Document:

Exhibit 10.3

 

INVESTOR RIGHTS AGREEMENT

 

by and between

 

IAC/INTERACTIVECORP

 

and

 

MATCH GROUP, INC.

 

Dated as of

 

November 24, 2015

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I   REGISTRATION RIGHTS
    	
1
    
	
 
    	
 
    
	
Section 1.1
    	
Requested Registration
    	
1
    
	
Section 1.2
    	
Company Registration
    	
3
    
	
Section 1.3
    	
Registration on   Form S-3
    	
4
    
	
Section 1.4
    	
Registration in   Connection with Spin-Off
    	
4
    
	
Section 1.5
    	
Expenses of   Registration
    	
5
    
	
Section 1.6
    	
Registration Procedures
    	
5
    
	
Section 1.7
    	
Indemnification
    	
6
    
	
Section 1.8
    	
Information by IAC
    	
8
    
	
Section 1.9
    	
Rule 144 Reporting
    	
8
    
	
Section 1.10
    	
Limitations on   Subsequent Registration Rights
    	
9
    
	
Section 1.11
    	
Termination of   Registration Rights
    	
9
    
	
 
    	
 
    
	
ARTICLE II   ANTI-DILUTION
    	
9
    
	
 
    	
 
    
	
Section 2.1
    	
Anti-Dilution Rights
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III   FUTURE TRANSACTIONS
    	
11
    
	
 
    	
 
    
	
Section 3.1
    	
Future Transactions
    	
11
    
	
 
    	
 
    
	
ARTICLE IV   MISCELLANEOUS
    	
11
    
	
 
    	
 
    
	
Section 4.1
    	
Entire Agreement
    	
11
    
	
Section 4.2
    	
Governing Law
    	
12
    
	
Section 4.3
    	
Notices
    	
12
    
	
Section 4.4
    	
Counterparts
    	
12
    
	
Section 4.5
    	
Binding Effect;   Assignment
    	
12
    
	
Section 4.6
    	
Severability
    	
13
    
	
Section 4.7
    	
Failure or Indulgence Not   Waiver; Remedies Cumulative
    	
13
    
	
Section 4.8
    	
Amendment
    	
13
    
	
Section 4.9
    	
Interpretation
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE V   DEFINITIONS
    	
13
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
“Ancillary Agreements”
    	
13
    
	
Section 5.2
    	
“Beneficial Ownership”   or “Beneficially Own”
    	
14
    
	
Section 5.3
    	
“Code”
    	
14
    
	
Section 5.4
    	
“Commission”
    	
14
    

 

i

 

	
Section 5.5
    	
“Exchange Act”
    	
14
    
	
Section 5.6
    	
“Excluded Issuance”
    	
14
    
	
Section 5.7
    	
“Fair Market Value”
    	
14
    
	
Section 5.8
    	
“IAC Group”
    	
14
    
	
Section 5.9
    	
“Indemnified Party”
    	
15
    
	
Section 5.10
    	
“Indemnifying Party”
    	
15
    
	
Section 5.11
    	
“Initial Public   Offering”
    	
15
    
	
Section 5.12
    	
“Issue Price”
    	
15
    
	
Section 5.13
    	
“Match Capital Stock”
    	
15
    
	
Section 5.14
    	
“Match Non-voting   Stock”
    	
15
    
	
Section 5.15
    	
“Match Voting Stock”
    	
15
    
	
Section 5.16
    	
“Person”
    	
15
    
	
Section 5.17
    	
“Registrable   Securities”
    	
15
    
	
Section 5.18
    	
“Register,”   “Registered” and “Registration”
    	
16
    
	
Section 5.19
    	
“Registration Expenses”
    	
16
    
	
Section 5.20
    	
“Restricted Securities”
    	
16
    
	
Section 5.21
    	
“Rule 144”
    	
16
    
	
Section 5.22
    	
“Rule 145”
    	
16
    
	
Section 5.23
    	
“Sale Transaction”
    	
16
    
	
Section 5.24
    	
“Securities Act”
    	
16
    
	
Section 5.25
    	
“Selling Expenses”
    	
16
    
	
Section 5.26
    	
“Subsidiary”
    	
16
    
	
Section 5.27
    	
“Transaction Agreement”
    	
17
    
	
Section 5.28
    	
“Voting Power”
    	
17
    

 

ii

 

INVESTOR RIGHTS AGREEMENT

 

This Investor Rights Agreement (this “Agreement”), dated as of November 24, 2015, between IAC/InterActiveCorp, a Delaware corporation (“IAC”), and Match Group, Inc., a Delaware corporation (“Match”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article IV hereof or, if not defined therein, in the Transaction Agreement (as defined below).

 

RECITALS

 

WHEREAS, IAC currently owns all of the issued and outstanding capital stock of Match;

 

WHEREAS, Match plans to undertake an initial public offering of its common stock, par value $0.001 per share (the “Match Common Stock”) to the public pursuant to a registration statement on Form S-1 filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended;

 

WHEREAS, in connection with such offering, the parties intend that Match grant to IAC certain rights, as provided for in this Agreement, following the offering; and

 

WHEREAS, this Agreement shall be void and of no force and effect until the occurrence of the “Effective Time” as defined in that certain Master Transaction Agreement (the “Transaction Agreement”) by and between Match and IAC dated as of November 24, 2015, as may be amended from time to time, at which time this Agreement shall become effective.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows:

 

ARTICLE I
 REGISTRATION RIGHTS

 

Section 1.1                                    Requested Registration.

 

(a)                                 Request for Registration.  Subject to the conditions set forth in this Section 1.1, if Match shall receive from IAC a written request signed by an authorized officer of IAC that Match effect the registration of all or any portion of the Registrable Securities (which request shall state the number of shares of Registrable Securities intended to be disposed of and the intended methods of disposition of such shares by IAC), Match shall, as soon as practicable, use its reasonable best efforts to effect such registration and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request.

 

(b)                                 Limitations on Requested Registration.  Match shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 1.1:

 

 

(i)                                     Prior to the time set forth, or the earlier waiver, in the applicable “lock up” provisions of any agreement executed by IAC and the underwriters in connection with Match’s Initial Public Offering;

 

(ii)                                  In any twelve-month period, after Match has initiated three such registrations pursuant to this Section 1.1 (counting for these purposes only registrations that have been declared or ordered effective and pursuant to which securities have been sold); or

 

(iii)                               If IAC proposes to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made under Section 1.3 hereof.

 

(c)                                  Deferral.  If (i) in the good faith judgment of the Board of Directors of Match, the filing of a registration statement covering the Registrable Securities would be materially detrimental to Match due to the early disclosure of information relating to the business, financial condition or results of operation of Match that Match is not otherwise then obligated to disclose, (ii) the Board of Directors of Match concludes, as a result, that it is in the best interests of Match to defer the filing of such registration statement at such time, and (iii) Match furnishes to IAC a certificate signed by the Chairman of the Audit Committee of Match stating that in the good faith judgment of the Board of Directors of Match, it would be materially detrimental to Match for such registration statement to be filed in the near future and that it is, therefore, in the best interests of Match to defer the filing of such registration statement, then Match shall have the right to defer such filing for a period of not more than seventy-five (75) days after receipt of the request of IAC (or such shorter period such that the Board of Directors concludes in good faith is necessary); provided, however, that Match shall not defer its obligation in this manner more than once in any twelve-month period.

 

(d)                                 Underwriting.  If IAC intends to distribute the Registrable Securities covered by its request by means of an underwriting, it shall so advise Match as a part of its request made pursuant to this Section 1.1.  In such event, the right of IAC to include all or any portion of its Registrable Securities in a registration pursuant to this Section 1.1 shall be conditioned upon IAC’s participation in an underwriting and the inclusion of IAC’s Registrable Securities to the extent provided herein.  If Match shall request inclusion in any registration pursuant to this Section 1.1 of securities being sold for its own account, or if other persons shall request inclusion in any registration pursuant to this Section 1.1, IAC may, in its sole discretion, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of Match or such other persons in such underwriting and the inclusion of Match’s and such person’s other securities of Match and their acceptance of the further applicable provisions of this ARTICLE I.  Match shall (together with IAC and other persons proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting.  IAC shall select the underwriter or underwriters for such registration.

 

(e)                                  Withdrawal of Request.  IAC may withdraw its request for registration pursuant to this Section 1.1 at any time.  If IAC does so, Match shall cease all efforts to secure registration and such registration nonetheless shall be deemed a registration for purposes of this Section 1.1 unless (i) the withdrawal is made following deferral pursuant to Section 1.1(c), (ii) the withdrawal is based on the reasonable determination of IAC that there has been, since the

 

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date of the registration request, a material adverse change in the business or prospects of Match, or (iii) IAC shall have paid or reimbursed Match for all of the reasonable out-of-pocket fees and expenses incurred by Match in connection with the withdrawn registration.

 

Notwithstanding any other provision of this Section 1.1, if the underwriters advise IAC in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of Registrable Securities that may be so included shall be allocated as follows:  (i) first, to IAC; (ii) second, to Match; and (iii) third, to any other persons IAC has offered inclusion in the registration.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from Match, the underwriter or IAC.  The securities so excluded shall also be withdrawn from such registration.

 

Section 1.2                                    Company Registration.

 

(a)                                 Company Registration.  If Match shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Section 1.1, Section 1.3 or Section 1.4, the Initial Public Offering, a registration relating solely to employee benefit plans, a registration relating solely to the offer and sale of debt securities or a registration relating solely to a corporate reorganization or other Rule 145 transaction, Match shall:

 

(i)                                     promptly give written notice of the proposed registration to IAC; and

 

(ii)                                  use its reasonable best efforts to include in such registration (and any related qualification under state securities laws or other compliance), except as set forth in Section 1.2(b) below, and in any underwriting involved therein, all such Registrable Securities specified in any written request or requests made by IAC and received by Match within twenty (20) days after such written notice from Match is delivered.  Such written request may specify all or any portion of the Registrable Securities.

 

(b)                                 Underwriting.  If the registration of which Match gives notice is for a registered public offering involving an underwriting, Match shall so advise IAC as a part of the written notice given pursuant to Section 1.2(a)(i).  In such event, the right of IAC to registration pursuant to this Section 1.2 shall be conditioned upon IAC’s participation in such underwriting and the inclusion of IAC’s Registrable Securities in the underwriting to the extent provided herein.  If IAC proposes to distribute its securities through such underwriting it shall (together with Match) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by Match, provided that such underwriting agreement shall be subject to IAC’s written consent.

 

Notwithstanding any other provision of this Section 1.2, if the underwriters advise Match in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) limit the number of Registrable Securities to be included in the registration and underwriting.  Match shall so

 

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advise IAC, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows:  (i) first, to Match for securities being sold for its own account, and (ii) second, to IAC; and (iii) third, to any other holders of Match securities.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from Match or the underwriter.  The securities so excluded shall also be withdrawn from such registration.

 

(c)                                  Right to Terminate Registration.  Match shall have the right to terminate or withdraw any registration initiated by it under this Section 1.2 prior to the effectiveness of such registration whether or not IAC has elected to include securities in such registration.  IAC shall also have the right to withdraw its request for inclusion of its Registrable Securities in the offering pursuant to this Section 1.2 at any time.

 

Section 1.3                                    Registration on Form S-3.

 

(a)                                 Request for Form S-3 Registration.  After its Initial Public Offering, Match shall use its reasonable best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms.  After Match has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this ARTICLE I and subject to the conditions set forth in this Section 1.3, if Match shall receive from IAC a written request that Match effect any registration on Form S-3 or any similar short form registration statement with respect to all or any portion of the Registrable Securities (which request shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by IAC), Match shall use its reasonable best efforts to effect such registration and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request.

 

(b)                                 Deferral.  The provisions of Section 1.1(c) shall apply to any registration pursuant to this Section 1.3.

