EXHIBIT 10.3


 


TAX SHARING AGREEMENT 


 


DATED AS OF [                    ]



 


BY AND BETWEEN 


 


HARVARD BIOSCIENCE, INC. 


 


AND 


 


HARVARD APPARATUS REGENERATIVE TECHNOLOGY,
INC.


 


(for itself and on behalf of each member
of the SpinCo Group) 


 




    	 



    	 



    

 


TABLE OF CONTENTS


 


	 	 	Page
	Section 1.	Definition of Terms	1
	 	 	 
	Section 2.	Allocation of Tax Liabilities	8
	 	 	 
	Section 2.01	Distributing Liability	8
	 	 	 
	Section 2.02	Allocation of United States Federal Income Tax and Federal Other Tax	8
	 	 	 
	Section 2.03	Allocation of State Income and State Other Taxes	8
	 	 	 
	Section 2.04	Allocation of Foreign Taxes	9
	 	 	 
	Section 2.05	Certain Transaction and Other Taxes	9
	 	 	 
	Section 2.06	SpinCo Group Attributes	10
	 	 	 
	Section 3.	Proration of Taxes	10
	 	 	 
	Section 4.	Preparation and Filing of Tax Returns	10
	 	 	 
	Section 4.01	General	10
	 	 	 
	Section 4.02	Distributing’s Responsibility	10
	 	 	 
	Section 4.03	SpinCo’s Responsibility	11
	 	 	 
	Section 4.04	Tax Accounting Practices	11
	 	 	 
	Section 4.05	Consolidated or Combined Tax Returns	12
	 	 	 
	Section 4.06	Right to Review Tax Returns	12
	 	 	 
	Section 4.07	SpinCo Carrybacks, Carryforwards and Claims for Refund	12
	 	 	 
	Section 4.08	Apportionment of Earnings and Profits and Tax Attributes	12
	 	 	 
	Section 5.	Tax Payments	12
	 	 	 
	Section 5.01	Payment of Separate Company Taxes	12
	 	 	 
	Section 5.02	Indemnification Payments	12
	 	 	 
	Section 6. 	Tax Benefits	13
	 	 	 
	Section 6.01	Tax Benefits	13
	 	 	 
	Section 6.02	Distributing and SpinCo Income Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation	13
	 	 	 
	Section 7. 	Tax-Free Status	14
	 	 	 
	Section 7.01	Tax Opinions/Rulings and Representation Letters	14
	 	 	 
	Section 7.02	Restrictions on SpinCo	14
	 	 	 
	Section 7.03	Restrictions on Distributing	16
	 	 	 
	Section 7.04	Procedures Regarding Opinions and Rulings	16
	 	 	 
	Section 7.05	Liability for Tax-Related Losses	17


  




    	 



    	 



    

  


	Section 8.	Assistance and Cooperation	17
	 	 	 
	Section 8.01	Assistance and Cooperation	17
	 	 	 
	Section 8.02	Income Tax Return Information	18
	 	 	 
	Section 9. 	Tax Records	18
	 	 	 
	Section 9.01	Retention of Tax Records	18
	 	 	 
	Section 9.02	Access to Tax Records	18
	 	 	 
	Section 10.	Tax Contests	18
	 	 	 
	Section 10.01	Notice	18
	 	 	 
	Section 10.02	Control of Tax Contests	19
	 	 	 
	Section 11.	Effective Date; Termination of Prior Intercompany Tax Allocation Agreements	19
	 	 	 
	Section 12.	Survival of Obligations	20
	 	 	 
	Section 13.	Treatment of Payments; Tax Gross Up	20
	 	 	 
	Section 13.01	Treatment of Tax Indemnity and Tax Benefit Payments	20
	 	 	 
	Section 13.02	Tax Gross Up	20
	 	 	 
	Section 13.03	Interest Under This Agreement	20
	 	 	 
	Section 14.	Disagreements	20
	 	 	 
	Section 15.	Reserved	20
	 	 	 
	Section 16.	Expenses	20
	 	 	 
	Section 17.	General Provisions	21
	 	 	 
	Section 17.01	Addresses and Notices	21
	 	 	 
	Section 17.02	Binding Effect	21
	 	 	 
	Section 17.03	Waiver	21
	 	 	 
	Section 17.04	Severability	21
	 	 	 
	Section 17.05	Authority	21
	 	 	 
	Section 17.06	Further Action	21
	 	 	 
	Section 17.07	Integration	22
	 	 	 
	Section 17.08	Construction	22
	 	 	 
	Section 17.09	No Double Recovery	22
	 	 	 
	Section 17.10	Counterparts	22
	 	 	 
	Section 17.11	Governing Law	22
	 	 	 
	Section 17.12	Jurisdiction	22
	 	 	 
	Section 17.13	Amendment	22
	 	 	 
	Section 17.14	SpinCo Subsidiaries	22
	 	 	 
	Section 17.15	Successors	22
	 	 	 
	Section 17.16	Injunctions	22


 




    	 



    	 



    

 


TAX SHARING AGREEMENT


 


This TAX SHARING AGREEMENT (this “Agreement”)
is entered into as of [            ], by and among HARVARD BIOSCIENCE,
INC., a Delaware corporation (“Distributing”), and HARVARD APPARATUS REGENERATIVE TECHNOLOGY, INC., a
Delaware corporation and a wholly owned subsidiary of Distributing (“SpinCo”), for itself and on behalf
of each member of the SpinCo Group (as defined below).


 


RECITALS 


 


WHEREAS, the Board of Directors of Distributing
has determined that it would be appropriate and desirable to completely separate the regenerative medicine device business of Distributing
from the life science tools research business of Distributing;


 


WHEREAS, as of the date hereof, Distributing
is the common parent of an affiliated group of corporations, including SpinCo, which has elected to file consolidated Federal income
tax returns;


 


WHEREAS, pursuant to the Separation and
Distribution Agreement (as defined below), Distributing and SpinCo have agreed to separate the regenerative medicine device business
from Distributing generally by means of the Distribution;


 


WHEREAS, prior to the Distribution, Distributing
intends to cause it and its applicable Subsidiaries to contribute the HART Assets to SpinCo and its applicable Subsidiaries (and
SpinCo and its applicable Subsidiaries will assume the HART Liabilities), each as defined in and more fully described in the Separation
and Distribution Agreement;


 


WHEREAS, prior to the Distribution, Distributing
and SpinCo will also enter into an underwriting agreement to conduct an offer and sale to the public of a limited number of shares
of the common stock, par value $0.01 per share, of SpinCo (the “Offering,” and the date on which such
Offering occurs, the “Offering Date”);


 


WHEREAS, as a result of the Distribution,
SpinCo and its subsidiaries will cease to be members of the affiliated group (as that term is defined in Section 1504 of the
Code) of which Distributing is the common parent (the “Deconsolidation”); and


 


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


 


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


 


Section 1. Definition of Terms.
For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings, and capitalized
terms used but not otherwise defined herein shall have the meaning ascribed to them in the Separation and Distribution Agreement:


 


“Accounting Cutoff Date”
means, with respect to SpinCo, any date as of the end of which there is a closing of the financial accounting records for such
entity.


 


“Active Trade or Business”
means the active conduct (as defined in Section 355(b)(2) of the Code and the regulations thereunder) by SpinCo and its “separate
affiliated group” (as defined in Section 355(b)(3)(B) of the Code) of the HART Business as conducted immediately prior
to the Distribution.


 


“Adjustment Request”
means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the
adjustment, refund, or credit of Taxes, including (a) any amended Tax return claiming adjustment to the Taxes as reported
on a Tax Return or, if applicable, as previously adjusted, (b) any claim for equitable recoupment or other offset, and (c) any
claim for refund or credit of Taxes previously paid.


 


“Affiliate” means
any entity that is directly or indirectly “controlled” by either the person in question or an Affiliate of such person.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise. The term
Affiliate shall refer to Affiliates of a person as determined immediately after the Distribution.


 




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“Agreement” shall
have the meaning provided in the first sentence of this Agreement.


 


“Board Certificate”
shall have the meaning set forth in Section 7.02(e) of this Agreement.


 


“Business Day”
means a day (other than Saturday or Sunday) on which banks are generally open in the State of New York, USA for ordinary business.


 


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


 


“Company” means
Distributing or SpinCo.


 


“Company Indemnifying Party”
shall have the meaning set forth in Section 5.02(b) of this Agreement.


 


“Contribution”
means the contribution of assets, by Distributing itself directly to SpinCo itself pursuant to Section 2.1(a) of the Separation
and Distribution Agreement.


 


“Controlling Party”
shall have the meaning set forth in Section 10.02(c) of this Agreement.


 


“Deconsolidation”
shall have the meaning provided in the Recitals.


 


“Deconsolidation Date”
means the last date on which SpinCo qualifies as a member of the affiliated group (as defined in Section 1504 of the Code)
of which Distributing is the common parent.


 


“DGCL” means
the Delaware General Corporation Law.


 


“Distributing”
shall have the meaning provided in the first sentence of this Agreement.


 


“Distributing Affiliated Group”
shall have the meaning provided in the definition of “Distributing Federal Consolidated Income Tax Return.”


 


“Distributing Federal Consolidated
Income Tax Return” means any United States federal Income Tax Return for the affiliated group (as that term is defined
in Section 1504 of the Code and the regulations thereunder) of which Distributing is the common parent (the “Distributing
Affiliated Group”).


 


“Distributing Full Taxpayer”
means the assumption that the Distributing Affiliated Group (a) is subject to the highest marginal regular statutory income
Tax rate, (b) has sufficient taxable income to permit the realization or receipt of the relevant Tax Benefit at the earliest
possible time, and (c) is not subject to the alternative minimum tax.


 


“Distributing Group”
means Distributing and its Affiliates, excluding any entity that is a member of the SpinCo Group.


 


“Distributing Group Transaction
Returns” shall have the meaning set forth in Section 4.04(b) of this Agreement.


 


“Distributing Separate Return”
means any Separate Return of Distributing or any member of the Distributing Group.


 


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


 


“Federal Income Tax”
means any Tax imposed by Subtitle A of the Code, and any interest, penalties, additions to tax, or additional amounts in respect
of the foregoing.


