Exhibit 10.1

 

TAX SHARING AGREEMENT

 

BETWEEN

 

LIBERTY INTERACTIVE CORPORATION

 

AND

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

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TABLE OF CONTENTS

 

 

Page

 

 

SECTION 1.     Definition of Terms

1

 

 

SECTION 2.     Allocation of Taxes and Tax-Related Losses

8

 

 

2.1

Allocation of Taxes

8

2.2

Special Rules

9

2.3

Tax Payments

9

 

 

SECTION 3.     Preparation and Filing of Tax Returns

9

 

 

3.1

Combined Returns

9

3.2

Separate Returns

9

3.3

Provision of Information

10

3.4

Special Rules Relating to the Preparation of Tax Returns

10

3.5

Refunds, Credits or Offsets

12

3.6

Carrybacks

12

3.7

Amended Returns

13

 

 

SECTION 4.     Tax Payments

13

 

 

4.1

Payment of Taxes to Tax Authority

13

4.2

Indemnification Payments

13

4.3

Interest on Late Payments

14

4.4

Tax Consequences of Payments

14

 

 

SECTION 5.     Assistance and Cooperation

14

 

 

5.1

Cooperation

14

 

 

SECTION 6.     Tax Records

15

 

 

6.1

Retention of Tax Records

15

6.2

Access to Tax Records

15

6.3

Confidentiality

15

6.4

Delivery of Tax Records

15

 

 

SECTION 7.     Restriction on Certain Actions of Distributing and Splitco;
Indemnity

16

 

 

7.1

Restrictive Covenants

16

7.2

Distributing Indemnity

17

7.3

Splitco Indemnity

17

7.4

Scope

18

 

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7.5

Notices of Tax Contests (Other than Joint Claims)

18

7.6

Control of Tax Contests (Other than Joint Claims)

18

7.7

Cooperation

19

7.8

Joint Claims

19

 

 

SECTION 8.     General Provisions

19

 

 

8.1

Termination

19

8.2

Predecessors or Successors

19

8.3

Expenses

20

8.4

Governing Law

20

8.5

Waiver of Jury Trial

20

8.6

Notices

20

8.7

Counterparts

21

8.8

Binding Effect; Assignment

21

8.9

Severability

21

8.10

Amendments; Waivers

22

8.11

Effective Date

22

8.12

Change in Law

22

8.13

Authorization, Etc.

22

8.14

No Third Party Beneficiaries

22

8.15

Entire Agreement

22

8.16

No Strict Construction; Interpretation

23

8.17

Headings

23

 

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TAX SHARING AGREEMENT

 

THIS TAX SHARING AGREEMENT (this “Agreement”) is entered into as of November 4,
2016, between Liberty Interactive Corporation, a Delaware corporation
(“Distributing”), and Liberty Expedia Holdings, Inc., a Delaware corporation
(“Splitco”).  Unless otherwise indicated, all “Section” references in this
Agreement are to sections of this Agreement.

 

RECITALS

 

WHEREAS, Splitco is a wholly owned subsidiary of Distributing; and

 

WHEREAS, the Board of Directors of Distributing has determined that it would be
appropriate and desirable for Distributing to separate the Splitco Group from
the Distributing Group; and

 

WHEREAS, the Board of Directors of Splitco has also approved such transaction;
and

 

WHEREAS, following the Contribution, Distributing intends to distribute its
entire interest in the stock of Splitco to holders of Liberty Ventures Common
Stock  in exchange for a portion of their shares of Liberty Ventures Common
Stock (the “Distribution”), in what is intended to qualify as a tax-free
transaction described under Sections 368(a)(1)(D), 355, and 361 of the Code; and

 

WHEREAS, the parties set forth in the Reorganization Agreement the principal
arrangements between them regarding the separation of the Splitco Group from the
Distributing Group; and

 

WHEREAS, the parties desire to provide for and agree upon the allocation between
the parties of liabilities for Taxes arising prior to, as a result of, and
subsequent to the Distribution, and to provide for and agree upon other matters
relating to Taxes.

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, and intending to be legally bound hereby,
Distributing and Splitco hereby agree as follows:

 

SECTION 1.                         Definition of Terms.  For purposes of this
Agreement (including the recitals hereof), the following terms have the
following meanings:

 

“Affiliate” means with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person.  For the avoidance of doubt,
(x) no member of the Splitco Group will be treated as an Affiliate of any member
of the Distributing Group and (y) no member of the Distributing Group will be
treated as an Affiliate of any member of the Splitco Group.

 

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“Agreement” has the meaning set forth in the preamble hereof.

 

“business day” means any day other than a Saturday, Sunday or a day on which
banking institutions in New York City, New York or London, England are
authorized or required by law or executive order to close.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time, or any successor law.

 

“Combined Return” means a consolidated, combined or unitary Tax Return that
includes, by election or otherwise, one or more members of the Distributing
Group and one or more members of the Splitco Group.

 

“Company” means Distributing or Splitco, as the context requires.

 

“Compensatory Equity Interests” means options, stock appreciation rights,
restricted stock, restricted stock units or other rights with respect to
Distributing Stock or Splitco Stock that are granted on or prior to the
Distribution Date by Distributing, Splitco or any of their respective
Subsidiaries in connection with employee, independent contractor or director
compensation or other employee benefits (including, for the avoidance of doubt,
options, stock appreciation rights, restricted stock, restricted stock units or
other rights issued in respect of any of the foregoing by reason of the
Distribution or any subsequent transaction).

 

“Contribution” has the meaning given to such term in the Reorganization
Agreement.

 

“Control” means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through ownership of securities or partnership,
membership, limited liability company, or other ownership interests, by contract
or otherwise and the terms “Controlling” and “Controlled” have meanings
correlative to the foregoing.

 

“Delaware Chancery Court” has the meaning set forth in Section 8.4.

 

“Disclosing Party” has the meaning set forth in Section 6.3.

 

“Distributing” has the meaning set forth in the preamble hereof.

 

“Distributing Group” means Distributing and each Subsidiary of Distributing (but
only while such Subsidiary is a Subsidiary of Distributing) other than any
Person that is a member of the Splitco Group (but only during the period such
Person is treated as a member of the Splitco Group).

 

“Distributing Indemnitees” has the meaning set forth in Section 7.3.

 

“Distributing Stock” means (x) the Series A QVC Group common stock, par value
$.01 per share, the Series B QVC Group common stock, par value $.01 per

 

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share, the Series A Liberty Ventures common stock, par value $.01 per share, and
the Series B Liberty Ventures common stock, par value $.01 per share, (y) if and
when issued, the Series C QVC Group common stock, par value $.01 per share, and
the Series C Liberty Ventures common stock, par value $.01 per share, and
(z) any series or class of stock into which the Series A, Series B, or Series C
QVC Group common stock or the Series A, Series B, or Series C Liberty Ventures
common stock is redesignated, reclassified, converted or exchanged following the
Effective Time.

 

“Distribution” has the meaning set forth in the recitals hereof.

 

“Distribution Date” means the date on which the Distribution occurs.

 

“Due Date” has the meaning set forth in Section 4.3.

 

“Effective Time” means the time at which the Distribution is effected on the
Distribution Date.

