Tax Returns; Audits. (i) The Sellers shall be responsible for preparing or causing to be prepared, at the appropriate SMR Company's expense, the Company's federal income tax return on Form 1120S and comparable state and local income and franchise tax returns (each, an "S Period Return"), for the Company's taxable year ending on the Closing Date (collectively, the "Final S Period Tax Returns") or prior to the Closing Date and all other Income Tax Returns of the SMR Companies for the taxable periods ending on or prior to the Closing Date. Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax laws. The Purchaser shall cause the Company to cooperate in the preparation and filing of such Tax Returns (including providing the Sellers with all information reasonably requested by the Sellers in connection with the preparation of such Tax Returns). The Sellers shall be responsible for preparing the Tax Returns of SMR Developers and SMR Associates in respect of taxable periods ending on or before the Closing Date in accordance with the principles set forth in this Section 13.2(a). The Sellers shall provide the Purchaser with a copy of such Tax Returns together with the schedules thereto, and a statement setting forth the amount of Tax shown due on such Tax Return for which the Purchaser is liable, at least 10 days prior to the due date (including any extensions thereof) for the filing of such Final S Period Tax Returns, and the Purchaser shall have the right to review such Final S Period Tax Returns prior to the filing of such Final S Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at the direction of the Sellers. The Purchaser shall cause any amount of Tax shown as due from an SMR Company on such Tax Return to be paid, subject to indemnification as provided in Article 11. (ii) The Sellers and the Purchaser will, to the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company on the Closing Date. In any case where applicable Law does not permit an SMR Company to close its taxable year on the Closing Date, then Taxes, if any, attributable to the taxable period of the SMR Company beginning on or before and ending after the Closing Date shall be allocated between (A) the period up to and including the Closing Date, and (B) the period subsequent to the Closing Date by means of a closing of the books and records of each of the SMR Companies as of the close of business on the Closing Date. (i) Except as provided in Section 13.2(a), following the Closing, Purchaser shall be responsible for preparing or causing to be prepared all Tax Returns required to be filed by the SMR Companies after the Closing Date. (ii) With respect to any Tax Return required to be filed by the Purchaser for a taxable period of an SMR Company beginning on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior practice of the respective SMR Company unless otherwise required by applicable Tax laws, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers shall have the right to review and comment on such Tax Return and the Statement prior to the filing of such Tax Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possible; provided, however, that the sole issue before the Accounting Referee shall be whether the changes proposed by the Sellers are reasonable. If the Accounting Referee is unable to make a determination with respect to any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to the Sellers of the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7. (c) In the event that, following the Closing Date, any Governmental Body notifies the Purchaser or any of the SMR Companies or any affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return of the Company or an SMR Subsidiary (or a Tax Return of SMR Developers or SMR Associates) relating to a taxable period ending on or before the Closing Date, the Purchaser shall promptly notify the Sellers of the receipt of such notice. Upon receipt of notice of the Audit from the Purchaser, the Sellers may, at the Sellers' option and sole expense, control all further determinations with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof, including but not limited to all negotiation and correspondence with such Governmental Body and the compromise or settlement of such matter; provided, however, that if and to the extent that the Audit involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body. (i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay. (ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding with respect to any S Corporation Period or any Tax Return of SMR Associates or SMR Developers for a period ending on or before the Closing Date) (i) involves an issue that recurs for a taxable period of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such time), (ii) would be binding on the Purchaser or the SMR Companies for any taxable period beginning after the Closing Date, and (iii) would materially and detrimentally affect the Tax liability of the SMR Companies for a taxable period beginning after the Closing Date, then the Sellers shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Purchaser, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent to any settlement, closing or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheld). (iii) With respect to any taxable period of an SMR Company beginning before and ending after the Closing Date, the Purchaser and the Sellers shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld. (e) A claim for indemnity under Sections 11.2(e) or 11.3(f) may not be made later than 60 days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period.
Appears in 1 contract
Tax Returns; Audits. (i) The Sellers shall be responsible for preparing or causing to be prepared, at the appropriate SMR Company's expense, the Company's federal income tax return on Form 1120S and comparable state and local income and franchise tax returns (each, an "S Period Return"), for the Company's taxable year ending on the Closing Date (collectively, the "Final S Period Tax Returns") or prior to the Closing Date and all other Income Tax Returns of the SMR Companies for the taxable periods ending on or prior to the Closing Date. Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax laws. The Purchaser shall cause the Company to cooperate in the preparation and filing of such Tax Returns (including providing the Sellers with all information reasonably requested by the Sellers in connection with the preparation of such Tax Returns). The Sellers shall be responsible for preparing the Tax Returns of SMR Developers and SMR Associates in respect of taxable periods ending on or before the Closing Date in accordance with the principles set forth in this Section 13.2(a). The Sellers shall provide the Purchaser with a copy of such Tax Returns together with the schedules thereto, and a statement setting forth the amount of Tax shown due on such Tax Return for which the Purchaser is liable, at least 10 days prior to the due date (including any extensions thereof) for the filing of such Final S Period Tax Returns, and the Purchaser shall have the right to review such Final S Period Tax Returns prior to the filing of such Final S Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at the direction of the Sellers. The Purchaser shall cause any amount of Tax shown as due from an SMR Company on such Tax Return to be paid, subject to indemnification as provided in Article 11.
(ii) The Sellers and the Purchaser will, to the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company on the Closing Date. In any case where applicable Law does not permit an SMR Company to close its taxable year on the Closing Date, then Taxes, if any, attributable to the taxable period of the SMR Company beginning on or before and ending after the Closing Date shall be allocated between (A) the period up to and including the Closing Date, and (B) the period subsequent to the Closing Date by means of a closing of the books and records of each of the SMR Companies as of the close of business on the Closing Date.
(i) Except as provided in Section 13.2(a), following the Closing, Purchaser shall be responsible for preparing or causing to be prepared all Tax Returns required to be filed by the SMR Companies after the Closing Date.
(ii) With respect to any Tax Return required to be filed by the Purchaser for a taxable period of an SMR Company beginning on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior practice of the respective SMR Company unless otherwise required by applicable Tax laws, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers shall have the right to review and comment on such Tax Return and the Statement prior to the filing of such Tax Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possible; provided, however, that the sole issue before the Accounting Referee shall be whether the changes proposed by the Sellers are reasonable. If the Accounting Referee is unable to make a determination with respect to any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to the Sellers of the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7.
