its Affiliates and (ii)
Converse and its Affiliates.
(b) Filing Returns.
(i) INTERCO shall prepare (or cause to be
prepared) and file (or cause to be filed) the Consolidated
Federal Income Tax Return of INTERCO's Consolidated Group and all
other consolidated, combined or unitary Tax Returns of INTERCO or
its Tax Affiliates which include Converse, and shall report the
operations of Converse and its Affiliates in such Tax Returns for
all taxable periods of Converse and its Affiliates ending prior
to the Distribution Date.
(ii) Converse shall be responsible for preparing
and filing all Income Tax Returns required to be filed by or on
behalf of Converse or any of its Affiliates, for all taxable
periods beginning on or after the Distribution Date. Those
Income Tax Returns which include any taxable period beginning
before and ending on or after the Distribution Date shall be
prepared and filed by Converse on a basis which is consistent
with the manner in which INTERCO or its Tax Affiliates filed such
Tax Returns in the past, unless a contrary treatment is required
by law.
(c) Copies of Returns Provided. With respect to
any Income Tax Return required to be filed by INTERCO for a
taxable period which includes (but does not close on) the day
immediately preceding the Distribution Date, INTERCO shall
provide Converse and its authorized representatives with copies
of their pro-forma portion of the Federal Return in accordance
with past practice. INTERCO shall also provide to Converse and
its authorized representatives a statement certifying the amount
of Tax shown on such tax returns that is allocable to Converse
pursuant to Section 2(d) hereof (the "Statement") at least 15
business days prior to the due date for the filing of such Tax
Return, and Converse and its authorized representatives shall
have the right to review such Tax Return (or pro-forma Federal
return) and Statement prior to the filing of such Tax Return.
(d) Allocation of Tax Liability. The
distribution of Converse stock shall be effective for Income
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Taxes purposes in all taxing jurisdictions as of the day
immediately preceding the Distribution Date (even though the laws
of a particular Taxing jurisdiction do not recognize a short Tax
period in respect of the distribution of Converse). With respect
to the tax returns referred to in Section 2(b)(i), all income,
deductions, losses, gains and credits incurred before the
Distribution Date shall be reported on returns prepared by
INTERCO.
In order to allocate any Income Taxes
relating to a taxable period that includes but that would not,
except for this Section 2(d), close on the day immediately
preceding the Distribution Date, INTERCO and Converse will elect,
or direct Converse's Affiliates to elect, with the relevant state
and local Taxing Authority, to the extent permitted by applicable
law, to close the taxable period of Converse and its Affiliates
on the day immediately preceding the Distribution Date. In any
case where applicable law does not permit Converse or its
Affiliates to close its taxable year on the day immediately
preceding the Distribution Date, the Income Taxes, if any,
attributable to the taxable period of Converse and its Affiliates
that includes the day immediately preceding the Distribution Date
shall be allocated to INTERCO for the portion of the taxable
period up to and including the Distribution Date only to the
extent such Income Taxes exceed the applicable Tax Reserves and
to Converse and its Affiliates to the extent of such Tax
Reserves, and to Converse and its Affiliates for the portion of
the taxable period commencing on the Distribution Date.
For purposes of this Section 2(d) hereof, the
Income Taxes for the portion of the taxable period up to but
excluding the Distribution Date shall be determined on the basis
of an interim closing of the books as of the day immediately
preceding the Distribution Date.
(e) Tax Refunds. INTERCO shall be entitled to,
and Converse agrees to promptly pay to INTERCO, an amount equal
to all foreign, federal, state and local tax refunds and interest
thereon (including, without limitation, as a credit or offset
against any other Taxes) (collectively "Refunds"), if any,
received by Converse or its Affiliates to the extent attributable
to any Taxes for which INTERCO has indemnified Converse and its
Affiliates pursuant to this Agreement.