 

“Employing Party” has the meaning set forth in Section 3.4(d)(i).

 

“Expedia” means Expedia, Inc., a Delaware corporation.

 

“Final Determination” means a determination within the meaning of Section 1313
of the Code or any similar provision of state or local Tax Law.

 

“Group” means the Distributing Group or the Splitco Group, as the context
requires.

 

“Income Tax” means all Taxes (i) based upon, measured by, or calculated with
respect to, net income, net profits or deemed net profits (including any capital
gains Tax, minimum Tax based upon, measured by, or calculated with respect to,
net income, net profits or deemed net profits, any Tax on items of Tax
preference and depreciation recapture or clawback, but not including sales, use,
real or personal property, gross or net receipts, gross profits, transfer and
similar Taxes), (ii) imposed by a foreign country which qualify under
Section 903 of the Code or (iii) based upon, measured by, or calculated with
respect to multiple bases (including, but not limited to, corporate franchise
and occupation Taxes) if such Taxes may be based upon, measured by, or
calculated with respect to one or more bases described in clause (i) above.

 

“Interest Rate” means the Rate determined below, as adjusted as of each Interest
Rate Determination Date.  The “Rate,” means, with respect to each period between
two consecutive Interest Rate Determination Dates, a rate determined at
approximately 11:00 a.m., London time, two London business days before the first
Interest Rate Determination Date equal to the greater of:  (x) the sum of
(i) the six month dollar LIBOR rate as displayed on page “LR” of Bloomberg (or
such other appropriate page as may replace such page), plus (ii) 2%, and (y) the
interest rate that would be applicable at such time to a “large corporate
underpayment” (within the meaning of Section 6621(c) of the Code) under Sections
6601 and 6621 of the Code.  Interest will be

 

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calculated on the basis of a year of 365 days and the actual number of days for
which due.

 

“Interest Rate Determination Date” means the Due Date and each March 31,
June 30, September 30 and December 31 thereafter.

 

“IRS” means the Internal Revenue Service.

 

“issuing corporation” has the meaning set forth in Section 3.4(d)(ii).

 

“Joint Claim” has the meaning set forth in Section 7.8.

 

“Liberty Ventures Common Stock” means the Series A Liberty Ventures common
stock, par value $.01 per share, and the Series B Liberty Ventures common stock,
par value $.01 per share.

 

“Losses” means any and all damages, losses, deficiencies, liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including the fees and expenses of any and all
actions and demands, assessments, judgments, settlements and compromises
relating thereto and the costs and expenses of attorneys’, accountants’,
consultants’ and other professionals’ fees and expenses incurred in the
investigation or defense thereof or the enforcement of rights hereunder);
provided, however, that “Losses” shall exclude any special or punitive damages;
provided, further, that the foregoing proviso will not be interpreted to limit
indemnification for Losses incurred as a result of the assertion by a claimant
(other than the parties hereto and their successors and assigns) in a
third-party claim for special or punitive damages.

 

“Non-Preparer” means the Company that is not responsible for the preparation and
filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.

 

“Payment Date” means (x) with respect to any U.S. federal income tax return, the
due date for any required installment of estimated taxes determined under Code
Section 6655, the due date (determined without regard to extensions) for filing
the return determined under Code Section 6072, and the date the return is filed,
and (y) with respect to any other Tax Return, the corresponding dates determined
under the applicable Tax Law.

 

“Person” means any individual, corporation, company, partnership, trust,
incorporated or unincorporated association, joint venture or other entity of any
kind.

 

“Post-Distribution Period” means any Tax Year or other Taxable period beginning
after the Distribution Date and, in the case of any Straddle Period, that part
of the Tax Year or other taxable period that begins at the beginning of the day
after the Distribution Date.

 

“Pre-Distribution Period” means any Tax Year or other taxable period that ends
on or before the Distribution Date and, in the case of any Straddle Period, that
part

 

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of the Tax Year or other taxable period through the end of the day on the
Distribution Date.

 

“Preparer” means the Company that is responsible for the preparation and filing
of the applicable Tax Return pursuant to Sections 3.1 or 3.2.

 

“Protective Election” has the meaning set forth in Section 3.4(a).

 

“Receiving Party” has the meaning set forth in Section 6.3.

 

“Reorganization Agreement” means the Reorganization Agreement between
Distributing and Splitco dated October 26, 2016.

 

“Restructuring” has the meaning assigned to such term in the Reorganization
Agreement.

 

“Separate Return” means (a) in the case of any Tax Return required to be filed
by any member of the Distributing Group (including any consolidated, combined or
unitary Tax Return), any such Tax Return that does not include any member of the
Splitco Group, and (b) in the case of any Tax Return required to be filed by any
member of the Splitco Group (including any consolidated, combined or unitary Tax
Return), any such Tax Return that does not include any member of the
Distributing Group.

 

“Splitco” has the meaning set forth in the preamble hereof.

 

“Splitco Group” means (x) with respect to any Tax Year (or portion thereof)
ending at or before the Effective Time, Splitco and each of its Subsidiaries at
the Effective Time; and (y) with respect to any Tax Year (or portion thereof)
beginning after the Effective Time, Splitco and each Subsidiary of Splitco (but
only while such Subsidiary is a Subsidiary of Splitco).

 

“Splitco Indemnitees” has the meaning set forth in Section 7.2.

 

“Splitco Section 355(e) Event” means the application of Section 355(e) of the
Code to the Distribution as a result of the Distribution being “part of a plan
(or series of related transactions) pursuant to which 1 or more persons acquire
directly or indirectly stock representing a 50-percent or greater interest” in
Splitco (within the meaning of Section 355(e) of the Code).

 

“Splitco Stock” means Splitco’s Series A common stock, par value $.01 per share,
and Series B common stock, par value $.01 per share, and if and when issued,
Splitco’s Series C common stock, par value $.01 per share, and any series or
class of stock into which Splitco’s Series A, Series B, or Series C common stock
is redesignated, reclassified, converted or exchanged following the Effective
Time.

 

“Straddle Period” means any Taxable period commencing on or prior to, and ending
after, the Distribution Date.

 

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“Subsidiary” when used with respect to any Person, means (i)(A) a corporation a
majority in voting power of whose share capital or capital stock with voting
power, under ordinary circumstances, to elect directors is at the time, directly
or indirectly, owned by such Person, by one or more Subsidiaries of such Person,
or by such Person and one or more Subsidiaries of such Person, whether or not
such power is subject to a voting agreement or similar encumbrance, (B) a
partnership or limited liability company in which such Person or a Subsidiary of
such Person is, at the date of determination, (1) in the case of a partnership,
a general partner of such partnership with the power affirmatively to direct the
policies and management of such partnership or (2) in the case of a limited
liability company, the managing member or, in the absence of a managing member,
a member with the power affirmatively to direct the policies and management of
such limited liability company, or (C) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person or
such Person and one or more Subsidiaries of such Person, directly or indirectly,
at the date of determination thereof, has or have (1) the power to elect or
direct the election of a majority of the members of the governing body of such
Person, whether or not such power is subject to a voting agreement or similar
encumbrance, or (2) in the absence of such a governing body, at least a majority
ownership interest or (ii) any other Person of which an aggregate of 50% or more
of the equity interests are, at the time, directly or indirectly, owned by such
Person and/or one or more Subsidiaries of such Person.  For purposes of the
foregoing, neither Expedia nor any of its Subsidiaries will be treated as
Subsidiaries of Distributing or Splitco during any period in which such party
beneficially owns less than 50% of the outstanding stock of Expedia by value.

