Exhibit 10.4


 


[FORM OF
TAX MATTERS AGREEMENT]


 


TAX MATTERS AGREEMENT


 


by and among


 


APPLERA CORPORATION


 


AND ITS AFFILIATES,


 


and


 


CELERA CORPORATION


 


AND ITS AFFILIATES,


 


Dated


 


[DATE]


 

















 


TAX MATTERS AGREEMENT


 


THIS
TAX MATTERS AGREEMENT (this “Agreement”) dated as of [date], by and among
Applera Corporation, a Delaware corporation (“Applera”), each Applera
Affiliate, Celera Corporation, a Delaware corporation (“Celera”), and each
Celera Affiliate (the “Parties”) is entered into in connection with the Split-Off.  Capitalized terms used in this Agreement are
defined herein.


 


W  I  T
N  E  S  S  E  T  H:


 


WHEREAS,
as of the date hereof, Applera and its direct and indirect domestic
subsidiaries are members of an Affiliated Group, of which Applera is the common
parent;


 


WHEREAS,
Applera, acting through its direct and indirect subsidiaries, currently
conducts a number of businesses, including (i) the Applera Business, and (ii) the
Celera Business;


 


WHEREAS,
the Board of Directors of Applera has determined that it is appropriate,
desirable and in the best interests of Applera and its stockholders to separate
Applera into two separate, independent and publicly traded companies, (i) one
comprising the Celera Business, which shall be owned and conducted, directly or
indirectly, by Celera, and (ii) one comprising the Applera Business which
shall continue to be owned and conducted, directly or indirectly, by Applera;


 


WHEREAS,
in order to effect such separation, (i) Applera will contribute to the
capital of Celera the assets of the Celera Business, including the stock of
Berkeley Heart Laboratories (“BHL”), Axys Pharmaceuticals, Inc., PE AgGen, Inc.,
GenScope, Inc. and Paracel, Inc.; and have Celera assume liabilities
of the Celera Business (together, the “Contribution”) and (ii) all of the
stock of Celera will be exchanged on a one-for-one basis for all of the
outstanding Applera – CRA Tracking Stock (the “Exchange” and together with the “Contribution,”
the “Split-Off”).


 


WHEREAS,
Applera and Celera have determined that it is necessary and desirable, as part
of the Split-Off, to allocate, transfer, retain or assign to the Celera Group,
the Celera Group Assets and Celera Group Liabilities, and to allocate,
transfer, retain or assign to the Applera Group, the Applied Biosystems Group
Assets and Applied Biosystems Group Liabilities;


 


WHEREAS,
it is the intention of the Parties that the Split-Off qualify as a
reorganization within the meaning of sections 368(a)(1)(D) and 355 of the
Code and this Agreement is hereby adopted as a plan of reorganization within
the meaning of section 368 of the Code; and


 


WHEREAS,
in contemplation of the Split-Off, pursuant to which the Celera Group will
cease to be members of the Affiliated Group of which Applera is the parent, the
Parties have determined to enter into this Agreement, setting forth their
agreement with respect to certain tax matters.


 


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AGREEMENT


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the Parties hereby agree as follows:


 


Section 1.              Definitions.


 


“Affiliated Group” means an affiliated group of corporations within the meaning of
section 1504(a)(1) of the Code that files a consolidated return for United
States federal Income Tax purposes.


 


“After Tax Amount” means any additional amount necessary to reflect the hypothetical Tax
consequences of the receipt or accrual of any payment required to be made under
this Agreement (including  payment
of an additional amount or amounts hereunder and the effect of the deductions
available for interest paid or accrued and for Taxes such as state and local
Income Taxes), determined by using the highest applicable statutory corporate
Income Tax rate (or rates, in the case of an item that affects more than one
Tax) for the relevant taxable period (or portion thereof).


 


“Agreement” shall have the meaning set forth in the preamble hereto.


 


“Applera” shall have the meaning set forth in the
preamble hereto.


 


“Applera Affiliate” means any corporation or other entity directly or indirectly “controlled”
by Applera where “control” means the ownership of fifty percent (50%) of the
ownership interests of such corporation or other entity (by vote or value) or
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such corporation or other entity,
but at all times excluding Celera and all Celera Affiliates.


 


“Applera Business” means all of the businesses and operations conducted by Applera and
the Applera Affiliates, excluding the Celera Business at any time, whether
prior to, or after the Split-Off Date.


 


“Applera  Group”
means the Affiliated Group, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions, of which Applera
is the common parent corporation, and any corporation or other entity which may
be, may have been or may become a member of such group from time to time, but
excluding any member of the Celera Group.


 


“Applera-CRA Tracking Stock” means the Applera Corporation-Celera Group common stock.


 


“Applera Sharing Percentage” means as of the close of business on the first trading day after the
Split-Off Date, the percentage of Applera’s market capitalization as compared
to the combined market capitalization of Applera and Celera.


 


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“Applied Biosystems Group Assets” shall mean the assets of Applera after the
Split-Off Date, as determined under the Separation Agreement by and among the
Parties.


 


“Applied Biosystems Group Liabilities” shall mean the liabilities of Applera after
the Split-Off Date, as determined under the Separation Agreement by and among
the Parties.


 


“Audit” means any audit, assessment of Taxes, other examination by any Taxing
Authority, proceeding, or appeal of such a proceeding relating to Taxes,
whether administrative or judicial, including proceedings relating to competent
authority determinations.


 


“BHL”
shall have the meaning set forth in the preamble hereto.


 


“BHL Affiliates” means any corporation or other entity
directly or indirectly “controlled” by BHL at the time in question, where “control”
means the ownership of fifty percent (50%) of the ownership interests of such
corporation or other entity (by vote or value) or the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such corporation or other entity.


 


“Big Dye Agreement” means the supply agreement among Applera and Celera for Big Dye
Terminators.


 


“Carryback Period” shall have the meaning set forth in Section 3.05.


 


“Celera” shall have the meaning set forth in the preamble hereto.


 


“Celera Affiliate” means any corporation or other entity directly or indirectly “controlled”
by Celera at the time in question, where “control” means the ownership of fifty
percent (50%) of the ownership interests of such corporation or other entity
(by vote or value) or the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such corporation
or other entity.


 


“Celera Group Assets” shall mean the assets of Celera after the Split-Off Date, as
determined under the Separation Agreement by and among the Parties.


 


“Celera Business” means the business and operations conducted by Celera and the Celera
Affiliates as such business and operations will continue after the Split-Off
Date.


 


“Celera Business Records” shall have the meaning set forth in Section 9.02(b).


 


“Celera Group” means the Affiliated Group, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions, of which Celera
will be the common parent corporation immediately after the Split-Off and
including any corporation or other entity which may become a member of such
group from time to time.


 


“Celera Group Liabilities” shall mean the liabilities of Celera after the Split-Off Date, as
determined under the Separation Agreement by and among the Parties.


 


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“Celera Separate Tax Amount” shall mean with
respect to any Tax Return, the amount of Taxes attributable to a Post-Split-Off Period that Celera and each
Celera Affiliate would have incurred if they had filed a consolidated return,
combined return or a separate return, as the case may be, separate from the
members of the Applera Group, for the relevant Tax period, and such amount
shall be computed by Applera in a manner consistent with (i) general Tax
accounting principles, (ii) the Code and the Treasury regulations
promulgated thereunder, and (iii) past practice.


 


“Celera Sharing Percentage” means as of the close of business
on the first trading day after the Split-Off Date, the percentage of Celera’s
market capitalization as compared to the combined market capitalization of
Applera and Celera.


