Exhibit 2(f)
TAX SHARING AGREEMENT
TAX SHARING AGREEMENT (the "Agreement") dated as of ___________, 1997
by and among General Motors Corporation, a Delaware corporation ("GM"), HE
Holdings, Inc., a Delaware corporation ("Xxxxxx"), and Xxxxxx Network Systems,
Inc., a Delaware corporation ("Telecom").
W I T N E S S E T H
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WHEREAS, Xxxxxx and Raytheon Company, a Delaware corporation
("Raytheon"), have entered into an Agreement and Plan of Merger (the "Xxxxxx
Merger Agreement"), dated as of January 16, 1997, providing for the merger of
Raytheon with and into Xxxxxx (the "Xxxxxx Merger");
WHEREAS, it is a condition to the consummation of the Xxxxxx Merger
that GM effect the spin-off of Xxxxxx from GM (the "Distribution") and certain
related transactions pursuant to the Xxxxxx Distribution Agreement (as defined
herein);
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Distribution qualify as a tax-free distribution under Section 355 of the Code
(as defined herein);
WHEREAS, at the end of the day on which the Distribution occurs (the
"Distribution Date"), Xxxxxx' taxable year shall close for U.S. federal income
tax purposes;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, GM and Xxxxxx have executed and delivered the Xxxxxx Spin-off
Separation Agreement (as defined herein) which sets forth, among other things,
certain representations, warranties, covenants and indemnities relating to the
preservation of the tax-free status of the Distribution; and
WHEREAS, the parties hereto wish to provide for the payment of Income
Taxes (as defined herein) and entitlement to refunds thereof, allocate
responsibility and provide for cooperation in the filing of returns in respect
of Income Taxes, and provide for certain other matters relating to Income Taxes
not provided for in the Xxxxxx Spin-off Separation Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, covenants and agreements herein contained and intending to be
legally bound hereby, GM, Xxxxxx, and Telecom hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
"Actually Realized" or "Actually Realizes" shall mean, for purposes of
determining the timing of the incurrence of any Income Tax Liability or the
realization of a Refund (or any related Income Tax cost or benefit) by a Person
in respect of any payment, transaction, occurrence or event, the time at which
the amount of Income Taxes paid by such Person is increased above or reduced
below the amount of Income Taxes that such Person would have been required to
pay but for such payment, transaction, occurrence or event.
"Allowable Tax" shall mean any Income Tax which is an allowable cost
under (i) the Federal Acquisition Regulations, 48 C.F.R. Chapter 1, and
associated regulations or (ii) an agreement in effect on or prior to the
Distribution Date between a member of the Xxxxxx Group or an affiliate thereof
and any U.S. governmental entity.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions located in the State of New York are
authorized or obligated by law or executive order to close.
"Carryback" shall mean the carryback of a tax attribute (including,
without limitation, a net operating loss, a net capital loss or a tax credit) by
a member of the Xxxxxx Group (i) from a Post-Distribution Taxable Period to a
Straddle Period or a Pre-Distribution Taxable Period or (ii) from a Straddle
Period to a Pre-Distribution Taxable Period.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Combined Return" shall mean a consolidated, combined or unitary
Income Tax Return that includes, or is permitted to include, one or more members
of the GM Group and one or more members of the Xxxxxx Group.
"CPR Rules" shall mean the Rules for Non-Administered Arbitration of
Business Disputes promulgated by the Center for Public Resources attached hereto
as Annex I.
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"Dispute Notice" shall mean a written notice of a dispute between
Telecom or GM and Xxxxxx with respect to the subject matter of this Agreement,
which shall set forth in reasonable detail the nature of the dispute.
"Final Determination" shall mean the final resolution of liability for
any Income Tax, which resolution may be for a specific issue or adjustment or
for a taxable period, (i) by Internal Revenue Service Form 870 or 870-AD (or any
successor forms thereto), on the date of acceptance by or on behalf of the
taxpayer, or by a comparable form under the laws of a state or local taxing
jurisdiction, except that a Form 870 or 870-AD or comparable form shall not
constitute a Final Determination to the extent that it reserves (whether by its
terms or by operation of law) the right of the taxpayer to file a claim for
refund or the right of the taxing authority to assert a further deficiency in
respect of such issue or adjustment or for such taxable period (as the case may
be); (ii) by a decision, judgment, decree, or other order by a court of
competent jurisdiction, which has become final and unappealable; (iii) by a
closing agreement or accepted offer in compromise under Sections 7121 or 7122 of
the Code, or a comparable agreement under the laws of a state or local taxing
jurisdiction; (iv) by any allowance of a refund or credit in respect of an
overpayment of Income Tax, but only after the expiration of all periods during
which such refund may be recovered (including by way of offset) by the
jurisdiction imposing such Income Tax; or (v) by any other final disposition,
including by reason of the expiration of the applicable statute of limitations
or by mutual agreement of the parties.
"GM Consolidated Group" shall mean GM and the other members of the
affiliated group of corporations (within the meaning of Section 1504(a) of the
Code) of which GM is the common parent.
"GM Group" shall mean, solely for purposes of this Agreement, GM and
each of the other members of the GM Consolidated Group, other than any member of
the Xxxxxx Group.
"Xxxxxx Distribution Agreement" shall mean the Agreement and Plan of
Merger by and between GM and [Mergeco] Corporation, a Delaware corporation,
which provides for, among other things, the Distribution.
"Xxxxxx Electronics" shall mean Xxxxxx Electronics Corporation, which
owns all the outstanding common stock of Xxxxxx at the date of execution of the
Xxxxxx Merger Agreement.
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"Xxxxxx Group" shall mean, solely for purposes of this Agreement,
Xxxxxx and its subsidiaries, determined immediately after the Distribution and
immediately prior to the Xxxxxx Merger, and shall include any corporation that
shall have merged or liquidated into Xxxxxx or any of its subsidiaries or into
which Xxxxxx or any of its subsidiaries shall have merged or liquidated.
"Xxxxxx Post-Merger Group" shall mean Xxxxxx and the other members of
the affiliated group of corporations (within the meaning of Section 1504(a) of
the Code) which includes Xxxxxx, as determined from time to time after giving
effect to the Xxxxxx Merger, and shall include Raytheon.
"Xxxxxx Spin-off Separation Agreement" shall mean the Xxxxxx Spin-off
Separation Agreement, dated as of _______ __, 1997, by and between Xxxxxx and
GM.
"Income Tax" (i) shall mean (A) any United States federal, state or
local (but not foreign) tax, charge, fee, impost, levy or other assessment which
is based upon, measured by, or calculated with respect to (1) net income or
profits (including, but not limited to, the Michigan Single Business Tax and any
capital gains, gross receipts, value added or minimum tax and any tax on items
of tax preference, but not including sales, use, real property gains, real or
personal property, transfer or similar taxes), or (2) multiple bases (including,
but not limited to, corporate franchise, doing business or occupation taxes), if
one or more of the bases upon which such tax may be based, by which it may be
measured, or with respect to which it may be calculated is described in clause
(i)(A)(1) of this definition, together with (B) any interest and any penalties,
fines, additions to tax or additional amounts imposed by any taxing authority
with respect thereto and (ii) shall include any transferee liability in respect
of an amount described in clause (i) of this definition.
"Income Tax Benefit" shall mean, in respect of a Person or group of
Persons for any taxable period, the excess of (A) the hypothetical Income Tax
Liability of such Person or group of Persons for such taxable period, calculated
as if the Timing Difference, Reverse Timing Difference, increase in foreign tax
credits or carryover of a Tax Attribute, as the case may be, had not occurred
but with all other facts unchanged, over (B) the actual Income Tax Liability of
such Person or group of Persons for such taxable period, calculated taking into
account the Timing Difference, Reverse Timing Difference, increase in foreign
tax credits or carryover of such Tax Attribute, as the case may be (and treating
a Refund as a negative Income Tax Liability, and taking into account credits (if
any), for purposes of such calculation).
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"Income Tax Detriment" shall mean, in respect of any Person or group
of Persons for any taxable period, the excess of (A) the actual Income Tax
Liability of such Person or group of Persons for such taxable period, calculated
taking into account the Timing Difference, Reverse Timing Difference or decrease
in foreign tax credits, as the case may be, over (B) the hypothetical Income Tax
Liability of such Person or group of Persons for such taxable period, calculated
as if the Timing Difference, Reverse Timing Difference or decrease in foreign
tax credits, as the case may be, had not occurred but with all other facts
unchanged (and treating a Refund as a negative Income Tax Liability, and taking
into account credits (if any), for purposes of such calculation).
"Income Tax Liabilities" shall mean all liabilities for Income Taxes.
"Income Tax Return" shall mean any return, report, filing, statement,
questionnaire, declaration or other document required to be filed with a taxing
authority in respect of Income Taxes.
"Indemnified Party" shall mean any Person which is seeking
indemnification from an Indemnifying Party pursuant to the provisions of this
Agreement.
"Indemnifying Party" shall mean any party hereto from which any
Indemnified Party is seeking indemnification pursuant to the provisions of this
Agreement.
"Look-Back Interest" shall mean interest computed under the look-back
method of Section 460(b)(2) of the Code (or similar provision of state or local
Income Tax law).
"Negotiation Period" shall mean the period of 20 Business Days
following the initial meeting of the representatives of Telecom and Xxxxxx
following the receipt of a Dispute Notice.
"Overpayment Rate" shall mean the annual rate of interest described in
Section 6621(a)(1) of the Code (or similar provision of state or local Income
Tax law, as applicable), as determined from time to time.