 

(c)                                  Underwriting.  If IAC requests registration under this Section 1.3 intending to distribute the Registrable Securities covered by its request by means of an underwriting, the provisions of Section 1.1(d) shall apply to such registration.  Notwithstanding anything contained herein to the contrary, registrations effected pursuant to this Section 1.3 shall not be counted as requested for registration or registrations effected pursuant to Section 1.1.

 

Section 1.4                                    Registration in Connection with Spin-Off.  In addition to the other rights provided for herein, Match agrees that if any Registrable Securities require registration with or approval of any governmental authority under any federal or state law before such Registrable Securities may be distributed to IAC stockholders, whether by dividend, recapitalization or other extraordinary transaction, or sold by such IAC stockholders thereafter without restriction under applicable law, Match shall cause such Registrable Securities to be duly registered or approved, as the case may be.  In addition, Match shall use its reasonable best efforts to list any shares of Match Common Stock required to be delivered upon any conversion,

 

4

 

exchange or transfer of shares of its Class B common stock, par value $0.001 per share (the “Match Class B Common Stock”), prior to such delivery, on each national securities exchange or interdealer quotation system on which the outstanding Match Common Stock is listed at the time of such delivery.

 

Section 1.5                                    Expenses of Registration.  Except as contemplated by Section 1.1(e), all Registration Expenses incurred in connection with registrations pursuant to Section 1.1, Section 1.2, Section 1.3 and Section 1.4 hereof shall be borne by Match; provided, however, that Match shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.1, Section 1.3 or Section 1.4 if the registration request is subsequently withdrawn at the request of IAC (unless such registration request is withdrawn at the request of IAC based upon material adverse information relating to Match that is different from the information known to IAC at the time of its request for registration).  All Selling Expenses relating to securities registered on behalf of IAC and any other holders of securities shall be borne by IAC and such other holders of securities included in such registration pro rata among each other on the basis of the number of Registrable Securities so registered.

 

Section 1.6                                    Registration Procedures.  In the case of each registration effected by Match pursuant to this ARTICLE I, Match shall keep IAC advised in writing as to the initiation of each registration and as to the completion thereof.  At its expense, Match shall use its reasonable best efforts to:

 

(a)                                 Keep such registration effective for a period ending on the earlier of the date that is one-hundred and twenty (120) days from the effective date of the registration statement or such time as IAC has completed the distribution described in the registration statement relating thereto;

 

(b)                                 Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in Section 1.6(a) above;

 

(c)                                  Furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as IAC may from time to time reasonably request;

 

(d)                                 Register and qualify the securities covered by such registration statement under such other securities laws of such jurisdictions as shall be reasonably requested by IAC;

 

(e)                                  Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly (and in any event within 5 days thereafter) prepare and furnish to such

 

5

 

seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;

 

(f)                                   Furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing Match for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and reasonably satisfactory to IAC and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of Match, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters;

 

(g)                                  Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(h)                                 Comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act;

 

(i)                                     Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by Match are then listed; and

 

(j)                                    In connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 1.1 or Section 1.3 hereof, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Match Capital Stock; provided, however, that such underwriting agreement contains reasonable and customary provisions, and provided further, however, that IAC shall also enter into and perform its obligations under such an agreement.

 

Section 1.7                                    Indemnification.

 

(a)                                 To the extent permitted by law, Match will indemnify and hold harmless IAC, each of its officers, directors and partners, legal counsel, and accountants and each person controlling IAC within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant to this ARTICLE I, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect thereof) arising out of or based on:  (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular, or other document (including any related registration

 

6

 

statement, notification, or the like) incident to any such registration, qualification, or compliance, (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation (or alleged violation) by Match of the Securities Act, any state securities laws or any rule or regulation thereunder applicable to Match and relating to action or inaction required of Match in connection with any offering covered by such registration, qualification, or compliance, and Match will reimburse IAC, each of its officers, directors, partners, legal counsel, and accountants and each person controlling IAC, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided, however, that Match will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to Match by IAC and stated by IAC to be specifically for use therein, any of IAC’s officers, directors, partners, legal counsel or accountants, any person controlling IAC, such underwriter or any person who controls any such underwriter and stated to be specifically for use therein; and provided further, however, that the indemnity agreement contained in this Section 1.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of Match (which consent shall not be unreasonably withheld or delayed).

 

(b)                                 To the extent permitted by law, IAC will, if Registrable Securities held by IAC are included in the securities as to which such registration, qualification, or compliance is being effected, indemnify and hold harmless Match, each of its directors, officers, partners, legal counsel, and accountants and each underwriter, if any, of Match’s securities covered by such a registration statement, each person who controls Match or such underwriter within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on:  (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any such registration statement, prospectus, offering circular, or other document, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse Match and Match’s directors, officers, partners, legal counsel, and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to Match by IAC and stated by IAC to be specifically for use therein; provided, however, that the obligations of IAC hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of IAC (which consent shall not be unreasonably withheld or delayed); and provided further, however, that in no event shall any indemnity under this Section 1.7 exceed the net proceeds from the offering received by IAC.

 

(c)                                  Each party entitled to indemnification under this Section 1.7 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim

 

7

 

as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; and provided further, however, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1.7 to the extent such failure is not prejudicial.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

(d)                                 If the indemnification provided for in this Section 1.7 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

(e)                                  Disputes, controversies and claims hereunder shall be subject to the terms of Articles 7 and 10 of the Transaction Agreement.

 

(f)                                   Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

Section 1.8                                    Information by IAC.  IAC shall furnish to Match such information regarding IAC and the distribution proposed by IAC as Match may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this ARTICLE I.

 

Section 1.9                                    Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Restricted Securities to the public without registration, Match agrees to use its best efforts to:

 

8

 

(a)                                 Make and keep public information regarding Match available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after ninety (90) days following the effective date of the first registration under the Securities Act filed by Match for an offering of its securities to the general public;

 

(b)                                 File with the Commission in a timely manner all reports and other documents required of Match under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

 

(c)                                  So long as IAC owns any Restricted Securities, furnish to IAC promptly upon written request a written statement by Match as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by Match for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of Match, and such other reports and documents so filed as IAC may reasonably request in availing itself of any rule or regulation of the Commission allowing IAC to sell any such securities without registration.

 

Section 1.10                             Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, Match shall not, without the prior written consent of a IAC, enter into any agreement with any holder or prospective holder of any securities of Match giving such holder or prospective holder any registration rights the terms of which are pari passu with or senior to the registration rights granted to IAC hereunder.  For these purposes, as to Form S-3 registration rights, pari passu and seniority shall refer to priority in underwriter cut-backs.

 

Section 1.11                             Termination of Registration Rights.  The right of IAC to request registration or inclusion in any registration pursuant to Section 1.1, Section 1.2 or Section 1.3 and the limitations on Match with respect to the granting of subsequent registration rights pursuant to Section 1.10 shall terminate on such date, on or after the closing of Match’s Initial Public Offering, on which all shares of Registrable Securities held or entitled to be held upon conversion by IAC may immediately be sold under Rule 144 during any ninety (90)-day period.

 

ARTICLE II

ANTI-DILUTION

 

Section 2.1                                    Anti-Dilution Rights.

 

(a)                                 In the event that, after the Initial Public Offering, Match issues or proposes to issue (other than to IAC and other than pursuant to an Excluded Issuance) any Match Capital Stock (including Match Capital Stock issued upon exercise, conversion or exchange of options, warrants and convertible securities (other than shares of Match Common Stock issued upon conversion of shares of Match Class B Common Stock))  (an “Additional Issuance”), IAC shall have the right (but not the obligation) to purchase or cause one or more members of the IAC Group to purchase for cash at a price per share equal to the Issue Price:

 

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(i)                                     up to an amount of Match Voting Stock (allocated between Match Common Stock, Match Class B Common Stock, and any other class of Match Voting Stock then being issued in the same proportion as the Additional Issuance giving rise to the anti-dilution rights provided in this Article II, except to the extent that IAC opts to receive Match Common Stock in lieu of Match Class B Common Stock), as is necessary for the IAC Group to maintain (after giving effect to the Additional Issuance and any issuance of Match Voting Stock to the IAC Group pursuant to this Section 2.1(a)(i)) ownership of Match Voting Stock possessing Voting Power equal to the Voting Power possessed by Match Voting Stock owned by the IAC Group immediately prior to the Additional Issuance; provided that

 

(A)                               such Additional Issuance is with respect to Match Voting Stock; and

 

(B)                               either (1) such Additional Issuance is in excess of 1% of the aggregate Voting Power of shares of Match Voting Stock or (2) such Additional Issuance, together with any prior Additional Issuance(s) with respect to which IAC’s anti-dilution right was not exercisable as a result of this Section 2.1(a)(i)(B) exceeds 1% of the aggregate Voting Power of shares Match Voting Stock outstanding after giving effect to the first such Additional Issuance (it being understood, for purposes of clarity, that IAC’s purchase right would apply to all such Additional Issuances); or

 

(ii)                                  up to an amount of such class or classes of Match Non-voting Stock as is necessary for the IAC Group to maintain (after giving effect to the Additional Issuance and any issuance of Match Non-voting Stock to the IAC Group pursuant to this Section 2.1(a)(ii)) ownership of  at least 80.1% of the issued and outstanding shares of each class of Match Non-voting Stock, without regard to whether the IAC Group owned any shares of such class of Match Non-voting Stock before such Additional Issuance; provided that such Additional Issuance is with respect to Match Non-voting Stock.

 

(b)                                 Match shall give immediate written notice (an “Issuance Notice”) to IAC that Match (x) has received notice of an intended exercise, conversion or exchange of options, warrants or convertible securities (other than shares of Match Common Stock issued upon conversion of shares of Match Class B Common Stock) or (y) otherwise intends to issue any Match Capital Stock (other than to IAC).  Such notice shall specify: (i) the class of Match Capital Stock to be issued, (ii) if such shares are of a class not previously issued, a description of the rights of such shares, (iii) the number of shares proposed to be issued, and (iv) the Issue Price (if known) per share.  IAC may exercise its rights to purchase Match Capital Stock pursuant to this Section 2.1 by sending an irrevocable written notice to Match (a “Purchase Election Notice”) not later than fifteen business days after receipt of an Issuance Notice (or, if later, two business days following the determination of the Issue Price) from Match that it elects to purchase or to cause one or more members of the IAC Group to purchase all or a portion of such Match Capital Stock (the “IAC Additional Shares”).  Match shall give immediate written notice to IAC in the event Match or any of its subsidiaries intends to issue (other than to IAC) any option, warrant,

 

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convertible security or other instrument convertible or exchangeable into Match Capital Stock, together with a description of the terms thereof and any other information reasonably requested by IAC, to enable IAC to determine whether the issuance of such instrument constitutes an issuance of Match Capital Stock.

 

(c)                                  So long as IAC sends a Purchase Election Notice on or prior to the effective date of the Additional Issuance (the “Additional Issuance Date”), but subject to the occurrence of the Additional Issuance, (i) the purchase of the IAC Additional Shares shall be effective, (ii) IAC (or such member of the IAC Group designated by IAC) shall be considered the owner of the IAC Additional Shares purchased pursuant to this Section 2.1 and (iii) IAC (or such member of the IAC Group designated by IAC) shall possess all incidents, benefits and burdens of ownership of such Match Capital Stock, including the right to appreciation in value, the risk of depreciation in value, the right to vote the shares, the right to dividends with respect to the shares, and the right to sell, pledge, hypothecate or otherwise dispose of such shares, in each case, as of immediately prior to the Additional Issuance.  As soon as possible, and in any event within three business days after the Additional Issuance Date, Match shall deliver to IAC (or such member of the IAC Group designated by IAC), against payment therefor, certificates (issued in the name of IAC or a member of the IAC Group) representing the shares of Match Capital Stock being purchased pursuant to Section 2.1. Payment for such shares shall be unconditionally owing by IAC (or a member of the IAC Group so designated) as of the Additional Issuance Date.

 

(d)                                 If a Purchase Election Notice is sent after the Additional Issuance Date, the closing of the purchase of IAC Additional Shares shall be the later of ten business days after the delivery of the Purchase Election Notice by IAC and five business days after receipt of any necessary regulatory approvals.

