Common use of Tax Audit Clause in Contracts

Tax Audit. (a) As promptly as practicable following the Signing, the Company will engage PriceWaterhouseCoopers, LLC (“PWC”) to conduct a forensic audit of the Company’s Tax records. Parent shall initially pay any costs PWC in connection with the audit that exceed $25,000, provided that Parent shall be reimbursed for all such costs through a claim against the Tax Escrow Fund in an amount equal to such costs, and such reimbursement shall be made by the Escrow Agent within five (5) Business Days of a claim by Parent upon submission of an invoice from PWC (for avoidance of doubt, the Escrow Agent shall disburse funds for such reimbursement without the consent of, or any instruction from, the Stockholder Representative). PWC shall prepare and deliver to Parent and the Company (or the Company Stockholder Representative if the audit is completed post-Closing) a report (the “Tax Audit Report”) detailing the amount of any potential Tax liability relating to the Company’s failure to pay any sales or use Tax with respect to any Tax year or portion thereof ending on or before the date of this Agreement (or for any Tax year beginning before and ending after the date of this Agreement, to the extent allocable (as determined in the last sentence in Section 6.4(b)) to the portion of such period beginning before and ending on the date of this Agreement (the “Tax Liability”). The Company (and Parent if the audit does not conclude by the Closing) shall provide PWC with reasonable access to review the computations, work papers (including access to accountants’ work papers, subject to such confidentiality restrictions as such accountants may reasonably request) and underlying books and records reasonably related to PWC’s preparation of the Tax Audit Report. Following receipt of the Tax Audit Report, the Company or the Company Stockholder Representative, as applicable, shall have ten (10) business days in which to approve or object to the Tax Audit Report in writing. Any notice of objection shall include in reasonable detail the basis for such objection. If the Tax Audit Report is approved, or if the aforementioned ten (10) business days shall have lapsed without the delivery of a written objection, then the Tax Audit Report shall be deemed final (a “Final Tax Audit Report”). If an objection is made pursuant to this Section 7.11(a), Parent and PWC shall in good faith negotiate and attempt to agree with the Company or Company Stockholder Representative, as applicable, and the Company Accountant (as defined below) upon the objectionable items in the Tax Audit Report. For such purpose, the Company or Company Stockholder Representative may, at its sole cost and expense, retain the services of independent public accounts of nationally recognized standing as determined by the Company (“Company Accountant”). Also for such purpose, PWC shall provide the Company or Company Stockholder Representative, as applicable, and Company Accountant, if any, with reasonable access to review the computations, work papers (including access to PWC’s work papers, subject to such confidentiality restrictions as PWC may reasonably request) and underlying books and records reasonably related to PWC’s preparation of the Tax Audit Report. If the Company or Company Stockholder Representative, as applicable, Company Accountants, if any, Parent and PWC shall so agree, then the Tax Audit Report shall be so revised and deemed final (such Tax Audit Report also deemed a “Final Tax Audit Report”). If no such agreement is reached after good faith negotiation, the Tax Audit Report originally delivered by PWC shall be deemed final and binding (such Tax Audit Report then deemed a “Final Tax Audit Report”).

Tax Audit. If Purchaser (a) As promptly as practicable following the Signingwhich, the Company will engage PriceWaterhouseCoopersfor purposes of this first sentence of this Section 8.5, LLC (“PWC”) shall be deemed to conduct a forensic audit include any of its Affiliates or any of the Company’s Tax records. Transferred Entities) or Parent shall initially pay any costs PWC in connection with the audit that exceed $25,000(which, provided that Parent for purposes of this first sentence of this Section 8.5, shall be reimbursed for all such costs through a claim against deemed to include any of its Affiliates (other than the Tax Escrow Fund Transferred Entities)) receives notice of any Action in an amount equal to such costs, and such reimbursement shall be made by the Escrow Agent within five (5) Business Days respect of a claim by Parent upon submission of an invoice from PWC (for avoidance of doubt, the Escrow Agent shall disburse funds for such reimbursement without the consent of, any Taxes or any instruction from, Tax Return of the Stockholder Representative). PWC shall prepare and deliver to Parent and the Company (or the Company Stockholder Representative if the audit is completed post-Closing) a report (the “Tax Audit Report”) detailing the amount of Transferred Entities for any potential Tax liability relating to the Company’s failure to pay any sales or use Tax with respect to any Tax year or portion thereof taxable period ending on or before the date Closing Date or any Straddle Period, then such party will promptly give written notice along with copies of any assessment, notice or other document received from any Governmental Entity to the other party; provided, that the failure of such party to give such prompt notice shall not relieve the other party of any of its obligations under this Agreement