"Person" shall mean and include any individual, partnership, joint
venture, limited liability company, corporation, association, joint stock
company, trust, unincorporated organization or similar entity or a governmental
authority or any department or agency or other unit thereof.
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"Post-Distribution Taxable Period" shall mean a taxable period that,
to the extent it relates to a member of the Xxxxxx Group, begins after the
Distribution Date.
"Pre-Distribution Taxable Period" shall mean a taxable period that, to
the extent it relates to a member of the Xxxxxx Group, ends on or before the
Distribution Date.
"Proceeding" shall mean any audit or other examination, judicial or
administrative proceeding relating to liability for or refunds or adjustments
with respect to Income Taxes.
"Refund" shall mean any refund of Income Taxes, including any
reduction in Income Tax Liabilities by means of a credit, offset or otherwise.
"Reverse Timing Difference" shall mean an adjustment to an Income Tax
Return which results in (x) an increase in income, gain or recapture, or a
decrease in deduction, loss or credit, as calculated for Income Tax purposes, of
any member of the GM Consolidated Group for any Pre-Distribution Taxable Period
or the portion of a Straddle Period ending on the Distribution Date and (y) an
increase in deduction, loss or credit, or a decrease in income, gain or
recapture, of a member of the Xxxxxx Post-Merger Group for a Post-Distribution
Taxable Period or the portion of a Straddle Period beginning on the day after
the Distribution Date.
"Straddle Period" shall mean a taxable period that, to the extent it
relates to a member of the Xxxxxx Group, includes, but does not end on, the
Distribution Date.
"Tax Allocation Agreement" shall mean the Agreement for the Allocation
of United States Federal Income Taxes, by and between GM, Xxxxxx Electronics,
Xxxxxx and Delco Electronics Corporation, dated as of December 29, 1985, as
amended.
"Tax Attribute" shall mean a tax attribute which is described in
Section 6.d(i) or (ii) hereof.
"Timing Difference" shall mean an adjustment to an Income Tax Return
which results in (x) an increase in income, gain or recapture, or a decrease in
deduction, loss or credit, as calculated for Income Tax purposes, of any member
of the Xxxxxx Post-Merger Group for any Post-Distribution Taxable Period or the
portion of a Straddle Period beginning on the day after the Distribution Date
and (y) an increase in
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deduction, loss or credit, or a decrease in income, gain or recapture, of a
member of the GM Consolidated Group for a Pre-Distribution Taxable Period or the
portion of a Straddle Period ending on the Distribution Date.
"Underpayment Rate" shall mean the annual rate of interest described
in Section 6621(c) of the Code for large corporate underpayments of Income Tax
(or similar provision of state or local Income Tax law, as applicable), as
determined from time to time.
2. Filing of Income Tax Returns; Payment of Income Taxes.
a. Income Tax Returns for Pre-Distribution Taxable Periods.
(i) GM shall prepare and file or cause to be prepared and
filed (A) the U.S. consolidated federal Income Tax Returns of the GM
Consolidated Group required to be filed after the date hereof for all Pre-
Distribution Taxable Periods, including the taxable period in which the
Distribution Date occurs, (B) all other Combined Returns for Pre-Distribution
Taxable Periods that are required to be filed by a member of the GM Group and
(C) all other Income Tax Returns of or which include one or more members of the
Xxxxxx Group that are required to be filed (taking into account any extensions)
on or prior to the Distribution Date. Subject to later reimbursement by Xxxxxx
pursuant to Section 2.d hereof, GM shall pay or cause to be paid any and all
Income Taxes due with respect to such Income Tax Returns. At least 30 days prior
to the earlier of (x) the due date for filing any such Income Tax Return or (y)
the date by which Telecom is required by GM to deliver its portion of such
Income Tax Return to GM, Telecom shall provide Xxxxxx with a copy of those
portions of such Income Tax Returns that relate exclusively to one or more
members of the Xxxxxx Group and shall identify, in a separate statement, any
Income Tax elections, changes in accounting method or actions inconsistent with
past practice in respect thereof. Xxxxxx shall have the right to review and
approve (which approval shall not be unreasonably withheld) such portions of
each such Income Tax Return for 15 days following receipt thereof; provided,
however, that Xxxxxx shall be deemed to have unreasonably withheld its approval
unless, as the basis for withholding such approval, Xxxxxx demonstrates (by
means of a written explanation in sufficient detail to permit such conclusion to
be verified) that Telecom has failed to comply with the requirements of Section
2.e(i) hereof with respect to such portions of such Income Tax Returns. The
failure of Xxxxxx to propose any changes to any such Income Tax Return within
such 15-day period shall be deemed to constitute Xxxxxx' approval thereof.
Telecom and Xxxxxx shall attempt in good faith mutually to resolve any
disagreements regarding such portions of such Income Tax Returns prior to the
due date for filing thereof; provided, however, that if any such disagreements
are not
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resolved prior to such date, GM shall file (or cause to be filed) any such
Income Tax Return in the form and manner in which it was prepared. Any
disagreements regarding such portions of such Income Tax Returns which are not
resolved prior to the filing thereof shall be promptly resolved pursuant to
Section 8 hereof.
(ii) Telecom shall prepare, and Xxxxxx shall file or cause
to be filed (in the form and manner so prepared by Telecom), any Income Tax
Return which (A) includes one or more members of the Xxxxxx Group for a Pre-
Distribution Taxable Period, (B) is not required to be, and is not, filed on or
prior to the Distribution Date and (C) is required to be filed by a member of
the Xxxxxx Group. Telecom shall provide Xxxxxx with each such Income Tax Return
at least 30 days prior to the due date for filing thereof, and shall identify,
in a separate statement, any Income Tax elections, changes in accounting method
or actions inconsistent with past practice in respect thereof. Xxxxxx shall have
the right to review and approve (which approval shall not be unreasonably
withheld) each such Income Tax Return for 15 days following receipt thereof;
provided, however, that Xxxxxx shall be deemed to have unreasonably withheld its
approval of such Income Tax Return unless, as the basis for withholding such
approval, Xxxxxx demonstrates (by means of a written explanation in sufficient
detail to permit such conclusion to be verified) that Telecom has failed to
comply with the requirements of Section 2.e(i) hereof. The failure of Xxxxxx to
propose any changes to any such Income Tax Return within such 15-day period
shall be deemed to constitute Xxxxxx' approval thereof. Xxxxxx shall pay or
cause to be paid the Income Tax Liability shown due on such Income Tax Returns.
No later than 5 Business Days prior to the due date for filing any such Income
Tax Return (taking into account extensions), either (A) Telecom shall pay to
Xxxxxx, subject to later reimbursement by Xxxxxx pursuant to Section 2.d hereof,
the excess, if any, of (1) the Income Tax Liability shown due on such Income Tax
Return over (2) the estimated Income Tax payments (including payments made in
connection with an application for an extension) previously made in respect
thereof by a member of the GM Consolidated Group, or (B) Xxxxxx shall pay to
Telecom the excess, if any, of (1) the amount described in clause (A)(2) of this
sentence over (2) the amount described in clause (A)(1) of this sentence.
Telecom and Xxxxxx shall attempt in good faith mutually to resolve any
disagreements regarding such Income Tax Returns prior to the due date for filing
thereof; provided, however, that the failure to resolve all disagreements prior
to such date shall not relieve Xxxxxx of its obligation to file (or cause to be
filed) any such Income Tax Return in accordance with the first sentence of this
Section 2.a(ii). Any disagreements regarding such Income Tax Returns which are
not resolved prior to the filing thereof shall be promptly resolved pursuant to
Section 8 hereof.
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(iii) Telecom shall prepare any documentation required to be
filed in connection with the making of estimated Income Tax payments due in
respect of Pre-Distribution Taxable Periods for which Telecom (or another member
of the GM Group) is obligated to prepare an Income Tax Return hereunder and
shall make any such estimated Income Tax payments, whether due before, on or
after the Distribution Date.
b. Income Tax Returns for Post-Distribution Taxable Periods.
Xxxxxx shall be responsible for (i) preparing and filing or causing to be
prepared and filed all Income Tax Returns required to be filed by Xxxxxx or any
member of the Xxxxxx Group for any Post-Distribution Taxable Period and (ii)
paying the Income Tax Liability due with respect to such Income Tax Returns,
subject to later reimbursement by Telecom pursuant to Sections 2.g and 2.h
hereof.
c. Income Tax Returns for Straddle Periods.
(i) For U.S. federal Income Tax purposes, the taxable year
of the Xxxxxx Group shall end as of the close of the Distribution Date and, with
respect to all other Income Taxes, GM (or the appropriate member of the GM
Group) and Xxxxxx shall, unless prohibited by applicable law, take all action
necessary or appropriate to close the taxable period of the members of the
Xxxxxx Group as of the close of the Distribution Date. Neither any member of the
GM Group nor any member of the Xxxxxx Group shall take any position inconsistent
with the preceding sentence on any Income Tax Return.
