Exhibit 10.3

 

Form of Split-Off Tax Sharing Agreement

 

TAX SHARING AGREEMENT

 

BETWEEN

 

LIBERTY INTERACTIVE CORPORATION

 

AND

 

GCI LIBERTY, INC.

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

SECTION 1.

Definition of Terms

 

1

 

 

 

 

SECTION 2.

Allocation of Tax Liabilities, Tax Benefits and Certain Losses

 

15

 

 

 

 

2.1

Liability for and the Payment of Taxes

 

15

2.2

Allocation Rules

 

17

 

 

 

 

SECTION 3.

Preparation and Filing of Tax Returns

 

22

 

 

 

 

3.1

Combined Returns

 

22

3.2

Separate Returns

 

22

3.3

Provision of Information

 

22

3.4

Special Rules Relating to the Preparation of Tax Returns

 

23

 

 

 

 

SECTION 4.

Tax Payments

 

24

 

 

 

 

4.1

Payment of Taxes to Tax Authority

 

24

4.2

Indemnification Payments

 

24

4.3

Payments for Tax Refunds and Tax Benefits

 

25

4.4

Interest on Late Payments

 

26

4.5

Initial Determinations and Subsequent Adjustments

 

26

4.6

Tax Consequences of Payments

 

27

 

 

 

 

SECTION 5.

Assistance and Cooperation

 

27

 

 

 

 

5.1

Cooperation

 

27

 

 

 

 

SECTION 6.

Tax Records

 

27

 

 

 

 

6.1

Retention of Tax Records

 

27

6.2

Access to Tax Records

 

27

6.3

Confidentiality

 

28

6.4

Delivery of Tax Records

 

28

 

 

 

 

SECTION 7.

Restrictions on Certain Actions of Distributing and Splitco; Indemnity

 

28

 

 

 

 

7.1

Restrictive Covenants

 

28

7.2

Distributing Indemnity

 

29

7.3

Splitco Indemnity

 

30

7.4

Scope

 

31

7.5

Notices of Tax Contests

 

31

7.6

Control of Tax Contests Generally

 

31

7.7

Cooperation

 

31

7.8

Joint Claims

 

32

7.9

Other Claims

 

32

 

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SECTION 8.

General Provisions

 

33

 

 

 

 

8.1

Termination

 

33

8.2

Predecessors or Successors

 

33

8.3

Expenses

 

33

8.4

Governing Law; Jurisdiction

 

33

8.5

Waiver of Jury Trial

 

34

8.6

Notices

 

34

8.7

Counterparts

 

35

8.8

Binding Effect; Assignment

 

35

8.9

Severability

 

35

8.10

Amendments; Waivers

 

35

8.11

Effective Date

 

36

8.12

Change in Law

 

36

8.13

Authorization, Etc

 

36

8.14

No Third Party Beneficiaries

 

36

8.15

Entire Agreement

 

36

8.16

No Strict Construction; Interpretation

 

36

8.17

Headings

 

37

8.18

Assignment of Rights under the LEXE Tax Sharing Agreement

 

37

8.19

Assignment of Rights under the CHUB Tax Sharing Agreement

 

37

8.20

Assignment of Rights under LTRIP Tax Sharing Agreement

 

38

 

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TAX SHARING AGREEMENT

 

THIS TAX SHARING AGREEMENT (this “Agreement”) is entered into as of [    ],
between Liberty Interactive Corporation, a Delaware corporation
(“Distributing”), and GCI Liberty, Inc.,(1) an Alaska corporation (“Splitco”). 
Unless otherwise indicated, all “Section” references in this Agreement are to
sections of this Agreement.

 

RECITALS

 

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

 

WHEREAS, immediately following the Contribution, Distributing will own an amount
of Splitco Stock that constitutes “control” of Splitco within the meaning of
Section 368(c) of the Code;

 

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

 

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

 

WHEREAS, the parties desire to provide for and agree upon the allocation between
the parties of liabilities for Taxes and credits for Tax Benefits 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:

 

“2014 Reattribution and Dividend” means the reattribution of assets and
liabilities between Distributing’s Interactive Group and Ventures Group effected
on October 3, 2014 and the distribution of shares of Liberty Ventures Common
Stock to holders of Liberty Interactive Common Stock effected on October 20,
2014.

 

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(1)  Name of General Communication, Inc. to change to GCI Liberty, Inc. before
agreement is executed.

 

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“2029 Exchangeables” means the 4% Exchangeable Senior Debentures due 2029 issued
by Liberty LLC.

 

“2030 Exchangeables” means the 3.75% Exchangeable Senior Debentures due 2030
issued by Liberty LLC.

 

“2031 3.25% Exchangeables” means the 3.25% Exchangeable Senior Debentures due
2031 issued by Liberty LLC.

 

“2031 3.5% Exchangeables” means the 3.5% Exchangeable Senior Debentures due 2031
issued by Liberty LLC.

 

“2043 Exchangeables” means the 0.75% Exchangeable Senior Debentures due 2043
issued by Liberty LLC.

 

“2046 Exchangeables” means the 1.75% Exchangeable Senior Debentures due 2046
issued by Liberty LLC, and “2046 Exchangeable Debenture” means a single
debenture that is a 1.75% Exchangeable Senior Debenture due 2046 issued by
Liberty LLC having an original principal amount of $1,000.00.

 

“Adjusted Issue Price” means the adjusted issue price, as determined pursuant to
Treasury Regulations Section 1.1275-4(b)(7)(ii), of a 2046 Exchangeable
Debenture, taking into account any adjustments pursuant to the Closing
Agreement.

 

“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.

 

“Aggregate Market Capitalization” means the sum of the Interactive Market
Capitalization and the Ventures Market Capitalization.

 

“Applicable 2046 Exchangeables Tax Benefits Amount” has the meaning set forth in
Section 4.3(d)(ii).

 

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

 

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

 

“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.

 

“CHUB” means CommerceHub, Inc., a Delaware corporation.

 

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“CHUB Distribution” means the “Distribution” (as defined in CHUB Tax Sharing
Agreement).

 

“CHUB Opinion” means the opinion delivered by Baker Botts L.L.P. to Distributing
in connection with the CHUB Distribution to the effect that the CHUB
Distribution will qualify as a tax-free transaction described under Section 355
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).

 

“CHUB Tax Materials” means (i) the representation letters delivered to Baker
Botts L.L.P. in connection with the delivery of the CHUB Opinion, and (ii) any
other materials delivered by Distributing, CHUB and others in connection with
the rendering by Baker Botts L.L.P. of the CHUB Tax Opinion.

 

“CHUB Tax-Related Losses” mean any Losses resulting from the failure of (i) the
“Restructuring” (as defined in the CHUB Tax Sharing Agreement) to qualify in
whole for nonrecognition of income, gain and loss for U.S. federal income tax
purposes to Distributing, CHUB, “Old CommerceHub” (as defined in the CHUB Tax
Sharing Agreement), and the holders of stock of “Old CommerceHub” (as defined in
the CHUB Tax Sharing Agreement) (in each case, except with respect to the
receipt of any cash in connection therewith), or (ii) the CHUB Distribution to
qualify in whole for nonrecognition of income, gain and loss for U.S. federal
income tax purposes to Distributing, CHUB, each of their respective Subsidiaries
at the “Effective Time” (as defined in the CHUB Tax Sharing Agreement), and the
holders of Liberty Ventures Common Stock that received stock of CHUB in the CHUB
Distribution (except with respect to the receipt of cash in lieu of fractional
shares).

 

“CHUB Tax Sharing Agreement” means the Tax Sharing Agreement dated as of
July 22, 2016, by and among Distributing and CHUB.

 

“CHUB Transaction Taxes” means any Taxes resulting from the “Restructuring” (as
defined in the CHUB Tax Sharing Agreement) and the CHUB Distribution.

 

“Closing Agreement” means the Closing Agreement on Final Determination Covering
Specific Matters on Form 906-c relating to the 2046 Exchangeables that was
entered into in May 2017 by and among Distributing and its Subsidiaries and the
Commissioner of Internal Revenue.

 

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

 

“Combined Return” means (i) with respect to any Tax Return for a Tax Year
beginning on or before the Distribution Date, any Tax Return that includes Tax
Items of both the Distributing Business and the Splitco Business, determined in
accordance with the allocation rules of Section 2.2, and (ii) with respect to
any Tax Return for a Tax Year beginning after the Distribution Date, any Tax
Return that includes

 

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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 similar rights with respect to
the equity of any entity that are granted on or prior to the Distribution Date
in connection with employee, independent contractor or director compensation
(including, for the avoidance of doubt, options, stock appreciation rights,
restricted stock, restricted stock units or other similar 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.

 

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

 

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

 

“Distributing Acquired Subsidiary” has the meaning set forth in Section 2.2(n).

 

“Distributing Business” means, (i) with respect to any Tax Year (or portion
thereof) ending at or before the Effective Time, the assets, liabilities and
businesses of Distributing and its Subsidiaries (other than the Splitco
Business); and (ii) with respect to any Tax Year (or portion thereof) beginning
after the Effective Time, the assets, liabilities, and businesses of the
Distributing Group during such Tax Year (or portion thereof).