Article VIII. To the extent that portion of any such audit, investigation, or other Action is reasonably expected to relate to a Parent Tax Return or the validity of the Tax treatment of the steps contemplated by Exhibit A (the portion of each Action, a “Parent Tax Audit”), Parent will have the right, at its own expense, to control the defense of the Parent Tax Audit, provided that (A) Parent gives written notice to the Purchaser within fifteen (15) days after the Parent receives notice of the Parent Tax Audit from the Purchaser (or for any of its Affiliates) or the applicable Governmental Entity, (B) Parent keeps the Purchaser reasonably informed of all material matters that come to its attention in respect of the Parent Tax year beginning Audit, (C) Parent offers Purchaser an opportunity to comment before submitting any written materials prepared or furnished in connection with such Parent Tax Audit, (D) Parent defends such Parent Tax Audit diligently and ending after in good faith as if it were the date only party in interest in connection with such Parent Tax Audit, and (E) Parent does not settle, compromise or abandon any such Parent Tax Audit without obtaining the prior written consent of this Agreementthe Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed. The Purchaser will be entitled to participate in the defense of any Parent Tax Audit, at its own expense. Where Parent does not elect to control the defense of the Parent Tax Audit, Purchaser shall be entitled to control such Parent Tax Audit and to settle or compromise such Parent Tax Audit, without the consent of Parent. Notwithstanding the foregoing, to the extent allocable (as determined in the last sentence in Section 6.4(b)) that any audit, investigation, or other Action is reasonably expected to relate to the portion validity of the Tax treatment of the steps contemplated by or the Post-Closing Restructuring Schedule, Purchaser shall not settle or compromise any such audit, investigation, or other Action without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed. In addition, with respect to any U.S. Transferred Entity that is or was a partnership for U.S. federal income Tax purposes, (i) the parties agree that an election under Section 6226 of the Code with respect to such Transferred Entity for any Tax period beginning before and ending on or before the date Closing Date or any Straddle Period shall be made, and (ii) at the request of this Agreement (the “Tax Liability”). The Company (and Parent if the audit does not conclude by the Closing) shall provide PWC with reasonable access to review the computations, work papers (including access to accountants’ work papersPurchaser, subject to such confidentiality restrictions as such accountants may reasonably request) and underlying books and records reasonably related to PWC’s preparation the terms of the Tax Audit Report. Following receipt of the Tax Audit Reportthis Section 8.5, the Company or the Company Stockholder RepresentativeParent shall (and, as if applicable, shall have ten cause its Affiliates, any Person appointed as the “partnership representative” of any of the Transferred Entities, and any Person appointed as the “designated individual” of any of the Transferred Entities to) promptly revoke the appointment, or cause the resignation, of any Person previously appointed as the “partnership representative” or the “designated individual” of any of the Transferred Entities (10in each case, pursuant to Treasury Regulations Section 301.6223-1) business days for any Pre-Closing Tax Period (including any Straddle Period) in which accordance with the procedures described in Treasury Regulations Section 301.6223-1 in connection with any Tax Proceeding with respect to approve or object to any of the Transferred Entities under the Partnership Tax Audit Report in writing. Any notice of objection shall include in reasonable detail the basis for such objection. If the Tax Audit Report is approved, or if the aforementioned ten (10) business days shall have lapsed without the delivery of a written objection, then the Tax Audit Report shall be deemed final (a “Final Tax Audit Report”). If an objection is made pursuant to this Section 7.11(a), Parent and PWC shall in good faith negotiate and attempt to agree with the Company or Company Stockholder Representative, as applicable, and the Company Accountant (as defined below) upon the objectionable items in the Tax Audit Report. For such purpose, the Company or Company Stockholder Representative may, at its sole cost and expense, retain the services of independent public accounts of nationally recognized standing as determined by the Company (“Company Accountant”). Also for such purpose, PWC shall provide the Company or Company Stockholder Representative, as applicable, and Company Accountant, if any, with reasonable access to review the computations, work papers (including access to PWC’s work papers, subject to such confidentiality restrictions as PWC may reasonably request) and underlying books and records reasonably related to PWC’s preparation of the Tax Audit Report. If the Company or Company Stockholder Representative, as applicable, Company Accountants, if any, Parent and PWC shall so agree, then the Tax Audit Report shall be so revised and deemed final (such Tax Audit Report also deemed a “Final Tax Audit Report”). If no such agreement is reached after good faith negotiation, the Tax Audit Report originally delivered by PWC shall be deemed final and binding (such Tax Audit Report then deemed a “Final Tax Audit Report”)Rules.