 

ARTICLE III

FUTURE TRANSACTIONS

 

Section 3.1                                    Future Transactions.  At any time after the Effective Date, if IAC advises Match that IAC intends dispose of all or a portion of its interest in Match (including by way of a distribution to IAC’s shareholders), Match agrees to cooperate and take all action reasonably requested by IAC to facilitate such a transaction.

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1                                    Entire Agreement.  Subject to those applicable terms in the Ancillary Agreements referenced herein, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.

 

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Section 4.2                                    Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the internal laws of the State of Delaware, irrespective of the choice of laws principles of the State of Delaware, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.

 

Section 4.3                                    Notices.  Notices, offers, requests or other communications required or permitted to be given by either party pursuant to the terms of this Agreement shall be given in writing to the respective parties at the following addresses:

 

if to IAC:

 

IAC/InterActiveCorp
 555 West 18th Street
 New York, NY  10011
 Attention:  General Counsel
 Fax:  (212) 632-9551

 

if to Match:

 

Match Group, Inc.
 8300 Douglas Avenue

Suite 800

Dallas, TX 75225

Attention:  Chief Financial Officer

Fax: (917) 793-4497

 

or to such other address as the party to whom notice is given may have previously furnished to the other in writing as provided herein.  Any notice involving non-performance, termination, or renewal shall be sent by hand delivery, recognized overnight courier or, within the United States, may also be sent via certified mail, return receipt requested.  All other notices may also be sent by fax, confirmed by first class mail.  All notices shall be deemed to have been given and received on the earlier of actual delivery or three (3) days from the date of postmark.

 

Section 4.4                                    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement.

 

Section 4.5                                    Binding Effect; Assignment.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives and successors in interest, and, except for the indemnification rights in this Agreement of any Indemnified Party in its capacity as such, nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.  Neither party may assign this Agreement or any rights or obligations hereunder, without the prior written consent of the other party, and any such assignment shall be void.  Any permitted assignee shall agree to perform the obligations of the

 

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assignor of this Agreement, and this Agreement shall inure to the benefit of and be binding upon any permitted assignee.

 

Section 4.6                                    Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to either party hereto or any party thereto.  Upon such determination, the parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties.

 

Section 4.7                                    Failure or Indulgence Not Waiver; Remedies Cumulative.  No failure or delay on the part of either party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise or waiver of any such right preclude other or further exercise thereof or of any other right.  All rights and remedies existing under this Agreement or the exhibits or schedules attached hereto are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

Section 4.8                                    Amendment.  No change or amendment shall be made to this Agreement or the exhibits or schedules attached hereto except by an instrument in writing signed on behalf of each of the parties hereto.

 

Section 4.9                                    Interpretation.  The headings contained in this Agreement, in any exhibit or schedule attached hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Any capitalized term used in any exhibit or schedule but not otherwise defined therein, shall have the meaning assigned to such term in this Agreement.  When a reference is made in this Agreement to an article, section, exhibit or schedule, such reference shall be to an article or section of, or an exhibit or schedule to, this Agreement, unless otherwise indicated.

 

ARTICLE V

DEFINITIONS

 

The capitalized words and expressions and variations thereof used in this Agreement or in its schedules, unless a clearly inconsistent meaning is required under the context, shall have the meanings set forth below. Terms not defined below or elsewhere in this Agreement shall have the meaning set forth in the Transaction Agreement:

 

Section 5.1                                    “Ancillary Agreements” shall have the meaning set forth in the Transaction Agreement, except that the reference to this Agreement shall be replaced with a reference to the Transaction Agreement.

 

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Section 5.2                                    “Beneficial Ownership” or “Beneficially Own” shall have the meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s Beneficial Ownership of Match Capital Stock shall be calculated in accordance with the provisions of such Rule; provided, however, that for purposes of Beneficial Ownership, (a) a Person shall be deemed to be the Beneficial Owner of any Equity Securities which may be acquired by such Person (disregarding any legal impediments to such Beneficial Ownership), whether within 60 days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities issued by Match or any Subsidiary thereof and (b) no Person shall be deemed to Beneficially Own any Equity Securities solely as a result of such Person’s execution of this Agreement, or with respect to which such Person does not have a pecuniary interest.

 

Section 5.3                                    “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

Section 5.4                                    “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

Section 5.5                                    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

Section 5.6                                    “Excluded Issuance” shall mean any issuance of Match Capital Stock (i) in a Sale Transaction, or (ii) to an employee or independent contractor in connection with the performance of services by such person, which Match Capital Stock is “substantially nonvested” within the meaning of Section 83 of the Code and the Treasury Regulations promulgated thereunder and with respect to which no election pursuant to Section 83(b) of the Code is made (“Restricted Stock”), provided that for purposes of this definition and Section 2.1 of this Agreement any stock covered by the provisions of clause (ii) shall be deemed to have been issued for purposes of Section 2.1 of this Agreement on the date (the “Lapse Date”) on which it becomes “substantially vested” within the meaning of Section 83 of the Code and the Treasury Regulations promulgated thereunder.

 

Section 5.7                                    “Fair Market Value” for a security publicly traded in the over-the-counter market (on either NASDAQ-NMS or NASDAQ) or on a recognized exchange shall be the average closing price of such security for the three trading days ending on the applicable day (or, if such day is not a trading day, the trading day immediately preceding the applicable day), and for all other securities or property “Fair Market Value” shall be determined, by a nationally recognized investment banking firm which has not been engaged by Match or IAC or their respective Affiliates for the prior three years, selected by (i) Match and (ii) IAC; provided that, if Match and IAC cannot agree on such an investment banking firm within 10 business days, such investment banking firm shall be selected by a panel designated in accordance with the rules of JAMS, Inc.  The fees, costs and expenses of the JAMS, Inc. and the investment banking firm so selected shall be borne equally by Match and IAC.

 

Section 5.8                                    “IAC Group” shall have the meaning set forth in the Transaction Agreement.

 

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Section 5.9                                    “Indemnified Party” shall have the meaning set forth in Section 1.7(c) hereto.

 

Section 5.10                             “Indemnifying Party” shall have the meaning set forth in Section 1.7(c) hereto.

 

Section 5.11                             “Initial Public Offering” shall mean the closing of Match’s first firm commitment underwritten public offering of Match Common Stock registered under the Securities Act.

 

Section 5.12                             “Issue Price” shall mean the price per share equal to (i) in connection with an underwritten offering of Match Capital Stock, the price at which the stock is offered to the public or other investors as reflected in the final prospectus for such offering, (ii) in connection with other sales of Match Capital Stock for cash, the cash price paid therefor, (iii) in connection with the vesting of Restricted Stock, the Fair Market Value of the stock on the Lapse Date (as defined in the definition of “Excluded Issuance” above), (iv) in connection with the issuance of Match Capital Stock as consideration in an acquisition by Match or any of its subsidiaries, the average of the Fair Market Value of the stock for the five trading days ending on the third trading day immediately preceding (a) the date upon which definitive agreements with respect to such acquisition were entered into to the extent the number shares of Match Capital Stock to be issued in such transaction is fixed on that date, or (b) such later date on which the consideration, or remaining portion thereof, issuable in such transaction becomes fixed, (v) in connection with a compensatory issuance of shares of Match Common Stock (other than Restricted Stock), the Fair Market Value of the Match Common Stock upon issuance, and (vi) in all other cases, including, without limitation, in connection with the issuance of Match Capital Stock pursuant to an option, warrant or convertible security (other than in connection with issuances described in clause (v) above), the Fair Market Value of the Match Capital Stock on the date of issuance.

 

Section 5.13                             “Match Capital Stock” shall mean common stock of Match, including the Match Common Stock, the Match Class B Common Stock, the Match Class C Common Stock and any other equity interest treated as  stock of Match for U.S. federal income tax purposes.

 

Section 5.14                             “Match Non-voting Stock” shall mean Match Class C Common Stock and any other class of Match Capital Stock that is not Match Voting Stock.

 

Section 5.15                             “Match Voting Stock” shall mean the Match Common Stock and the Match Class B Common Stock, and any other class of common stock or other equity interest in Match  treated as voting stock of Match for U.S. federal income tax purposes. For the avoidance of doubt, Match Voting Stock does not include the Match Class C Common Stock.

 

Section 5.16                             “Person” shall mean any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or department or agency of a government.

 

Section 5.17                             “Registrable Securities” shall mean (i) any and all shares of Match Capital Stock held by IAC and (ii) any Match Capital Stock issued as a dividend or other

 

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distribution with respect to or in exchange for or in replacement of the shares referenced in (i) above; provided, however, that Registrable Securities shall not include any shares of Match Capital Stock described in clause (i) or (ii) above which have previously been registered or which have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferor’s rights under this Agreement are not validly assigned in accordance with this Agreement.

 

Section 5.18                             “Register,” “Registered” and “Registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

Section 5.19                             “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for Match and one special counsel for IAC, state securities law fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, fees and disbursements of other counsel for IAC and the compensation of regular employees of Match, which shall be paid in any event by Match.

 

Section 5.20                             “Restricted Securities” shall mean any Registrable Securities that have not been registered under the Securities Act.

 

Section 5.21                             “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

Section 5.22                             “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

Section 5.23                             “Sale Transaction” shall mean the consummation of a merger, consolidation or amalgamation between Match and another entity (other than a Subsidiary of Match) in which Match is acquired by such other entity or a Person who controls such entity, or a sale of all or substantially all of the assets of Match to another entity, other than a Subsidiary of Match.

 

Section 5.24                             “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

Section 5.25                             “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for IAC (other than the fees and disbursements of one special counsel to IAC included in Registration Expenses).

 

Section 5.26                             “Subsidiary” has the meaning set forth in the Transaction Agreement.

 

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Section 5.27                             “Transaction Agreement” shall mean the Master Transaction Agreement between IAC and Match, dated as of November 24, 2015.

 

Section 5.28                             “Voting Power” shall have the meaning ascribed to such term for purposes of Section 368(c) of the Code.

 

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IN WITNESS WHEREOF, the parties have signed this Investor Rights Agreement effective as of the date first set forth above.

 

	
 
    	
 
    
	
 
    	
IAC/INTERACTIVECORP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Gregg   Winiarski
    
	
 
    	
 
    	
Name: Gregg   Winiarski
    
	
 
    	
 
    	
Title: Executive   Vice President, General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MATCH   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Joanne Hawkins
    
	
 
    	
 
    	
Name: Joanne   Hawkins
    
	
 
    	
 
    	
Title: Vice   President and Assistant Secretary
    

 

[Signature page to Investor Rights Agreement]Exhibit 10.4

 

TAX SHARING AGREEMENT

 

by and between

 

IAC/INTERACTIVECORP

 

and

 

MATCH GROUP, INC.

 

Dated as of

 

November 24, 2015

 

 

TAX SHARING AGREEMENT

 

This Tax Sharing Agreement (this “Agreement”), dated as of November 24, 2015, is entered into by and between IAC/InterActiveCorp, a Delaware corporation (“Parent”), and Match Group, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Match”).

 

W I T N E S S E T H

 

WHEREAS, as of the date hereof, Parent and its direct and indirect domestic subsidiaries are members of an affiliated group (as defined in Section 1504 of the Code) of which Parent is the common parent;

 

WHEREAS, Parent and Match intend to effect the initial public offering by Match of Match Common Stock (the “IPO”);

 

WHEREAS, in connection with the IPO, Parent and Match have entered into a Master Transaction Agreement, dated as of November 24, 2015 (the “Transaction Agreement”), providing for, among other things, (a) the transfer of the Match Businesses, the Match Assets and the Match Liabilities to Match and its Subsidiaries, and (b) the Remaining Business, the Remaining Assets and the Remaining Liabilities to be held by IAC and its Subsidiaries (other than Match and its Subsidiaries); and

 

WHEREAS, in connection with the IPO, the parties hereto have determined to enter into this Agreement, setting forth their agreement with respect to certain Tax matters;

 

NOW, THEREFORE, in consideration of the premises and the representations, covenants and agreements herein contained and intending to be legally bound hereby, Parent and Match hereby agree as follows:

 

1.                                      Definitions.  Capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Transaction Agreement.  For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Actually Realized” or “Actually Realizes” shall mean, for purposes of determining the timing of the incurrence of any Tax Liability, Distribution Tax Liability, or the realization of a Refund (or any related Tax cost or benefit), whether by receipt or as a credit or other offset to Taxes payable, by a Person in respect of any payment, transaction, occurrence or event, the time at which the amount of Taxes paid (or Refund realized) by such Person is increased above (or reduced below) the amount of Taxes that such Person would have been required to pay (or Refund that such Person would have realized) but for such payment, transaction, occurrence or event.

