Exhibit 10.1

 

TAX MATTERS AGREEMENT

 

by and between

 

WESTROCK COMPANY

 

and

 

INGEVITY CORPORATION

 

Dated as of May 14, 2016

 

 

 

 

TABLE OF CONTENTS

 

    Page       Article I     DEFINITIONS       Section 1.01. General 2 Section
1.02. Additional Definitions 12       Article II     PREPARATION, FILING AND
PAYMENT OF TAXES SHOWN DUE
ON TAX RETURNS       Section 2.01. Combined Tax Returns 12 Section 2.02. Parent
Separate Tax Returns 12 Section 2.03. SpinCo Separate Tax Returns 12 Section
2.04. Restructuring Transfer Tax Returns 13       Article III     TAX RETURN
PROCEDURES       Section 3.01. Procedures Relating to Combined Tax Returns and
Parent Separate Tax Returns 13 Section 3.02. Procedures Relating to SpinCo
Separate Tax Returns 14 Section 3.03. Preparation of all Tax Returns 14 Section
3.04. Tax Returns Reflecting Restructuring/Distribution Taxes 14       Article
IV     TAX TIMING AND ALLOCATION       Section 4.01. Timing of Payments 14
Section 4.02. Expenses 14 Section 4.03. Apportionment of SpinCo Taxes 15      
Article V INDEMNIFICATION       Section 5.01. Indemnification by Parent 15
Section 5.02. Indemnification by SpinCo 15 Section 5.03. Characterization of and
Adjustments to Payments 15 Section 5.04. Timing of Indemnification Payments 16

 

 

 

 

Article VI REFUNDS, DEDUCTIONS       Section 6.01. Refunds 16 Section 6.02.
Treatment of Deductions Associated with Equity-Related Compensation 16      
Article VII TAX PROCEEDINGS       Section 7.01. Notification of Tax Proceedings
17 Section 7.02. Tax Proceedings 17       Article VIII TAX-FREE STATUS OF THE
TRANSACTIONS       Section 8.01. Representations and Warranties 18 Section 8.02.
Restrictions Relating to the Distribution 19 Section 8.03. Procedures Regarding
Post-Distribution Rulings and Unqualified Tax Opinions 21 Section 8.04. Section
336(e) Election 22       Article IX COOPERATION       Section 9.01. General
Cooperation 23 Section 9.02. Retention of Records 23       Article X
MISCELLANEOUS       Section 10.01. Dispute Resolution 24 Section 10.02. Tax
Sharing Agreements 24 Section 10.03. Interest on Late Payments 24 Section 10.04.
Survival of Covenants 24 Section 10.05. Severability 24 Section 10.06. Entire
Agreement 25 Section 10.07. No Third-Party Beneficiaries 25 Section 10.08.
Specific Performance 25 Section 10.09. Amendment 25 Section 10.10. Rules of
Construction 25 Section 10.11. Counterparts 26 Section 10.12. Coordination with
Separation and Distribution Agreement 26 Section 10.13. Coordination with the
Employee Matters Agreement 26 Section 10.14. Governing Law 26 Section 10.15.
Assignability 26 Section 10.16. Notices 26 Section 10.17. Effective Date 27

 

 ii  

 

 

DEFINED TERMS

 

  Page     Acquisition Transaction 2 Adjustment 2 Affiliate 2 Agreement 1, 2
Ancillary Agreement 3 Benefited Party 3, 16 Cash Transfer 3 Code 3 Combined Tax
Return 3 Contribution 3 Disqualifying Action 3 Distribution 1, 3 Distribution
Date 3 Due Date 3 Effective Time 3 Employee Matters Agreement 3 Equity
Securities 3 Fifty-Percent or Greater Interest 3 Final Determination 3 Income
Tax Return 4 Income Taxes 4 Indemnified Party 4 Indemnifying Party 4 Information
4, 23 Internal Contribution 4 Internal Controlled 4 Internal Controlled Entity 4
Internal Controlled Group 4 Internal Distributing 5 Internal Distributing
Acquisition Transaction 5 Internal Distributing Active Trade or Business 5
Internal Distributing Entity 5 Internal Distributing Group 6 Internal
Distribution 6 IRS 6 IRS Ruling 6 IRS Ruling Request 6 Law 6 Liability 6
Non-Income Tax Return 6 Notified Action 6, 21 Ordinary Course of Business 6
Parent 1, 6

 

 iii  

 

 

Parent Board 6 Parent Business 6 Parent Disqualifying Action 6 Parent Entity 7
Parent Group 7 Parent Mergers 7 Parent Separate Tax Return 7 Parent Tax
Proceeding 7, 17 Parent Taxes 7 Parties 1 Party 1, 8 Past Practice 8, 13 Payment
Date 8 Person 8 Plan of Reorganization 8 Post-Distribution Ruling 8, 21 Prime
Rate 8 Record Holders 8 Refund 8 Representatives 8 Restriction Period 8
Restructuring 1, 8 Restructuring Transfer Taxes 9 Restructuring/Distribution
Taxes 8 SAG 9 Section 336(e) Election 9, 22 Separate Return 9 Separation and
Distribution Agreement 1, 9 SpinCo 1, 9 SpinCo Active Trade or Business 9 SpinCo
Assets 9 SpinCo Business 9 SpinCo Disqualifying Action 9 SpinCo Entity 9 SpinCo
Group 10 SpinCo Liabilities 10 SpinCo Separate Tax Return 1 SpinCo Shares 10, 17
SpinCo Tax Proceeding 10 SpinCo Taxes 10 Subsidiary 10 Tax 10 Tax Attributes 11
Tax Counsel 11 Tax Item 11 Tax Materials 11

 

 iv  

 

 

Tax Matter 11, 23 Tax Opinions 11 Tax Package 11 Tax Proceeding 11 Tax Return 11
Tax-Free Status 11 Taxing Authority 12 Taxing Jurisdiction 12 Transactions 12
Transfer Taxes 12 Treasury Regulations 12 U.S. 12 Unqualified Tax Opinion 12
Waiver 12, 21

 

 v  

 

 

TAX MATTERS AGREEMENT

 

THIS TAX MATTERS AGREEMENT (this “Agreement”), dated as of May 14, 2016, is by
and between WestRock Company, a Delaware corporation (“Parent”), and Ingevity
Corporation, a Delaware corporation (“SpinCo”). Each of Parent and SpinCo is
sometimes referred to herein as a “Party” and, collectively, as the “Parties.”

 

RECITALS

 

WHEREAS, Parent, through its respective Subsidiaries, is engaged in the Parent
Business and the SpinCo Business;

 

WHEREAS, the Parent Board has determined that it is in the best interests of
Parent and its stockholders to create a new publicly traded company which shall
operate the SpinCo Business;

 

WHEREAS, Parent and SpinCo have entered into the Separation and Distribution
Agreement, dated as of May 14, 2016 (the “Separation and Distribution
Agreement”), providing for the separation of the SpinCo Business from the Parent
Business, pursuant to which (a) Parent will, and will cause its Subsidiaries to,
transfer the SpinCo Assets and the SpinCo Liabilities to SpinCo and its
Subsidiaries, as a result of which transfer SpinCo and its Subsidiaries will
own, directly and through their respective Subsidiaries, the SpinCo Business
(the “Restructuring”) and (b) Parent will distribute all of the outstanding
shares of common stock, par value $0.01 per share, of SpinCo (“SpinCo Shares”)
owned by Parent to the Record Holders of the issued and outstanding shares of
common stock, par value $0.01 per share, of Parent on a pro rata basis (the
“Distribution”);

 

WHEREAS, Parent and its Subsidiaries have engaged in the Internal Contribution
(as defined below) and Internal Distribution (as defined below) to facilitate
the Distribution;

 

WHEREAS, for U.S. federal Income Tax purposes, it is intended that (i) the
Contribution (as defined herein) and the Distribution, taken together, and (ii)
the Internal Contribution and the Internal Distribution, taken together, shall
in each case qualify as a tax-free transaction under Sections 355(a) and
368(a)(1)(D) of the Code; and

 

WHEREAS, the Parties wish to (a) provide for the payment of Tax liabilities and
entitlement to refunds thereof, (b) allocate responsibility for, and cooperation
in, the filing of Tax Returns, and provide for certain other matters relating to
Taxes, and (c) set forth certain covenants and indemnities relating to the
preservation of the tax-free status of certain steps of the Restructuring and
the Distribution.

 

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions,
covenants and provisions of this Agreement, each of the Parties mutually
covenants and agrees as follows:

 

 

 

 

Article I

DEFINITIONS

 

Section 1.01.         General. As used in this Agreement, the following terms
shall have the following meanings:

 

“Acquisition Transaction” means a transaction or series of transactions (or any
agreement, understanding or arrangement, within the meaning of Section 355(e) of
the Code and Treasury Regulations Section 1.355-7, or any other regulations
promulgated thereunder, to enter into a transaction or series of transactions),
whether such transaction is supported, permitted or solicited by management or
shareholders of SpinCo, is a hostile acquisition, or otherwise, as a result of
which SpinCo would merge or consolidate with or enter into any other
reorganization transaction with any other Person or as a result of which one or
more Persons would (directly or indirectly) acquire, or have the right to
acquire, from SpinCo and/or one or more holders of outstanding shares of Equity
Securities of SpinCo, as the case may be, a number of shares of Equity
Securities of SpinCo that would, when combined with any other direct or indirect
changes in ownership of the Equity Securities of SpinCo pertinent for purposes
of Section 355(e) of the Code (including the Parent Mergers), comprise a 50% or
greater interest in SpinCo (A) by value, as of the date of such transaction, or
in the case of a series of transactions, the date of the last transaction of
such series, or (B) by vote, as of the date of such transaction, or in the case
of a series of transactions, the date of the last transaction of such series.
Notwithstanding the foregoing, an Acquisition Transaction shall not include (A)
the adoption by SpinCo of a shareholder rights plan or (B) issuances of Equity
Securities by SpinCo that satisfy Safe Harbor VIII (relating to acquisitions in
connection with a person’s performance of services) or Safe Harbor IX (relating
to acquisitions by a retirement plan of an employer) of Treasury Regulations
Section 1.355-7(d). For purposes of determining whether a transaction
constitutes an indirect acquisition, any recapitalization resulting in a shift
of voting power shall be treated as an indirect acquisition of shares of Equity
Securities by the shareholders whose voting power is increased thereby and any
redemption of shares of Equity Securities shall be treated as an indirect
acquisition of shares of Equity Securities by the non-exchanging shareholders.
For purposes of this definition, each reference to SpinCo shall include a
reference to any entity treated as successor thereto. This definition and the
application thereof is intended to monitor compliance with Section 355(e) of the
Code and shall be interpreted accordingly. Any clarification of, or change in,
the statute or regulations promulgated under Section 355(e) of the Code or
published IRS guidance with respect thereto shall be incorporated in this
definition and its interpretation.