(f) INTERCO Indemnification. INTERCO will
indemnify Converse and its Affiliates (each a "Converse
Indemnitee") against and hold them harmless from (i) any Pre-
Distribution Tax Liability and (ii) all liability for fees, costs
and expenses (including reasonable attorneys' fees) arising out
of or incident to any proceeding before any Taxing Authority or
any judicial authority with respect to any amount indemnifiable
under this sentence of this Section 2(f); provided, however, the
amount indemnifiable pursuant to this Section 2(f) is limited to
SL01 223349.2 6
the extent (A) any such tax liability exceeds the aggregate Tax
Reserves and (B) further limited to the extent the After-Tax
Amount of such indemnified tax liability exceeds $25,000.
INTERCO will indemnify each Converse Indemnitee against and hold
them harmless from the Income Taxes referred to in Section 2(j)
hereof.
(g) Converse Indemnification. Converse and each
Converse Subsidiary will jointly and severally indemnify INTERCO
and each member of the INTERCO Group (each an "INTERCO
Indemnitee") against and hold them harmless from (i) any
liability resulting from any Income Taxes of Converse or any of
its Affiliates with respect to any taxable period beginning on or
after the Distribution Date or any Income Taxes of Converse or
any of its Affiliates allocated to such party for any taxable
period commencing on the Distribution Date pursuant to section
3(d) hereof and (ii) all liability for fees, costs and expenses
(including reasonable attorneys' fees) arising out of or incident
to any proceedings before any Taxing Authority or any judicial
authority with respect to any amount indemnifiable under this
Section 2(g) or under Section 3(c); provided that the amount
indemnified pursuant to this sentence of this Section 2(g) shall
apply only to the extent the After-Tax Amount of such indemnified
tax liability exceeds $25,000. Converse and each Converse
Subsidiary will jointly and severally indemnify each INTERCO
Indemnitee against and hold them harmless from any liability
resulting from any Income Taxes of Converse or any of its
Affiliates with respect to any taxable period ending before the
Distribution Date or any Income Taxes of Converse or any of its
Affiliates allocated to such party for any taxable period ending
on the Distribution Date to the extent that such liability is
reflected in any Tax Reserve of Converse or any of its
Affiliates. If INTERCO is obligated to pay, or indemnify any
Converse Indemnitee in respect of, any tax of a Converse
Indemnitee by reason of any tax audit or other tax adjustment in
respect of a Pre-Distribution Tax Period and such adjustment
gives rise to an increase to any prepaid item in the Tax Reserves
of any Converse Indemnitee, Converse and each Converse Subsidiary
hereby jointly and severally agree to pay to INTERCO an amount
equal to such increase in such prepaid item, subject to Section
2(h) hereof.
(h) Indemnification Payments. INTERCO and
Converse and any Affiliate of Converse shall discharge their
obligations under Sections 2(f) and 2(g) hereof, respectively, by
paying an After-Tax Amount within 30 days of demand therefor.
Notwithstanding the foregoing, if either Converse or INTERCO
disputes in good faith the fact or the amount of an obligation
under Section 2(f) or 2(g), then no payment shall be required
until any such good faith dispute is resolved in accordance with
Section 13(b) hereof; provided, however, that any amount not paid
within 30 days of demand therefor shall bear interest at the
SL01 223349.2 7
Applicable Rate from the date on which such demand was made until
the date of payment.
(i) Filing Authorization. Converse and each
Converse Subsidiary hereby designates INTERCO as their agent (and
the agent of all Converse Affiliates) for the purpose of taking
any and all actions necessary or incidental to the filing of any
Federal or Consolidated State Tax Return, any Income Tax Return
for any taxable period including a period beginning before the
Distribution Date or any amended Federal or Consolidated State
Tax Return of any claim for refund of Tax attributable to any
period during which Converse was a member of the INTERCO
Consolidated Group or any State Consolidated Group, and INTERCO
shall keep Converse reasonably informed of all actions to be
taken on behalf of Converse. Converse shall provide INTERCO with
a Power of Attorney in respect of the filing of such returns.
(j) Taxes on Distribution. Any tax liability for
Income Taxes attributable to the distribution by INTERCO of
Converse stock pursuant to the Distribution Agreement shall be
and remain the sole liability of INTERCO and neither Converse nor
any Affiliate thereof shall have any responsibility therefor.
