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EXHIBIT 2.1
July 23, 1999
infoUSA Inc.
Hugo Acquisition Corporation
5711 South 86 Circle
Omaha, Nebraska 68127
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Reorganization, dated
as of May 28, 1999 (the "Agreement"), among infoUSA Inc., a Delaware corporation
("Purchaser"), Hugo Acquisition Corporation, a Delaware corporation and wholly
owned subsidiary of Purchaser ("Merger Sub"), First Data Corporation, a Delaware
corporation ("Seller Parent"), First Data Information Management Group, Inc., a
Delaware corporation ("Seller"), DM Holdings, Inc., a Delaware corporation
("Holdco"), Donnelley Marketing Holdings, Inc., a Delaware corporation
("Parent"), and Donnelley Marketing, Inc., a Delaware corporation (the
"Company"). Each reference in the Agreement to "this Agreement" shall mean the
Agreement as amended by this letter agreement, and as hereafter amended or
restated. Terms not defined herein shall have the respective meanings set forth
in the Agreement.
Purchaser, Merger Sub, Seller Parent, Holdco, Parent and Company,
acknowledge that they desire to amend the Agreement in certain respects pursuant
to Section 9.4 of the Agreement (Seller having been merged into Seller Parent
effective July 22, 1999).
In consideration of the foregoing and of the mutual agreements set
forth herein, the parties hereto agree as follows:
SECTION 1. Amendments to the Agreement. Effective as of the date
hereof, the Agreement is hereby amended as follows:
(a) The first sentence of Section 1.6 of the Agreement is hereby
deleted in its entirety and the following is substituted therefor:
"1.6 Consideration. The consideration to be paid by
Purchaser in exchange for the acquisition by Purchaser of all
outstanding Holdco Capital Stock in the merger (the "PURCHASE PRICE")
shall be equal to:
(i) $200,000,000 plus
(ii) the absolute value of the Net July Cash Amount, as
determined in accordance with the provisions of Section 1.6.1 of this
Agreement.
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
(b) The following is hereby inserted immediately after Section 1.6 of
the Agreement:
1.6.1 Determination of Estimated Payment Adjustment. (a) For
the period from July 1, 1999 to the Closing Date (the "JULY PERIOD"),
the Company shall accept any third-party account receivable payments
received by the Company during such July Period (collectively, such
payments being the "JULY CASH RECEIPTS") and shall pay all amounts due
by the Company to third-parties in the ordinary course of business
consistent with past practice during such July Period (such amounts,
including, but not limited to, any outstanding checks not cleared as
of June 30, 1999 and checks and wire transfers cut and mailed from
June 30, 1999 through the Closing Date for all disbursement categories
which have been or will be presented to the Seller Parent's bank and
cleared against Seller Parent accounts from June 30, 1999, hereinafter
collectively being the "JULY CASH PAYMENTS"). The Company shall ensure
that all July Cash Receipts and July Cash Payments are noted in the
books and records maintained by the Company with respect to such
payments. The amount of July Cash Receipts minus the amount of July
Cash Payments is hereinafter referred to as the "NET JULY CASH
AMOUNT".
(b) Seller Parent and Purchaser hereby agree that the Net
July Cash Amount is a negative amount equal to $665,084.19; Seller
Parent having provided to Purchaser on or prior to the date hereof
detailed documentation (the "July Cash Details") supporting such Net
July Cash Amount. Purchaser shall pay to Seller Parent at Closing, by
wire transfer of immediately available funds to such bank account of
Seller Parent as Seller Parent shall designate in writing to
Purchaser, an amount equal to $200,000,000. On July 28, 1999,
Purchaser shall pay to Seller Parent, by wire transfer of immediately
available funds to such bank account of Seller Parent as Seller Parent
shall designate in writing to Purchaser, an amount equal to
$665,084.19, plus any interest accruing thereon from the Closing Date
to the date of such payment at the Agreed Rate. The "Agreed Rate"
shall mean: the Prime Rate as published in The Wall Street Journal on
July 28, 1999, plus 2%. Seller Parent and Purchaser agree that the
Purchase Price shall not be subject to further adjustment, except as
expressly provided herein.