(c) In the event that, following the Closing Date, any Governmental Body notifies the Purchaser or any of the SMR Companies or any affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return of the Company or an SMR Subsidiary (or a Tax Return of SMR Developers or SMR Associates) relating to a taxable period ending on or before the Closing Date, the Purchaser shall promptly notify the Sellers of the receipt of such notice. Upon receipt of notice of the Audit from the Purchaser, the Sellers may, at the Sellers' option and sole expense, control all further determinations with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof, including but not limited to all negotiation and correspondence with such Governmental Body and the compromise or settlement of such matter; provided, however, that if and to the extent that the Audit involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body.
(i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay.
(ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding with respect to any S Corporation Period or any Tax Return of SMR Associates or SMR Developers for a period ending on or before the Closing Date) (i) involves an issue that recurs recurs
for a taxable period of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such time), (ii) would be binding on the Purchaser or the SMR Companies for any taxable period beginning after the Closing Date, and (iii) would materially and detrimentally affect the Tax liability of the SMR Companies for a taxable period beginning after the Closing Date, then the Sellers shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Purchaser, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent to any settlement, closing or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheld).
(iii) With respect to any taxable period of an SMR Company beginning before and ending after the Closing Date, the Purchaser and the Sellers shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld.
(e) A claim for indemnity under Sections 11.2(e) or 11.3(f) may not be made later than 60 days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period.
Appears in 1 contract
Tax Returns; Audits. (i) The Sellers shall be responsible for preparing or causing to be prepared, at the appropriate SMR Company's expense, the Company's federal will include all items of income tax return on Form 1120S and comparable state and local income and franchise tax returns (each, an "S Period Return"including deferred revenue), for gain, loss, deduction or credit of the Company's taxable year ending on the Closing Date (collectively, the "Final S Period Tax Returns") Company or prior that relate to the Closing Date and all other Income Tax Returns of the SMR Companies Business for the taxable periods ending on (or prior to the Closing Date. Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax laws. The Purchaser shall cause the Company to cooperate in the preparation and filing of such Tax Returns (including providing the Sellers with all information reasonably requested by the Sellers in connection with the preparation of such Tax Returns). The Sellers shall be responsible for preparing the Tax Returns of SMR Developers and SMR Associates in respect of taxable periods portions thereof) ending on or before the Closing Date in accordance with reflecting the principles set forth in this Section 13.2(a). The fact that the Company is a disregarded entity and Sellers shall provide not be deemed for Tax purposes to make any payment to Buyer or any of its Affiliates with respect to any deferred revenue. All personal property Taxes or ad valorem obligations and similar recurring Taxes and fees imposed on the Purchaser with a copy of such Tax Returns together with Company or related to the schedules theretoBusiness for taxable periods beginning on or before, and a statement setting forth the amount of Tax shown due on such Tax Return for which the Purchaser is liableending after, at least 10 days prior to the due date (including any extensions thereof) for the filing of such Final S Period Tax Returns, and the Purchaser shall have the right to review such Final S Period Tax Returns prior to the filing of such Final S Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at the direction of the Sellers. The Purchaser shall cause any amount of Tax shown as due from an SMR Company on such Tax Return to be paid, subject to indemnification as provided in Article 11.
(ii) The Sellers and the Purchaser will, to the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company on the Closing Date. In any case where applicable Law does not permit an SMR Company to close its taxable year on the Closing Date, then Taxes, if any, attributable to the taxable period shall be prorated between Buyer and Sellers as of the SMR Company beginning on or before and ending after the Closing Date based on the number of days in any such taxable period ending on the end of the Closing Date and the number of days in such entire taxable period. Seller shall be allocated between liable for all Taxes of the Company or that relate to the Business imposed for any taxable period (Aor portion thereof) the period up to and including the Closing Date, Date and (B) the period subsequent Company shall be liable for all Taxes of the Company or that relate to the Closing Date by means of a closing of the books and records of each of the SMR Companies as of the close of business on the Closing Date.
Business imposed for any taxable period (ior portion thereof) Except as provided in Section 13.2(a), following the Closing, Purchaser shall be responsible for preparing or causing to be prepared all Tax Returns required to be filed by the SMR Companies beginning after the Closing Date.
(ii) With respect to any Tax Return required to be filed by the Purchaser for a taxable period of an SMR Company beginning on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior practice of the respective SMR Company unless otherwise required by applicable Tax laws, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers shall will have the right to review and comment on such Tax Return and control all audits or other proceedings by any taxing authority of the Statement prior Company or that relate to the filing of such Tax Return. The Sellers and Business for taxable periods that end on or include the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possibleClosing Date; provided, however, that in the sole issue before case of any such audit or other proceeding involving the Accounting Referee shall be whether Company or the changes proposed by Business the Sellers are reasonable. If elect in writing to control any such audit or other proceeding within fifteen (15) days of receiving written notice thereof the Accounting Referee is unable Buyer shall have the right, at its own expense, to make a determination with respect to participate in any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made audit or other proceeding and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to that the Sellers of shall not settle any such audit or other proceeding involving the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7.
(c) In the event that, following the Closing Date, any Governmental Body notifies the Purchaser Company or any of the SMR Companies or any affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return of the Company or an SMR Subsidiary (or a Tax Return of SMR Developers or SMR Associates) relating to a taxable period ending on or before the Closing Date, the Purchaser shall promptly notify the Sellers of the receipt of such notice. Upon receipt of notice of the Audit from the Purchaser, the Sellers may, at the Sellers' option and sole expense, control all further determinations with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof, including but not limited to all negotiation and correspondence with such Governmental Body and the compromise or settlement of such matter; provided, however, assets that if and to the extent that the Audit involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body.
(i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay.
(ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding with respect to any S Corporation Period or any Tax Return of SMR Associates or SMR Developers for a period ending on or before the Closing Date) (i) involves an issue that recurs for a taxable period of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such time), (ii) would be binding on the Purchaser or the SMR Companies for any taxable period beginning after the Closing Date, and (iii) would materially and detrimentally could affect the Tax liability of the SMR Companies Buyer or any of its Affiliates (including, for a taxable period beginning after the Closing Dateavoidance of doubt, then following the Sellers shall not enter into a settlement or closing or other agreement with respect thereto Closing, the Company) without the consent of the PurchaserBuyer’s prior written permission, which consent permission shall not be unreasonably withheld and (B) if conditioned, delayed or withheld. The Buyer shall have the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant right to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing any other audits or other agreement with respect to such issue or adjustment without the consent proceedings by any taxing authority of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent to any settlement, closing Company or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheld)Business.
(iii) With respect to any taxable period of an SMR Company beginning before and ending after the Closing Date, the Purchaser and the Sellers shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld.
(e) A claim for indemnity under Sections 11.2(e) or 11.3(f) may not be made later than 60 days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Allscripts Healthcare Solutions, Inc.)
Tax Returns; Audits. (i) The Sellers Shareholders shall be responsible for preparing or causing to be prepared, at the appropriate SMR Company's Shareholders' expense, the Company's federal Maynxxx'x xxxeral income tax return on Form 1120S returns and comparable state and local income and franchise tax returns (each, an "S Period Return"), for the Company's taxable Maynxxx'x xxxable year ending on the Closing Date (collectivelyeach, the a "Final S Short Period Tax ReturnsReturn") or prior to the Closing Date ), and all other Income income Tax Returns of the SMR Companies for Maynxxx xxx the taxable periods ending on or prior to the Closing DateDate (together with the Short Period Return, the "Closing Period Returns"). Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax lawslaws consistent with prior practice. The Purchaser Company shall cause the Company to Maynxxx xx cooperate in the preparation and filing of such Tax Returns (including providing the Sellers Shareholders with access to all information reasonably requested by the Sellers Shareholders in connection with the preparation of such Tax Returns). The Sellers Shareholders shall be jointly and severally responsible for preparing the Tax Returns payment of SMR Developers and SMR Associates in all Taxes due or to become due from Maynxxx xx respect of taxable periods ending on or before the Closing Date and the share of Taxes due or to become due for the portion of any taxable period that is on or prior to the Closing Date. Unless paid separately by Maynxxx xxxor to the Closing Date, any such Taxes shall be payable and reportable by or at the direction of the Shareholders from sources outside of Maynxxx'x xxxk accounts or cash equivalents. Tax liabilities, if any, assumed by the Shareholders under this Agreement either will be treated as a reduction from the Net Consideration in accordance with the principles set forth manner described in this Section 13.2(a)2.2 or otherwise be the financial obligation of the Shareholders. The Sellers Shareholders shall provide the Purchaser Company with a copy of such Tax Returns together with the schedules thereto, and a -29- 30 statement setting forth the amount of Tax shown due on such Tax Return for which the Purchaser is Shareholders are liable, at least 10 30 days prior to the due date (including any extensions thereof) for the filing of such Final S Closing Period Tax Returns, and the Purchaser Company shall have the right to review such Final S Closing Period Tax Returns prior to the filing of such Final S Closing Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at At the direction of the Sellers. The Purchaser Shareholders, the Company shall cause Maynxxx xx execute and file the Closing Period Returns after the review period and on or prior to their due date. Filing these returns is not an assumption by the Company or Maynxxx xx any amount responsibilities of Tax shown as due from an SMR Company on the Shareholders for such Tax Return to be paid, subject to indemnification as provided in Article 11Taxes or the accuracy of the Closing Period Returns or any Short Period Return.
(ii) The Sellers and the Purchaser Company will, to the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company on Maynxxx xx the Closing Date. In any case where applicable Law does not permit an SMR Company to Maynxxx xx close its taxable year on the Closing Date, then Taxes, if any, attributable to the taxable period of the SMR Company beginning on or Maynxxx xxxinning before and ending after the Closing Date shall be allocated between (A) the period up to and including the Closing Date, and (B) the period subsequent to the Closing Date by means of a closing of the books and records of each of the SMR Companies as Maynxxx xx of the close of business on the Closing Date.
(ib) Except as provided in Section 13.2(a)6.1, following the Closing, Purchaser Maynxxx xx its Affiliates shall be responsible for preparing or causing to be prepared all Tax Returns required to be filed by the SMR Companies Maynxxx xxx taxable periods beginning after the Closing Date.
(ii) With respect to any Tax Return required to be filed by the Purchaser for a taxable period of an SMR Company beginning on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior practice of the respective SMR Company unless otherwise required by applicable Tax laws, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers shall have the right to review and comment on such Tax Return and the Statement prior to the filing of such Tax Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possible; provided, however, that the sole issue before the Accounting Referee shall be whether the changes proposed by the Sellers are reasonable. If the Accounting Referee is unable to make a determination with respect to any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to the Sellers of the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7.
(c) In the event that, following the Closing Date, any Governmental Body Entity notifies the Purchaser Company or Maynxxx xx any of the SMR Companies or any affiliate Affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return of the Company or an SMR Subsidiary (or a any Tax Return of SMR Developers or SMR Associates) relating Maynxxx xxxating to a taxable period ending on or before the Closing Date, the Purchaser Company shall promptly notify the Sellers Shareholders of the receipt of such notice. Upon receipt of notice of the Audit from the PurchaserCompany, the Sellers Shareholders may, at the SellersShareholders' option and sole expense, control all further determinations with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof, including but not limited to all negotiation and correspondence with such Governmental Body Entity and the compromise or settlement of such matter; provided, however, that if and to the extent that the Audit involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body.
(i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay.
(ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding with respect to any S Corporation Period Tax year or any Tax Return of SMR Associates or SMR Developers for a period ending on or before the Closing Date) (i) involves an issue that recurs for a taxable period of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such time), (ii) would be binding on the Purchaser or the SMR Companies for any taxable period beginning after the Closing Date, and (iii) would materially and detrimentally affect the Tax liability of the SMR Companies for a taxable period beginning after the Closing Date, then the Sellers shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Purchaser, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent to any settlement, closing or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheld).