 

“Tax” or “Taxes” means any net income, gross income, gross receipts, profits,
capital stock, franchise, withholding, payroll, social security, workers
compensation, employment, unemployment, disability, property, ad valorem, stamp,
excise, severance, occupation, service, sales, use, license, lease, transfer,
import, export, value added, alternative minimum, estimated or other similar tax
(including any fee, assessment, or other charge in the nature of or in lieu of
any tax) imposed by any Tax Authority and any interest, penalties, additions to
tax, or additional amounts in respect of the foregoing.

 

“Tax Authority” means, with respect to any Tax, the governmental entity or
political subdivision, agency, commission or authority thereof that imposes such
Tax, and the agency, commission or authority (if any) charged with the
assessment, determination or collection of such Tax for such entity or
subdivision.

 

“Tax Contest” means an audit, review, examination, or any other administrative
or judicial proceeding with the purpose, potential or effect of redetermining
Taxes of any member of either Group (including any administrative or judicial
review of any claim for refund).

 

“Tax Counsel” means Skadden, Arps, Slate, Meagher & Flom LLP.

 

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“Tax Item” means, with respect to any Tax, any item of income, gain, loss,
deduction, credit or other attribute that may have the effect of increasing or
decreasing any Tax.

 

“Tax Law” means the law of any governmental entity or political subdivision
thereof, and any controlling judicial or administrative interpretations of such
law, relating to any Tax.

 

“Tax Materials” means (i) the representation letters delivered to Tax Counsel in
connection with the delivery of the Tax Opinion, and (ii) any other materials
delivered or deliverable by Distributing, Splitco and others in connection with
the rendering by Tax Counsel of the Tax Opinion.

 

“Tax Opinion” means the opinion to be delivered by Tax Counsel to Distributing
in connection with the Distribution to the effect that the Contribution and the
Distribution will qualify as a tax-free transaction described under Sections
368(a)(1)(D), 355 and 361 of the Code to Distributing and the holders of Liberty
Ventures Common Stock (except with respect to the receipt of cash in lieu of
fractional shares).

 

“Tax Records” means Tax Returns, Tax Return work papers, documentation relating
to any Tax Contests, and any other books of account or records required to be
maintained under applicable Tax Laws (including but not limited to Section 6001
of the Code) or under any record retention agreement with any Tax Authority.

 

“Tax Return” means any report of Taxes due, any claims for refund of Taxes paid,
any information return with respect to Taxes, or any other similar report,
statement, declaration, or document filed or required to be filed (by paper,
electronically or otherwise) under any applicable Tax Law, including any
attachments, exhibits, or other materials submitted with any of the foregoing,
and including any amendments or supplements to any of the foregoing.

 

“Tax Year” means, with respect to any Tax, the year, or shorter period, if
applicable, for which the Tax is reported as provided under applicable Tax Law.

 

“Transaction Taxes” means any Taxes resulting from the Restructuring and the
Distribution, other than Transfer Taxes.

 

“Transaction Tax-Related Losses” means any Losses resulting from the failure of
(i) the Restructuring to qualify in whole for nonrecognition of income, gain and
loss for U.S. federal income tax purposes to Distributing, Splitco and each of
their respective Subsidiaries immediately prior to the Distribution, (ii) the
Contribution and Distribution to qualify as a tax-free transaction described
under Sections 368(a)(1)(D), 355 and 361 of the Code (except with respect to the
receipt of cash in lieu of fractional shares), or (iii) the Contribution and
Distribution to qualify in whole for nonrecognition of income, gain and loss for
U.S. federal income tax purposes to Distributing, Splitco, each of their
respective Subsidiaries at the Effective Time, and the holders of Liberty

 

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Ventures Common Stock that receive stock of Splitco in the Distribution (except
with respect to the receipt of cash in lieu of fractional shares).

 

“Transfer Taxes” means all U.S. federal, state, local or foreign transfer,
documentary, stamp, duties, recording, and similar Taxes and fees (including any
penalties, interest or additions thereto) imposed upon any party hereto or any
of its Subsidiaries in connection with the Restructuring or the Distribution.

 

“Treasury Regulations” means the regulations promulgated from time to time under
the Code as in effect for the relevant Tax Year.

 

SECTION 2.                         Allocation of Taxes and Tax-Related Losses

 

2.1                               Allocation of Taxes.  Except as provided in
Section 2.2 (Special Rules) and Section 3.4(d) (Compensatory Equity Interests),
Taxes shall be allocated as follows:

 

(a)                                 Combined Returns.

 

(i)                                     Allocation of Taxes for Combined
Returns.  Distributing shall be allocated: (A) all Taxes that are attributable
to members of the Distributing Group and reported on, or required to be reported
on, a Combined Return; and (B) all Taxes that are attributable to members of the
Splitco Group for the Pre-Distribution Period and reported on, or required to be
reported on, a Combined Return.  Splitco shall be allocated all Taxes that are
attributable to members of the Splitco Group for the Post-Distribution Period
and reported on, or required to be reported on, a Combined Return.

 

(ii)                                  Transactions Occurring on the Distribution
Date.  Notwithstanding the provisions of Section 2.1(a)(i) (but subject to the
provisions of Section 2.2), Taxes attributable to any transaction or action
taken by or with respect to any member of the Splitco Group outside the ordinary
course of business before the Distribution on the Distribution Date shall be
allocated to the Pre-Distribution Period, and Taxes attributable to any
transaction or action taken by or with respect to any member of the Splitco
Group outside the ordinary course of business after the Distribution on the
Distribution Date shall be allocated to the Post-Distribution Period.

 

(b)                                 Separate Returns.

 

(i)                                     Splitco Separate Returns.  Splitco shall
be allocated all Taxes that are attributable to members of the Splitco Group and
reported on, or required to be reported on, a Separate Return that is required
to be filed by a member of the Splitco Group.

 

(ii)                                  Distributing Separate Returns. 
Distributing shall be allocated all Taxes that are attributable to members of
the Distributing Group and reported on, or required to be reported on, a
Separate Return that is required to be filed by a member of the Distributing
Group.

 

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(c)                                  Taxes Not Reported on Tax Returns.  
Splitco shall be allocated any Tax attributable to members of the Splitco Group
that is not required to be reported on a Tax Return, and Distributing shall be
allocated any Tax attributable to members of the Distributing Group that is not
required to be reported on a Tax Return.

 

2.2                               Special Rules.

 

(a)                                 Transaction Taxes and Transaction
Tax-Related Losses.  Notwithstanding any other provision in this Section 2:

 

(i)                                     Distributing shall be allocated all
Transaction Taxes and Transaction Tax-Related Losses other than any Transaction
Taxes and Transaction Tax-Related Losses allocated to Splitco pursuant to clause
(ii) of this Section 2.2(a).