 

“Adjustment” means any change in the Tax liability of a taxpayer, whether in
connection with a Tax Proceeding, resulting from a change in facts or subsequent
transactions, pursuant to amendment or otherwise, determined issue-by-issue,
transaction-by-transaction, or with respect to a taxable period, as the case may
be.

 

“Affiliate” has the meaning set forth in the Separation and Distribution
Agreement.

 

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

 

 2  

 

 

“Ancillary Agreement” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Benefited Party” has the meaning set forth in Section 6.01(b).

 

“Cash Transfer” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Combined Tax Return” means a consolidated, combined, unitary, affiliated or
similar Income Tax Return or Non-Income Tax Return that actually includes, by
election or otherwise, one or more members of the Parent Group together with one
or more members of the SpinCo Group.

 

“Contribution” means the contribution and assignment by Parent and certain of
its Subsidiaries of certain SpinCo Assets and SpinCo Liabilities to SpinCo in
exchange for SpinCo Shares and the Cash Transfer, pursuant to the Plan of
Reorganization and the Separation and Distribution Agreement.

 

“Disqualifying Action” means a Parent Disqualifying Action or a SpinCo
Disqualifying Action.

 

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

 

“Distribution Date” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Due Date” means (i) with respect to a Tax Return, the date (taking into account
all valid extensions) on which such Tax Return is required to be filed under
applicable Law and (ii) with respect to a payment of Taxes, the date on which
such payment is required to be made to avoid the incurrence of interest,
penalties and/or additions to Tax.

 

“Effective Time” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Employee Matters Agreement” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Equity Securities” means, with respect to a Person, all classes or series of
capital stock of such Person (or any entity treated as a successor to such
Person) and all other instruments treated as stock in such Person (or any entity
treated as a successor to such Person) for U.S. federal Income Tax purposes, and
including all options, warrants or any other rights to acquire such stock.

 

“Fifty-Percent or Greater Interest” has the meaning ascribed to such term for
purposes of Sections 355(d) and (e) of the Code.

 

“Final Determination” means the final resolution of liability for any Tax or Tax
Item, which resolution may be for a specific issue or adjustment or for a
taxable period, by or as a result

 

 3  

 

 

of (i) IRS Form 870 or 870-AD (or any successor forms thereto), on the date of
acceptance by or on behalf of the taxpayer, or by a comparable form under the
Laws of any Taxing Jurisdiction, except that an IRS Form 870 or 870-AD or
comparable form shall not constitute a Final Determination to the extent that it
reserves (whether by its terms or by operation of law) the right of the taxpayer
to file a claim for Refund or the right of the Taxing Authority to assert a
further deficiency in respect of such issue or adjustment or for such taxable
period (as the case may be); (ii) a final decision, judgment, decree or other
order by any court of competent jurisdiction that can no longer be appealed;
(iii) a final settlement with the IRS, a closing agreement or accepted offer in
compromise under Sections 7121 or 7122 of the Code, or a comparable agreement
under the Laws of any Taxing Jurisdiction; (iv) any allowance of a Refund or
credit in respect of an overpayment of Tax, but only after the expiration of all
periods during which such Refund or credit may be recovered by the jurisdiction
imposing the Tax; or (v) any other final resolution, including by reason of the
expiration of the applicable statute of limitations, the execution of a
pre-filing agreement with the IRS or other Taxing Authority or by mutual
agreement of the Parties.

 

“Income Tax Return” means any Tax Return relating to Income Taxes.

 

“Income Taxes” means any Taxes measured by or calculated with respect to net
income, profits, net receipts or gross receipts (including any margin Tax,
capital Tax, excise Tax or franchise Tax), but excluding (i) any Transfer Taxes
and (ii) those Taxes listed on Schedule 1.

 

“Indemnified Party” means the Party which is entitled to seek indemnification
from another Party pursuant to the provisions of Article V.

 

“Indemnifying Party” means the Party from which another Party is entitled to
seek indemnification pursuant to the provisions of Article V.

 

“Information” has the meaning set forth in Section 9.01.

 

“Internal Contribution” means the deemed contribution of assets to Internal
Controlled upon its conversion to a state law corporation, pursuant to the Plan
of Reorganization and the Separation and Distribution Agreement.

 

“Internal Controlled” shall mean the successor of WestRock Virginia Corporation,
a Delaware corporation, after the completion of both (i) its conversion to a
limited liability company organized under the laws of the State of Delaware
disregarded as separate from Internal Distributing for U.S. federal income Tax
purposes, and (ii) its subsequent conversion to a state law corporation, in each
case pursuant to the Plan of Reorganization.

 

“Internal Controlled Entity” means any member of the Internal Controlled Group
other than Internal Controlled.

 

“Internal Controlled Group” means individually or collectively, as the case may
be, (a) Internal Controlled and any of its Subsidiaries (including, for the
avoidance of doubt, any such Subsidiary that is treated as a “disregarded
entity” for U.S. federal Income Tax purposes (or for purposes of any state,
local or foreign Tax law)) immediately after the Internal Distribution (giving
effect to the Restructuring completed up to such time and the Internal
Distribution), (b) any

 

 4  

 

 

Person that shall have merged or liquidated into Internal Controlled or any such
Subsidiary and (c) any predecessor or successor to any Person otherwise
described in this definition.

 

“Internal Distributing” shall mean Ingevity Virginia Corporation, a Virginia
corporation.

 

“Internal Distributing Acquisition Transaction” means a transaction or series of
transactions (or any agreement, understanding or arrangement, within the meaning
of Section 355(e) of the Code and Treasury Regulations Section 1.355-7, or any
other regulations promulgated thereunder, to enter into a transaction or series
of transactions), whether such transaction is supported, permitted or solicited
by management or shareholders of SpinCo and/or Internal Distributing, is a
hostile acquisition, or otherwise, as a result of which Internal Distributing
would merge or consolidate with or enter into any other reorganization
transaction with any other Person or as a result of which one or more Persons
would (directly or indirectly) acquire, or have the right to acquire, from
Internal Distributing and/or one or more holders of outstanding shares of Equity
Securities of Internal Distributing, as the case may be, a number of shares of
Equity Securities of Internal Distributing that would, when combined with any
other direct or indirect changes in ownership of the Equity Securities of
Internal Distributing pertinent for purposes of Section 355(e) of the Code
(including the Parent Mergers), comprise a 50% or greater interest in Internal
Distributing (A) by value, as of the date of such transaction, or in the case of
a series of transactions, the date of the last transaction of such series, or
(B) by vote, as of the date of such transaction, or in the case of a series of
transactions, the date of the last transaction of such series. Notwithstanding
the foregoing, an Internal Distributing Acquisition Transaction shall not
include (A) the adoption by Internal Distributing of a shareholder rights plan
or (B) issuances of Equity Securities by Internal Distributing that satisfy Safe
Harbor VIII (relating to acquisitions in connection with a person’s performance
of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of
an employer) of Treasury Regulations Section 1.355-7(d). For purposes of
determining whether a transaction constitutes an indirect acquisition, any
recapitalization resulting in a shift of voting power shall be treated as an
indirect acquisition of shares of Equity Securities by the shareholders whose
voting power is increased thereby and any redemption of shares of Equity
Securities shall be treated as an indirect acquisition of shares of Equity
Securities by the non-exchanging shareholders. For purposes of this definition,
each reference to Internal Distributing shall include a reference to any entity
treated as successor thereto. This definition and the application thereof is
intended to monitor compliance with Section 355(e) of the Code and shall be
interpreted accordingly. Any clarification of, or change in, the statute or
regulations promulgated under Section 355(e) of the Code or published IRS
guidance with respect thereto shall be incorporated in this definition and its
interpretation.

 

“Internal Distributing Active Trade or Business” means the active conduct (as
defined in Section 355(b)(2) of the Code and the regulations thereunder) by
Internal Distributing and its “separate affiliated group” (as defined in Section
355(b)(3)(B) of the Code) of the business of manufacturing and selling specialty
chemicals, immediately prior to the Internal Distribution.

 

“Internal Distributing Entity” means any member of the Internal Distributing
Group other than Internal Distributing.

 

“Internal Distributing Group” means individually or collectively, as the case
may be, (a) Internal Distributing and any of its Subsidiaries (including, for
the avoidance of doubt, any such

 

 5  

 

 

Subsidiary that is treated as a “disregarded entity” for U.S. federal Income Tax
purposes (or for purposes of any state, local or foreign Tax law)) immediately
after the Internal Distribution (giving effect to the Restructuring completed up
to such time and the Internal Distribution), (b) any Person that shall have
merged or liquidated into Internal Distributing or any such Subsidiary and (c)
any predecessor or successor to any Person otherwise described in this
definition.

 

“Internal Distribution” shall mean the distribution by Internal Distributing of
all the common stock of Internal Controlled to Parent (or a wholly owned
subsidiary of Parent disregarded for U.S. federal income Tax purposes) in a
transaction intended to qualify as a distribution that is generally tax free
pursuant to Sections 355(a) and 368(a)(1)(D) of the Code.

 

“IRS” means the U.S. Internal Revenue Service.

 

“IRS Ruling” means the U.S. federal income Tax ruling, and any supplements
thereto, issued to Parent by the IRS in connection with the Restructuring and
the Distribution.

 

“IRS Ruling Request” means any letter filed by Parent with the IRS requesting a
ruling regarding certain tax consequences of the Transactions and any amendment
or supplement to such ruling request letter.

 

“Law” has the meaning set forth in the Separation and Distribution Agreement.

