Representations and Obligations Regarding Taxes. The Company and Sellers jointly and severally represent and warrant to and agree with Buyer as follows, in each case except to the extent set forth on Schedule 10 (for purposes of this Section 10, the term “Company” shall mean the Company, together with the Company Subsidiaries): 10.1.1 The Company has duly and timely filed all Tax Returns it was required to file. All of those Tax Returns were true, correct and complete in all material respects. All material elections with respect to Taxes affecting the Company are disclosed on or attached to a Tax Return of the Company. 10.1.2 All Taxes of the Company (whether or not shown on any Tax Return and whether or not any Tax Return was required) have been timely paid. The Company is not the beneficiary of any extension of time within which to file any Tax Return. The Company has maintained adequate provision for Taxes (excluding amounts deferred to take into account timing differences between book and tax) payable by the Company as of the Closing Date. 10.1.3 No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not currently file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. There are no Liens on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax, except for Liens for Taxes not yet due. 10.1.4 There is no dispute or claim concerning any Tax Liability of the Company either (A) claimed or raised by any Governmental Authority in writing or (B) to Sellers’ Knowledge based upon personal contact with any agent of any Governmental Authority. The Company has not received from any Governmental Authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other similar notice which Taxes have not been satisfied by payment or been withdrawn, and no claims have been asserted relating to such Taxes against the Company. To Sellers’ Knowledge, no taxing authority will assert liability for any additional Taxes for any period for which Tax Returns have been filed. 10.1.5 No Tax Return has been audited, or is currently the subject of audit. Sellers have made available in the Data Room true, correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by the Company since its formation. The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency. There is no power of attorney with respect to any Tax executed or filed with any Governmental Authority. 10.1.6 The Company is not a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for Federal income tax purposes. The Company has not been a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free or partly tax-free treatment under Section 355 of the Code. The Company has not entered into any sale leaseback or leveraged lease transaction that fails to satisfy the requirements of Revenue Procedure 75-21 or Revenue Procedure 2001-28 (or similar provisions of foreign law) or any safe harbor lease transaction. The Company has not acquired nor does it own any assets that directly or indirectly secure any debt the interest on which is tax exempt under Section 103 of the Code. No indebtedness of the Company consists of “corporate acquisition indebtedness” within the meaning of section 279 of the Code. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury regulation section 1.62-2(c). 10.1.7 The Company shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued prior to the Closing Date but was not recognized on or before the Closing Date as a result of the an open transaction disposition, the installment, long-term contract or completed contract method of accounting, the cash method of accounting, any change in the Company’s method of accounting, including by reason of Section 481 of the Code, or any comparable provision of state, local, or foreign tax law. The Company has not entered into any closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) (or any similar or corresponding provision of any state, local or non-U.S. Law). 10.1.8 The Company has properly disclosed on its U.S. Federal Income Tax Returns all positions taken thereon that could give rise to a substantial understatement of U.S. Federal income Tax within the meaning of Section 6662 of the Code. The Company has not consummated or participated in, and is not currently participating in, (i) any transaction that was or is a “tax shelter” transaction as defined in Section 6662 of the Code (or the Treasury Regulations promulgated thereunder) or (ii) any transaction that was or is a “listed transaction” or “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulations Section 1.6011-4(b). 10.1.9 The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts allocable, paid or owing to any employee, independent contractor, creditor, stockholder, member, partner, foreign person or other third party. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury Regulation Section 1.62-2(c). 10.1.10 The Company has been a validly electing S corporation (within the meaning of sections 1361 and 1362 of the Code) at all times during its existence. The Company has not, in the past ten years, acquired any assets from another corporation in a transaction in which the Company’s Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor. 10.1.11 The Company is not a party to any Tax allocation or sharing agreement. The Company (i) has not been a member of an Affiliated Group filing a consolidated Federal income Tax Return and (ii) has no liability for the Taxes of any Person under Treasury regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise. 10.1.12 Neither Seller is a foreign person within the meaning of Section 1445 of the Code. The Company does not have, and has not had, a permanent establishment in any foreign country, as defined in any applicable income tax treaty to which the United States and the foreign country are parties or under the law of the foreign country. The Company does not have an overall foreign loss within the meaning of section 904(f) of the Code. The Company does not own, and has not at any time owned, an interest in a foreign company. 10.1.13 All private letter rulings issued by the Internal Revenue Service to the Company (and any corresponding ruling or determination of any state, local or foreign Governmental Authority) have been disclosed on Schedule 10, and there are no pending requests for any rulings (or corresponding determinations). 10.1.14 The Company is not a successor to any other company, and the Company has never owned any stock in any other corporation. For U.S. Federal income tax purposes, Diamond Game Enterprises Canada ULC is a disregarded entity within the meaning of Treasury regulations sections 301.7701-2 and -3, and no election has been made to classify Diamond Game Enterprises Canada ULC otherwise.