(c) Schedule 2.4 to the Agreement is hereby amended as follows:
(i) by deleting the following agreement:
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
"Bundling Agreement dated 2/11/97 between
Quarterdeck Corporation and the Company, requires
consent upon a change in control";
(ii) by deleting the last sentence of paragraph #5 in its
entirety and by substituting therefor the following:
"The Company and Purchaser are working with the
U.S. Postal Service to arrange a novation of the
current NCOA License and to bring the Company
under Purchaser's current NCOA License as a second
platform."
(d) Schedule 2.7 to the Agreement is hereby amended by inserting the
contents of Annex A attached hereto.
(e) Schedule 2.11(g) to the Agreement is hereby amended by deleting
the following agreement and all references thereto:
"Bundling Agreement dated February 11, 1997 between
Quarterdeck Corporation and the Company, as licensee."
(f) Schedule 2.20 to the Agreement is hereby amended by deleting the
following names from Attachment 2.20:
(i) Beck, Cindy Manager
(ii) Kaiser, Jim Vice President
(g) Section 6.11 of the Agreement is hereby deleted in its entirety
and the contents of Annex B attached hereto is substituted therefor.
(h) Section 6.13 of the Agreement is hereby amended to read in its
entirety as follows:
6.13 Release of Guaranties. With respect to any obligations
of Seller Parent under the guaranty identified on Schedule 6.13 (the
"Ames Lease Guaranty"), Purchaser shall, within 30 days of the Closing
Date, post or have posted a letter of credit authorizing Seller Parent
to draw upon such letter of credit for any and all losses and/or
expenses incurred after the Closing Date by Seller Parent in respect
of the Ames Lease Guaranty. Purchaser shall, within 45 days of the
Closing Date, have or have caused Seller Parent to be released from
the Ames
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
Lease Guaranty either by posting or having posted a letter of credit
in favor of the holder of the Ames Lease Guaranty, or by any other
commercially reasonable means. Purchaser shall indemnify and hold
harmless Seller Parent from any and all losses and/or expenses
incurred after the Closing Date by Seller Parent in respect of the
Ames Lease Guaranty, without regard to the limitations set forth in
Section 10.4. Without limiting the foregoing, after the Closing,
Purchaser will not, and will not permit any of its Affiliates to,
renew, extend, amend or supplement any loan, contract, lease or other
obligation that is covered by the Ames Lease Guaranty without
providing to Seller Parent evidence satisfactory to Seller Parent that
the Ames Lease Guaranty has been released. Any cash or other
collateral posted by Seller Parent in respect of the Ames Lease
Guaranty shall be delivered to Seller Parent.
(i) Article VII to the Agreement is hereby amended by inserting the
following:
7.7 STAY BONUS AGREEMENT. Seller Parent shall use its reasonable best
efforts to cause each of the Company employees identified on Schedule
7.7 (the "Identified Employees") to enter into an agreement with the
Company substantially in the form attached hereto as Exhibit K
(collectively, the "Stay Bonus Agreements"). Purchaser shall deliver
to Seller Parent an officer's certificate setting forth (1) the total
amount of payments made to the Identified Employees in respect of the
Stay Bonus Agreements, and (2) that all such payments were made to the
Identified Employees named on such certificate only after the
fulfillment by such Identified Employees of the terms and conditions
set forth in the Stay Bonus Agreements. Upon receipt of such officer's
certificate, Seller Parent shall reimburse the Company for all amounts
paid by the Company to the Identified Employees in accordance with the
Stay Bonus Agreements.
(j) The Schedules to the Agreement are hereby amended by inserting
the contents of Annex C attached hereto.
(k) Section 8.3(c) of the Agreement is hereby amended to read in its
entirety as follows:
"Third Party Consents. Seller Group shall have used its
reasonable best efforts to obtain the consents, approvals
and waivers set forth in Schedule 8.3(c).
(l) Exhibit A (Excluded Liabilities) to the Agreement is hereby
amended by deleting paragraph #3 in its entirety and by substituting therefor
the following:
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
"All liabilities related to the lease of the Naperville, IL
facility of the Company and the termination of the Employees
identified in Attachment A-1, other than the Company's
sublease of the current second floor space at such facility
(approximately 19,411 square feet) unless as otherwise
provided for in the Interim Services Agreement."
SECTION 2. Effect of Termination Date. If the Closing shall not have
occurred on or before July 31, 1999, then the provisions of clauses (ii) and
(iii) of the first sentence of Section 1.6 of the Agreement and Section 1.6.1 of
the Agreement shall be of no further force and effect and the provisions of the
Agreement hereby amended by those provisions shall be deemed reinstated as they
existed prior hereto.
