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;