(ii) Telecom shall prepare, and Xxxxxx shall file or cause
to be filed (in the form and manner so prepared by Telecom), all Income Tax
Returns of or which include the Xxxxxx Group or any member thereof for a
Straddle Period. Telecom shall provide Xxxxxx with each such Income Tax Return
at least 30 days prior to the due date for filing thereof, and shall identify,
in a separate statement, any Income Tax elections, changes in accounting method
or actions inconsistent with past practice in respect thereof. Xxxxxx shall have
the right to review and approve (which approval shall not be unreasonably
withheld) each such Income Tax Return for 15 days following receipt thereof;
provided, however, that Xxxxxx shall be deemed to have unreasonably withheld its
approval of such Income Tax Return unless, as the basis for withholding such
approval, Xxxxxx demonstrates (by means of a written explanation in sufficient
detail to permit such conclusion to be verified) that Telecom has failed to
comply with the requirements of Section 2.e(i) hereof. The failure of Xxxxxx to
propose any changes to any such Income Tax Return within such 15-day period
shall be deemed to constitute Xxxxxx' approval thereof. Telecom and Xxxxxx shall
attempt in good faith mutually to resolve any disagreements regarding such
Income Tax Returns prior to the due date for filing thereof; provided, however,
that the failure to resolve
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all disagreements prior to such date shall not relieve Xxxxxx of its obligation
to file (or cause to be filed) any such Income Tax Return in accordance with the
first sentence of this Section 2.c(ii). Any disagreements regarding such Income
Tax Returns which are not resolved prior to the filing thereof shall be promptly
resolved pursuant to Section 8 hereof.
(iii) An Income Tax Liability in respect of an Income Tax
Return for a Straddle Period shall be (A) allocated to Telecom to the extent
such Income Tax Liability is (1) attributable to a member of the Xxxxxx Group
for the period up to and including the Distribution Date or (2) attributable
solely to the inclusion in such Income Tax Return of one or more members of the
GM Group, and (B) allocated to Xxxxxx to the extent such Income Tax Liability is
(1) attributable to a member of the Xxxxxx Group for the period subsequent to
the Distribution Date or (2) attributable solely to the inclusion in such Income
Tax Return of any member of the Xxxxxx Post-Merger Group which is formed or
acquired after the Distribution. The allocation of any Income Tax Liability
between the portion of any Straddle Period ending on the Distribution Date and
the portion of such Straddle Period after the Distribution Date shall be made by
means of a closing of the books and records of the members of the Xxxxxx Group
as of the close of the Distribution Date, as if such taxable period ended as of
the close of the Distribution Date; provided, that exemptions, allowances or
deductions that are calculated on an annual basis (including, but not limited
to, depreciation and amortization deductions) shall be allocated between the
period ending on the Distribution Date and the period after the Distribution
Date in proportion to the number of days in each such period. In the case of any
Income Tax Liability of any member of the Xxxxxx Group which is attributable to
the ownership by such member of an equity interest in a partnership or other
"flowthrough" entity for Income Tax purposes, such allocation shall be made as
if the taxable period of such partnership or other "flowthrough" entity ended as
of the close of the Distribution Date; provided, however, that to the extent
that the information necessary to compute such allocation on the basis of an
interim closing of the books of such "flowthrough" entity is not available to
Telecom or Xxxxxx, such allocation shall be made between the period ending on
the Distribution Date and the period after the Distribution Date in proportion
to the number of days in each such period.
(iv) Xxxxxx shall pay or cause to be paid the Income Tax
Liability due with respect to any Straddle Period. No later than 5 Business Days
prior to the due date for filing any such Income Tax Return (taking into account
extensions), either (A) Telecom shall pay to Xxxxxx, subject to later
reimbursement by Xxxxxx pursuant to Section 2.d hereof, the excess, if any, of
(1) the portion of the Income Tax Liability for such Straddle Period which is
allocable to Telecom pursuant to Section 2.c(iii) hereof over (2) the estimated
Income Tax payments (including payments made in connection with an application
for an extension) made in respect of such Straddle Period by a member of the GM
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Consolidated Group on or prior to the Distribution Date, or (B) Xxxxxx shall pay
to Telecom the excess, if any, of (1) the amount described in clause (A)(2) of
this sentence over (2) the amount described in clause (A)(1) of this sentence.
(v) Telecom shall prepare any documentation required to be
filed in connection with the making of estimated Income Tax payments due in
respect of Straddle Periods for which Xxxxxx (or another member of the Xxxxxx
Group) is obligated to file an Income Tax Return hereunder. Xxxxxx shall make
any such estimated Income Tax payments which are due on or after the
Distribution Date.
d. Allowable Taxes.
(i) The Xxxxxx Group's allocable share of an Income Tax
Liability which is attributable to Allowable Taxes for all Pre-Distribution
Taxable Periods and the portion of any Straddle Period ending with the
Distribution Date shall be determined in a manner consistent with prior practice
of Xxxxxx Electronics and in accordance with the applicable Cost Accounting
Standards Board Disclosure Statements of Xxxxxx Electronics. (A copy of the
statement dated as of July 19, 1996 is annexed hereto as Annex II.)
(ii) As soon as practicable after (A) the filing of any
Income Tax Return for a Pre-Distribution Taxable Period or a Straddle Period in
respect of an Allowable Tax or (B) a redetermination of the liability shown as
due on any such Income Tax Return that results in an adjustment of payments to
or from the relevant U.S. governmental entity pursuant to an agreement or under
applicable law, Telecom shall provide Xxxxxx with a written statement setting
forth the difference, if any, between (x) the amount of such Allowable Tax that
is allocable to the Xxxxxx Group for such taxable period and (y) the amount of
such Allowable Tax previously allocated to the Xxxxxx Group. Such statement
shall contain sufficient information to allow Xxxxxx to verify the amount of
Allowable Tax, and Telecom shall provide Xxxxxx with any information reasonably
requested to enable Xxxxxx to complete the calculations required by Section
2.d(iii) hereof.
(iii) No later than 90 days after delivery by Telecom to
Xxxxxx of a statement of allocable Income Tax pursuant to Section 2.d(ii) hereof
for any taxable period, Xxxxxx shall provide to Telecom a schedule setting forth
the following calculation: (A) if the amount described in clause (x) of Section
2.d(ii) exceeds the amount described in clause (y) thereof, the portion of such
excess (plus interest, if any) for which the Xxxxxx Group is entitled to be
reimbursed by the relevant U.S. governmental entity (or other contracting party)
under the relevant contracts and applicable law, and (B) if the amount described
in clause (y) of Section 2.d(ii) exceeds the amount described in clause (x)
thereof,
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the portion of such excess which the Xxxxxx Group is obligated to reimburse to
the relevant U.S. governmental entity (or other contracting party) under the
relevant contracts and applicable law. In each case, such calculation shall be
made (1) without giving effect to any decision by the Xxxxxx Group not to seek
reimbursement of any amount to which it is entitled or to any credit or offset
for any amount which is not related to such Allowable Tax and (2) in accordance
with the applicable disclosed or established cost accounting practices of the
Xxxxxx Group, consistently applied, and applicable law; provided, that, with
respect to interest, such calculation shall be consistent with the final
decision in the pending action titled Lockheed Corporation x. Xxxxxxx, 95-1025
(Fed. Cir.). Such schedule shall set forth separately the reimbursement amount
for each contract requiring payments of more than $10,000, but may aggregate the
reimbursement amounts for all contracts requiring payments of $10,000 or less.
Within 5 days after delivery of such schedule, either Xxxxxx shall pay to
Telecom the amount shown thereon (in the case of an amount described in clause
(A) of this Section 2.d(iii)), notwithstanding any disagreement of Telecom
therewith (which disagreement shall be resolved pursuant to Section 2.d(iv)
hereof), or Telecom shall pay to Xxxxxx the amount shown thereon (in the case of
an amount described in clause (B) of this Section 2.d(iii)).
(iv) Telecom shall have the right to review the schedule
delivered by Xxxxxx pursuant to Section 2.d(iii) hereof for 90 days after the
delivery thereof. Xxxxxx shall provide Telecom with any information reasonably
requested to enable Telecom to complete its review. The parties shall attempt in
good faith mutually to resolve any disagreements regarding such schedule. Any
disagreements that the parties do not resolve within such 90-day period shall be
referred to a nationally recognized independent accounting firm mutually agreed
to by Xxxxxx and Telecom, whose determination shall be final and binding on the
parties. To the extent that the amount shown on such schedule, as revised to
take into account the resolution of any disagreements therewith in accordance
with this Section 2.d(iv), differs from the amount shown in the original
schedule delivered pursuant to Section 2.d(iii) hereof, Xxxxxx shall pay to
Telecom (or Telecom shall pay to Xxxxxx) an amount equal to such difference,
with interest thereon at the Overpayment Rate from the date of payment pursuant
to Section 2.d(iii).
e. Preparation of Income Tax Returns.
(i) GM (or such member of the GM Group as shall be
responsible for the preparation of such Income Tax Returns) shall, in its sole
and absolute discretion, determine the entities to be included in a Combined
Return and, subject to any right of review and approval by Xxxxxx contained in
Section 2 hereof, make or revoke any Income Tax elections, adopt or change any
accounting methods, and determine any other
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position taken on or in respect of an Income Tax Return for a Pre-Distribution
Taxable Period or a Straddle Period that is required to be filed after the date
of the Xxxxxx Merger Agreement; provided, however, that GM (or any such member)
shall prepare all such Income Tax Returns and take all such actions, to the
extent such Income Tax Returns or actions relate to the Xxxxxx Group, in a
manner consistent with past practice to the extent that to do otherwise would
result in a significant adverse effect on the Income Tax Liability of the Xxxxxx
Group in a Post-Distribution Taxable Period (after giving effect to any
inconsistency with past practice which has a beneficial effect on the Income Tax
Liability of the Xxxxxx Group in a Post-Distribution Taxable Period), except (A)
in the case of a state or local Income Tax Return, to the extent that such
Income Tax Return is required to be, and is, consistent with the U.S.
consolidated federal Income Tax Return of the GM Consolidated Group or (B) as
required by applicable law or as a result of a Final Determination (in which
case, GM (or such member) shall provide Xxxxxx with written notice of its intent
to take any such inconsistent position at least 15 Business Days prior to filing
the relevant Income Tax Return) or (C) where Xxxxxx has approved, or been deemed
to have approved, an inconsistency with past practice having an adverse effect
on the Xxxxxx Group, which inconsistency with past practice was specifically
identified in a separate statement provided by Telecom in connection with an
Income Tax Return or portion thereof supplied to Xxxxxx in accordance with the
provisions of Section 2 hereof.