 

“Aggregate Distribution Tax Liabilities” shall mean, in the event of a Distribution, the sum of the Distribution Tax Liabilities with respect to each Taxing Jurisdiction.

 

 

“Carryback” shall mean the carryback of a Tax Attribute (including, without limitation, a net operating loss, a net capital loss or a tax credit) by a member of the Match Group from a Post-Deconsolidation Taxable Period to a Pre-Deconsolidation Taxable Period during which such member of the Match Group was included in a Combined Return filed for such Pre-Deconsolidation Taxable Period.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Combined Return” shall mean a consolidated, combined or unitary Income Tax Return that includes, by election or otherwise, one or more members of the Parent Group together with one or more members of the Match Group.

 

“Deconsolidation Date” shall mean the date, if any, on which a Deconsolidation Event occurs.

 

“Deconsolidation Event” shall mean any event or transaction that causes Match to cease to be a member of the Parent Consolidated Group.

 

“Distribution” shall mean a distribution, however effected (including by way of a reclassification or split-off), of Match Capital Stock to holders of Parent capital stock in a transaction intended to qualify as tax-free for federal Income Tax purposes pursuant to Section 368(a)(1)(D) and/or Section 355 of the Code.

 

“Distribution Date” shall mean, in the event of a Distribution, the date on which the Distribution is completed.

 

“Distribution-Related Proceeding” shall mean, in the event of a Distribution, any Proceeding in which the IRS, another Tax Authority or any other party asserts a position that could reasonably be expected to adversely affect the Tax-Free Status of the Distribution.

 

“Distribution Tax Liabilities” shall mean, in the event of a Distribution, with respect to any Taxing Jurisdiction, the sum of (a) any increase in a Tax Liability (or reduction in a Refund) Actually Realized as a result of any corporate-level gain or income recognized with respect to the failure of the Distribution to qualify for Tax-Free Status under the Income Tax laws of such Taxing Jurisdiction pursuant to any settlement, Final Determination, judgment, assessment, proposed adjustment or otherwise, (b) interest on such amounts calculated pursuant to such Taxing Jurisdiction’s laws regarding interest on Tax liabilities at the highest Underpayment Rate for corporations in such Taxing Jurisdiction from the date such additional gain or income was recognized until full payment with respect thereto is made pursuant to Section 3 hereof (or in the case of a reduction in a Refund, the amount of interest that would have been received on the foregone portion of the Refund but for the failure of the Distribution to qualify for Tax-Free Status), and (c) any penalties actually paid to such Taxing Jurisdiction that would not have been paid but for the failure of the Distribution to qualify for Tax-Free Status in such Taxing Jurisdiction.

 

“EMA” shall mean the Employee Matters Agreement by and between Parent and Match dated as of November 24, 2015.

 

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“Equity Securities” shall mean any stock or other securities treated as equity for federal income tax purposes, options, warrants, rights, convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock.

 

“Estimated Tax Payments” shall have the meaning set forth in Section 2(c).

 

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

 

“Final Determination” shall mean the final resolution of liability for any 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 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; or (e) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.

 

“Group” shall mean the Parent Group or the Match Group, as applicable.

 

“Income Taxes” (a) shall mean (i) any federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments that are based upon, measured by, or calculated with respect to (A) net income or profits (including, but not limited to, any capital gains, gross receipts, or minimum tax, and any tax on items of tax preference, but not including sales, use, value added, real property gains, real or personal property, transfer or similar taxes), (B) multiple bases (including, but not limited to, corporate franchise, doing business or occupation taxes), if one or more of the bases upon which such tax may be based, by which it may be measured, or with respect to which it may be calculated is described in clause (a)(i)(A) of this definition, or (C) any net worth, franchise or similar tax, in each case together with (ii) any interest, penalties, fines, additions to tax or additional amounts imposed by any Tax Authority with respect thereto and (b) shall include any transferee or successor liability in respect of an amount described in clause (a) of this definition.

 

“Income Tax Return” shall mean any return, report, filing, statement, questionnaire, declaration or other document filed or required to be filed with a Tax Authority in respect of Income Taxes.

 

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“Indemnified Party” shall mean any Person seeking indemnification pursuant to the provisions of this Agreement.

 

“Indemnifying Party” shall mean any Party from which any Indemnified Party is seeking indemnification pursuant to the provisions of this Agreement.

 

“IPO” shall have the meaning set forth in the recitals.

 

“IRS” shall mean the Internal Revenue Service.

 

“Losses” shall mean any and all losses, liabilities, claims, damages, obligations, payments, costs and expenses, matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown (including, without limitation, the costs and expenses of any and all Actions, threatened Actions, demands, assessments, judgments, settlements and compromises relating thereto and attorneys’ fees and any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any such Actions or threatened Actions).

 

“Match” shall have the meaning set forth in the preamble.

 

“Match Active Business” shall mean, in the event of a Distribution, each trade or business actively conducted (within the meaning of Section 355(b) of the Code) by the Match Consolidated Group immediately after the Distribution, as set forth in the Tax Opinion Documents.

 

“Match Adjustment” shall mean an adjustment of any item of income, gain, loss, deduction or credit on a Combined Return attributable to members of the Match Group (including, in the case of any state or local consolidated, combined or unitary income or franchise Taxes, a change in one or more apportionment factors of members of the Match Group) pursuant to a Final Determination for a Pre-Deconsolidation Taxable Period.

 

“Match COD Income” shall mean 50% of the aggregate amount of cancellation of indebtedness income, if any, recognized by the Parent Consolidated Group as a result of (i) the exchange of 4.75% Senior Notes due 2022 issued by Parent for 6.75% Senior Notes due 2022 issued by Match pursuant to the Exchange Offer and Consent Solicitation commenced on October 16, 2015 and (ii) the purchase for cash of 4.875% Senior Notes due 2018 issued by Parent pursuant to the Offer to Purchase and Consent Solicitation Statement commenced on October 16, 2015.

 

“Match Consolidated Group” shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code) of which Match is the common parent, determined immediately after the Deconsolidation Date (and any predecessor or successor to such affiliated group other than the Parent Consolidated Group).

 

“Match Group” shall mean (a) Match and each Person that is a direct or indirect Subsidiary of Match (including any Subsidiary of Match that is disregarded for U.S. federal Income Tax purposes (or for purposes of any State, local, or foreign tax law)) immediately after the IPO, (b) any corporation (or other Person) that shall have merged or liquidated into Match or

 

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any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.

 

“Match Option” shall have the meaning ascribed thereto in the EMA.

 

“Match Separate Return” shall mean any Separate Return required to be filed by Match or any member of the Match Group, including, without limitation, any U.S. consolidated federal Income Tax Returns of the Match Consolidated Group required to be filed with respect to a Post-Deconsolidation Taxable Period.

 

“Match Stand-Alone Tax Liability” means, with respect to any Combined Return for any taxable period (or portion thereof) beginning after the date of the IPO, the hypothetical stand-alone Tax Liability of the Match Group and/or any of its members for such taxable period (or portion thereof), determined on the following basis:  (i) to the extent that members of the Match Group would (but for their inclusion in a Combined Return) be entitled to file a Tax Return on a consolidated, combined or unitary basis solely with other members of the Match Group, such Tax Liability shall be determined as though such members filed on a consolidated, combined or unitary basis, as applicable, solely with such other members of the Match Group, (ii) taxable income of the Match Group and/or any of its members shall be calculated by taking into account losses, credits and other Tax attributes of Match and the relevant members of the Match Group, in each case, to the extent arising after the date of the IPO, and treating all such Tax attributes as being subject to the limitations under applicable Tax law (including limitations on carrybacks and carryforwards) that would apply if the relevant members of the Match Group had filed on a separate Tax Return basis for all taxable periods (or portions thereof) relevant to the computation (provided, that the Match Group and/or its members shall be deemed to have relinquished, waived or otherwise foregone any carrybacks to any taxable period (or portion thereof) beginning prior the date of the IPO; and if any such Tax attribute would, under applicable Tax law be required to be carried back, such Tax attribute shall be deemed to be available to the Match Group on a carryforward basis (subject to the limitations under applicable Tax law on such carryforwards)), and (iii) by specially allocating to the Match Group the following items: (A) Match COD Income, (B) any amount required to be included in income pursuant to any “gain recognition agreement” within the meaning of Treasury Regulations Section 1.367-8(c) with respect to which a member of the Match Group is the “U.S. transferor” (regardless of whether such amount is reportable for the taxable year of the initial transfer or the year during which the recognition event occurs), and (C) any compensation deductions to which the Match Group is entitled pursuant to Section 11 hereof.  For the avoidance of doubt, for purposes of calculating any available carryforward or carryback of Tax attributes pursuant to clause (ii) hereof, the utilization of any such Tax attributes by members of the Parent Group shall be disregarded.

 

“Notified Action” shall have the meaning ascribed thereto in Section 4(b)(i).

 

“Option” shall have the meaning ascribed to such term in the EMA.

 

“Other Taxes” shall mean any federal, state, local or foreign taxes, charges, fees imposts, levies or other assessments of any nature whatsoever, and without limiting the generality of the foregoing, shall include superfund, sales, use, ad valorem, value added,

 

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occupancy, transfer, recording, withholding, payroll, employment, excise, occupation, premium or property taxes (in each case, together with any related interest, penalties, additions to tax, or additional amounts imposed by any Tax Authority thereon); provided, however, that Other Taxes shall not include any Income Taxes.

 

“Other Tax Returns” shall mean any return, report, filing, statement, questionnaire, declaration or other document filed or required to be filed with a Tax Authority in respect of Other Taxes.

 

“Parent” shall have the meaning set forth in the preamble.

 

“Parent Consolidated Group” shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code) of which Parent is the common parent (and any predecessor or successor to such affiliated group).

 

“Parent Group” shall mean (a) Parent and each Person that is a direct or indirect Subsidiary of Parent (including any Subsidiary of Parent that is disregarded for U.S. federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) immediately after the IPO (other than any Person that is a member of the Match Group), (b) any corporation (or other Person) that shall have merged or liquidated into Parent or any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.

 

“Parent Separate Return” shall mean any Separate Return required to be filed by Parent or any member of the Parent Group.

 

“Permitted Transaction” shall mean, in the event of a Distribution, any transaction that satisfies the requirements of Section 4(c).

 

“Person” shall mean any individual, partnership, joint venture, limited liability company, corporation, association, joint stock company, trust, estate, unincorporated organization or similar entity or a governmental authority or any department or agency or other unit thereof.

 

“Post-Deconsolidation Taxable Period” shall mean a taxable period that, to the extent it relates to a member of the Match Group, begins after the Deconsolidation Date.

 

“Pre-Deconsolidation Taxable Period” shall mean a taxable period that, to the extent it relates to a member of the Match Group, ends on or before the Deconsolidation Date.

 

“Private Letter Ruling” shall mean, in the event of a Distribution, (a) any private letter ruling issued by the IRS in connection with the Distribution or (b) any similar ruling issued by any other Tax Authority in connection with the Distribution.