3. Carrybacks; Other Tax Adjustments.
(a) INTERCO, in its absolute and sole discretion,
will permit the use in any taxable period beginning before the
Distribution Date (a "Pre-Distribution Tax Period") of a
carryback of any net operating loss, net capital loss, investment
Tax credit, foreign Tax credit, charitable deduction or any other
credit or Tax attribute of Converse to reduce the Federal Tax or
Consolidated State Taxes, including, without limitation,
deductions and credits related to alternative minimum Taxes (each
a "Tax Asset") arising in a taxable period beginning on or after
the Distribution Date (a "Post-Distribution Tax Period") of
INTERCO or any Affiliate. Such benefit shall be considered equal
to (i) the excess of the amount of Federal or Consolidated State
Taxes, as the case may be, that would have been payable by the
INTERCO Consolidated Group or any relevant State Consolidated
Group in the absence of such carryback over (ii) the amount of
Federal or Consolidated State Taxes, as the case may be, actually
payable by the INTERCO Consolidated Group or relevant State
Consolidated Group. INTERCO shall pay to Converse 50% of the
benefit of such Tax Asset. Payment of the amount of such benefit
shall be made within 30 days of the receipt by INTERCO of any
refund, credit or other offset attributable thereto.
(b) At Converse's request and expense, INTERCO
shall undertake those actions reasonably necessary to enable
Converse to receive the benefit of any Tax Asset.
(c) If, subsequent to the payment by INTERCO to
Converse of any amount referred to in Section 3(a) above, there
SL01 223349.2 8
shall be (A) a Final Determination under applicable law of a
deficiency of Federal or State Consolidated Taxes of the INTERCO
Consolidated Group or the relevant State Consolidated Group on
the grounds that the Tax Asset giving rise to such payment was in
fact not available in whole or in part, or (B) a Final
Determination resulting from an audit of Converse or any of its
Affiliates (or any successor thereto) which results in a
reduction of any Tax Asset so carried back, Converse shall repay
to INTERCO, within 30 days of such Final Determination, an After-
Tax Amount reflecting the amount which would not have been
payable to Converse pursuant to this Section 3 had the amount of
the benefit been determined in light of such event.
(d) INTERCO agrees to pay Converse the detriment
to Converse and its Affiliates (or any successor thereto) from an
adjustment to the Pre-Distribution Tax Liability of the INTERCO
Consolidated Group which results in an increase of Converse's or
any Affiliate's liability for any Post-Distribution Tax Period.
Converse agrees to pay INTERCO the benefit received by Converse
or any Affiliate (or any successor thereto) from an adjustment to
the Pre-Distribution Tax Liability of the INTERCO Consolidated
Group which results in a reduction of Converse's or any
Affiliate's liability for any Post-Distribution Tax Period. Such
detriment/benefit shall be considered equal to the difference
between the amount of Federal or State Taxes, as the case may be,
that would have been payable by Converse or any Affiliate over
the amount of Federal or State Taxes, as the case may be,
actually payable by Converse or any Affiliate, taking into
account such adjustment. Payment of such detriment/benefit shall
be made within 30 days of the filing of applicable Federal or
State Tax Return (including, without limitation, any amended or
estimated return) for the taxable period for which the benefit is
utilized. Converse agrees to file such an applicable Tax Return
as soon as practicable after receiving notice from INTERCO to the
effect that such an adjustment to the Pre-Distribution Tax
Liability had been made.
4. Other Taxes.
Liability for all Taxes other than Income Taxes ("Other
Taxes") of Converse or any of its Affiliate shall be the sole
responsibility of Converse or any such Affiliate, and liability
for all Other Taxes that are attributable to INTERCO or any of
its Affiliates shall be the sole responsibility of INTERCO or any
such Affiliate. Each party agrees to indemnify and hold the
other harmless in accordance with such undertaking.
Any Tax liabilities (including, but not limited to,
sales Tax, stock transfer Tax, documentary Tax, and stamp Tax)
attributable to the distribution by INTERCO of Converse stock
pursuant to the Distribution Agreement shall be and remain the
sole liability of INTERCO and neither Converse nor any Affiliate
thereof shall have any responsibility therefor.