Tax Audit. (a) As promptly While the Company will be responsible directly to the Canada Revenue Agency or other Governmental Entity, as practicable following applicable, (the Signing“CRA”) for the pending GST audit (the “GST Audit”) by the CRA under Part IX of the Excise Tax Act (Canada), the Company will engage PriceWaterhouseCoopers, LLC (“PWC”) to conduct a forensic audit of the Company’s Tax records. Parent shall initially pay any costs PWC in connection with the audit that exceed $25,000, provided that Parent shall be reimbursed for all such costs through a claim against the Tax Escrow Fund in an amount equal to such costsconsult with, and such reimbursement shall be made seek the assistance of, Parent in a timely fashion in order to address any GST Audit issues or concerns raised by the Escrow Agent within five (5) Business Days of a claim by Parent upon submission of an invoice from PWC (for avoidance of doubt, the Escrow Agent shall disburse funds for such reimbursement without the consent of, or any instruction from, the Stockholder Representative). PWC shall prepare and deliver to Parent and the Company (or the Company Stockholder Representative if the audit is completed post-Closing) a report (the “Tax Audit Report”) detailing the amount of any potential Tax liability relating to the Company’s failure to pay any sales or use Tax with respect to any Tax year or portion thereof ending on or before the date of this Agreement (or for any Tax year beginning before and ending after the date of this Agreement, to the extent allocable (as determined in the last sentence in Section 6.4(b)) to the portion of such period beginning before and ending on the date of this Agreement (the “Tax Liability”)CRA. The Company (and Parent if the audit does not conclude by the Closing) shall provide PWC with reasonable access to review the computations, work papers (including access to accountants’ work papers, subject to such confidentiality restrictions as such accountants may reasonably request) and underlying books and records reasonably related to PWC’s preparation of the Tax Audit Report. Following receipt of the Tax Audit Report, the Company or the Company Stockholder Representative, as applicable, shall have ten (10) business days in which to approve or object to the Tax Audit Report in writing. Any notice of objection shall include in reasonable detail the basis for such objection. If the Tax Audit Report is approved, or if the aforementioned ten (10) business days shall have lapsed without the delivery of a written objection, then the Tax Audit Report shall be deemed final (a “Final Tax Audit Report”). If an objection is made pursuant to this Section 7.11(a), Parent and PWC shall in good faith negotiate and attempt to agree with the Company or Company Stockholder Representative, as applicable, and the Company Accountant (as defined below) upon the objectionable items in the Tax Audit Report. For such purpose, the Company or Company Stockholder Representative maySeller, at its sole cost and expense, retain shall have the services right to control any audit or other legal proceeding in respect of independent public accounts any Tax Return or Taxes of nationally recognized standing as determined by the Company to the extent such audit or legal proceeding relates solely or mostly to Taxes for which the Seller may be liable under this Agreement (the “Company AccountantSeller Indemnified Taxes”) and cannot reasonably be expected to have a material adverse impact on Taxes for a Post-Closing Tax Period (a “Tax Contest”). Also for ; provided, however that (i) the Seller shall keep the Purchaser reasonably informed regarding the status of such purposeTax Contest and shall provide to the Purchaser copies of any material correspondence relating to such Tax Contest, PWC (ii) the Seller shall consult in good faith with the Purchaser and the Company regarding the defense of such Tax Contest and the Purchaser and the Company shall have the right to participate in such Tax Contest, (iii) the Seller shall provide the Purchaser and the Company with a reasonable opportunity to comment on any representations or Company Stockholder Representative, as applicable, submissions proposed to be made to a Governmental Entity in respect of such Tax Contest and Company Accountant, if any, to attend any meeting with reasonable access to review the computations, work papers (including access to PWC’s work papers, subject any such Governmental Entity with respect to such confidentiality restrictions as PWC may reasonably requestmatters and (iv) the Seller shall not settle, resolve or abandon, (and underlying books and records reasonably related shall not allow the Company to PWC’s preparation settle, resolve or abandon), such Tax Contest without the prior written consent of the Tax Audit ReportCompany and the Purchaser, which consent shall not be unreasonably withheld, conditioned, or delayed. If the Seller does not assume control of a Tax Contest or cannot do so, but has an interest in the outcome as it has a reasonable likelihood of affecting the Taxes in the Pre-Closing Tax Period, the Purchaser and the Company shall provide the Seller with a reasonable opportunity to comment on any representations or Company Stockholder Representative, as applicable, Company Accountants, if any, Parent and PWC shall so agree, then the Tax Audit Report shall submissions proposed to be so revised and deemed final (made to a Governmental Entity in respect of such Tax Audit Report also deemed a “Final Tax Audit Report”)Contest and to attend any meeting with any such Governmental Entity with respect to such matters. If no such agreement is reached after good faith negotiationIn addition, the Tax Audit Report originally delivered by PWC requirements in (i) to (iv) above shall be deemed final and binding (such Tax Audit Report then deemed a “Final Tax Audit Report”)apply mutatis mutandis to the Purchaser with respect to the Seller.