(ii) Xxxxxx shall, and shall cause each member of the
Xxxxxx Group to, execute such documents and take such actions as shall be
reasonably requested by GM or Telecom to cause those members of the Xxxxxx Group
or Xxxxxx Post-Merger Group designated by GM or Telecom to be included in any
Combined Return (whether it relates to a Pre-Distribution Taxable Period or a
Straddle Period). Without limiting the foregoing, Xxxxxx (on behalf of itself
and each member of the Xxxxxx Group) agrees to file a Combined Return with GM or
any member of the GM Group wherever required to do so by applicable law or
wherever the option to do so is elected by any member of the GM Group. Except as
required by applicable law or as a result of a Final Determination, Xxxxxx shall
not, and shall cause each member of the Xxxxxx Post-Merger Group not to, take
any position with respect to a specific item of income, deduction, gain, loss or
credit on an Income Tax Return for a Post-Distribution Taxable Period that is
directly inconsistent with a position taken on a previously filed Income Tax
Return of or which included a member of the Xxxxxx Group for a Pre-Distribution
Taxable Period or a Straddle Period with respect to such item (including,
without limitation, the claiming of a deduction previously claimed on any such
Income Tax Return). If Xxxxxx believes in good faith that, under applicable law
or as a result of a Final Determination, Xxxxxx or a member of the Xxxxxx Post-
Merger Group must take such an inconsistent position, Xxxxxx shall provide
Telecom with written notice of its intent to take any such inconsistent position
at least 15
13
Business Days prior to filing the relevant Income Tax Return and to consult in
good faith with Telecom concerning the extent to which such inconsistency is so
mandated.
f. Redeterminations of Income Tax Liability. If the Income Tax
Liability attributable to the Xxxxxx Group or a member thereof is redetermined
for a Pre-Distribution Taxable Period or a Straddle Period as part of a Final
Determination, then, except as provided in the Xxxxxx Spin-Off Separation
Agreement, the payments required to be made by a party hereto pursuant to
Section 2 hereof shall be recomputed by substituting the amount of the Income
Tax Liability as so redetermined. A party hereto which is liable to make a
payment by reason of such redetermination to another party hereto shall make
such payment with interest thereon, computed at the Underpayment Rate, from the
due date for filing the Income Tax Return for which the Income Tax Liability was
redetermined until the date of payment pursuant to this Section 2.f (but without
duplication of the amount of interest included in the Income Tax Liability as so
redetermined). Such payment shall be made no later than 5 Business Days prior to
the date that payment is due to the relevant taxing authority by reason of such
redetermination.
g. Look-Back Interest. Notwithstanding Sections 2.b and 2.c
hereof, if Look-Back Interest is allocable to a Pre-Distribution Taxable Period
or the portion of a Straddle Period ending on the Distribution Date, (i) Telecom
shall pay or cause to be paid to Xxxxxx the amount of any such interest required
to be paid to a taxing authority by a member of the Xxxxxx Group, net of any tax
benefit therefrom allowable to a member of the Xxxxxx Group and (ii) Xxxxxx
shall pay or cause to be paid to Telecom the amount of any such interest which a
member of the Xxxxxx Group shall be entitled to receive from a taxing authority,
net of any tax cost incurred thereon. If Xxxxxx files, causes to be filed or is
included in an Income Tax Return setting forth an amount described in the
preceding sentence, Xxxxxx shall deliver to Telecom, no later than 45 Business
Days prior to the due date for filing of such Income Tax Return, a schedule
setting forth in reasonable detail the calculation of such amount. Telecom shall
have the right to review and approve (which approval shall not be unreasonably
withheld) such calculation for 30 Business Days. The failure of Telecom to
propose any change to such calculation within such 30-Business Day period shall
be deemed to constitute Telecom's approval thereof. Telecom shall pay to Xxxxxx,
or Xxxxxx shall pay to Telecom (as the case may be), the amount required by this
Section 2.g, no later than 5 Business Days prior to the due date for filing any
such Income Tax Return. If Telecom notifies Xxxxxx that a member of the Xxxxxx
Group is entitled to receive Look-Back Interest in respect of a Pre-Distribution
Taxable Period or the portion of a Straddle Period ending on the Distribution
Date, Xxxxxx shall claim such amount on the relevant Income Tax Return, and
shall not be relieved from the obligation to make a payment to Telecom in
respect thereof by reason of its failure to do so.
14
h. Flowthrough Entities. If the Income Tax Liability of any
member of the Xxxxxx Group for a Post-Distribution Taxable Period is increased
or decreased as a result of the ownership by such member of an equity interest
in a partnership or other "flowthrough" entity for Income Tax purposes and, in
accordance with the principle set forth in the last sentence of Section 2.c(iii)
hereof, such increase or decrease is allocable to a Pre-Distribution Taxable
Period, (i) Telecom shall pay or cause to be paid to Xxxxxx the amount of any
such increase in Income Tax Liability, and (ii) Xxxxxx shall pay or cause to be
paid to Telecom the amount of any such decrease in Income Tax Liability. If
Xxxxxx files, causes to be filed or is included in an Income Tax Return setting
forth an amount described in the preceding sentence, Xxxxxx shall deliver to
Telecom, no later than 45 Business Days prior to the due date for filing of such
Income Tax Return, a schedule setting forth in reasonable detail the calculation
of such amount. Telecom shall have the right to review and approve (which
approval shall not be unreasonably withheld) such calculation for 30 Business
Days. The failure of Telecom to propose any change to such calculation within
such 30-Business Day period shall be deemed to constitute Telecom's approval
thereof. Telecom shall pay to Xxxxxx, or Xxxxxx shall pay to Telecom (as the
case may be), the amount required by this Section 2.h, no later than 5 Business
Days prior to the due date for filing any such Income Tax Return (taking into
account extensions).
i. Review and Approval of Income Tax Returns. Notwithstanding
anything in this Agreement to the contrary, Xxxxxx shall have no right to review
and approve any Income Tax Return the due date for filing of which (or, in the
case of the portion of any Income Tax Return described in Section 2.a(i) hereof
that relates to the Xxxxxx Group, the date by which such portion is required by
GM to be delivered to GM) is prior to, or less than 30 days after, the
Distribution; provided, that (i) Telecom shall, upon request by Xxxxxx after the
Distribution, provide Xxxxxx with copies of any such Income Tax Returns (or
portions thereof), and (ii) this sentence shall not be construed to relieve GM
of its undertakings set forth in Section 2.e(i) hereof.
3. Indemnification for Income Taxes.
a. Indemnification by GM and Telecom. Except as otherwise
provided in the Xxxxxx Spin-off Separation Agreement, from and after the
Distribution Date, GM and Telecom jointly and severally shall indemnify and hold
each member of the Xxxxxx Group and their respective directors, officers,
employees, affiliates, agents, successors and assigns harmless from and against
(i) all Income Tax Liabilities incurred by any member of the GM Consolidated
Group in respect of the Distribution or the Xxxxxx Merger, (ii) all costs,
expenses and damages associated with stockholder litigation or controversies
arising in connection with any proposed tax assessment or controversy with
respect to the Distribution
15
or the Xxxxxx Merger, (iii) without duplication, all Income Tax Liabilities
which Telecom (or any other member of the GM Group) is required to pay, or
reimburse Xxxxxx for, pursuant to Section 2 hereof, and (iv) all Income Taxes
incurred by any member of the Xxxxxx Group by reason of the breach by Telecom or
GM of any of its covenants hereunder and, in any case, any related costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses).
b. Indemnification by Xxxxxx. From and after the Distribution
Date, Xxxxxx shall indemnify and hold each member of the GM Group and their
respective directors, officers, employees, affiliates, agents, successors and
assigns harmless from and against (i) all Income Tax Liabilities which Xxxxxx
(or any other member of the Xxxxxx Group or the Xxxxxx Post-Merger Group) is
required to pay, or reimburse GM or Telecom for, under Section 2 hereof and (ii)
all Income Taxes incurred by any member of the GM Group or Xxxxxx Group by
reason of the breach by Xxxxxx of any of its covenants hereunder and, in either
case, any related costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses). Nothing in this Agreement shall limit Xxxxxx'
indemnification obligations under the Xxxxxx Spin-off Separation Agreement.
c. Payment. Subject to the following sentence, the Indemnifying
Party shall pay to the Indemnified Party, no later than 45 Business Days after
the Indemnifying Party receives from the Indemnified Party calculations thereof
(in sufficient detail so as to permit the Indemnifying Party to understand such
calculations), the amount that the Indemnifying Party is required to pay the
Indemnified Party under this Section 3 by reason of a Final Determination. The
failure of the Indemnifying Party to notify the Indemnified Party in writing of
its disagreement with such calculations within 20 Business Days of receiving
such calculations shall be deemed to constitute the Indemnifying Party's
agreement therewith. Any dispute regarding such calculations shall be resolved
in accordance with Section 8 hereof.
