PDD WITH ALL INFORMATION AND OTHER ASSISTANCE REASONABLY
REQUESTED BY PDD TO ENABLE THE PDD AFFILIATES TO PREPARE AND FILE PDD SEPARATE
RETURNS REQUIRED TO BE FILED BY THEM PURSUANT TO THIS AGREEMENT.
4.2.
AUDITS AND ADJUSTMENTS.
(A)
WHENEVER A PHARMACOPEIA AFFILIATE OR PDD AFFILIATE RECEIVES IN
WRITING FROM THE IRS OR ANY OTHER TAXING AUTHORITY NOTICE OF AN ADJUSTMENT THAT
MAY GIVE RISE TO A PAYMENT FROM THE OTHER PARTY UNDER THIS AGREEMENT OR
OTHERWISE AFFECT THE OTHER PARTY'S TAXES, PHARMACOPEIA OR PDD, AS THE CASE MAY
BE, SHALL GIVE WRITTEN NOTICE OF THE ADJUSTMENT TO THE OTHER PARTY IN ACCORDANCE
WITH THE TERMS OF ARTICLE VIII.
THE AUDIT SHALL BE CONTROLLED AND SETTLED
PURSUANT TO THE TERMS OF THAT ARTICLE.
(B)
PDD AGREES REASONABLY TO COOPERATE WITH PHARMACOPEIA IN THE
NEGOTIATION, SETTLEMENT, OR LITIGATION OF ANY LIABILITY FOR TAXES OF ANY
PHARMACOPEIA AFFILIATE.
(C)
PHARMACOPEIA AGREES REASONABLY TO COOPERATE, AND TO CAUSE EACH
PHARMACOPEIA AFFILIATE TO COOPERATE, WITH PDD IN THE NEGOTIATION, SETTLEMENT, OR
LITIGATION OF ANY LIABILITY FOR TAXES OF ANY PDD AFFILIATE.
(D)
PHARMACOPEIA WILL REASONABLY PROMPTLY NOTIFY PDD IN WRITING OF ANY
ADJUSTMENT INVOLVING A CHANGE IN THE TAX BASIS OF ANY ASSET OF ANY PDD
AFFILIATE, SPECIFYING THE NATURE OF THE CHANGE SO THAT SUCH PDD AFFILIATE WILL
BE ABLE TO REFLECT THE REVISED BASIS OF ITS TAX BOOKS AND RECORDS FOR PERIODS
BEGINNING ON OR AFTER THE DISTRIBUTION DATE.
4.3.
PDD CARRYBACKS.
WHENEVER PERMITTED TO DO SO BY APPLICABLE LAW,
AND UNLESS AGREED OTHERWISE BY PHARMACOPEIA, PDD SHALL ELECT TO RELINQUISH ANY
CARRYBACK PERIOD WHICH WOULD INCLUDE ANY PRE-DISTRIBUTION TAX PERIOD.
For purposes of this Article IV, the term "party" shall refer to any
Pharmacopeia Affiliate and any PDD Affiliate, as the case may be.
8
ARTICLE V
RETENTION OF RECORDS
5.1.
RETENTION OF RECORDS.
PHARMACOPEIA AND PDD AGREE TO RETAIN THE
APPROPRIATE RECORDS WHICH MAY AFFECT THE DETERMINATION OF THE LIABILITY FOR
TAXES OF ANY PDD AFFILIATE OR PHARMACOPEIA AFFILIATE, RESPECTIVELY, UNTIL SUCH
TIME AS THERE HAS BEEN A FINAL DETERMINATION WITH RESPECT TO SUCH LIABILITY FOR
TAXES.
A PARTY MAY SATISFY ITS OBLIGATIONS UNDER THE PRECEDING SENTENCE BY
ALLOWING THE OTHER PARTY TO DUPLICATE RECORDS AT SUCH SECOND PARTY'S REQUEST AND
EXPENSE.
5.2.
STATUTE OF LIMITATIONS.
PHARMACOPEIA AND PDD WILL NOTIFY EACH
OTHER IN WRITING OF ANY WAIVERS OR EXTENSIONS OF THE APPLICABLE STATUTE OF
LIMITATIONS THAT MAY AFFECT THE PERIOD FOR WHICH ANY MATERIALS, RECORDS, OR
DOCUMENTS MUST BE RETAINED.
ARTICLE VI
COVENANTS
6.1.
PHARMACOPEIA COVENANTS.
PHARMACOPEIA COVENANTS TO PDD THAT:
(A)
NO PHARMACOPEIA AFFILIATE WILL TAKE ANY ACTION OR FAIL TO TAKE ANY
ACTION, WHICH ACTION OR FAILURE TO ACT WOULD CAUSE THE CONTRIBUTION AND THE
DISTRIBUTION TO FAIL TO QUALIFY UNDER SECTIONS 351(A), 355(A), AND 368(A)(1)(D)
OF THE CODE OR ANY CORRESPONDING PROVISION OF STATE OR LOCAL LAW.
WITHOUT
LIMITING THE FOREGOING, PHARMACOPEIA COVENANTS TO PDD THAT:
(I)
DURING THE SIX-MONTH PERIOD FOLLOWING THE DISTRIBUTION DATE, NO
PHARMACOPEIA AFFILIATE WILL LIQUIDATE, MERGE, OR CONSOLIDATE WITH ANY PERSON