 


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


 


“Combined Return” means any Tax Return, other than with respect to United States federal
Income Taxes, filed on a consolidated, combined (including nexus combination,
worldwide combination, domestic combination, line of business combination or
any other form of combination) or unitary basis wherein Celera or one or more
Celera Affiliates join in the filing of such Tax Return (for any taxable period
or portion thereof) with Applera or one or more Applera Affiliates.


 


“Consolidated Return” means any Tax Return with respect to United
States federal Income Taxes filed on a consolidated basis wherein Celera or one
or more Celera Affiliates join in the filing of such Tax Return (for any
taxable period or portion thereof) with Applera or one or more Applera
Affiliates.


 


“Contribution”
shall have the meaning set forth in the recitals hereto.


 


“Contribution Taxes” shall mean any U.S. federal income tax imposed relating to the
Contribution, including as a result of the Parties entering into the IP Access
Agreements; provided, however, that Contribution Taxes shall not
include Taxes related to the Big Dye Agreement. 
For the avoidance of doubt, Contribution Taxes shall not include any
Exchange Taxes.


 


“Estimated Tax Installment Date” means, with respect to United States federal
Income Taxes, the estimated Tax installment due dates prescribed in section
6655(c) of the Code and, in the case of any other Tax, means any other
date on which an installment payment of an estimated amount of such Tax is
required to be made.


 


“Exchange” shall have the meaning set forth in the recitals hereto.


 


“Exchange Taxes” means any Taxes imposed on, or increase in Taxes incurred by, Applera
or any Applera Affiliate (without regard to whether such Taxes are offset or
reduced by any Tax Asset, Tax Item, or otherwise) resulting from, or arising in
connection with, the failure of the Exchange to qualify as a transaction in
which no income, gain or loss is recognized 


 


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pursuant
to sections 355 and 368(a)(1)(D) of the Code (including any Tax resulting
from the application of section 355(d) or section 355(e) of the Code
to the Exchange) or corresponding provisions of the laws of any other jurisdictions.  Any Income Tax referred to in the immediately
preceding sentence shall be determined using the highest applicable statutory
corporate Income Tax rate for the relevant taxable period (or portion thereof).


 


“Filing Party” shall have the meaning set forth in Section 8.01.


 


“Final Determination” means the final resolution of liability for
any Tax for any taxable period, by or as a result of (i) a final and
unappealable decision, judgment, decree or other order by any court of
competent jurisdiction; (ii) a final settlement with the IRS, a closing
agreement or accepted offer in compromise under section 7121 or section 7122 of
the Code, or a comparable agreement under the laws of other jurisdictions,
which resolves the entire Tax liability for any taxable period; (iii) 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 may be recovered
by the jurisdiction imposing the Tax; or (iv) any other final disposition,
including by reason of the expiration of the applicable statute of limitations.


 


“Income Tax” means any federal, state, local or foreign Tax determined (in whole or
in part) by reference to net income, net worth, gross receipts or capital, or
any such Taxes imposed in lieu of such a Tax. 
For the avoidance of doubt, the term “Income Tax” includes any franchise
Tax, net worth, gross receipts, capital or any such Taxes imposed in lieu of
such a Tax.


 


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


 


“ IP Access Agreements” means the agreements entered into by the Parties to license IP and
supply goods to the other Party for a period of time after the Split-Off.


 


“IRS”
means the United States Internal Revenue Service or any successor thereto, including
its agents, representatives, and attorneys.


 


“Joint Responsibility Item” means any Tax Item for which the non-Filing
Party’s responsibility under this Agreement could exceed one hundred thousand
dollars ($100,000), but not a Sole Responsibility Item.


 


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


 


“Officer’s Certificate” means a letter executed by an officer of
Applera or Celera and provided to Tax Counsel as a condition for the completion
of a Tax Opinion or Supplemental Tax Opinion.


 


“Owed Party” shall have the meaning set forth in Section 7.05.


 


“Owing Party” shall have the meaning set forth in Section 7.05.


 


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“Parties” shall have the meaning set forth in the preamble hereto.


 


“Payment Period” shall have the meaning set forth in Section 7.05(e).


 


“Post-Split-Off Period” means any taxable period (or portion
thereof) beginning after the Split-Off Date.


 


“Pre-Split-Off Period” means any taxable period (or portion
thereof) ending on or before the Split-Off Date.


 


“Proposed Merger” means the proposed merger of Applera with and into Invitrogen
Corporation or an entity wholly owned by Invitrogen Corporation.


 


“Ruling”  means
any private letter ruling issued by the IRS in connection with the Split-Off in
response to a request for such a private letter ruling filed by Applera (or any
Applera Affiliate).


 


“Ruling Documents” means (i) the request for a Ruling filed with the IRS, together
with any supplemental filings or other materials subsequently submitted on
behalf of Applera, the Applera Affiliates and Applera’s shareholders to the
IRS, the appendices and exhibits thereto, and any Ruling issued by the IRS to
Applera (or any Applera Affiliate) in connection with the Split-Off and (ii) any
similar filings submitted to, or rulings issued by, any other Taxing Authority
in connection with the Split-Off.


 


“Separation Agreement” means the separation agreement by and between Applera and Celera.


 


“Sole Responsibility Item” means any Tax Item for which the non-Filing
Party has the entire economic liability under this Agreement.


 


“Split-Off”
shall have the meaning set forth in the recitals hereto.


 


“Split-Off Date” means the close of business on the date which the Split-Off is effected.


 


“Straddle Period” shall mean any taxable period that begins on or before and ends after
the Split-Off Date.


 


“Supplemental Tax Opinion”  shall have the meaning set forth in Section 4.02(d).


 


“Tax Asset” means any Tax Item that has accrued for Tax purposes, but has not been
realized during the taxable period in which it has accrued, and that could
reduce a Tax in another taxable period, including a net operating loss, net
capital loss, research and development tax credit, investment tax credit, foreign
tax credit, charitable deduction or credit related to alternative minimum tax
or any other Tax credit.


 


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“Tax Benefit” means a reduction in the Tax liability (or increase in refund or
credit or any item of deduction or expense) of a taxpayer (or of the Affiliated
Group, or similar group of entities as defined under corresponding provisions
of the laws of any other jurisdiction, of which it is a member) for any taxable
period.  Except as otherwise provided in
this Agreement, a Tax Benefit shall be deemed to have been realized or received
from a Tax Item in a taxable period only if and to the extent that the Tax
liability of the taxpayer (or of the Affiliated Group, or similar group of
entities as defined under corresponding provisions of the laws of any other
jurisdiction, of which it is a member) for such period, after taking into
account the effect of the Tax Item on the Tax liability of such taxpayer (or of
the Affiliated Group, or similar group of entities as defined under
corresponding provisions of the laws of any other jurisdiction, of which it is
a member) in the current period and all prior periods, is less than it would
have been had such Tax liability been determined without regard to such Tax Item.


 


“Tax Counsel” means a nationally recognized law firm selected by Applera to provide
a Tax Opinion.


 


“Tax Detriment” means an increase in the Tax liability (or reduction in refund or
credit or any item of deduction or expense) of a taxpayer (or of the Affiliated
Group, or similar group of entities as defined under corresponding provisions
of the laws of any other jurisdiction, of which it is a member) for any taxable
period.  Except as otherwise provided in
this Agreement, a Tax Detriment shall be deemed to have been realized or
incurred from a Tax Item in a taxable period only if and to the extent that the
Tax liability of the taxpayer (or of the Affiliated Group, or similar group of
entities as defined under corresponding provisions of the laws of any other
jurisdiction, of which it is a member) for such period, after taking into
account the effect of the Tax Item on the Tax liability of such taxpayer (or of
the Affiliated Group, or similar group of entities as defined under
corresponding provisions of the laws of any other jurisdiction, of which it is
a member) in the current period and all prior periods, is more than it would
have been had such Tax liability been determined without regard to such Tax
Item.