4. Refunds; Foreign Tax Credits.
a. Refunds. Except to the extent provided in Sections 6.a and
6.d hereof, Telecom shall be entitled to all Refunds (and any interest thereon
received from the applicable taxing authority) in respect of Income Taxes for
all Pre-Distribution Taxable Periods and the portion of any Straddle Period
ending on the Distribution Date, subject to later reimbursement of Xxxxxx
pursuant to Section 2.d(iii) hereof. Except to the extent provided in Section
6.b or 6.d hereof, Xxxxxx shall be entitled to all Refunds (and any interest
thereon received from the applicable taxing authority) in respect of Income
Taxes for all Post-Distribution Taxable Periods and the portion of any Straddle
Period beginning after
16
the Distribution Date. A party receiving a Refund to which another party is
entitled pursuant to this Section 4.a shall pay the amount to which such other
party is entitled within 10 days after such Refund is Actually Realized. Telecom
shall be permitted to file, and Xxxxxx shall fully cooperate with Telecom in
connection with, any claim for Refund in respect of an Income Tax for which
Telecom (or any other member of the GM Group) is responsible pursuant to Section
2 hereof.
b. Foreign Tax Credits.
(i) If, as a result of the payment by the Xxxxxx Group
after the Distribution Date of a foreign tax, there is an increase in the
foreign tax credits allowed to a member of the GM Group for Income Tax purposes,
Telecom shall pay to Xxxxxx the amount of any Income Tax Benefit Actually
Realized therefrom, including interest (computed at the Overpayment Rate) from
the original due date (without extensions) of the Income Tax Return for the
taxable period in which such Income Tax Benefit is Actually Realized (or, if
later, the date which is 45 days after the date of receipt of the notice
described in the next sentence) through the date of payment under this Section
4.b(i) (but without duplication of the amount of interest, if any, included in
the Income Tax Benefit Actually Realized). Xxxxxx shall provide written notice
to Telecom of any such payment of a foreign tax, together with any documentation
reasonably requested by Telecom to enable Telecom to verify and substantiate
such payment. Until such time as any such foreign tax credit has been utilized
by GM or any member of the GM Group, Telecom shall, in connection with each U.S.
federal Income Tax Return filed by or on behalf of a member of the GM Group,
provide Xxxxxx with a statement, signed by Telecom's chief financial officer,
setting forth a good faith calculation of the extent to which any such foreign
tax credit was utilized on such Income Tax Return, which calculation shall be
final and binding upon the parties (subject to adjustment in the event of a
subsequent Final Determination). Any tax attribute arising from the carryforward
of any such foreign tax credit shall not be subject to Section 6.d hereof.
(ii) If, as a result of the receipt by the Xxxxxx Group
after the Distribution Date of a refund of foreign tax (including by means of a
credit or offset), there is a decrease in the foreign tax credits allowed to a
member of the GM Group for Income Tax purposes, Xxxxxx shall pay to Telecom the
amount of any Income Tax Detriment Actually Realized by the GM Group therefrom,
including interest (computed at the Underpayment Rate) from the original due
date (without extensions) of the Income Tax Return for the taxable period in
which such Income Tax Detriment is Actually Realized through the date of payment
under this Section 4.b(ii) (but without duplication of the amount of interest,
if any, included in the Income Tax Detriment Actually Realized). Xxxxxx shall
provide written notice to Telecom of the nature and amount of any such refund.
Telecom
17
shall provide Xxxxxx with any documentation reasonably requested by Xxxxxx to
enable Xxxxxx to verify and substantiate the amount of any such Income Tax
Detriment resulting therefrom.
5. Income Tax Contests.
a. Notification. Xxxxxx shall, promptly upon receipt of notice
thereof by any member of the Xxxxxx Group, notify Telecom in writing of any
communication with respect to any pending or threatened Proceeding in connection
with an Income Tax Liability (or an issue related thereto) for which a member of
the GM Group may be responsible pursuant to this Agreement. Xxxxxx shall include
with such notification a true, correct and complete copy of any written
communication, and an accurate and complete written summary of any oral
communication, so received by a member of the Xxxxxx Group. The failure of
Xxxxxx timely to forward such notification in accordance with the immediately
preceding sentence shall not relieve Telecom of its obligation to pay such
Income Tax Liability or indemnify the Xxxxxx Group therefor, except and to the
extent that the failure timely to forward such notification actually prejudices
the ability of Telecom to contest such Income Tax Liability or increases the
amount of such Income Tax Liability.
b. Pre-Distribution Taxable Periods. GM (or such member of the
GM Group as GM shall designate) shall have the sole right to represent the
interests of the members of the Xxxxxx Group in any Proceeding relating to Pre-
Distribution Taxable Periods and to employ counsel of its choice at its expense;
provided, that if the resolution of any such Proceeding reasonably could be
expected to have a material adverse effect on the Income Tax Liability of the
Xxxxxx Group for Post-Distribution Taxable Periods or on its liability for
Allowable Taxes, GM (or such designee) shall act in good faith in defending or
resolving any such Proceeding on the merits, without regard to the provisions of
Section 6 hereof.
c. Straddle Periods. GM (or such member of the GM Group as GM
shall designate) and Xxxxxx jointly shall represent the interests of the Xxxxxx
Post-Merger Group (or any member thereof) in any Proceeding relating to any
Straddle Period. Neither party shall settle any dispute relating to an Income
Tax Liability attributable to a member of the Xxxxxx Group for a Straddle Period
without the consent of the other party (which consent shall not be unreasonably
withheld); provided, however, that if GM (or such designee) proposes a
settlement of such an Income Tax Liability, and Xxxxxx does not consent thereto,
the liability of Telecom (and any other member of the GM Group) under this
Agreement in respect of such Income Tax Liability shall be limited to the
portion of the proposed settlement amount attributable to the portion of the
Straddle Period ending on the
18
Distribution Date. Any disputes regarding the conduct or resolution of any such
Proceeding shall be resolved pursuant to Section 8; provided, that no such
resolution shall affect the limitation on the liability of Telecom and the GM
Group set forth in the immediately preceding sentence. All costs, fees and
expenses paid to third parties in the course of such Proceeding shall be borne
by Telecom and Xxxxxx in the same ratio as the ratio in which, pursuant to the
terms of this Agreement, Telecom and Xxxxxx would share the responsibility for
payment of the Income Taxes asserted by the taxing authority in its claim or
assessment if such claim or assessment were sustained in its entirety; provided,
however, that in the event that any party hereto retains its own advisors or
experts in connection with any such Proceeding, the costs and expenses thereof
shall be borne solely by such party.
d. Post-Distribution Taxable Periods. Xxxxxx shall have the
sole right to represent the interests of the Xxxxxx Group (or any member
thereof) in any Proceedings relating to a Post-Distribution Taxable Period.
e. Power of Attorney. Each member of the Xxxxxx Group shall
execute and deliver to GM (or such member of the GM Group as GM shall designate)
any power of attorney or other document requested by GM (or such designee) in
connection with any Proceeding described in Section 5.b or 5.c hereof.
6. Timing Differences; Reverse Timing Differences; Apportionment of
Tax Attributes; Carrybacks.
a. Timing Differences. If an adjustment to an Income Tax Return
pursuant to a Final Determination results in a Timing Difference, then for each
Post-Distribution Taxable Period or portion of a Straddle Period beginning on
the day after the Distribution Date in which a member of the Xxxxxx Post-Merger
Group Actually Realizes an Income Tax Detriment by reason of such Timing
Difference, Telecom shall pay to Xxxxxx an amount equal to such Income Tax
Detriment, including interest (computed at the Underpayment Rate for the taxing
jurisdiction in which such Income Tax Detriment is Actually Realized) from the
original due date (without extensions) for filing of the Income Tax Return for
such taxable period through the date of payment under this Section 6.a;
provided, however, that, subject to the last sentence of Section 6.c(i) hereof,
the aggregate payments which Telecom shall be required to make under this
Section 6.a with respect to a Timing Difference shall not exceed the aggregate
amount of the Income Tax Benefits Actually Realized by a member of the GM
Consolidated Group for all Pre-Distribution Taxable Periods and the portion of a
Straddle Period ending on the Distribution Date by reason of such Timing
Difference, including interest (computed at the Overpayment Rate for the taxing
jurisdiction in which such Income Tax Benefit is Actually Realized) from the
19
original due date (without extensions) for filing of the Income Tax Return for
such taxable period through the date of payment under this Section 6.a. Upon
request, Telecom shall provide Xxxxxx with a statement, signed by Telecom's
chief financial officer and certified by Telecom's independent accounting firm,
setting forth calculations in detail sufficient to permit Xxxxxx to verify
Telecom's compliance with this Section 6.a.
b. Reverse Timing Differences. If an adjustment to an Income
Tax Return pursuant to a Final Determination results in a Reverse Timing
Difference, then, subject to the last sentence of Section 6.c(ii) hereof, for
each Post-Distribution Taxable Period or portion of a Straddle Period beginning
on the day after the Distribution Date in which a member of the Xxxxxx Post-
Merger Group Actually Realizes an Income Tax Benefit by reason of such Reverse
Timing Difference, Xxxxxx shall pay to Telecom an amount equal to such Income
Tax Benefit, including interest (computed at the Overpayment Rate for the taxing
jurisdiction in which such Income Tax Benefit is Actually Realized) from the
original due date (without extensions) for filing of the Income Tax Return for
such taxable period through the date of payment under this Section 6.b;
provided, however, that the aggregate payments which Xxxxxx shall be required to
make under this Section 6.b with respect to a Reverse Timing Difference shall
not exceed the aggregate amount of the Income Tax Detriments Actually Realized
by a member of the GM Consolidated Group (whether in one or more taxable
periods, and whether such taxable periods end before, after or on the
Distribution Date) by reason of such Reverse Timing Difference, including
interest (computed at the Underpayment Rate for the taxing jurisdiction in which
such Income Tax Detriment is Actually Realized) from the original due date
(without extensions) for filing of the Income Tax Return for such taxable period
through the date of payment under this Section 6.b. Upon request, Xxxxxx shall
provide Telecom with a statement, signed by Xxxxxx' chief financial officer and
certified by Xxxxxx' independent accounting firm, setting forth calculations in
detail sufficient to permit Telecom to verify Xxxxxx' compliance with this
Section 6.b.
c. Notification of Timing Differences and Reverse Timing
Differences.
(i) In the event of an adjustment to an Income Tax Return
of any member of the Xxxxxx Post-Merger Group which Xxxxxx reasonably believes
will result in a Timing Difference, Xxxxxx shall deliver notice in writing of
such adjustment to Telecom. Telecom (or the appropriate member of the GM Group)
(A) shall take such action as shall be legally available and necessary or
appropriate to preserve the opportunity of the members of the GM Consolidated
Group to obtain a Refund in respect of taxable periods for which Income Tax
Returns already shall have been filed, and to obtain the Income Tax
20
Benefits resulting from such Timing Difference to the maximum extent permitted
by applicable law, and (B) shall provide Xxxxxx with written notice of the
timing and amount of any Income Tax Benefits Actually Realized by the GM Group
as a result of such Timing Difference or which would have been Actually Realized
by the GM Group but for a failure to take the actions described in clause (A) of
this sentence. The failure to have taken such actions as shall have been legally
available and necessary or appropriate to obtain the Income Tax Benefits
resulting from such Timing Difference shall not relieve Telecom from the
obligation to make the payments that would have been due from Telecom under
Section 6.a hereof had GM (or the appropriate members of the GM Consolidated
Group) taken such actions.
(ii) In the event of an adjustment to an Income Tax Return
of any member of the GM Consolidated Group which GM (or such other member of the
GM Group as shall be designated by GM) reasonably believes will result in a
Reverse Timing Difference, GM (or such other member) shall deliver notice in
writing of such adjustment to Xxxxxx. Xxxxxx shall take, and shall cause the
appropriate member of the Xxxxxx Post-Merger Group to take, such action as shall
be legally available and necessary or appropriate to preserve the opportunity of
the appropriate members of the Xxxxxx Post-Merger Group to obtain a Refund in
respect of taxable periods for which Income Tax Returns already shall have been
filed, and shall take such positions as shall be consistent with obtaining the
Income Tax Benefits resulting from such Reverse Timing Difference for such
taxable periods for which Income Tax Returns shall not have been filed. For all
such taxable periods, Xxxxxx (A) shall take all actions necessary or appropriate
and legally available to obtain the Income Tax Benefits resulting from such
Reverse Timing Difference to the maximum extent permitted by applicable law and
(B) shall provide Telecom with written notice of the timing and amount of any
Income Tax Benefits Actually Realized by the Xxxxxx Post-Merger Group as a
result of such Reverse Timing Difference or which would have been Actually
Realized by the Xxxxxx Post-Merger Group but for a failure to take the actions
described in clause (A) of this sentence. The failure to have taken such actions
as shall have been legally available and necessary or appropriate to obtain the
Income Tax Benefits resulting from such Reverse Timing Difference shall not
relieve Xxxxxx from the obligation to make the payments that would have been due
from Xxxxxx under Section 6.b had Xxxxxx (or the appropriate members of the
Xxxxxx Post-Merger Group) taken such actions.
d. Apportionment of Tax Attributes.
(i) If the GM Consolidated Group has a consolidated net
operating loss, a consolidated net capital loss, a consolidated unused
investment credit, a consolidated unused foreign tax credit or a consolidated
excess charitable contribution (as
21
such terms are used in Treasury Regulation Section 1.1502-79) that arises in a
Pre-Distribution Taxable Period (including the taxable period in which the
Distribution Date occurs) and can be carried to a taxable period ending after
the Distribution Date, the portion, if any, of such Tax Attribute which shall be
apportioned to Xxxxxx or any member of the Xxxxxx Group and treated as a
carryover to the first Post-Distribution Taxable Period of Xxxxxx (or such
member) shall be determined in accordance with Treasury Regulation Section
1.1502-79; provided, however, that the portion, if any, of any consolidated
unused foreign tax credit which shall be apportioned to Xxxxxx or such member
shall be determined separately with respect to each of the items of income
listed in Section 904(d) of the Code.
(ii) No consolidated U.S. federal Income Tax attribute of
the GM Consolidated Group, other than those described in Section 6.d(i) hereof
(including, but not limited to, any minimum tax credit or general business
credit but excluding tax basis and earnings and profits), and no consolidated,
combined or unitary state or local Income Tax attribute arising in respect of a
Combined Return shall be apportioned to Xxxxxx or any member of the Xxxxxx
Group, except as GM (or such member of the GM Group as GM shall designate)
determines is otherwise required under the provisions of applicable law;
provided, that any credits which are earned by a member of the Xxxxxx Group for
purposes of the Arizona Corporate Income Tax in a Post-Distribution Taxable
Period by reason of the continuation of an employee position in any Post-
Distribution Taxable Period shall not be deemed to have arisen in respect of a
Combined Return even though such position was created prior to the Distribution
Date; and provided further, that any such credits which are earned in a Pre-
Distribution Taxable Period by reason of the creation or continuation of an
employee position in a Pre-Distribution Taxable Period and which are carried
forward to a Post-Distribution Taxable Period shall not be considered to have
been earned in a Post-Distribution Taxable Period.
(iii) GM (or its designee) shall determine the portion, if
any, of any Tax Attribute, which must be apportioned to Xxxxxx or to any member
of the Xxxxxx Group in accordance with this Section 6.d and applicable law and
shall provide written notice of the calculation thereof to Xxxxxx as soon as
practicable after the information necessary to make such calculation becomes
available to GM.
(iv) Xxxxxx shall prepare or cause to be prepared and file
or cause to be filed all Income Tax Returns for which it is responsible under
this Agreement so as to take into account, to the extent permitted by applicable
law, any Tax Attribute apportioned to Xxxxxx or any member of the Xxxxxx Group
as calculated pursuant to Section 6.d(iii) hereof. Until such time as any such
Tax Attribute has been utilized by Xxxxxx or any member of the Xxxxxx Group (or
would have been so utilized had Xxxxxx complied with
22
the requirements of the previous sentence), Xxxxxx shall, in connection with
each Income Tax Return filed by or on behalf of a member of the Xxxxxx Group,
provide GM with a statement, signed by Xxxxxx' chief financial officer and
certified by Xxxxxx' independent accounting firm, setting forth in reasonable
detail a calculation of the extent to which any such Tax Attribute was utilized
on such Income Tax Return (or would have been so utilized had Xxxxxx complied
with the requirements of the previous sentence).
(v) If any Tax Attribute is carried forward to an Income Tax
Return of Xxxxxx or any other member of the Xxxxxx Post-Merger Group for any
Post-Distribution Taxable Period or the portion of any Straddle Period beginning
after the Distribution Date, Xxxxxx shall pay to GM (or its designee) the amount
of any Income Tax Benefit Actually Realized by a member of the Xxxxxx Post-
Merger Group as a result of the carryover of such Tax Attribute, including
interest (computed at the Overpayment Rate) from the original due date (without
extensions) of the Income Tax Return for the taxable period in which such Income
Tax Benefit is Actually Realized through the date of payment under this Section
6.d(v) (but without duplication of the amount of interest, if any, included in
the Income Tax Benefit Actually Realized); provided, however, that the failure
of Xxxxxx to comply with the requirements of the first sentence of Section
6.d(iv) hereof shall not relieve Xxxxxx of the obligation to make the payment
that it would be required to make pursuant to this Section 6.d(v) were Xxxxxx to
have complied with such requirements.
(vi) If there is a Final Determination that results in any
change to or adjustment of the portion of any Tax Attribute which shall have
been apportioned to Xxxxxx or to any member of the Xxxxxx Group pursuant to this
Section 6.d, then GM (or its designee) shall make a payment to Xxxxxx, or Xxxxxx
shall make a payment to GM (or its designee), as may be necessary to adjust the
payments between Xxxxxx and GM (or its designee) to reflect the payments that
would have been made under Section 6.d(v) had the adjusted amount of the Tax
Attribute been taken into account in computing the payments due under Section
6.d(v) hereof.
e. Present Value Determination. To the extent any Income Tax
Benefit or Income Tax Detriment is not Actually Realized when a Timing
Difference or Reverse Timing Difference occurs or in a taxable period to which a
Tax Attribute is carried forward, Telecom and Xxxxxx shall attempt in good faith
to agree (i) upon the present value of the Income Tax Benefits and Income Tax
Detriments reasonably expected to be Actually Realized, and (ii) to base the
payments due to or from Telecom or Xxxxxx under Sections 6.a, 6.b or 6.d(v)
hereof on such present values; provided, however, that such parties shall be
under no obligation to reach such an agreement. Section 8 hereof shall not apply
if the parties shall not have reached such an agreement.