 

“Distributing Group” means, with respect to any Tax Year (or portion thereof)
beginning after the Effective Time, Distributing and each Subsidiary of
Distributing (but only while such Subsidiary is a Subsidiary of Distributing).

 

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

 

“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 4.4.

 

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

 

“Employing Party” means the Company whose Group includes any entity that is
required under applicable Tax law to satisfy, jointly or otherwise, any Tax
withholding and reporting obligations with respect to any employee, independent
contractor or director compensation attributable to any Compensatory Equity
Interests.

 

“Estimated 2046 Exchangeables Tax Benefits Amount” has the meaning set forth in
Section 4.3(d)(i).

 

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

 

“GLIB Subsidiaries” means the Subsidiaries of Splitco at the effective time of
the Auto Conversion.

 

“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.

 

“Income Tax Benefit” means a Tax Item which decreases the Income Tax liability
of a taxpayer, including a Tax Refund of any Income Taxes.

 

“Indemnification Agreement” means the Indemnification Agreement dated as of
[   ] (as the same may be amended from time to time), by and among Distributing,
Liberty LLC, Splitco, and LV Bridge, LLC, and any other Person that may become a
party thereto.

 

“Indemnity Payment Tax Year” means, with respect to any Splitco Indemnity
Payment, the Tax Year in which such Splitco Indemnity Payment is made.

 

“Interactive Group” has the meaning given to such term in Distributing’s
restated certificate of incorporation as in effect at the Issue Record Date.

 

“Interactive Market Capitalization” means the product obtained by multiplying
the VWAP of the Series A Liberty Interactive Common Stock by the number

 

5

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of shares of Liberty Interactive Common Stock outstanding immediately following
the Recapitalization.

 

“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
earlier 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 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.

 

“Issue Date Exchangeable Debentures” means the 3.125% Exchangeable Senior
Debentures due 2023 issued by Liberty LLC, the 2029 Exchangeables, the 2030
Exchangeables, the 2031 3.25% Exchangeables, and the 2031 3.5% Exchangeables
that were outstanding on the Issue Record Date.

 

“Issue Date Senior Notes and Debentures” means the senior notes and debentures
of Liberty LLC that were outstanding on the Issue Record Date, other than any
Issue Date Exchangeable Debentures.

 

“Issue Record Date” means 5:00 p.m., New York City time, on August 9, 2012.

 

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

 

“Joint Claim” means any pending or threatened Tax Contest, claim, action, suit,
investigation or proceeding brought by a third party relating to (w) any
Transaction Taxes or any Transaction Tax-Related Losses, (x) any LEXE
Transaction Taxes or any LEXE Tax-Related Losses, (y) any CHUB Transaction Taxes
or any CHUB Tax-Related Losses, or (z) any LTRIP Transaction Taxes or any LTRIP
Tax-Related Losses, in each case, for which one Company is or may be indemnified
by the other Company under Section 7.

 

“LEXE” means Liberty Expedia Holdings, Inc., a Delaware corporation.

 

“LEXE Opinion” means the opinion delivered by Tax Counsel to Distributing in
connection with the LEXE Transaction to the effect that the LEXE Transaction
will qualify as a tax-free transaction described under Sections 368(a)(1)(D),

 

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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).

 

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

 

“LEXE Tax-Related Losses” mean any Losses resulting from the failure of (i) the
“Restructuring” (as defined in the LEXE Tax Sharing Agreement) to qualify in
whole for nonrecognition of income, gain and loss for U.S. federal income tax
purposes to Distributing, LEXE and each of their respective Subsidiaries
immediately prior to the “Distribution” (as defined in the LEXE Tax Sharing
Agreement), (ii) the LEXE Transaction 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 LEXE
Transaction to qualify in whole for nonrecognition of income, gain and loss for
U.S. federal income tax purposes to Distributing, LEXE, each of their respective
Subsidiaries at the “Effective Time” (as defined in the LEXE Tax Sharing
Agreement), and the holders of Liberty Ventures Common Stock that received stock
of LEXE in the LEXE Transaction (except with respect to the receipt of cash in
lieu of fractional shares).

 

“LEXE Tax Sharing Agreement” means the Tax Sharing Agreement dated as of
November 4, 2016, by and among Distributing and LEXE.

 

“LEXE Transaction” means the “Contribution” and the “Distribution,” in each case
as such terms are defined in LEXE Tax Sharing Agreement.

 

“LEXE Transaction Taxes” means any Taxes resulting from the “Restructuring” (as
defined in the LEXE Tax Sharing Agreement) and the LEXE Transaction.

 

“Liberty LLC” means Liberty Interactive LLC, a Delaware limited liability
company.

 

“Liberty Interactive Common Stock” means the Series A Liberty Interactive Common
Stock and Series B Liberty Interactive Common Stock.

 

“Liberty Ventures Common Stock” means the Series A Liberty Ventures Common Stock
and Series B Liberty Ventures Common Stock.

 

“Losses” means any and all damages, losses, deficiencies, liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including, without limitation, 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

 

7

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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.

 

“LTRIP” means Liberty TripAdvisor Holdings, Inc., a Delaware corporation.

 

“LTRIP IRS Submissions” means the request for rulings, dated August 15, 2013,
filed by Distributing with the IRS in connection with the LTRIP Transaction, and
each supplemental submission and any other correspondence or supplemental
materials submitted to the IRS in connection with obtaining the LTRIP Ruling.

 

“LTRIP Opinion” means the opinion delivered by Baker Botts L.L.P. to
Distributing in connection with the LTRIP Transaction to the effect that the
LTRIP Transaction 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.

 

“LTRIP Ruling” means PLR 201435005 issued to Distributing in connection with the
LTRIP Transaction.

 

“LTRIP Tax Materials” means (i) the LTRIP Ruling, (ii) each LTRIP IRS
Submission, (iii) the representation letters delivered to Baker Botts L.L.P. in
connection with the delivery of the LTRIP Opinion, and (iv) any other materials
delivered by Distributing, LTRIP and others in connection with the rendering by
Baker Botts L.L.P. of the LTRIP Opinion or the issuance by the IRS of the LTRIP
Ruling.

 

“LTRIP Tax-Related Losses” mean any Losses resulting from the failure of (i) the
“Restructuring” (as defined in the LTRIP Tax Sharing Agreement) to qualify in
whole for nonrecognition of income, gain and loss for U.S. federal income tax
purposes to Distributing, LTRIP and each of their respective Subsidiaries
immediately prior to the “Distribution” (as defined in the LTRIP Tax Sharing
Agreement), (ii) the LTRIP Transaction to qualify as a tax-free transaction
described under Sections 368(a)(1)(D), 355 and 361 of the Code, or (iii) the
LTRIP Transaction to qualify in whole for nonrecognition of income, gain and
loss for U.S. federal income tax purposes to Distributing, LTRIP, each of their
respective Subsidiaries at the “Effective Time” (as defined in the LTRIP Tax
Sharing Agreement), and the holders of Liberty Ventures Common Stock that
received stock of LTRIP in the LTRIP Transaction.

 

“LTRIP Tax Sharing Agreement” means the Tax Sharing Agreement dated as of
August 27, 2014, by and among Distributing and LTRIP.

 

“LTRIP Transaction” means the “Contribution” and the “Distribution,” in each
case as such terms are defined in LTRIP Tax Sharing Agreement.

 

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“LTRIP Transaction Taxes” means any Taxes resulting from the “Restructuring” (as
defined in the LTRIP Tax Sharing Agreement) and the LTRIP Transaction.

 

“Non-Preparer” means the Company that is not responsible for the preparation and
filing of the Combined Return or Separate Return, as applicable, pursuant to
Section 3.

 

“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
Section 6655 of the Code, the due date (determined without regard to extensions)
for filing the return determined under Section 6072 of the Code, 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 of the Tax Year or other taxable period through the end of the day on the
Distribution Date.

 

“Pre-Issue Date Period” means any taxable period (or portion thereof) that ends
on or before the Issue Record Date.

 

“Preparer” means the Company that is responsible for the preparation and filing
of the Combined Return or Separate Return, as applicable, pursuant to Section 3.

 

“Purchase Offer” has the meaning given to such term in the Indemnification
Agreement.

 

“Purchased Debenture” means any 2046 Exchangeable Debenture purchased pursuant
to Section 2.1 of the Indemnification Agreement.

 

“Purchased Debenture Indemnity” has the meaning given to such term in the
Indemnification Agreement.

 

“Purchased Debenture Value” means, in respect of any Purchased Debenture, the
purchase price paid by Liberty LLC to acquire such Purchased Debenture in
connection with the completion of any Purchase Offer (without taking into
account any costs, expenses or fees related to such purchase which are to be
reimbursed to Liberty LLC by Splitco pursuant to Section 3.1 of the
Indemnification Agreement).

 

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“QVC Group” has the meaning given to such term in Distributing’s restated
certificate of incorporation that was filed to effect the Redesignation.

 

“QVC Group Common Stock” means (i) Distributing’s Series A QVC Group Common
Stock, Series B QVC Group Common Stock, and if and when issued, Series C QVC
Group common stock, par value $.01 per share, (ii) for any taxable periods (or
portions thereof) prior to the Redesignation, Distributing’s Series A Liberty
Interactive Common Stock and Series B Liberty Interactive Common Stock, and
(iii) any series or class of stock into which Distributing’s Series A, Series B,
or Series C QVC Group common stock is redesignated, reclassified, converted or
exchanged following the Effective Time.