 

(ii)                                  Splitco will be allocated any Transaction
Taxes (including corresponding state and local Taxes) and Transaction
Tax-Related Losses that (x) result primarily from, individually or in the
aggregate, any breach by Splitco of any of its covenants set forth in
Section 7.1 hereof, or (y) result from a Splitco Section 355(e) Event.

 

(b)                                 Transfer Taxes.  Notwithstanding any other
provision in this Section 2, all Transfer Taxes shall be allocated 50% to
Splitco and 50% to Distributing.

 

2.3                               Tax Payments.  Each Company shall pay the
Taxes allocated to it by this Section 2 either to the applicable Tax Authority
or to the other Company in accordance with Section 4 and the other applicable
provisions of this Agreement.

 

SECTION 3.                         Preparation and Filing of Tax Returns.

 

3.1                               Combined Returns.

 

(a)                                 Preparation of Combined Returns. 
Distributing shall be responsible for preparing and filing (or causing to be
prepared and filed) all Combined Returns for any Tax Year.

 

3.2                               Separate Returns.

 

(a)                                 Tax Returns to be Prepared by Distributing. 
Distributing shall be responsible for preparing and filing (or causing to be
prepared and filed) all Separate Returns which relate to one or more members of
the Distributing Group for any Tax Year.

 

(b)                                 Tax Returns to be Prepared by Splitco. 
Splitco shall be responsible for preparing and filing (or causing to be prepared
and filed) all Separate Returns which relate to one or more members of the
Splitco Group for any Tax Year.

 

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3.3                               Provision of Information.

 

(a)                                 Distributing shall provide to Splitco, and
Splitco shall provide to Distributing, any information about members of the
Distributing Group or the Splitco Group, respectively, that the Preparer needs
to determine the amount of Taxes due on any Payment Date with respect to a Tax
Return for which the Preparer is responsible pursuant to Section 3.1 or 3.2 and
to properly and timely file all such Tax Returns.

 

(b)                                 If a member of the Splitco Group supplies
information to a member of the Distributing Group, or a member of the
Distributing Group supplies information to a member of the Splitco Group, and an
officer of the requesting member intends to sign a statement or other document
under penalties of perjury in reliance upon the accuracy of such information,
then a duly authorized officer of the member supplying such information shall
certify, to the best of such officer’s knowledge, the accuracy of the
information so supplied.

 

3.4                               Special Rules Relating to the Preparation of
Tax Returns.

 

(a)                                 In General.  All Tax Returns that include
any members of the Splitco Group or Distributing Group, or any of their
respective Affiliates, shall be prepared in a manner that is consistent with the
Tax Opinion; provided, however, that Distributing and Splitco may agree to make
protective elections under Sections 336(e) and/or 338 of the Code (and any
similar provisions of state, local and foreign Tax law) with respect to Splitco
and its Subsidiaries in connection with the Distribution (any such election, a
“Protective Election”) and to prepare and file Tax Returns consistent with such
Protective Elections.  Except as otherwise set forth in this Agreement, and
subject to Sections 3.4(b) through (d), the Company responsible for preparing
and filing (or causing to be prepared and filed) a Tax Return pursuant to
Sections 3.1 or 3.2 shall have the right with respect to such Tax Return to
determine (i) the manner in which such Tax Return shall be prepared and filed,
including the elections, methods of accounting, positions, conventions and
principles of taxation to be used and the manner in which any Tax Item shall be
reported, (ii) whether any extensions may be requested, (iii) whether an amended
Tax Return shall be filed, (iv) whether any claims for refund shall be made,
(v) whether any refunds shall be paid by way of refund or credited against any
liability for the related Tax and (vi) whether to retain outside firms to
prepare or review such Tax Return.

 

(b)                                 Splitco Tax Returns.  With respect to any
Separate Return for which Splitco is responsible pursuant to Section 3.2(b),
Splitco and the other members of the Splitco Group must allocate Tax Items
between such Separate Return for which Splitco is responsible pursuant to
Section 3.2(b) and any related Combined Return for which Distributing is
responsible pursuant to Section 3.1 that are filed with respect to the same Tax
Year in a manner that is consistent with the reporting of such Tax Items on the
related Combined Return for which Distributing is responsible pursuant to
Section 3.1.

 

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(c)                                  Election to File Consolidated, Combined or
Unitary Tax Returns.  Distributing shall have the sole discretion of filing any
Tax Return on a consolidated, combined or unitary basis, if such Tax Return
would include at least one member of each Group and the filing of such Tax
Return is elective under the relevant Tax Law.

 

(d)                                 Compensatory Equity Interests.

 

(i)                                     Deductions Related to Compensatory
Equity Interests.  To the extent permitted by applicable Tax Law, Income Tax
deductions with respect to the issuance, exercise, vesting or settlement after
the Distribution Date of any Compensatory Equity Interests held by any Person
shall be claimed (A) in the case of an active officer or employee, solely by the
Group that employs such Person at the time of such issuance, exercise, vesting,
or settlement, as applicable; (B) in the case of a former officer or employee,
solely by the Group that was the last to employ such Person; and (C) in the case
of a director or former director (who is not an officer or employee or former
officer or employee of a member of either Group), (x) solely by the Distributing
Group if such person was, at any time before or after the Distribution, a
director of any member of the Distributing Group, and (y) in any other case,
solely by the Splitco Group (the party whose Group is described in (A), (B), or
(C), the “Employing Party”).

 

(ii)                                  Withholding and Reporting.  For any Tax
Year (or portion thereof), the Employing Party shall (A) satisfy, or shall cause
to be satisfied, all applicable Tax reporting obligations with respect to the
issuance, exercise, vesting or settlement of Compensatory Equity Interests and
(B) satisfy, or cause to be satisfied, all liabilities for Taxes imposed in
connection with such issuance, exercise, vesting or settlement (including the
employer portion of any employment taxes); provided that, (x) in the event
Compensatory Equity Interests are settled by the corporation that is the issuer
or obligor under the Compensatory Equity Interest (the “issuing corporation”)
and the issuing corporation is not a member of the same Group as the Employing
Party, the issuing corporation shall promptly remit to the Employing Party an
amount of cash equal to the amount required to be withheld in respect of any
withholding Taxes, and (y) the Employing Party shall not be liable for failure
to remit to the applicable Tax Authority any amount required to have been
withheld from the recipient of the Compensatory Equity Interest in connection
with such issuance, exercise, vesting or settlement, except to the extent that
the issuing corporation shall have remitted such amount to the Employing Party. 
Distributing shall promptly notify Splitco, and Splitco shall promptly notify
Distributing, regarding the exercise of any option or the issuance, vesting,
exercise or settlement of any other Compensatory Equity Interest to the extent
that, as a result of such issuance, exercise, vesting or settlement, any other
party may be entitled to a deduction or required to pay any Tax, or such
information otherwise may be relevant to the preparation of any Tax Return or
payment of any Tax by such other party or parties.

 

(iii)                               Distributing Employees.  For purposes of
this Section 3.4(d), if a Person is an officer or employee of Distributing or
any member of the Distributing Group for any Tax Year (or portion thereof), then
such officer or employee

 

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will exclusively be considered to be employed by Distributing (or the applicable
member of the Distributing Group) for such Tax Year (or portion thereof).