 


“Federal Other Tax”
means any Tax imposed by the federal government of the United States of America other than any Federal Income Taxes, and any interest,
penalties, additions to tax, or additional amounts in respect of the foregoing.


 




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


 


“Filing Date”
shall have the meaning set forth in Section 7.05(b) of this Agreement.


 


“Final Determination”
means the final resolution of liability for Tax, which resolution may be for a specific issue or adjustment or for a taxable period,
(a) by 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 a State, local, or foreign taxing jurisdiction, except that a Form 870 or 870-AD or comparable
form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the
right of the taxpayer to file a claim for refund or the right of the Tax Authority to assert a further deficiency in respect of
such issue or adjustment or for such taxable period (as the case may be); (b) by any audit assessment of taxes or other examination
by any taxing authorities, proceeding or appeal of such proceedings relating to taxes whether administrative or judicial including
proceedings related to competent authority determinations, or by a decision, judgment, decree, or other order by a court of competent
jurisdiction, which has become final and unappealable; (c) by a closing agreement or accepted offer in compromise under Sections
7121 or 7122 of the Code, or a comparable agreement under the laws of a State, local, or foreign taxing jurisdiction; (d) by
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 (including by way of offset) by the jurisdiction imposing such Tax; (e) by a final settlement
resulting from a treaty-based competent authority determination; or (f) by any other final disposition, including by reason
of the expiration of the applicable statute of limitations or by mutual agreement of the parties.


 


“Foreign Income Tax”
means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign
country or United States possession, which is an income tax as defined in Treasury Regulation Section 1.901-2, and any interest,
penalties, additions to tax, or additional amounts in respect of the foregoing.


 


“Foreign Other Tax”
means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign
country or United States possession, other than any Foreign Income Taxes, and any interest, penalties, additions to tax, or additional
amounts in respect of the foregoing.


 


“Foreign Tax”
means any Foreign Income Taxes or Foreign Other Taxes.


 


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


 


“Income Tax”
means any Federal Income Tax, State Income Tax or Foreign Income Tax.


 


“Indemnitee”
shall have the meaning set forth in Section 13.03 of this Agreement.


 


“Indemnitor”
shall have the meaning set forth in Section 13.03 of this Agreement.


 


“Internal Restructuring”
shall have the meaning set forth in Section 7.02(f) of this Agreement.


 


“IRS” means the
United States Internal Revenue Service.


 


“Joint Return”
shall mean any Return of a member of the Distributing Group or the SpinCo Group that is not a Separate Return.


 


“Non-Controlling Party”
shall have the meaning set forth in Section 10.02(c) of this Agreement.


 


“Notified Action”
shall have the meaning set forth in Section 7.04(a) of this Agreement.


 


“Offering” shall
have the meaning set forth in the Recitals.


 


“Offering Date”
shall have the meaning set forth in the Recitals.


 


“Other Tax” means
any Federal Other Tax, State Other Tax, or Foreign Other Tax.


 


“Past Practices”
shall have the meaning set forth in Section 4.04(a) of this Agreement.


 




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


 


“Payor” shall
have the meaning set forth in Section 5.02(a) of this Agreement.


 


“Person” means
an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without
regard to whether any entity is treated as disregarded for U.S. federal income tax purposes.


 


“Post-Deconsolidation Period”
means any Tax Period beginning after the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such Straddle
Period beginning the day after the Deconsolidation Date.


 


“Pre-Deconsolidation Period”
means any Tax Period ending on or before the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such
Straddle Period ending on the Deconsolidation Date.


 


“Privilege” means
any privilege that may be asserted under applicable law, including, any privilege arising under or relating to the attorney-client
relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating
to internal evaluation processes.


 


“Proposed 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 Regulation Section 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction
or series of transactions), whether such transaction is supported by SpinCo management or shareholders, is a hostile acquisition,
or otherwise, as a result of which SpinCo would merge or consolidate with any other Person or as a result of which any Person or
any group of related Persons would (directly or indirectly) acquire, or have the right to acquire, from SpinCo and/or one or more
holders of outstanding shares of SpinCo Capital Stock, a number of shares of SpinCo Capital Stock that would, when combined with
any other changes in ownership of SpinCo Capital Stock pertinent for purposes of Section 355(e) of the Code, comprise 40%
or more of (A) the value of all outstanding shares of stock of SpinCo 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) the total combined voting power of all outstanding
shares of voting stock of SpinCo 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, a Proposed Acquisition Transaction shall not include (A) the
adoption by SpinCo of a shareholder rights plan or (B) issuances 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 Regulation 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 or any redemption of shares of stock shall be treated as
an indirect acquisition of shares of stock by the exchanging or non-exchanging shareholders, as applicable. This definition and
the application thereof are 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 shall be incorporated
in this definition and its interpretation.


 


“Representation Letters”
means the representation letters and any other materials (including, without limitation, the Ruling Request) delivered or deliverable
by Distributing and others in connection with the rendering by Tax Advisors, and/or the issuance by the IRS, of the Tax Opinions/Rulings.


 


“Required Party”
shall have the meaning set forth in Section 5.02(a) of this Agreement.


 


“Responsible Company”
means, with respect to any Tax Return, the Company having responsibility for preparing and filing such Tax Return under this Agreement.


 


“Retention Date”
shall have the meaning set forth in Section 9.01 of this Agreement.


 




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“Ruling” means
any private letter ruling (and any supplemental private letter ruling, including without limitation, any Supplemental Ruling) issued
by the IRS to Distributing in connection with the Transactions.


 


“Ruling Documents”
means the Ruling and the Ruling Request.


 


“Ruling Request”
means any letter filed by Distributing with the IRS requesting a ruling regarding certain tax consequences of the Transactions
(including all attachments, exhibits, and other materials submitted with such ruling request letter) and any amendment or supplement
to such ruling request letter.


 


“Section 41 Credit”
means any credit allowed pursuant to Section 41 of the Code, pertaining to research for credit.


 


“Section 45K Credit”
means any credit allowed pursuant to Section 45K of the Code, including any credit allowed pursuant to Section 29 of
the Code prior to the redesignation of Section 29 as Section 45K.


 


“Section 48B Credit”
means any credit allowed pursuant to Section 48B of the Code.


 


“Section 199 Deduction”
means any deduction allowed pursuant to Section 199 of the Code.


 


“Section 7.02(e) Acquisition
Transaction” means any transaction or series of transactions that is not a Proposed Acquisition Transaction but would
be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 25%
instead of 40%.


 


“Separate Return”
means (a) in the case of any Tax Return of any member of the SpinCo Group (including any consolidated, combined or unitary
return), any such Tax Return that does not include any member of the Distributing Group and (b) in the case of any Tax Return
of any member of the Distributing Group (including any consolidated, combined or unitary return), any such Tax Return that does
not include any member of the SpinCo Group.


 


“Separation and Distribution
Agreement” means the Separation and Distribution Agreement, as amended from time to time, by and among Distributing
and SpinCo dated [_____________].


 


“Specified Election”
means the election set forth in Section 4.04(c), but solely to the extent such election is claimed as being subject to the
application of Section 168(k)(5) (or any similar provision of state income Tax law, if applicable).


 


“Specified Excess Income Taxes”
means Income Taxes resulting from a reduction in SpinCo Federal Attributes that arose from a Specified Election in an amount equal
to the excess of (x) the amount of such SpinCo Federal Attributes claimed as being subject to the application of Section 168(k)(5)
(or any similar provision of state income Tax law, if applicable) over (y) the amount of such Tax Attributes not claimed as
being subject to the application of Section 168(k)(5) (or any similar provision of state income Tax law, if applicable).


 


“Specified Excess Tax Benefit”
means a Tax Benefit resulting from an adjustment pursuant to a Final Determination to a Tax Attribute that arose from a Specified
Election in an amount equal to the excess of (x) the amount of such Tax Attribute claimed as being subject to the application
of Section 168(k)(5) (or any similar provision of state income Tax law, if applicable) over (y) the amount of such Tax
Attribute not claimed as being subject to the application of Section 168(k)(5) (or any similar provision of state income Tax
law, if applicable).


 


“SpinCo” shall
have the meaning provided in the first sentence of this Agreement.


 


“SpinCo Capital Stock”
means all classes or series of capital stock of SpinCo, including (i) the SpinCo Common Stock, (ii) all options, warrants
and other rights to acquire such capital stock and (iii) all instruments properly treated as stock in SpinCo for U.S. federal
income tax purposes.


 


“SpinCo Carried Item”
means any net operating loss, net capital loss, excess tax credit, or other similar Tax item of any member of the SpinCo Group
which may or must be carried from one Tax Period to another prior Tax Period, or carried from one Tax Period to another subsequent
Tax Period, under the Code or other applicable Tax Law.


 




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“SpinCo Common Stock”
has the meaning given to HART Common Stock in the Separation and Distribution Agreement.


 


“SpinCo Federal Attribute”
shall have the meaning set forth in Section 2.02(a)(ii).


 


“SpinCo Federal Consolidated
Income Tax Return” shall mean any United States federal Income Tax Return for the affiliated group (as that term
is defined in Section 1504 of the Code) of which SpinCo is the common parent.


 


“SpinCo Full Taxpayer”
means the assumption that the SpinCo Group (a) is subject to the highest marginal regular statutory income Tax rate that would
be applicable to SpinCo if it filed Tax Returns on a standalone basis, (b) has sufficient taxable income to permit the realization
or receipt of the relevant Tax Benefit at the earliest possible time, and (c) is not subject to the alternative minimum tax.


 


“SpinCo Group”
means SpinCo and its Affiliates, as determined immediately after the Distribution.


 


“SpinCo Group Attributes”
shall have the meaning set forth in Section 2.03(a)(ii).


 


“SpinCo Separate Return”
means any Separate Return of SpinCo or any member of the SpinCo Group.


 


“SpinCo State Attribute”
shall have the meaning set forth in Section 2.03(a)(ii).


 


“State Income Tax”
means any Tax imposed by any State of the United States or the District of Columbia or by any political subdivision of any such
State or the District of Columbia which is imposed on or measured by net income, including state and local franchise or similar
Taxes measured by net income, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.


 


“State Other Tax”
means any Tax imposed by any State of the United States or the District of Columbia or by any political subdivision of any such
State or the District of Columbia other than any State Income Taxes, and any interest, penalties, additions to tax, or additional
amounts in respect of the foregoing.