 

“Liability” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Non-Income Tax Return” means any Tax Return relating to Taxes other than Income
Taxes.

 

“Non-Income Taxes” means (i) any Taxes other than Income Taxes and (ii) for the
avoidance of doubt, those Taxes listed on Schedule 1.

 

“Notified Action” has the meaning set forth in Section 8.03(a).

 

“Ordinary Course of Business” means an action taken by a Person only if such
action is taken in the ordinary course of the normal day-to-day operations of
such Person.

 

“Parent” has the meaning set forth in the preamble.

 

“Parent Board” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Parent Business” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Parent Disqualifying Action” means (i) any action (or the failure to take any
action) by Parent or any Parent Entity (including entering into any agreement,
understanding or arrangement or any negotiations or discussions with respect to
any transaction or series of transactions) that, (ii) any acquisition of all or
a portion, or any event (or series of events) involving, the Equity Securities
of Parent, any assets of Parent or any Equity Securities or assets of any Parent
Entity, Internal Controlled or any Internal Controlled Entity that, or (iii) any
inaccuracy in or breach

 

 6  

 

 

by Parent or any Parent Entity of any of the representations, warranties or
covenants of or made by Parent in this Agreement or in connection with the Tax
Opinions, the IRS Ruling, or any IRS Ruling Request (other than, in each case,
any representations and warranties made by Parent on behalf of, or with respect
to, SpinCo or any SpinCo Entity) that, in each case, causes any of the
Transactions to fail to have Tax-Free Status; provided, however, that the term
“Parent Disqualifying Action” shall not include any action expressly
contemplated by the Separation and Distribution Agreement or any Ancillary
Agreement or that is undertaken pursuant to the Restructuring, the Distribution
or the Plan of Reorganization.

 

“Parent Entity” means any member of the Parent Group other than Parent.

 

“Parent Group” means, individually or collectively, as the case may be, (a)
Parent and any of its Subsidiaries (including, for the avoidance of doubt, any
such Subsidiary that is treated as a “disregarded entity” for U.S. federal
Income Tax purposes (or for purposes of any state, local or foreign Tax law))
immediately after the Effective Time (and giving effect to the Restructuring and
the Distribution), (b) any Person that shall have merged or liquidated into
Parent or any such Subsidiary and (c) any predecessor or successor to any Person
otherwise described in this definition.

 

The “Parent Mergers” means the Mergers, as defined in the Second Amended and
Restated Business Combination Agreement, dated as of April 17, 2015, by and
among Parent (then named Rome-Milan Holdings, Inc.), MeadWestvaco Corporation, a
Delaware Corporation, Rock-Tenn Company, a Georgia Corporation, Milan Merger
Sub, LLC, a Delaware limited liability company and Rome Merger Sub, Inc., a
Georgia corporation, as restated and amended by the First Amendment to the
Second Amended and Restated Business Combination Agreement, by and among Parent
(then named Rome-Milan Holdings, Inc.), MeadWestvaco Corporation, Rock-Tenn
Company, Milan Merger Sub, LLC and Rome Merger Sub, Inc.

 

“Parent Separate Tax Return” means any Separate Return required to be filed by
any member of the Parent Group.

 

“Parent Tax Proceeding” has the meaning set forth in Section 7.02(a).

 

“Parent Taxes” means, without duplication, (i) any Taxes of or imposed on Parent
or any Parent Entity (including any Taxes reported on or otherwise imposed with
respect to a Combined Tax Return, but excluding any Restructuring/Distribution
Taxes), whether imposed as a result of an Adjustment, amendment or otherwise,
(ii) any Restructuring Transfer Taxes (A) due in connection with an
originally-filed Tax Return that Parent determines to be due or (B) attributable
to, or arising with respect to, assets or activities of the Parent Business (in
the case of clause (B), whether imposed as a result of an Adjustment, amendment
or otherwise), (iii) any Restructuring/Distribution Taxes, whether imposed as a
result of an Adjustment, amendment or otherwise, and (iv) any Taxes attributable
to a Parent Disqualifying Action, whether imposed as a result of an Adjustment,
amendment or otherwise; provided, that, notwithstanding anything in clauses (i)
through (iv) to the contrary, Parent Taxes shall not include any SpinCo Taxes
(including, for the avoidance of doubt, any Taxes attributable to a SpinCo
Disqualifying Action).

 

“Party” has the meaning set forth in the preamble.

 

 7  

 

 

“Past Practice” has the meaning set forth in Section 3.01(a).

 

“Payment Date” means (i) with respect to any Combined Tax Return, the earliest
of the due date for any required installment of estimated taxes determined under
Section 6655 of the Code or any similar provision of foreign Tax Law, the due
date (determined without regard to extensions) for filing the return determined
under Section 6072 of the Code or any similar provision of foreign Tax Law, and
the date the return is filed, and (ii) with respect to any other Tax Return, the
corresponding dates determined under the applicable Tax Law.

 

“Person” has the meaning set forth in the Separation and Distribution Agreement.

 

“Plan of Reorganization” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Post-Distribution Ruling” has the meaning set forth in Section 8.02(d).

 

“Post-Separation Period” means any taxable period (or portion thereof) beginning
on or after the Distribution Date, including for the avoidance of doubt, the
portion of any Straddle Period beginning on or after the Distribution Date.

 

“Prime Rate” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Record Holders” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Refund” means any refund (or credit in lieu thereof), drawback or other
recovery of Taxes (including any overpayment of Taxes that can be refunded or,
alternatively, applied to other Taxes payable), including any interest paid on
or with respect to such refund, credit, drawback or other recovery of Taxes;
provided, however, that for purposes of this Agreement, the amount of any Refund
required to be paid to another Party shall be reduced by the net amount of any
Income Taxes imposed on, related to, or attributable to, the receipt or accrual
of such Refund.

 

“Representatives” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Restriction Period” means the period beginning on the date hereof and ending on
the twenty five (25) month anniversary of the Distribution Date.

 

“Restructuring” has the meaning set forth in the recitals and includes, for the
avoidance of doubt, the Contribution and the Distribution.

 

“Restructuring/Distribution Taxes” means any Taxes imposed on, in connection
with, or by reason of the Restructuring or the Distribution (not including any
Transfer Taxes), other than any such Taxes caused by a Disqualifying Action.

 

“Restructuring Transfer Taxes” means any Transfer Taxes imposed on, in
connection with, or by reason of the Restructuring or the Distribution.

 

 8  

 

 

“SAG” has the meaning ascribed to the term “separate affiliated group” in
Section 355(b)(3)(B) of the Code.

 

“Section 336(e) Election” has the meaning set forth in Section 8.04.

 

“Separate Return” means (i) in the case of any Tax Return required to be filed
by any member of the Parent Group (including any consolidated, combined, unitary
or similar Tax Return), any such Tax Return that does not include any member of
the SpinCo Group and (ii) in the case of any Tax Return required to be filed by
any member of the SpinCo Group (including any consolidated, combined, unitary or
similar Tax Return), any such Tax Return that does not include any member of the
Parent Group.

 

“Separation and Distribution Agreement” has the meaning set forth in the
recitals.

 

“SpinCo” has the meaning set forth in the preamble.

 

“SpinCo Active Trade or Business” means the trade or business actively conducted
(within the meaning of Section 355(b) of the Code) by SpinCo (taking into
account Section 355(b)(3) of the Code and Revenue Ruling 2007-42, 2007-2 C.B.
44) immediately prior to the Distribution and relied upon to satisfy the
requirements of Section 355(b) of the Code with respect to the Distribution, as
set forth in the Tax Materials.

 

“SpinCo Assets” has the meaning set forth in the Separation and Distribution
Agreement.

 

“SpinCo Business” has the meaning set forth in the Separation and Distribution
Agreement.

 

“SpinCo Disqualifying Action” means (i) any action (or the failure to take any
action) by SpinCo or any SpinCo Entity (including entering into any agreement,
understanding or arrangement or any negotiations or discussions with respect to
any transaction or series of transactions) that, (ii) any acquisition of all or
a portion, or any event (or series of events) involving, the Equity Securities
of SpinCo, any assets of SpinCo or any Equity Securities or assets of any SpinCo
Entity, Internal Distributing or any Internal Distributing Entity that, or (iii)
any inaccuracy in or breach by SpinCo or any SpinCo Entity of any of the
representations, warranties or covenants of or made by SpinCo in this Agreement
or in connection with the Tax Opinions, the IRS Ruling or any IRS Ruling Request
(irrespective of whether Parent made the same representation or warranty on
behalf of, or with respect to, SpinCo or any SpinCo Entity), that, in each case,
causes any of the Transactions to fail to have Tax-Free Status (regardless of
whether a Post-Distribution Ruling, Unqualified Tax Opinion or Waiver may have
been obtained or provided with respect to such action, event, inaccuracy or
breach); provided, however, that the term “SpinCo Disqualifying Action” shall
not include any action expressly contemplated by the Separation and Distribution
Agreement or any Ancillary Agreement or that is undertaken pursuant to the
Restructuring, the Distribution or the Plan of Reorganization.

 

“SpinCo Entity” means any member of the SpinCo Group other than SpinCo.

 

“SpinCo Group” means individually or collectively, as the case may be, (a)
SpinCo and any of its Subsidiaries (including, for the avoidance of doubt, any
such Subsidiary that is treated

 

 9  

 

 

as a “disregarded entity” for U.S. federal Income Tax purposes (or for purposes
of any state, local or foreign Tax law)) immediately after the Effective Time
(and giving effect to the Restructuring and the Distribution), (b) any Person
that shall have merged or liquidated into SpinCo or any such Subsidiary and (c)
any predecessor or successor to any Person otherwise described in this
definition.

 

“SpinCo Liabilities” has the meaning set forth in the Separation and
Distribution Agreement.

 

“SpinCo Separate Tax Return” means any Separate Return required to be filed by
any member of the SpinCo Group.

 

“SpinCo Tax Proceeding” has the meaning set forth in Section 7.02(a).