 

3.5                               Refunds, Credits or Offsets.

 

(a)                                 Except as otherwise contemplated by this
Section 3.5 or Section 3.6, any refunds, credits or offsets with respect to
Taxes of any member of (i) the Distributing Group that were reported on any
Combined Return shall be for the account of Distributing, (ii) the Splitco Group
that were reported on any Combined Return and are attributable to the
Pre-Distribution Period shall be for the account of Distributing, (iii) the
Splitco Group that were reported on any Combined Return and are attributable to
the Post-Distribution Period shall be for the account of Splitco, (iv) the
Distributing Group that were reported on any Separate Return required to be
filed by a member of the Distributing Group shall be for the account of
Distributing, and (v) the Splitco Group that were reported on any Separate
Return required to be filed by a member of the Splitco Group shall be for the
account of Splitco.

 

(b)                                 Notwithstanding Section 3.5(a), (i) any
refunds, credits or offsets with respect to Taxes, including Transaction Taxes,
allocated to, and actually paid by, Distributing pursuant to this Agreement
shall be for the account of Distributing, and (ii) any refunds, credits or
offsets with respect to Taxes, including Transaction Taxes, allocated to, and
actually paid by, Splitco pursuant to this Agreement shall be for the account of
Splitco.

 

(c)                                  Distributing shall forward to Splitco, or
reimburse Splitco for, any such refunds, credits or offsets, plus any interest
received thereon, net of any Taxes incurred with respect to the receipt or
accrual thereof and any expenses incurred in connection therewith, that are for
the account of Splitco within five business days from receipt thereof by
Distributing or any of its Affiliates.  Splitco shall forward to Distributing,
or reimburse Distributing for, any refunds, credits or offsets, plus any
interest received thereon, net of any Taxes incurred with respect to the receipt
or accrual thereof and any expenses incurred in connection therewith, that are
for the account of Distributing within five business days from receipt thereof
by Splitco or any of its Affiliates.  Any refunds, credits or offsets, plus any
interest received thereon, or reimbursements not forwarded or made within the
five business day period specified above shall bear interest from the date
received by the refunding or reimbursing party (or its Affiliates) through and
including the date of payment at the Interest Rate (treating the date received
as the Due Date for purposes of determining such Interest Rate).  If, subsequent
to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority
reduces or eliminates such allowance, any refund, credit or offset, plus any
interest received thereon, forwarded or reimbursed under this Section 3.5 shall
be returned to the party who had forwarded or reimbursed such refund, credit or
offset and interest upon the request of such forwarding party in an amount equal
to the applicable reduction, including any interest received thereon.

 

3.6                               Carrybacks.  If and to the extent that Splitco
requests in writing that Distributing or any of its Affiliates obtain a refund,
credit or offset of Taxes with

 

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respect to the carryback of any Tax attribute of the members of the Splitco
Group arising in a Post-Distribution Period to a Pre-Distribution Period, and
provided that Distributing or any of its Affiliates would not otherwise be
required to forego a refund, credit or offset of Taxes for its own account or
otherwise be adversely affected as a result of such carryback, then
(i) Distributing (or its Affiliate) shall take all reasonable measures to obtain
a refund, credit or offset of Tax with respect to such carryback (including by
filing an amended Tax Return), and (ii) to the extent that Distributing or any
of its Affiliates receives any refund, credit or offset of Taxes attributable
(on a last dollar basis) to such carryback, Distributing shall pay such refund,
credit or offset, plus any interest received thereon, to Splitco within five
business days from receipt thereof by Distributing or any of its Affiliates;
provided, however, that Distributing shall be entitled to reduce the amount of
any such refund, credit or offset for its reasonable out-of-pocket costs and
expenses incurred in connection therewith and any Taxes incurred with respect to
the receipt or accrual thereof; and provided further, that Splitco, upon the
request of Distributing, agrees to repay such refund, credit or offset, plus any
interest received thereon and net of Taxes, to Distributing in the event, and to
the extent, that Distributing is required to repay such refund, credit or
offset, plus any interest received thereon, to a Tax Authority.

 

3.7                               Amended Returns.  Any amended Tax Return or
claim for Tax refund, credit or offset with respect to any member of the Splitco
Group may be made only by the Company (or its Subsidiaries) responsible for
preparing the original Tax Return with respect to such member pursuant to
Sections 3.1 and 3.2.  Splitco (or its Subsidiaries) shall not, without the
prior written consent of Distributing (which consent shall not be unreasonably
withheld or delayed), file, or cause to be filed, any such amended Tax Return or
claim for Tax refund, credit or offset to the extent that such filing, if
accepted, is likely to increase the Taxes allocated to, or the Tax indemnity
obligations under this Agreement of, Distributing for any Tax Year (or portion
thereof) by more than a de minimis amount; provided, however, that such consent
need not be obtained if Splitco agrees to indemnify Distributing for the
incremental Taxes allocated to, or the incremental Tax indemnity obligation
resulting under this Agreement to, Distributing as a result of the filing of
such amended Tax Return.

 

SECTION 4.                         Tax Payments.

 

4.1                               Payment of Taxes to Tax Authority. 
Distributing shall be responsible for remitting to the proper Tax Authority the
Tax shown on any Tax Return for which it is responsible for the preparation and
filing pursuant to Section 3.1 or Section 3.2, and Splitco shall be responsible
for remitting to the proper Tax Authority the Tax shown on any Tax Return for
which it is responsible for the preparation and filing pursuant to Section 3.2.

 

4.2                               Indemnification Payments.

 

(a)                                 Tax Payments Made by the Distributing
Group.  If any member of the Distributing Group is required to make a payment to
a Tax Authority for Taxes allocated to Splitco under this Agreement, Splitco
will pay the amount of Taxes

 

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allocated to it to Distributing not later than the later of (i) five business
days after receiving notification requesting such amount, and (ii) one business
day prior to the date such payment is required to be made to such Tax Authority.

 

(b)                                 Tax Payments Made by the Splitco Group.  If
any member of the Splitco Group is required to make a payment to a Tax Authority
for Taxes allocated to Distributing under this Agreement, Distributing will pay
the amount of Taxes allocated to it to Splitco not later than the later of
(i) five business days after receiving notification requesting such amount, and
(ii) one business day prior to the date such payment is required to be made to
such Tax Authority.

 

4.3                               Interest on Late Payments.  Payments pursuant
to this Agreement that are not made by the date prescribed in this Agreement or,
if no such date is prescribed, not later than five business days after demand
for payment is made (the “Due Date”) shall bear interest for the period from and
including the date immediately following the Due Date through and including the
date of payment at the Interest Rate.  Such interest will be payable at the same
time as the payment to which it relates.