SECTION 3. Confirmation of the Agreement. Except as herein expressly
amended, the Agreement is ratified and confirmed in all respects and shall
remain in full force and effect in accordance with its terms.
SECTION 4. Execution in Counterparts. This letter agreement may be
executed in one or more counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties hereto and delivered to each of Purchaser and
Seller Parent.
SECTION 5. Amendments; Conflicts. This letter agreement shall not be
amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of the parties hereto. In the event of any
conflict between the provisions of this letter agreement and the provisions of
the Agreement, the provisions of this letter agreement shall control.
SECTION 6. Governing Law. This letter agreement shall be governed by
and construed in accordance with the internal laws (as opposed to the conflict
of laws provisions) of the State of New York.
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us as a counterpart hereof, whereupon this
letter and your acceptance shall represent a binding agreement among Purchaser,
Merger Sub, Seller Parent, Holdco, Parent and Company.
Very truly yours,
FIRST DATA CORPORATION
By
--------------------------------
Name:
Title:
DONNELLEY MARKETING HOLDINGS, INC. DM HOLDINGS, INC.
By By
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
DONNELLEY MARKETING, INC.
By
--------------------------------
Name:
Title:
[Signature page to Master Amendment]
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
The foregoing amendment is hereby confirmed and accepted as of the date of this
letter.
infoUSA Inc. HUGO ACQUISITION CORPORATION
By By
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
[Signature page to Master Amendment]
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infoUSA Inc.
Hugo Acquisition Corporation
July 23, 1999
ANNEX B
6.11 Certain Tax Matters.
(a) Liability for Taxes.
(i) Seller Parent shall be liable for and pay, and pursuant to
Article X (and subject to any applicable limitations thereunder) shall
indemnify, defend and hold harmless Purchaser against, all Taxes (A) imposed on
any Holdco Group Member, or for which any Holdco Group Member may otherwise be
liable, for any taxable year or period that ends on or before the Closing Date
and, with respect to any Straddle Period (as hereinafter defined), the portion
of such Straddle Period that ends on and includes the Closing Date, (B) imposed
on any Holdco Group Member, pursuant to Treas. Reg. Section 1.1502-6 or similar
provision of state, local or foreign law solely as a result of such Holdco Group
Member having been a member of Seller Parent's Group (as hereinafter defined),
(C) that are withholding or payroll Taxes associated with any Payment (as
defined in Section 6.11(a)(vi)), (D) imposed as a result of any audit, written
inquiry, claim or demand by a taxing authority disallowing a deduction or
similar Tax item that was previously claimed with respect to a Payment in
accordance with Section 6.11(a)(vi) and that gave rise to a tax reduction for
which Purchaser previously paid Seller Parent in accordance with Section
6.11(a)(vi) or (E) imposed as a result of any dividend or other transfer
contemplated by Section 6.12; provided, however, that Seller Parent shall not be
liable for or pay, and shall not indemnify, defend or hold harmless Purchaser
against, (I) any Taxes shown as a liability on the Company Financials (other
than the Excluded Liabilities), (II) any Taxes that result from any actual or
deemed election under Section 338 of the Code or any similar provisions of
state, local or foreign law as a result of the purchase of Holdco Capital Stock
or the deemed purchase of shares of any of its subsidiaries, or that result from
Purchaser, any Affiliate of Purchaser, any Holdco Group Member or any of their
subsidiaries engaging in any activity or transaction that would cause the
transactions contemplated by this Agreement to be treated a purchase or sale of
assets of any Holdco Group Member or any of their subsidiaries for federal,
state or local Tax purposes, (III) any Taxes imposed on any Holdco Group Member
or for which any Holdco Group Member may otherwise be liable as a result of
transactions other than in the ordinary course of business and occurring on the
Closing Date that are properly allocable (based on, among other relevant
factors, factors set forth in Treas. Reg. Section 1.1502-76(b)(1)(ii)(B)) to the
portion of the Closing Date after the Closing and (IV) any Interim Period Tax
imposed on any Holdco Group Member or for which any Holdco Group Member may
otherwise be liable to the extent in excess of the Offset Amount with respect to
such Interim Period Tax (Taxes described in this proviso, hereinafter "Excluded
Taxes"). Purchaser and Seller Parent agree that, with respect to any transaction
described in clause (III) of the preceding sentence, each Holdco Group
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Member and all persons related to any Holdco Group Member under Section 267(b)
of the Code immediately after the Closing shall treat the transaction for all
federal income Tax purposes (in accordance with Treas. Reg. Section
1.1502-76(b)(1)(ii)(B)), and (to the extent permitted) for other income Tax
purposes, as occurring at the beginning of the day following the Closing Date.