 


“State Tax” means
any State Income Taxes or State Other Taxes.


 


“Straddle Period”
means any Tax Period that begins on or before and ends after the Deconsolidation Date.


 


“Supplemental Ruling”
means any ruling issued by the IRS in connection with the spin-off other than a ruling in response to Distributing’s initial
request for a private letter ruling.


 


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


 


“Tax Attribute”
shall mean a net operating loss, net capital loss, unused investment credit, unused foreign tax credit, excess charitable contribution,
general business credit or any other Tax Item that could reduce a Tax.


 


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


 


“Tax Benefit”
means any refund, credit, or other reduction in otherwise required Tax payments.


 


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


 


“Tax Control”
means the definition of “control” set forth in Section 368(c) of the Code (or in any successor statute or provision),
as such definition may be amended from time to time.


 






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“Tax Dispute”
shall have the meaning set forth in Section 14 of this Agreement.


  


“Tax-Free Status”
means the qualification of the Contribution and Distribution, taken together, each (a) as a reorganization described in Sections
355(a) and 368(a)(1)(D) of the Code, (b) as a transaction in which the stock distributed thereby is “qualified property”
for purposes of Sections 355(d), 355(e) and 361(c) of the Code and (c) as a transaction in which Distributing, SpinCo, and
the shareholders of Distributing recognize no income or gain for U.S. federal income tax purposes pursuant to Sections 355, 361
and 1032 of the Code, other than, in the case of Distributing and SpinCo, intercompany items or excess loss accounts taken into
account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code.


 


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


 


“Tax Law” means
the law of any governmental entity or political subdivision thereof relating to any Tax.


 


“Tax Opinions/Rulings”
means the opinion or opinions of Tax Advisors deliverable to Distributing in connection with the Contribution and the Distribution
and/or the Ruling or Rulings.


 


“Tax Period”
means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.


 


“Tax Records”
means any Tax Returns, Tax Return workpapers, documentation relating to any Tax Contests, and any other books of account or records
(whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other
medium) required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any
Tax Authority.


 


“Tax-Related Losses”
means (i) all federal, state and local Taxes (including interest and penalties thereon) imposed pursuant to any settlement,
Final Determination, judgment or otherwise; (ii) all accounting, legal and other professional fees, and court costs incurred
in connection with such Taxes; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies
and any amount paid by Distributing (or any Distributing Affiliate) or SpinCo (or any SpinCo Affiliate) in respect of the liability
of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority, in each case, resulting from the failure
of the Contribution and the Distribution, taken together, to have Tax-Free Status.


 


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


 


“Third Party Indemnifying Party”
shall have the meaning set forth in Section 5.02(b) of this Agreement.


 


“Transactions”
means the Contribution, the Distribution and the other transactions contemplated by the Separation and Distribution Agreement.


 


“Transition Services Agreement”
means the Transition Services Agreement, dated [_______________], by and between Distributing and SpinCo.


 


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


 


“Unqualified Tax Opinion”
means an unqualified “will” opinion of a Tax Advisor, which Tax Advisor is acceptable to Distributing, on which Distributing
may rely to the effect that a transaction will not affect the Tax-Free Status. Any such opinion must assume that the Contribution
and Distribution, taken together, would have qualified for Tax-Free Status if the transaction in question did not occur.


 




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Section 2. Allocation of Tax Liabilities.



 


Section 2.01 Distributing Liability.


 


(a) Distributing shall be liable
for, and shall indemnify and hold harmless the SpinCo Group from and against any liability for, Taxes which are allocated to Distributing
under this Section 2.


 


(b) SpinCo Liability. SpinCo shall
be liable for, and shall indemnify and hold harmless the Distributing Group from and against any liability for, Taxes which are
allocated to SpinCo under this Section 2.


 


Section 2.02 Allocation of
United States Federal Income Tax and Federal Other Tax. Except as provided in Section 2.05, Federal Income Tax and
Federal Other Tax shall be allocated as follows:


 


(a) Allocation of Tax Relating to Distributing
Federal Consolidated Income Tax Returns. For the Tax Periods ending on or before the Deconsolidation Date, Distributing shall
be responsible for any and all Federal Income Taxes attributable to the Tax Items of the SpinCo Group (whether as a result of a
Final Determination or otherwise) and attributable to the Tax Items of the Distributing Group (whether as a result of a Final Determination
or otherwise).


 


(b) Allocation of Tax Relating to Federal
Separate Income Tax Returns. (i) For the Tax Periods ending after the Deconsolidation Date, Distributing shall be responsible
for any and all Federal Income Taxes due with respect to or required to be reported on any Distributing Separate Return (including
any increase in such Tax as a result of a Final Determination)(ii) For the Tax Periods ending after the Deconsolidation Date,
SpinCo shall be responsible for any and all Federal Income Taxes due with respect to or required to be reported on any SpinCo Separate
Return (including any increase in such Tax as a result of a Final Determination).


 


(c) Allocation of Federal Other Tax.


 


(i) For the Tax Periods ending
after the Deconsolidation Date, SpinCo shall be responsible for any and all Federal Other Taxes attributable to the Tax Items,
or imposed on a member of, of the SpinCo Group.


 


(ii) For the Tax Periods ending
after the Deconsolidation Date Distributing shall be responsible for any and all Federal Other Taxes attributable to the Tax Items
of the Distributing Group.


 


Section 2.03 Allocation of
State Income and State Other Taxes. Except as provided in Section 2.05, State Income Tax and State Other Tax shall
be allocated as follows:


 


(a) Allocation of Tax Relating to Distributing
State Combined Income Tax Returns.


 


(i) For the Tax Periods ending
on or before the Deconsolidation Date, Distributing shall be responsible for any and all State Income Taxes, attributable to the
Tax Items of the Distributing Group (whether as a result of a Final Determination or otherwise) and for any and all State Income
Taxes, attributable to the Tax Items of the SpinCo Group (whether as a result of a Final Determination or otherwise). For the Tax
Periods ending after the Deconsolidation Date, SpinCo shall be responsible for any and all State Income Taxes (calculated on the
basis that SpinCo is a SpinCo Full Taxpayer) attributable to the Tax Items of the SpinCo Group (whether as a result of a Final
Determination or otherwise). For the Tax Periods ending after the Deconsolidation Date, Distributing shall be responsible for any
and all State Income Taxes, attributable to the Tax Items of the Distributing Group (whether as a result of a Final Determination
or otherwise).


 


(ii) For the Tax Periods ending
on or before the Deconsolidation Date, Distributing shall be responsible for any and all State Income Taxes (calculated on the
basis that Distributing is a Distributing Full Taxpayer) attributable to any Tax Items of the Distributing Group which Taxes result
from a reduction in any Tax Attributes of the SpinCo Group (any such Tax Attribute, a “SpinCo State Attribute,”
and together with any SpinCo Federal Attribute, the “SpinCo Group Attributes”) relative to the amount
of such Tax Attributes reflected on the original Tax Return in respect of such Tax Attributes (whether such reduction occurs as
a result of a Final Determination or otherwise).


 


(b) Allocation of Tax Relating to State
Separate Income Tax Returns. (i) For the Tax Periods ending after the Deconsolidation Date, Distributing shall be responsible
for any and all State Income Taxes due with respect to or required to be reported on any Distributing Separate Return (including
any increase in such Tax as a result of a Final Determination); (ii) For the Tax Periods ending after the Deconsolidation
Date SpinCo shall be responsible for any and all State Income Taxes due with respect to or required to be reported on any SpinCo
Separate Return (including any increase in such Tax as a result of a Final Determination).


 




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(c) Allocation of State Other Tax.


 


(i) For the Tax Periods ending
on or before the Deconsolidation Date, Distributing shall be responsible for any and all State Other Taxes attributable to the
Tax Items of the Distributing Group and all State Other Taxes attributable to the Tax Items of the SpinCo Group.


 


(ii) For the Tax Periods ending
after the Deconsolidation Date, SpinCo shall be responsible for any and all State Other Taxes attributable to the Tax Items of
the SpinCo Group.


 


(iii) For the Tax Periods
ending after the Deconsolidation Date, Distributing shall be responsible for any and all State Other Taxes attributable to the
Tax Items of the Distributing Group.


 


Section 2.04 Allocation of
Foreign Taxes. Except as provided in Section 2.05, Foreign Income Tax and Foreign Other Tax shall be allocated as
follows:


 


(a) Allocation of Tax Relating to Separate
Returns. (i) Distributing shall be responsible for any and all Foreign Income Taxes due with respect to or required to
be reported on any Distributing Separate Return, including Foreign Income Tax of Distributing or any member of the Distributing
Group imposed by way of withholding by a member of the SpinCo Group (and including any increase in such Foreign Income Tax as a
result of a Final Determination); (ii) For the Tax Periods ending after the Deconsolidation Date, SpinCo shall be responsible
for any and all Foreign Income Taxes due with respect to or required to be reported on any SpinCo Separate Return, including Foreign
Income Tax of SpinCo or any member of the SpinCo Group imposed by way of withholding by a member of the Distributing Group (and
including any increase in such Foreign Income Tax as a result of a Final Determination).


 


(b) Allocation of Foreign Other Tax.


 


(i) For the Tax Periods ending
on or before the Deconsolidation Date, Distributing shall be responsible for any and all Foreign Other Taxes attributable to the
Tax Items of the Distributing Group and SpinCo Group.


 


(ii) For the Tax Periods ending
after the Deconsolidation Date, SpinCo shall be responsible for any and all Foreign Other Taxes attributable to the Tax Items of
the SpinCo Group.


 


(iii) For the Tax Periods
ending after the Deconsolidation Date, Distributing shall be responsible for any and all Foreign Other Taxes attributable to the
Tax Items of the Distributing Group.


 


Section 2.05 Certain Transaction
and Other Taxes.


 


(a) SpinCo Liability. SpinCo shall
be liable for, and shall indemnify and hold harmless the Distributing Group from and against any liability for:


 


(i) Any stamp, sales and use,
gross receipts, value-added or other transfer Taxes imposed by any Tax Authority on any member of the SpinCo Group (if such member
is primarily liable for such Tax) on the transfers occurring pursuant to the Transactions;


 


(ii) any Tax resulting from
a breach by SpinCo of any covenant in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement; and


 


(iii) any Tax-Related Losses
for which SpinCo is responsible pursuant to Section 7.05 of this Agreement.