 

4.4                               Tax Consequences of Payments.  For all Tax
purposes and to the extent permitted by applicable Tax Law, the parties hereto
shall treat any payment made pursuant to this Agreement as a capital
contribution or a distribution, as the case may be, immediately prior to the
Distribution.  If the receipt or accrual of any indemnity payment under this
Agreement causes, directly or indirectly, an increase in the taxable income of
the recipient under one or more applicable Tax Laws, such payment shall be
increased so that, after the payment of any Taxes with respect to the payment,
the recipient thereof shall have realized the same net amount it would have
realized had the payment not resulted in taxable income.  To the extent that
Taxes for which any party hereto (the indemnifying party) is required to pay
another party (the indemnified party) pursuant to this Agreement may be deducted
or credited in determining the amount of any other Taxes required to be paid by
the indemnified party (for example, state Taxes which are permitted to be
deducted in determining federal Taxes), the amount of any payment made to the
indemnified party by the indemnifying party shall be decreased by taking into
account any resulting reduction in other Taxes of the indemnified party.  If
such a reduction in Taxes of the indemnified party occurs following the payment
made to the indemnified Party with respect to the relevant indemnified Taxes,
the indemnified party shall promptly repay the indemnifying party the amount of
such reduction when actually realized.  If the Tax benefit arising from the
foregoing reduction of Taxes described in this Section 4.4 is subsequently
decreased or eliminated, then the indemnifying party shall promptly pay the
indemnified party the amount of the decrease in such Tax benefit.

 

SECTION 5.                         Assistance and Cooperation.

 

5.1                               Cooperation.  In addition to the obligations
enumerated in Sections 3.3 and 7.7, Distributing and Splitco will cooperate (and
cause their respective Subsidiaries and Affiliates to cooperate) with each other
and with each other’s agents, including accounting firms and legal counsel, in
connection with Tax matters, including provision of relevant documents and
information in their possession and making

 

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available to each other, as reasonably requested and available, personnel
(including officers, directors, employees and agents of the parties or their
respective Subsidiaries or Affiliates) responsible for preparing, maintaining,
and interpreting information and documents relevant to Taxes, and personnel
reasonably required as witnesses or for purposes of providing information or
documents in connection with any administrative or judicial proceedings relating
to Taxes.

 

SECTION 6.                         Tax Records.

 

6.1                               Retention of Tax Records.  Each of
Distributing and Splitco shall preserve, and shall cause their respective
Subsidiaries to preserve, all Tax Records that are in their possession, and that
could affect the liability of any member of the other Group for Taxes, for as
long as the contents thereof may become material in the administration of any
matter under applicable Tax Law, but in any event until the later of (x) the
expiration of any applicable statutes of limitation, as extended, and (y) seven
years after the Distribution Date.

 

6.2                               Access to Tax Records.  Splitco shall make
available, and cause its Subsidiaries to make available, to members of the
Distributing Group for inspection and copying (x) all Tax Records in their
possession that relate to a Pre-Distribution Period, and (y) the portion of any
Tax Record in their possession that relates to a Post-Distribution Period and
which is reasonably necessary for the preparation of a Tax Return by a member of
the Distributing Group or any of their Affiliates or with respect to a Tax
Contest by a Tax Authority of such return.  Distributing shall make available,
and cause its Subsidiaries to make available, to members of the Splitco Group
for inspection and copying the portion of any Tax Record in their possession
that relates to a Pre-Distribution Period and which is reasonably necessary for
the preparation of a Tax Return by a member of the Splitco Group or any of their
Affiliates or with respect to a Tax Contest by a Tax Authority of such return.

 

6.3                               Confidentiality.  Each party hereby agrees
that it will hold, and shall use its reasonable best efforts to cause its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence all records and information prepared and shared by
and among the parties in carrying out the intent of this Agreement, except as
may otherwise be necessary in connection with the filing of Tax Returns or any
administrative or judicial proceedings relating to Taxes or unless disclosure is
compelled by a governmental authority.  Information and documents of one party
(the “Disclosing Party”) shall not be deemed to be confidential for purposes of
this Section 6.3 to the extent such information or document (i) is previously
known to or in the possession of the other party or parties (the “Receiving
Party”) and is not otherwise subject to a requirement to be kept confidential,
(ii) becomes publicly available by means other than unauthorized disclosure
under this Agreement by the Receiving Party or (iii) is received from a third
party without, to the knowledge of the Receiving Party after reasonable
diligence, a duty of confidentiality owed to the Disclosing Party.

 

6.4                               Delivery of Tax Records.  Within five business
days after receiving notification from Splitco requesting any applicable Tax
Records described

 

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below which are in the possession of a member of the Distributing Group,
Distributing shall provide to Splitco (to the extent not previously provided or
held by any member of the Splitco Group on the Distribution Date) copies of
(i) the Separate Returns of any member of the Splitco Group, (ii) the relevant
portions of any other Tax Returns with respect to any member of the Splitco
Group, and (iii) other existing Tax Records (or the relevant portions thereof)
reasonably necessary to prepare and file any Tax Returns of, or with respect to,
the members of the Splitco Group, or to defend or contest Tax matters relevant
to the members of the Splitco Group, including in each case, all Tax Records
related to Tax attributes of the members of the Splitco Group and any and all
communications or agreements with, or rulings by, any Tax Authority with respect
to any member of the Splitco Group.

 

SECTION 7.                         Restriction on Certain Actions of
Distributing and Splitco; Indemnity.

 

7.1                               Restrictive Covenants.

 

(a)                                 General Restrictions.  Following the
Effective Time, and except as contemplated by the provisions of Section 7.1(e),
Splitco shall not, and shall cause the members of the Splitco Group and their
Affiliates not to, and Distributing shall not, and shall cause the members of
the Distributing Group and their Affiliates not to, take any action that, or
fail to take any action the failure of which, (i) would cause Distributing or
any Subsidiary of Distributing immediately prior to the Distribution to
recognize gain or loss, or otherwise include any amount in income, as a result
of the Restructuring for U.S. federal income tax purposes, (ii) would be
inconsistent with the Contribution and Distribution qualifying, or would
preclude the Contribution and Distribution from qualifying, as a tax-free
transaction described under Sections 368(a)(1)(D), 355 and 361 of the Code
(except with respect to the receipt of cash in lieu of fractional shares), or
(iii) would cause Distributing, Splitco, any of their respective Subsidiaries at
the Effective Time, or the holders of Liberty Ventures Common Stock that receive
stock of Splitco in the Distribution, to recognize gain or loss, or otherwise
include any amount in income, as a result of the Contribution and/or the
Distribution for U.S. federal income tax purposes (except with respect to the
receipt of cash in lieu of fractional shares).

 

(b)                                 Restricted Actions.  Without limiting the
provisions of Section 7.1(a) hereof, following the Effective Time, Splitco shall
not, and shall cause the members of the Splitco Group and their Affiliates not
to, and Distributing shall not, and shall cause the members of the Distributing
Group and their Affiliates not to, take any action that, or fail to take any
action the failure of which, would be inconsistent with, or would cause any
Person to be in breach of, any representation or covenant, or any material
statement, made in the Tax Materials (except as contemplated by the provisions
of Section 7.1(e)).

 

(c)                                  Reporting.  Unless and until there has been
a Final Determination to the contrary, each party agrees not to take any
position on any Tax Return, in connection with any Tax Contest, or otherwise for
Tax purposes (in each case,

 

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excluding any position taken for financial accounting purposes) that is
inconsistent with the Tax Opinion, except as contemplated pursuant to the
provisions of Section 7.1(e).