SL01 223349.2 9
5. Additional Covenants.
(a) Converse and INTERCO shall cooperate (and
shall cause each of their Affiliates to cooperate) fully at such
time and to the extent reasonably requested by the other party in
connection with the preparation and filing of any return, claim
for a refund or other claim with respect to Taxes or the conduct
of any audit, dispute, proceeding, suit or action concerning any
return, amounts indemnifiable hereunder or any other matter
contemplated hereunder. Such cooperation shall include, without
limitation, (i) the retention and provision for inspection on
reasonable request of books, records, documentation or other
information relating to any return until the expiration of the
applicable statute of limitation (giving effect to any extension,
waiver of mitigation thereof); (ii) the provision of additional
information and explanation of material provided under clause (i)
of this Section 5(a); (iii) the execution of any document that
may be necessary or helpful in connection with the filing of any
return by INTERCO of any Affiliate of INTERCO, or by Converse or
any Affiliate, or any audit, proceeding, suit or action addressed
in the preceding sentence; and (iv) the use of the parties' best
efforts to obtain any documentation from a governmental authority
or a third party that may be necessary or helpful in connection
with the foregoing.
(b) INTERCO and Converse, as the case may be,
shall promptly furnish to the other upon receipt a copy of any
revenue agent's report or similar report, notice of proposed
adjustment, or notice of deficiency received by INTERCO, any
Affiliate of INTERCO, or Converse, as the case may be, relating
to the other party's (or its Affiliate's) obligations under
Sections 2 or 3 hereof, or any adjustment referred to in Section
5(c) hereof. INTERCO and Converse shall cooperate to keep each
other fully informed with respect to any development relating to
all matters described in this Agreement.
(c) INTERCO and Converse shall advise each other
with respect to any proposed Tax adjustments relating to the
INTERCO Consolidated Group or any State Consolidated Group which
are the subject of any Internal Revenue Service or State Taxing
Authority, audit or investigation, or are the subject of any
proceeding or litigation, and which may affect any Tax attribute
of Converse, INTERCO or any Affiliate of INTERCO (including, but
not limited to, basis in an asset or the amount of earnings and
profits).
(d) INTERCO shall not without the prior written
consent of Converse modify or make any election (except as
required by law) with respect to Taxes affecting or binding on
Converse or any of its Affiliates for any taxable period
beginning on or after the Distribution Date. Converse shall not
without the prior written consent of INTERCO modify or make any
election (except as required by law) with respect to Taxes
SL01 223349.2 10
affecting or binding on INTERCO or any of its Affiliates for any
taxable period beginning before the Distribution Date.
6. Cooperation and Contest.
(a) INTERCO shall have control over all matters
in respect of any Tax Return filed by the INTERCO, or any Tax
audit, dispute or proceeding (whether administrative or judicial)
relating to any Tax matters in respect of any Tax Return filed by
INTERCO. INTERCO shall promptly notify Converse of any inquiries
from the Internal Revenue Service or any State Taxing Authority
which relate to matters described in Sections 2(g) and 3.
Converse shall have control over all matters in respect of any
Tax Returns filed by Converse and any Tax audit, dispute or
proceeding related thereto. Converse shall promptly notify
INTERCO of any inquiries from the Internal Revenue Service or any
State Taxing Authority which relate or may relate to matters
described in Sections 2(f) and 3.
(b) No settlement of any Internal Revenue Service
or State Taxing Authority audit relating to any matter which
would cause a payment under Section 2(f), Section 2(g) or Section
3 shall be accepted or entered into by or on behalf of the party
entitled to receive a payment under Section 2(f), Section 2(g) or
Section 3, whichever is applicable (the "Indemnitee"), unless (x)
the party ultimately responsible for such payment under Section
2(f), Section 2(g) or Section 3, whichever is applicable (the
"Indemnitor"), consents thereto in writing (which consent shall
not be unreasonably withheld), or (y) the Indemnitor has provided
the Indemnitee with an opinion of Tax Counsel that there is a
reasonable basis for the Indemnitor's position.
(c) In the event that a judgment of the United
States Tax Court or other court of competent jurisdiction results
in an adverse determination with respect to any issue which would
cause Converse to pay INTERCO any amount under Sections 2(g) or
3, Converse shall have the right to cause INTERCO to appeal from
such adverse determination at Converse's expense if Converse
delivers to INTERCO an opinion from Tax Counsel that such appeal
will more likely than not succeed.