(iii) With respect to any taxable period of an SMR Company beginning Maynxxx xxxinning before and ending after on the Closing Date, the Purchaser Company and the Sellers Shareholders shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld. The Company shall cooperate and provide or cause Maynxxx xx cooperate and provide the Shareholders with access to such records and personnel of Maynxxx xx the Shareholders determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. Each of the parties shall provide the others concerning any audit with copies of all correspondence, notices and other written materials received from any Governmental Entity.
(ed) A claim for indemnity under Sections 11.2(e) Any Taxes imposed upon or 11.3(f) may not be made later than 60 days after the expiration incurred by any of the applicable Tax statute Shareholders in connection with the sale of limitations BE Stock pursuant to this Agreement, and any Taxes in connection with respect pre-closing distributions to any Shareholder or any payment to or for the relevant taxable periodShareholders contemplated by this Agreement, and any legal or other expenses incurred by the Shareholders in connection with such Taxes, shall be borne solely by the Shareholders.
Appears in 1 contract
Samples: Share Purchase and Sale Agreement (Be Aerospace Inc)
Tax Returns; Audits. (i) The Sellers Parent shall be responsible for preparing prepare or causing cause to be prepared, at prepared and file or cause to be filed all Tax Returns (other than income Tax Returns) of the appropriate SMR Company's expense, the Company's federal income tax return on Form 1120S and comparable state and local income and franchise tax returns (each, an "S Period Return"), for the Company's taxable year ending on Company filed after the Closing Date (collectively, the "Final S Period Tax Returns"i) or prior to the Closing Date and all other Income Tax Returns of the SMR Companies for the taxable periods ending on or prior to the Closing Date. Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax laws. The Purchaser shall cause the Company to cooperate in the preparation and filing of such Tax Returns (including providing the Sellers with all information reasonably requested by the Sellers in connection with the preparation of such Tax Returns). The Sellers shall be responsible for preparing the Tax Returns of SMR Developers and SMR Associates in respect of taxable periods ending that end on or before the Closing Date in accordance with the principles set forth in this Section 13.2(a). The Sellers shall provide the Purchaser with (each such period, a copy of such “Tax Returns together with the schedules thereto, Pre-Closing Period”) and a statement setting forth the amount of Tax shown due on such Tax Return for which the Purchaser is liable, at least 10 days prior to the due date (including any extensions thereof) for the filing of such Final S Period Tax Returns, and the Purchaser shall have the right to review such Final S Period Tax Returns prior to the filing of such Final S Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at the direction of the Sellers. The Purchaser shall cause any amount of Tax shown as due from an SMR Company on such Tax Return to be paid, subject to indemnification as provided in Article 11.
(ii) The Sellers and the Purchaser will, to the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company on the Closing Date. In any case where applicable Law does not permit an SMR Company to close its taxable year on the Closing Date, then Taxes, if any, attributable to the taxable period of the SMR Company beginning on or for periods that begin before and ending end after the Closing Date shall be allocated between (A) the period up to and including the Closing Date, and (B) the period subsequent to the Closing Date by means of a closing of the books and records of each of the SMR Companies as of the close of business on the Closing Date.
(i) Except as provided in Section 13.2(a“Straddle Period”), following the Closing, Purchaser if those Tax Returns relate in whole or in part to any Taxes included in Assumed Liabilities. The Parent shall be responsible for preparing prepare or causing cause to be prepared all Tax Returns required to be of any Company Subsidiaries for taxable periods that include but do not end on the Closing Date and that are filed by the SMR Companies after the Closing Date.
. Until the expiration of three (ii3) With years after the dissolution of the Company (as determined under Section 278 of the DGCL), no later than twenty (20) days before the filing of each Tax Return referenced in this Section 6.16, Parent shall deliver to the Company a draft of such Tax Return and shall permit the Company to review and comment on such Tax Return. No later than ten (10) days after the Company’s receipt of such Tax Return, the Company shall notify Parent of the existence of any reasonable objection that the Company has to any items set forth on such draft Tax Return. For this purpose an objection with respect to any item shall only be reasonable if the Company has received written advice of Tax counsel that such item would subject a Tax Return required preparer to a penalty under Section 6694 of the Code. If Parent and the Company are unable to resolve any such reasonable objections within ten (10) days, such objections shall be filed resolved by the Purchaser for a taxable period of an SMR Company beginning treating items on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior past practice of the respective SMR Company with respect to such items, unless otherwise required by applicable Law. The Parent shall control any audit or examination by any governmental authority of any Tax lawsReturns of the Company or any Company Subsidiaries relating in whole or in part to Taxes included in any Assumed Liabilities, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers Company shall have the right to review and comment on such Tax Return and participate at its expense. Until the Statement prior to expiration of three (3) years after the filing of such Tax Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possible; provided, however, that the sole issue before the Accounting Referee shall be whether the changes proposed by the Sellers are reasonable. If the Accounting Referee is unable to make a determination with respect to any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to the Sellers of the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7.
(c) In the event that, following the Closing Date, any Governmental Body notifies the Purchaser or any of the SMR Companies or any affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return dissolution of the Company or an SMR Subsidiary (or a Tax Return of SMR Developers or SMR Associates) relating to a taxable period ending on or before the Closing Date, the Purchaser shall promptly notify the Sellers as determined under Section 278 of the receipt of such notice. Upon receipt of notice of the Audit from the Purchaser, the Sellers may, at the Sellers' option and sole expense, control all further determinations with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof, including but not limited to all negotiation and correspondence with such Governmental Body and the compromise or settlement of such matter; provided, however, that if and to the extent that the Audit involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(fDGCL), the Purchaser no such audit or examination shall be entitled to jointly control with the Sellers such adjustment or issue, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment settled without the written consent of the other partyCompany, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body.
(i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay.
(ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding For this purpose an objection with respect to any S Corporation such settlement shall only be reasonably withheld if the Company has received written advice of Tax counsel that such settlement would subject the Company to material liability for Taxes that are not Assumed Liabilities. At all times until the expiration of three (3) years after the dissolution of the Company (as determined under Section 278 of the DGCL) and at the Parent’s request, the Company shall assist and fully cooperate with the Parent in the preparation and filing of any Tax Returns of the Company or any Company Subsidiary for a Tax Pre-Closing Period or Straddle Period and in the resolution of any audit or examination relating to any Assumed Liabilities. Prior to and after the Closing, except as required to by law (including, for avoidance of doubt, until the expiration of three (3) years after the dissolution of the Company, as determined under Section 278 of the DGCL), (i) the Company shall not amend any Tax Return of SMR Associates the Company that includes, or SMR Developers for a period ending on that would adversely impact, any Taxes that are Assumed Liabilities without the prior written consent of the Parent, and the Company shall not otherwise take any action or before enter into any agreement with any Person (other than the Closing Date) (i) involves an issue that recurs for a taxable period Parent or any Affiliate of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such timeParent), without the prior written consent of the Parent, that would adversely impact the amount of any Taxes included in Assumed Liabilities; (ii) would be binding on the Purchaser Company shall promptly forward to the Parent copies of any notices or other written communications received by the SMR Companies for Company from any taxable period beginning after Person (other than the Closing Date, Parent or any Affiliate of the Parent) relating to any Taxes included in Assumed Liabilities; and (iii) would materially and detrimentally affect the Tax liability Company shall promptly inform the Parent in writing of any oral communications that the SMR Companies for Company has with any Governmental Entity that could impact the Taxes included in Assumed Liabilities (including any oral communication regarding a taxable period beginning after the Closing Date, then the Sellers shall not enter into a settlement potential or closing threatened audit or other agreement with respect thereto without the consent of the Purchaser, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent administrative proceeding relating to any settlement, closing or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheldTaxes).
(iii) With respect to any taxable period of an SMR Company beginning before and ending after the Closing Date, the Purchaser and the Sellers shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld.
(e) A claim for indemnity under Sections 11.2(e) or 11.3(f) may not be made later than 60 days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period.
Appears in 1 contract
Tax Returns; Audits. (i) The Sellers Shareholders' Representative shall be responsible for preparing or causing to be prepared, at the appropriate SMR Company's Shareholders' expense, the CompanyDelco's federal income tax return on Form 1120S and comparable state and local income and franchise tax returns (each, an "S Period Return"), ) for the CompanyDelco's taxable year ending on the day preceding the Closing Date (collectively, the "Final S Period Tax Returns") and all other income Tax Returns (together with the Final S Period Returns, the "Pre-Closing Period Returns") of Delco for any taxable period ending on or prior to before the day preceding the Closing Date and all other Income Tax Returns of (the SMR Companies for the taxable periods ending on or prior to the "Pre-Closing DatePeriods"). Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax lawsLaws consistent with prior practice. The Purchaser Following the Closing Date, the Company shall cause the Company Delco to cooperate in the preparation and filing of such Tax Returns (including providing the Sellers Shareholders with access to all information reasonably requested by the Sellers Shareholders in connection with the preparation of such Tax Returns).
(ii) The Shareholders shall be jointly and severally responsible for the payment of all Taxes imposed on Delco in respect of the Pre-Closing Periods, and in respect of any Taxes that are not subject to the "closing-the-books" method. The Sellers Shareholders shall jointly and severally be responsible for preparing such Taxes on a prorated basis for the Tax Returns portion of SMR Developers and SMR Associates in respect of any taxable periods ending period commencing on or before the day preceding the Closing Date and ending after the day preceding the Closing Date determined in accordance with the principles set forth in this Section 13.2(a). The Sellers shall provide the Purchaser with a copy of such Tax Returns together subsection (a)(iv) below.
(iii) In connection with the schedules theretopreparation of the Final S Period Tax Returns, and the Shareholders' Representative shall use his best efforts to cause the accountants selected by him to deliver a statement setting forth the amount draft of Tax shown due on such each Final S Period Tax Return for which to the Purchaser is liableCompany within a reasonable period of time, at least 10 30 days before its due date (considering valid extensions), so that the Company may be able to review and comment on each Final S Period Tax Return prior to the due date (including any extensions thereofextension, if any) for filing such Tax Returns. If the filing of such Company agrees with the information in the Final S Period Tax Returns, the Company will cause the appropriate officers of Delco to sign and file such returns with the applicable taxing authority as prepared by the accountants selected by the Shareholders' Representative within ten (10) business days, if reasonably practicable. In the event that the Company disputes or questions any item in a Final S Period Tax Return, the Company shall use its commercially reasonable efforts to provide to the Shareholders' Representative and the Purchaser shall have accountant its comments on, and proposed changes to, the right draft of each disputed Final S Period Tax Return within a reasonable period of time, for this purpose ten (10) days being deemed reasonable, so that the Shareholders' Representative may be able to review and comment on such proposed changes prior to the due date (including extensions, if any) of such Tax Return. If any aspect of any Final S Period Tax Return remains in dispute within 20 days before the due date (including extensions, if any) for filing such Tax Return, the matter in dispute shall be submitted to a mutually acceptable accounting firm for resolution. The decision of the accounting firm concerning any disputed item shall be final and binding on the parties and the fees and expenses of the accounting firm shall be paid by the non-prevailing party. After any dispute is resolved by the mutually acceptable accounting firm, the Company will cause the appropriate officers of Delco to sign and file the Final S Period Tax Returns prior to (as resolved) with the filing of such Final S Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at the direction of the Sellers. The Purchaser shall cause any amount of Tax shown as due from an SMR Company on such Tax Return to be paid, subject to indemnification as provided in Article 11applicable taxing authority.
(iiiv) The Sellers Items to be taken into account for the taxable year beginning on January 1, 2001 and ending on the date immediately preceding the Closing Date shall be determined using the "closing-the-books" method as described in Section 1362(e)(3) of the Code and the Purchaser willregulations thereunder, and the Company and the Shareholders agree to make an election, if necessary, under Section 1362(e)(3) of the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company on the Closing DateCode. In any case where applicable Law does not permit an SMR Company Delco to close its taxable year on the day preceding the Closing Date, then Taxes, if any, attributable to the taxable period of the SMR Company Delco beginning on or before the day preceding the Closing Date and ending after the day preceding the Closing Date shall be allocated between (A) the period up to and including the day preceding the Closing Date, and (B) the period on and subsequent to the Closing Date by means of a closing method that is consistent with the "closing-the-books" method under Section 1362(e)(3) of the books Code and records of each of the SMR Companies as of the close of business on the Closing Dateregulations thereunder.