 

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

 

“Recapitalization” means the recapitalization of Distributing’s outstanding
stock and distribution of Liberty Ventures Common Stock and Series A Rights that
was effected at the Issue Record Date.

 

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

 

“Redesignation” means the filing of Distributing’s restated certificate of
incorporation on June 4, 2015 to, among other things, rename its “Interactive
Group” as the “QVC Group” and rename its Series A Liberty Interactive Common
Stock and Series B Liberty Interactive Common Stock as its Series A QVC Group
Common Stock and Series B QVC Group Common Stock, respectively.

 

“Reference Share Value” has the meaning given to such term in the
Indemnification Agreement.

 

“Reorganization Agreement” means the Agreement and Plan of Reorganization dated
as of April 4, 2017, as amended, by and among Distributing, Liberty LLC and
Splitco.

 

“Respective Percentage” means (i) in the case of Distributing, the percentage
derived by multiplying 100 by the quotient obtained by dividing the Interactive
Market Capitalization by the Aggregate Market Capitalization, and (ii) in the
case of Splitco, the percentage derived by multiplying 100 by the quotient
obtained by dividing the Ventures Market Capitalization by the Aggregate Market
Capitalization.

 

“Retained Debenture Indemnity” has the meaning given to such term in the
Indemnification Agreement.

 

“Separate Return” means any Tax Return that is not a Combined Return.

 

“Series A Liberty Interactive Common Stock” means Distributing’s Series A
Liberty Interactive common stock, par value $0.01 per share, prior to such
stock’s redesignation as Series A QVC Group Common Stock.

 

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“Series A Liberty Ventures Common Stock” means Distributing’s Series A Liberty
Ventures common stock, par value $0.01 per share.

 

“Series A QVC Group Common Stock” means Distributing’s Series A QVC Group common
stock, par value $0.01 per share.

 

“Series A Rights” means rights to acquire Series A Liberty Ventures Common Stock
that were issued by Distributing in connection with the Recapitalization.

 

“Series B Liberty Interactive Common Stock” means Distributing’s Series B
Liberty Interactive common stock, par value $0.01 per share, prior to such
stock’s redesignation as Series B QVC Group Common Stock.

 

“Series B Liberty Ventures Common Stock” means Distributing’s Series B Liberty
Ventures common stock, par value $0.01 per share.

 

“Series B QVC Group Common Stock” means Distributing’s Series B QVC Group common
stock, par value $0.01 per share.

 

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

 

“Splitco Acquired Subsidiary” has the meaning set forth in Section 2.2(n).

 

“Splitco Business” means:  (i) with respect to any Pre-Issue Date Period, the
assets, liabilities, and businesses of Distributing and its Subsidiaries
attributed to the Ventures Group as of the Issue Record Date during such Tax
Year (or portion thereof), (ii) with respect to any Tax Year (or portion
thereof) beginning after the Issue Record Date and ending at or before the
Effective Time, the assets, liabilities and businesses of Distributing and its
Subsidiaries that were tracked during such Tax Year (or portion thereof), and
only for so long as so tracked, by the Liberty Ventures Common Stock (including
any equity or debt interests in any entities so tracked); and (iii) with respect
to any Tax Year (or portion thereof) beginning after the Effective Time, the
assets, liabilities, and businesses of the Splitco Group during such Tax Year
(or portion thereof).

 

“Splitco Group” means, 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 Indemnity Payment” means an indemnification payment to be made by
Splitco to Liberty LLC under the Indemnification Agreement pursuant to the
Retained Debenture Indemnity or the Purchased Debenture Indemnity.

 

“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

 

11

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stock representing a 50-percent or greater interest” in Splitco or any successor
corporation (within the meaning of Section 355(e) of the Code).

 

“Splitco Stock” means Splitco’s Class A-1 common stock, Class B-1 common stock,
Class A common stock, Class B common stock, Series A cumulative redeemable
preferred stock, and if and when issued, Class C common stock, and any series or
class of stock into which Splitco’s Class A-1, Class B-1, Class A, Class B, or
Class C common stock or Series A cumulative redeemable preferred 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.

 

“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, partnership, or limited liability company) 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 voting 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.

 

“Supplemental Indenture” has the meaning given to such term in the
Indemnification Agreement.

 

“Tax” or “Taxes” means any net income, gross income, gross receipts, profits,
capital stock, franchise, withholding, payroll, social security, workers
compensation, employment, unemployment, Medicare, 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.

 

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“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 Benefit” means a Tax Item which decreases the Tax liability of a taxpayer,
including a Tax Refund.

 

“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.

 

“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 the representation letters delivered to Tax Counsel in
connection with the delivery of the Tax Opinion, and 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, under applicable U.S.
federal income tax law, (i) the Auto Conversion will qualify as a
“reorganization” within the meaning of Section 368(a) of the Code; (ii) the
Contribution and the Distribution, taken together, will qualify as a tax-free
transaction described under Sections 368(a)(1)(D), 355 and 361 of the Code;
(iii) no income, gain or loss will be recognized by Distributing upon the
receipt of Splitco Stock in the Contribution or the distribution of Splitco
Stock pursuant to the Distribution; and (iv) no gain or loss will be recognized
by, and no amount will be included in the income of, holders of Liberty Ventures
Common Stock upon the exchange of their shares of Liberty Ventures Common Stock
for shares of Splitco Stock pursuant to the Distribution.

 

“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 Refund” means a refund of Taxes previously paid and any overpayment
interest within the meaning of Section 6611 of the Code or any similar

 

13

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provision under applicable Tax Law (whether paid by way of a refund or credited
against any liability for related Taxes).

 

“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 Sharing Payable” has the meaning given to such term in Section 2.1(c)(i).

 

“Tax Sharing Receivable” has the meaning given to such term in
Section 2.1(c)(ii).

 

“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.

 

“Tracking Stock Taxes and Losses” means any Taxes and Losses resulting from
(i) the Recapitalization failing to qualify as a reorganization within the
meaning of Section 368(a) of the Code, (ii) the treatment, for U.S. federal
income tax purposes with respect to any taxable period (or portion thereof)
ending on or before the date of the Distribution, of the QVC Group Common Stock
or the Liberty Ventures Common Stock as other than stock of our company,
(iii) the treatment, for U.S. federal income tax purposes, of the Series A
Rights as other than rights issued by Distributing to acquire stock of
Distributing, (iv) the treatment of the QVC Group Common Stock, the Liberty
Ventures Common Stock or the Series A Rights as Section 306 stock within the
meaning of Section 306(c) of the Code with respect to any Pre-Distribution
Period, (v) the actual or deemed disposition or exchange of any assets or
liabilities of our company and our subsidiaries for U.S. federal income tax
purposes caused by the Recapitalization, (vi) any income, gain or loss
recognized by the stockholders of Distributing for U.S. federal income tax
purposes resulting from the Recapitalization (except with respect to the receipt
of cash in lieu of fractional shares of Liberty Ventures common stock) or
(vii) the 2014 Reattribution and Dividend.

 

“Transaction Taxes” means any Taxes resulting from the Transactions, other than
Transfer Taxes.

 

“Transaction Tax-Related Losses” means any Losses resulting from the
Transactions as a result of the failure of (i) the Reattribution 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; 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

 

14

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at the Effective Time, and the holders of Liberty Ventures Common Stock that
receive stock of Splitco in the Distribution.  For the avoidance of doubt,
“Transaction Tax-Related Losses” shall not include any Transfer Taxes.

 

“Transactions” means the Reattribution, the Contribution, and the Distribution.

 

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

 

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

 

“Ventures Group” has the meaning given to such term in Distributing’s restated
certificate of incorporation as in effect at the Issue Record Date.

 

“Ventures Market Capitalization” means the product obtained by multiplying the
VWAP of the Series A Liberty Ventures Common Stock by the number of shares of
Liberty Ventures Common Stock outstanding immediately following the
Recapitalization.

 

“VWAP” means, (i) in the case of the Series A Liberty Interactive Common Stock,
a price per share of Series A Liberty Interactive Common Stock equal to the
volume-weighted average price of the shares of Series A Liberty Interactive
Common Stock over the first three trading days following the commencement of
regular way trading of the Series A Liberty Interactive Common Stock after the
Issue Record Date as determined by reference to the screen entitled
“LINTA<EQUITY> AQR SEC” as reported by Bloomberg L.P. (without regard to
pre-open or after hours trading outside of any regular trading session for such
trading days), and (ii) in the case of the Series A Liberty Ventures Common
Stock, a price per share of Series A Liberty Ventures Common Stock equal to the
volume-weighted average price of the shares of Series A Liberty Ventures Common
Stock over the first three trading days following the commencement of regular
way trading of the Series A Liberty Ventures Common Stock after the Issue Record
Date as determined by reference to the screen entitled “LVNTA<EQUITY> AQR SEC”
as reported by Bloomberg L.P. (without regard to pre-open or after hours trading
outside of any regular trading session for such trading days).

 

SECTION 2.  Allocation of Tax Liabilities, Tax Benefits and Certain Losses.

 

2.1                               Liability for and the Payment of Taxes. 
Except as provided in Section 3.4(e) (Withholding and Reporting) and Section 7.5
(Notices) and in accordance with Section 4:

 

(a)                                 Distributing Liabilities and Payments.  For
any Tax Year (or portion thereof), Distributing shall (i) be liable for the
Taxes (determined without

 

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regard to Tax Benefits) allocated to it by this Section 2, reduced by any Tax
Benefits allocated to Distributing or Splitco that are allowable under
applicable Tax Law to reduce such Taxes, (ii) pay such Taxes, as so reduced,
either to the applicable Tax Authority or to Splitco as required by Section 4,
and (iii) pay Splitco for any Tax Benefits allocated to Splitco by this
Section 2 that Distributing uses to reduce Taxes payable by it pursuant to
clause (ii) of this Section 2.1(a).

 

(b)                                 Splitco Liabilities and Payments.  For any
Tax Year (or portion thereof), Splitco shall (i) be liable for the Taxes
(determined without regard to Tax Benefits) allocated to it by this Section 2,
reduced by any Tax Benefits allocated to Distributing or Splitco that are
allowable under applicable Tax Law to reduce such Taxes, (ii) pay such Taxes, as
so reduced, either to the applicable Tax Authority or to Distributing as
required by Section 4, and (iii) pay Distributing for any Tax Benefits allocated
to Distributing by this Section 2 that Splitco uses to reduce Taxes payable by
it pursuant to clause (ii) of this Section 2.1(b).

 

(c)                                  Certain Tax Sharing Payments.

 

(i)                                     To the extent that Distributing has any
obligation or liability to make any payment (including any indemnification
payment) to any Person pursuant to the terms of the LEXE Tax Sharing Agreement,
the CHUB Tax Sharing Agreement, or the LTRIP Tax Sharing Agreement (a “Tax
Sharing Payable”) in respect of any Taxes or Losses (including LEXE Transaction
Taxes, LEXE Tax-Related Losses, CHUB Transaction Taxes, CHUB Tax-Related Losses,
LTRIP Transaction Taxes and LTRIP Tax-Related Losses) that are allocated to
Splitco pursuant to this Section 2 (and which Taxes or Losses have not otherwise
been taken into account in determining the amount of a payment obligation of
Splitco to Distributing pursuant to Section 2.1(b)), then Splitco shall be
liable for, and responsible for the payment of, such Tax Sharing Payable either
to such Person or to Distributing.

 

(ii)                                  To the extent that Distributing has the
right to receive any payment (including any indemnification payment) from any
Person pursuant to the terms of the LEXE Tax Sharing Agreement, the CHUB Tax
Sharing Agreement or the LTRIP Tax Sharing Agreement (a “Tax Sharing
Receivable”) in respect of any Tax Benefits allocated to Splitco pursuant to
this Section 2 (and which Tax Benefits have not otherwise been taken into
account in determining a payment amount between Distributing and Splitco
pursuant to Section 2.1(a) or (b)), then Splitco shall be entitled to receive
such Tax Sharing Receivable, and Distributing shall pay to Splitco any Tax
Sharing Receivable that it has received.

 

(d)                                 Use of Tax Benefits. For purposes of
Section 2.1(a)(i), (x) Distributing shall reduce Taxes allocated to it with any
Tax Benefits allocated to Distributing that are allowable under applicable Tax
Law in the same Tax Year prior to reducing such Taxes with any Tax Benefits
allocated to Splitco, and (y) Distributing shall reduce Taxes allocated to it by
Tax Benefits allocated to Splitco only to the extent such Tax Benefits are not
taken into account by Splitco pursuant to Section 2.1(b)(i) in the same Tax
Year.  For purposes of Section 2.1(b)(i), (x) Splitco shall reduce Taxes

 

16

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allocated to it with any Tax Benefits allocated to Splitco that are allowable
under applicable Tax Law in the same Tax Year prior to reducing such Taxes with
any Tax Benefits allocated to Distributing, and (y) Splitco shall reduce Taxes
allocated to it by Tax Benefits allocated to Distributing only to the extent
such Tax Benefits are not taken into account by Distributing pursuant to
Section 2.1(a)(i) in the same Tax Year.

 

2.2                               Allocation Rules.  For purposes of Section
2.1:

 

(a)                                 General Rule.  Except as otherwise provided
in this Section 2.2, Taxes (determined without regard to Tax Benefits) for any
Tax Year (or portion thereof) shall be allocated between Splitco and
Distributing in proportion to the taxable income or other applicable items
attributable to or arising from the respective Splitco Business and Distributing
Business (as so defined for such Tax Year or portion thereof) that contribute to
such Taxes, and Tax Benefits for any Tax Year (or portion thereof) shall be
allocated between Splitco and Distributing in proportion to the losses, credits,
or other applicable items attributable to or arising from the respective Splitco
Business and Distributing Business (as so defined for such Tax Year or portion
thereof) that contribute to such Tax Benefits.

 

(b)                                 Transaction Taxes and Transaction
Tax-Related Losses.

 

(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(b).

 

(ii)                                  Splitco shall be allocated any Transaction
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.

 

(c)                                  LEXE Transaction Taxes and LEXE Tax-Related
Losses.

 

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

 

(ii)                                  Distributing shall be allocated any LEXE
Transaction Taxes and LEXE Tax-Related Losses that result primarily from,
individually or in the aggregate, any breach by Distributing of any of its
covenants set forth in Section 7.1 hereof.

 

(d)                                 CHUB Transaction Taxes and CHUB Tax-Related
Losses.

 

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

 

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(ii)                                  Distributing shall be allocated any CHUB
Transaction Taxes and CHUB Tax-Related Losses that result primarily from,
individually or in the aggregate, any breach by Distributing of any of its
covenants set forth in Section 7.1 hereof.

 

(e)                                  LTRIP Transaction Taxes and LTRIP
Tax-Related Losses.

 

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

 

(ii)                                  Distributing shall be allocated any LTRIP
Transaction Taxes and LTRIP Tax-Related Losses that result primarily from,
individually or in the aggregate, any breach by Distributing of any of its
covenants set forth in Section 7.1 hereof.

 

(f)                                   Taxes and Losses with Respect to Tracking
Stock.

 

(i)                                     Distributing and Splitco shall each be
allocated their Respective Percentage of any Tracking Stock Taxes and Losses,
other than any Tracking Stock Taxes and Losses allocated to Distributing
pursuant to clause (ii) of this Section 2.2(f) or to Splitco pursuant to clause
(iii) of this Section 2.2(f).

 

(ii)                                  Distributing shall be allocated any
Tracking Stock Taxes and Losses that result from (x) “deferred intercompany
transactions” or “excess loss accounts” (as those terms are defined by
applicable Treasury Regulations) triggered by the actual or deemed disposition
of any assets referred to in clause (v) of the definition of “Tracking Stock
Taxes and Losses” that form a part of the Distributing Business, and (y) any
actual or deemed exchange or disposition of any Issue Date Senior Notes and
Debentures for Tax purposes.

 

(iii)                               Splitco shall be allocated any Tracking
Stock Taxes and Losses that result from (x) “deferred intercompany transactions”
or “excess loss accounts” (as those terms are defined by applicable Treasury
Regulations) triggered by the actual or deemed disposition of any assets
referred to in clause (v) of the definition of “Tracking Stock Taxes and Losses”
that form a part of the Splitco Business, and (y) any actual or deemed exchange
or disposition of any Issue Date Exchangeable Debentures for Tax purposes.

 

(g)                                  TripAdvisor Spin-off.  Splitco shall be
allocated any Taxes and Tax Items resulting from Expedia, Inc.’s spin-off of
TripAdvisor, Inc.

 

(h)                                 Exchangeable Debentures.

 

(i)                                     Except for the Tax Items related to the
2046 Exchangeables described in clause (ii) of this Section 2.2(h), Taxes and
Tax Items (including from any cancellation of indebtedness income recognized or
income

 

18

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recognized under the Treasury Regulations applicable to contingent payment debt
instruments) with respect to Liberty LLC’s 2029 Exchangeables, 2030
Exchangeables, 2031 3.5% Exchangeables, 2043 Exchangeables and 2046
Exchangeables that are reattributed in the Reattribution which are recognized
during any Tax Year (or portion thereof) (x) ending on or before the date of the
Reattribution shall be allocated to Splitco, and (y) beginning after the date of
the Reattribution shall be allocated to Distributing.

 

(ii)                                  Splitco shall be allocated any Tax Items
recognized during any Tax Year (or portion thereof) that are attributable to: 
(x) in the case of any 2046 Exchangeable Debenture with respect to which Splitco
will make a Splitco Indemnity Payment pursuant to the Retained Debenture
Indemnity, the amount by which (A) the Reference Share Value payable to a holder
of a 2046 Exchangeable Debenture exceeds (B) the Adjusted Issue Price of such
2046 Exchangeable Debenture at the time of the exchange of such debenture, and
(y) in the case of any 2046 Exchangeable Debenture with respect to which Splitco
will make a Splitco Indemnity Payment pursuant to the Purchased Debenture
Indemnity, the amount by which (A) the Purchased Debenture Value payable to a
holder of a 2046 Exchangeable Debenture exceeds (B) the Adjusted Issue Price of
such 2046 Exchangeable Debenture at the time of the repurchase of such
debenture.

 

(i)                                     COD Income.  Taxes and Tax Items
resulting from an aggregate of approximately $846.2 million in net taxable
income to be recognized ratably in Tax Years 2014 through 2018 for income tax
purposes as a result of the cancellation in April 2009 of $400 million in
principal amount of the 2029 Exchangeables and $350 million in principal amount
of the 2030 Exchangeables and the cancellation in March 2009 of $10 million in
principal amount of the 2031 3.25% Exchangeables that are recognized during any
Tax Year (or portion thereof) (x) ending on or before the date of the
Reattribution shall be allocated to Splitco, and (y) beginning after the date of
the Reattribution shall be allocated to Distributing.

 

(j)                                    Carryovers or Carrybacks of Tax
Benefits.  If any Tax Item allocable to the Splitco Business in a Tax Year is
carried forward or back and utilized as a Tax Benefit in another Tax Year, then,
except as provided in Section 2.2(k), the resulting Tax Benefit shall be
allocated to Splitco.  If any Tax Item allocable to the Distributing Business in
a Tax Year is carried forward or back and utilized as a Tax Benefit in another
Tax Year, the resulting Tax Benefit shall be allocated to Distributing.

 

(k)                                 Splitco Carrybacks from Post-Distribution
Period.  If, pursuant to Section 3.4(d), any Tax Item allocable to Splitco in a
Tax Year beginning in the Post-Distribution Period is carried back and generates
a Tax Benefit on a Combined Return filed with respect to a Tax Year beginning in
the Pre-Distribution Period, then, notwithstanding Section 2.2(j), any resulting
Tax Benefit shall be allocated to Distributing to the extent, if any, that the
carryback of such Tax Item increases the Taxes otherwise allocable to
Distributing or reduces the amount of Tax Benefits allocable to Distributing
that otherwise could be used with respect to such Tax Year.

 

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(l)                                     Compensatory Equity Interests and
Employee Benefits.

 

(i)                                     Pre-Distribution Period.  For any
Pre-Distribution Period:  (u) Taxes and Tax Items arising from the issuance,
vesting, exercise or settlement of any Compensatory Equity Interests with
respect to any series of QVC Group Common Stock or in any Person that was owned
directly or indirectly by Distributing prior to the Distribution during a period
that such Person is or was tracked by the QVC Group Common Stock or that is
acquired, directly or indirectly by Distributing following the Distribution
shall be allocated to Distributing,  (v) Taxes and Tax Items (other than any
such Taxes and Tax Items which are required to be paid by, or are permitted to
be claimed by, LEXE under the LEXE Tax Sharing Agreement, CHUB under the CHUB
Tax Sharing Agreement, or LTRIP under the LTRIP Tax Sharing Agreement) arising
from the issuance, vesting, exercise or settlement of any Compensatory Equity
Interests with respect to any class or series of Liberty Ventures Common Stock
or in any Person that was owned directly or indirectly by Distributing prior to
the Distribution during a period that such Person is or was tracked by the
Liberty Ventures Common Stock or that is acquired, directly or indirectly by
Splitco following the Distribution shall be allocated to Splitco, (w) Taxes and
Tax Items arising from the issuance, vesting, exercise or settlement of any
Compensatory Equity Interests with respect to any class or series of Liberty
Ventures Common Stock, or in any Person that was owned directly or indirectly by
Distributing prior to the Distribution during a period that such Person is or
was tracked by the Liberty Ventures Common Stock, that are required to be paid
by, or are permitted to be claimed by, LEXE under the LEXE Tax Sharing
Agreement, CHUB under the CHUB Tax Sharing Agreement, or LTRIP under the LTRIP
Tax Sharing Agreement shall be allocated to (A) Splitco for the portion of the
Pre-Distribution Period ending on the date of the Reattribution and
(B) Distributing for the portion of the Pre-Distribution Period beginning on the
day after the Reattribution, (x) Taxes and Tax Items arising from the issuance,
vesting, exercise or settlement of any Compensatory Equity Interests with
respect to any class or series of stock of LEXE, CHUB, or LTRIP shall be
allocated to (A) Splitco for the portion of the Pre-Distribution Period ending
on the date of the Reattribution and (B) Distributing for the portion of the
Pre-Distribution Period beginning on the day after the Reattribution, (y) Taxes
and Tax Items arising in any Pre-Issue Date Period from the issuance, vesting,
exercise or settlement of any Compensatory Equity Interests with respect to any
class or series of Distributing stock or in any Person that was owned, directly
or indirectly, by Distributing during such Pre-Issue Date Period shall be
allocated to Distributing, and (z) any other Taxes or Tax Items related to
employee, independent contractor or director compensation or employee benefits
shall be allocated to Distributing to the extent that the Distributing Business
is or was responsible for the underlying obligation and to Splitco to the extent
that the Splitco Business is or was responsible for the underlying obligation.

 

(ii)                                  Post-Distribution Period.  For any
Post-Distribution Period:  (v) Taxes and Tax Items arising from the issuance,
vesting, exercise or settlement of any Compensatory Equity Interests with
respect to any class or series of QVC Group Common Stock or in any member of the
Distributing Group shall be allocated to Distributing, (w) Taxes and Tax Items
(other than any such Taxes and Tax Items which are required to be paid by, or
are permitted to be claimed by, LEXE under

 

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the LEXE Tax Sharing Agreement, CHUB under the CHUB Tax Sharing Agreement, or
LTRIP under the LTRIP Tax Sharing Agreement) arising from the issuance, vesting,
exercise or settlement of any Compensatory Equity Interests with respect to any
class or series of Splitco Stock or in any member of the Splitco Group shall be
allocated to Splitco, (x) Taxes and Tax Items arising from the issuance,
vesting, exercise or settlement of any Compensatory Equity Interests with
respect to any class or series of Splitco Stock or in any member of the Splitco
Group shall be allocated to Distributing if such Taxes or Tax Items are required
to be paid by, or are permitted to be claimed by, LEXE under the LEXE Tax
Sharing Agreement, CHUB under the CHUB Tax Sharing Agreement, or LTRIP under the
LTRIP Tax Sharing Agreement, (y) Taxes and Tax Items arising from the issuance,
vesting, exercise or settlement of any Compensatory Equity Interests with
respect to any class or series of stock of LEXE, CHUB, or LTRIP shall be
allocated to Distributing, and (z) any other Taxes or Tax Items related to
employee, independent contractor or director compensation or employee benefits
shall be allocated to Distributing to the extent that the Distributing Business
is or was responsible for the underlying obligation and to Splitco to the extent
that the Splitco Business is or was responsible for the underlying obligation.

 

(m)                             Alternative Minimum Tax Credit.  Any credit
arising in any Tax Year (or portion thereof) from the payment of any alternative
minimum consolidated federal tax liability on any Combined Return shall be
allocated between Distributing and Splitco in a manner that offsets the excess
of the net payment or payments previously made by each Company pursuant to this
Agreement in respect of such Combined Return over the net payment or payments
that would have been made by such Company pursuant to this Agreement in respect
of such Combined Return if no alternative minimum consolidated federal tax
liability had been owed with respect to such Combined Return.  For purposes of
this Section 2.2(m), net payments received shall be treated as a negative amount
of net payments made.

 

(n)                                 Acquired Subsidiaries.  If any Person
becomes a Subsidiary of any member of the Splitco Group in any transaction after
the Distribution (and such Person was not a member of the Splitco Group or the
Distributing Group prior to such transaction) (a “Splitco Acquired Subsidiary”),
then any Taxes and Tax Items of such Splitco Acquired Subsidiary for any Tax
Year (or portion thereof) ending on or prior to the date of such transaction
shall be allocated to Splitco.  If any Person becomes a Subsidiary of any member
of the Distributing Group in any transaction after the Distribution (and such
Person was not a member of the Splitco Group or the Distributing Group prior to
such transaction) (a “Distributing Acquired Subsidiary”), then any Taxes and Tax
Items of such Distributing Acquired Subsidiary for any Tax Year (or portion
thereof) ending on or prior to the date of such transaction shall be allocated
to Distributing.

 

(o)                                 Splitco.  Any Taxes and Tax Items of Splitco
and the GLIB Subsidiaries attributable to any Tax Year (or portion thereof)
ending at or before the Effective Time shall be allocated to Splitco.

 

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(p)                                 Transfer Taxes.  All Transfer Taxes shall be
allocated 50% to Distributing and 50% to Splitco.

 

(q)                                 Pre-Issue Date Period.  Except as provided
in Section 2.2(f), (g), (h), (j), (l), (n), or (o), Distributing shall be
allocated all Income Taxes and Income Tax Benefits attributable to or arising
from the Splitco Business and the Distributing Business that are reported on any
Tax Return for any Pre-Issue Date Period that would be a Combined Return if
determined without regard to this Section 2.2(q).

 

SECTION 3.  Preparation and Filing of Tax Returns.