 

“Private Letter Ruling Documents” shall mean, in the event of a Distribution, (a) any Private Letter Ruling, any request for a Private Letter Ruling submitted to the IRS, together with any appendices and exhibits thereto and any supplemental filings or other materials subsequently submitted to the IRS, in connection with the Distribution-related transactions, or

 

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(b) any similar filings submitted to any other Tax Authority in connection with any such request for a Private Letter Ruling.

 

“Proceeding” shall mean any audit or other examination, or judicial or administrative proceeding relating to liability for, or Refunds or adjustments with respect to, Taxes.

 

“Proposed Acquisition Transaction” shall mean, in the event of a Distribution, a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulations 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 Match management or shareholders, is a hostile acquisition, or otherwise, as a result of which Match would merge or consolidate with any other Person or as a result of which any Person or Persons would (directly or indirectly) acquire, or have the right to acquire, from Match and/or one or more holders of outstanding shares of Match Capital Stock, a number of shares of Match Capital Stock that would, when combined with any other changes in ownership of Match 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 Match stock 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 Match stock 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 Match of a shareholder rights plan or (b) issuances by Match 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 non-exchanging shareholders.  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 into this definition and its interpretation.

 

“Refund” shall mean any refund of Taxes, including any reduction in Tax Liabilities by means of a credit, offset or otherwise.

 

“Representative” shall mean with respect to a Person, such Person’s officers, directors, employees and other authorized agents.

 

“Restriction Period” shall mean, in the event of a Distribution, the period beginning on the Distribution Date and ending on the day following the two-year anniversary thereof.

 

“Section 336(e) Election” shall have the meaning set forth in Section 4(d).

 

“Separate Return” shall mean (a) in the case of any Tax Return required to be filed by any member of the Match Group (including any consolidated, combined or unitary

 

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return), any such Tax Return that does not include any member of the Parent Group and (b) in the case of any Tax Return required to be filed by any member of the Parent Group (including any consolidated, combined or unitary return), any such Tax Return that does not include any member of the Match Group.

 

“Tax Attribute” shall mean a consolidated, combined or unitary net operating loss, net capital loss, unused investment credit, unused foreign tax credit, or excess charitable contribution (as such terms are used in Treasury Regulations 1.1502-79 and 1.1502-79A or comparable provisions of foreign, state or local tax law), or a minimum tax credit or general business credit.

 

“Tax Authority” shall mean a governmental authority (foreign or domestic) or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including, without limitation, the IRS).

 

“Tax Benefits” shall have the meaning set forth in Section 3(c) hereof.

 

“Tax Counsel” shall mean tax counsel of recognized national standing that is acceptable to Parent in its sole discretion.

 

“Taxes” shall mean any Income Taxes and Other Taxes.

 

“Tax-Free Status” shall mean, in the event of a Distribution, the qualification of the Distribution, (a) as a transaction described in Section 368(a)(1)(D) and/or Section 355(a) of the Code, (b) as a transaction in which the stock distributed thereby is “qualified property” for purposes of Sections 355(c)(2) and 361(c)(2) of the Code, and (c) as a transaction in which Parent, the members of the Parent Group, Match and the members of the Match Group recognize no income or gain, other than intercompany items or excess loss accounts, if any, taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code.

 

“Taxing Jurisdiction” shall mean the United States and every other government or governmental unit having jurisdiction to tax Parent, Match or any of their respective Subsidiaries.

 

“Tax Liabilities” shall mean any liability for Taxes.

 

“Tax Opinion” shall mean, in the event of a Distribution, the opinion issued to Parent by Tax Counsel regarding the Tax-Free Status of the Distribution.

 

“Tax Opinion Documents” shall mean, in the event of a Distribution, the Tax Opinion and the information and representations provided by, or on behalf of, Parent and Match to Tax Counsel in connection therewith.

 

“Tax-Related Losses” shall mean, in the event of a Distribution:

 

(a)                                 the Aggregate Distribution Tax Liabilities,

 

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(b)                                 all reasonable accounting, legal and other professional fees, and court costs incurred in connection with any settlement, Final Determination, judgment or other determination with respect to such Aggregate Distribution Tax Liabilities, and

 

(c)                                  all costs, expenses and damages associated with stockholder litigation or controversies and any amount required to be paid by Parent or Match in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority payable by Parent or Match or their respective Affiliates, in each case, resulting from the failure of the Distribution to qualify for Tax-Free Status.

 

“Transaction Agreement” shall have the meaning set forth in the recitals of this Agreement.

 

“Underpayment Rate” shall mean the annual rate of interest described in Section 6621(c) of the Code for large corporate underpayments of Income Tax (or similar provision of state, local, or foreign Income Tax law, as applicable), as determined from time to time.

 

“Unqualified Tax Opinion” shall mean, in the event of a Distribution, an unqualified opinion of Tax Counsel on which Parent may rely to the effect that a transaction (a) will not disqualify the Distribution from Tax-Free Status, assuming that the Distribution would have qualified for Tax-Free Status if such transaction did not occur, and (b) will not adversely affect any of the conclusions set forth in the Tax Opinion; provided that any tax opinion obtained in connection with a proposed acquisition of Equity Securities of Match entered into during the Restriction Period shall not qualify as an Unqualified Tax Opinion unless such tax opinion concludes that such proposed acquisition will not be treated as “part of a plan (or series of related transactions)” within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, that includes the Distribution.

 

2.                                      Tax Returns; Responsibility for Taxes.

 

(a)                                 Preparation and Filing of Tax Returns; Payment of Taxes.

 

(i)                                     Parent Consolidated Returns; Other Combined Returns.  Parent shall prepare and file or cause to be prepared and filed (A) all U.S. consolidated federal Income Tax Returns of the Parent Consolidated Group and (B) all other Combined Returns for all taxable periods.  Subject to Section 2(c) hereof, Parent shall pay, or cause to be paid, any and all Taxes due or required to be paid with respect to or required to be reported on any such Tax Return (including any increase in such Tax Liabilities attributable to a Final Determination).

 

(ii)                                  Parent Separate Returns.  Parent shall prepare and file or cause to be prepared and filed all Parent Separate Returns for all taxable periods.  Parent shall pay, or cause to be paid, any and all Taxes due or required to be paid with respect to or required to be reported on any Parent Separate Return (including any increase in such Tax Liabilities attributable to a Final Determination).

 

(iii)                               Match Separate Returns.  Match shall prepare and file or cause to be prepared and filed all Match Separate Returns for all taxable periods ending on or after the date hereof.  Match shall pay, or cause to be paid, any and all Taxes due or required to be paid

 

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with respect to or required to be reported on any Match Separate Return (including any increase in such Tax Liabilities attributable to a Final Determination).

 

(b)                                 Tax Returns Standards.

 

(i)                                     Parent (or its designee) shall determine the entities to be included in any Combined Return and make or revoke any Tax elections, adopt or change any accounting methods, and determine any other position taken on or in respect of any Tax Return required to be prepared and filed by Parent pursuant to Section 2(a)(i).  Match shall elect and join, and shall cause its respective Subsidiaries to elect and join any Combined Returns that Parent determines to file.  Any Tax Return filed by Parent pursuant to Section 2(a)(i) with respect to any Pre-Deconsolidation Taxable Period or any taxable period that includes the Deconsolidation Date shall, to the extent relating to Match or the Match Group, be prepared in good faith, provided that Tax items shall be apportioned between Pre-Deconsolidation Taxable Periods and Post-Deconsolidation Taxable Periods in accordance with the principles of Treasury Regulations Section 1.1502-76(b) as reasonably interpreted and applied by Parent.  Match shall, and shall cause each member of the Match Group promptly (and in any event within 30 days following a request by Parent) to, prepare and deliver to Parent, at its expense, all information that Parent may reasonably request, in such form as Parent may reasonably request, including any information required to enable Parent to prepare any Tax Return required to be filed by Parent pursuant to Section 2(a)(i).  Parent shall make any such Tax Return and related workpapers available for review by Match sufficiently in advance of the due date for filing such Tax Return to the extent such Tax Return relates to Taxes for which Match is or would reasonably be expected to be responsible or with respect to which Match would reasonably be expected to have a claim.  Parent and Match shall attempt in good faith to resolve any issues arising out of the review of such Tax Return.

 

(ii)                                  Except to the extent otherwise required by applicable Law or as a result of a Final Determination, Match shall not (and shall not cause or permit any members of the Match Group to) take any position on any Match Separate Return (A) that is inconsistent with the past practices, accounting methods, elections or conventions used by Parent or any of its Subsidiaries in preparing any Tax Return for which Parent is responsible pursuant to Section 2(a)(i) (unless there is no reasonable basis for such past practices, methods, elections or conventions or there is no adverse effect on any member of the Parent Group), or (B) that is inconsistent with this Agreement or, in the event of a Distribution, any Tax Opinion or Tax Opinion Documents, any Unqualified Tax Opinion, or any Private Letter Ruling (including any supplemental Private Letter Ruling).

 

(c)                                  Match Tax Sharing Payments.

 

(i)                                     With respect to any Combined Return for each taxable period (or portion thereof) that begins after the date of the IPO, Match shall pay, or cause to be paid, to Parent the amount of estimated Taxes, if any, that would be incurred by the Match Group and/or its members for such taxable period had the Match Group and/or its members not been included in such Combined Return (“Estimated Tax Payments”).  The Estimated Tax Payments owed by the Match Group or any of its members for any such taxable period (or portion thereof) shall be determined in accordance with the definition of Match Stand-Alone Tax Liability.

 

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(ii)                                  With respect to any Combined Return for each taxable period (or portion thereof) that begins after the date of the IPO, Match shall pay, or shall cause to be paid, to Parent an amount equal to the excess, if any, of (A) the Match Stand-Alone Tax Liability for such taxable period over (B) the aggregate amount of Estimated Tax Payments made to Parent for such taxable period.  If the aggregate amount of Estimated Tax Payments made to Parent with respect to such taxable period exceeds the Match Stand-Alone Tax Liability for such taxable period, Parent shall pay to Match an amount equal to such excess.

 

(iii)                               At least ten (10) days prior to the due date for any payment of Taxes (including estimated Taxes) in respect of any Combined Return for any taxable period (or portion thereof) that begins after the date of the IPO, Parent shall deliver to Match a schedule setting forth in reasonable detail Parent’s calculation of the Match Stand-Alone Tax Liability or Estimated Tax Payments, as applicable.  No later than ten (10) days following the delivery of such schedule, Match shall pay Parent (or Parent shall pay Match) the amount shown as due on such schedule.

 

(iv)                              If, as a result of a Final Determination with respect to any Combined Return or the filing by Parent or any member of the Parent Group of any amended Combined Return, in each case, for any taxable period, there is an increase or decrease in the Match Stand-Alone Tax Liability for such taxable period (or any preceding or subsequent taxable period, in each case, beginning after the date of the IPO), the parties shall promptly make appropriate adjusting payments such that the aggregate amount paid by Match to Parent for such taxable period (and any prior or subsequent taxable periods affected by such Final Determination or amended Combined Return, in each case, beginning after the date of the IPO) equals the redetermined Match Stand-Alone Tax Liability for such taxable period or periods; provided, that if such Final Determination or amended Combined Return affects one or more taxable periods (or portions thereof) ending on or prior to the date of the IPO, Parent shall determine in good faith the portion of any increase or decrease in the Tax liability reflected on the relevant Combined Return(s) for such taxable periods that is attributable to members of the Match Group and shall notify Match within ten (10) days of its determination in writing.  No later than ten (10) days following the delivery of such schedule, Match shall pay Parent (or Parent shall pay Match) the amount shown as due on such schedule.

 

3.                                      Responsibility for Taxes and Indemnification.

 

(a)                                 Parent Liability.  Except as otherwise provided in Section 3(b), Parent and the members of the Parent Group shall be responsible for and shall indemnify and hold harmless Match and its Affiliates and each of their respective officers, directors and employees from and against (i) any Taxes imposed with respect to any Combined Return (except to the extent that Match is responsible for such Taxes pursuant to this Agreement (including any Match Stand-Alone Tax Liability)) and any other Taxes imposed with respect to any Tax Return for which any member of the Parent Group is responsible pursuant to Section 2(a)(ii), (ii) any Taxes resulting from any breach by Parent of any representation or covenant in this Agreement, the Transaction Agreement or any Ancillary Agreement, and (iii) in the event of a Distribution, any Tax-Related Losses for which Parent is responsible pursuant to Section 4(c) of this Agreement.