23
f. Carrybacks. Except to the extent otherwise consented to by GM
or prohibited by applicable law, Xxxxxx shall elect to relinquish, waive or
otherwise forego all Carrybacks. In the event that Xxxxxx (or the appropriate
member of the Xxxxxx Group) is prohibited by applicable law to relinquish, waive
or otherwise forego a Carryback (or GM consents thereto), (i) Telecom shall
cooperate with Xxxxxx, at Xxxxxx' expense, in seeking from the appropriate
taxing authority such Refund as reasonably would result from such Carryback, and
(ii) Xxxxxx shall be entitled to any Income Tax Benefit Actually Realized by a
member of the GM Group (including any interest thereon received from such taxing
authority), to the extent that such Refund is directly attributable to such
Carryback, within 10 days after such Refund is Actually Realized; provided,
however, that Xxxxxx shall indemnify and hold the members of the GM Group
harmless from and against any and all collateral tax consequences resulting from
or caused by any such Carryback, including (but not limited to) the loss or
postponement of benefit from the use of tax attributes which are generated by a
member of the GM Group or an affiliate thereof and (x) which expire unutilized,
but which would have been utilized but for such Carryback, or (y) the use of
which is postponed to a later taxable period than the taxable period in which
such tax attributes otherwise would have been utilized but for such Carryback.
If there is a Final Determination that results in any change to or adjustment of
an Income Tax Benefit Actually Realized by a member of the GM Group that is
directly attributable to a Carryback, then GM (or its designee) shall make a
payment to Xxxxxx, or Xxxxxx shall make a payment to GM (or its designee), as
may be necessary to adjust the payments between Xxxxxx and GM (or its designee)
to reflect the payments that would have been made under this Section 6.f had the
adjusted amount of such Income Tax Benefit been taken into account in computing
the payments due under Section 6.f hereof. The parties shall provide each other
with sufficient information to enable the other to verify and substantiate any
such adjustment.
g. Straddle Periods. For purposes of Sections 6.d and 6.f hereof,
(i) a Straddle Period shall be deemed to consist of two taxable periods, the
first of which shall end on the Distribution Date, and (ii) any net operating
loss or other Tax Attribute which is deemed to have been generated in either of
such hypothetical taxable periods shall be treated as having been carried to the
other such hypothetical taxable period, to the extent such net operating loss or
other Tax Attribute actually reduced the Income Tax Liability for such Straddle
Period.
7. Cooperation and Exchange of Information.
a. Preparation of Income Tax Returns.
24
(i) Xxxxxx shall, and shall cause each member of the Xxxxxx
Group to, prepare and submit to Telecom, at Xxxxxx' expense, all information
that Telecom shall reasonably request, in such form as Telecom reasonably shall
request and (i) by no later than 150 days prior to the due date (taking into
account extensions), but in no case earlier than 60 days after the close of the
relevant taxable period of the GM Group, (A) to enable GM to prepare the Income
Tax Returns described in Section 2.a(i) hereof, and (B) to enable Telecom to
prepare the Income Tax Returns described in Sections 2.a(ii) and 2.c hereof, and
(ii) by the time reasonably specified by Telecom, to enable Telecom to determine
the amounts of estimated tax due and to prepare any related documentation in
respect of the taxable periods covered by the Income Tax Returns described in
clauses (i)(A) and (B) of this sentence. In the event that Xxxxxx (x) does not
timely provide such information or (y) provides information that is incomplete
or otherwise not reasonably satisfactory to Telecom and does not cure such
defect within 20 days after Telecom gives notice thereof, Telecom shall be
entitled to require Xxxxxx to engage, at Xxxxxx' expense, a nationally
recognized independent accounting firm reasonably acceptable to Telecom to
gather and provide, in the manner set forth in the preceding sentence, the
information which Xxxxxx is required to provide under this Section 7.a.
(ii) Telecom shall, and shall cause each member of the GM
Group to, prepare and submit to Xxxxxx, at Telecom's expense, all information
that Xxxxxx reasonably shall request to enable Xxxxxx to prepare any Income Tax
Returns which Xxxxxx is responsible to prepare in accordance with Section 2
hereof. In the event that Telecom (x) does not timely provide such information
or (y) provides information that is incomplete or otherwise not reasonably
satisfactory to Xxxxxx and does not cure such defect within 20 days after Xxxxxx
gives notice thereof, Xxxxxx shall be entitled to require Telecom to engage, at
Telecom's expense, a nationally recognized independent accounting firm
reasonably acceptable to Xxxxxx to gather and provide, in the manner set forth
in the preceding sentence, the information which Telecom is required to provide
under this Section 7.a.
b. Cooperation and Exchange of Information. Each party hereto, on
behalf of itself and each of its affiliates, agrees to provide each other party
with such cooperation and information as such other party reasonably shall
request in connection with the preparation or filing of any Income Tax Return or
claim for Refund, the determination and payment of estimated Income Taxes, the
determination of the amount of Allowable Taxes which are to be reimbursed to or
by a governmental entity, or the conduct of any Proceeding. Such cooperation and
information shall include, without limitation, upon reasonable notice (i)
promptly forwarding copies of appropriate notices and forms or other
communications (including, without limitation, information document requests,
revenue agent's reports and similar reports, notices of proposed adjustments and
notices of
25
deficiency) received from or sent to any taxing authority or any other
administrative, judicial or governmental authority, (ii) providing copies of all
relevant Income Tax Returns, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by taxing
authorities, and such other records concerning the ownership and tax basis of
property, or other relevant information which such Person or its affiliates may
possess, (iii) the provision of such additional information and explanations of
documents and information provided under this Agreement (including statements,
certificates and schedules delivered by either party) as shall be reasonably
requested by the other party, (iv) the execution of any document that may be
necessary or reasonably helpful in connection with the filing of an Income Tax
Return, a claim for a Refund, or in connection with any Proceeding, including
such waivers, consents or powers of attorney as may be necessary for such party
to exercise its rights under this Agreement, and (v) the use of the parties'
reasonable efforts to obtain any documentation from a governmental authority or
a third party that may be necessary or reasonably helpful in connection with any
of the foregoing. It is expressly the intention of the parties to this Agreement
to take all actions requested by Telecom that shall be necessary to establish
Telecom as the sole agent for Income Tax purposes (to the extent that GM is not
otherwise the sole agent for such purpose) of each member of the Xxxxxx Group
with respect to all Income Tax Returns of the Xxxxxx Group for Pre-Distribution
Taxable Periods and for any Combined Return for a Straddle Period. Upon
reasonable notice, the parties hereto shall make their, or shall cause their
affiliates to make their, employees and facilities available on a mutually
convenient basis to provide explanation of any documents or information provided
hereunder. Any information obtained under this Section 7 shall be kept
confidential, except as otherwise reasonably may be necessary in connection with
the filing of Income Tax Returns or claims for Refund or in conducting any
Proceeding.
c. Record Retention. GM and Xxxxxx agree to retain all Income
Tax Returns, related schedules and workpapers, and all material records and
other documents as required under Section 6001 of the Code and the regulations
promulgated thereunder (and any similar provision of state or local Income Tax
law) existing on the date hereof or created in respect of (i) any taxable period
that ends on or before or includes the Distribution Date or (ii) any taxable
period which may be subject to a claim hereunder (including by reason of a
Timing Difference or a Reverse Timing Difference), until the later of (x) the
expiration of the statute of limitations (including extensions) for the taxable
periods to which such Income Tax Returns and other documents relate and (y) the
Final Determination of any payments which may be required in respect of such
taxable periods under this Agreement. From and after the end of the period
described in the preceding sentence of this Section 7.c, if a member of the GM
Group or a member of the Xxxxxx Post-Merger Group wishes to dispose of any such
records and documents, then GM or Xxxxxx (as the case may be) shall provide
26
written notice thereof to the other party and shall provide such other party (at
such other party's sole expense) the opportunity to take possession of any such
records and documents within 90 days after such notice is delivered; provided,
however, that if such other party does not, within such 90-day period, confirm
its intention to take possession of such records and documents, GM or Xxxxxx (as
the case may be) may destroy or otherwise dispose of such records and documents.
d. Remedies.
(i) Xxxxxx hereby acknowledges and agrees that (A) the
failure of any member of the Xxxxxx Group to comply with the provisions of this
Section 7 may result in substantial harm to the GM Group, including the
inability to determine or appropriately substantiate an Income Tax Liability (or
a position in respect thereof) for which the GM Group (or a member thereof)
would be responsible under this Agreement or appropriately defend against an
adjustment thereto by a taxing authority, and (B) the remedies available to the
GM Group for the breach by a member of the Xxxxxx Group of its obligations
hereunder shall include (without limitation) the indemnification by Xxxxxx of
the GM Group for any Income Tax Liability incurred or any Income Tax benefit
lost or postponed by reason of such breach and the forfeiture by the Xxxxxx
Group of any related rights to indemnification by GM or Telecom. In addition, if
any member of the Xxxxxx Group fails to provide (x) any cooperation or
information requested pursuant to Section 7.a by the dates specified therein or
(y) any other information requested pursuant to this Agreement within a
reasonable period, as determined in good faith by the party requesting such
information, then, without limiting any other remedy available to any member of
the GM Group for breach of Xxxxxx' obligations under this Agreement, Telecom
shall have the right to engage a nationally recognized accounting firm of its
choice to gather such information. Xxxxxx agrees to permit any such nationally
recognized accounting firm full access to all appropriate records or other
information in the possession of any member of the Xxxxxx Group during normal
business hours, and promptly to reimburse or pay directly all costs and expenses
in connection with the engagement of such accountants.