 


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


 


“Tax Opinion” means an opinion issued by Tax Counsel as one of the conditions to
completing the Split-Off addressing certain United States federal Income Tax
consequences of the Split-Off under section 355 of the Code.


 


“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, amended tax return, claim for refund or
declaration of estimated Tax) required to be supplied to, or filed with, a
Taxing Authority in connection with the determination, assessment or collection
of any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.


 


“Taxes” means all federal, state, local or foreign taxes, charges, fees,
duties, levies, imposts, rates or other assessments, including income, gross
receipts, excise, property, sales, use, license, capital stock, transfer,
franchise, payroll, withholding, social security, value added or 


 


8

















 


other
taxes, (including any interest, penalties or additions attributable thereto)
and a “Tax” shall mean any one of such Taxes.


 


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


 


Section 2.              Preparation and Filing of
Tax Returns.


 


2.01.        Applera’s Responsibility.  Subject to the other
applicable provisions of this Agreement, Applera shall have sole and exclusive
responsibility for the preparation and filing of:


 


(a) 
all Consolidated Returns and all Combined Returns for any taxable period;


 


(b) 
all Income Tax Returns (other than Consolidated Returns and Combined Returns)
with respect to Applera and/or any Applera Affiliate for any taxable period;


 


(c) all
Non-Income Tax Returns with respect to Applera, any Applera Affiliate, or the
Applera Business or any part thereof for any taxable period; and


 


(d) all
Non-Income Tax Returns with respect to Celera, any Celera Affiliate, or the
Celera Business or any part thereof, that are required to be filed (taking into
account any extension of time which has been requested or received) on or prior
to the Split-Off Date.


 


2.02.        Celera’s Responsibility.  Celera shall have sole and exclusive
responsibility for the preparation and filing of:


 


(a) 
all Income Tax Returns (other than Consolidated Returns and Combined Returns)
with respect to Celera and/or any Celera Affiliate for any taxable period that
are required to be filed after the Split-Off Date; and


 


(b) 
all Non-Income Tax Returns with respect to Celera, any Celera Affiliate, or the
Celera Business or any part thereof, that are required to be filed (taking into
account any extension of time which has been requested or received) after the
Split-Off Date.


 


2.03.        Agent.  Subject to the other applicable provisions of
this Agreement, Celera hereby irrevocably designates, and agrees to cause each
Celera Affiliate to so designate, Applera as its sole and exclusive agent and
attorney-in-fact to take such action (including execution of documents) as
Applera, in its sole discretion, may deem appropriate in any and all matters
(including Audits) relating to any Tax Return described in Section 2.01,
subject, however, to the joint control provisions and control by a non-Filing
Party provisions in Section 8.


 


2.04.        Manner of Tax Return Preparation.


 


(a) 
Unless otherwise required by a Taxing Authority, the Parties hereby agree to
prepare and file all Tax Returns, and to take all other actions, in a manner
consistent with (1) this 


 


9

















 


Agreement,
(2) any Tax Opinion, (3) any Supplemental Tax Opinion, and (4) any
Ruling.  All Tax Returns shall be filed
on a timely basis (taking into account applicable extensions) by the Party responsible
for filing such returns under this Agreement.


 


(b) 
Subject to the other applicable provisions of this Agreement, Applera shall
have the exclusive right, in its sole discretion, with respect to any Tax
Return described in Section 2.01, to determine (1) the manner in
which such Tax Return shall be prepared and filed, including the elections,
method of accounting, positions, conventions and principles of taxation to be
used and the manner in which any Tax Item shall be reported, (2) whether
any extensions shall be requested, (3) the elections that will be made by
Applera, any Applera Affiliate, Celera, and/or any Celera Affiliate on such Tax
Return, (4) whether any amended Tax Returns shall be filed, (5) whether
any claims for refund shall be made, (6) whether any refunds shall be paid
by way of refund or credited against any liability for the related Tax, and (7) whether
to retain outside firms to prepare and/or review such Tax Returns.


 


Section 3.              Liability for Ordinary
Course Taxes.


 


3.01.        Applera’s Liability for Ordinary Course Taxes. 
Except as provided in Sections 4.01 and 4.03, Applera shall be liable
for the following Taxes, and shall be entitled to receive and retain all
refunds of:


 


(a) all
Taxes attributable to the Applera Group or the Applera Business, in each case
for any and all periods,


 


(b) except
for Taxes related to BHL and BHL Affiliates, all Taxes attributable to the
Celera Group, the Celera Group Assets or the Celera Business, in each case for
any and all Pre-Split-Off Periods,


 


(c) except
for Taxes related to BHL and BHL Affiliates, all Taxes for which the Celera
Group may be liable by virtue of any agreement or arrangement with respect to
Taxes (other than pursuant to this Agreement or any other agreements entered
into in connection with the Split-Off) entered into on or prior to the
Split-Off Date.


 


3.02.        Celera’s Liability for Ordinary Course Taxes.  
Except as provided in Sections 4.01 and 4.03, Celera and each Celera
Affiliate shall be jointly and severally liable for (i) all Taxes
attributable to any and all members of the Celera Group or the Celera Group
Assets or the Celera Business, in each case for any and all Post-Split-Off
Periods and (ii) all Taxes related to BHL and the BHL Affiliates for any
and all periods.


 


3.03.        Straddle Periods.  For purposes of Sections 3.01 and 3.02, in
the case of any Straddle Period, (i) property taxes and exemptions,
allowances or deductions that are calculated on an annualized basis shall be
apportioned between the Pre-Split-Off Period and the Post-Split-Off Period on a
daily pro-rata basis and (ii) all other Taxes shall be apportioned between
the Pre-Split-Off Period and the Post-Split-Off Period on a closing of the
books basis as of the close of business on the Split-Off Date.


 


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3.04.  Refunds.  The amount or economic benefit of any
refunds, credits or offsets of Taxes relating to (i) Celera, the Celera
Group Assets or the Celera Business for a Pre-Split-Off Period shall be for the
account of Applera, (ii) Celera, the Celera Group Assets or the Celera
Business for a Post-Split-Off Period shall be for the account of Celera, and (iii) the
Applera Group, the Applied Biosystems Group Assets or the Applera Business
shall for the account of Applera.


 


3.05.  Carryback.  Notwithstanding Section 3.04, to the
extent permitted by law, the Celera Group shall elect to forego a carryback of
any net operating losses, capital losses, credits or other Tax benefits to a
taxable period, or portion thereof, ending on or before the Split-Off Date
unless Applera otherwise elects, in its sole discretion, to allow such
carryback.  To the extent that Celera is
required under law to carry back Tax Assets described in this section, Applera
agrees to pay to Celera the United States federal Income Tax Benefit from the
use in any Pre-Split-Off Period (the “Carryback Period”) of a carryback of any
such Tax Asset of the Celera Group from a Post-Split-Off Period (other than a
carryback of any Tax Asset attributable to Exchange Taxes for which the
liability is borne by Applera or any Applera Affiliate).  If subsequent to the payment by Applera to
Celera of the United States federal Income Tax Benefit of a carryback of a Tax
Asset of the Celera Group, there shall be a Final Determination which results
in a (1) change to the amount of the Tax Asset so carried back or (2) change
to the amount of such United States federal Income Tax Benefit, Celera shall
repay to Applera, or Applera shall repay to Celera, as the case may be, any
amount which would not have been payable to such other Party pursuant to this Section 3.05
had the amount of the benefit been determined in light of these events.  Nothing in this Section 3.05 shall
require Applera to file an amended Tax Return or claim for refund of United
States federal Income Taxes; provided, however, that Applera
shall use its commercially reasonable efforts to use any carryback of a Tax
Asset of the Celera Group that is carried back under this Section 3.05.