 

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(b)                                 Match Liability.  Match and the members of the Match Group shall be responsible for and shall indemnify and hold harmless Parent and its Affiliates and each of their respective officers, directors and employees from and against (i) any Taxes imposed with respect to any Combined Return to the extent that Match is responsible for such Taxes pursuant to this Agreement (including any Match Stand-Alone Tax Liability) and any other Taxes imposed with respect to any Tax Return for which any member of the Match Group is responsible pursuant to Section 2(a)(iii), (ii) any Taxes resulting from any breach by Match of any representation or covenant in this Agreement, the Transaction Agreement or any Ancillary Agreement, and (iii) in the event of a Distribution, any Tax-Related Losses for which Match is responsible pursuant to Section 4(c) of this Agreement.

 

(c)                                  Tax Benefits.  If an indemnification obligation of Parent or any member of the Parent Group under Section 3(a) (or the adjustment giving rise to such indemnification obligation) results in (i) increased deductions, losses, or credits, or (ii) decreases in income, gains or recapture of Tax credits (“Tax Benefits”) to Match or any member of the Match Group, which would not, but for the indemnification obligation (or the adjustment giving rise to such indemnification obligation), be allowable, then Match shall pay Parent the amount by which such Tax Benefit actually reduces, in cash, the amount of Tax that Match or any member of the Match Group would have been required to pay and bear (or increases, in cash, the amount of Tax Refund to which Match or any member of the Match Group would have been entitled) but for such indemnification obligation (or adjustment giving rise to such indemnification obligation).  Match shall pay Parent for such Tax Benefit no later than ten (10) days after such Tax Benefit is Actually Realized.  If an indemnification obligation of Match or any member of the Match Group under Section 3(b) (or the adjustment giving rise to such indemnification obligation) results in a Tax Benefit to Parent or any member of the Parent Group, which would not, but for the Tax which is the subject of the indemnification obligation (or the adjustment giving rise to such indemnification obligation), be allowable, then Parent shall pay Match the amount by which such Tax Benefit actually reduces, in cash, the amount of Tax that Parent or any member of the Parent Group would have been required to pay and bear (or increases, in cash, the amount of Tax refund to which Parent or any member of the Parent Group would have been entitled) but for such indemnification (or adjustment giving rise to such indemnification obligation).  Match shall pay Parent for such Tax Benefit no later than ten (10) days after such Tax Benefit is Actually Realized.

 

(d)                                 Timing of Indemnification Payments.  Any indemnification payment required to made pursuant to this Section 3 (other than a payment for any Tax Benefit, the timing of which is provided in Section 3(c)) shall be made by the Indemnifying Party promptly, but, in any event, no later than:

 

(i)                                     in the case of an indemnification obligation with respect to any Tax Liabilities, the later of (A) five (5) days after the Indemnified Party notifies the Indemnifying Party in writing and (B) five (5) days prior to the date the Indemnified Party is required to make a payment of Taxes to the applicable Tax Authority (including a payment with respect to an assessment of a tax deficiency by any Taxing Jurisdiction or a payment made in settlement of an asserted tax deficiency) or realizes a reduced Refund; and

 

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(ii)                                  in the case of any indemnification payment for any Losses not otherwise described in clause (i) of this Section 3(d) (including, but not limited to, any Losses described in clause (b) or (c) of the definition of Tax-Related Losses, attorneys’ fees and expenses and other indemnifiable Losses), the later of (A) five (5) days after the Indemnified Party notifies the Indemnifying Party in writing and (B) five (5) days prior to the date the Indemnified Party is required to make a payment thereof.

 

4.                                      Distribution-Related Matters.

 

(a)                                 Covenants.

 

(i)                                     Match agrees that, as long as a Distribution could, in the reasonable discretion of Parent, be effected, (A) Match shall (and shall cause each member of the Match Group to) take any action reasonably requested by Parent in order to consummate a Distribution, and (B) Match shall not take or fail to take any action (and it shall cause the members of the Match Group not to take or fail to take any action) which action or failure to act could reasonably be expected to prevent Parent from consummating a Distribution.  Match agrees that, without Parent’s prior written consent, it will not take (and will cause each member of the Match Group not to take) any action that could reasonably be expected to (1) cause Parent to cease to have “control” (within the meaning of Section 368(c) of the Code) of Match or (2) result in a Deconsolidation Event, in each case, prior to the Distribution Date.

 

(ii)                                  In the event of a Distribution, neither Parent (or any member of the Parent Group) nor Match (or any member of the Match Group) shall take or fail to take any action, or permit or cause any member of the Parent Group or the Match Group, respectively, to take or fail to take any action, if such action or failure to act would be inconsistent with or cause to be untrue any material information, covenant or representation in the Tax Opinion Documents or Private Letter Ruling.

 

(iii)                               In the event of a Distribution, from and after the Distribution Date, Match shall not (A) take any action or permit any member of the Match Group to take any action, and Match shall not fail to take any action or permit any member of the Match Group to fail to take any action, in each case, unless such action or failure to act could not reasonably be expected to (1) cause the Distribution to fail to have Tax-Free Status or (2) require Parent or Match to reflect a liability or reserve for Income Taxes with respect to the Distribution in its financial statements, or (B) until the first day after the Restriction Period, engage in any transaction that could result in the Match Consolidated Group ceasing to be engaged in any Match Active Business for purposes of Section 355(b)(2) of the Code.

 

(iv)                              In the event of a Distribution, from and after the Distribution Date until the first day after the Restriction Period, Match shall not (A) enter into any Proposed Acquisition Transaction or, to the extent Match has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (x) redeeming rights under a shareholder rights plan, (y) 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 (z) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the DGCL or any similar

 

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corporate statute, any “fair price” or other provision of Match’s charter or bylaws or otherwise), (B) merge or consolidate with any other Person or liquidate or partially liquidate, (C) in a single transaction or series of transactions (1) sell or transfer (other than sales or transfers of inventory in the ordinary course of business) all or substantially all of the assets held by Match at the time of the Distribution (2) sell or transfer 50% or more of the gross assets of the Match Active Business or (3) sell or transfer 30% or more of the consolidated gross assets of Match and its Subsidiaries (in each case, such percentages to be measured based on fair market value as of the Distribution Date), (D) redeem or otherwise repurchase (directly or through a Subsidiary) any Match 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 by Revenue Procedure 2003-48), (E) 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 Match Capital Stock (including, without limitation, through the conversion of one class of Match Capital Stock into another class of Match Capital Stock), or (F) take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation or covenant made in the Tax Opinion Documents or Private Letter Ruling) which in the aggregate (and taking into account any other transactions described in this subparagraph (iv)) would be reasonably likely to have the effect of causing or permitting one or more Persons to acquire, directly or indirectly, stock representing a Fifty-Percent or Greater Interest in Match or otherwise jeopardize the Tax Free Status of the Distribution, unless, in each case, prior to taking any such action set forth in the foregoing clauses (A) through (F), Match shall have requested that Parent obtain a Private Letter Ruling (or, if applicable, a supplemental Private Letter Ruling) from the IRS and/or any other applicable Tax Authority in accordance with Section 4(b) of this Agreement to the effect that such transaction will not affect the Tax-Free Status of the Distribution and Parent shall have received such Private Letter Ruling in form and substance satisfactory to Parent in its reasonable discretion (and in determining whether a Private Letter Ruling is satisfactory, Parent may consider, among other factors, the appropriateness of any underlying assumptions and representations made in connection with such Private Letter Ruling), or Match shall provide Parent with an Unqualified Tax Opinion in form and substance satisfactory to Parent in its reasonable discretion (and in determining whether an opinion is satisfactory, Parent may consider, among other factors, the appropriateness of any underlying assumptions and representations if used as a basis for the opinion), or Parent shall have waived the requirement to obtain such private letter ruling or Unqualified Tax Opinion.

 

(b)                                 Procedures Regarding Opinions and Rulings.

 

(i)                                     If Match notifies Parent that it desires to take one of the actions described in clauses (A) through (F) of Section 4(a)(iv) (a “Notified Action”), Parent and Match shall reasonably cooperate to attempt to obtain the Private Letter Ruling or Unqualified Tax Opinion referred to in Section 4(a)(iv), unless Parent shall have waived the requirement to obtain such Private Letter Ruling or Unqualified Tax Opinion.

 

(ii)                                  At the reasonable request of Match pursuant to Section 4(a)(iv), Parent shall cooperate with Match and use commercially reasonable efforts to seek to obtain, as expeditiously as possible, a Private Letter Ruling from the IRS (and/or any other applicable Tax Authority, or if applicable, a supplemental Private Letter Ruling) or an Unqualified Tax Opinion

 

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for the purpose of permitting Match to take the Notified Action.  Further, in no event shall Parent be required to file any request for a Private Letter Ruling under this Section 4(b) unless Match represents that (A) it has reviewed the request for such Private Letter Ruling, and (B) all information and representations, if any, relating to any member of the Match Group, contained in the related Private Letter Ruling documents are (subject to any qualifications therein) true, correct and complete.  Match shall reimburse Parent for all reasonable costs and expenses incurred by the Parent Group in obtaining a Private Letter Ruling or Unqualified Tax Opinion requested by Match within ten (10) days after receiving an invoice from Parent therefor.

 

(iii)                               Parent shall have the right to request a Private Letter Ruling from the IRS (and/or any other applicable Tax Authority, or if applicable, a supplemental Private Letter Ruling) or an Unqualified Tax Opinion at any time in its sole and absolute discretion.  If Parent determines to obtain a Private Letter Ruling or an Unqualified Tax Opinion, Match shall (and shall cause each Affiliate of Match to) cooperate with Parent and take any and all actions reasonably requested by Parent in connection with obtaining the Private Letter 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 Counsel; provided that Match shall not be required to make (or cause any Affiliate of Match 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).  Parent and Match shall each bear its own costs and expenses in obtaining a Private Letter Ruling or an Unqualified Tax Opinion requested by Parent.

 

(iv)                              Match hereby agrees that Parent shall have sole and exclusive control over the process of obtaining any Private Letter Ruling, and that only Parent shall apply for a Private Letter Ruling.  In connection with obtaining a Private Letter Ruling pursuant to Section 4(b) hereof, (A) Parent shall keep Match informed in a timely manner of all material actions taken or proposed to be taken by Parent in connection therewith; (B) Parent shall (1) reasonably in advance of the submission of any related Private Letter Ruling documents provide Match with a draft copy thereof, (2) reasonably consider Match’s comments on such draft copy, and (3) provide Match with a final copy; and (C) Parent shall provide Match with notice reasonably in advance of, and Match shall have the right to attend, any formally scheduled meetings with the IRS (subject to the approval of the IRS) that relate to such Private Letter Ruling.  Neither Match nor any member of the Match Group shall request any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Distribution (including the impact of any transaction on the Distribution).

 

(c)                                  Responsibility for Tax-Related Losses.

 

(i)                                     Notwithstanding anything in this Agreement to the contrary, subject to Section 4(c)(iii), in the event of a Distribution, Match shall be responsible for, and shall indemnify and hold harmless Parent 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 acquisition after the Distribution of all or a portion of Match’s Capital Stock and/or its or its subsidiaries’ assets by any means whatsoever by any Person, (B) any “agreement, understanding, arrangement, substantial negotiations or discussions” (as such terms are defined in Treasury

 

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Regulation Section 1.355-7(h)) by any one or more officers or directors of any member of the Match Group or by any other Person or Persons with the implicit or explicit permission of one or more of such officers or directors (other than officers or directors of Parent) that cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire, directly or indirectly, Match stock representing a Fifty-Percent or Greater Interest therein, (C) any action or failure to act by Match after the Distribution (including, without limitation, any amendment to Match’s certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise) affecting the voting rights of Match stock (including, without limitation, through the conversion of one class of Match Capital Stock into another class of Match Capital Stock), or (D) any breach by Match or any Match Affiliate of any covenant contained in Section 4(a)(ii), (iii) or (iv) (regardless whether such act or failure to act is covered by a Private Letter Ruling, Unqualified Tax Opinion or Parent waiver described in Section 4(a)(iv).

 

(ii)                                  Notwithstanding anything in this Agreement to the contrary, subject to Section 4(c)(iii), in the event of a Distribution, Parent shall be responsible for, and shall indemnify and hold harmless Match 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 acquisition after the Distribution of all or a portion of Parent’s stock and/or its or its subsidiaries’ assets by any means whatsoever by any Person, (B) any “agreement, understanding, arrangement, substantial negotiations or discussions” (as such terms are defined in Treasury Regulation Section 1.355-7(h)) by any one or more officers or directors of any member of the Parent Group or by any other Person or Persons with the implicit or explicit permission of one or more of such officers or directors 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 Parent representing a Fifty-Percent or Greater Interest therein, or (C) any breach by Parent or a member of the Parent Group of any covenant contained in Section 4(a)(ii).

 

(iii)                               To the extent any Tax-Related Loss is subject to indemnification under both Sections 4(c)(i) and (ii), responsibility for such Tax-Related Loss shall be shared by Parent and Match according to relative fault.

 

(A)                               Notwithstanding anything in Section 4(c)(ii) or (iii) or any other provision of this Agreement to the contrary:

 

(1)                                 with respect to (I) any Tax-Related Loss resulting from the application of Section 355(e) of the Code and (II) any other Tax-Related Loss resulting, in each case, in whole or in part, from an acquisition after the Distribution of any stock or assets of Match (or any member of the Match Group) by any means whatsoever by any Person or any action or failure to act by Match after the Distribution affecting the voting rights of Match, Match shall be responsible for, and shall indemnify and hold harmless Parent and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss; and

 

(2)                                 for purposes of calculating the amount and timing of any Tax-Related Loss for which Match is responsible under this Section 4(c)(iii)(A), Tax-Related

 

16

 

Losses shall be calculated by assuming that Parent, the Parent Consolidated Group and each member of the Parent Group (I) pay Tax at the highest marginal corporate Tax rates in effect in each relevant taxable year and (II) have no Tax Attributes in any relevant taxable year.

 

(B)                               Notwithstanding anything in Section 4(c)(i) or (iii) or any other provision of this Agreement to the contrary, with respect to (I) any Tax-Related Loss resulting from the application of Section 355(e) of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in Match) and (II) any other Tax-Related Loss resulting, in each case, in whole or in part, from an acquisition after the Distribution of any stock or assets of Parent (or any member of the Parent Group) by any means whatsoever by any Person, Parent shall be responsible for, and shall indemnify and hold harmless Match and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss.

 

(d)                                 Section 336(e) Election.  If Parent determines, in its sole discretion, that a protective election under Section 336(e) of the Code (a “Section 336(e) Election”) shall be made with respect to the Distribution, Match shall (and shall cause the relevant members of the Match Group to) join with Parent or the relevant members of the Match Group in the making of such election and shall take any action reasonably requested by Parent or that is otherwise necessary to give effect to such election (including making any other related election).  If a Section 336(e) Election is made with respect to the Distribution, then this Agreement shall be amended in such a manner as is determined by Parent in good faith to take into account such Section 336(e) Election (including by requiring that, in the event the Distribution fails to have Tax-Free Status and Parent is not entitled to indemnification for the Tax-Related Losses arising from such failure, Match shall pay over to Parent any Tax Benefits realized by the Match Group arising from the step-up in Tax basis resulting from the Section 336(e) Election).

 

5.                                      Refunds.  Parent shall be entitled to all Refunds (and any interest thereon received from the applicable Tax Authority) of Taxes for which Parent is responsible pursuant to this Agreement. Match shall be entitled to all Refunds (and any interest thereon received from the applicable Tax Authority) of Taxes for which Match is responsible pursuant to this Agreement.  A party receiving a Refund to which another party is entitled pursuant to this Section 5 shall pay the amount to which such other party is entitled within ten (10) days after such Refund is Actually Realized.  Each of Parent and Match shall cooperate with the other party in connection with any claim for a Refund in respect of a Tax for which any member of the Parent Group or the Match Group, as the case may be, is responsible.

 

6.                                      Tax Contests.

 

(a)                                 Notification.  Each of Parent and Match shall notify the other party in writing of any communication with respect to any pending or threatened Proceeding in connection with a Tax Liability (or any issue related thereto) of Parent or any member of the Parent Group, or Match or any member of the Match Group, respectively, for which a member of the Match Group or the Parent Group, respectively, may be responsible pursuant to this Agreement within ten (10) days of receipt; provided, however, that in the case of any Distribution-Related Proceeding (whether or not Match or Parent may be responsible thereunder), such notice shall be provided no later than ten (10) days after Parent or Match, as

 

17

 

the case may be, first receives written notice from the IRS or other Tax Authority of such Distribution-Related Proceeding).  Each of Parent and Match shall include with such notification a true, correct and complete copy of any written communication, and an accurate and complete written summary of any oral communication, received by Parent or a member of the Parent Group, or Match or a member of the Match Group, respectively.  The failure of Parent or Match timely to forward such notification in accordance with the immediately preceding sentence shall not relieve Match or Parent, respectively, of any obligation to pay such Tax Liability or indemnify Parent and the members of the Parent Group, or Match and the members of the Match Group, respectively, and their respective Representatives, Affiliates, successors and assigns therefor, except to the extent that the failure timely to forward such notification actually prejudices the ability of Match or Parent to contest such Tax Liability or increases the amount of such Tax Liability.

 

(b)                                 Representation with Respect to Tax Disputes.  Parent (or such member of the Parent Group as Parent shall designate) shall, subject to Section 6(d), have the exclusive right to represent the interests of the members of the Parent Group and the members of the Match Group and to employ counsel of its choice at its expense in any Proceeding relating to (i) any U.S. consolidated federal Income Tax Returns of the Parent Consolidated Group, (ii) any other Combined Returns and (iii) any Parent Separate Returns.  Match (or such member of the Match Group as Match shall designate) shall have the sole right to represent the interests of the members of the Match Group and to employ counsel of its choice at its expense in any Proceeding relating to any Match Separate Returns.

 

(c)                                  Power of Attorney.  Each member of the Match Group shall execute and deliver to Parent (or such member of the Parent Group as Parent shall designate) any power of attorney or other document requested by Parent (or such designee) in connection with any Proceeding described in the first sentence of Section 6(b).

 

(d)                                 Distribution-Related Proceedings and Proceedings with Respect to Combined Returns.

 

(i)                                     In the event of any Distribution-Related Proceeding or Proceeding relating to a Combined Return that Parent has the right to control pursuant to Section 6(b) and as a result of which Match could reasonably be expected to become liable for any Tax or any Tax-Related Losses in excess of five (5) million dollars, (A) Parent shall consult with Match reasonably in advance of taking any significant action in connection with such Proceeding, (B) Parent shall consult with Match and offer Match a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Proceeding, (C) Parent shall defend such Proceeding diligently and in good faith as if it were the only party in interest in connection with such Proceeding, and (D) Parent shall provide Match copies of any written materials relating to such Proceeding received from the relevant Tax Authority.  Notwithstanding anything in the preceding sentence to the contrary, the final determination of the positions taken, including with respect to any settlement or other disposition, in (1) any Distribution-Related Proceeding, or (2) any other Proceeding relating to a Combined Return, which other Proceeding would not reasonably be expected to result in a liability for additional Taxes for which Match is responsible in an amount exceeding five (5) million dollars for a single tax year, shall be made in the sole discretion of Parent and shall be final and not subject to the

 

18

 

dispute resolution provisions of Article 9.  With respect to any Proceeding relating to a Combined Return (other than any Distribution-Related Proceeding), which could reasonably be expected to result in liability for additional Taxes for which Match is responsible in an amount in an amount exceeding five (5) million dollars for a single tax year, Match shall be entitled to participate in such Proceeding, and Parent shall not settle, compromise or abandon any such Proceeding without obtaining the prior written consent of Match, which consent shall not be unreasonably withheld.

 

(ii)                                  In the event of any Distribution-Related Proceeding with respect to any Match Separate Return, (A) Match shall consult with Parent reasonably in advance of taking any significant action in connection with such Proceeding, (B) Match shall consult with Parent and offer Parent a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Proceeding, (C) Match shall defend such Proceeding diligently and in good faith as if it were the only party in interest in connection with such Proceeding, (D) Parent shall be entitled to participate in such Proceeding and receive copies of any written materials relating to such Proceeding received from the relevant Tax Authority, and (E) Match shall not settle, compromise or abandon any such Proceeding without obtaining the prior written consent of Parent, which consent shall not be unreasonably withheld.

 

7.                                      Apportionment of Tax Attributes upon Deconsolidation; Carrybacks.

 

(a)                                 Apportionment of Tax Attributes upon Deconsolidation.  In the event of a Deconsolidation Event:

 

(i)                                     Parent shall determine the portion, if any, of any Tax Attribute of the Parent Consolidated Group required to be apportioned to Match or any member of the Match Consolidated Group and/or treated as a carryover to the first Post-Deconsolidation Taxable Period of Match (or such member) in accordance with Treasury Regulation Sections 1.1502-21, 1.1502-21T, 1.1502-22, 1.1502-79 and, if applicable, 1.1502-79A.

 

(ii)                                  No Tax Attribute with respect to consolidated U.S. federal Income Tax of the Parent Consolidated Group, other than those described in Section 7(a)(i), and no Tax Attribute with respect to any consolidated, combined or unitary State, local, or foreign Income Tax, in each case, arising in respect of a Combined Return shall be apportioned to Match or any member of the Match Group, except as Parent (or such member of the Parent Group as Parent shall designate) determines is otherwise required under applicable Law.

 

(iii)                               Parent (or its designee) shall determine the portion, if any, of any Tax Attribute which must (absent a Final Determination to the contrary) be apportioned to Match or any member of the Match Group in accordance with this Section 7(a) and applicable Law, and, if applicable, the amount of tax basis and earnings and profits to be apportioned to Match or any member of the Match Group in accordance with applicable Law, and shall provide written notice of the calculation thereof to Match as soon as practicable after the information necessary to make such calculation becomes available to Parent.

 

(iv)                              Except as otherwise required by applicable Law or pursuant to a Final Determination, Match shall not take any position (whether on a Tax Return or otherwise)

 

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that is inconsistent with the information contained in the written notice delivered by Parent pursuant to Section 7(a)(iii).

 

(b)                                 Carrybacks.  Except to the extent otherwise consented to by Parent or prohibited by applicable Law, Match shall elect to relinquish, waive or otherwise forgo all Carrybacks.  In the event that Match (or the appropriate member of the Match Group) is prohibited by applicable Law to relinquish, waive or otherwise forgo a Carryback (or Parent consents to a Carryback), (i) Parent shall cooperate with Match, at Match’s expense, in seeking from the appropriate Tax Authority such Refund as reasonably would result from such Carryback, and (ii) Match shall be entitled to any Refund Actually Realized by a member of the Parent Group (including any interest thereon received from such Tax Authority), to the extent that such Refund is directly attributable to such Carryback, within ten (10) days after such Refund is Actually Realized; provided, however, that Match shall indemnify and hold the members of the Parent Group harmless from and against any and all collateral Tax consequences resulting from or caused by any such Carryback, including (but not limited to) the loss or postponement of any benefit from the use of Tax Attributes generated by a member of the Parent Group or an Affiliate thereof if (x) such Tax Attributes expire unutilized, but would have been utilized but for such Carryback, or (y) the use of such Tax Attributes is postponed to a later taxable period than the taxable period in which such Tax Attributes would have been utilized but for such Carryback.  If there is a Final Determination that results in any change to or adjustment of a Refund Actually Realized by a member of the Parent Group that is directly attributable to a Carryback, then Parent (or its designee) shall make a payment to Match, or Match shall make a payment to Parent (or its designee), as may be necessary to adjust the payments between Match and Parent (or its designee) to reflect the payments that would have been made under this Section 7(b) had the adjusted amount of such Refund been taken into account in computing payments under this Section 7(b).