(ii) Telecom hereby acknowledges and agrees that (A) the
failure of any member of the GM Group to comply with the provisions of this
Section 7 may result in substantial harm to the Xxxxxx Group, including the
inability to determine or appropriately substantiate an Income Tax Liability (or
a position in respect thereof) for which the Xxxxxx Group (or a member thereof)
would be responsible under this Agreement or appropriately defend against an
adjustment thereto by a taxing authority, and (B) the remedies available to the
Xxxxxx Group for the breach by a member of the GM Group of its obligations
hereunder shall include (without limitation) the indemnification by GM and
27
Telecom of the Xxxxxx Group for any Income Tax Liability incurred or any Income
Tax benefit lost or postponed by reason of such breach and the forfeiture by the
GM Group of any related rights to indemnification by Xxxxxx. In addition, if
any member of the GM Group fails to provide any information requested pursuant
to this Agreement within a reasonable period, as determined in good faith by the
party requesting such information, then, without limiting any other remedy
available to any member of the Xxxxxx Group for breach of GM's obligations under
this Agreement, Xxxxxx shall have the right to engage a nationally recognized
accounting firm of its choice to gather such information. Telecom agrees to
permit any such nationally recognized accounting firm full access to all
appropriate records or other information in the possession of any member of the
GM Group during normal business hours, and promptly to reimburse or pay directly
all costs and expenses in connection with the engagement of such accountants.
e. Reliance.
(i) If any member of the Xxxxxx Group supplies information
to a member of the GM Group in connection with an Income Tax Liability and an
officer of a member of the GM Group signs a statement or other document under
penalties of perjury in reliance upon the accuracy of such information, then
upon the written request of such member of the GM Group identifying the
information being so relied upon, the chief financial officer of such member of
the Xxxxxx Group shall certify in writing the accuracy and completeness of the
information so supplied. Xxxxxx agrees to indemnify and hold harmless each
member of the GM Group and its directors, officers and employees from and
against any fine, penalty, or other cost or expense of any kind (other than a
liability for income tax) attributable to a member of the Xxxxxx Group having
supplied a member of the GM Group with inaccurate or incomplete information in
connection with an Income Tax Liability.
(ii) If any member of the GM Group supplies information to
a member of the Xxxxxx Group in connection with an Income Tax Liability and an
officer of a member of the Xxxxxx Group signs a statement or other document
under penalties of perjury in reliance upon the accuracy of such information,
then upon the written request of such member of the Xxxxxx Group identifying the
information being so relied upon, the chief financial officer of such member of
the GM Group shall certify in writing the accuracy and completeness of the
information so supplied. Telecom agrees to indemnify and hold harmless each
member of the Xxxxxx Group and its directors, officers and employees from and
against any fine, penalty, or other cost or expense of any kind (other than a
liability for income tax) attributable to a member of the GM Group having
supplied a member of the
28
Xxxxxx Group with inaccurate or incomplete information in connection with an
Income Tax Liability.
8. Resolution of Disputes.
a. Negotiation. Telecom and Xxxxxx shall attempt in good faith
promptly to resolve any dispute arising in connection with this Agreement. In
the event of any such dispute, either party may deliver a Dispute Notice to the
other party, and within 20 Business Days of the receipt of such Dispute Notice,
the appropriate representatives of Telecom and Xxxxxx shall meet to attempt to
resolve the dispute. If the dispute has not been resolved within the Negotiation
Period, or if one of the parties fails or refuses to negotiate the dispute, the
issue shall be settled by arbitration pursuant to this Section 8, which shall be
final and binding on the parties. Nothing in this Section 8 shall be construed
to extend the time periods set forth in this Agreement during which any party
may make a payment, deliver a notice, provide information, grant or withhold
approval or consent or take any other action.
b. Arbitration Procedure. Either party may initiate arbitration
by giving the other party a written notice (the "Arbitration Notice") either (i)
within one year following the end of the Negotiation Period, or (ii) if the
parties do not meet within 20 Business Days of the receipt of the Dispute
Notice, within one year thereafter. The arbitration shall be in accordance with
the CPR Rules, except as otherwise provided in this Section 8. The arbitrators
shall allow all discovery permitted by the Federal Rules of Civil Procedure. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. (S)
1-14. The place of arbitration shall be Los Angeles, California or such other
location as shall be mutually agreed by the parties. Any deadlines specified in
this Section 8 may be extended by mutual agreement of the parties.
c. Selection of Arbitrators. Telecom and Xxxxxx shall make
every reasonable effort to jointly select the arbitrator. If Telecom and Xxxxxx
are unable to agree on the designated arbitrator within 20 Business Days after
either party gives the Arbitration Notice, then the arbitration shall be by a
panel of three arbitrators. Telecom and Xxxxxx shall each appoint one
arbitrator. The two arbitrators so appointed shall appoint the third arbitrator.
If either Telecom or Xxxxxx shall fail to appoint an arbitrator within such 20-
Business Day period, the arbitration shall be by the sole arbitrator appointed
by the other party. Whether jointly selected by Telecom and Xxxxxx or otherwise,
each arbitrator shall be an attorney who is generally recognized in the tax
community as a qualified and competent tax practitioner with experience in the
tax area involved in the issue or issues to be resolved.
29
d. Settlement Proposal. Each party shall present an overall
settlement proposal to the arbitrator which shall encompass all issues to be
resolved. The two proposals shall set the outer limits of the range within which
the arbitrator can make a determination as to the appropriate settlement result.
All costs of the arbitration process shall be borne by the party determined by
the arbitrator to have lost the arbitration. In the event the arbitrator makes a
determination which reflects a 50-50 settlement, Telecom and Xxxxxx shall share
equally the costs of the arbitration. In the event the arbitrator makes a
determination which reflects a divided settlement, the arbitrator shall
determine the proportion in which the parties shall share the costs of
arbitration.
e. Time and Method of Making Payments Determined by
Arbitration. All amounts determined by arbitration to be payable by one party to
the other shall be due and payable on or before the 90th calendar day following
the determination that such amount is payable.
9. Payments.
a. Method of Payment. All payments required by this Agreement
shall be made by (i) wire transfer to the appropriate bank account as may from
time to time be designated by the parties for such purpose; provided, that on
the date of such wire transfer notice of the transfer is given to the recipient
thereof in accordance with Section 11 hereof, or (ii) any other method agreed to
by the parties. All payments due under this Agreement shall be deemed to be paid
when available funds are actually received by the payee.
b. Interest. Any payment required by this Agreement that is not
made on or before the date required hereunder shall bear interest, from and
after such date through the date of payment, at the Underpayment Rate.
c. Characterization of Payments. For all tax purposes, the
parties hereto agree to treat, and to cause their respective affiliates to
treat, (i) any payment, required by this Agreement as either a contribution by
GM or Xxxxxx or a distribution by Xxxxxx to GM, as the case may be, occurring
immediately prior to the Distribution and (ii) any payment of interest or non-
Federal Income Taxes by or to a taxing authority as taxable or deductible, as
the case may be, to the party entitled under this Agreement to retain such
payment or required under this Agreement to make such payment, in either case
except as otherwise mandated by applicable law; provided, that in the event it
is determined as a result of a Final Determination that any such treatment is
not permissible, the payment in question
30
shall be adjusted to place the parties in the same after-tax position they would
have enjoyed absent such Final Determination.
10. Existing Tax Allocation Agreement. The Tax Allocation Agreement
shall be amended as of the Distribution Date to exclude the members of the
Xxxxxx Group and to provide that any rights or obligations of the members of the
Xxxxxx Group existing thereunder shall be fully and finally settled without any
payment by or to any member of the Xxxxxx Group.
11. Notices. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given upon (a) a transmitter's confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery of a standard overnight
courier the following Business Day or if delivered by hand the following
Business Day), or (b) confirmed delivery of a standard overnight courier or
delivered by hand, to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice):
If to GM, to:
General Motors Corporation
General Motors Building
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and a copy to:
Weil, Gotshal & Xxxxxx LLP
31
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
If to Xxxxxx, to:
Raytheon Company
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy No: (000) 000-0000
If to Telecom, to:
Xxxxxx Network Systems, Inc.
0000 Xxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and a copy to:
32
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Such names and addresses may be changed by notice given in accordance with this
Section 11.
12. Designation of Affiliate. GM may assign any of its rights or
obligations (or the rights or obligations of Telecom) under this Agreement to
any member of the GM Group as it shall designate; provided, however, that no
such assignment shall relieve GM or Telecom (as the case may be) of any
obligation to make a payment hereunder to Xxxxxx to the extent such designee
fails to make such payment.
13. Entire Agreement. This Agreement, together with the Xxxxxx Spin-
off Separation Agreement, contains the entire understanding of the parties
hereto with respect to the subject matter contained herein, and supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter.
14. Amendment. This Agreement may be amended, modified or
supplemented only by a written agreement signed by all of the parties hereto.
15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
reference to choice of law principles, including matters of construction,
validity and performance.
16. 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
shall constitute one and the same original.
17. Effective Date; Term. This Agreement shall become effective only
upon the occurrence of the Distribution Date and shall continue in effect until
otherwise agreed to in writing by the parties hereto.
18. Titles and Headings. Titles and headings to sections herein are
included for convenience of reference only and are not intended to be a part, or
to affect the meaning or interpretation, of this Agreement.
33
19. Successors and Assigns. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns.
20. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner.
34
IN WITNESS WHEREOF, each of the parties has caused this Tax Sharing
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first written above.
GENERAL MOTORS CORPORATION
By:
-----------------------------------
Name:
Title:
HE HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
XXXXXX NETWORK SYSTEMS, INC.
By:
-----------------------------------
Name:
Title:
35