 

“SpinCo Taxes” means, without duplication, (i) any Income Taxes of or imposed on
any member of the SpinCo Group (including any Taxes reported on or otherwise
imposed with respect to a Combined Tax Return), in each case, for any
Post-Separation Period, attributable to, or arising with respect to, assets or
activities of the SpinCo Business (excluding any Restructuring/Distribution
Taxes or any Restructuring Transfer Taxes), whether imposed as a result of an
Adjustment, amendment or otherwise, (ii) any Non-Income Taxes of or imposed on
any member of the Parent Group or any member of the SpinCo Group (including any
Taxes reported on or otherwise imposed with respect to a Combined Tax Return),
in each case, required to be paid in any Post-Separation Period, attributable
to, or arising with respect to, assets or activities of the SpinCo Business
(excluding any Restructuring/Distribution Taxes or any Restructuring Transfer
Taxes), whether imposed as a result of an Adjustment or amendment or otherwise,
(iii) any Restructuring Transfer Taxes resulting from an Adjustment or amendment
and attributable to, or arising with respect to, assets or activities of the
SpinCo Business, and (iv) any Taxes attributable to a SpinCo Disqualifying
Action, whether imposed as a result of an Adjustment, amendment or otherwise;
provided, that SpinCo Taxes shall not include any Taxes attributable to a Parent
Disqualifying Action.

 

“Straddle Period” means any taxable period beginning on or prior to the
Distribution Date and ending after the Distribution Date.

 

“Subsidiary” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Tax” means (i) all taxes, charges, fees, duties, levies, imposts, or other
similar assessments, imposed by any U.S. federal, state or local or foreign
governmental authority, including, but not limited to (A) income, gross
receipts, excise, property, sales, use, license, capital stock, transfer,
franchise, margin, payroll, withholding, social security, value added and other
taxes and (B) for the avoidance of doubt, those taxes listed on Schedule 1,
(ii) any interest, penalties or additions attributable thereto and (iii) all
liabilities in respect of any items described in clause (i) or (ii) payable by
reason of contract, transferee or successor liability, operation of Law or
Treasury Regulations Section 1.1502-6(a) (or any predecessor or successor
thereof or any analogous or similar provision under Law).

 

 10  

 

 

“Tax Attributes” means net operating losses, capital losses, credits, earnings
and profits, overall foreign losses, previously taxed income, separate
limitation losses and all other Tax attributes.

 

“Tax Counsel” shall mean tax counsel of recognized national standing that is
acceptable to Parent.

 

“Tax Item” means any item of income, gain, loss, deduction, credit, recapture of
credit or any other item that increases or decreases Taxes paid or payable.

 

“Tax Materials” means (i) the IRS Ruling, (ii) the Tax Opinions, (iii) each
submission to the IRS in connection with any IRS Ruling Request, (iv) the
representation letters from Parent and SpinCo addressed to Tax Counsel
supporting the Tax Opinions and (v) any other materials delivered or deliverable
by Parent or SpinCo in connection with the rendering by Tax Counsel of the Tax
Opinions or the issuance by the IRS of the IRS Ruling.

 

“Tax Matter” has the meaning set forth in Section 9.01.

 

“Tax Opinions” shall mean the opinions issued by Tax Counsel to Parent with
respect to certain Tax aspects of the Contribution and the Distribution, as
referenced in Section 3.3(a)(iv) of the Separation and Distribution Agreement.

 

“Tax Package” means all relevant Tax-related information relating to the
operations of the Parent Business or the SpinCo Business, as applicable, that is
reasonably necessary to prepare and file the applicable Tax Return.

 

“Tax Proceeding” means any audit, assessment of Taxes, pre-filing agreement,
other examination by any Taxing Authority, proceeding, appeal of a proceeding or
litigation relating to Taxes, whether administrative or judicial, including
proceedings relating to competent authority determinations.

 

“Tax Return” means any return, report, certificate, form or similar statement or
document (including any related or supporting information or schedule attached
thereto and any information return, or declaration of estimated Tax) supplied
to, filed with or required to be supplied to or filed with, a Taxing Authority
in connection with the payment, determination, assessment or collection of any
Tax or the administration of any Laws relating to any Tax and any amended Tax
return or claim for refund.

 

“Tax-Free Status” means, with respect to (a) the Contribution and the
Distribution, taken together, and (b) the Internal Contribution and the Internal
Distribution, taken together, the qualification in each case thereof (i) as a
reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code, (ii)
as a transaction in which the stock distributed thereby is “qualified property”
for purposes of Sections 355(c)(2) and 361(c) of the Code, and (iii) as a
transaction in which Parent, SpinCo, members of the Parent Group, members of the
SpinCo group and the shareholders of Parent recognize no income or gain for U.S.
federal Income Tax purposes pursuant to Sections 355, 361 and 1031 of the Code,
other than intercompany items or excess loss accounts taken into account
pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the
Code.

 

 11  

 

 

“Taxing Authority” means any governmental authority or any subdivision, agency,
commission or entity thereof or any quasi-governmental or private body having
jurisdiction over the assessment, determination, collection or imposition of any
Tax (including the IRS).

 

“Taxing Jurisdiction” means the United States and every other government or
governmental unit having jurisdiction to tax Parent, SpinCo or any of their
respective Affiliates.

 

“Transactions” means the transactions referred to in the definition of “Tax-Free
Status.”

 

“Transfer Taxes” means all sales, use, transfer, real property transfer (whether
such transfer is direct or indirect), intangible, recordation, registration,
documentary, stamp or similar Taxes.

 

“Treasury Regulations” means the final and temporary (but not proposed) income
Tax regulations promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).

 

“U.S.” means the United States of America.

 

“Unqualified Tax Opinion” means a “will” opinion, without substantive
qualifications, of a nationally recognized law firm, which law firm is
reasonably acceptable to Parent, to the effect that a transaction will not
affect the conclusions set forth in the Tax Opinions.

 

“Waiver” has the meaning set forth in Section 8.02(d).

 

Section 1.02.         Additional Definitions. Capitalized terms not defined in
this Agreement shall have the meaning ascribed to them in the Separation and
Distribution Agreement.

 

Article II

PREPARATION, FILING AND PAYMENT OF TAXES SHOWN DUE
ON TAX RETURNS

 

Section 2.01.         Combined Tax Returns. Parent shall prepare and file (or
cause to be prepared and filed) all Combined Tax Returns and shall pay (or cause
to be paid) all Taxes shown to be due and payable on such Tax Returns; provided,
that SpinCo shall reimburse Parent for any such Taxes that are SpinCo Taxes.

 

Section 2.02.         Parent Separate Tax Returns. Parent shall prepare and file
(or cause to be prepared and filed) all Parent Separate Tax Returns and shall
pay (or cause to be paid) all Taxes shown to be due and payable on such Tax
Returns; provided, that SpinCo shall reimburse Parent for any such Taxes that
are SpinCo Taxes.

 

Section 2.03.         SpinCo Separate Tax Returns. SpinCo shall prepare and file
(or cause to be prepared and filed) all SpinCo Separate Tax Returns (a) for
Income Taxes with respect to all taxable periods beginning after the
Distribution Date, and (b) for Non-Income Taxes with respect to all Straddle
Periods and all taxable periods beginning after the Distribution Date, and shall
pay (or cause to be paid) all Taxes shown to be due and payable on such Tax
Returns; provided, that Parent shall reimburse SpinCo for any such Taxes that
are Parent Taxes. Parent shall prepare and file (or cause to be prepared and
filed) all other SpinCo Separate Tax Returns and shall pay (or cause to be paid)
all Taxes shown to be due and payable on such Tax Returns; provided, that SpinCo
shall reimburse Parent for any such Taxes that are SpinCo Taxes.

 

 12  

 

 

Section 2.04.         Restructuring Transfer Tax Returns. Parent shall prepare
and file (or cause to be prepared and filed) all Tax Returns required to be
filed with respect to Restructuring Transfer Taxes and Parent shall pay (or
cause to be paid) all Taxes shown to be due and payable on such Tax Returns;
provided, that SpinCo shall reimburse Parent for any such Taxes that are SpinCo
Taxes.

 

Article III

TAX RETURN PROCEDURES

 

Section 3.01.         Procedures Relating to Combined Tax Returns and Parent
Separate Tax Returns.

 

(a)          In connection with the preparation of any Combined Tax Return
pursuant to Section 2.01, any Parent Separate Tax Return pursuant to Section
2.02 or any SpinCo Separate Tax Return required by this Agreement to be filed by
Parent that may include Tax Items relating to the activities or assets of the
SpinCo Business, SpinCo will (and will cause the SpinCo Entities to) assist and
cooperate with Parent by preparing and providing to Parent such information and
other documentation as may be requested by or necessary to enable Parent, in
such form as Parent may reasonably request, to prepare such Combined Tax Return,
Parent Separate Tax Return or SpinCo Separate Tax Return, including, but not
limited to, pro forma Tax Returns for SpinCo and any SpinCo Entity to be
included in such Combined Tax Return or equivalent financial data to be used in
the preparation of such Parent Separate Tax Return or SpinCo Separate Tax
Return, as applicable. Any such pro forma Tax Return or equivalent financial
data shall be prepared in accordance with past practices, accounting methods,
elections and conventions (“Past Practice”), unless otherwise required by Law or
reasonably requested in writing by Parent, and shall be delivered no later than
sixty (60) days following Parent’s request therefor. At its option, Parent may
engage an accounting firm of its choice to review the pro forma Tax Return or
equivalent financial data, supporting documentation, and statements submitted by
SpinCo and in connection therewith, shall determine whether such Tax Return was
prepared in accordance with Past Practice. All costs and expenses associated
with such review will be borne by Parent.

 

(b)          Parent (or its designee) shall determine the entities to be
included in any Combined Tax Return and make or revoke any Tax elections, adopt
or change any Tax accounting methods, and determine any other position taken on
or in respect of any Combined Tax Return, Parent Separate Tax Return or any
SpinCo Separate Tax Return required by this Agreement to be filed by Parent.
Notwithstanding the immediately preceding sentence, any such Combined Tax
Return, Parent Separate Tax Return or SpinCo Separate Tax Return shall, to the
extent relating to SpinCo, any SpinCo Entity or the activities or assets of the
SpinCo Business, be prepared in good faith. Parent shall deliver to SpinCo for
its review a draft of any Combined Tax Return, Parent Separate Tax Return or
SpinCo Separate Tax Return, in each case, if such Tax Return reflects or relates
to Taxes for which SpinCo would reasonably be expected to be liable hereunder,
at least fifteen (15) days prior to the Due Date for such Tax Return to enable
SpinCo to analyze and comment on such Tax Return (along with a statement setting
forth the calculation of the Tax shown due and payable on such Tax Return
reimbursable by SpinCo under Section 2.01 or Section 2.02). Parent shall in good
faith consider any such reasonable comments received from SpinCo and Parent and
SpinCo shall attempt in good faith to resolve any issues arising out of the
review of any such Tax Return; provided, however, that nothing herein shall
prevent Parent from timely filing (or causing to be filed) any such Tax Return.