(iv) The Company shall not amend, re-file or otherwise modify any Pre-Closing Period Return of Delco without the consent of the Shareholders' Representative, which shall not be withheld or delayed unreasonably. To the extent that a Pre-Closing Period Return of Delco needs to be amended, the Shareholders' Representative shall use his best efforts to cause the accounting firm that prepared the original return on behalf of Delco to prepare such amendment. In connection with the preparation of such amendment, the Shareholders' Representative shall use his best efforts to cause the accountants selected by him to deliver a draft of the amendment to the Company within a reasonable period of time so that the Company may be able to review and comment on the amendment prior to the intended date for filing (or due date, if any, including extensions, if any) such Tax Returns. If the Company agrees with the information in the amendment, the Company will within ten (10) business days cause the appropriate officers of Delco to sign and file such amendment with the applicable taxing authority as prepared by the accountants selected by the Shareholders' Representative. In the event that the Company disputes or questions any item in the amendment, the Company shall use its commercially reasonable efforts to provide to the Shareholders' Representative and the accountant its comments on, and proposed changes to, the draft of the amendment within a reasonable period of time, for this purpose ten (10) days being deemed reasonable, and the Shareholders' Representative may review and comment on such proposed changes prior to the due date (including extensions, if any) of such Tax Return. If any aspect of the amendment remains in dispute within 20 days before the due date (including extensions, if any) for filing such amendment, the matter in dispute shall be submitted to a mutually acceptable accounting firm for resolution. The decision of the accounting firm concerning any disputed item shall be final and binding on the parties and the fees and expenses of the accounting firm shall be paid by the non-prevailing party. After any dispute is resolved by the mutually acceptable accounting firm, the Company will cause the appropriate officers of Delco to sign and file the amendment (as resolved) with the applicable taxing authority.
(vi) If the Company or Delco receives a refund, credit or reduction of Taxes on Delco attributable to a Pre-Closing Period, the recipient promptly shall reimburse the Shareholders for such refund, credit or reduction of Tax. If the Shareholders receive a refund, credit or reduction of Taxes attributable to a Pre-Closing Period, the Shareholders shall hold in trust for the benefit of the Company, and shall promptly reimburse the Company for, such refund, credit or reduction or Tax if, and only to the extent that, the receipt thereof is a direct or indirect result of any additional Taxes on Delco attributable to invalidating Delco's S election in a Pre-Closing Period or any additional Taxes on Delco attributable to a post-Closing period, and such amount reimbursed shall be applied to reduce Losses incurred by the Company on a dollar for dollar basis.
(b) Except as provided in Section 13.2(a)6.1, following the ClosingClosing Date, Purchaser Delco or its Affiliates shall be responsible for preparing or causing to be prepared all Tax Returns required to be filed by the SMR Companies Delco for taxable periods beginning on or after the Closing Date.
(ii) With respect to any Tax Return required to be filed by the Purchaser for a taxable period of an SMR Company beginning on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior practice of the respective SMR Company unless otherwise required by applicable Tax laws, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers shall have the right to review and comment on such Tax Return and the Statement prior to the filing of such Tax Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possible; provided, however, that the sole issue before the Accounting Referee shall be whether the changes proposed by the Sellers are reasonable. If the Accounting Referee is unable to make a determination with respect to any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to the Sellers of the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7.
(c) In the event that, following the Closing Date, any Governmental Body Entity notifies the Purchaser Company or Delco or any of the SMR Companies or any affiliate Affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return of Delco, the Company or an SMR Subsidiary (or a Tax Return of SMR Developers or SMR Associates) relating to a taxable period ending on or before the Closing Date, the Purchaser shall promptly notify the Sellers Shareholder's Representative of the receipt of such notice. Upon receipt The Company shall cooperate and provide or cause Delco to cooperate and provide the Shareholder's Representative with access to such records and personnel of notice of Delco as the Audit from the Purchaser, the Sellers may, at the Sellers' option and sole expense, control all further determinations Shareholder's Representative determine may be necessary in connection with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof. Each of the parties promptly shall provide the others concerning any audit with copies of all correspondence, including but not limited notices and other written materials received from any Governmental Entity.
(i) The Company or Delco will promptly notify the Shareholder's Representative in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax period ending on or prior to all negotiation the Closing Date.
(ii) The Shareholders, through the Shareholder's Representative, shall have the right to represent Delco's interests in any Tax Audit or administrative or court proceeding relating to any Pre-Closing Periods and correspondence with such Governmental Body and to employ counsel of its choice at its sole expense; provided that (A) if the compromise or settlement results of such matter; providedAudit or proceeding (i) involves an issue that recurs for a taxable period of Delco beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Audit or proceeding at such time), however(ii) would be binding on the Company or Delco for any taxable period beginning on or after the Closing Date, that or (iii) would Materially and detrimentally affect the Tax liability of Delco for a taxable period beginning on or after the Closing Date, then the Shareholder's Representative, on behalf of the Shareholders, shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Company, which consent shall not be unreasonably withheld, and (B) if and to the extent that the Audit Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser Company or Delco will be liable pursuant to Section 11.3(f)liable, the Purchaser Company shall be entitled to jointly control with the Sellers Shareholder's Representative such adjustment or issueissue in the Audit or proceeding, and neither the Sellers Shareholder's Representative nor the Purchaser Company shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body.
(i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay.
(ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding with respect to any S Corporation Period or any Tax Return of SMR Associates or SMR Developers for a period ending on or before the Closing Date) (i) involves an issue that recurs for a taxable period of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such time), (ii) would be binding on the Purchaser or the SMR Companies for any taxable period beginning after the Closing Date, and (iii) would materially and detrimentally affect the Tax liability of the SMR Companies for a taxable period beginning after the Closing Date, then the Sellers shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Purchaser, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent to any settlement, closing or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheld).
(iii) With respect to any taxable period of an SMR Company Delco beginning before and ending after the Closing Date, the Purchaser Company and the Sellers Shareholder's Representative shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld.
(e) A claim for indemnity under Sections 11.2(e) or 11.3(f) may not be made later than 60 days after the expiration of the applicable Tax statute of limitations with respect to the relevant taxable period.