 


(b) Distributing Liability. Distributing
shall be liable for, and shall indemnify and hold harmless the SpinCo Group from and against any liability for:


 


(i) Any stamp, sales and use,
gross receipts, value-added or other transfer Taxes imposed by any Tax Authority on any member of the Distributing Group (if such
member is primarily liable for such Tax) on the transfers occurring pursuant to the Transactions; and


 




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(ii) any Tax resulting from
a breach by Distributing of any covenant in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement.


 


in the case of each of (i) and (ii), such amounts to be
calculated on the basis that SpinCo is a SpinCo Full Taxpayer.


 


(c)Additional Restrictions. SpinCo
agrees not to take any action after the Deconsolidation Date that would adversely impact the tax liability of Distributing prior
to the Deconsolidation Date. Distributing agrees not to take any action after the Deconsolidation Date that would adversely impact
the tax liability of SpinCo prior to the Deconsolidation Date.


 


Section 2.06 SpinCo Group Attributes.
For the avoidance of doubt (but without prejudice to the provisos set forth in Sections 2.02(a)(i) and (ii)), except as set forth
in Section 6.01, SpinCo shall not be entitled to receive payment from Distributing in respect of any SpinCo Group Attributes
or for any reduction of any Taxes (or increase in Tax Attributes) or any Tax Benefit (whether such Tax Attributes, Tax Benefits
or reduction in Taxes are reported on an original Tax Return, arise pursuant to a Final Determination or otherwise).


 


Section 3. Proration of Taxes.



 


(a) General Method of Proration.
Tax Items shall be apportioned between Pre-Deconsolidation Periods and Post-Deconsolidation Periods in accordance with the principles
of Treasury Regulation Section 1.1502-76(b) as reasonably interpreted and applied by Distributing. If the Deconsolidation
Date is not an Accounting Cutoff Date (and provided an election under Treasury Regulation Section 1.1502-76(b)(2)(ii)(D) is
not made), the provisions of Treasury Regulation Section 1.1502-76(b)(2)(iii) will be applied to ratably allocate the items
(other than extraordinary items) for the month which includes the Deconsolidation Date. At Distributing’s election, in its
sole discretion, an election under Treasury Regulation Section 1.1502-76(b)(2)(ii)(D) (relating to ratable allocation of a
year’s items) shall be made.


 


(b) Transaction Treated as Extraordinary
Item. In determining the apportionment of Tax Items between Pre-Deconsolidation Periods and Post-Deconsolidation Periods, any
Tax Items relating to the Transactions shall be treated as extraordinary items described in Treasury Regulation Section 1.1502-76(b)(2)(ii)(C)
and shall (to the extent occurring on or prior to the Deconsolidation Date) be allocated to Pre-Deconsolidation Periods, and any
Taxes related to such items shall be treated under Treasury Regulation Section 1.1502-76(b)(2)(iv) as relating to such extraordinary
item and shall (to the extent occurring on or prior to the Deconsolidation Date) be allocated to Pre-Deconsolidation Periods.


 


Section 4. Preparation and Filing
of Tax Returns. 


 


Section 4.01 General.
Except as otherwise provided in this Section 4, Tax Returns shall be prepared and filed when due (including extensions) by
the person obligated to file such Tax Returns under the Code or applicable Tax Law. The Companies shall provide, and shall cause
their Affiliates to provide, assistance and cooperation to one another in accordance with Section 8 with respect to the preparation
and filing of Tax Returns, including providing information required to be provided in Section 8.


 


Section 4.02 Distributing’s
Responsibility. Distributing has the exclusive obligation and right to prepare and file, or to cause to be prepared and
filed:


 


(a) Distributing Federal Consolidated
Income Tax Returns for any Tax Periods ending on, before or after the Deconsolidation Date;


 


(b) Distributing State Combined
Income Tax Returns and any other Joint Returns which Distributing reasonably determines are required to be filed (or which Distributing
chooses to be filed) by the Companies or any of their Affiliates for Tax Periods ending on, before or after the Deconsolidation
Date; provided, however, that Distributing shall use commercially reasonable efforts to provide written notice to
SpinCo of such determination to file a Distributing State Combined Income Tax Return or other Joint Return if such a Tax Return
has never for such type of Tax in such jurisdiction been filed in a prior Tax Period; and


 






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(c) SpinCo Separate Returns relating
to Income Taxes and Distributing Separate Returns which Distributing reasonably determines are required to be filed by the Companies
or any of their Affiliates (or which Distributing chooses to be filed) for Tax Periods ending on, before or after the Deconsolidation
Date (limited, in the case of SpinCo Separate Returns relating to Income Taxes, to such Returns as are required to be filed (or
which Distributing chooses to be filed) for Tax Periods beginning prior to the Deconsolidation Date);


  


provided, however, that to the extent any Tax
Returns described in clauses (b), (c) or (d) relate to SpinCo, the preparation and filing of such Tax Returns by Distributing
shall be treated as a Service pursuant to the Transition Services Agreement, and SpinCo shall pay to Distributing the applicable
Service Charge as provided in the Transition Services Agreement.


 


Section 4.03 SpinCo’s
Responsibility. SpinCo shall prepare and file, or shall cause to be prepared and filed, all Tax Returns required to be
filed by or with respect to members of the SpinCo Group other than those Tax Returns which Distributing is required, or chooses,
to prepare and file under Section 4, provided that SpinCo shall not file any SpinCo Separate Returns for a Tax Period in a
jurisdiction and for a type of Tax where Distributing files a Joint Return. The Tax Returns required to be prepared and filed by
SpinCo under this Section 4.03 shall include (a) any SpinCo Federal Consolidated Income Tax Return for Tax Periods ending
after the Deconsolidation Date, (b) SpinCo Separate Returns relating to Income Taxes required to be filed for Tax Periods
beginning on or after the Deconsolidation Date, and (c) SpinCo Separate Returns relating to Other Taxes.


 


Section 4.04 Tax Accounting
Practices. 


 


(a) General Rule. With respect
to any Tax Return that SpinCo has the obligation and right to prepare and file, or cause to be prepared and filed, under Section 4.03,
for any Pre-Deconsolidation Period or any Straddle Period (or any taxable period beginning after the Deconsolidation Date to the
extent items reported on such Tax Return might reasonably be expected to affect items reported on any Tax Return that Distributing
has the obligation or right to prepare and file, or chooses to be prepared and filed, under Section 4.03), except as provided
in Section 4.04(b) such Tax Return shall be prepared in accordance with past practices, accounting methods, elections or conventions
(“Past Practices”) used with respect to the Tax Returns in question (unless there is no reasonable basis
for the use of such Past Practices or unless there is no adverse effect to Distributing), and to the extent any items are not covered
by Past Practices (or in the event that there is no reasonable basis for the use of such Past Practices or there is no adverse
effect to Distributing), in accordance with reasonable Tax accounting practices selected by SpinCo. Except as provided in Section 4.04(b),
Distributing shall prepare any Tax Return which it has the obligation and right to prepare and file, or cause to be prepared and
filed, under Section 4.02, in accordance with reasonable Tax accounting practices selected by Distributing.


 


(b) Reporting of Transactions.
The Tax treatment reported on any Tax Return relating to the Transactions shall be consistent with the treatment thereof in the
Ruling Requests and the Tax Opinions/Rulings, unless there is no reasonable basis for such Tax treatment. The Tax treatment reported
on any Tax Return for which SpinCo is the Responsible Party shall be consistent with that on any Tax Return filed or to be filed
by Distributing or any member of the Distributing Group or caused to be filed by Distributing, in each case with respect to periods
prior to the Distribution Date or with respect to Straddle Periods (“Distributing Group Transaction Returns”),
unless there is no reasonable basis for such Tax treatment. To the extent there is a Tax treatment relating to the Transactions
which is not covered by the Ruling Requests, the Tax Opinions/Rulings or Distributing Group Transaction Returns, the Companies
shall agree on the Tax treatment to be reported on any Tax Return. For this purpose, the Tax treatment shall be determined by the
Responsible Company with respect to such Tax Return and shall be agreed to by the other Company unless either (i) there is
no reasonable basis for such Tax treatment, or (ii) such Tax treatment is inconsistent with the Tax treatment contemplated
in the Ruling Requests, the Tax Opinions/Rulings and/or the Distributing Group Transaction Returns. Such Tax Return shall be submitted
for review pursuant to Section 4.06(a), and any dispute regarding such proper Tax treatment shall be referred for resolution
pursuant to Section 14, sufficiently in advance of the filing date of such Tax Return (including extensions) to permit timely
filing of the Tax Return.


 


(c) Bonus Depreciation. Notwithstanding
anything to the contrary herein, Distributing shall be entitled, in its sole discretion, to elect whether SpinCo shall take “bonus
depreciation” described in Section 168(k) of the Code for any federal income tax purposes for any tax year of SpinCo
that includes the Deconsolidation Date (or the day following the Deconsolidation Date), irrespective of whether Distributing is
responsible for filing the Tax Return to which such election relates under this Agreement.


 




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Section 4.05 Consolidated or
Combined Tax Returns. At Distributing’s election, in its sole discretion, SpinCo will elect and join, and will cause
its respective Affiliates to elect and join, in filing any Distributing State Combined Income Tax Returns and any Joint Returns
that Distributing determines are required to be filed or that Distributing chooses to file pursuant to Section 4.02(b). With
respect to any SpinCo Separate Returns relating to any Tax Period (or portion thereof) ending on or prior to the Deconsolidation
Date, SpinCo will elect and join, and will cause its respective Affiliates to elect and join, in filing consolidated, unitary,
combined, or other similar joint Tax Returns, to the extent reasonably determined by Distributing.