Seller Parent shall be entitled to any refund of (or credit for) Taxes allocable
to any taxable year or period that ends on or before the Closing Date and, with
respect to any Straddle Period, the portion of such Straddle Period ending on
and including the Closing Date other than any Tax refunds shown as an asset on
the Company Financials.
For purposes of this Section 6.11:
(A) "CUT-OFF DATE" shall mean June 30, 1999.
(B) "CUT-OFF STRADDLE PERIOD" shall mean any taxable year or
period that begins before and ends after the Cut-Off Date.
(C) "INTERIM PERIOD" shall mean the period of time beginning on
the day after the Cut-Off Date and ending at the close of the Closing
Date.
(D) "INTERIM PERIOD TAX" shall mean any Tax imposed with
respect to the Interim Period.
(E) "OFFSET AMOUNT" shall mean, with respect to an Interim
Period Tax, either (i) the amount of such Tax that is included in July
Cash Payments as reflected in the July Cash Details or (ii) the amount
by which the Tax liability of Seller Parent is actually reduced, upon
the conversion of the stock of Holdco pursuant to Article I, by reason
of the Tax items which result in such Interim Period Tax increasing
the Tax basis of Seller Parent's Holdco Capital Stock.
(F) "SELLER PARENT'S GROUP" shall mean any "affiliated group"
(as defined in Section 1504(a) of the Code without regard to the
limitations contained in Section 1504(b) of the Code), and any
combined, consolidated, unitary or affiliated group under state, local
or foreign law, that includes Seller Parent.
(G) "STRADDLE PERIOD" shall mean any taxable year or period
beginning before and ending after the Closing Date (whether or not
such taxable year or period is also a Cut-Off Straddle Period).
(ii) Purchaser shall be liable for and pay, and pursuant to
Article X (and subject to any applicable limitations thereunder) shall
indemnify, defend and hold harmless Seller Parent against, (A) all Taxes imposed
on any Holdco Group Member or for which any Holdco Group Member may otherwise be
liable, for any taxable year or period that begins after the Closing Date and,
with respect to any Straddle Period, the portion of such Straddle Period
beginning after the Closing Date and (B) Excluded Taxes. Except as otherwise
provided herein,
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Purchaser shall be entitled to any refund of (or credit for) Taxes allocable to
any taxable year or period that begins after the Closing Date and, with respect
to any Straddle Period, the portion of such Straddle Period beginning after the
Closing Date.
(iii) For purposes of Sections 6.11(a)(i) and 6.11(a)(ii), in
determining the amount of Interim Period Taxes:
(A) the Interim Period Taxes of the Holdco Group and each
Member thereof shall be computed as if the Effective Time of the
Merger had occurred at the close of the CutOff Date, except that
(where relevant) the benefits of the graduated tax rates of Section 11
of the Code, the $25,000 bracket amount in Section 38 of the Code, the
$40,000 exemption amount and the $150,000 phase-out bracket amount in
Section 55 of the Code, and the $2 million bracket amount in Section
59A of the Code (and any similar or corresponding benefits under
federal, state or local Tax law) shall be taken into account solely in
determining the Tax liability of Seller Parent.
(B) Interim Period Taxes shall be computed without regard to
any Tax items that arise as a result of transactions other than in the
ordinary course of business (with such disregarded Tax items
including, but not limited to, any income or gain arising as a result
of transactions other than in the ordinary course of business, any
deduction for severance or similar payments or benefits, any deduction
related to the exercise of employee stock options, and any deduction
attributable to what would be a "Payment" as defined in Section
6.11(a)(vi) if "Cut-Off Date" were substituted in place of each
reference to "Closing Date" therein (other than the second reference
to "Closing Date" in clause (ii) thereof)); and
(C) the Interim Period Taxes shall include Taxes attributable
to the portion of any Cut-Off Straddle Period or Straddle Period
included in such period, determined in accordance with Section
6.11(a)(iv).