 


3.06.  Celera Tax Assets on Applera
Post-Split-Off Period Returns.  With
respect to any Post-Split-Off Period, to the extent that any Tax Assets
relating to the Celera Business attributable to Pre-Split-Off Periods remain
with the Applera Group after the Split-Off: (i) to the extent that the
Celera Group generates sufficient income or recognizes sufficient gains in a
given Tax period that the Celera Group would have been able to utilize such Tax
Assets (that were not already utilized by Applera pursuant to clause (ii)) on a
pro-forma basis, Applera shall compensate Celera for such utilizable amount on
a pro-forma basis, and (ii) to the extent that (A) Celera Group does
not generate sufficient income or recognize sufficient gains in such Tax period
and (B) Applera utilizes such Tax Assets on its Tax Returns for such Tax
Period, then Applera shall not be required to compensate Celera for Applera’s
utilization of such Tax Assets.  For the
avoidance of doubt, this section is intended to provide that Celera is
compensated for a Celera-related Tax Asset that remains with the Applera Group
after the Split-Off Date only if and to the extent that Celera would have been
able to utilize such Tax Asset on or before the time that the Applera Group
actually utilizes such Tax Asset.  For
the avoidance of doubt, this section shall apply to any gain related to
Exchange Taxes in the same manner as it applies to any other income or gains.


 


3.07.  Payment of Tax Liability.  If one Party is liable or responsible for
Taxes, under Sections 3.01 through 3.06, with respect to Tax Returns for which
another party is responsible 


 


11

















 


for
preparing and/or filing, or with respect to Taxes that are paid by another
Party, then the liable or responsible Party shall pay the Taxes (or a
reimbursement of such Taxes) to the other Party pursuant to Section 7.05.


 


                3.08.  Computation.  With respect to any Tax Return filed by
Applera for which Celera is liable for Taxes under this Section 3, Applera
shall provide Celera with a written calculation in reasonable detail (including
copies of work sheets and other materials used in preparation thereof) setting
forth the amount of any Celera Separate Tax Amount or estimated Celera Separate
Tax Amount (for purposes of Section 7.01). 
Celera shall have the right to review and comment on such
calculation.  Any dispute with respect to
such calculation shall be resolved pursuant to Section 9.03; provided,
however, that, notwithstanding any dispute with respect to any such
calculation, in no event shall any payment attributable to the amount of any
Celera Separate Tax Amount or estimated Celera Separate Tax Amount be paid
later than the date provided in Section 7.


 


Section 4.              Exchange
Taxes, Contribution Taxes and Deconsolidation.


 


4.01.  Exchange Taxes.


 


(a) 
Applera’s Liability for Exchange Taxes. 
Notwithstanding Sections 3.01 through 3.03, Applera and each Applera
Affiliate shall be jointly and severally liable for any Exchange Taxes
attributable to, caused by, or resulting from, one or more of the following:


 


(i)  any action or omission by Applera (or any
Applera Affiliate) inconsistent with any material, information, covenant or
representation related to Applera, any Applera Affiliate, or the Applera
Business in an Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling
Documents or Ruling (for the avoidance of doubt, disclosure of any action or
fact that is inconsistent with any material, information, covenant or
representation submitted to Tax Counsel, the IRS, or other Taxing Authority, as
applicable, in connection with an Officer’s Certificate, Tax Opinion,
Supplemental Tax Opinion, Ruling Documents or Ruling shall not relieve Applera
(or any Applera Affiliate) of liability under this Agreement);


 


(ii) 
any action or omission by Applera (or any Applera Affiliate), after the
Split-Off (including any act or omission that is in furtherance of, connected
to, or part of a plan or series of related transactions (within the meaning of
section 355(e) of the Code) occurring on or prior to the Split-Off), including
a cessation, transfer to affiliates, or disposition of its active trades or
businesses, stock buyback or payment of an extraordinary dividend;


 


(iii) 
any acquisition of any stock or assets of Applera (or any Applera Affiliate) by
one or more other persons (other than Celera or a Celera Affiliate) prior to or
following the Split-Off; or


 


(iv) any
issuance of stock by Applera (or any Applera Affiliate), including any issuance
pursuant to the exercise of employee stock options or other employment related
arrangements or the exercise of warrants, or change in ownership of stock in
Celera (or any Celera Affiliate).


 


12

















 


(b) 
Celera’s Liability for Exchange Taxes. 
Notwithstanding Sections 3.01 through 3.03, Celera and each Celera
Affiliate shall be jointly and severally liable for any Exchange Taxes
attributable to, caused by, or result from, one or more of the following:


 


(i)  any action or omission by Celera (or any
Celera Affiliate) after the Split-Off at any time, that is inconsistent with
any material, information, covenant or representation related to Celera, any
Celera Affiliate, or the Celera Business in an Officer’s Certificate, Tax
Opinion, Supplemental Tax Opinion, Ruling Documents or Ruling (for the
avoidance of doubt, disclosure by Celera (or any Celera Affiliate) to Applera
(or any Applera Affiliate) of any action or fact that is inconsistent with any
material, information, covenant or representation submitted to Tax Counsel, the
IRS, or other Taxing Authority, as applicable, in connection with an Officer’s
Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents or Ruling
shall not relieve Celera (or any Celera Affiliate) of liability under this
Agreement);


 


(ii) 
any action or omission by Celera (or any Celera Affiliate), after the Split-Off
Date (including any act or omission that is in furtherance of, connected to, or
part of a plan or series of related transactions (within the meaning of section
355(e) of the Code) occurring on or prior to the Split-Off Date) including
a cessation, transfer to affiliates or disposition of the active trades or
businesses, stock buyback or payment of an extraordinary dividend;


 


(iii) 
any acquisition of any stock or assets of Celera (or any Celera Affiliate) by
one or more other persons (other than Applera or any Applera Affiliate)
following the Split-Off; or


 


(iv) 
any issuance of stock by Celera (or any Celera Affiliate) after the Split-Off,
including any issuance pursuant to the exercise of employee stock options or other
employment related arrangements or the exercise of warrants, or change in
ownership of stock in Celera (or any Celera Affiliate) after the Split-Off.


 


(c) Joint
Liability for Remaining Exchange Taxes. 
Applera and each Applera Affiliate shall be liable for the Applera
Sharing Percentage and Celera and each Celera Affiliate shall be jointly and
severally liable for the Celera Sharing Percentage of any Exchange Taxes
(including costs related or attributable to such Exchange Taxes) not otherwise
allocated by Sections 4.01(a) or (b) (e.g., because of a retroactive
change in law).


 


(d) Representation.  Each of Applera and Celera represents that,
as of the date of this Agreement, neither it nor its Affiliates know of any
fact (other than the Proposed Merger) that may cause the Exchange to fail to
qualify under section 355 or section 368(a)(1)(D) of the Code.


 


13

















 


4.02.  Continuing Covenants.


 


(a) 
In General.  Each of Applera (for
itself and each Applera Affiliate) and Celera (for itself and each Celera
Affiliate) agrees (1) not to take any action reasonably expected to result
in an increased Tax liability to the other, a reduction in a Tax Asset of the
other or an increased liability to the other under this Agreement, and (2) to
take any action reasonably requested by the other that would reasonably be
expected to result in a Tax Benefit or avoid a Tax Detriment to the other,
provided, in either such case, that the taking or refraining to take such
action does not result in any additional cost not fully compensated for by the
other Party or any other adverse effect to such Party.  The Parties hereby acknowledge that the
preceding sentence is not intended to limit, and therefore shall not apply to,
the rights of the Parties with respect to matters otherwise covered by this
Agreement.


 


(b) 
Celera Restrictions.  Celera
agrees that it will not knowingly take or fail to take, or permit any Celera
Affiliate to knowingly take or fail to take, any action where such action or
failure to act would be inconsistent with any material, information, covenant
or representation that relates to facts or matters related to Celera (or any
Celera Affiliate) or within the control of Celera and is contained in an
Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents
or Ruling (except where such material, information, covenant or representation
was not previously disclosed to Celera) other than as permitted by this Section 4.02.  For this purpose an action is considered
inconsistent with a representation if the representation states that there is
no plan or intention to take such action. 
Celera agrees that it will not take (and it will cause the Celera
Affiliates to refrain from taking) any position on a Tax Return that is
inconsistent with the treatment of the Exchange as transactions in which no
income, gain, or loss is recognized pursuant to section 355 of the Code.


 


(c) 
Applera Restrictions.  Applera
agrees that it will not knowingly take or fail to take, or permit any Applera
Affiliate to knowingly take or fail to take, any action where such action or
failure to act would be inconsistent with any material, information, covenant
or representation that relates to facts or matters related to Applera (or any
Applera Affiliate) or within the control of Applera and is contained in an
Officer’s Certificate, Tax Opinion, Supplemental Tax Opinion, Ruling Documents
or Ruling other than as permitted by this Section 4.02.  For this purpose an action is considered
inconsistent with a representation if the representation states that there is
no plan or intention to take such action. 
Applera agrees that it will not take (and it will cause the Applera
Affiliates to refrain from taking) any position on a Tax Return that is inconsistent
with the treatment of the Exchange as transactions in which no income, gain, or
loss is recognized pursuant to section 355 of the Code.


 


(d) 
Certain Celera Actions Following the Split-Off.  Celera agrees that, during the two (2) year
period following the Split-Off, without first obtaining, at Celera’s own
expense, either a supplemental opinion from Tax Counsel that such action will
not result in Exchange Taxes (a “Supplemental Tax Opinion”) or a Ruling that
such action will not result in Exchange Taxes, unless in any such case Applera
and Celera agree otherwise in writing, Celera shall not (1) sell all or
substantially all of the assets of Celera or any Celera Affiliate, (2) merge
Celera, or any Celera Affiliate with another entity, without regard to which
party is the surviving entity, (3) transfer any assets of Celera in a
transaction described in section 351 (other than a transfer to a corporation
which files a consolidated return with Celera and which is wholly-owned,
directly or indirectly, by Celera) or subparagraph (C) or (D) of
section 368(a)(1) of the Code, (4) issue stock 


 


14

















 


of
Celera or any Celera Affiliate (or any instrument that is convertible or
exchangeable into any such stock) in an acquisition or public or private
offering (excluding any issuance pursuant to the exercise of employee stock
options or other employment related arrangements having customary terms and
conditions and that satisfy the requirements of Treasury Regulations section
1.355-7(d)(8), or any successor provision thereto), or (5) facilitate or
otherwise participate in any acquisition of stock in Celera that would result
in any shareholder owning five percent (5%) or more of the outstanding stock of
Celera.  Celera (or any Celera Affiliate)
shall only undertake any of such actions after Applera’s receipt of such
Supplemental Tax Opinion or Ruling and pursuant to the terms and conditions of
any such Supplemental Tax Opinion or Ruling or as otherwise consented to in
writing in advance by Applera; provided, however, that if Celera
contemplates entering into a transaction described in this section and Celera
acknowledges in writing that it would have sole liability for any Exchange
Taxes under Section 4.01(b) that might arise from such transaction
and can demonstrate to the reasonable satisfaction of Applera that Celera can
satisfy its liability for any such Exchange Taxes, Applera shall consent to
Celera’s entering into such transaction without further restriction; and provided,
further, that in the event that (i) Applera completes a transaction
that results in a tax being imposed on Applera under Section 355(e) of
the Code (including without limitation the Proposed Merger), after such
completion, Celera shall no longer be subject to the restrictions under clause
4 and clause 5, or (ii) the Split-off is determined to be taxable, then
these restrictions shall no longer apply. 
The Parties hereby agree that they will act in good faith to take all
reasonable steps necessary to amend this Section 4.02(d), from time to
time, by mutual agreement, to (i) add certain actions to the list
contained herein, or (ii) remove certain actions from the list contained
herein, in either case, in order to reflect any relevant change in law,
regulation or administrative interpretation occurring after the date of this
Agreement.


 


(e) 
Notice of Specified Transactions. 
Not later than three (3) days after the public announcement
regarding any of the transactions described in Section 4.02(d) (including
a public announcement regarding Celera’s intent to enter into any such
transaction) Celera shall provide written notice of such transaction to
Applera.


 


4.03.  Other Taxes.


 


(a) 
Contribution Taxes. 
Notwithstanding Sections 3.01 through 3.03, but subject to Section 4.03(c),
if any Contribution Taxes are imposed on Applera or Celera, Applera and Celera
shall each be responsible for 50 percent of such Contribution Taxes.  For the avoidance of doubt, this equal
sharing of Contribution Taxes shall not be affected by the availability of any
corresponding deductions resulting from such Contribution Taxes.


 


(b) 
Big Dye Agreement Taxes. 
Notwithstanding Sections 3.01 through 3.03, but subject to Section 4.03(c),
the Parties intend to report the Big Dye Agreement as giving rise to current
taxable income to Applera, and corresponding current and future deductions to
Celera.  Celera shall pay to Applera (i) the
present value of the Tax benefit expected to be realized by Celera with respect
to such current and future deductions plus (ii) 50 percent of the
difference between (A) the Tax imposed on Applera resulting from the Big
Dye Agreement and (B) the present value of the Tax benefit expected to be
realized by Celera (as determined in 4.03(b)(i)).


 


15

















 


(c) 
Treatment if Proposed Merger is Completed.  To the extent allowable under applicable law,
if the Proposed Merger is completed and results in the Split-off being taxable,
Applera and Celera shall report the entering into the IP Access Agreements as
taxable transactions for U.S. federal income tax purposes and the
indemnification provisions in Section 4.03(a) and (b) shall not
apply.  In such an event, Applera shall
be responsible for the resulting tax imposed on Applera, and Celera shall pay
Applera 50 percent of the present value of the Tax benefit expected to be
realized by Celera with respect to current and future deductions resulting from
the Big Dye Agreement and the IP Access Agreement.


 


4.04.  Allocation of Tax Items.  All Tax computations for (1) any
Pre-Split-Off Periods ending on the Split-Off Date and (2) the immediately
following taxable period of Celera or any Celera Affiliate, shall be made
pursuant to the principles of section 1.1502-76(b) of the Treasury Regulations
or of a corresponding provision under the laws of other jurisdictions, as
reasonably determined by Applera, taking into account all reasonable
suggestions made by Celera with respect thereto.


 


4.05.  Allocation of Tax Assets.


 


(a) 
In General.  In connection with
the Split-Off, Applera and Celera have set forth on Schedule 4.5 the Tax Assets
allocated to Applera and Celera, and each of Applera and Celera agrees that
each shall prepare all Tax Returns in a manner consistent with such allocation,
unless otherwise required by law.  The
Parties hereby agree that to the extent that Tax Assets are not shown in
Schedule 4.5, such Tax Assets were incurred by Applera and shall remain with
Applera.


 


(b) 
Earnings and Profits.  Applera
will advise Celera in writing of the decrease in Applera earnings and profits
attributable to the Split-Off under section 312(h) of the Code on or
before the first anniversary of the Split-Off Date; provided, however,
that Applera shall provide Celera with estimates of such amounts (determined in
accordance with past practice) prior to such anniversary as reasonably
requested by Celera.


 


Section 5.              Employee
Wages.


 


At
Applera’s request, Celera shall assume the Form W-2 and Form W-3
reporting obligations (including the filing of all forms necessary to comply
with magnetic media reporting requirements) of Applera with respect to any
employee of the Celera Business that Celera or any Celera Affiliate employs
during the calendar year which includes the Split-Off Date consistent with the
procedures set forth in section 5 of Rev. Proc. 2004-53, 2004-34 I.R.B. 320.


 


Section 6.              Indemnification.


 


6.01.  In General.  Applera and each member of the Applera Group
shall jointly and severally indemnify Celera, each Celera Affiliate, and their
respective directors, officers and employees, and hold them harmless from and
against any and all Taxes for which Applera or any Applera Affiliate is liable
under this Agreement and any loss, cost, damage or expense, including
reasonable attorneys’ fees and costs, that is attributable to, or results from,
the failure of Applera, 


 


16

















 


any
Applera Affiliate or any director, officer or employee to make any payment
required to be made under this Agreement. 
Celera and each member of the Celera Group shall jointly and severally
indemnify Applera, each Applera Affiliate, and their respective directors,
officers and employees, and hold them harmless from and against any and all
Taxes for which Celera or any Celera Affiliate is liable under this Agreement
and any loss, cost, damage or expense, including reasonable attorneys’ fees and
costs, that is attributable to, or results from, the failure of Celera, any
Celera Affiliate or any director, officer or employee to make any payment
required to be made under this Agreement.


 


6.02.  Inaccurate or Incomplete Information.  Applera and each member of the Applera Group
shall jointly and severally indemnify Celera, each Celera Affiliate, and their
respective directors, officers and employees, and hold them harmless from and
against any cost, fine, penalty, or other expense of any kind attributable to
the failure of Applera or any Applera Affiliate in supplying Celera or any
Celera Affiliate with inaccurate or incomplete information, in connection with
the preparation of any Tax Return. 
Celera and each member of the Celera Group shall jointly and severally
indemnify Applera, each Applera Affiliate, and their respective directors,
officers and employees, and hold them harmless from and against any cost, fine,
penalty, or other expenses of any kind attributable to the failure of Celera or
any Celera Affiliate in supplying Applera or any Applera Affiliate with
inaccurate or incomplete information, in connection with the preparation of any
Tax Return.


 


6.03.  No Indemnification for Tax Items.  Nothing in this Agreement shall be construed
as a guarantee of the existence or amount of any loss, credit, carryforward,
basis or other Tax Item, whether past, present or future, of Applera, any Applera
Affiliate, Celera or any Celera Affiliate. 
In addition, for the avoidance of doubt, for purposes of determining any
amount owed between the Parties hereto, all such determinations shall be made
without regard to any financial accounting tax asset or liability or other
financial accounting items.


 


Section 7.              Payments.


 


7.01.  Estimated Tax Payments.  Not later than ten (10) business days
after each Estimated Tax Installment Date with respect to a taxable period for
which a Consolidated Return or a Combined Return that includes a Celera
Separate Tax Amount will be filed, Celera shall pay to Applera on behalf of the
Celera Group an amount equal to the amount of any estimated Celera Separate Tax
Amount.


 


7.02.  True-Up Payments.  Not later than ten (10) business days
after filing a Tax Return, Celera shall pay to Applera, or Applera shall pay to
Celera, as appropriate, an amount equal to the difference, if any, between the
Celera Separate Tax Amount and the aggregate amount paid by Celera with respect
to such period under Section 7.01.


 


7.03.  Redetermination Amounts.  In the event of a redetermination of any Tax
Item reflected on any Consolidated Return or Combined Return (other than Tax
Items relating to Exchange Taxes), as a result of a refund of Taxes paid, a
Final Determination or any settlement or compromise with any Taxing Authority
which in any such case would affect the Celera Separate Tax Amount, Applera
shall prepare a revised pro forma Tax Return in accordance with 


 


17

















 


Section 2.04(b) for
the relevant taxable period reflecting the redetermination of such Tax Item as
a result of such refund, Final Determination, settlement or compromise.  Celera shall pay to Applera, or Applera shall
pay to Celera, as appropriate, an amount equal to the difference, if any,
between the Celera Separate Tax Amount reflected on such revised pro forma Tax
Return and the Celera Separate Tax Amount for such period as originally
computed pursuant to this Agreement.


 


7.04.  Payments of Refunds and Credits.  If one Party receives a refund or credit of
any Tax to which the other Party is entitled pursuant to Section 3.04, the
Party receiving such refund or credit shall pay to the other Party the amount
of such refund or credit pursuant to Section 7.05.


 


7.05.  Payments Under This Agreement.  In the event that one Party (the “Owing Party”)
is required to make a payment to another Party (the “Owed Party”) pursuant to
this Agreement, then such payments shall be made according to this Section 7.05.


 


(a) 
In General.  All payments shall be
made to the Owed Party or to the appropriate Taxing Authority as specified by
the Owed Party within the time prescribed for payment in this Agreement, or if
no period is prescribed, within ten (10) days after delivery of written
notice of payment owing together with a computation of the amounts due.


 


(b) 
Treatment of Payments.  Unless
otherwise required by any Final Determination, the Parties agree that any
payments made by one Party to another Party pursuant to this Agreement (other
than (i) payments for the Celera Separate Tax Amount for the
Post-Split-Off Period, (ii) payments of After Tax Amounts pursuant to Section 7.05(d),
and (iii) payments of interest pursuant to Section 7.05(e)) shall be
treated for all Tax purposes as nontaxable payments (dividend distributions or
capital contributions, as the case may be) made immediately prior to the
Split-Off and, accordingly, as not includible in the taxable income of the
recipient or as deductible by the payor.


 


(c) 
Prompt Performance.  All actions
required to be taken (including payments) by any Party under this Agreement
shall be performed within the time prescribed for performance in this
Agreement, or if no period is prescribed, such actions shall be performed
promptly.


 


(d) 
After Tax Amounts.  If pursuant to
a Final Determination it is determined that the receipt or accrual of any
payment made under this Agreement (other than payments of interest pursuant to Section 7.05(e))
is subject to any Tax, the Party making such payment shall be liable for (a) the
After Tax Amount with respect to such payment and (b) interest at the rate
described in Section 7.05(e) on the amount of such Tax from the date
such Tax accrues through the date of payment of such After Tax Amount.  A Party making a demand for a payment
pursuant to this Agreement and for a payment of an After Tax Amount with
respect to such payment shall separately specify and compute such After Tax
Amount.  However, a Party may choose not
to specify an After Tax Amount in a demand for payment pursuant to this
Agreement without thereby being deemed to have waived its right subsequently to
demand an After Tax Amount with respect to such payment.


 


18

















 


(e) 
Interest.  Payments pursuant to
this Agreement that are not made within the period prescribed in this Agreement
(the “Payment Period”) shall bear interest for the period from and including
the date immediately following the last date of the Payment Period through and
including the date of payment at  a
per annum rate equal to the applicable rate under Section 6621 of the
Code.  Such interest will be payable at
the same time as the payment to which it relates and shall be calculated  on the basis of a year of three hundred
sixty-five (365) days and the actual number of days for which due.


 


Section 8.              Tax
Proceedings.


 


8.01.  In General.  Except as otherwise provided in this
Agreement, the Party responsible for preparing and filing a Tax Return pursuant
to Section 2 (the “Filing Party”) shall have the exclusive right, in its
sole discretion, to control, contest, and represent the interests of Applera,
any Applera Affiliate, Celera, and/or any Celera Affiliate in any Audit
relating to such Tax Return and to resolve, settle or agree to any deficiency,
claim or adjustment proposed, asserted or assessed in connection with or as a
result of any such Audit; provided, however, that for purposes of
this Section 8, Celera shall be treated as the Filing Party for all Tax
Returns of BHL and BHL Affiliates (other than Consolidated Returns or Combined
Returns).  The Filing Party’s rights
shall extend to any matter pertaining to the management and control of an
Audit, including execution of waivers, choice of forum, scheduling of
conferences and the resolution of any Tax Item. 
Any costs incurred in handling, settling, or contesting an Audit shall
be borne by the Filing Party.


 


8.02.  Participation of non-Filing Party.  Except as provided in Section 8.04, the
non-Filing Party shall, at its own expense, have control over decisions to
resolve, settle or otherwise agree to any deficiency, claim or adjustment with
respect to any Sole Responsibility Item. 
Except as provided in Section 8.04, the Filing Party, at its own
expense, and the non-Filing Party, at its own expense, shall have joint control
over decisions to resolve, settle or otherwise agree to any deficiency, claim
or adjustment with respect to any Joint Responsibility Item.  Except as provided in Section 8.04, the
Filing Party shall not settle any Audit it controls concerning a Tax Item on a
basis that would reasonably be expected to adversely affect the non-Filing
Party by at least one hundred thousand dollars ($100,000) without obtaining
such non-Filing Party’s consent, which consent shall not be unreasonably
withheld, conditioned or delayed if failure to consent would adversely affect
the Filing Party.


 


8.03.  Notice.  Within ten (10) days after a Party
receives written notice of a proposed Audit adjustment that may give rise to an
indemnification obligation under this Agreement, such Party shall give notice
to the other Party of such issue (such notice shall contain factual
information, to the extent known, describing any asserted tax liability in
reasonable detail), and shall forward to the other Party copies of all notices
and material communications with any Taxing Authority relating to such
issue.  Notwithstanding any provision in Section 9.15
to the contrary, if a Party to this Agreement fails to provide the other Party
notice as required by this Section 8.03, and the failure results in a
detriment to the other Party then any amount which the other Party is otherwise
required to pay pursuant to this Agreement shall be reduced by the amount of
such detriment.


 


19

















 


8.04.  Control of Exchange Tax and Contribution
Tax Proceedings.  Applera shall have
the exclusive right, in its sole discretion, to control, contest, and represent
the interests of Applera, any Applera Affiliate, Celera, and/or any Celera
Affiliate in any Audits relating to Exchange Taxes and Contribution Taxes and
to resolve, settle or agree to any deficiency, claim or adjustment proposed,
asserted or assessed in connection with or as a result of any such Audit; provided,
however, that Applera shall not settle any such audit with respect to
Exchange Taxes or Contribution Taxes with a Taxing Authority as part of a
formal understanding with the Taxing Authority for a settlement on an issue or
issues unrelated to such Exchange Taxes or Contribution Taxes that would
reasonably be expected to result in a Tax liability to Celera or any Celera
Affiliate (including as a result of an indemnification obligation pursuant to
this Agreement) in excess of one hundred thousand dollars ($100,000), without
the prior consent of Celera, which consent shall not be unreasonably withheld,
conditioned or delayed.  Applera’s rights
shall extend to any matter pertaining to the management and control of such
Audit, including execution of waivers, choice of forum, scheduling of
conferences and the resolution of any Tax Item. 
Celera may assume sole control of any Audits relating to Exchange Taxes
if it acknowledges in writing that it has sole liability for any Exchange Taxes
under Section 4.01(b) that might arise in such Audit and can
demonstrate to the reasonable satisfaction of Applera that it can satisfy its
liability for any such Exchange Taxes. 
If Celera is unable to demonstrate to the reasonable satisfaction of
Applera that it will be able to satisfy its liability for such Exchange Taxes,
but acknowledges in writing that it has sole liability for any Exchange Taxes
under Section 4.01(b), Celera and Applera shall have joint control over
the Audit.


 


Section 9.              Miscellaneous
Provisions.


 


9.01.  Effectiveness.  This Agreement shall become effective upon
execution by the Parties hereto.


 


9.02.  Cooperation and Exchange of Information.


 


(a) 
Cooperation.  Celera and Applera
shall each cooperate fully (and each shall cause its respective affiliates to
cooperate fully) with all reasonable requests from another party for
information and materials not otherwise available to the requesting party in
connection with the preparation and filing of Tax Returns, claims for refund,
and Audits concerning issues or other matters covered by this Agreement or in
connection with the determination of a liability for Taxes or a right to a
refund of Taxes.  Such cooperation shall
include:


 


(i) the
retention until the expiration of the applicable statute of limitations, and
the provision upon request, of copies of all Tax Returns, books, records
(including information regarding ownership and Tax basis of property),
documentation and other information relating to the 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 that may be necessary or reasonably helpful in
connection with any Tax Proceeding, or the filing of a Tax Return or refund
claim by a member of the Applera Group or the Celera Group, including
certification, to the best of a Party’s knowledge, of the accuracy and
completeness of the information it has supplied; and


 


20














 


(iii)       the use of the
Party’s commercially reasonable efforts to obtain any documentation that may be
necessary or reasonably helpful in connection with any of the foregoing.  Each Party shall make its employees and
facilities available on a reasonable and mutually convenient basis in
connection with the foregoing matters.


 


(b) 
Retention of Records.  Any Party
that is in possession of documentation of Applera (or any Applera Affiliate) or
Celera (or any Celera Affiliate) relating to the Celera Business, including
books, records, Tax Returns and all supporting schedules and information
relating thereto (the “Celera Business Records”) shall retain such Celera
Business Records for a period of seven (7) years following the Exchange
Date.  Thereafter, any Party wishing to
dispose of Celera Business Records in its possession (after the expiration of
the applicable statute of limitations), shall provide written notice to the
other Party describing the documentation proposed to be destroyed or disposed
of sixty (60) business days prior to taking such action.  The other Party may arrange to take delivery
of any or all of the documentation described in the notice at its expense
during the succeeding sixty (60) day period.


 


9.03.              Dispute Resolution.  Except with respect to Exchange Taxes, all
disputes under this agreement shall be controlled by Section 13.3 of the
Separation Agreement.  Notwithstanding
the foregoing, any disagreement between the Parties relating to Exchange Taxes
shall be settled in a court of law or as otherwise agreed to by the Parties.


 


9.04.              Notices.  All notices and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed
given upon (a) a transmitter’s confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery of a standard
overnight courier the following business day or if delivered by hand the
following business day), (b) confirmed delivery of a standard overnight
courier or when delivered by hand, or (c) the expiration of five (5) business
days after the date mailed by certified or registered mail (return receipt
requested), postage prepaid, to the Parties at the following addresses (or at
such other addresses for a Party as shall be specified by like notice):


 


If
to Applera or any Applera Affiliate, to the Vice President, Tax of Applera,
with a copy to the General Counsel of Applera, at:


 


Applera
Corporation


301
Merritt 7


Norwalk,
Connecticut 06851


 


If
to Celera or any Celera Affiliate, to the General Counsel of Celera, at:


 


Celera
Corporation


1401
Harbor Bay Parkway


Alameda,
California 94502


 


Either
Party may, by written notice to the other Parties, change the address or the
Party to which any notice, request, instruction or other documents is to be
delivered.


 


21

















 


9.05.              Changes in Law.


 


(a) 
Any reference to a provision of the Code or a law of another jurisdiction shall
include a reference to any applicable successor provision or law.


 


(b) 
If, due to any change in applicable law or regulations or their interpretation
by any court of law or other governing body having jurisdiction subsequent to
the date of this Agreement, performance of any provision of this Agreement or
any transaction contemplated thereby shall become impracticable or impossible,
the Parties hereto shall use their commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such provision.


 


9.06.              Confidentiality.  The Parties shall comply with the
confidentiality provisions in section 13.9 of the Separation Agreement.


 


9.07.              Successors.  This Agreement shall be binding on and inure
to the benefit and detriment of any successor, by merger, acquisition of assets
or otherwise, to any of the Parties hereto, to the same extent as if such
successor had been an original party.


 


9.08.              Affiliates.  Applera shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth herein to be performed by any Applera Affiliate, and Celera shall
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Celera
Affiliate; provided, however, that (1) if it is contemplated
that a Celera Affiliate may cease to be a Celera Affiliate as a result of a
transfer of its stock or other ownership interests to a third party in exchange
for consideration in an amount approximately equal to the fair market value of
the stock or other ownership interests transferred and such consideration is
not distributed outside of the Celera Group to the shareholders of Celera then (a) Celera
shall request in writing no later than thirty (30) days prior to such cessation
that Applera execute a release of such Celera Affiliate from its obligations
under this Agreement effective as of such transfer provided that Celera shall
have confirmed in writing its obligations and the obligations of its remaining
Celera Affiliates with respect to their own obligations and those of the
departing Celera Affiliate and that such departing Celera Affiliate shall have
executed a release of any rights it may have against Applera or any Applera
Affiliate by reason of this Agreement, or (b) Celera shall acknowledge in
writing no later than thirty (30) days prior to such cessation that it shall
bear one hundred percent (100%) of the liability for the obligations of Celera
and each Celera Affiliate (including the departing Celera Affiliate) under this
Agreement and (2) if it is contemplated that an Applera Affiliate may
cease to be an Applera Affiliate as a result of a transfer of its stock or
other ownership interests to a third party in exchange for consideration in an
amount approximately equal to the fair market value of the stock or other
ownership interests transferred and such consideration is not distributed
outside of the Applera Group to the shareholders of Applera then (a) Applera
shall request in writing no later than thirty (30) days prior to such cessation
that Celera execute a release of such Applera Affiliate from its obligations
under this Agreement effective as of such transfer provided that Applera shall
have confirmed in writing its obligations and the obligations of its remaining Applera
Affiliates with respect to their 


 


22

















 


own
obligations and the obligations of the departing Applera Affiliate and that
such departing Applera Affiliate shall have executed a release of any rights it
may have against Celera or any Celera Affiliate by reason of this Agreement, or
(b) Applera shall acknowledge in writing no later than thirty (30) days
prior to such cessation that it shall bear one hundred percent (100%) of the
liability for the obligations of Applera and each Applera Affiliate (including
the departing Applera Affiliate) under this Agreement.  If at any time (1) Applera shall,
directly or indirectly, obtain beneficial ownership of more than fifty percent
(50%) of the total combined voting power of any other entity, Applera shall
cause such entity to become a party to this Agreement by executing together
with Celera an agreement in substantially the same form as set forth in
Schedule 9.08 and such entity shall have all rights and obligations of an
Applera Affiliate under this Agreement, and (2) Celera shall, directly or
indirectly, obtain beneficial ownership of more than fifty percent (50%) of the
total combined voting power of any other entity, Celera shall cause such entity
to become a party to this Agreement by executing together with Applera an
agreement in substantially the same form as set forth in Schedule 9.08 and such
entity shall have all rights and obligations of a Celera Affiliate under this
Agreement.


 


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


 


9.10.              Entire Agreement.  This Agreement contains the entire agreement
among the Parties hereto with respect to the subject matter hereof and
supersedes any prior tax sharing agreements between Applera (or any Applera
Affiliate) and Celera (or any Celera Affiliate) and such prior tax sharing
agreements shall have no further force and effect.  If, and to the extent, the provisions of this
Agreement conflict with any agreement entered into in connection with the
Split-Off, the provisions of this Agreement shall control.


 


9.11.              Applicable Law; Jurisdiction.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY (i) AGREES THAT THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND ALL DISPUTES CONTROVERSIES OR CLAIMS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY
HEREOF SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ITS
CONFLICTS OF LAW RULES, (ii) AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS
AND SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF
THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, (iii) TO THE EXTENT
SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF
DELAWARE, HEREBY APPOINTS THE CORPORATION TRUST COMPANY, AS SUCH PARTY’S AGENT
IN THE STATE OF DELAWARE FOR ACCEPTANCE OF LEGAL PROCESS, AND (iv) AGREES
THAT SERVICE MADE ON ANY SUCH AGENT SET FORTH IN (iii) ABOVE SHALL HAVE 


 


23

















 


THE
SAME LEGAL FORCE AND EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE
STATE OF DELAWARE.


 


9.12.              Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.


 


9.13.              Severability.  If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction (or
an arbitrator or arbitration panel) to be invalid, void, or unenforceable, the
remainder of the terms, provisions, covenants, and restrictions set forth
herein shall remain in full force and effect, and shall in no way be affected,
impaired, or invalidated.  In the event
that any such term, provision, covenant or restriction is held to be invalid,
void or unenforceable, the Parties hereto shall use commercially reasonable
efforts to find and employ an alternate means to achieve the same or
substantially the same result as that contemplated by such terms, provisions,
covenant, or restriction.


 


9.14.              No Third Party Beneficiaries.  This Agreement is solely for the benefit of
Applera, the Applera Affiliates, Celera and the Celera Affiliates.  This Agreement should not be deemed to confer
upon third parties any remedy, claim, liability, reimbursement, cause of action
or other rights in excess of those existing without this Agreement.


 


9.15.              Waivers, Etc.  No failure or delay on the part of a Party in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power.  No modification or waiver of any
provision of this Agreement nor consent to any departure by the Parties
therefrom shall in any event be effective unless the same shall be in writing,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.


 


9.16.              Setoff.  All payments to be made by any Party under
this Agreement may be netted against payments due to such Party under this
Agreement, but otherwise shall be made without setoff, counterclaim or
withholding, all of which are hereby expressly waived.


 


9.17.              Other Remedies.  Celera recognizes that any failure by it or
any Celera Affiliate to comply with its obligations under Section 4 could
result in Exchange Taxes that would cause irreparable harm to Applera, Applera
Affiliates, and their stockholders. 
Accordingly, Applera shall be entitled to an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, this being in addition to any other remedy to which
Applera is entitled at law or in equity.


 


9.18.              Amendment and Modification.  This Agreement may be amended, modified or
supplemented only by a written agreement signed by all of the Parties hereto.


 


9.19.              Waiver of Jury Trial.  Each of the Parties hereto irrevocably and
unconditionally waives all right to trial by jury in any litigation, claim,
action, suit, arbitration, inquiry, 


 


24

















 


proceeding,
investigation or counterclaim (whether based in contract, tort or otherwise)
arising out of or relating to this Agreement or the actions of the Parties
hereto in the negotiation, administration, performance and enforcement thereof.


 


9.20. Interpretations.  The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. 
Whenever the words “include,” “includes” or “including” are used in this
Agreement they shall be deemed to be followed by the words “without limitation.”  The words “hereof,” “herein” and “herewith”
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, paragraph, Exhibit and schedule
references are to the articles, sections, paragraphs, exhibits and schedules of
this Agreement unless otherwise specified. 
The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. 
Where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning. 
The Parties have participated jointly in the negotiation and drafting of
this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties, and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any provisions of this Agreement.


 


25

















 


IN
WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed by a duly authorized officer as of the date first above written.


 


	
   

  	
  Applera
  Corporation

  
	
   

  	
  on
  behalf of itself and each of the Applera Affiliates

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  [name]

  
	
   

  	
  Title:

  	
  [title]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Celera
  Corporation

  
	
   

  	
  on
  behalf of itself and each of the Celera Affiliates

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  [name]

  
	
   

  	
  Title:

  	
  [title]

  



 


26