 

8.                                      Cooperation and Exchange of Information.

 

(a)                                 Cooperation and Exchange of Information.  Each of Parent and Match, on behalf of itself and each member of the Parent Group and the Match Group, respectively, agrees to provide the other party (or its designee) with such cooperation or information as such other party (or its designee) reasonably shall request in connection with the determination of any payment or any calculations described in this Agreement, the preparation or filing of any Tax Return or claim for Refund, or the conduct of any Proceeding.  Such cooperation and information shall include, without limitation, upon reasonable notice (i) promptly forwarding copies of appropriate notices and forms or other communications (including, without limitation, information document requests, revenue agents’ reports and similar reports, notices of proposed adjustments and notices of deficiency) received from or sent to any Tax Authority or any other administrative, judicial or governmental authority, (ii) providing copies of all relevant Tax Returns, together with accompanying schedules and related workpapers, documents relating to rulings or other determinations by any Tax Authority, and such other records concerning the ownership and tax basis of property, or other relevant information, (iii) the provision of such additional information and explanations of documents and information provided under this Agreement (including statements, certificates, forms, returns and schedules delivered by either party) as shall be reasonably requested by Parent (or its designee) or Match (or its designee), as the case may be, (iv) the execution of any document that may be necessary or reasonably helpful

 

20

 

in connection with the filing of a Tax Return, a claim for a Refund, or in connection with any Proceeding, including such waivers, consents or powers of attorney as may be necessary for Parent or Match, as the case may be, to exercise its rights under this Agreement, and (v) the use of Parent’s or Match’s, as the case may be, reasonable efforts to obtain any documentation from a governmental authority or a third party that may be necessary or reasonably helpful in connection with any of the foregoing.  It is expressly the intention of the parties to this Agreement to take all actions that shall be necessary to establish Parent as the sole agent for Tax purposes of each member of the Match Group with respect to all Combined Returns.  Upon reasonable notice, each of Parent and Match shall make its, or shall cause the members of the Parent Group or the Match Group, as applicable, to make their, employees and facilities available on a mutually convenient basis to provide explanation of any documents or information provided hereunder.  Any information obtained under this Section 8 shall be kept confidential, except as otherwise reasonably may be necessary in connection with the filing of Tax Returns or claims for Refund or in conducting any Proceeding.

 

(b)                                 Retention of Records.  Each of Parent and Match agrees to retain all Tax Returns, related schedules and workpapers, and all material records and other documents as required under Section 6001 of the Code and the regulations promulgated thereunder (and any similar provision of State, local, or foreign law) existing on the date hereof or created in respect of (i) any taxable period that ends on or before or includes the Distribution Date or (ii) any taxable period that may be subject to a claim hereunder until the later of (A) the expiration of the statute of limitations (including extensions) for the taxable periods to which such Tax Returns and other documents relate and (B) the Final Determination of any payments that may be required in respect of such taxable periods under this Agreement.  From and after the end of the period described in the preceding sentence of this Section 8(b), if a member of the Parent Group or the Match Group wishes to dispose of any such records and documents, then Parent or Match, as the case may be, shall provide written notice thereof to the other party and shall provide the other party the opportunity to take possession of any such records and documents within 90 days after such notice is delivered; provided, however, that if such other party does not, within such 90-day period, confirm its intention to take possession of such records and documents, Parent or Match, as the case may be, may destroy or otherwise dispose of such records and documents.

 

(c)                                  Remedies.  Each of Parent and Match hereby acknowledges and agrees that (i) the failure of any member of the Parent Group or the Match Group, as the case may be, to comply with the provisions of this Section 8 may result in substantial harm to the Parent Group or the Match Group, as the case may be, including the inability to determine or appropriately substantiate a Tax Liability (or a position in respect thereof) for which the Parent Group (or a member thereof) or the Match Group (or a member thereof), as applicable, would be responsible under this Agreement or appropriately defend against an adjustment thereto by a Tax Authority, (ii) the remedies available to the Parent Group for the breach by a member of the Match Group of its obligations under this Section 8 shall include (without limitation) the indemnification by Match of the Parent Group for any Tax Liabilities incurred or any Tax Benefit lost or postponed by reason of such breach and the forfeiture by the Match Group of any related rights to indemnification by Parent and (iii) the remedies available to the Match Group for the breach by a member of the Parent Group of its obligations under this Section 8 shall include (without limitation) the indemnification by Parent of the Match Group for any Tax Liabilities incurred or

 

21

 

any Tax Benefit lost or postponed by reason of such breach and the forfeiture by the Parent Group of any related rights to indemnification by Match.

 

(d)                                 Reliance by Parent.  If any member of the Match Group supplies information to a member of the Parent Group in connection with a Tax Liability and an officer of a member of the Parent Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Parent Group identifying the information being so relied upon, the chief financial officer of Match (or his or her designee) shall certify in writing that to his knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete.  Match agrees to indemnify and hold harmless each member of the Parent Group and its directors, officers and employees from and against any fine, penalty, or other cost or expense of any kind attributable to a member of the Match Group having supplied, pursuant to this Section 8, a member of the Parent Group with inaccurate or incomplete information in connection with a Tax Liability.

 

(e)                                  Reliance by Match.  If any member of the Parent Group supplies information to a member of the Match Group in connection with a Tax Liability and an officer of a member of the Match Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Match Group identifying the information being so relied upon, the chief financial officer of Parent (or his or her designee) shall certify in writing that to his knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. Parent agrees to indemnify and hold harmless each member of the Match Group and its directors, officers and employees from and against any fine, penalty, or other cost or expense of any kind attributable to a member of the Parent Group having supplied, pursuant to this Section 8, a member of the Match Group with inaccurate or incomplete information in connection with a Tax Liability.

 

9.                                      Resolution of Disputes.  The provisions of Article 7 of the Transaction Agreement (Dispute Resolution) shall apply to any dispute arising in connection with this Agreement; provided, however, that in the case of disputes arising under this Agreement, Parent and Match shall jointly select the arbitrator, who shall be an attorney or accountant who is generally recognized in the tax community as a qualified and competent tax practitioner with experience in the tax area involved in the issue or issues to be resolved.

 

10.                               Payments.

 

(a)                                 Method of Payment.  All payments required by this Agreement shall be made by (i) wire transfer to the appropriate bank account as may from time to time be designated by the parties for such purpose; provided that, on the date of such wire transfer, notice of the transfer is given to the recipient thereof in accordance with Section 12, or (ii) any other method agreed to by the parties.  All payments due under this Agreement shall be deemed to be paid when available funds are actually received by the payee.

 

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(b)                                 Interest.  Any payment required by this Agreement that is not made on or before the date required hereunder shall bear interest, from and after such date through the date of payment, at the Prime Rate.

 

(c)                                  Characterization of Payments.  Except to the extent otherwise required by applicable Law or pursuant to a Final Determination, the parties hereto agree to treat, and to cause their respective Affiliates to treat, (i) any payment required by this Agreement or by the Transaction Agreement (other than payments of interest), as either a contribution by Parent to Match or a distribution by Match to Parent, as the case may be (which contribution or distribution shall, in the case of any payment made following the Distribution Date, be treated as occurring immediately prior to the Distribution) and (ii) any payment of interest or non-federal Income Taxes by or to a Tax Authority, as taxable or deductible, as the case may be, to the party entitled under this Agreement to retain such payment or required under this Agreement to make such payment; provided that in the event such treatment is not permissible (or that an Indemnified Party nevertheless suffers a Tax detriment as a result of such payment), the payment in question shall be adjusted to place the Indemnified Party in the same after-tax position it would have enjoyed absent such applicable Law or Final Determination.

 

11.                               Treatment of Certain Equity Awards.

 

(a)                                 Deductions.  Any compensation deductions arising in respect of equity awards held by Match Employees or Former Match Employees (as such terms are defined in the EMA) (i) with respect to which Match is required to reimburse Parent for IAC Award Costs or Subsidiary Award Costs (as such terms are defined in the EMA) or (ii) that are denominated in or determined by reference to the value of Match Capital Stock shall be allocated to the Match Group.

 

(b)                                 Withholding and Reporting.  Match shall be responsible for tax reporting and withholding and the employer portion of any payroll taxes in respect of equity awards held by Match Employees or Former Match Employees (as such terms are defined in the EMA).

 

12.                               Effective Date; Termination of Prior Intercompany Tax Allocation Arrangements.  This Agreement shall be effective as of the date following the IPO.  As of such date, (i) all prior intercompany Tax allocation agreements or arrangements solely between or among Parent and/or any of its Subsidiaries, on the one hand, and Match and/or any of its Subsidiaries, on the other hand (including the Tax Sharing Agreement dated as of July 1, 2014 by and between Parent and Tinder) shall be terminated, and (ii) any amounts due under such agreements with respect to taxable periods (or portions thereof) ending on or before the date of the IPO shall be settled as promptly as practicable following the date of the IPO (and in any event no later than the due date for filing any Combined Returns for such taxable periods).  Upon such termination and settlement, no further payments by or to Parent or any of its Subsidiaries or by or to Match or any of its Subsidiaries, with respect to such agreements, shall be made and all other rights and obligations pursuant to such agreements shall cease at such time.  For the avoidance of doubt, in the event of a Final Determination with respect to any Combined Return or the filing by Parent or any member of the Parent Group of any amended Combined Return, in each case following the termination of any such prior Tax allocation agreements, any Tax

 

23

 

sharing payments with respect to such Final Determination or amended Combined Return shall be determined solely pursuant to Section 2(c)(iv) hereof.

 

13.                               Notices.  All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given when delivered in person or successfully transmitted by facsimile, addressed as follows:

 

(a)                                 if to IAC:

 

IAC/InterActiveCorp

555 West 18th Street

New York, NY 10011

Attention:  General Counsel
 Fax:  212-632-9551

 

with a copy to:

 

Wachtell, Lipton, Rosen & Katz
 51 West 52nd Street
 New York, NY 10019
 Attention:  Andrew J. Nussbaum, Esq.
                                                      Ante Vucic, Esq.
 Fax:  212-403-2000

 

(b)                                 if to Match:

 

Match Group, Inc.

8300 Douglas Avenue

Suite 800

Dallas, TX 75225

Attention:  Chief Financial Officer
 Fax:  917-793-4497

 

with a copy (prior to the Effective Time) to:

 

Wachtell, Lipton, Rosen & Katz
 51 West 52nd Street
 New York, NY 10019
 Attention:  Andrew J. Nussbaum, Esq.
                                                      Ante Vucic, Esq.
 Fax:  212-403-2000

 

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14.                               Designation of Affiliate.  Each of Parent and Match may assign any of its rights or obligations under this Agreement to any member of the Parent Group or the Match Group, respectively, as it shall designate; provided, however, that no such assignment shall relieve Parent or Match, respectively, of any obligation hereunder, including any obligation to make a payment hereunder to Match or Parent, respectively, to the extent such designee fails to make such payment.

 

15.                               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.

 

16.                               Miscellaneous.  Except to the extent otherwise provided in this Agreement, this Agreement shall be subject to the provisions of Article 10 (Miscellaneous) of the Transaction Agreement to the extent set forth therein.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

 

	
 
    	
IAC/INTERACTIVECORP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Gregg Winiarski
    
	
 
    	
 
    	
Name:   Gregg Winiarski
    
	
 
    	
 
    	
Title:   Executive Vice President, General Counsel
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
MATCH   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Joanne Hawkins
    
	
 
    	
 
    	
Name:   Joanne Hawkins
    
	
 
    	
 
    	
Title:   Vice President and Assistant Secretary
    

 

26

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