(iv) For purposes of paragraphs (a)(i), (a)(ii) and (a)(iii),
whenever it is necessary to determine the liability for (or refund with respect
to) Taxes of any Holdco Group Member for a Cut-Off Straddle Period or Straddle
Period, the determination of the Taxes of such Holdco Group Member for the
portion of the Cut-Off Straddle Period ending on and including, and the portion
of the Cut-Off Straddle Period beginning after, the Cut-Off Date, or for the
portion of the Straddle Period ending on and including, and the portion of the
Straddle Period beginning after the Closing Date, as the case may be, shall be
determined by assuming that the Cut-Off Straddle Period or Straddle Period, as
the case may be, consisted of two taxable years or periods, one which ended at
the close of the Cut-Off Date or Closing Date, as the case may be, and the other
which began at the beginning of the day following the Cut-Off Date or Closing
Date, as the case may be, and items of income, gain, deduction, loss or credit
of such Holdco Group Member for the Cut-Off Straddle Period or Straddle Period
shall be allocated between such two taxable years or periods on a "closing of
the books basis" by assuming that the books of such Holdco Group Member were
closed at the close of the Cut-Off Date or Closing Date, provided, however, that
(I) transactions occurring on the Closing Date that are properly allocable
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(based on, among other relevant factors, factors set forth in Treas. Reg.
Section 1.1502-76(b)(1)(ii)(B)) to the portion of the Closing Date after the
Closing shall be allocated to the taxable year or period that is deemed to begin
at the beginning of the day following the Closing Date, and (II) exemptions,
allowances or deductions that are calculated on an annual basis, such as the
deduction for depreciation, shall be apportioned between such two taxable years
or periods on a daily basis. Notwithstanding the foregoing provisions of this
paragraph (a)(iv), if the transactions contemplated by this Agreement result in
the reassessment of the value of any property owned by any Holdco Group Member
for property Tax purposes, or the imposition of any property Taxes at a rate
which is different than the rate that would have been imposed if such
transactions had not occurred, then (y) the portion of such property Taxes for
the portion of the Straddle Period ending on and including the Closing Date
shall be determined on a daily basis, using the assessed value and Tax rate that
would have applied had such transactions not occurred, and (z) the portion of
such property Taxes for the portion of such Straddle Period beginning after the
Closing Date shall be the total property Taxes for the Straddle Period minus the
amount described in clause (y) of this sentence.
(v) Notwithstanding anything herein to the contrary, Purchaser
shall pay, and shall indemnify, defend and hold harmless Seller Parent and its
Affiliates against, any real property transfer or gains Tax, sales Tax, use Tax,
stamp Tax, stock transfer Tax, or other similar Tax imposed on the conversion of
the stock of Holdco pursuant to the Merger.
(vi) To the extent it is established in accordance with the
procedures set forth in this Section 6.11(a)(vi), that any Payment (as defined
below) results in a reduction of the federal, state or local income, franchise
or similar Taxes of any Holdco Group Member, Purchaser or any Affiliate or
successor thereof for any taxable year or period beginning after the Closing
Date or for the portion of any Straddle Period that begins after the Closing
Date (each such reduction, a "TAX REDUCTION"), Purchaser shall pay to Seller
Parent an amount equal to such Tax Reduction. For purposes of this Section
6.11(a)(vi), the amount of any Tax Reduction shall be determined after taking
into account all other applicable items of income, gain, deduction or loss (or
any other Tax attributes) of Purchaser, any Affiliate of Purchaser or any Holdco
Group Member. Purchaser shall be required to claim, and to cause the relevant
Holdco Group Member, Affiliate or successor to claim, a deduction or similar Tax
item (and to claim no income, gain or similar Tax item) with respect to a
Payment unless there is no reasonable basis for doing so under the standards of
Section 6662 of the Code. Any dispute regarding whether the standard set forth
in the preceding sentence is met, or regarding the calculation of the Tax
Reduction, shall be referred to a mutually acceptable independent accounting
firm for final resolution. Payment of any Tax Reduction shall be made at the due
date for filing the Return (after taking into account extensions) for the
taxable year or period in which the Tax Reduction in question occurs, together
with interest on the amount of such payment computed at the applicable federal
rate (determined under Section 1274 of the Code) from the due date for filing
such Return (without taking into account extensions) through the date of
payment. Seller Parent shall refund to Purchaser any Tax Reduction to the extent
it has been paid by Purchaser to Seller Parent but is subsequently recaptured by
Purchaser (other than as a result of an audit, written inquiry, claim or demand
by a taxing authority for which indemnification is provided under
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Section 6.11(a)(i)) including, for example, by reason of any carry back of
losses. To the extent that, after any such recapture, the relevant Payment
subsequently produces a Tax Reduction (established in accordance with the above
procedures), such Tax Reduction shall be governed by this Section 6.11(a)(vi).
