set forth their respective responsibilities for
Taxes, including any Taxes that could be incurred in connection with the
Distribution.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth below, the parties agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined in this Agreement, capitalized terms shall have the
meanings ascribed thereto in the Distribution Agreement.
As used in this
Agreement, the following terms shall have the following meanings:
1.1.
"ADJUSTMENT" MEANS ANY PROPOSED OR FINAL
CHANGE IN THE TAXABLE INCOME OR TAX LIABILITY OF A TAXPAYER.
1.2.
"AFFILIATE" MEANS, WHEN USED WITH RESPECT TO A
SPECIFIED PERSON, ANOTHER PERSON THAT DIRECTLY, OR INDIRECTLY THROUGH ONE OR
MORE INTERMEDIARIES, CONTROLS OR IS CONTROLLED BY OR IS UNDER COMMON CONTROL
WITH SUCH PERSON.
1.3.
"ASSOCIATES" HAS THE MEANING ASCRIBED TO SUCH
TERM IN THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
1.4.
"CODE" MEANS THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
1.5.
"COMBINED STATE TAX" MEANS, WITH RESPECT TO
EACH UNITED STATES STATE OR LOCAL TAXING JURISDICTION, ANY INCOME, FRANCHISE OR
SIMILAR TAX PAYABLE TO SUCH STATE OR LOCAL TAXING JURISDICTION IN WHICH ANY PDD
AFFILIATE FILES RETURNS WITH A PHARMACOPEIA AFFILIATE, ON A CONSOLIDATED,
COMBINED OR UNITARY BASIS FOR PURPOSES OF SUCH TAX.
1.6.
"COMBINED STATE TAX RETURN" MEANS ANY RETURN
WITH RESPECT TO ANY COMBINED STATE TAXES THAT INCLUDES ANY PRE-DISTRIBUTION TAX
PERIOD.
2
1.7.
"DISTRIBUTION" HAS THE MEANING SET FORTH IN
THE RECITALS.
1.8.
"DISTRIBUTION AGREEMENT" MEANS THE MASTER
SEPARATION AND DISTRIBUTION AGREEMENT BETWEEN PHARMACOPEIA, ACCELRYS INC. AND
PDD DATED APRIL 30, 2004.
1.9.
"DISTRIBUTION DATE" HAS THE MEANING SET FORTH
IN THE DISTRIBUTION AGREEMENT.
1.10.
"FEDERAL TAX" MEANS ANY TAX IMPOSED UNDER THE CODE,
INCLUDING ANY INTEREST, PENALTY OR OTHER ADDITIONS TO TAX IMPOSED UNDER SUBTITLE
F OF THE CODE.
1.11.
"FEDERAL TAX RETURN" MEANS ANY RETURN WITH RESPECT
TO ANY FEDERAL TAXES THAT INCLUDES ANY PRE-DISTRIBUTION TAX PERIOD.
1.12.
"FINAL DETERMINATION" MEANS THE FINAL RESOLUTION OF
ANY TAX MATTER.
A FINAL DETERMINATION SHALL RESULT FROM THE FIRST TO OCCUR OF:
(A)
THE EXPIRATION OF 30 DAYS AFTER THE IRS'S
ACCEPTANCE OF A WAIVER OF RESTRICTIONS ON ASSESSMENT AND COLLECTION OF
DEFICIENCY IN TAX AND ACCEPTANCE OF OVERASSESSMENT ON FORM 870 OR 870-AD (OR ANY
SUCCESSOR COMPARABLE FORM) (THE "WAIVER"), EXCEPT AS TO RESERVED MATTERS
SPECIFIED THEREIN, OR THE EXPIRATION OF 30 DAYS AFTER ACCEPTANCE BY ANY OTHER
TAXING AUTHORITY OF A COMPARABLE AGREEMENT OR FORM UNDER THE LAWS OF ANY OTHER
JURISDICTION, INCLUDING STATE, LOCAL, AND FOREIGN JURISDICTIONS; UNLESS, WITHIN
SUCH PERIOD, THE TAXPAYER GIVES NOTICE TO THE OTHER PARTY TO THIS AGREEMENT OF
THE TAXPAYER'S INTENTION TO ATTEMPT TO RECOVER ALL OR PART OF ANY AMOUNT PAID
PURSUANT TO THE WAIVER BY THE FILING OF A TIMELY CLAIM FOR REFUND;
(B)
A DECISION, JUDGMENT, DECREE, OR OTHER ORDER
BY A COURT OF COMPETENT JURISDICTION THAT IS NOT SUBJECT TO FURTHER JUDICIAL
REVIEW (BY APPEAL OR OTHERWISE) AND HAS BECOME FINAL;