NOT, AS OF THE CLOSING DATE, EXCEED THE RESERVE FOR
TAX LIABILITY (RATHER THAN ANY RESERVE FOR DEFERRED TAXES ESTABLISHED TO REFLECT
TIMING DIFFERENCES BETWEEN BOOK AND TAX INCOME) SET FORTH ON THE FACE OF THE
INTERIM CONSOLIDATED BALANCE SHEET.
EXCEPT AS DISCLOSED IN SCHEDULE 4.17, SINCE
DECEMBER 31, 2004, NEITHER CORPORATION HAS RECEIVED NOTICE OF ANY PROPOSED TAX
ASSESSMENT OR DEFICIENCY AGAINST EITHER CORPORATION.
SINCE THE DATE OF THE
INTERIM CONSOLIDATED BALANCE SHEET, THE CORPORATIONS HAVE NOT INCURRED ANY
LIABILITY FOR TAXES ARISING FROM EXTRAORDINARY GAINS OR LOSSES, AS THAT TERM IS
USED IN CANADIAN GAAP.
(D)
TRANSACTIONS AFFECTING POST-CLOSING TAX
YEARS.
THE CORPORATIONS WILL NOT BE REQUIRED TO INCLUDE ANY ITEM OF INCOME IN,
OR EXCLUDE ANY ITEM OF DEDUCTION FROM, TAXABLE INCOME FOR ANY TAXABLE PERIOD (OR
PORTION THEREOF) ENDING AFTER THE CLOSING DATE AS A RESULT OF ANY (I) CHANGE IN
METHOD OF ACCOUNTING FOR A TAXABLE PERIOD ENDING ON OR PRIOR TO THE CLOSING
DATE, (II) "CLOSING AGREEMENT" AS DESCRIBED IN CODE SECTION 7121 (OR ANY
CORRESPONDING PROVISION OR SIMILAR PROVISION OF FEDERAL, STATE, PROVINCIAL,
TERRITORIAL, LOCAL OR FOREIGN INCOME TAX LAW) EXECUTED ON OR PRIOR TO THE
CLOSING DATE, (III) INSTALLMENT SALE OR OPEN TRANSACTION
32
DISPOSITION MADE ON OR PRIOR TO THE CLOSING DATE, OR (IV) PREPAID AMOUNT
RECEIVED ON OR PRIOR TO THE CLOSING DATE.
(E)
SPECIFIC POTENTIAL TAX LIABILITIES AND TAX
SITUATIONS.
EXCEPT AS PROVIDED IN SCHEDULE 4.17:
(I)
WITHHOLDING.
ALL TAXES THAT THE
CORPORATIONS ARE OR WERE REQUIRED BY LEGAL REQUIREMENTS TO WITHHOLD, DEDUCT OR
COLLECT PRIOR TO THE CLOSING DATE HAVE BEEN OR WILL BE DULY WITHHELD, DEDUCTED
AND COLLECTED AND, TO THE EXTENT REQUIRED, WILL BE PAID TO THE PROPER
GOVERNMENTAL BODY OR OTHER PERSON.
(II)
TAX SHARING OR SIMILAR AGREEMENTS.
THERE
IS NO TAX SHARING AGREEMENT, TAX ALLOCATION AGREEMENT, TAX INDEMNITY OBLIGATION
OR SIMILAR WRITTEN OR UNWRITTEN AGREEMENT OR PRACTICE WITH RESPECT TO TAXES
(INCLUDING ANY ADVANCE PRICING AGREEMENT, CLOSING AGREEMENT OR OTHER ARRANGEMENT
RELATING TO TAXES) THAT WILL REQUIRE ANY PAYMENT BY EITHER CORPORATION AFTER THE
CLOSING.
(III)
CONSOLIDATED GROUP.
NEITHER CORPORATION
(I) HAS BEEN A MEMBER OF AN AFFILIATED GROUP (OR ANY SIMILAR GROUP DEFINED UNDER
A SIMILAR PROVISION OF FEDERAL, STATE, PROVINCIAL, TERRITORIAL, LOCAL OR FOREIGN
LAW) AND (II) HAS NO LIABILITY FOR TAXES OF ANY PERSON (OTHER THAN THE
CORPORATIONS) UNDER §1.1502-6 OF THE TREASURY REGULATIONS (OR ANY SIMILAR
PROVISION OF STATE, LOCAL OR FOREIGN LAW), AS A TRANSFEREE OR SUCCESSOR BY
CONTRACT OR OTHERWISE.
(IV)
LISTED TRANSACTIONS.
IN THE PAST SIX YEARS,
NEITHER CORPORATION HAS EVER PARTICIPATED IN A TRANSACTION THAT HAS BEEN
SPECIFICALLY IDENTIFIED BY THE IRS AS A "LISTED" TRANSACTION FOR PURPOSES OF
§1.6011-4(B) OF THE TREASURY REGULATIONS AND HAS NOT DISCLOSED ANY TRANSACTIONS
TO THE IRS UNDER ANY PENALTY AMNESTY PROGRAM.
(V)
GOLDEN PARACHUTE AGREEMENTS.
NEITHER
CORPORATION IS A PARTY TO ANY AGREEMENT, CONTRACT OR PLAN THAT AS A RESULT OF
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY COULD RESULT,
SEPARATELY OR IN THE AGGREGATE, IN THE PAYMENT