 


Section 4.06 Right to Review
Tax Returns. The Responsible Company with respect to any Tax Return shall make such Tax Return and related workpapers available
for review by the other Company, if requested, to the extent (i) such Tax Return relates to Taxes for which the requesting
party would reasonably be expected to be liable, (ii) such Tax Return relates to Taxes and the requesting party would reasonably
be expected to be liable in whole or in part for any additional Taxes owing as a result of adjustments to the amount of such Taxes
reported on such Tax Return, (iii) such Tax Return relates to Taxes for which the requesting party would reasonably be expected
to have a claim for Tax Benefits under this Agreement, or (iv) the requesting party reasonably determines that it must inspect
such Tax Return to confirm compliance with the terms of this Agreement. The Responsible Company shall use its reasonable best efforts
to make such Tax Return available for review as required under this paragraph at least fifteen (15) days prior to the due
date for filing of such Tax Return to provide the requesting party with a meaningful opportunity to analyze and comment on such
Tax Return.


 


Section 4.07 SpinCo Carrybacks,
Carryforwards and Claims for Refund. SpinCo hereby agrees that Distributing shall be entitled to determine in its sole
discretion whether (x) any Adjustment Request with respect to any Joint Return shall be filed to claim in any Pre-Deconsolidation
Period any SpinCo Carried Item, and (y) any available elections shall be made to waive the right to claim in any Pre-Deconsolidation
Period with respect to any Joint Return any SpinCo Carried Item, and whether any affirmative election shall be made to claim any
such SpinCo Carried Item.


 


Section 4.08 Apportionment
of Earnings and Profits and Tax Attributes. Distributing shall in good faith advise SpinCo as soon as reasonably practicable
in writing of the portion, if any, of any earnings and profits, Tax Attribute, overall foreign loss or other consolidated, combined
or unitary attribute which Distributing determines shall be allocated or apportioned to the SpinCo Group under applicable Tax law.
SpinCo and all members of the SpinCo Group shall prepare all Tax Returns in accordance with such written notice. In the event of
an adjustment to the earnings and profits or any Tax Attributes determined by Distributing, Distributing shall promptly notify
SpinCo in writing of such adjustment. For the absence of doubt, Distributing shall not be liable to SpinCo or any member of the
SpinCo Group for any failure of any determination under this Section 4.08 to be accurate under applicable law and regulations
and in good faith.


 


Section 5. Tax Payments. 


 


Section 5.01 Payment of Separate
Company Taxes. Each Company shall pay, or shall cause to be paid, to the applicable Tax Authority when due all Taxes owed
by such Company or a member of such Company’s Group with respect to a Separate Return.


 


Section 5.02 Indemnification
Payments.


 


(a) If any Company (the “Payor”)
is required under applicable Tax Law to pay to a Tax Authority a Tax that another Company (the “Required Party”)
is liable for under this Agreement, the Required Party shall reimburse the Payor within eight (8) days of delivery by the
Payor to the Required Party of an invoice for the amount due, accompanied by evidence of payment and a statement detailing the
Taxes paid and describing in reasonable detail the particulars relating thereto.


 


(b) If any Company (the “Third
Party Indemnifying Party”) is required under the terms of an agreement to which it is a party (or with respect to
which it has agreed to guarantee the obligations thereunder) to pay to a third party a Tax that another Company (the “Company
Indemnifying Party”) is liable for under this Agreement, the Company Indemnifying Party shall reimburse the Third
Party Indemnifying Party within eight (8) days of delivery by the Third Party Indemnifying Party to the Company Indemnifying
Party of an invoice for the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing
in reasonable detail the particulars relating thereto.


 




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(c) All indemnification payments
under this Agreement shall be made by Distributing directly to SpinCo and by SpinCo directly to Distributing; provided, however,
that if the Companies mutually agree with respect to any such indemnification payment, any member of the Distributing Group, on
the one hand, may make such indemnification payment to any member of the SpinCo Group, on the other hand, and vice versa.


 


Section 6. Tax Benefits. 


 


Section 6.01 Tax Benefits.


 


(a) Distributing shall be entitled
to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes received by any member of the Distributing
Group or the SpinCo Group, other than any refund to which SpinCo is entitled pursuant to Section 6.01(d). SpinCo shall not
be entitled to any refund (or any interest thereon received from the applicable Tax Authority), except as set forth in Section 6.01(d).
A Company receiving a refund to which another Company is entitled hereunder shall pay over such refund to such other Company within
five (5) Business Days after such refund is received.


 


(b) If a member of the SpinCo Group
would be expected to realize a Tax Benefit as a result of an adjustment pursuant to a Final Determination to any Taxes for which
a member of the Distributing Group would otherwise be liable hereunder (or an adjustment pursuant to a Final Determination to any
Tax Attribute of a member of the Distributing Group) and such Tax Benefit would not have arisen but for such adjustment (determined
on a “with and without” basis assuming the SpinCo Group is a SpinCo Full Taxpayer), SpinCo shall make a payment to
Distributing within five (5) Business Days following such Final Determination, in an amount equal to the Taxes for which the
Distributing Group would otherwise be, or would otherwise be reasonably expected to be, liable as a result of such adjustment provided,
however, that to the extent the Tax Benefit resulting from the Final Determination would be expected to be realized in a Pre-Deconsolidation
Period, SpinCo shall instead be responsible under this Section 6.01(b) for an amount equal to the excess of (x) the amount
of Taxes for which a member of the Distributing Group is liable as a result of the adjustment (for the avoidance of doubt, including
any interest payable in respect thereof) over (y) the amount of such Tax Benefit (for the avoidance of doubt, including any
interest owed in respect thereof) (such amounts to be calculated on the basis that Distributing is a Distributing Full Taxpayer),
and provided, further, however, that SpinCo shall not be required to make a payment to Distributing pursuant to this Section 6.01(b)
to the extent of any Specified Excess Tax Benefit. For purposes of determining the amount of Taxes for which the Distributing Group
is, or is reasonably be expected to be, liable as a result of an adjustment pursuant to a Final Determination, the Distributing
Group shall be deemed (i) not to utilize any Tax Attributes available to the Distributing Group and (ii) to be a Distributing
Full Taxpayer.


 


(c) No later than five (5) Business
Days following a Final Determination described in Section 6.01(b), Distributing shall provide SpinCo with a written calculation
of the amount payable to Distributing by SpinCo pursuant to this Section 6. In the event that SpinCo disagrees with any such
calculation described in this Section 6.01(c), SpinCo shall so notify Distributing in writing within thirty (30) days
of receiving the written calculation set forth above in this Section 6.01(c). Distributing and SpinCo shall endeavor in good
faith to resolve such disagreement, and, failing that, the amount payable under Section 6.01(b) shall be determined in accordance
with the disagreement resolution provisions of Section 14 as promptly as practicable.


 


(d) Without prejudice to Section 6.01(b),
SpinCo shall be entitled to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes reported
on (i) a SpinCo Separate Return for a Post-Deconsolidation Period or (ii) a SpinCo Separate Return of Other Taxes for
any Tax period that ends after the Deconsolidation Date. For the avoidance of doubt, Distributing, and not SpinCo, shall be entitled
to any refund or Tax Benefit that results from a SpinCo Carried Item, other than any refund to which SpinCo is entitled pursuant
to the first sentence of this Section 6.01(d).


 


Section 6.02 Distributing and
SpinCo Income Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation. 


 


(a) Solely the member of the Group
by which the relevant individual is currently employed at the time of the vesting, exercise, disqualifying disposition, payment
or other relevant taxable event, as appropriate, in respect of the equity awards and other incentive compensation described in
Article VIII of the Separation and Distribution Agreement, or, if such individual is not currently employed at such time by a member
of the Group, the member of the Group by which the relevant individual was most recently employed, shall be entitled to claim,
in a Post-Deconsolidation Period, any Income Tax deduction in respect of such equity awards and other incentive compensation on
its respective Tax Return associated with such event.


 




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(b) In the event that an employee of SpinCo
exercises any Distributing stock option, SpinCo, and not Distributing, will be entitled to any tax deduction available in respect
of such exercise.


 


(c) In the event that an employee of Distributing
exercises any SpinCo stock option, Distributing, and not SpinCo, will be entitled to any tax deduction available in respect of
such exercise.


 


Section 7. Tax-Free Status. 


 


Section 7.01 Tax Opinions/Rulings
and Representation Letters. Each of SpinCo and Distributing hereby represents and agrees that (A) it has examined
the Ruling Documents and the Representation Letters prior to the date hereof and (B) subject to any qualifications therein,
all information contained in such Ruling Documents or Representation Letters that concerns or relates to such Company or any member
of its Group is and, to the extent such information relates to future events or circumstances, will be, true, correct and complete.


 


Section 7.02 Restrictions on
SpinCo. 


 


(a) SpinCo agrees that it will
not take or fail to take, or permit any SpinCo Affiliate to take or fail to take, any action where such action or failure to act
would be inconsistent with or cause to be untrue any material, information, covenant or representation in any Representation Letters
or Tax Opinions/Rulings. SpinCo agrees that it will not take or fail to take, or permit any SpinCo Affiliate to take or fail to
take, any action which prevents or could reasonably be expected to prevent (A) the Tax-Free Status, or (B) any transaction
contemplated by the Separation and Distribution Agreement which is intended by the parties to be tax-free from so qualifying, including,
in the case of SpinCo, issuing any SpinCo Capital Stock that would prevent the Distribution from qualifying as a tax-free distribution
within the meaning of Section 355 of the Code.


 


(b) Pre-Distribution Period. During
the period from the date hereof until the completion of the Distribution, SpinCo shall not take any action (including the issuance
of SpinCo Capital Stock) or permit any SpinCo Affiliate directly or indirectly controlled by SpinCo to take any action if, as a
result of taking such action, SpinCo could have a number of shares of SpinCo Capital Stock (computed on a fully diluted basis or
otherwise) issued and outstanding, including by way of the exercise of stock options (whether or not such stock options are currently
exercisable) or the issuance of restricted stock, that could cause Distributing to cease to have Tax Control of SpinCo.


 


(c) SpinCo agrees that, from the
date hereof until the first day after the two-year anniversary of the Distribution Date, it will (i) maintain its status as
a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, and (ii) not engage
in any transaction that would result in it ceasing to be a company engaged in the Active Trade or Business for purposes of Section 355(b)(2)
of the Code, in each case, taking into account Section 355(b)(3) of the Code.