Appears in 1 contract
Representations and Obligations Regarding Taxes. The Company and the Sellers jointly and severally represent and warrant to and agree with Buyer the Purchaser as follows, in each case except to the extent set forth on Schedule 10 :
(for purposes of this Section 10, the term “Company” shall mean the Company, together with the Company Subsidiaries):
10.1.1 a) The Company has duly and timely filed all Tax Returns that it was required to file. All of those such Tax Returns were true, correct and complete in all material respects. All material elections with respect to Taxes affecting the Company are disclosed on or attached to a Tax Return of the Company.
10.1.2 All Taxes of owed by the Company (whether or not shown on any Tax Return and whether or not any Tax Return was required) have been timely paid. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. The Company has maintained adequate provision for Taxes (excluding amounts deferred to take into account timing differences between book and tax) payable by the Company as of the Closing Date.
10.1.3 No claim has ever been made by a Governmental Authority taxing authority in a jurisdiction where the Company does not currently file Tax Returns that the Company it is or may be subject to taxation by that jurisdiction. There are no Liens on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax, except for Liens for Taxes not yet due.
10.1.4 There is no dispute (b) The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or claim concerning owing to any employee, independent contractor, creditor, stockholder or other third party.
(c) No director or officer (or employee responsible for Tax Liability matters) of the Company either (A) claimed or raised by expects any Governmental Authority in writing or (B) to Sellers’ Knowledge based upon personal contact with any agent of any Governmental Authority. The Company has not received from any Governmental Authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other similar notice which Taxes have not been satisfied by payment or been withdrawn, and no claims have been asserted relating to such Taxes against the Company. To Sellers’ Knowledge, no taxing authority will assert liability for to assess any additional Taxes for any period for which Tax Returns have been filed.
10.1.5 No . There is no dispute or claim concerning any Tax Return liability of the Company either (i) claimed or raised by any taxing authority in writing or (ii) as to which any of the directors or officers (or employees responsible for Tax matters) of the Company has actual knowledge (after reasonable investigation) based upon personal contact with any agent of such taxing authority. SCHEDULE 8.1(c) lists all Federal, state, local and foreign income Tax Returns filed with respect to the Company for taxable periods ended on or after December 31, 2007, indicates those Tax Returns that have been audited, or is audited and indicates those Tax Returns that currently are the subject of auditaudit or in respect of which any written or unwritten notice of any audit or examination has been received by the Company. Sellers have made available Except as set forth on SCHEDULE 8.1(c), no issue relating to Taxes has been raised in the Data Room truewriting by a taxing authority during any pending audit or examination, and no issue relating to Taxes was raised in writing by a taxing authority in any completed audit or examination, that reasonably can be expected to recur in a later taxable period. The Company has delivered to Purchaser correct and complete copies of all Federal, state, local and foreign income Tax Returns, examination reports, reports and statements of deficiencies assessed against, against or agreed to by the Company since its formation. The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time inception.
(d) SCHEDULE 8.1(d) sets forth the following information with respect to the Company as of the most recent practicable date (as well as on an estimated pro forma basis as of the Closing giving effect to the consummation of the transactions contemplated hereby): (i) the basis of the Company in its assets, and (ii) the amount of any net operating loss, net operating loss carryover, net capital loss, net capital loss carryover, Tax assessment credit, Tax credit carryover or deficiency. There is no power excess charitable contribution of attorney with respect to any Tax executed or filed with any Governmental Authoritythe Company.