Appears in 1 contract
Samples: Share Purchase and Sale Agreement (Be Aerospace Inc)
Tax Returns; Audits. (i) The Sellers Shareholders shall be responsible for preparing or causing to be prepared, at the appropriate SMR Company's Shareholders' expense, the CompanyAlson's federal income tax return on Form 1120S and comparable state and local income and franchise tax returns (each, an "S Period Return"), for the CompanyAlson's taxable year ending on the day preceding the Closing Date or on the Closing Date if an election is made under Section 338(h)(10) of the Code (collectively, the "Final S Period Tax Returns") or prior to the Closing Date and all other Income income Tax Returns of the SMR Companies Xxxxx for the taxable periods ending on or prior to the Closing Date. Such Tax Returns shall be prepared in a manner consistent with prior practice unless otherwise required by applicable Tax lawslaws consistent with prior practice. The Purchaser Company shall cause the Company Xxxxx to cooperate in the preparation and filing of such Tax Returns (including providing the Sellers Shareholders with access to all information reasonably requested by the Sellers Shareholders in connection with the preparation of such Tax Returns). The Sellers Shareholders shall be jointly and severally responsible for preparing the Tax Returns payment of SMR Developers and SMR Associates all Taxes due or to become due from Xxxxx in respect of taxable periods ending ending, on or before the Closing Date and the share of Taxes due or to become due for the portion of any taxable period that is prior to the Closing Date except only the Tax described in accordance with the principles set forth in this Section 13.2(a6.3(f)(i). Unless paid separately by Xxxxx prior to the Closing Date, any such Taxes shall be payable and reportable by or at the direction of the Shareholders from sources outside of Alson's bank accounts or cash equivalents. Tax liabilities, if any, assumed by the Shareholders under this Agreement either will be treated as a reduction from the Net Consideration in the manner described in Section 2.2 or otherwise be the financial obligation of the Shareholders. The Sellers Shareholders shall provide the Purchaser Company with a copy of such Tax Returns together with the schedules thereto, and a statement setting forth the amount of Tax shown due on such Tax Return for which the Purchaser is Shareholders are liable, at least 10 30 days prior to the due date (including any extensions thereof) for the filing of such Final S Period Tax Returns, and the Purchaser Company shall have the right to review such Final S Period Tax Returns prior to the filing of such Final S Period Tax Returns. The Purchaser shall cause such Tax Returns to be signed by the appropriate SMR Company so that they may be timely filed by or at At the direction of the Sellers. The Purchaser Shareholders' Representative, the Company shall cause Xxxxx to execute and file the Final S Period Tax Returns after the review period and on or prior to their due date. Filing these returns is not an assumption by the Company or Xxxxx of any amount responsibilities the Shareholders have for such Taxes or the accuracy of the Final S Period Tax shown as due from an SMR Company on such Tax Return to be paid, subject to indemnification as provided in Article 11Returns or any S Period Return.
(ii) The Sellers and the Purchaser Company will, to the extent permitted by applicable Law, elect with the relevant Taxing authority to close the taxable period of each SMR Company Xxxxx on the day preceding the Closing Date. In any case where applicable Law does not permit an SMR Company Xxxxx to close its taxable year on the day preceding the Closing Date, then Taxes, if any, attributable to the taxable period of the SMR Company Xxxxx beginning on or before and ending on or after the Closing Date shall be allocated between (A) the period up to and but not including the Closing Date, and (B) the period on and subsequent to the Closing Date by means of a closing of the books and records of each of the SMR Companies Xxxxx as of prior to the close opening of business on the Closing Date.
(ib) Except as provided in Section 13.2(a)6.1, following the Closing, Purchaser Xxxxx or its Affiliates shall be responsible for preparing or causing to be prepared all Tax Returns required to be filed by the SMR Companies Xxxxx for taxable periods beginning on or after the Closing Date.
(ii) With respect to any Tax Return required to be filed by the Purchaser for a taxable period of an SMR Company beginning on or before the Closing Date, (A) the Purchaser shall prepare (or cause to be prepared) such Tax Returns in a manner consistent with the prior practice of the respective SMR Company unless otherwise required by applicable Tax laws, and (B) the Purchaser shall deliver, at least twenty (20) business days prior to the due date for filing of such Tax Return (including extensions), to the Sellers (1) a statement setting forth the amount of Tax shown due on such Tax Return for which the Sellers are liable pursuant to Section 11.2(e) hereof (the "Statement"), and (2) copies of such Tax Return. The Sellers shall have the right to review and comment on such Tax Return and the Statement prior to the filing of such Tax Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Tax Return and the Statement and to mutually consent to the filing as promptly as possible of such Tax Return. In the event the parties are unable to resolve any dispute within ten (10) business days following the delivery of such Tax Return and the Statement, the parties shall jointly request the Accounting Referee to resolve any issue in dispute as promptly as possible; provided, however, that the sole issue before the Accounting Referee shall be whether the changes proposed by the Sellers are reasonable. If the Accounting Referee is unable to make a determination with respect to any disputed issue within five (5) business days prior to the due date (including extensions) for the filing of the Tax Return in question, then the Purchaser may file such Tax Return on the due date (including extensions) therefor without such determination having been made and without the Sellers' consent. Notwithstanding the filing of such Tax Return, the Accounting Referee shall make a determination with respect to any disputed issue, and the amount of Taxes for which Sellers are liable under Section 11.2(e) hereof shall be as determined by the Accounting Referee. The fees and expenses of the Accounting Referee shall be paid one-half by the Purchaser and one-half by the Sellers. The Purchaser shall pay or cause to be paid all Taxes shown due on such Tax Return. Not later than (A) three days before the due date for the payment of Taxes with respect to such Tax Return or (B) in the event of a dispute, five business days after notice to the Sellers of the resolution thereof, the Purchaser shall be paid such amount in accordance with Section 11.7.