 




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(d) SpinCo agrees that, from the
date hereof until the first day after the two-year anniversary of the Distribution Date, it will not (i) enter into any Proposed
Acquisition Transaction or, to the extent SpinCo has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed
Acquisition Transaction to occur (whether by (a) redeeming rights under a shareholder rights plan, (b) finding a tender
offer to be a “permitted offer” under any such plan or otherwise causing any such plan to be inapplicable or neutralized
with respect to any Proposed Acquisition Transaction, or (c) approving any Proposed Acquisition Transaction, whether for purposes
of Section 203 of the DGCL or any similar corporate statute, any “fair price” or other provision of SpinCo’s
charter or bylaws or otherwise), (ii) merge or consolidate with any other Person or liquidate or partially liquidate, (iii) in
a single transaction or series of transactions sell or transfer (other than sales or transfers of inventory in the ordinary course
of business) all or substantially all of the assets that were transferred to SpinCo pursuant to the Contribution or sell or transfer
60% or more of the gross assets of the Active Trade or Business or 60% or more of the consolidated gross assets of SpinCo and its
Affiliates (such percentages to be measured based on fair market value as of the Distribution Date), (iv) redeem or otherwise
repurchase (directly or through a SpinCo Affiliate) any SpinCo stock, or rights to acquire stock, 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), (v) amend its certificate of incorporation (or other organizational documents), or take any other action,
whether through a stockholder vote or otherwise, affecting the voting rights of SpinCo Capital Stock (including, without limitation,
through the conversion of one class of SpinCo Capital Stock into another class of SpinCo Capital Stock) or (vi) take any other
action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation
made in the Representation Letters or the Tax Opinions/Rulings) which in the aggregate (and taking into account any other transactions
described in this subparagraph (d) and the Offering) 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 stock representing a Fifty-Percent or
Greater Interest in SpinCo or otherwise jeopardize the Tax-Free Status, unless prior to taking any such action set forth in the
foregoing clauses (i) through (vi), (A) SpinCo shall have requested that Distributing obtain a Ruling in accordance with
Section 7.04(b) and (d) of this Agreement to the effect that such transaction will not affect the Tax-Free Status and
Distributing shall have received such a Ruling in form and substance satisfactory to Distributing in its sole and absolute discretion,
which discretion shall be exercised in good faith solely to preserve the Tax-Free Status (and in determining whether a Ruling is
satisfactory, Distributing may consider, among other factors, the appropriateness of any underlying assumptions and management’s
representations made in connection with such Ruling), or (B) SpinCo shall provide Distributing with an Unqualified Tax Opinion
in form and substance satisfactory to Distributing in its sole and absolute discretion, which discretion shall be exercised in
good faith solely to preserve the Tax-Free Status (and in determining whether an opinion is satisfactory, Distributing may consider,
among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis
for the opinion and Distributing may determine that no opinion would be acceptable to Distributing) or (C) Distributing shall
have waived the requirement to obtain such Ruling or Unqualified Tax Opinion.


 


(e) Certain Issuances of SpinCo Capital
Stock. If SpinCo proposes to enter into any Section 7.02(e) Acquisition Transaction or, to the extent SpinCo has the right
to prohibit any Section 7.02(e) Acquisition Transaction, proposes to permit any Section 7.02(e) Acquisition Transaction
to occur, in each case, during the period from the date hereof until the first day after the two-year anniversary of the Distribution
Date, SpinCo shall provide Distributing, no later than ten (10) days following the signing of any written agreement with respect
to the Section 7.02(e) Acquisition Transaction, with a written description of such transaction (including the type and amount
of SpinCo Capital Stock to be issued in such transaction) and a certificate of the Board of Directors of SpinCo to the effect that
the Section 7.02(e) Acquisition Transaction is not a Proposed Acquisition Transaction or any other transaction to which the
requirements of Section 7.02(d) apply (a “Board Certificate”).


 


(f) SpinCo Internal Restructuring.
SpinCo shall not engage in, cause or permit any internal restructuring (including by making or revoking any election under
Treasury Regulation Section 301.7701-3) involving SpinCo and/or any of its subsidiaries or any contribution, sale or other
transfer of any of the assets directly or indirectly contributed to SpinCo as part of the Contribution to SpinCo or any of its
subsidiaries (any such action, an “Internal Restructuring”) during or with respect to any Tax Period
(or portion thereof) ending on or prior to the Distribution Date without obtaining the prior written consent of Distributing (such
prior written consent not to be unreasonably withheld). SpinCo shall provide written notice to Distributing describing any Internal
Restructuring proposed to be taken during or with respect to any Tax Period (or portion thereof) beginning after the Distribution
Date and ending on or prior to the two-year anniversary of the Distribution Date and shall consult with Distributing regarding
any such proposed actions reasonably in advance of taking any such proposed actions and shall consider in good faith any comments
from Distributing relating thereto.


 


(g) Distributions by Foreign SpinCo
Subsidiaries. Until January 1st of the calendar year immediately following the calendar year in which the Distribution
occurs, SpinCo shall neither cause nor permit any foreign subsidiary of SpinCo to enter into any transaction or take any action
that would be considered under the Code to constitute the declaration or payment of a dividend (including pursuant to Section 304
of the Code) without obtaining the prior written consent of Distributing (such prior written consent not to be unreasonably withheld).


 




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Section 7.03 Restrictions on
Distributing. Distributing agrees that it will not take or fail to take, or permit any member of the Distributing Group
to take or fail to take, any action where such action or failure to act would be inconsistent with or cause to be untrue any material,
information, covenant or representation in any Representation Letters or Tax Opinions/Rulings. Distributing agrees that it will
not take or fail to take, or permit any member of the Distributing Group to take or fail to take, any action which prevents or
could reasonably be expected to prevent (A) the Tax-Free Status, or (B) any other transaction contemplated by the Separation
and Distribution Agreement which is intended by the parties to be tax-free from so qualifying; provided, however,
that this Section 7.03 shall not be construed as obligating Distributing to consummate the Distribution without the satisfaction
or waiver of all conditions set forth in Section 4.3 of the Separation and Distribution Agreement nor shall it be construed
as preventing Distributing from terminating the Separation and Distribution Agreement pursuant to Article XI thereof.


 


Section 7.04 Procedures Regarding
Opinions and Rulings. 


 


(a) If SpinCo notifies Distributing
that it desires to take one of the actions described in clauses (i) through (vi) of Section 7.02(d) (a “Notified
Action”), Distributing and SpinCo shall reasonably cooperate to attempt to obtain the Ruling or Unqualified Tax Opinion
referred to in Section 7.02(d), unless Distributing shall have waived the requirement to obtain such Ruling or Unqualified
Tax Opinion.


 


(b) Rulings or Unqualified Tax Opinions
at SpinCo’s Request. Distributing agrees that at the reasonable request of SpinCo pursuant to Section 7.02(d), Distributing
shall cooperate with SpinCo and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Ruling from
the IRS or an Unqualified Tax Opinion for the purpose of permitting SpinCo to take the Notified Action. Further, in no event shall
Distributing be required to file any Ruling Request under this Section 7.04(b) unless SpinCo represents that (A) it has
read the Ruling Request, and (B) all information and representations, if any, relating to any member of the SpinCo Group,
contained in the Ruling Request documents are (subject to any qualifications therein) true, correct and complete. SpinCo shall
reimburse Distributing for all reasonable costs and expenses incurred by the Distributing Group in obtaining a Ruling or Unqualified
Tax Opinion requested by SpinCo within ten (10) Business Days after receiving an invoice from Distributing therefor.


 


(c) Rulings or Unqualified Tax Opinions
at Distributing’s Request. Distributing shall have the right to obtain a Ruling or an Unqualified Tax Opinion at any
time in its sole and absolute discretion. If Distributing determines to obtain a Ruling or an Unqualified Tax Opinion, SpinCo shall
(and shall cause each Affiliate of SpinCo to) cooperate with Distributing and take any and all actions reasonably requested by
Distributing in connection with obtaining the Ruling or Unqualified Tax Opinion (including, without limitation, by making any representation
or covenant or providing any materials or information requested by the IRS or Tax Advisor; provided that SpinCo shall not
be required to make (or cause any Affiliate of SpinCo 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). Distributing and SpinCo shall each bear its own costs and
expenses in obtaining a Ruling or an Unqualified Tax Opinion requested by Distributing.


 


(d) SpinCo hereby agrees that Distributing
shall have sole and exclusive control over the process of obtaining any Ruling, and that only Distributing shall apply for a Ruling.
In connection with obtaining a Ruling pursuant to Section 7.04(b), (A) Distributing shall keep SpinCo informed in a timely
manner of all material actions taken or proposed to be taken by Distributing in connection therewith; (B) Distributing shall
(1) reasonably in advance of the submission of any Ruling Request documents 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 (C) Distributing 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 Ruling. Neither SpinCo nor any SpinCo Affiliate directly
or indirectly controlled by SpinCo shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or
otherwise) at any time concerning the Transactions (including the impact of any transaction on the Transactions) or any transaction
listed on Schedule 7.02(a).


 




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Section 7.05 Liability for
Tax-Related Losses.


 


(a) Notwithstanding anything in
this Agreement or the Separation and Distribution Agreement to the contrary, SpinCo shall be responsible for, and shall indemnify
and hold harmless Distributing and its Affiliates and each of their respective officers, directors and employees from and against,
one hundred percent (100%) of any Tax-Related Losses that are attributable to or result from any one or more of the following:
(A) the direct or indirect acquisition (other than pursuant to the Contribution, or the Distribution) of all or a portion
of SpinCo’s stock and/or its or its subsidiaries’ stock or assets by any means whatsoever by any Person, (B) any
negotiations, understandings, agreements or arrangements by SpinCo with respect to transactions or events (including, without limitation,
stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions,
or a series of such transactions or events) that cause the Distribution to be treated as part of a plan pursuant to which one or
more Persons acquire directly or indirectly stock of SpinCo representing a Fifty-Percent or Greater Interest therein, (C) any
action or failure to act by SpinCo after the Distribution (including, without limitation, any amendment to SpinCo’s certificate
of incorporation (or other organizational documents), whether through a stockholder vote or otherwise) affecting the voting rights
of SpinCo stock (including, without limitation, through the conversion of one class of SpinCo Capital Stock into another class
of SpinCo Capital Stock), (D) any act or failure to act by SpinCo or any SpinCo Affiliate described in Section 7.02 (regardless
whether such act or failure to act is covered by a Ruling, Unqualified Tax Opinion or waiver described in clause (A), (B) or
(C) of Section 7.02(d), a Board Certificate described in Section 7.02(e) or a consent described in Section 7.02(f)
or (g)) or (E) any breach by SpinCo of its agreement and representation set forth in Section 7.01(a).