10.1.6 (e) The Company is not a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for Federal income tax purposes. .
(f) The Company has not never been a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free or partly tax-free treatment under Section 355 of the Code. The Company has not entered into any sale leaseback or leveraged lease transaction that fails to satisfy the requirements of Revenue Procedure 75-21 or Revenue Procedure 2001-28 (or similar provisions of foreign law) or any safe harbor lease transaction. The Company has not acquired nor does it own any assets that directly or indirectly secure any debt the interest on which is tax exempt under Section 103 of the Code. No indebtedness of the Company consists of “corporate acquisition indebtedness” within the meaning of section 279 of the Code. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury regulation section 1.62-2(c).
10.1.7 The Company shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued prior to the Closing Date but was not recognized on or before the Closing Date as a result of the an open transaction disposition, the installment, long-term contract or completed contract method of accounting, the cash method of accounting, any change in the Company’s method of accounting, including by reason of Section 481 of the Code, or any comparable provision of state, local, or foreign tax law. The Company has not entered into any closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) (or any similar or corresponding provision of any state, local or non-U.S. Law).
10.1.8 The Company has properly disclosed on its U.S. Federal Income Tax Returns all positions taken thereon that could give rise to a substantial understatement of U.S. Federal income Tax within the meaning of Section 6662 of the Code. The Company has not consummated or participated in, and is not currently participating in, (i) any transaction that was or is a “tax shelter” transaction as defined in Section 6662 of the Code (or the Treasury Regulations promulgated thereunder) or (ii) any transaction that was or is a “listed transaction” or “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulations Section 1.6011-4(b).
10.1.9 The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts allocable, paid or owing to any employee, independent contractor, creditor, stockholder, member, partner, foreign person or other third party. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury Regulation Section 1.62-2(c).
10.1.10 The Company has been a validly electing S corporation (within the meaning of sections 1361 and 1362 Section 1361(a)(1) of the Code).
(g) All material elections with respect to Taxes affecting the Company are disclosed or attached to a Tax Return of the Company.
(h) The Company shall grant to Purchaser or its designees access at all reasonable times during its existenceto all of the Company's books and records (including tax workpapers and returns and correspondence with tax authorities), including the right to take extracts therefrom and make copies thereof, to the extent such books and records relate to taxable periods ending on or prior to or that include the Closing Date. The Company has not, in the past ten years, acquired any assets from another corporation in a transaction in which the Company’s Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor.
10.1.11 The Company is not a party to any Tax allocation or sharing agreement. The Company Sellers shall (i) has not been a member grant to Purchaser access at all reasonable times to all of an Affiliated Group filing a consolidated Federal income Tax Return the Company's books and records (including tax workpapers and returns and correspondence with tax authorities), including the right to take extracts therefrom and make copies thereof, to the extent that such books and records relate to the operations of the Company during taxable periods ending on or prior to or that include the Closing Date, and (ii) has no otherwise cooperate with Purchaser in connection with any audit of Taxes that relate to the business of the Company prior to Closing.
(i) The transfer of the Shares to Purchaser pursuant to the terms of this Agreement will not result in any Tax liability for to the Taxes Company or result in a reduction of the amount of any Person net operating loss, net operating loss carryover, net capital loss, net capital loss carryover, Tax credit, Tax credit carryover, excess charitable contribution or basis of property that otherwise would be available to the Company by reason or as a result of deferred intercompany transactions, excess loss accounts, or otherwise.
(j) Neither of the Sellers nor the Company has taken or will take any action that could result in a deemed election under Treasury regulation section 1.1502-6 338 of the Code with respect to Purchaser's purchase of the Shares.
(k) As used in this Agreement, "AFFILIATED GROUP" means any affiliated group within the meaning of Section 1504(a) of the Code or any similar group defined under a similar provision of state, local or foreign law); "CODE" means the Internal Revenue Code of 1986, as a transferee or successor, by contract or otherwise.