For purposes of this Section 6.11:
"PAYMENT" shall mean (i) any payment or delivery by Seller Parent or
any Affiliate thereof of cash, stock or other property (including, without
limitation, any delivery of Seller Parent common stock pursuant to an option to
purchase Seller Parent common stock) after the Closing Date to or for the
benefit of any employee, former employee or independent contractor of any Holdco
Group Member (or, after the Closing Date, any Affiliate thereof) (collectively,
the "EMPLOYEES" and individually an "EMPLOYEE"), except, in all cases, the Stay
Bonus Agreements contemplated by Section 7.7 hereof, (ii) any vesting after the
Closing Date of cash, stock or other property paid or delivered by Seller
Parent, Seller or any Affiliate of either thereof on or prior to the Closing
Date to an Employee, and (iii) any severance payment that Seller or Seller
Parent is responsible for under Section 6.8(k).
(b) Returns.
(i) Seller Parent shall timely file or cause to be timely filed
when due (taking into account all extensions properly obtained) all Returns that
are required to be filed by or with respect to each Holdco Group Member for
taxable years or periods ending on or before the Closing Date (in the case of
income, franchise and similar Returns required to be filed by or with respect to
each Holdco Group Member as well as Returns required to be filed by or with
respect to any Holdco Group Member on a combined, consolidated or unitary basis
with Seller Parent, Seller, or any Affiliate thereof that is not a Holdco Group
Member) or due on or before the Closing Date (with respect to other Returns),
and in each case Seller Parent shall remit or cause to be remitted any Taxes due
in respect of such Returns, and Purchaser shall timely file or cause to be
timely filed when due (taking into account all extensions properly obtained) all
other Returns that are required to be filed by or with respect to any Holdco
Group Member and Purchaser shall remit or cause to be remitted any Taxes due in
respect of such Returns. With respect to Returns to be filed by Purchaser
pursuant to the preceding sentence that relate to taxable years or periods
ending on or before the Closing Date or Straddle Periods: [x] except to the
extent no reasonable basis exists for doing so, such Returns shall be filed in a
manner consistent with past practice and no position shall be taken, election
made or method adopted that is inconsistent with positions taken, elections made
or methods used in prior periods in filing such Returns (including positions
which would have the effect of accelerating income to periods for which Seller
Parent is liable hereunder or deferring deductions to periods for which
Purchaser is liable hereunder) and (y) such Returns shall be submitted to Seller
Parent not later than forty-five (45) days prior to the due date for filing such
Returns (or, if such due date is within 45 days following the Closing Date, as
promptly as practicable following the Closing Date) for review and approval by
Seller Parent, which approval may not be unreasonably withheld, but may in all
cases be withheld if such Returns were not prepared in accordance with clause
[x] of this
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sentence. Seller Parent or Purchaser shall pay the other party for the Taxes for
which Seller Parent or Purchaser, respectively, is liable pursuant to paragraph
(a) of this Section 6.11 but which are payable with any Tax Return to be filed
by the other party pursuant to this paragraph (b) upon the written request of
the party entitled to payment, setting forth in detail the computation of the
amount owed by Seller Parent or Purchaser, as the case may be, but in no event
earlier than ten (10) days prior to the due date for paying such Taxes.
(ii) None of Purchaser or any Affiliate of Purchaser shall (or
shall cause or permit any Holdco Group Member to) amend, refile or otherwise
modify (or grant an extension of any statute of limitation with respect to) any
Return relating in whole or in part to any Holdco Group Member with respect to
any taxable year or period ending on or before the Closing Date (or with respect
to any Straddle Period) without the prior written consent of Seller Parent,
which consent may be withheld in the sole discretion of Seller Parent. In no
event may Purchaser, any Holdco Group Member or any Affiliate thereof carry back
any net operating loss or net capital loss of any Holdco Group Member from a
taxable year or period ending after the Closing Date to a taxable year or period
ending on or before the Closing Date without the express written consent of
Seller Parent.