 

3.1                               Combined Returns.  Except as otherwise
provided in this Section 3:

 

(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.  Except as otherwise
provided in this Section 3:

 

(a)                                 Tax Returns to be Prepared by Distributing. 
Distributing shall be responsible for preparing and filing (or causing to be
prepared and filed) (i) all Separate Returns for a Tax Year beginning on or
before the Distribution Date that include Tax Items of the Distributing
Business, determined in accordance with the allocation rules of Section 2.2, and
(ii) all Separate Returns for a Tax Year beginning after the Distribution Date
that include one or more members of the Distributing Group.

 

(b)                                 Tax Returns to be Prepared by Splitco. 
Splitco shall be responsible for preparing and filing (or causing to be prepared
and filed) (i) all Separate Returns for a Tax Year beginning on or before the
Distribution Date that include Tax Items of the Splitco Business, determined in
accordance with the allocation rules of Section 2.2, and (ii) all Separate
Returns for a Tax Year beginning after the Distribution Date that include one or
more members of the Splitco Group.

 

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

 

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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)                                 General Rule.  Except as otherwise provided
in this Agreement, the Company responsible for filing (or causing to be filed) a
Tax Return pursuant to Sections 3.1 or 3.2 shall have the exclusive right, in
its sole discretion, 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):

 

(i)                                     Splitco may not take (and shall cause
the members of the Splitco Group not to take) any positions that it knows, or
reasonably should know, would adversely affect any member of the Distributing
Group, except to the extent that the failure to take such position would be
contrary to applicable Tax Law; and Splitco and the other members of the Splitco
Group must (x) allocate Tax Items between such Separate Return for which Splitco
is responsible and any related Combined Return for which Distributing is
responsible that is filed with respect to the same Tax Year in a manner that is
consistent with the reporting of such Tax Items on such related Combined Return
and (y) make any applicable elections required under applicable Tax Law
(including, without limitation, under Treasury Regulations
Section 1.1502-76(b)(2)), necessary to effect such allocation.

 

(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 applicable Tax Law.

 

(d)                                 Filing Claims for Carrybacks.  If a Tax Item
allocable to Splitco is carried back from a Tax Year beginning in the
Post-Distribution Period and generates a Tax Benefit on a Combined Return filed
with respect to a Tax Year beginning in the Pre-Distribution Period, then, upon
the request of Splitco, Distributing may, in its reasonable discretion, file a
claim for refund arising from such Tax Benefit.  Any resulting Tax Benefit shall
be allocated to Splitco pursuant to Section 2.2(j), except as otherwise provided
by Section 2.2(k).  For the avoidance of doubt, nothing in this Agreement
imposes any obligation on Splitco to carry back any such Tax Items.

 

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(e)                                  Withholding and Reporting.  Following the
Effective Time, in the event any Compensatory Equity Interests are settled
(whether by issuance, exercise, vesting or otherwise) by the corporation that is
the issuer or obligor under the Compensatory Equity Interest (the “issuing
corporation”) or by another member of the Group to which the issuing corporation
belongs, and if an Employing Party is not a member of the same Group as the
issuing corporation, the Company whose Group includes the issuing corporation
shall be responsible for withholding the appropriate amount of Taxes upon such
settlement (or otherwise making satisfactory arrangements for such withholding)
and shall promptly remit to such Employing Party or the applicable Tax Authority
an amount in cash equal to the amount required to be withheld in respect of any
withholding Taxes.  In the application of this Agreement, the Company whose
Group includes the issuing corporation shall indemnify such Employing Party for
any such withholding Taxes, except to the extent that the Company whose Group
includes the issuing corporation shall have remitted such amount to such
Employing Party or to the applicable Tax Authority.  Distributing shall promptly
notify Splitco, and Splitco shall promptly notify Distributing, regarding the
settlement of any Compensatory Equity Interest (whether by issuance, exercise,
vesting or otherwise) to the extent that, as a result of such settlement, the
other party may be entitled to a Tax Benefit 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 the other party.

 

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(a) or Section 3.2(a), 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(b).

 

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
shall pay the amount of Taxes 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 shall 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.

 

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4.3                               Payments for Tax Refunds and Tax Benefits.

 

(a)                                 Tax Refund or Tax Benefit Received by
Distributing Group.  If a member of the Distributing Group receives a Tax Refund
with respect to Taxes for which Splitco is liable hereunder or uses a Tax
Benefit for which Splitco is entitled to reimbursement pursuant to clause
(iii) of Section 2.1(a), subject to the provisions of Section 4.3(d),
Distributing shall pay to Splitco, within five business days following the
receipt of the Tax Refund or the use of such Tax Benefit, an amount equal to
such Tax Refund or Tax Benefit.

 

(b)                                 Tax Refund or Tax Benefit Received by
Splitco Group.  If a member of the Splitco Group receives a Tax Refund with
respect to Taxes for which Distributing is liable hereunder or uses a Tax
Benefit for which Distributing is entitled to reimbursement pursuant to clause
(iii) of Section 2.1(b), Splitco shall pay to Distributing, within five business
days following the receipt of the Tax Refund or the use of such Tax Benefit, an
amount equal to such Tax Refund or Tax Benefit.

 

(c)                                  Rules Regarding Tax Benefits.  For purposes
of this Agreement, a Tax Benefit (other than a Tax Refund) shall be considered
used or received  (i) at the time the Tax Return is filed with respect to such
Tax Benefit, or (ii) if no Tax Return is filed, (x) at the time a Tax Refund
generated by use of such Tax Benefit is received or (y) if no Tax Refund is
received, at the time the Tax would have been due in the absence of such Tax
Benefit.  The amount of such Tax Benefit shall be the amount by which Taxes are
actually reduced by such Tax Benefit.

 

(d)                                 Special Payment Rules Applicable to Tax
Benefits Allocated to Splitco pursuant to Section 2.2(h)(ii).

 

(i)                                     Notwithstanding anything herein to the
contrary, in the event that any Splitco Indemnity Payment is required to be
made, Distributing will reasonably estimate the Tax Benefits for which it
expects Splitco will be entitled to reimbursement pursuant to clause (iii) of
Section 2.1(a) for the Indemnity Payment Tax Year as a result of the Tax Items
allocated to Splitco under Section 2.2(h)(ii) (the “Estimated 2046 Exchangeables
Tax Benefits Amount”).  Distributing will notify Splitco of the Estimated 2046
Exchangeables Tax Benefits Amount no later than two business days prior to the
date the applicable Splitco Indemnity Payment is required to be paid by Splitco
under the Indemnification Agreement.  Distributing and Splitco agree that, in
accordance with the provisions of the Indemnification Agreement, the amount of
the relevant Splitco Indemnity Payment will be reduced by the applicable
Estimated 2046 Exchangeables Tax Benefits Amount.  For all purposes of this
Agreement other than Section 4.6, such reduction shall be treated as if
Distributing had paid the Estimated 2046 Exchangeables Tax Benefits Amount to
Splitco at the time the applicable Splitco Indemnity Payment is made.

 

(ii)                                  When the Tax Benefits resulting from the
Tax Items allocated to Splitco under Section 2.2(h)(ii) related to a Splitco
Indemnity Payment are considered to be used in accordance with
Section 4.3(c) hereof for the relevant Indemnity

 

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Payment Tax Year, Distributing shall determine the amount of the Tax Benefits
for which Splitco is entitled to reimbursement pursuant to clause (iii) of
Section 2.1(a) for such Tax Year (the “Applicable 2046 Exchangeables Tax
Benefits Amount”).  Within five business days following the use of such Tax
Benefits for the Indemnity Payment Tax Year, (x) Distributing shall pay to
Splitco the amount by which the Applicable 2046 Exchangeables Tax Benefits
Amount exceeds the Estimated 2046 Exchangeables Tax Benefits Amount related to
such Splitco Indemnity Payment, and (y) Splitco shall pay to Distributing the
amount by which the Estimated 2046 Exchangeables Tax Benefits Amount exceeds the
Applicable 2046 Exchangeables Tax Benefits Amount related to such Splitco
Indemnity Payment.  Payments related to such Tax Benefits for the applicable
Indemnity Payment Tax Year may be further redetermined and adjusted in
accordance with the provisions of Section 4.5.

 

(iii)                               Tax Benefits resulting from the Tax Items
allocated to Splitco under Section 2.2(h)(ii) related to a Splitco Indemnity
Payment that are considered to be used in accordance with Section 4.3(c) in a
Tax Year other than the Indemnity Payment Tax Year shall be determined and paid
in a manner consistent with the provisions of this Agreement other than this
Section 4.3(d).

 

4.4                               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.

 

4.5                               Initial Determinations and Subsequent
Adjustments.  Subject to the provisions of Section 4.3(d), the initial
determination of the amount of any payment that one Company is required to make
to another under this Agreement shall be made on the basis of the Tax Return as
filed, or, if the Tax to which the payment relates is not reported in a Tax
Return, on the basis of the amount of Tax initially paid to the Tax Authority. 
The amounts paid under this Agreement shall be redetermined, and additional
payments relating to such redetermination shall be made, as appropriate, if as a
result of an audit by a Tax Authority or for any other reason (x) additional
Taxes to which such determination relates are subsequently paid, (y) a Tax
Refund or a Tax Benefit relating to such Taxes is received or used, or (z) the
amount or character of any Tax Item is adjusted or redetermined.  Each payment
required by the immediately preceding sentence (i) as a result of a payment of
additional Taxes will be due five business days after the date on which the
additional Taxes were paid or, if later, five business days after the date of a
request from the other Company for the payment, (ii) as a result of the receipt
or use of a Tax Refund or Tax Benefit will be due five business days after the
Tax Refund or Tax Benefit was received or used, or (iii) as a result of an
adjustment or redetermination of the amount or character of a Tax Item will be
due five business days after the date on which the final action resulting in
such adjustment or redetermination is taken by a Tax Authority or either Company
or any of their Subsidiaries.  If a payment is made as a result of an audit by a
Tax Authority which does not conclude the matter, further

 

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adjusting payments will be made, as appropriate, to reflect the outcome of
subsequent administrative or judicial proceedings.