 

 13  

 

 

Section 3.02.         Procedures Relating to SpinCo Separate Tax Returns. In the
case of any SpinCo Separate Tax Return required by this Agreement to be filed by
SpinCo that reflects or relates to Taxes for which Parent would reasonably be
expected to be liable hereunder, SpinCo shall (1) unless otherwise required by
Law or agreed to in writing by Parent, prepare (or cause to be prepared) such
Tax Return in a manner consistent with Past Practice to the extent such items
affect the Taxes for which Parent may be responsible pursuant to this Agreement,
and (2) submit to Parent a draft of any such Tax Return (along with a statement
setting forth the calculation of the Tax shown due and payable on such Tax
Return reimbursable by Parent under Section 2.03) at least fifteen (15) days
prior to the Due Date for such Tax Return to enable Parent to analyze and
comment on such Tax Return. SpinCo shall reflect any such reasonable comments
received from Parent in good faith, to the extent such comments relate to Taxes
for which Parent would reasonably be expected to be liable hereunder.

 

Section 3.03.         Preparation of all Tax Returns. Except as required by
applicable Law or as a result of a Final Determination, (i) neither Parent nor
SpinCo shall (nor shall cause or permit any members of the Parent Group or
SpinCo Group, respectively, to) take any position that is either inconsistent
with the Tax-Free Status (or analogous status under any state or local Law) or,
with respect to a specific Tax Item on any Tax Return, treat such Tax Item in a
manner that is inconsistent with the manner such Tax Item is reported on a Tax
Return prepared or filed by Parent pursuant to Article II hereof (including,
without limitation, the claiming of a deduction previously claimed on any such
Tax Return) and (ii) Parent and SpinCo shall (and shall cause the members of the
Parent Group and SpinCo Group, respectively, to) prepare all Tax Returns in a
manner consistent with the terms of this Agreement and the Separation and
Distribution Agreement.

 

Section 3.04.         Tax Returns Reflecting Restructuring/Distribution Taxes.
Notwithstanding anything to the contrary in Articles II, III and IV, the portion
of any Tax Return that relates to any Restructuring/Distribution Taxes or any
Taxes attributable to a Parent Disqualifying Action shall be prepared by Parent
in the manner determined by Parent in its sole discretion.

 

Article IV

TAX TIMING AND ALLOCATION

 

Section 4.01.         Timing of Payments. All Taxes required to be paid or
caused to be paid pursuant to Article II by either Parent or SpinCo, as the case
may be, to an applicable Taxing Authority or to be reimbursed by Parent or
SpinCo to the other Party (or any member of its Group) pursuant to this
Agreement, shall, in the case of a payment to a Taxing Authority, be paid on or
before the Due Date for the payment of such Taxes and, in the case of a payment
to the other Party, be paid at least two (2) business days before the Due Date
for the payment of such Taxes by the other Party.

 

Section 4.02.         Expenses. Except as otherwise expressly provided herein
(including in Section 3.01), each Party shall bear its own expenses incurred in
connection with this Agreement.

 

Section 4.03.         Apportionment of SpinCo Taxes. For all purposes of this
Agreement, Parent shall determine in its sole discretion exercised in good faith
which Tax Items are properly

 

 14  

 

 

attributable to assets or activities of the SpinCo Business (and in the case of
a Tax Item that is properly attributable to both the SpinCo Business and the
Parent Business, the allocation of such Tax Item between the SpinCo Business and
the Parent Business).

 

Article V
INDEMNIFICATION

 

Section 5.01.         Indemnification by Parent. Parent shall pay, and shall
indemnify and hold SpinCo and the SpinCo Entities harmless from and against,
without duplication, (i) all Parent Taxes, (ii) all Taxes incurred by SpinCo or
any SpinCo Entity as a result of any inaccuracy in or breach by Parent or any
Parent Entity of any of the representations, warranties or covenants of or made
by Parent in this Agreement, and (iii) any costs and expenses related to the
foregoing (including reasonable fees of attorneys and experts and out-of-pocket
expenses).

 

Section 5.02.         Indemnification by SpinCo. SpinCo shall pay, and shall
indemnify and hold Parent and the Parent Entities harmless from and against,
without duplication, (i) all SpinCo Taxes, (ii) all Taxes incurred by Parent or
any Parent Entity as a result of any inaccuracy in or breach by SpinCo or any
SpinCo Entity of any of the representations, warranties or covenants of or made
by SpinCo in this Agreement, and (iii) any costs and expenses related to the
foregoing (including reasonable fees of attorneys and experts and out-of-pocket
expenses).

 

Section 5.03.         Characterization of and Adjustments to Payments.

 

(a)          For all Tax purposes, the Parties agree to treat (and to cause
their respective Affiliates to treat) (i) any payment required by this Agreement
(other than payments with respect to interest accruing after the Distribution
Date) as either a contribution by Parent to SpinCo or a distribution by SpinCo
to Parent, as the case may be, occurring immediately prior to the Distribution
or as a payment of an assumed or retained Liability and (ii) any payment of
non-federal Taxes by or to a Taxing Authority or any payment of interest as
taxable or deductible, as the case may be, to the Party entitled under this
Agreement to retain such payment or required under this Agreement to make such
payment, in each case, except as otherwise required by applicable Law.

 

(b)          Any indemnification payment under this Article V and under Article
VI of the Separation and Distribution Agreement shall be increased to take into
account any inclusion in taxable income of the Indemnified Party arising from
the receipt of such indemnity payment and shall be decreased to take into
account any reduction in taxable income of the Indemnified Party arising from
such indemnified Liability. For purposes hereof, any adjustment to an
indemnification payment on account of Taxes shall be determined (i) using the
highest marginal rates in effect for Parent, in the case of an Indemnified Party
that is a member of the Parent Group, or for SpinCo, in the case of an
Indemnified Party that is a member of the SpinCo Group, at the time of the
determination and (ii) assuming that the Indemnified Party will be liable for
Taxes at such rate and has no Tax Attributes at the time of the determination.

 

Section 5.04.         Timing of Indemnification Payments. Indemnification
payments required pursuant to this Article V shall be paid by the Indemnifying
Party to the Indemnified Party within ten (10) business days of the receipt by
the Indemnifying Party of notification of the amount owed, together with
reasonable documentation showing (i) the basis for the calculation of such

 

 15  

 

 

amount and (ii) if the Indemnified Party has already paid such amount to the
relevant Taxing Authority or other recipient, evidence of such payment.

 

Article VI
REFUNDS, DEDUCTIONS

 

Section 6.01.         Refunds.

 

(a)          Parent shall be entitled to all Refunds of Taxes for which Parent
is responsible pursuant to Article II or for which Parent is or may be liable
pursuant to Article V, and SpinCo shall be entitled to all Refunds of Taxes for
which SpinCo is responsible pursuant to Article II or for which SpinCo is or may
be liable pursuant to Article V. A Party receiving a Refund to which the other
Party is entitled pursuant to this Agreement shall pay the amount to which such
other Party is entitled within ten (10) days after the receipt of the Refund.

 

(b)          In the event of an Adjustment relating to Taxes for which one Party
is responsible pursuant to Article II or is or may be liable pursuant to Article
V which would have given rise to a Refund but for an offset against the Taxes
for which the other Party is or may be liable pursuant to Article V (the
“Benefited Party”), then the Benefited Party shall pay to the other Party,
within ten (10) days of the Final Determination of such Adjustment an amount
equal to the lesser of (i) the amount of such hypothetical Refund or (ii) the
amount of such reduction in the Taxes of the Benefited Party, in each case plus
interest at the rate set forth in Section 6621(a)(1) of the Code on such amount
for the period from the filing date of the Tax Return that would have given rise
to such Refund to the payment date. For purposes of this Section 6.01(b), a
decrease in taxable income shall be considered to decrease Taxes of a Benefited
Party, and an increase in taxable income shall be considered to increase Taxes
for which a party is or may be liable.

 

(c)          Notwithstanding Section 6.01(a), to the extent that a Party applies
or causes to be applied an overpayment of Taxes as a credit toward or a
reduction in Taxes otherwise payable (or a Taxing Authority requires such
application in lieu of a Refund) and such overpayment of Taxes, if received as a
Refund, would have been payable by such Party to the other Party pursuant to
this Section 6.01, such Party shall pay such amount to the other Party no later
than the Due Date of the Tax Return for which such overpayment is applied to
reduce Taxes otherwise payable.

 

(d)          To the extent that the amount of any Refund under this Section 6.01
is later reduced by a Taxing Authority or a Tax Proceeding, such reduction shall
be allocated to the Party to which such Refund was allocated pursuant to this
Section 6.01 and an appropriate adjusting payment shall be made.

 

Section 6.02.         Treatment of Deductions Associated with Equity-Related
Compensation. The treatment of Tax deductions associated with equity-related
compensation shall be governed by Section 5.3 of the Employee Matters Agreement.

 

 16  

 

 

Article VII
TAX PROCEEDINGS

 

Section 7.01.         Notification of Tax Proceedings. Within thirty (30) days
after an Indemnified Party becomes aware of the commencement of a Tax Proceeding
that may give rise to Taxes for which an Indemnifying Party is responsible
pursuant to Article V, such Indemnified Party shall notify the Indemnifying
Party of such Tax Proceeding, and thereafter shall promptly forward or make
available to the Indemnifying Party copies of notices and communications
relating to such Tax Proceeding. The failure of the Indemnified Party to notify
the Indemnifying Party of the commencement of any such Tax Proceeding within
such thirty (30)-day period or promptly forward any further notices or
communications shall not relieve the Indemnifying Party of any obligation which
it may have to the Indemnified Party under this Agreement except to the extent
that the Indemnifying Party is actually prejudiced by such failure.