10.1.12 Neither Seller is a foreign person within amended; "COMPANY" means the meaning of Section 1445 of the Code. The Company does not have, and has not had, a permanent establishment in and/or any foreign country, as defined in any applicable income tax treaty to which the United States and the foreign country are parties or under the law of the foreign country. The Company does not have an overall foreign loss within the meaning of section 904(f) of the Code. The Company does not own, and has not corporation that at any time ownedhas been a subsidiary of the Company; "PERSON" means an individual, a partnership, a corporation, an interest in association, a foreign joint stock company.
10.1.13 All private letter rulings issued by the Internal Revenue Service to the Company , a trust, a joint venture, an unincorporated organization or a governmental entity (and or any corresponding ruling department, agency or determination of political subdivision thereof); "TAX" means any Federal, state, local or foreign Governmental Authority) have been disclosed income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on Schedule 10minimum, estimated or other tax of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not, and there are no pending requests "TAXES" means any or all of the foregoing collectively; and "TAX RETURN" means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any rulings (schedule or corresponding determinations)attachment thereto and including any amendment thereof.
10.1.14 The Company is not a successor to any other company, and the Company has never owned any stock in any other corporation. For U.S. Federal income tax purposes, Diamond Game Enterprises Canada ULC is a disregarded entity within the meaning of Treasury regulations sections 301.7701-2 and -3, and no election has been made to classify Diamond Game Enterprises Canada ULC otherwise.
Appears in 1 contract
Samples: Securities Purchase Agreement (Bella Viaggio, Inc.)
Representations and Obligations Regarding Taxes. The Company and Sellers the Owners jointly and severally represent and warrant to and agree with Buyer as followsHEICO, in each case except to the extent set forth on Schedule 10 that:
(for purposes of this Section 10, the term “Company” shall mean the Company, together with the Company Subsidiaries):
10.1.1 The a) Company has duly and timely filed all Tax Returns that it was required to file, except where the failure to file Tax Returns would not have a material adverse effect on Buyer. All of those Tax Returns were true, correct and complete in all material respects. All material elections with respect to Taxes affecting the Company are disclosed on or attached to a Tax Return of the Company.
10.1.2 All Taxes of the owed by Company (whether or not shown on any Tax Return and whether or not any Tax Return was required) have been timely paid, except where the failure to pay Taxes would not have a material adverse effect on Buyer. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. The Company has maintained adequate provision for Taxes (excluding amounts deferred to take into account timing differences between book and tax) payable by the Company as of the Closing Date.
10.1.3 No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not currently file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. There are no Liens liens on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax, except for Liens liens for Taxes not yet due.
10.1.4 (b) Company has withheld and paid to the applicable taxing authority all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, Owner or other third party in accordance with applicable law.
(c) There is no dispute or claim concerning any Tax Liability liability of the Company either (Ai) claimed or raised by any Governmental Authority taxing authority in writing or (Bii) as to Sellers’ Knowledge which any of the directors or officers (or employees responsible for Tax matters) of Company has actual knowledge (after reasonable investigation) based upon personal contact with any agent of any Governmental Authoritysuch taxing authority. The Schedule 7.01(c) lists all Federal and state income Tax Returns filed with respect to Company has not received from any Governmental Authority any written notice of proposed adjustmentfor taxable periods ended on or after December 31, deficiency1998, underpayment of Taxes or any other similar notice which Taxes have not been satisfied by payment or been withdrawn, and no claims indicates those Tax Returns that have been asserted relating to such Taxes against the Company. To Sellers’ Knowledge, no taxing authority will assert liability for any additional Taxes for any period for which audited and indicates those Tax Returns have been filed.
10.1.5 No Tax Return has been audited, or is that currently are the subject of audit. Sellers have made available audit or in the Data Room true, correct and complete copies respect of all Tax Returns, which any written or unwritten notice of any audit or examination reports, and statements of deficiencies assessed against, or agreed to has been received by the Company since its formation. The Company.
(d) Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any a Tax assessment or deficiency. There is no power of attorney with respect to any Tax executed or filed with any Governmental Authority.
10.1.6 The Company is not a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for Federal income tax purposes. The Company has not been a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free or partly tax-free treatment under Section 355 of the Code. The Company has not entered into any sale leaseback or leveraged lease transaction that fails to satisfy the requirements of Revenue Procedure 75-21 or Revenue Procedure 2001-28 (or similar provisions of foreign lawe) or any safe harbor lease transaction. The Company has not acquired nor does it own any assets that directly or indirectly secure any debt the interest on which is tax exempt under Section 103 of the Code. No indebtedness of the Company consists of “corporate acquisition indebtedness” within the meaning of section 279 of the Code. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury regulation section 1.62-2(c).
10.1.7 The Company shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued prior to the Closing Date but was not recognized on or before the Closing Date as a result of the an open transaction disposition, the installment, long-term contract or completed contract method of accounting, the cash method of accounting, any change in the Company’s method of accounting, including by reason of Section 481 of the Code, or any comparable provision of state, local, or foreign tax law. The Company has not entered into any closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) (or any similar or corresponding provision of any state, local or non-U.S. Law).
10.1.8 The Company has properly disclosed on its U.S. Federal Income Tax Returns all positions taken thereon that could give rise to a substantial understatement of U.S. Federal income Tax within the meaning of Section 6662 of the Code. The Company has not consummated or participated in, and is not currently participating in, (i) any transaction that was or is a “tax shelter” transaction as defined in Section 6662 of the Code (or the Treasury Regulations promulgated thereunder) or (ii) any transaction that was or is a “listed transaction” or “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulations Section 1.6011-4(b).
10.1.9 The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts allocable, paid or owing to any employee, independent contractor, creditor, stockholder, member, partner, foreign person or other third party. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury Regulation Section 1.62-2(c).
10.1.10 The Company has been a validly electing S corporation (within the meaning of sections 1361 and 1362 of the Code) at all times during its existence. The Company has not, in the past ten years, acquired any assets from another corporation in a transaction in which the Company’s Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor.
10.1.11 The Company is not a party to any Tax allocation or sharing agreement. .
(f) The unpaid Taxes of Company (i) has not been a member did not, as of an Affiliated Group filing a consolidated Federal income the most recent fiscal month end, exceed the reserve for Tax Return liability (other than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the most recent balance sheet (rather than in any notes thereto) and (ii) has no liability do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Company in filing its Tax Returns.
(g) Company shall grant to Buyer or its designees access at all reasonable times to all of Company's books and records (including tax work papers and returns and correspondence with tax authorities), including the right to take extracts therefrom and make copies thereof, to the extent such books and records relate to taxable periods ending on or prior to or that include the Closing Date. Buyer shall (i) grant to the Owners access at all reasonable times to all of Company's books and records (including tax work papers and returns and correspondence with tax authorities), including the right to take extracts therefrom and make copies thereof, to the extent that such books and records relate to the operations of Company during taxable periods ending on or prior to or that include the Closing Date, and (ii) otherwise cooperate with the Owners in connection with any audit of Taxes that relate to the business of any Person under Treasury regulation section 1.1502-6 Company prior to Closing.
(h) As used in this Agreement, "Code" means the Internal Revenue Code of 1986, as amended; "Company" means Company; "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any similar provision of department, agency or political subdivision thereof); "Tax" means any Federal, state, local local, foreign or foreign lawother income, gross receipts, payroll, employment, withholding, social security (or similar), as a transferee unemployment, real property, personal, property, environmental, excise, sales, or successoruse or other tax, by contract including any interest, penalty or otherwise.
10.1.12 Neither Seller is a foreign person within the meaning of Section 1445 addition thereto, whether disputed or not, and "Taxes" means any or all of the Code. The Company does not haveforegoing collectively; and "Tax Return" means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto and has not had, a permanent establishment in including any foreign country, as defined in any applicable income tax treaty to which the United States and the foreign country are parties or under the law of the foreign country. The Company does not have an overall foreign loss within the meaning of section 904(f) of the Code. The Company does not own, and has not at any time owned, an interest in a foreign companyamendment thereof.
10.1.13 All private letter rulings issued by the Internal Revenue Service to the Company (and any corresponding ruling or determination of any state, local or foreign Governmental Authority) have been disclosed on Schedule 10, and there are no pending requests for any rulings (or corresponding determinations).
10.1.14 The Company is not a successor to any other company, and the Company has never owned any stock in any other corporation. For U.S. Federal income tax purposes, Diamond Game Enterprises Canada ULC is a disregarded entity within the meaning of Treasury regulations sections 301.7701-2 and -3, and no election has been made to classify Diamond Game Enterprises Canada ULC otherwise.
Appears in 1 contract
Representations and Obligations Regarding Taxes. The Company Seller represents and Sellers jointly and severally represent and warrant warrants to and agree agrees with the Buyer as follows, in each case except to the extent set forth on Schedule 10 6 (for purposes of this Section 106, the term “Company” shall mean includes the Company and/or any corporation that at any time has been a subsidiary of the Company, together with the Company Subsidiaries):
10.1.1 (a) The Company has duly and timely filed all Tax Returns that it was required to file. All of those Tax Returns were truecorrect and complete. Schedule 6.1(a) lists all Federal, state, local and foreign Tax Returns filed with respect to the Company for taxable periods ending after December 31, 2000. The Company has delivered to the Buyer correct and complete in copies of all material respectsFederal income Tax Returns and all state and local income or franchise Tax returns for each taxable period ending after December 31, 2000. All material elections with respect to Taxes affecting the Company are disclosed on or attached to a Tax Return of the Company.
10.1.2 All (b) Except as set forth in the second succeeding sentence, all Taxes of owed by the Company (whether or not shown on any Tax Return and whether or not any Tax Return was required) have been timely paid, and the Company has made adequate accrual in its Reviewed Financials for all Taxes through the date hereof not yet due and payable. The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party. The unpaid Taxes of the Company (i) did not, as of the most recent fiscal month end, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto) and (ii) will not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company in filing its Tax Returns.
(c) The Company has not made any change in accounting methods, received a ruling from any taxing authority or signed an agreement with respect thereto or signed any closing agreement with respect to any Tax year. The Company is not required to include in income any adjustment pursuant to section 481(a) of the Code by reason of any voluntary change in accounting method (nor has any Governmental Authority proposed in writing any such adjustment or change of accounting method).
(d) The Company is not currently the beneficiary of any extension of time within which to file any Tax Return. The Company has maintained adequate provision for Taxes (excluding amounts deferred to take into account timing differences between book and tax) payable All private letter rulings issued by the IRS to the Company as (and any corresponding ruling or determination of any state, local or foreign Governmental Authority, including, without limitation, any clearance for taxation purposes in relation to any transaction or arrangement involving the Closing DateCompany) have been disclosed on Schedule 6.1(d), and there are no pending requests for any rulings (or corresponding determinations). There is no power of attorney with respect to any Tax executed or filed with any Governmental Authority.
10.1.3 No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not currently file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. (e) There are no Liens liens on any of the assets of the Company Assets that arose in connection with any failure (or alleged failure) to pay any Tax, except for Liens liens for Taxes not yet due.
10.1.4 There is no dispute or claim concerning any Tax Liability of the Company either (A) claimed or raised by any Governmental Authority in writing or (B) to Sellers’ Knowledge based upon personal contact with any agent of any Governmental Authority. The Company has not received from any Governmental Authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other similar notice which Taxes have not been satisfied by payment or been withdrawn, and no claims have been asserted relating to such Taxes against the Company. To Sellers’ Knowledge, no taxing authority will assert liability for any additional Taxes for any period for which Tax Returns have been filed.
10.1.5 No Tax Return has been audited, or is currently the subject of audit. Sellers have made available in the Data Room true, correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by the Company since its formation. The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any a Tax assessment or deficiencydeficiency which waiver or extension has not since expired. There is no power of attorney Schedule 6.1(e) lists those Tax Returns filed with respect to the Company for taxable periods ended on or after December 31, 2000 that have been audited or that have been the subject of any written or unwritten notice of any audit, examination, investigation or other proceeding. The Company has delivered to the Buyer correct and complete copies of all audit, examination, revenue agent’s and other reports of, and any closing agreement with, any taxing jurisdiction with respect to taxable periods ended on or after December 31, 2000. No issue relating to Taxes has been raised in writing by a Governmental Authority during any pending audit or examination, and no issue relating to Taxes was raised in writing by a Governmental Authority in any completed audit or examination, that reasonably can be expected to recur in a later taxable period. Except as noted on Schedule 6.1(e), there is no dispute or claim concerning any Tax executed liability of the Company either (i) claimed or filed with raised by any Governmental AuthorityAuthority in writing or (ii) as to which any of the directors or officers (or employees responsible for Tax matters) of the Company has knowledge. No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction or that it satisfies or may satisfy the nexus or permanent establishment requirements to be subject to taxation by that jurisdiction. Except to the extent set forth on Schedule 6.1(e), no director or officer (or employee responsible for Tax matters) of the Company has any reason to believe that any Governmental Authority will assert liability for any additional Taxes for any period for which Tax Returns have been filed.
10.1.6 (f) The Company has not made any payments, is not obligated to make any payments and is not a party to any joint venture, partnership agreement that under certain circumstances could obligate it to make any payments that will not be deductible under section 280G of the Code or other arrangement or contract that could be treated as a partnership would give rise to any obligation to indemnify any Person for Federal income any excise tax purposes. The Company has not been a “distributing corporation” or a “controlled corporation” in a distribution of stock intended payable pursuant to qualify for tax-free or partly tax-free treatment under Section 355 section 4999 of the Code. The Company has not entered into any sale leaseback or leveraged lease transaction that fails to satisfy the requirements of Revenue Procedure 75-21 or Revenue Procedure 2001-28 (or similar provisions of foreign law) or any safe harbor lease transaction, and the Company is not a lessor or lessee of any tangible property located outside the United States. The None of the property of the Company has not acquired nor does it own is tax-exempt use property within the meaning of section 168(h) of the Code, is property that is required to be treated as being owned by any assets other Person pursuant to the safe harbor lease provisions of former section 168(f)(8) of the Code or is property that directly or indirectly secure secures any debt the interest on which is exempt from federal income tax exempt under Section pursuant to section 103 of the Code. The Company is not a controlled corporation or a distributing corporation in respect of a distribution to which section 355(e) of the Code could apply by reason of the acquisition of the Company’s shares pursuant to this Agreement. The Company has not distributed stock of another entity, or had its stock distributed by another entity, in a transaction that was purported or intended to be governed in whole or in part by section 355 or section 361 of the Code. No indebtedness Debt of the Company consists of “corporate acquisition indebtedness” within the meaning of section 279 of the Code. .
(g) The Company (i) has not made an election, or is required to treat any of its assets as owned by another Person pursuant to the provisions of Section 168(f) of the Internal Revenue Code of 1954 or as tax-exempt bond financed property or tax-exempt use of property within the meaning of Section 168 of the Code; (ii) owns no property that is subject to a “section 467 rental agreement” as defined in Section 467 of the Code; (iii) has not elected at any time to be treated as an S corporation within the meaning of Sections 1361 or 1362 of the Code; or (iv) made any of the foregoing elections or is required to apply any of the foregoing rules under any comparable state or local Tax provision.
(h) The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury regulation section 1.62-2(c).
10.1.7 The Company shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued prior to the Closing Date but was not recognized on or before the Closing Date as a result of the an open transaction disposition, the installment, long-term contract or completed contract method of accounting, the cash method of accounting, any change in the Company’s method of accounting, including by reason of Section 481 of the Code, or any comparable provision of state, local, or foreign tax law. The Company has not entered into any closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) (or any similar or corresponding provision of any state, local or non-U.S. Law).
10.1.8 The Company has properly disclosed on its U.S. Federal Income Tax Returns all positions taken thereon that could give rise to a substantial understatement of U.S. Federal income Tax within the meaning of Section 6662 of the Code. The Company has not consummated or participated in, and is not currently participating in, (i) any transaction that was or is a “tax shelter” transaction as defined in Section 6662 of the Code (or the Treasury Regulations promulgated thereunder) or (ii) any transaction that was or is a “listed transaction” or “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulations Section 1.6011-4(b).
10.1.9 The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts allocable, paid or owing to any employee, independent contractor, creditor, stockholder, member, partner, foreign person or other third party. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury Regulation Section 1.62-2(c).
10.1.10 (i) No taxing authority is asserting or to the Seller’s Knowledge threatening to assert a claim against the Company under or as a result of Section 482 of the Code or any similar provision of any foreign, state or local Tax law.