(c) In the event that, following the Closing Date, any Governmental Body Entity notifies the Purchaser Company or Xxxxx or any of the SMR Companies or any affiliate Affiliate thereof of its intention to audit, assess, examine or otherwise review (collectively, "Audit") an S Period Return of the Company or an SMR Subsidiary (or a Tax Return of SMR Developers or SMR Associates) Xxxxx relating to a taxable period ending on or before the Closing Date, the Purchaser Company shall promptly notify the Sellers Shareholders of the receipt of such notice. Upon receipt of notice of the Audit from the PurchaserCompany, the Sellers Shareholders may, at the SellersShareholders' option and sole expense, control all further determinations with respect to the conduct of such Audit or any administrative or judicial proceeding arising in respect thereof, including but not limited to all negotiation and correspondence with such Governmental Body Entity and the compromise or settlement of such matter; provided, however, that if and to the extent that the Audit involves an adjustment or issue which will produce a Tax for which the Purchaser Company will be liable pursuant to Section 11.3(f)liable, the Purchaser Company shall be entitled to jointly control with the Sellers Shareholders such adjustment or issue, and the Shareholders shall not enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the Company, which consent shall not be unreasonably withheld. The Company shall cooperate and provide or cause Xxxxx to cooperate and provide the Shareholders with access to such records and personnel of Xxxxx as the Shareholders determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. Each of the parties shall provide the others concerning any audit with copies of all correspondence, notices and other written materials received from any Governmental Entity.
(i) On and after the Closing Date, the Company or Xxxxx will promptly notify the Shareholders in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax period ending on or prior to the Closing Date.
(ii) The Shareholders shall have the right to represent Alson's interests in any Tax Audit or administrative or court proceeding relating to taxable periods of Xxxxx ending on or prior to the Closing Date and to employ counsel of its choice at its sole expense; provided that (A) if the results of such Audit or proceeding (i) involves an issue that recurs for a taxable period of Xxxxx beginning on or after the Closing Date (whether or not such subsequent taxable period is the subject of such Audit or proceeding at such time), (ii) would be binding on the Company or Xxxxx for any taxable period beginning on or after the Closing Date, and (iii) would materially and detrimentally affect the Tax liability of Xxxxx for a taxable period beginning on or after the Closing Date, then the Shareholders shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Company, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Company or Xxxxx will be liable, the Company shall be entitled to jointly control with the Shareholders such adjustment or issue in the Audit or proceeding, and neither the Sellers Shareholders nor the Purchaser Company shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld. The Purchaser shall cooperate and provide or cause the Company to cooperate and provide the Sellers with access to such records and personnel of the SMR Companies as the Sellers determine may be necessary in connection with the conduct of such Audit or any administrative or judicial proceeding in respect thereof. The Purchaser shall provide the Sellers with copies of all correspondence, notices and other written materials received from any Governmental Body.
(i) Without prejudice to Sellers' rights under Section 13.2(c), the Purchaser will promptly notify the Sellers in writing of the commencement of any claim, Audit, or other proposed change or adjustment by any taxing authority concerning any Tax covered by Section 11.2(e) hereof (a "Tax Claim"); provided, however, that a Purchaser Indemnified Party shall not be foreclosed from seeking indemnification pursuant to Article XI by any failure to provide such prompt notice of the existence of a Tax Claim except to the extent that the Sellers have been damaged or prejudiced as a result of such delay.
(ii) The Sellers shall have the right to represent any SMR Company's interests in any Tax audit or administrative or court proceeding relating to taxable periods of such SMR Company ending on or prior to the Closing Date and to employ counsel of its choice at its expense; provided that (A) if the results of such Tax audit or proceeding (other than a Tax audit or proceeding with respect to any S Corporation Period or any Tax Return of SMR Associates or SMR Developers for a period ending on or before the Closing Date) (i) involves an issue that recurs for a taxable period of an SMR Company beginning after the Closing Date (whether or not such subsequent taxable period is the subject of such Tax audit or proceeding at such time), (ii) would be binding on the Purchaser or the SMR Companies for any taxable period beginning after the Closing Date, and (iii) would materially and detrimentally affect the Tax liability of the SMR Companies for a taxable period beginning after the Closing Date, then the Sellers shall not enter into a settlement or closing or other agreement with respect thereto without the consent of the Purchaser, which consent shall not be unreasonably withheld and (B) if the Tax Claim involves an adjustment or issue which will produce a Tax for which the Purchaser will be liable pursuant to Section 11.3(f), the Purchaser shall be entitled to jointly control with the Sellers such adjustment or issue in the Tax audit or proceeding, and neither the Sellers nor the Purchaser shall enter into a settlement or closing or other agreement with respect to such issue or adjustment without the consent of the other party, which consent shall not be unreasonably withheld; provided, however, that, in a case described in clause (A) above, if the Purchaser shall refuse to consent to any settlement, closing or other agreement that the Sellers propose to accept (a "Proposed Settlement"), then (1) the Sellers' liability with respect to the subject matter of the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted, and (2) the Purchaser shall be responsible for all expenses incurred thereafter in connection with the contest of such audit or proceeding except to the extent that the final settlement imposes less liability on the Sellers than the Proposed Settlement would have imposed. The Purchaser agrees that, to the extent reasonably requested in writing by the Sellers, it will cause the SMR Companies to take such requested actions in the defense against or compromise of any claim in any such Tax audit or proceeding. The Sellers shall promptly notify the Purchaser if it decides not to control the defense or settlement of any such Tax audit or administrative or court proceeding and the Purchaser thereupon shall be permitted to defend and settle such Tax audit or proceeding; provided, however, that there shall be no settlement or closing or other agreement with respect thereto without the consent of the Sellers (which consent shall not be unreasonably withheld).
(iii) With respect to any taxable period of an SMR Company Xxxxx beginning before and ending after the Closing Date, the Purchaser Company and the Sellers Shareholders shall jointly control the defense and settlement of any Tax audit or administrative or court proceeding and each party shall cooperate with the other party at their own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent will not be unreasonably withheld.
(e) A claim for indemnity under Sections 11.2(e) Any Taxes, except the Tax described in Section 6.3(f)(i), imposed upon or 11.3(f) may not be made later than 60 days after the expiration incurred by any of the applicable Tax statute Shareholders in connection with the sale of limitations BE Stock pursuant to this Agreement, and any Taxes in connection with respect pre-closing distributions to any Shareholder or any payment to or for the relevant taxable periodShareholders contemplated by this Agreement, and any legal or other expenses incurred by the Shareholders in connection with such Taxes, shall be borne solely by the Shareholders.
Appears in 1 contract
Samples: Share Purchase and Sale Agreement (Be Aerospace Inc)