 

Section 7.02.         Tax Proceedings.

 

(a)          Generally. Except as provided in Section 7.02(c)(i), Parent (or
such member of the Parent Group as Parent shall designate) shall have the sole
right to control, and to represent the interests of the members of the Parent
Group and the members of the SpinCo Group and to employ counsel of its choice at
its expense in, any Tax Proceeding (including any Tax Proceeding with respect to
Restructuring/Distribution Taxes) relating to (i) any Combined Tax Return, (ii)
any Parent Separate Tax Return, (iii) any Restructuring/Distribution Taxes, (iv)
any SpinCo Separate Tax Return required by this Agreement to be filed by Parent
or (v) any Non-Income Taxes that are both SpinCo Taxes and Parent Taxes (each, a
“Parent Tax Proceeding”). Except as provided in Section 7.02(c)(ii), SpinCo (or
such member of the SpinCo Group as SpinCo shall designate) shall have the sole
right to control, and to represent the interests of the members of the SpinCo
Group and to employ counsel of its choice at its expense in, (i) any Tax
Proceeding relating to any SpinCo Separate Tax Return required by this Agreement
to be filed by SpinCo and (ii) any Non-Income Taxes or Restructuring Transfer
Taxes that are attributable to, or arise with respect to, assets or activities
of the SpinCo Business, in each case, other than a Parent Tax Proceeding (a
“SpinCo Tax Proceeding”).

 

(b)          Power of Attorney. SpinCo shall (and shall cause the members of the
SpinCo Group to) execute and deliver to Parent (or such member of the Parent
Group as Parent shall designate) any power of attorney or other document
reasonably requested by Parent (or such designee) in connection with any Parent
Tax Proceeding.

 

(c)          Participation Rights.

 

(i)          Parent Tax Proceedings. In the event of any Parent Tax Proceeding
the resolution of which could reasonably be expected to give rise to an
indemnification obligation of SpinCo pursuant to Article V, (A) Parent shall
consult with SpinCo reasonably in advance of taking any significant action in
connection with such Tax Proceeding, (B) Parent shall consult with SpinCo and
offer SpinCo a reasonable opportunity to comment before submitting any written
materials prepared or furnished in connection with such Tax Proceeding, (C)
Parent shall defend such Tax Proceeding diligently and in good faith as if it
were the only party in interest in connection with such Tax Proceeding, and (D)
Parent shall provide SpinCo copies of any written materials relating to such Tax
Proceeding received from the relevant Taxing Authority.

 

 17  

 

 

Notwithstanding anything in the preceding sentence to the contrary, the final
determination of the positions taken, including with respect to settlement or
other disposition, in any Parent Tax Proceeding shall be made in the sole
discretion of Parent and shall be final and not subject to the dispute
resolution provisions of Section 10.01 (or, for the avoidance of doubt, Article
VII of the Separation and Distribution Agreement).

 

(ii)         SpinCo Tax Proceedings. In the event of any SpinCo Tax Proceeding
the resolution of which could reasonably be expected to give rise to an
indemnification obligation of Parent pursuant to Article V or which otherwise
could reasonably be expected to have an adverse impact on Parent, (A) SpinCo
shall consult with Parent reasonably in advance of taking any significant action
in connection with such Tax Proceeding, (B) SpinCo shall consult with Parent and
offer Parent a reasonable opportunity to comment before submitting any written
materials prepared or furnished in connection with such Tax Proceeding, (C)
SpinCo shall defend such Tax Proceeding diligently and in good faith as if it
were the only party in interest in connection with such Tax Proceeding, (D)
SpinCo shall provide Parent copies of any written materials relating to such Tax
Proceeding received from the relevant Taxing Authority, (E) Parent shall be
entitled to participate in such Tax Proceeding at its own expense and (F) SpinCo
shall not settle, compromise or abandon any such Tax Proceeding without
obtaining the prior written consent of Parent, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

Article VIII
TAX-FREE STATUS OF THE TRANSACTIONS

 

Section 8.01.         Representations and Warranties.

 

(a)          SpinCo. SpinCo hereby represents and warrants that (i) it has
examined the Tax Materials, and (ii) the facts presented and the representations
made in the Tax Materials, to the extent descriptive of or in reference to the
SpinCo Group or the SpinCo Business (including with respect to the plans,
proposals, intentions and policies of the SpinCo Group), are true, correct and
complete in all respects.

 

(b)          Parent. Parent hereby represents and warrants that (i) it has
delivered complete and accurate copies of the Tax Materials to SpinCo and (ii)
the facts presented and the representations made in the Tax Materials, to the
extent descriptive of or in reference to the Parent Group or the Parent Business
(including with respect to the business purposes for the Distribution described
in the Tax Materials and the plans, proposals, intentions and policies of the
Parent Group), are true, correct and complete in all respects.

 

(c)          No Contrary Plan. Each of Parent and SpinCo represents and warrants
that neither it, nor any of its Affiliates, has any plan or intention to take
any action (or fail to take any action) or knows of any fact or circumstance
(after due inquiry) (A) which is inconsistent with any statements or
representations made in the Tax Materials, this Agreement or the Separation and
Distribution Agreement (or that could cause any such statements or
representations to be untrue) or (B) which may cause any of the Transactions not
to have Tax-Free Status.

 

 18  

 

 

Section 8.02.         Restrictions Relating to the Distribution.

 

(a)          General. SpinCo shall not, and shall not permit any SpinCo Entity
to, take any action that constitutes (and shall not fail to take an action, the
omission of which would result in) a Disqualifying Action described in the
definition of SpinCo Disqualifying Action.

 

(b)          SpinCo Obligations. SpinCo shall not take any action (including,
but not limited to, any cessation, transfer or disposition of all or any portion
of any SpinCo Business, payment of extraordinary dividends and acquisitions or
issuance of Equity Securities) or permit any member of the SpinCo Group to take
any such action, and SpinCo shall not fail to take any such action or permit any
SpinCo Entity to fail to take any such action, in each case, unless such action
or failure to act (x) could not reasonably be expected to cause any of the
Transactions to fail to have Tax-Free Status or (y) could not require Parent or
SpinCo to reflect a liability or reserve for Taxes or other amounts with respect
to the Transactions in its financial statements.

 

(c)          SpinCo Restrictions. Prior to the first (1st) day after the end of
the Restriction Period, SpinCo:

 

(i)          (x) shall continue and/or cause to be continued the active conduct
(within the meaning of Section 355(b) of the Code) of the SpinCo Active Trade or
Business and the Internal Distributing Active Trade or Business (by Internal
Distributing) as conducted immediately prior to the Distribution, taking into
account Section 355(b)(3) of the Code and Revenue Ruling 2007-42, 2007-2 C.B.
44, and (y) shall not engage (or permit Internal Distributing or any other
SpinCo Entity to engage) in any transaction (including, without limitation, any
cessation, transfer or disposition of all or any portion of any SpinCo Business)
that could reasonably be expected to result in either SpinCo ceasing to be a
company engaged in the SpinCo Active Trade or Business or Internal Distributing
ceasing to be a company engaged in the Internal Distributing Active Trade or
Business.

 

(ii)         shall not, and shall not permit any SpinCo Entity, Internal
Distributing or any Internal Distributing Entity (other than any SpinCo Entity
or Internal Distributing Entity treated as an entity disregarded as separate
from its owner for U.S. federal Income Tax purposes) to voluntarily dissolve or
liquidate (or take any other action or enter into any transaction that would
effect a liquidation for U.S. federal Income Tax purposes).

 

(iii)        shall not (1) enter into, solicit, agree to, participate in,
approve or effect any Acquisition Transaction or any Internal Distributing
Acquisition Transaction or, to the extent SpinCo has the right to prohibit any
Acquisition Transaction or any Internal Distributing Acquisition Transaction,
permit any Acquisition Transaction or any Internal Distributing Acquisition
Transaction to occur, (2) redeem or otherwise repurchase or agree to redeem or
otherwise repurchase (directly or through an Affiliate) any Equity Securities of
SpinCo or Internal Distributing, except to the extent such repurchases satisfy
Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the
amendment of such Revenue Procedure by Revenue Procedure 2003-48), (3) amend
SpinCo’s or Internal Distributing’s certificate of incorporation (or other
organizational documents), or take any other action, whether through a
stockholder vote or otherwise, affecting the relative voting rights of SpinCo’s
or Internal Distributing’s Equity Securities (including through the conversion
of any Equity Securities into another class of Equity Securities), (4) merge or
consolidate (or agree to merge or consolidate) with any other Person or permit
any SpinCo Entity, Internal Distributing or any Internal Distributing Entity to
merge or consolidate

 

 19  

 

 

(or agree to merger or consolidate) with any other Person (other than, (A) in
the case of a SpinCo Entity, either SpinCo or another SpinCo Entity, or (B) in
the case of an Internal Distributing Entity, Internal Distributing or another
Internal Distributing Entity) or (5) take any other action or actions (including
any action or transaction that would be reasonably likely to be inconsistent
with any statement or representation made in the Tax Materials) which,
individually or in the aggregate (and taking into account any other transactions
described in this Section 8.02(c)(iii)) would be reasonably likely to have the
effect of causing or permitting one or more Persons (whether or not acting in
concert) to acquire, directly or indirectly, Equity Securities representing a
Fifty-Percent or Greater Interest in SpinCo or Internal Distributing or
otherwise jeopardize the Tax-Free Status of any of the Transactions. In
addition, SpinCo shall not at any time, whether before or subsequent to the
expiration of the Restriction Period, engage in or permit any action described
in the immediately preceding sentence if it is pursuant to an agreement
negotiated (in whole or in part) prior to the first (1st) day after the end of
the Restriction Period, even if at the time of the Distribution or thereafter
such action is subject to various conditions.

 

(iv)        (1) shall not, and shall not permit any SpinCo Entity to, sell,
transfer, or otherwise dispose of or agree to, sell, transfer or otherwise
dispose (including in any transaction treated for U.S. federal Income Tax
purposes as a sale, transfer or disposition) of assets (including, any shares of
Equity Securities of a Subsidiary) that, in the aggregate, constitute more than
thirty percent (30%) of the gross assets of SpinCo or more than thirty percent
(30%) of the consolidated gross assets of SpinCo and the members of its SAG; and
(2) shall not permit Internal Distributing or any Internal Distributing Entity
to sell, transfer, or otherwise dispose of or agree to, sell, transfer or
otherwise dispose (including in any transaction treated for U.S. federal Income
Tax purposes as a sale, transfer or disposition) of assets (including, any
shares of Equity Securities of a Subsidiary) that, in the aggregate, constitute
more than thirty percent (30%) of the gross assets of Internal Distributing or
more than thirty percent (30%) of the consolidated gross assets of Internal
Distributing and the members of its SAG. The foregoing sentence shall not apply
to (A) sales, transfers, or dispositions of assets in the Ordinary Course of
Business, (B) any cash paid to acquire assets from an unrelated Person in an
arm’s-length transaction, (C) any assets transferred to a Person that is
disregarded as an entity separate from the transferor for U.S. federal Income
Tax purposes or (D) any mandatory or optional repayment (or pre-payment) of any
indebtedness of SpinCo or Internal Distributing, as applicable (or any member of
the applicable SAG). The percentages of gross assets of SpinCo or of the
consolidated gross assets of SpinCo and the members of its SAG, as the case may
be, sold, transferred, or otherwise disposed of, shall be based on the fair
market value of the gross assets of such entity or entities as of the
Distribution Date. The percentages of gross assets of Internal Distributing or
of the consolidated gross assets of Internal Distributing and the members of its
SAG, as the case may be, sold, transferred, or otherwise disposed of, shall be
based on the fair market value of the gross assets of such entity or entities as
of the date of the Internal Distribution. For purposes of this Section
8.02(c)(iv), a merger of SpinCo or Internal Distributing (or a member of the
applicable SAG) with and into any Person shall constitute a disposition of all
of the assets of such entity or such member.

 

(d)          Notwithstanding the restrictions imposed by Section 8.02(c), during
the Restriction Period, SpinCo may proceed with (or permit to proceed) any of
the actions or transactions described in Section 8.02(c), if (x) such action or
transaction is not described in Section 8.02(a) or Section 8.02(b) and (y) prior
to entering into any agreement contemplating such action

 

 20  

 

 

or transaction, and prior to taking or consummating any such action or
transaction, (i) SpinCo shall first have requested Parent to obtain a private
letter ruling from the IRS (and any other relevant Taxing Authority) (a
“Post-Distribution Ruling”) in accordance with Section 8.03(d) of this Agreement
to the effect that such action or transaction will not affect the Tax-Free
Status of any of the Transactions and Parent shall have received such
Post-Distribution Ruling in form and substance satisfactory to Parent in its
sole and absolute discretion, (ii) SpinCo shall have provided Parent with an
Unqualified Tax Opinion in form and substance satisfactory to Parent in its sole
and absolute discretion, or (iii) Parent shall have waived in writing (a
“Waiver”) the requirement to obtain such Post-Distribution Ruling or Unqualified
Tax Opinion. In determining whether a Post-Distribution Ruling or Unqualified
Tax Opinion is satisfactory, Parent shall exercise its discretion in good faith
and may consider, among other factors, the appropriateness of any underlying
assumptions or representations used as a basis for the Post-Distribution Ruling
or Unqualified Tax Opinion and the views on the substantive merits. For the
avoidance of doubt, SpinCo shall not be relieved of any indemnification
obligation pursuant to Article V or otherwise under this Agreement as a result
of having satisfied the requirements of clauses (i), (ii) or (iii) of this
Section 8.02(d).

 

(e)          Tax Reporting. Each of SpinCo and Parent covenants and agrees that
it will not take, and will cause its respective Affiliates not to take, any
position on any Tax Return that is inconsistent with the Tax-Free Status of the
Transactions.

 

Section 8.03.         Procedures Regarding Post-Distribution Rulings and
Unqualified Tax Opinions.

 

(a)          Notification. If SpinCo determines that it desires to take one of
the actions described in Section 8.02(c) (a “Notified Action”), SpinCo shall
promptly notify Parent of this fact in writing.

 

(b)          Post-Distribution Rulings or Unqualified Tax Opinions at SpinCo’s
Request. Upon the reasonable request of SpinCo pursuant to Section 8.03(a),
Parent shall cooperate with SpinCo and use its commercially reasonable efforts
to seek to obtain, as expeditiously as possible, a Post-Distribution Ruling or
an Unqualified Tax Opinion for the purpose of permitting SpinCo to take the
Notified Action unless Parent shall have waived the requirement to obtain such
Post-Distribution Ruling or Unqualified Tax Opinion in writing pursuant to
Section 8.02(d). Notwithstanding the foregoing, in no event shall Parent be
required to file or cooperate in the filing of any ruling request for a
Post-Distribution Ruling under this Section 8.03(b) unless SpinCo represents
that (i) it has read such ruling request, and (ii) all statements, information
and representations relating to any member of the SpinCo Group contained in such
ruling request are (subject to any qualifications therein) true, correct and
complete. SpinCo shall reimburse Parent for all reasonable costs and expenses
incurred by the Parent Group in obtaining a Post-Distribution Ruling or
Unqualified Tax Opinion requested by Parent within ten (10) days after receiving
an invoice from Parent therefor.

 

(c)          Post-Distribution Rulings or Unqualified Tax Opinions at Parent’s
Request. Parent shall have the right to obtain a Post-Distribution Ruling or a
tax opinion at any time in its sole and absolute discretion. If Parent
determines to obtain a Post-Distribution Ruling or a tax opinion, SpinCo shall
(and shall cause each SpinCo Entity to) cooperate with Parent and use

 

 21  

 

 

commercial reasonably efforts to take any and all actions reasonably requested
by Parent in connection with obtaining such Post-Distribution Ruling or tax
opinion (including, without limitation, by making any representation or covenant
or providing any information, documents and materials requested by the IRS, any
other relevant Taxing Authority or the Tax Counsel issuing such opinion);
provided, that SpinCo shall not be required to make (or cause a SpinCo Entity to
make) any representation or covenant that is inconsistent with historical facts
or as to future matters or events over which it has no control. Parent and
SpinCo shall each bear its own costs and expenses in obtaining a
Post-Distribution Ruling or tax opinion requested by Parent.

 

(d)          All Post-Distribution Rulings. Parent shall have sole and exclusive
control over the process of obtaining any Post-Distribution Ruling, and only
Parent shall be permitted to apply for a Post-Distribution Ruling. In connection
with obtaining a Post-Distribution Ruling, (i) Parent shall keep SpinCo informed
in a timely manner of all material actions taken or proposed to be taken by
Parent in connection therewith; (ii) Parent shall (1) reasonably in advance of
the submission of any request for a Post-Distribution Ruling provide SpinCo with
a draft copy thereof; (2) reasonably consider SpinCo’s comments on such draft
copy; and (3) provide SpinCo with a final copy; and (iii) Parent shall provide
SpinCo with notice reasonably in advance of, and SpinCo shall have the right to
attend, any formally scheduled meetings with the IRS (subject to the approval of
the IRS) that relate to such Post-Distribution Ruling. Neither SpinCo nor any
SpinCo Entity shall seek any guidance from the IRS or any other Taxing Authority
(whether written, verbal or otherwise) at any time concerning the Restructuring,
the Distribution, the Internal Contribution or the Internal Distribution
(including the impact of any transaction on the Restructuring, the Distribution,
the Internal Contribution or the Internal Distribution, as applicable) without
Parent’s prior written consent.

 

Section 8.04.         Section 336(e) Election. The Parties agree that (i) Parent
and SpinCo shall enter into a written, binding agreement and (ii) Parent and
Internal Distributing, as applicable, shall timely make a protective election
under Section 336(e) of the Code (and any similar provision of any relevant U.S.
state or local jurisdiction) and Treasury Regulation Section 1.336-2(j) (each
election, a “Section 336(e) Election”), with respect to the Distribution and the
Internal Distribution, in each case, in accordance with Treasury Regulation
Section 1.336-2(h). SpinCo shall (or shall cause the relevant SpinCo Entity or
Internal Distributing Entity to) join with Parent or the relevant Parent Entity
in the making of such election and shall take any action reasonably requested by
Parent or that is otherwise necessary to give effect to such election (including
making any other related election). To the extent, pursuant to a Final
Determination, the Distribution or the Internal Distribution constitutes a
“qualified stock disposition,” as defined in Treasury Regulation Section
1.336-1(b)(6), the Parties shall not and shall not permit any of their
respective Subsidiaries to, take any position for Tax purposes inconsistent with
the relevant Section 336(e) Election, except as may be required pursuant to a
Final Determination. For the avoidance of doubt, in the event that (x) Section
336(e) applies to the Distribution and (y) neither Section 355(c) nor Section
361(c) applies to the Internal Distribution, Parent shall be permitted to make
an election under Treasury Regulation Section 1.1502-13(f)(5)(ii) in accordance
with Treasury Regulation Section 1.1502-13(f)(5)(ii)(E) and specifying Treasury
Regulation Section 1.1502-13(f)(5)(ii)(C) as the basis for relief. In the event
the Transactions fail to have Tax-Free Status and Parent is not entitled to
indemnification for any Taxes or Losses arising from such failure, SpinCo shall
pay over to Parent any refund, credit, or other reduction in otherwise required
Tax payments realized by the SpinCo Group or any member of the SpinCo Group
arising from the

 

 22  

 

 

step-up in Tax basis resulting from a Section 336(e) Election. In the event the
Transactions fail to have Tax-Free Status and Parent is entitled to
indemnification for any Taxes or Losses arising from such failure, the
Restructuring/Distribution Taxes subject to such indemnification shall include
any additional Taxes payable by Parent and its affiliates as a result of the
relevant Section 336(e) Election.

 

Article IX
COOPERATION

 

Section 9.01.         General Cooperation.