(j) The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion of any taxable period) after the Closing Date as a result of (i) a closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax law); (ii) an installment sale or open transaction disposition occurring on or prior to the Closing Date; (iii) the use of the cash basis method of accounting; or (iv) a prepaid amount received on or prior to the Closing Date.
(k) The Company has not been a validly electing S United States real property holding corporation (within the meaning of sections 1361 and 1362 section 897(c)(2) of the Code during the applicable period specified in section 897(c)(1)(A)(ii) of the Code) at all times during its existence. The Company does not have, and has notnot had, a permanent establishment in the past ten yearsany foreign country, acquired as defined in any assets from another corporation in a transaction in applicable income tax treaty to which the Company’s Tax basis for United Sates and the acquired assets was determined, in whole foreign country are parties or in part, by reference to under the Tax basis law of the acquired assets (or any other propertyforeign country. The Company does not have an overall foreign loss within the meaning of section 904(f) in the hands of the transferorCode.
10.1.11 (l) The Company is not a party to any Tax allocation or sharing agreement. The Company (i) has not been a member of an Affiliated Group filing a consolidated Federal income Tax Return and (ii) has no liability for the Taxes of any Person under Treasury regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise. The Company is not a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for Federal income tax purposes. Details of all claims or elections for any reliefs, allowances or credits, the making or claiming of which was taken into account in computing the provision or reserve for taxation in the Reviewed Financials and which have not been made by the Company are set out in Schedule 6.1(l). Except as provided in the Reviewed Financials, the Company is not and will not be under any obligation to make and has no entitlement to receive in respect of any period ending on or before the Closing any payment under any taxation sharing arrangement in respect of profits, gains or losses of another Person.
10.1.12 Neither Seller is (m) The Company has disclosed on its Federal income Tax Returns all positions taken therein that could give rise to a foreign person substantial understatement of Federal income Tax within the meaning of Section 1445 section 6662 of the Code. The Company does not have, and has not had, a permanent establishment engaged in any foreign country, as defined in any applicable income tax treaty to which the United States and the foreign country are parties “listed transaction” or under the law of the foreign country. The Company does not have an overall foreign loss “reportable transaction” within the meaning of section 904(f6707A(c) of the Code. The Company does not own, and has not at Code or Treasury regulation section 1.6011-4(b) or any time owned, an interest in a foreign company.
10.1.13 All private letter rulings issued by the Internal Revenue Service transaction (i) that was marketed to the Company in writing as a transaction that is intended to generate substantial tax benefits and (and ii) with respect to which the Company has paid a promoter of the transaction total fees in excess of $100,000.
(n) The transfer of the Shares to the Buyer pursuant to the terms of this Agreement will not result in any corresponding ruling Tax liability to the Company or determination result in a reduction of the amount of any statenet operating loss, local net operating loss carryover, net capital loss, net capital loss carryover, Tax credit, Tax credit carryover, excess charitable contribution or foreign Governmental Authority) have been disclosed on Schedule 10basis of property that otherwise would be available to the Company by reason or as a result of deferred intercompany transactions, and there are no pending requests for any rulings (excess loss accounts, or corresponding determinations)otherwise.
10.1.14 The (o) No charge to taxation will arise on the Company and no arrangement, concession, dispensation or agreement which the Company has with or from any Tax Authority will be prejudiced by virtue of the entering into of this Agreement or the consummation of the transactions contemplated hereby.
(p) Except as described in Schedule 6.1(p), the Company is not treated for any taxation purpose as resident in a successor to any country other company, than the country of its incorporation and the Company has never owned any stock in any other corporation. For U.S. Federal income tax purposesnot, Diamond Game Enterprises Canada ULC is a disregarded entity nor has it within the meaning past six (6) years had, a branch, agency or permanent establishment in a country other than the country of Treasury regulations sections 301.7701-2 and -3, and no election has been made its incorporation.
(q) No transactions or arrangements involving the Company have taken place or are in existence which are such that any provision relating to classify Diamond Game Enterprises Canada ULC otherwisetransfer pricing might be invoked by a Governmental Authority.
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