Tax Audit. (a) As promptly as practicable following Seller and the SigningCompany have advised Purchaser that by letter dated January 11, 2012, the Company will engage PriceWaterhouseCoopers, LLC Minnesota Department of Revenue (the “PWCState Tax Authority”) notified the Company in writing with respect to conduct a forensic an audit of the Company’s Minnesota Corporation Franchise Tax recordsreturns filed for the tax year(s) ended December 31, 2007 through 2010 (the “State Tax Audit”). Parent shall initially pay Seller acknowledges and reaffirms that any costs PWC Tax payable by any of the Acquired Companies with respect to the income, property or operations of the Acquired Companies for Pre-Closing Tax Periods that result from the State Tax Audit is and will remain subject to payment by Seller pursuant to Section 8.9 of the Stock Purchase Agreement and that in connection with therewith, the audit procedures set forth in Section 8.10 of the Stock Purchase Agreement shall apply to the State Tax Audit. In furtherance of the foregoing, Seller acknowledges and agrees that exceed $25,000of the total Indemnification Escrowed Funds (as increased by the Certificate Escrowed Funds), provided that Parent shall be reimbursed for all such costs through a claim against notwithstanding anything to the Tax contrary set forth in the Stock Purchase Agreement or the Escrow Fund in Agreement, an amount equal to such costs, and such reimbursement shall be made by the Escrow Agent within five (5) Business Days of a claim by Parent upon submission of an invoice from PWC (for avoidance of doubt, the Escrow Agent shall disburse funds for such reimbursement without the consent of, or any instruction from, the Stockholder Representative). PWC shall prepare and deliver to Parent and the Company (or the Company Stockholder Representative if the audit is completed post-Closing) a report $1,000,000 (the “Tax Audit ReportEscrowed Funds”) detailing shall be retained as part of the Indemnification Escrowed Funds and not released until the earlier of (x) completion and final resolution of the State Tax Audit and final determination of any amount of any potential Tax liability relating Taxes required to the Company’s failure to pay any sales or use Tax be paid with respect to the income, property or operations of the Acquired Companies for Pre-Closing Tax Periods as a result of the State Tax Audit (including any appeals or subsequent proceedings brought by the State Tax year Authority or portion Seller (or the Acquired Companies at the request of Seller)) and payment in full thereof ending on or before and (y) the date of this Agreement that is thirty (or for any Tax year beginning before and ending 30) months after the date of this AgreementClosing Date. Seller, to Purchaser and the extent allocable (as determined in the last sentence in Section 6.4(b)) to the portion of such period beginning before Company acknowledge and ending on the date of this Agreement (the “Tax Liability”). The Company (and Parent if the audit does not conclude by the Closing) shall provide PWC with reasonable access to review the computations, work papers (including access to accountants’ work papers, subject to such confidentiality restrictions as such accountants may reasonably request) and underlying books and records reasonably related to PWC’s preparation of agree that the Tax Audit Report. Following receipt of the Tax Audit ReportEscrowed Funds, the Company or the Company Stockholder Representative, so long as applicable, shall have ten (10) business days in which to approve or object to the Tax Audit Report in writing. Any notice of objection shall include in reasonable detail the basis for such objection. If the Tax Audit Report is approved, or if the aforementioned ten (10) business days shall have lapsed without the delivery of a written objection, then the Tax Audit Report they shall be deemed final (a “Final Tax Audit Report”). If an objection is made retained pursuant to this Section 7.11(a), Parent and PWC shall in good faith negotiate and attempt to agree with the Company or Company Stockholder Representative, as applicable, Amendment and the Company Accountant Escrow Agreement, shall be available for payment of any claim for indemnification by the Purchaser Indemnitees under this Amendment and the Stock Purchase Agreement that is validly made under Section 9.4(c) of the Stock Purchase Agreement if a Claim Notice (as defined below) upon the objectionable items in the Tax Audit Report. For such purpose, the Company or Company Stockholder Representative may, at its sole cost and expense, retain the services of independent public accounts of nationally recognized standing as determined by the Company (“Company Accountant”). Also for such purpose, PWC shall provide the Company or Company Stockholder Representative, as applicable, and Company Accountant, if any, Escrow Agreement) with reasonable access to review the computations, work papers (including access to PWC’s work papers, subject respect to such confidentiality restrictions claim has been validly delivered in accordance with the Escrow Agreement before the Scheduled Expiration Date (as PWC may reasonably request) and underlying books and records reasonably related to PWC’s preparation of defined in the Tax Audit Report. If the Company or Company Stockholder Representative, as applicable, Company Accountants, if any, Parent and PWC shall so agree, then the Tax Audit Report shall be so revised and deemed final (such Tax Audit Report also deemed a “Final Tax Audit Report”). If no such agreement is reached after good faith negotiation, the Tax Audit Report originally delivered by PWC shall be deemed final and binding (such Tax Audit Report then deemed a “Final Tax Audit Report”Escrow Agreement).