 

4.6                               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 between the parties as a
capital contribution or a distribution, as the case may be, immediately prior to
the Distribution.  For the avoidance of doubt, for all Tax purposes and to the
extent permitted by applicable Tax Law, the Estimated 2046 Exchangeables Tax
Benefits Amount related to any Splitco Indemnity Payment shall be treated as a
reduction of the applicable Splitco Indemnity Payment under the Indemnification
Agreement.

 

SECTION 5.  Assistance and Cooperation.

 

5.1                               Cooperation.  In addition to the obligations
enumerated in Sections 3.3 and 7.7, Distributing and Splitco shall cooperate
(and shall 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 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 the portion of any Tax Records in
their possession that relate to a Pre-Distribution Period or 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
any audit, litigation or other proceeding by a Tax Authority relating to 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 Records 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

 

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Group or any of their Affiliates or with respect to any audit, litigation or
other proceeding by a Tax Authority relating to 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.  On or before the
Distribution Date, 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 Items 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.  Restrictions on Certain Actions of Distributing and Splitco;
Indemnity.

 

7.1                               Restrictive Covenants.

 

(a)                                 General Restrictions.  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, (i) 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,
(ii) 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, (iii) would cause
Distributing or any Subsidiary of Distributing to recognize gain or loss,

 

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or otherwise include any amount in income, as a result of the Reattribution for
U.S. federal income tax purposes, (iv) would be inconsistent with the LEXE
Transaction qualifying, or would preclude the LEXE Transaction from qualifying,
as a tax-free transaction described under Sections 368(a)(1)(D), 355 and 361 of
the Code (except with respect to cash received in lieu of fractional shares),
(v) would cause Distributing, any Subsidiary of Distributing immediately prior
to the LEXE Transaction, or the holders of Liberty Ventures Common Stock that
received stock of LEXE in the LEXE Transaction to recognize gain or loss, or
otherwise include any amount in income, as a result of the LEXE Transaction for
U.S. federal income tax purposes (except with respect to cash received in lieu
of fractional shares), (vi) would be inconsistent with the CHUB Distribution
qualifying, or would preclude the CHUB Distribution from qualifying, as a
tax-free transaction described under Section 355 of the Code (except with
respect to cash received in lieu of fractional shares), (vii) would cause
Distributing, any Subsidiary of Distributing immediately prior to the CHUB
Distribution, or the holders of Liberty Ventures Common Stock that received
stock of CHUB in the CHUB Distribution to recognize gain or loss, or otherwise
include any amount in income, as a result of the CHUB Distribution for U.S.
federal income tax purposes (except with respect to cash received in lieu of
fractional shares), (viii) would be inconsistent with the LTRIP Transaction
qualifying, or would preclude the LTRIP Transaction from qualifying, as a
tax-free transaction described under Sections 368(a)(1)(D), 355 and/or 361 of
the Code, or (ix) would cause Distributing, any Subsidiary of Distributing
immediately prior to the LTRIP Transaction, or the holders of Liberty Ventures
Common Stock that received stock of LTRIP in the LTRIP Transaction to recognize
gain or loss, or otherwise include any amount in income, as a result of the
LTRIP Transaction for U.S. federal income tax purposes.

 

(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, (i) 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, the LEXE Tax Materials, the CHUB Tax
Materials, or the LTRIP Tax Materials, or (ii) would be inconsistent with, or
would cause Distributing to be in breach of, any representation or covenant made
in the LEXE Tax Sharing Agreement, the CHUB Tax Sharing Agreement or the LTRIP
Tax Sharing Agreement.

 

(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 that is inconsistent with the Tax Opinion.

 

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, Tax Items, and Losses allocated to, and

 

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payments required to be made by, Distributing pursuant to Section 2,
(b) Transaction Taxes and Transaction Tax-Related Losses allocated to
Distributing pursuant to Section 2.2(b), (c) LEXE Transaction Taxes and LEXE
Tax-Related Losses allocated to Distributing pursuant to Section 2.2(c),
(d) CHUB Transaction Taxes and CHUB Tax-Related Losses allocated to Distributing
pursuant to Section 2.2(d), (e) LTRIP Transaction Taxes and LTRIP Tax-Related
Losses allocated to Distributing pursuant to Section 2.2(e); (f) Tracking Stock
Taxes and Losses allocated to Distributing pursuant to Section 2.2(f), (g) 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, and (h) Losses, including 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 (g) of this Section 7.2; provided,
however, that notwithstanding clauses (a), (g) and (h) 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, Transaction Tax-Related Losses, LEXE Transaction Taxes, LEXE Tax-Related
Losses, CHUB Transaction Taxes, CHUB Tax-Related Losses, LTRIP Transaction
Taxes, LTRIP Tax-Related Losses, or Tracking Stock Taxes and Losses that are
allocated to Splitco pursuant to Sections 2.2(b), (c), (d), (e) or (f), 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, Tax Items, and Losses allocated to, and payments required to be made
by, Splitco pursuant to Section 2, (b) Transaction Taxes and Transaction
Tax-Related Losses allocated to Splitco pursuant to Section 2.2(b), (c) LEXE
Transaction Taxes and LEXE Tax-Related Losses allocated to Splitco pursuant to
Section 2.2(c), (d) CHUB Transaction Taxes and CHUB Tax-Related Losses allocated
to Splitco pursuant to Section 2.2(d), (e) LTRIP Transaction Taxes and LTRIP
Tax-Related Losses allocated to Splitco pursuant to Section 2.2(e), (f) Tracking
Stock Taxes and Losses allocated to Splitco pursuant to Section 2.2(f),
(g) 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, and (h) Losses, including reasonable out-of-pocket legal,
accounting and other advisory and court fees, incurred in connection with the
items described in clauses (a) through (g) of this Section 7.3; provided,
however, that notwithstanding clauses (a), (g) and (h) 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,
Transaction Tax-Related Losses, LEXE Transaction Taxes, LEXE Tax-Related Losses,
CHUB Transaction Taxes, CHUB Tax-Related Losses, LTRIP Transaction Taxes, LTRIP
Tax-Related Losses, or Tracking Stock Taxes and Losses that are allocated to
Distributing pursuant to Sections 2.2(b), (c), (d), (e) or (f), 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.

 

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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.  Each Company shall
provide prompt notice to the other Company of any pending or threatened Tax
audit, assessment, proceeding or other Tax Contest or Joint Claim of which it
becomes aware relating to Taxes, Losses or any other liabilities or amounts for
which it is or may be indemnified by such other Company hereunder.  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 in respect of any such matters, and (ii) the amount of
such asserted Tax liability or other 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, the
indemnified Company shall deliver to the indemnifying Company such additional
information with respect to such Tax Contest or Joint Claim in its possession
that the indemnifying Company may reasonably request.

 

7.6                               Control of Tax Contests Generally.

 

(a)                                 General Rule.  Except as provided in
Sections 7.6(b) and 7.8, each Company 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 or the reduction in any Tax Benefit to which the
Non-Preparer may be entitled to 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) if the settlement or compromise could have a more than de minimis
impact on the Non-Preparer and the other members of its Group, taken as a whole.

 

7.7                               Cooperation.  The parties shall provide each
other with all information relating to a Tax Contest or Joint Claim which is
needed by the other party or parties to handle, participate in, defend, settle
or contest the Tax Contest or Joint Claim.  At the request of a party, the other
party shall take any reasonable action (e.g., executing a power of attorney)
that is necessary to enable the requesting party to exercise its rights

 

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under this Agreement in respect of a Tax Contest or Joint Claim.  Splitco shall
assist Distributing, and Distributing shall assist Splitco, in taking any
commercially reasonable 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.  Distributing and Splitco will
have the right to jointly control the defense, compromise or settlement of any
Joint Claim; provided, however, that with respect to any Joint Claim arising
under the LEXE Tax Sharing Agreement, the CHUB Tax Sharing Agreement or the
LTRIP Tax Sharing Agreement (or otherwise subject to the indemnification
provisions of the LEXE Tax Sharing Agreement, the CHUB Tax Sharing Agreement or
the LTRIP Tax Sharing Agreement), Splitco’s rights to jointly control, or
otherwise participate in the defense, compromise or settlement of, any such
Joint Claim will be subject to the terms of the LEXE Tax Sharing Agreement, the
CHUB Tax Sharing Agreement or the LTRIP Tax Sharing Agreement, as applicable. 
Distributing shall use reasonable efforts to provide Splitco with the right to
jointly control with Distributing and otherwise participate in the defense,
compromise or settlement of, any Joint Claim arising under the LEXE Tax Sharing
Agreement, the CHUB Tax Sharing Agreement or the LTRIP Tax Sharing Agreement (or
otherwise subject to the indemnification provisions of the LEXE Tax Sharing
Agreement, the CHUB Tax Sharing Agreement or the LTRIP Tax Sharing Agreement),
including taking action on behalf of Splitco (at the request of Splitco) to the
extent any other party to the LEXE Tax Sharing Agreement, the CHUB Tax Sharing
Agreement or the LTRIP Tax Sharing Agreement does not recognize Splitco’s
ability to act thereunder; provided, however, that Distributing shall not be
required to relinquish any rights that it has to control the defense, compromise
or settlement of any such Joint Claim (other than to Splitco pursuant to the
foregoing).  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 unless such settlement, compromise or consent (x) includes an
unconditional release of the indemnified Company and (y) does not enjoin or
restrict in any way the future actions or conduct of the indemnified Company
(other than with respect to its performance hereunder).

 

7.9                               Other Claims.  In the event any Distributing
Indemnitee should have a claim against Splitco, or any Splitco Indemnitee should
have a claim against Distributing, under this Section 7 that does not involve a
third party action, such indemnified Company (or Distributing on behalf of all
Distributing Indemnitees or Splitco on behalf of all Splitco Indemnitees, as
applicable) shall as promptly as practicable notify the indemnifying Company of
such claim, describing such claim and the factual basis thereof, the amount of
such claim (if known) and the method of computation of such amount, all with
reasonable particularity.

 

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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, their respective Subsidiaries, or any other Person in
this Agreement shall include any predecessors or successors (e.g., by merger or
other reorganization, liquidation, conversion, or election under Treasury
Regulations Section 301.7701-3) of Distributing, Splitco, such Subsidiary, or
such Person, respectively.

 

8.3                               Expenses.  Except as otherwise expressly
provided for herein, each Company and its Subsidiaries shall bear their own
expenses incurred in connection with the 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; Jurisdiction.  This Agreement
and the legal relations among the parties hereto will be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware applicable to contracts made and performed wholly therein,
without giving effect to any choice or conflict of laws provisions or rules that
would cause the application of the laws of any other jurisdiction. Each of the
parties hereto irrevocably agrees that any legal action or proceeding with
respect to this Agreement, and the rights and obligations arising hereunder, or
for recognition and enforcement of any judgment in respect of this Agreement,
and the rights and obligations arising hereunder brought by the other party
hereto or its successors or assigns, shall be brought and determined exclusively
in the Delaware Court of Chancery and any state appellate court therefrom within
the State of Delaware (or, if the Delaware Court of Chancery declines to accept
jurisdiction over a particular matter, any state or federal court within the
State of Delaware).  Each of the parties hereto hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect of its
property, generally and unconditionally, to the personal jurisdiction of the
aforesaid courts and agrees that it will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than the
aforesaid courts.  Each of the parties hereto hereby irrevocably waives, and
agrees not to assert as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement (a) any claim that it is not
personally subject to the jurisdiction of the above named courts for any reason
other than the failure to serve in accordance with Section 8.6 and this
Section 8.4, (b) any claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) to the fullest extent permitted by applicable law, any claim that
(i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or
(iii) this Agreement or the subject matter hereof may not be enforced in or by

 

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such courts.  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, requests, and other
communications hereunder shall be in writing and shall be delivered in person,
by facsimile (with confirming copy sent by one of the other delivery methods
specified herein), by electronic mail, 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, electronic
mail 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:  Chief Legal Officer

Email:  legalnotices@libertymedia.com

Facsimile: (720) 875-5401

 

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(b)                                 If to Splitco, to:

 

GCI Liberty, Inc.

12300 Liberty Boulevard

Englewood, Colorado  80112

 

Attn:  Chief Legal Officer

Email: legalnotices@libertymedia.com

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.  This Agreement may be delivered by electronic mail or 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 parties; provided,
however, that each of Distributing and Splitco may assign its respective rights,
interests, liabilities and obligations under this Agreement to any other member
of its 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 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

 

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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, 7.3, and 8.8 of this Agreement, this Agreement is solely for the
benefit of the parties and their respective 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.

 

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

 

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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.

 

8.18                        Assignment of Rights under the LEXE Tax Sharing
Agreement.  Distributing hereby assigns to Splitco all of its rights to
indemnification payments and related rights under the LEXE Tax Sharing Agreement
with respect to any liability for LEXE Transaction Taxes, LEXE Tax-Related
Losses, or any other Taxes or Losses that, in each case, is allocated to Splitco
hereunder and with respect to which Splitco has paid in whole.  If any Joint
Claim is made against any member of the Distributing Group or the Splitco Group
with respect to any LEXE Transaction Taxes or LEXE Tax-Related Losses, any other
claim is made against any member of the Distributing Group or the Splitco Group
with respect to any other Taxes or Losses for which any member of the
Distributing Group or the Splitco Group would be entitled to indemnification
under the LEXE Tax Sharing Agreement, or Splitco is entitled to any Tax Sharing
Receivable which has not been paid by LEXE, then at Splitco’s request,
Distributing shall assert a claim for indemnification against LEXE under the
LEXE Tax Sharing Agreement in respect of such LEXE Transaction Taxes, LEXE
Tax-Related Losses, other Taxes or Losses, or Tax Sharing Receivable, as
applicable, to the extent such a claim would not be frivolous.  Splitco and
Distributing shall jointly control the prosecution of any such claim related to
LEXE Transaction Taxes or LEXE Tax-Related Losses under the principles contained
in Section 7.8, and the principles of Section 7.6 shall govern any claim that is
not a Joint Claim.  Distributing shall not amend, modify or terminate the LEXE
Tax Sharing Agreement, or waive any rights thereunder, without the prior written
consent of Splitco, which consent shall not be unreasonably withheld.

 

8.19                        Assignment of Rights under the CHUB Tax Sharing
Agreement.  Distributing hereby assigns to Splitco all of its rights to
indemnification payments and related rights under the CHUB Tax Sharing Agreement
with respect to any liability for CHUB Transaction Taxes, CHUB Tax-Related
Losses, or any other Taxes or Losses that, in each case, is allocated to Splitco
hereunder and with respect to which Splitco has paid in whole.  If any Joint
Claim is made against any member of the Distributing Group or

 

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the Splitco Group with respect to any CHUB Transaction Taxes or CHUB Tax-Related
Losses, any other claim is made against any member of the Distributing Group or
the Splitco Group with respect to any other Taxes or Losses for which any member
of the Distributing Group or the Splitco Group would be entitled to
indemnification under the CHUB Tax Sharing Agreement, or Splitco is entitled to
any Tax Sharing Receivable which has not been paid by CHUB, then at Splitco’s
request, Distributing shall assert a claim for indemnification against CHUB
under the CHUB Tax Sharing Agreement in respect of such CHUB Transaction Taxes,
CHUB Tax-Related Losses, other Taxes or Losses, or Tax Sharing Receivable, as
applicable, to the extent such a claim would not be frivolous.  Splitco and
Distributing shall jointly control the prosecution of any such claim related to
CHUB Transaction Taxes or CHUB Tax-Related Losses under the principles contained
in Section 7.8, and the principles of Section 7.6 shall govern any claim that is
not a Joint Claim.  Distributing shall not amend, modify or terminate the CHUB
Tax Sharing Agreement, or waive any rights thereunder, without the prior written
consent of Splitco, which consent shall not be unreasonably withheld.

 

8.20                        Assignment of Rights under LTRIP Tax Sharing
Agreement.  Distributing hereby assigns to Splitco all of its rights to
indemnification payments and related rights under the LTRIP Tax Sharing
Agreement with respect to any liability for LTRIP Transaction Taxes, LTRIP
Tax-Related Losses, or any other Taxes or Losses that, in each case, is
allocated to Splitco hereunder and with respect to which Splitco has paid in
whole.  If any Joint Claim is made against any member of the Distributing Group
or the Splitco Group with respect to any LTRIP Transaction Taxes or LTRIP
Tax-Related Losses, any other claim is made against any member of the
Distributing Group or the Splitco Group with respect to any other Taxes or
Losses for which any member of the Distributing Group or the Splitco Group would
be entitled to indemnification under the LTRIP Tax Sharing Agreement, or Splitco
is entitled to any Tax Sharing Receivable which has not been paid by LTRIP, then
at Splitco’s request, Distributing shall assert a claim for indemnification
against LTRIP under the LTRIP Tax Sharing Agreement in respect of such LTRIP
Transaction Taxes, LTRIP Tax-Related Losses, other Taxes or Losses, or Tax
Sharing Receivable, as applicable, to the extent such a claim would not be
frivolous.  Splitco and Distributing shall jointly control the prosecution of
any such claim related to LTRIP Transaction Taxes or LTRIP Tax-Related Losses
under the principles contained in Section 7.8, and the principles of Section 7.6
shall govern any claim that is not a Joint Claim.  Distributing shall not amend,
modify or terminate the LTRIP Tax Sharing Agreement, or waive any rights
thereunder, without the prior written consent of Splitco, which consent shall
not be unreasonably withheld.

 

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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:

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

GCI LIBERTY, INC.

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

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