 

(a)          The Parties shall each cooperate fully (and each shall cause its
respective Subsidiaries to cooperate fully) with all reasonable requests in
writing from the other Party hereto, or from an agent or Representative of such
Party, in connection with the preparation and filing of Tax Returns (including
the preparation of Tax Packages), claims for Refunds, Tax Proceedings, and
calculations of amounts required to be paid pursuant to this Agreement, in each
case, related or attributable to or arising in connection with Taxes of any of
the Parties or their respective Subsidiaries covered by this Agreement and the
establishment of any reserve required in connection with any financial reporting
(a “Tax Matter”). Such cooperation shall include the provision of any
information reasonably necessary or helpful in connection with a Tax Matter
(“Information”) and shall include, without limitation, at each Party’s own cost:

 

(i)          the provision of any Tax Returns of the Parties and their
respective Subsidiaries, books, records (including information regarding
ownership, Tax basis of property, and earnings and profits), documentation and
other information relating to such Tax Returns, including accompanying
schedules, related work papers, and documents relating to rulings or other
determinations by Taxing Authorities;

 

(ii)         the execution of any document (including any power of attorney) in
connection with any Tax Proceedings of any of the Parties or their respective
Subsidiaries, or the filing of a Tax Return or a Refund claim of the Parties or
any of their respective Subsidiaries;

 

(iii)        the use of the Party’s reasonable best efforts to obtain any
documentation in connection with a Tax Matter; and

 

(iv)        the use of the Party’s reasonable best efforts to obtain any Tax
Returns (including accompanying schedules, related work papers, and documents),
documents, books, records or other information in connection with the filing of
any Tax Returns of any of the Parties or their Subsidiaries.

 

(b)          Each Party shall make its employees, advisors, and facilities
available, without charge, on a reasonable and mutually convenient basis in
connection with the foregoing matters.

 

Section 9.02.         Retention of Records. Parent and SpinCo shall retain or
cause to be retained all Tax Returns, schedules and work papers, and all
material records or other documents relating thereto in their possession, until
sixty (60) days after the expiration of the applicable statute of limitations
(including any waivers or extensions thereof) of the taxable periods to which
such Tax Returns and other documents relate or until the expiration of any
additional

 

 23  

 

 

period that any Party reasonably requests, in writing, with respect to specific
material records or documents. A Party intending to destroy any material records
or documents shall provide the other Party with reasonable advance notice and
the opportunity to copy or take possession of such records and documents. The
Parties hereto will notify each other in writing of any waivers or extensions of
the applicable statute of limitations that may affect the period for which the
foregoing records or other documents must be retained.

 

Article X
MISCELLANEOUS

 

Section 10.01.          Dispute Resolution. In the event of any dispute between
the Parties as to any matter covered by this Agreement, the Parties shall
cooperate in good faith to resolve such dispute. If the Parties cannot resolve
such dispute within thirty (30) days from the time such dispute arises, Parent
shall, in its reasonable discretion, resolve such dispute, after considering in
good faith any comments provided by SpinCo.

 

Section 10.02.          Tax Sharing Agreements. All Tax sharing, indemnification
and similar agreements, written or unwritten, as between Parent or a Parent
Entity, on the one hand, and SpinCo or a SpinCo Entity, on the other hand (other
than this Agreement, the Separation and Distribution Agreement, any other
Ancillary Agreement and any agreement entered into after the Distribution),
shall be or shall have been terminated no later than the Effective Time and,
after the Effective Time, none of Parent, any Parent Entity, SpinCo or any
SpinCo Entity shall have any further rights or obligations under any such Tax
sharing, indemnification or similar agreement.

 

Section 10.03.          Interest on Late Payments. With respect to any payment
between the Parties pursuant to this Agreement not made by the due date set
forth in this Agreement for such payment, the outstanding amount will accrue
interest at a rate per annum equal to the rate in effect for underpayments under
Section 6621 of the Code from such due date to and including the earlier of the
ninetieth (90th) day or the payment date, and thereafter will accrue interest at
a rate per annum equal to Prime Rate plus 2%.

 

Section 10.04.          Survival of Covenants. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the Parties contained in this
Agreement shall survive the Effective Time and remain in full force and effect
in accordance with their applicable terms; provided, however, that the
representations and warranties and all indemnification for Taxes shall survive
until sixty (60) days following the expiration of the applicable statute of
limitations (taking into account all extensions thereof), if any, for assessment
of the Tax that gave rise to the indemnification; provided, further, that, in
the event that notice for indemnification has been given within the applicable
survival period, such indemnification shall survive until such time as such
claim is finally resolved.

 

Section 10.05.          Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or as
a matter of public policy, all other conditions and provisions of this Agreement
shall remain in full force and effect. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the

 

 24  

 

 

Parties to this Agreement shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the Parties as closely as possible in a
mutually acceptable manner.

 

Section 10.06.          Entire Agreement. Except as otherwise expressly provided
in this Agreement and subject to Section 10.12 hereof, this Agreement, the
Employee Matters Agreement, and the Separation and Distribution Agreement
constitute the entire agreement of the Parties hereto with respect to the
subject matter of this Agreement and supersede all prior agreements and
undertakings, both written and oral, between or on behalf of the Parties hereto
with respect to the subject matter of this Agreement.

 

Section 10.07.          No Third-Party Beneficiaries. Except as provided in
Article V with respect to indemnified Parties, this Agreement is for the sole
benefit of the Parties to this Agreement and their respective Subsidiaries and
their permitted successors and assigns and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

Section 10.08.          Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Agreement, the Party who is or is to be thereby aggrieved shall have the
right to specific performance and injunctive or other equitable relief of its
rights under this Agreement, in addition to any and all other rights and
remedies at law or in equity, and all such rights and remedies shall be
cumulative. The Parties agree that the remedies at law for any breach or
threatened breach, including monetary damages, may be inadequate compensation
for any loss, and that any defense in any action for specific performance that a
remedy at law would be adequate is waived. Any requirements for the securing or
posting of any bond with such remedy are waived by the Parties to this
Agreement.

 

Section 10.09.          Amendment. No provision of this Agreement may be amended
or modified except by a written instrument signed by the Parties to this
Agreement. No waiver by any Party of any provision of this Agreement shall be
effective unless explicitly set forth in writing and executed by the Party so
waiving. The waiver by any Party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other subsequent breach.

 

Section 10.10.          Rules of Construction. Interpretation of this Agreement
shall be governed by the following rules of construction: (i) words in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires; (ii)
references to the terms Article, Section, paragraph, clause, Exhibit and
Schedule are references to the Articles, Sections, paragraphs, clauses, exhibits
and schedules of this Agreement unless otherwise specified; (iii) the terms
“hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to
this entire Agreement, including the Schedules and Exhibits hereto; (iv)
references to “$” shall mean U.S. dollars; (v) the word “including” and words of
similar import when used in this Agreement shall mean “including without
limitation,” unless otherwise specified; (vi) the word “or” shall not be
exclusive; (vii) references to “written” or “in writing” include in electronic
form; (viii) provisions shall apply, when appropriate, to successive events and
transactions; (ix) 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; (x) Parent and SpinCo have each
participated in the negotiation and drafting of this

 

 25  

 

 

Agreement and if an ambiguity or question of interpretation should arise, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or burdening either Party by
virtue of the authorship of any of the provisions in this Agreement or any
interim drafts of this Agreement; and (xi) a reference to any Person includes
such Person’s successors and permitted assigns.

 

Section 10.11.          Counterparts. This Agreement may be executed in one or
more counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile or portable document format (PDF) shall be as effective
as delivery of a manually executed counterpart of any such Agreement.

 

Section 10.12.          Coordination with Separation and Distribution Agreement.
In the event of any inconsistency between this Agreement and the Separation and
Distribution Agreement, the Employee Matters Agreement, or any other Ancillary
Agreement with respect to matters addressed herein the provisions of this
Agreement shall control.

 

Section 10.13.          Coordination with the Employee Matters Agreement. To the
extent any covenants or agreements between the Parties with respect to employee
withholding Taxes are expressly set forth in the Employee Matters Agreement,
such Taxes shall be governed exclusively by the Employee Matters Agreement and
not by this Agreement.

 

Section 10.14.          Governing Law. This Agreement (and any claims or
disputes arising out of or related hereto or to the transactions contemplated
hereby or to the inducement of any Party to enter herein, whether for breach of
contract, tortious conduct or otherwise and whether predicated on common law,
statute or otherwise) shall be governed by and construed and interpreted in
accordance with the Laws of the State of Delaware, irrespective of the choice of
Laws principles of the State of Delaware, including all matters of validity,
construction, effect, enforceability, performance and remedies.

 

Section 10.15.          Assignability. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and
permitted assigns. Neither Party may assign its rights or delegate its
obligations under this Agreement without the express prior written consent of
the other Party hereto; provided, however, that each Party may assign all of its
rights and obligations under this Agreement to any of its Subsidiaries;
provided, further, that no such assignment shall release the assigning Party
from any of its liabilities or obligations under this Agreement.

 

Section 10.16.          Notices. Any notice, demand, claim or other
communication under this Agreement will be in writing and will be deemed to have
been given (a) on delivery if delivered personally; (b) on the date on which
delivery thereof is guaranteed by the carrier if delivered by a national courier
guaranteeing delivery within a fixed number of days of sending; or (c) on the
date of facsimile transmission thereof if delivery is confirmed, but, in each
case, only if addressed to the Parties in the following manner at the following
addresses or facsimile numbers (or at the other address or other number as a
Party may specify by notice to the others):

 

 26  

 

 

If to Parent, to:

 

WestRock Company
504 Thrasher Street
Norcross, GA 30071
Attention:    Chief Financial Officer

 

with a copy (until the Effective Time) to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Facsimile:    (212) 403-2000

 

If to SpinCo, to:

 

Ingevity Corporation
5255 Virginia Avenue

North Charleston, SC 29406
Attention:    General Counsel

 

with a copy (until the Effective Time) to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019

Facsimile:    (212) 403-2000

 

Section 10.17.          Effective Date. This Agreement shall become effective
only upon the occurrence of the Distribution.

 

[The remainder of this page is intentionally left blank.]

 

 27  

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written.

 

  WESTROCK COMPANY       By: /s/ Robert B. McIntosh   Name: Robert B. McIntosh  
Title: Executive Vice President, General Counsel       INGEVITY CORPORATION    
  By: /s/ Edward A. Rose   Name: Edward A. Rose   Title: President, Specialty
Chemicals

 

[Signature Page to Tax Matters Agreement]