(iii) Purchaser shall promptly cause each Holdco Group Member
to prepare and provide to Seller Parent a package of Tax information materials,
including, without limitation, schedules and work papers (the "TAX PACKAGE")
required by Seller Parent to enable Seller Parent to prepare and file all
Returns required to be prepared and filed by it pursuant to paragraph (b)(i).
The Tax Package shall be completed in accordance with past practice, including
past practice as to providing such information and as to the method of
computation of separate taxable income or other relevant measure of income of
each Holdco Group Member. Purchaser shall cause the Tax Package to be delivered
to Seller Parent within one hundred twenty (120) days after the Closing Date.
(c) Contest Provisions. Upon receipt by a party entitled to any
indemnification provided for under this Agreement, including this Section 6.11
or Section 2.8 (for purposes of this paragraph, the "INDEMNIFIED PARTY"), of
notice of any audit, written inquiry, claim or demand by a taxing authority, in
each case (i) related to Taxes with respect to which the indemnified party would
be entitled to indemnification under this Agreement to any extent or (ii) that
could result in the disallowance of any deduction or similar Tax item previously
claimed with respect to a Payment in accordance with Section 6.11(a)(vi) whether
or not indemnification payments would be owing upon such disallowance (any such
audit, written inquiry, claim or demand by a taxing authority, hereinafter a
"TAX ASSERTION"), the indemnified party shall notify the party obligated to
provide such indemnification (for purposes of this paragraph, the "INDEMNIFYING
PARTY") in writing of the Tax Assertion as promptly as practicable but in any
event within fifteen (15) days after receipt by such indemnified party of notice
of such Tax Assertion; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been prejudiced as a result of such failure.
Thereafter, the indemnified party shall deliver to the indemnifying party,
promptly after the indemnified party's receipt thereof, copies of all notices
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and documents (including court papers) received by the indemnified party
relating to such Tax Assertion. If a Tax Assertion is made, the indemnifying
party or any Person designated by the indemnifying party (the indemnifying party
or such Person, as relevant as determined by the indemnifying party with respect
to each reference herein, the "RELEVANT PARTY") will be entitled to choose to
defend and solely control the defense of such Tax Assertion (at the Relevant
Party's expense) with counsel selected by the Relevant Party (at the Relevant
Party's expense). If the Relevant Party chooses to defend or prosecute any Tax
Assertion, all of the parties hereto shall cooperate in the defense or
prosecution thereof. Such cooperation shall include taking all reasonable steps
necessary to retain and (upon the Relevant Party's request) to provide to the
Relevant Party records and information which are reasonably relevant to such Tax
Assertion, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.
Notwithstanding anything herein to the contrary, the indemnified party
shall have the sole right to defend any issue relating to a Tax Assertion not
described in clause (ii) of the definition thereof to the extent the indemnified
party shall have agreed to forego any indemnification under this Agreement with
respect thereto. Whether or not the Relevant Party shall have assumed the
defense of a Tax Assertion, neither the indemnified party nor the Relevant Party
shall admit any liability with respect to, or settle, such Tax Assertion without
the Relevant Party's prior written consent.
(d) Assistance and Cooperation. After the Closing Date, each of
Seller Parent and Purchaser shall (and cause their respective Affiliates to)
make commercially reasonable efforts to:
(i) assist the other party in preparing any Returns which such
other party is responsible for preparing and filing in accordance with paragraph
(b) of this Section 6.11;
(ii) cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding, any Returns of any Holdco Group Member;
(iii) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to Taxes
of any Holdco Group Member;
(iv) provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments of any Holdco Group Member for
taxable periods for which the other may have a liability under this Section
6.11;
(v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit or
information request with respect to any such taxable period;
(vi) timely sign and deliver such certificates or forms as may
be necessary or appropriate to establish an exemption from (or otherwise
reduce), or file Returns or other reports
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with respect to, Taxes described in paragraph (a)(v) of this Section 6.11
(relating to sales, transfer and similar Taxes);
(vii) timely provide to the other powers of attorney or similar
authorizations necessary to carry out the purposes of this Section 6.11; and
(viii) upon Seller Parent's reasonable request, Purchaser shall
provide information as to (i) whether there has been any extension, tolling or
expiration of any federal income tax statute of limitation for any Holdco Group
Member for any taxable year ended on or before the Closing Date; or (ii) whether
an IRS Form 870-AD (or successor form having the same effect) has been executed
by Purchaser or any Affiliate in respect of any Holdco Group Member for any
taxable year ended on or before the Closing Date.
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