 


(b) SpinCo shall pay Distributing
the amount of any Tax-Related Losses for which SpinCo is responsible under this Section 7.05 (calculated on the basis that
Distributing is a Distributing Full Taxpayer): (A) in the case of Tax-Related Losses described in clause (i) of the definition
of Tax-Related Losses no later than two (2) Business Days after receipt by SpinCo of notice of the settlement, Final Determination,
judgment or other action imposing the Taxes described in such clause (i) with respect to the Tax Return for the year of the Contribution
or Distribution, as applicable (provided that if such Tax-Related Losses arise pursuant to a Final Determination described
in clause (a), (b) or (c) of the definition of “Final Determination,” then SpinCo shall pay Distributing
no later than two (2) Business Days after receipt by SpinCo of notice of such Final Determination) and (B) in the case
of Tax-Related Losses described in clause (ii) or (iii) of the definition of Tax-Related Losses, no later than two (2) Business
Days after the date on which SpinCo receives notice from Distributing evidencing Distributing’s payment of such Tax-Related
Losses.


 


Section 8. Assistance and Cooperation.



 


Section 8.01 Assistance and
Cooperation.


 


(a) The Companies shall cooperate
(and cause their respective Affiliates to cooperate) with each other and with each other’s agents, including accounting firms
and legal counsel, in connection with Tax matters relating to the Companies and their Affiliates including (i) preparation
and filing of Tax Returns, (ii) determining the liability for and amount of any Taxes due (including estimated Taxes) or the
right to and amount of any refund of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial
proceeding in respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making all information and documents
in their possession relating to the other Company and its Affiliates available to such other Company as provided in Section 9.
Each of the Companies shall also make available to the other, as reasonably requested and available, personnel (including officers,
directors, employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining, and interpreting
information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information
or documents in connection with any administrative or judicial proceedings relating to Taxes.


 


(b) Any information or documents
provided under this Section 8 shall be kept confidential by the Company receiving the information or documents, except as
may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings
relating to Taxes. Notwithstanding any other provision of this Agreement or any other agreement, (i) neither Distributing
nor any Distributing Affiliate shall be required to provide SpinCo or any SpinCo Affiliate or any other Person access to or copies
of any information or procedures (including the proceedings of any Tax Contest) other than information or procedures that relate
solely to SpinCo, the business or assets of SpinCo or any SpinCo Affiliate and (ii) in no event shall Distributing or any
Distributing Affiliate be required to provide SpinCo, any SpinCo Affiliate or any other Person access to or copies of any information
if such action could reasonably be expected to result in the waiver of any Privilege. In addition, in the event that Distributing
determines that the provision of any information to SpinCo or any SpinCo Affiliate could be commercially detrimental, violate any
law or agreement or waive any Privilege, the parties shall use reasonable best efforts to permit compliance with its obligations
under this Section 8 in a manner that avoids any such harm or consequence.


 




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Section 8.02 Income Tax Return
Information.


 


(a) SpinCo and Distributing acknowledge
that time is of the essence in relation to any request for information, assistance or cooperation made by Distributing or SpinCo
pursuant to Section 8.01 or this Section 8.02. SpinCo and Distributing acknowledge that failure to conform to the deadlines
set forth herein or reasonable deadlines otherwise set by Distributing or SpinCo could cause irreparable harm.


 


(b) Each Company shall provide
to the other Company information and documents relating to its Group required by the other Company to prepare Tax Returns. Any
information or documents the Responsible Company requires to prepare such Tax Returns shall be provided in such form as the Responsible
Company reasonably requests and in sufficient time for the Responsible Company to file such Tax Returns on a timely basis.


 


Section 9. Tax Records. 


 


Section 9.01 Retention of Tax
Records. Each Company shall preserve and keep all Tax Records exclusively relating to the assets and activities of its
Group for Pre-Deconsolidation Periods, and Distributing shall preserve and keep all other Tax Records relating to Taxes of the
Groups for Pre-Deconsolidation Tax Periods, for so long as the contents thereof may become material in the administration of any
matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable
statutes of limitations, or (ii) seven years after the Deconsolidation Date (such later date, the “Retention Date”).
After the Retention Date, each Company may dispose of such Tax Records upon ninety (90) days’ prior written notice to
the other Company. If, prior to the Retention Date, (a) a Company reasonably determines that any Tax Records which it would
otherwise be required to preserve and keep under this Section 9 are no longer material in the administration of any matter
under the Code or other applicable Tax Law and the other Company agrees, then such first Company may dispose of such Tax Records
upon ninety (90) days’ prior notice to the other Company. Any notice of an intent to dispose given pursuant to this
Section 9.01 shall include a list of the Tax Records to be disposed of describing in reasonable detail each file, book, or
other record accumulation being disposed. The notified Company shall have the opportunity, at its cost and expense, to copy or
remove, within such 90-day period, all or any part of such Tax Records. If, at any time prior to the Retention Date, SpinCo determine
to decommission or otherwise discontinue any computer program or information technology system used to access or store any Tax
Records, then SpinCo may decommission or discontinue such program or system upon ninety (90) days’ prior notice to Distributing
and Distributing shall have the opportunity, at its cost and expense, to copy, within such 90-day period, all or any part of the
underlying data relating to the Tax Records accessed by or stored on such program or system.


 


Section 9.02 Access to Tax
Records. The Companies and their respective Affiliates shall make available to each other for inspection and copying during
normal business hours upon reasonable notice all Tax Records (and, for the avoidance of doubt, any pertinent underlying data accessed
or stored on any computer program or information technology system) in their possession and shall permit the other Company and
its Affiliates, authorized agents and representatives and any representative of a Taxing Authority or other Tax auditor direct
access during normal business hours upon reasonable notice to any computer program or information technology system used to access
or store any Tax Records, in each case to the extent reasonably required by the other Company in connection with the preparation
of Tax Returns or financial accounting statements, audits, litigation, or the resolution of items under this Agreement.


 


Section 10. Tax Contests. 


 


Section 10.01 Notice.
Each of the Companies shall provide prompt notice to the other Company of any written communication from a Tax Authority regarding
any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware related to Taxes for
Tax Periods for which it is indemnified by the other Company hereunder, provided, however, that the indemnifying Company shall
not be relieved of its obligations hereunder by reason of any failure by the indemnified Company to so notify except to the extent
such failure materially prejudices the indemnifying Company. Such notice shall attach copies of the pertinent portion of any written
communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability
in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect
of any such matters.


 




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Section 10.02 Control of Tax
Contests.


 


(a) Separate Company Taxes.


 


(i) In the case of any Tax
Contest with respect to any Separate Return relating to Income Taxes for Tax Periods beginning prior to the Deconsolidation Date,
Distributing shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of
such Tax liability, subject to Sections 10.02(c) and (d) below. SpinCo shall bear reasonable, out of pocket expenses incurred
by Distributing in connection with the control of any Tax Contest described in this Section 10.02(a)(i) provided that any
outside counsel, accountants or other advisors shall be mutually selected by Distributing and SpinCo.


 


(ii) In the case of any Tax
Contest with respect to any Separate Return (other than a Separate Return that is subject to Section 10.02(a)(i)), if any,
the Company having liability for the Tax shall have exclusive control over the Tax Contest including exclusive authority with respect
to any settlement of such Tax liability, subject to Sections 10.02(c) and (d) below.


 


(b) Joint Returns and Certain Other
Returns. In the case of any Tax Contest with respect to any Distributing Federal Consolidated Income Tax Return or Distributing
State Combined Income Tax Return, Distributing shall have exclusive control over the Tax Contest, including exclusive authority
with respect to any settlement of such Tax liability, subject to Sections 10.02(c) and (d) below.


 


(c) Settlement Rights. The Controlling
Party shall have the sole right to contest, litigate, compromise and settle any Tax Contest without obtaining the prior consent
of the Non-Controlling Party. Unless waived by the parties in writing, in connection with any potential adjustment in a Tax Contest
as a result of which adjustment the Non-Controlling Party may reasonably be expected to become liable to make any indemnification
payment (or any payment under Section 6) to the Controlling Party under this Agreement: (i) the Controlling Party shall
keep the Non-Controlling Party informed in a timely manner of all actions taken or proposed to be taken by the Controlling Party
with respect to such potential adjustment in such Tax Contest; (ii) the Controlling Party shall provide the Non-Controlling
Party copies of any written materials relating to such potential adjustment in such Tax Contest received from any Tax Authority;
(iii) the Controlling Party shall timely provide the Non-Controlling Party with copies of any correspondence or filings submitted
to any Tax Authority or judicial authority in connection with such potential adjustment in such Tax Contest; and (iv) the
Controlling Party shall consult with the Non-Controlling Party and offer the Non-Controlling Party a reasonable opportunity to
comment before submitting any written materials prepared or furnished in connection with such potential adjustment in such Tax
Contest. The failure of the Controlling Party to take any action specified in the preceding sentence with respect to the Non-Controlling
Party shall not relieve the Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party
under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall
such failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party.
In the case of any Tax Contest described in Section 10.02(a) or (b), “Controlling Party” means the
Company entitled to control the Tax Contest under such Section and “Non-Controlling Party” means the
other Company.


 


(d) Tax Contest Participation. Unless
waived by the parties in writing, the Controlling Party shall provide the Non-Controlling Party with written notice reasonably
in advance of, and the Non-Controlling Party shall have the right to request to attend, any formally scheduled meetings with Tax
Authorities or hearings or proceedings before any judicial authorities in connection with any potential adjustment in a Tax Contest
pursuant to which the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment (or
any payment under Section 6) to the Controlling Party under this Agreement. The failure of the Controlling Party to provide
any notice specified in this Section 10.02(d) to the Non-Controlling Party shall not relieve the Non-Controlling Party of
any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling
Party was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Party from any other
liability or obligation which it may have to the Controlling Party.