7. Payments.
All Payments to be made hereunder shall be made in
immediately available funds and, unless otherwise provided
herein, within 30 days of the date determined herein.
8. Notices.
All notice, demand, claim, or other communication under
this Agreement shall be in writing and shall be deemed to have
been given upon the delivery or mailing thereof, as the case may
be, if delivered personally or sent by certified mail, return
SL01 223349.2 11
receipt requested, postage prepaid, to the parties at the
following addresses (or at such other address as a party may
specify by notice to the other):
If to the INTERCO, to:
INTERCO INCORPORATED
TAX DEPARTMENT
101 S. Hanley
St. Louis, MO 63105
If to Converse, to:
Converse Inc.
Chief Financial Officer
One Fordham Road
North Reading, Massachusetts 01864-3680
9. Costs and Expenses.
Except as expressly set forth in this Agreement, each
party shall bear its own costs and expenses incurred pursuant to
this Agreement. INTERCO shall receive reimbursement for any
expenses in respect of any Return filed by INTERCO on behalf of
Converse. Such expenses shall include any services performed by
INTERCO on behalf of Converse at the rate of $50 per hour.
10. Termination and Survival.
Notwithstanding anything in this Agreement to the
contrary, this Agreement shall remain in effect and its
provisions shall survive for the full period of all applicable
statutes of limitation (giving effect to any extension, waiver or
mitigation thereof).
11. Section Headings.
The section headings contained in this Agreement are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
12. Amendments; No Waivers.
(a) Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by INTERCO and
Converse or in the case of a waiver, by the party against whom
the waiver is to be effective.
SL01 223349.2 12
(b) No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
13. Governing Law and Interpretation.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri.
(b) Any disagreement between the parties hereto
with respect to the provisions of Sections 2(a) through 2(j) and
Section 3 hereof not resolved by mutual agreement of the parties
shall be resolved by an internationally recognized, independent
accounting firm maintaining an office in St. Louis, Missouri
chosen by and mutually acceptable to the parties hereto (an
"Accounting Referee") within 5 days from the date the need to
choose such Accounting Referee arises unless one of the parties
hereto refuses to cooperate in such choice of Accounting Referee
or refuses to submit to arbitration, in which case such
Accounting Referee shall be chosen by the other party in its sole
discretion. An Accounting Referee so chosen shall resolve any
such disagreement within 30 days of appointment pursuant to such
procedures as it may deem advisable. Any such resolution shall
be binding on the parties hereto without further recourse. If
the parties are unable to choose an Accounting Referee pursuant
to this Section 13(b) because of an inability to agree on an
Accounting Referee that is independent and unbiased with respect
to each of the parties hereto, then the disagreements governed by
this Section 13(b) shall be settled by arbitration in the City of
St. Louis, State of Missouri in accordance with the Rules of the
American Arbitration Association, and judgment upon the award so
rendered may be entered in any court having jurisdiction thereof.
The cost and expense of such Accounting Referee (but not the cost
of expense of the separate counsel of each party) shall be shared
by the parties hereto as determined by the Accounting Referee
based on the outcome of such dispute.
14. Counterparts.
This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
15. Assignment.
This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
successors, provided that no party may assign, delegate or
SL01 223349.2 13
otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto.
THIS AGREEMENT CONTAINS BINDING ARBITRATION PROVISIONS
WHICH MAY BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement as of the day and year first above
written.
INTERCO INCORPORATED Converse Inc.
By:David P. Howard By:Donald J. Camacho
Its: Vice President
Converse Star I, Inc. Converse Germany, Inc.
By:Jack A. Green By:Jack A. Green
Converse EMEA, Ltd. Converse Benelux Holding
Company, Inc.
By:Jack A. Green By:Jack A. Green
Converse Europe, Inc. Converse Iberia, Inc.
By:Jack A. Green By:Jack A. Green
Converse Benelux, Inc. Converse France, Inc.
By:Jack A. Green By:Jack A. Green
Converse Italy, Inc.
By:Jack A. Green
SL01 223349.2 14