 

(d)                                 Election under Code Section 851(b).  Splitco
shall not make any election, or file any election with any Tax Return, under
Section 851(b) of the Code and the Treasury Regulations promulgated thereunder
to be treated as a regulated investment company for U.S. federal income tax
purposes with respect to any taxable period (or portion thereof) ending prior to
the five year anniversary of the Distribution Date, unless Distributing has
provided its written consent to the making or filing of such election.

 

(e)                                  Protective Elections.  Notwithstanding
anything herein to the contrary, any actions taken by Distributing, Splitco or
any members of their respective Groups with respect to the making of any
Protective Elections in respect of the Distribution, and the preparation and
filing of any forms, schedules, Tax Returns, and other materials in accordance
therewith, shall not be considered a breach or nonperformance of any covenant or
agreement made or to be performed by Distributing or Splitco contained in this
Agreement.

 

7.2                               Distributing Indemnity.  Distributing agrees
to indemnify and hold harmless each member of the Splitco Group and their
respective directors, officers, employees, agents, successors and assigns (the
“Splitco Indemnitees”) from and against any and all (without duplication)
(a) Taxes allocated to Distributing pursuant to Section 2.1, (b) Transaction
Taxes and Transaction Tax-Related Losses allocated to Distributing pursuant to
Section 2.2, (c) Taxes and Losses arising out of or based upon any breach or
nonperformance of any covenant or agreement made or to be performed by
Distributing contained in this Agreement, (d) Transfer Taxes allocated to
Distributing pursuant to Section 2.2, and (e) reasonable out-of-pocket legal,
accounting and other advisory and court fees and expenses incurred in connection
with the items described in clauses (a) through (d); provided, however, that
notwithstanding clauses (a), (c) and (e) of this Section 7.2, Distributing shall
not be responsible for, and shall have no obligation to indemnify or hold
harmless any Splitco Indemnitee for, (x) any Transaction Taxes or Transaction
Tax-Related Losses that are allocated to Splitco pursuant to Section 2.2, or
(y) any Taxes or Losses arising out of or based upon any breach or
nonperformance of any covenant or agreement made or to be performed by Splitco
contained in this Agreement.

 

7.3                               Splitco Indemnity.  Splitco agrees to
indemnify and hold harmless each member of the Distributing Group and their
respective directors, officers, employees, agents, successors and assigns (the
“Distributing Indemnitees”) from and against any and all (without duplication)
(a) Taxes allocated to Splitco pursuant to Section 2.1, (b) Transaction Taxes
and Transaction Tax-Related Losses allocated to Splitco pursuant to Section 2.2,
(c) Taxes and Losses arising out of or based upon any breach or nonperformance
of any covenant or agreement made or to be performed by Splitco contained in
this Agreement, (d) Transfer Taxes allocated to Splitco pursuant to Section 2.2,
and (e) reasonable out-of-pocket legal, accounting and other advisory and court
fees and expenses incurred in connection with the items described in clauses (a)

 

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through (d); provided, however, that notwithstanding clauses (a), (c) and (e) of
this Section 7.3, Splitco shall not be responsible for, and shall have no
obligation to indemnify or hold harmless any Distributing Indemnitee for,
(x) any Transaction Taxes or Transaction Tax-Related Losses that are allocated
to Distributing pursuant to Section 2.2, or (y) any Taxes or Losses arising out
of or based upon any breach or nonperformance of any covenant or agreement made
or to be performed by Distributing contained in this Agreement.

 

7.4                               Scope.  The provisions of this Section 7 are
intended to be for the benefit of, and shall be enforceable by, each
Distributing Indemnitee and its successors in interest and each Splitco
Indemnitee and its successors in interest.

 

7.5                               Notices of Tax Contests (Other than Joint
Claims).  Each Company shall provide prompt notice to the other Company of any
pending or threatened Tax audit, assessment or proceeding or other Tax Contest
of which it becomes aware relating to Taxes for which it is or may be
indemnified by such other Company hereunder (other than any Transaction Taxes or
Transaction Tax-Related Losses which shall be governed by Section 7.8).  Such
notice shall contain factual information (to the extent known) describing any
asserted Tax liability in reasonable detail and shall be accompanied by copies
of any notice and other documents received from any Tax Authority in respect of
any such matters; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except, and only to the
extent that, the indemnifying Company shall have been actually prejudiced as a
result of such failure.  Thereafter, the indemnified Company shall deliver to
the indemnifying Company such additional information with respect to such Tax
Contest in its possession that the indemnifying Company may reasonably request.

 

7.6                               Control of Tax Contests (Other than Joint
Claims).

 

(a)                                 General Rule.  Except as provided in
Sections 7.6(b) and 7.8, each Company (or the appropriate member of its Group)
shall have full responsibility, control and discretion in handling, defending,
settling or contesting any Tax Contest involving a Tax reported (or that, it is
asserted, should have been reported) on a Tax Return for which such Company is
responsible for preparing and filing (or causing to be prepared and filed)
pursuant to Section 3 of this Agreement.

 

(b)                                 Non-Preparer Participation Rights.  With
respect to a Tax Contest (other than with respect to a Joint Claim) of any Tax
Return which could result in a Tax liability for which the Non-Preparer may be
liable under this Agreement, (i) the Non-Preparer shall, at its own cost and
expense, be entitled to participate in such Tax Contest, (ii) the Preparer shall
keep the Non-Preparer updated and informed, and shall consult with the
Non-Preparer, (iii) the Preparer shall act in good faith with a view to the
merits in connection with the Tax Contest, and (iv) the Preparer shall not
settle or compromise such Tax Contest without the prior written consent of the
Non-Preparer (which consent shall not be unreasonably withheld or delayed) if
the settlement or compromise could have a more than de minimis impact on the
Non-Preparer or its Affiliates.

 

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7.7                               Cooperation.  The parties shall provide each
other with all information relating to a Tax Contest which is needed by the
other party to handle, participate in, defend, settle or contest the Tax
Contest.  At the request of any party, the other party shall take any action
(e.g., executing a power of attorney) that is reasonably necessary in order for
the requesting party to exercise its rights under this Agreement in respect of a
Tax Contest.  Splitco shall assist Distributing, and Distributing shall assist
Splitco, in taking any remedial actions that are necessary or desirable to
minimize the effects of any adjustment made by a Tax Authority.  The
indemnifying party shall reimburse the indemnified party for any reasonable
out-of-pocket costs and expenses incurred in complying with this Section 7.7.

 

7.8                               Joint Claims.  Each Company shall promptly
give notice to the other Company of any pending or threatened Tax Contest,
claim, action, suit, investigation or proceeding brought by a third party
relating to any Transaction Taxes or Transaction Tax-Related Losses for which
such Company is or may be indemnified by the other Company under this Section 7
(each, a “Joint Claim”).  Such notice shall contain (i) factual information (to
the extent known) describing any asserted Tax liability or other claim in
reasonable detail and shall be accompanied by copies of any notice and other
documents received from any Tax Authority or third party relating to the Joint
Claim, and (ii) the amount of the Joint Claim.  Such notice shall be given
within a reasonable period of time after notice thereof was received by such
Company, but any failure to give timely notice shall not affect the indemnities
given hereunder except, and only to the extent that, the indemnifying Company
shall have been actually prejudiced as a result of such failure.  Thereafter,
each Company shall deliver to the other Company such additional information with
respect to such Joint Claim in its possession that the other Company may
reasonably request.  Distributing and Splitco will have the right to jointly
control the defense, compromise or settlement of any Joint Claim.  No
indemnified Company shall settle or compromise or consent to entry of any
judgment with respect to any such Joint Claim without the prior written consent
of the indemnifying Company, which consent may be withheld in the indemnifying
Company’s sole discretion.  No indemnifying Company shall settle or compromise
or consent to entry of any judgment with respect to any such Joint Claim without
the prior written consent of the indemnified Company, which consent may not be
unreasonably withheld or delayed.

 

SECTION 8.                         General Provisions.

 

8.1                               Termination.  This Agreement shall terminate
at such time as all obligations and liabilities of the parties hereto have been
satisfied.  The obligations and liabilities of the parties arising under this
Agreement shall continue in full force and effect until all such obligations
have been satisfied and such liabilities have been paid in full, whether by
expiration of time, operation of law, or otherwise.

 

8.2                               Predecessors or Successors.  Any reference to
Distributing, Splitco, Expedia, a Person, or a Subsidiary in this Agreement
shall include any predecessors or successors (e.g., by merger or other
reorganization, liquidation,

 

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conversion, or election under Treasury Regulations Section 301.7701-3) of
Distributing, Splitco, Expedia, such Person, or such Subsidiary, respectively.

 

8.3                               Expenses.  Except as otherwise expressly
provided for herein, each party and its Subsidiaries shall bear their own
expenses incurred in connection with preparation of Tax Returns and other
matters related to Taxes under the provisions of this Agreement for which they
are liable.

 

8.4                               Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  Any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement will be brought exclusively
in the Court of Chancery of the State of Delaware (the “Delaware Chancery
Court”), or, if the Delaware Chancery Court does not have subject matter
jurisdiction, in the federal courts located in the State of Delaware.  Each of
the parties hereby consents to personal jurisdiction in any such action, suit or
proceeding brought in any such court (and of the appropriate appellate courts
therefrom) and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of any
such court.  Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 8.6 shall be deemed effective
service of process on such party.

 

8.5                               Waiver of Jury Trial.  EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE,
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH OR RELATING TO THIS AGREEMENT.  EACH PARTY HERETO CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF SUCH ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.5.

 

8.6                               Notices.  All notices and other communications
hereunder shall be in writing and shall be delivered in person, by facsimile
(with confirming copy sent by

 

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one of the other delivery methods specified herein), by overnight courier or
sent by certified, registered or express air mail, postage prepaid, and shall be
deemed given when so delivered in person, or when so received by facsimile or
courier, or, if mailed, three (3) calendar days after the date of mailing, as
follows:

 

(a)                                 If to Distributing, to:

 

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, Colorado  80112

 

Attn:  General Counsel

Facsimile:  (720) 875-5401

 

(b)                                 If to Splitco, to:

 

Liberty Expedia Holdings, Inc.

12300 Liberty Boulevard

Englewood, Colorado  80112

 

Attn:  General Counsel

Facsimile:  (720) 875-5401

 

or to such other address as the party to whom notice is given may have
previously furnished to the other parties in writing in the manner set forth
above.

 

8.7                               Counterparts.  This Agreement may be executed
in two or more identical counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same agreement.
The Agreement may be delivered by facsimile transmission of a signed copy
thereof.

 

8.8                               Binding Effect; Assignment.  This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Except with respect to a merger of a party, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party; provided, however,
that each of Distributing and Splitco may assign its respective rights,
interests, duties, liabilities and obligations under this Agreement to any other
member of their Group, but such assignment shall not relieve Distributing or
Splitco, as the assignor, of its liabilities or obligations hereunder.

 

8.9                               Severability.  Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.  Upon a
determination that any provision of this Agreement is prohibited or
unenforceable in any jurisdiction, the parties shall negotiate in good faith to
modify this Agreement so as to

 

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effect the original intent of the parties as closely as possible in an
acceptable manner in order that the provisions contemplated hereby are
consummated as originally contemplated to the fullest extent possible.

 

8.10                        Amendments; Waivers.  Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.  No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  Except as
otherwise provided herein, the rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by applicable
law.  Any consent provided under this Agreement must be in writing, signed by
the party against whom enforcement of such consent is sought.

 

8.11                        Effective Date.  This Agreement shall become
effective on the date recited above on which the parties entered into this
Agreement.

 

8.12                        Change in Law.  Any reference to a provision of the
Code or any other Tax Law shall include a reference to any applicable successor
provision or law.

 

8.13                        Authorization, Etc.  Each of the parties hereto
hereby represents and warrants that it has the power and authority to execute,
deliver and perform this Agreement, that this Agreement has been duly authorized
by all necessary corporate action on the part of such party, that this Agreement
constitutes a legal, valid and binding obligation of such party and that the
execution, delivery and performance of this Agreement by such party does not
contravene or conflict with any provision of law or of its charter or bylaws or
any agreement, instrument or order binding such party.

 

8.14                        No Third Party Beneficiaries.  Except as provided in
Sections 7.2 and 7.3 of this Agreement, this Agreement is solely for the benefit
of Distributing, Splitco, and their Subsidiaries and is not intended to confer
upon any other Person any rights or remedies hereunder.  Notwithstanding
anything in this Agreement to the contrary, this Agreement is not intended to
confer upon any Splitco Indemnitees any rights or remedies against Splitco
hereunder, and this Agreement is not intended to confer upon any Distributing
Indemnitees any rights or remedies against Distributing hereunder.

 

8.15                        Entire Agreement.  This Agreement embodies the
entire understanding among the parties relating to its subject matter and
supersedes and terminates any prior agreements and understandings among the
parties with respect to such subject matter, and no party to this Agreement
shall have any right, responsibility, obligation or liability under any such
prior agreement or understanding.  Any and all prior correspondence,
conversations and memoranda are merged herein and shall be without effect
hereon.  No promises, covenants or representations of any kind, other than those
expressly stated herein, have been made to induce any party to enter into this
Agreement.

 

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8.16                        No Strict Construction; Interpretation.

 

(a)                                 Distributing and Splitco each acknowledge
that this Agreement has been prepared jointly by the parties hereto and shall
not be strictly construed against any party hereto.

 

(b)                                 When a reference is made in this Agreement
to an Article, Section, Exhibit or Schedule, such reference shall be to an
Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated.  The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.  Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”.  The words “hereof”, “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.  All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.  The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term.  Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. 
References to a Person are also to its permitted successors and assigns.

 

8.17                        Headings.  The headings contained in this Agreement
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers as of the date set forth above.

 

 

LIBERTY INTERACTIVE CORPORATION

 

 

 

 

 

 

By:

/s/ Albert Rosenthaler

 

 

Name:

Albert Rosenthaler

 

 

Title:

Chief Corporate Development Officer

 

 

 

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

 

 

 

 

 

 

By:

/s/ Tim Lenneman

 

 

Name:

Tim Lenneman

 

 

Title:

Senior Vice President

 

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