 


(e) Power of Attorney. Each member
of the SpinCo Group shall execute and deliver to Distributing (or such member of the Distributing Group as Distributing shall designate)
any power of attorney or other similar document reasonably requested by Distributing (or such designee) in connection with any
Tax Contest (as to which Distributing is the Controlling Party) described in this Section 10.


 


Section 11. Effective Date; Termination
of Prior Intercompany Tax Allocation Agreements. This Agreement shall be effective as of the date hereof. As of the
date hereof, (i) all prior intercompany Tax allocation agreements or arrangements shall be terminated, and (ii) amounts
due under or contemplated by such agreements or arrangements as of the date hereof shall be settled as of the date hereof. Upon
such termination and settlement, no further payments by or to Distributing or by or to SpinCo, with respect to such agreements
or arrangements shall be made, and all other rights and obligations resulting from such agreements or arrangements between the
Companies and their Affiliates shall cease at such time. Any payments pursuant to such agreements or arrangements shall be disregarded
for purposes of computing amounts due under this Agreement.


 




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Section 12. Survival of Obligations.
The representations, warranties, covenants and agreements set forth in this Agreement shall be unconditional and absolute and shall
remain in effect without limitation as to time.


 


Section 13. Treatment of Payments;
Tax Gross Up. 


 


Section 13.01 Treatment of
Tax Indemnity and Tax Benefit Payments. In the absence of any change in Tax treatment under the Code or other applicable
Tax Law any payments made under this Agreement (and any deemed distributions or contributions relating to Taxes or Tax Attributes)
shall be reported for Tax purposes by the payor and the recipient as occurring immediately before the Contribution.


 


Section 13.02 Tax Gross Up.
If notwithstanding the manner in which Tax indemnity payments and Tax Benefit payments were reported, there is an adjustment to
the Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement, such payment shall be appropriately
adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable as a Full Taxpayer with respect
to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes),
shall equal the amount of the payment which the Company receiving such payment would otherwise be entitled to receive pursuant
to this Agreement.


 


Section 13.03 Interest Under
This Agreement. Anything herein to the contrary notwithstanding, to the extent one Company (“Indemnitor”)
makes a payment of interest to another Company (“Indemnitee”) under this Agreement with respect to the
period from the date that the Indemnitee made a payment of Tax to a Tax Authority to the date that the Indemnitor reimbursed the
Indemnitee for such Tax payment, the interest payment shall be treated as interest expense to the Indemnitor (deductible to the
extent provided by law) and as interest income by the Indemnitee (includible in income to the extent provided by law). The amount
of the payment shall not be adjusted under Section 2.02 to take into account any associated Tax Benefit to the Indemnitor
or increase in Tax to the Indemnitee.


 


Section 14. Disagreements.
The Companies mutually desire that friendly collaboration will continue between them. Accordingly, they will try, and they will
cause their respective Group members to try, to resolve in an amicable manner all disagreements and misunderstandings connected
with their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance thereof, in
the event of any dispute or disagreement (a “Tax Dispute”) between any member of the Distributing Group
and any member of the SpinCo Group as to the interpretation of any provision of this Agreement or the performance of obligations
hereunder, the Tax departments of the Companies shall negotiate in good faith to resolve the Tax Dispute. If such good faith negotiations
do not resolve the Tax Dispute within thirty (30) days after the initial written notice of the Tax Dispute (or such longer
period that the parties hereto agree to), then the matter shall be resolved pursuant to the procedures set forth in Article IX
of the Separation and Distribution Agreement, provided, however, that upon the request of either Company, the arbitrator
selected by each of the parties pursuant to Article IX shall be a recognized tax professional, such as a United States tax counsel
or accountant of recognized national standing. Nothing in this Section 14 will prevent either Company from seeking injunctive
relief if any delay resulting from the efforts to resolve the Tax Dispute through the procedures set forth in Article IX of the
Separation and Distribution Agreement could result in serious and irreparable injury to either Company. Notwithstanding anything
to the contrary in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement, Distributing and SpinCo
are the only members of their respective Group entitled to commence a dispute resolution procedure under this Agreement, and each
of Distributing and SpinCo will cause its respective Group members not to commence any dispute resolution procedure other than
through such party as provided in this Section 14.


  


Section 15. Reserved.


 


Section 16. Expenses. Except
as otherwise provided in this Agreement, each party and its Affiliates shall bear their own expenses incurred in connection with
preparation of Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement.


 




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Section 17. General Provisions.



 


Section 17.01 Addresses and
Notices. Each party giving any notice required or permitted under this Agreement will give the notice in writing and use
one of the following methods of delivery to the party to be notified, at the address set forth below or another address of which
the sending party has been notified in accordance with this Section 17.01: (a) personal delivery; (b) facsimile
or telecopy transmission with a reasonable method of confirming transmission; (c) commercial overnight courier with a reasonable
method of confirming delivery; or (d) pre-paid, United States of America certified or registered mail, return receipt requested.
Notice to a party is effective for purposes of this Agreement only if given as provided in this Section 17.01 and shall be
deemed given on the date that the intended addressee actually receives the notice.


 


If to Distributing:


 


Harvard Bioscience, Inc.


84 October Hill Road


Holliston, Massachusetts 01746


Attention: Chief Financial Officer


 


If to SpinCo:


 


Harvard Apparatus Regenerative Technology, Inc.


84 October Hill Road


Holliston, Massachusetts 01746


Attention: Chief Financial Officer


 


A party may change the address for receiving notices under this
Agreement by providing written notice of the change of address to the other parties.


 


Section 17.02 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.


 


Section 17.03 Waiver.
The parties may waive a provision of this Agreement only by a writing signed by the party intended to be bound by the waiver. A
party is not prevented from enforcing any right, remedy or condition in the party’s favor because of any failure or delay
in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically
waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the
purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a party’s
rights and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to
be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.


 


Section 17.04 Severability.
If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement
remain in full force, if the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable.


 


Section 17.05 Authority.
Each of the parties represents to the other that (a) it has the corporate or other requisite power and authority to execute,
deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this
Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general
equity principles.


 


Section 17.06 Further Action.
The parties shall execute and deliver all documents, provide all information, and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement, including the execution and delivery to the other parties and
their Affiliates and representatives of such powers of attorney or other authorizing documentation as is reasonably necessary or
appropriate in connection with Tax Contests (or portions thereof) under the control of such other parties in accordance with Section 10.


 




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Section 17.07 Integration.
This Agreement, together with each of the exhibits and schedules appended hereto, constitutes the final agreement between the parties,
and is the complete and exclusive statement of the parties’ agreement on the matters contained herein. All prior and contemporaneous
negotiations and agreements between the parties with respect to the matters contained herein are superseded by this Agreement,
as applicable. In the event of any inconsistency between this Agreement and the Separation and Distribution Agreement, or any other
agreements relating to the transactions contemplated by the Separation and Distribution Agreement, with respect to matters addressed
herein, the provisions of this Agreement shall control.


 


Section 17.08 Construction.
The language in all parts of this Agreement shall in all cases be construed according to its fair meaning and shall not be strictly
construed for or against any party. The captions, titles and headings included in this Agreement are for convenience only, and
do not affect this Agreement’s construction or interpretation. Unless otherwise indicated, all “Section” references
in this Agreement are to sections of this Agreement.


 


Section 17.09 No Double Recovery.
No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages, or other amounts
for which the damaged party has been fully compensated under any other provision of this Agreement or under any other agreement
or action at law or equity. Unless expressly required in this Agreement, a party shall not be required to exhaust all remedies
available under other agreements or at law or equity before recovering under the remedies provided in this Agreement.


 


Section 17.10 Counterparts.
The parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the party that
signed it, and all of which together constitute one agreement. This Agreement is effective upon delivery of one executed counterpart
from each party to the other party. The signatures of the parties need not appear on the same counterpart. The delivery of signed
counterparts by facsimile or email transmission that includes a copy of the sending party’s signature is as effective as
signing and delivering the counterpart in person.


 


Section 17.11 Governing Law.
The internal laws of the Commonwealth of Massachusetts (without reference to its principles of conflicts of law) govern the
construction, interpretation and other matters arising out of or in connection with this Agreement and each of the exhibits and
schedules hereto and thereto (whether arising in contract, tort, equity or otherwise).


 


Section 17.12 Jurisdiction.
If any dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of
this Agreement, the parties irrevocably (and the parties will cause each other member of their respective Group to irrevocably)
(a) consent and submit to the exclusive jurisdiction of federal and state courts located in Commonwealth of Massachusetts,
(b) waive any objection to that choice of forum based on venue or to the effect that the forum is not convenient, and (c) WAIVE
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.


 


Section 17.13 Amendment. Except
as otherwise expressly provided herein with respect to the Schedules hereto, the parties may amend this Agreement only by a written
agreement signed by each party to be bound by the amendment and that identifies itself as an amendment to this Agreement.


 


Section 17.14 SpinCo Subsidiaries.
If, at any time, SpinCo acquires or creates one or more subsidiaries that are includable in the SpinCo Group, they shall be subject
to this Agreement and all references to the SpinCo Group herein shall thereafter include a reference to such subsidiaries.


 


Section 17.15 Successors.
This Agreement shall be binding on and inure to the benefit of any successor by merger, acquisition of assets, or otherwise, to
any of the parties hereto (including but not limited to any successor of Distributing or SpinCo succeeding to the Tax Attributes
of either under Section 381 of the Code), to the same extent as if such successor had been an original party to this Agreement.


 


Section 17.16 Injunctions.
The parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. The parties hereto shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof
in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in
equity.


 


[signatures on following page]


 




    	22



    	 



    

 


IN WITNESS WHEREOF, each party has caused
this Agreement to be executed on its behalf by a duly authorized officer on the date first set forth above.


 


	“Distributing”	 	“SpinCo”
	 	 	 
	Harvard Bioscience, Inc., a Delaware corporation	 	Harvard Apparatus Regenerative Technology, Inc., a Delaware corporation, for itself and on behalf of each member of the SpinCo Group
	 	 	 	 
	By:	 	 	 
	 	Name:	 	 	By:	 
	 	Title:	 	 	 	Name:	 
	 	 	 	 	 	Title: