TAX SHARING AGREEMENT
DATED AS OF MARCH 31, 2000
BY AND BETWEEN
XXXXXX INTERNATIONAL INC.
AND
XXXXXXX LIFESCIENCES CORPORATION
TABLE OF CONTENTS Page
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Article I Definitions 2
Article II Preparation and Filing of Tax Returns 9
2.01 Manner of Preparation 9
2.02 Pre-Distribution Consolidated U.S. Federal Income Tax 9
2.03 Pre-Distribution U.S. State Income Tax Returns 10
2.04 International Tax Returns - Xxxxxxx Entities 11
2.05 Other Pre-Distribution Tax Returns 12
2.06 Sales, Use or Property Tax Returns 12
2.07 Franchise Tax Returns 12
2.08 Tax Packages and Other Information 13
2.09 Post-Distribution Date Tax Returns 13
2.10 Allocation of Tax Attributes 13
2.11 Employee Stock Incentives Other Than Restricted Stock 14
2.12 Restricted Stock 15
2.13 Abandoned/Unclaimed Property 15
Article III Tax Deficiencies and Overpayments 16
3.01 General Rule 16
3.02 Payments by Xxxxxxx 16
3.03 Payments by Baxter 20
3.04 Manner of Payments - Legal Entities 22
3.05 Transaction Taxes 22
3.06 Puerto Rico Filing Obligations 22
3.07 Harbor Maintenance Taxes 23
3.08 No Other Payments 23
2
Article IV Tax Audits and Administrative Matters 24
4.01 Tax Audits and Controversies 24
4.02 Retention of Books and Records 25
4.03 Cooperation Regarding Return Filing, Examinations And Controversies 26
4.04 Interest on Late Payments 28
4.05 Character and Effect of Payments 28
4.06 Agency 28
Article V Miscellaneous 28
5.01 Severability 28
5.02 Modification of Agreement 28
5.03 Conflict with the Reorganization Agreement or Other Tax Agreements 29
5.04 Notices 29
5.05 Application to Present and Future Subsidiaries 30
5.06 Term 30
5.07 Titles and Headings 30
5.08 Singular and Plural 30
5.09 Governing Law 31
5.10 Dispute Resolution 31
5.11 Counterparts 31
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TAX SHARING AGREEMENT
Tax Sharing Agreement (the "Agreement"), dated as of March 31, 2000 by and
between Xxxxxx International Inc., a Delaware corporation ("Baxter") and,
Xxxxxxx Lifesciences Corporation, a Delaware corporation (Xxxxxxx):
WHEREAS, Baxter and Xxxxxxx have entered into an Agreement and Plan of
Reorganization dated as of March 15, 2000 (the "Reorganization Agreement");
WHEREAS, pursuant to the Reorganization Agreement all the issued and
outstanding common stock of Xxxxxxx will be distributed by Baxter (pro rata) to
the holders of its common stock (the "Distribution"); and
WHEREAS, the parties hereto desire to provide for the payment of tax
liabilities and entitlement to tax refunds for the taxable periods ending
before, on or after the date of the Distribution, to allocate responsibility and
provide for cooperation in the preparation and filing of tax returns with
respect to such taxable periods, and to provide for certain other related
matters:
NOW, THEREFORE, Baxter, on behalf of itself and members of the Xxxxxx Group
(as hereinafter defined), and Xxxxxxx, on behalf of itself and members of the
Xxxxxxx Group (as hereinafter defined), in consideration of the mutual covenants
contained herein, agree as follows:
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ARTICLE I
DEFINITIONS
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As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
"Baxter Businesses" means the present and former subsidiaries, divisions
and businesses of any member of the Xxxxxx Group, other than the Xxxxxxx
Business.
"Baxter Employee" means any employee of the Xxxxxx Group who is not an
Xxxxxxx Employee.
"Xxxxxx Group" means Baxter and its past and present subsidiaries, except
for: (1) members of the Xxxxxxx Group, (2) the Xxxxxxx Business, and (3) any
past or present subsidiaries, divisions or businesses of Baxter (or of any of
its past or present subsidiaries) which (i) relate to the Xxxxxxx Business and
(ii) which are not, or are not contemplated by the Reorganization Agreement to
be, part of the Xxxxxx Group after the Distribution.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Disqualifying Disposition" means any disposition of Section 423 Xxxxxxx
Stock or Section 423 Baxter Stock which does not meet the requirements of
section 423(a) of the Code.
"Distribution Date" has the meaning set forth in the Reorganization
Agreement for "Distribution Date". For all purposes of this Agreement, the
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Distribution shall be deemed effective as of the close of business on the
Distribution Date.
"Xxxxxxx" means the present and future subsidiaries, divisions and
businesses and former divisions and businesses of any member of the Xxxxxxx
Group which are not, or are not contemplated by the Reorganization Agreement to
be, part of the Xxxxxx Group immediately after the Distribution, including
former divisions or subsidiaries described as the Divested Businesses in the
Reorganization Agreement.
"Xxxxxxx Business" has the meaning set forth in the Reorganization
Agreement for "Xxxxxxx Business" but shall also be defined to include any
operations, entities or contractual arrangements in which Xxxxxxx has a majority
participating interest.
"Xxxxxxx Employee" has the meaning set forth in section 12.1 of the
Reorganization Agreement.
"Xxxxxxx Group" means the "Xxxxxxx Business" as defined in the
Reorganization Agreement and its direct and indirect subsidiaries on and after
the Distribution Date, including former divisions and subsidiaries described as
the Divested Businesses as defined in the Reorganization Agreement.
"Xxxxxxx Distribution Date Balance Sheet" means the Xxxxxxx balance sheet
as of the Distribution Date.
"Xxxxxxx 1999 Currently Payable Federal Income Tax Expense" means the
amount of U.S. Baxter consolidated federal income tax liability attributable to
the Xxxxxxx Business for items reported in Xxxxxx'x 1999 consolidated federal
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income tax return as filed, computed at a 35% tax rate. This amount shall be
determined in good faith by Baxter, after consulting with Xxxxxxx, on the basis
of Xxxxxxx Business items as such items are reported (or should properly have
been reported) on the tax packages and other information provided by Xxxxxxx
under section 2.08 of this Agreement.
"Xxxxxxx 1999 Estimated Currently Payable Federal Income Tax Expense" means
the U.S. Baxter 1999 consolidated federal income tax expense attributable to the
Xxxxxxx Business for the taxable year ended December 31 1999, less the net
increase (or plus the net decrease) in the deferred federal income tax
liabilities attributable to the Xxxxxxx Business through December 31, 1999, as
reported in Xxxxxxx' consolidated balance sheet as of the December 31, 1999 and
consolidated income statement through December 31, 1999. Any adjustments to
Xxxxxxx' deferred tax liabilities for periods ending prior to January 1, 1999
shall be disregarded for this purpose.
"Xxxxxxx 1999 Currently Payable State Income Tax Expense" means the amount
of U.S. state income tax liability attributable to the Xxxxxxx Business for
items reported in Xxxxxx'x 1999 state income tax returns as filed, computed at
an 8% tax rate. This amount shall be determined in good faith by Baxter, after
consulting with Xxxxxxx, on the basis of Xxxxxxx Business items as such items
are reported (or should properly have been reported) on the tax packages and
other information provided by Xxxxxxx under section 2.05 of this Agreement.
"Xxxxxxx 1999 Estimated Currently Payable State Income Tax Expense" means
the U.S. state income tax expense attributable to the Xxxxxxx Business through
December 31, 1999, less the net increase (or plus the net decrease) in the
deferred state income tax liabilities attributable to the Xxxxxxx Business
through December 31, 1999, as reported in Xxxxxxx' consolidated balance sheet as
of December 31, 1999 and consolidated income statement through
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December 31, 1999. Any adjustments to Xxxxxxx' deferred tax liabilities for
periods ending prior to January 1, 1999 shall be disregarded for this purpose.
"Xxxxxxx 2000 Currently Payable Federal Income Tax Expense" means the
amount of U.S. Baxter consolidated federal income tax liability attributable to
the Xxxxxxx Business for items reported in Xxxxxx'x 2000 consolidated federal
income tax return as filed, computed at a 35% tax rate. This amount shall be
determined in good faith by Baxter, after consulting with Xxxxxxx, on the basis
of Xxxxxxx Business items as such items are reported (or should properly have
been reported) on the tax packages and other information provided by Xxxxxxx
under section 2.08 of this Agreement.
"Xxxxxxx 2000 Estimated Currently Payable Federal Income Tax Expense" means
the U.S. Baxter 2000 consolidated federal income tax expense attributable to the
Xxxxxxx Business through the Distribution Date, less the net increase (or plus
the net decrease) in the deferred federal income tax liabilities attributable to
the Xxxxxxx Business through the Distribution Date, as reported in Xxxxxxx'
consolidated balance sheet as of the Distribution Date and consolidated income
statement through the Distribution Date. Any adjustments to Xxxxxxx' deferred
tax liabilities for periods ending prior to January 1, 2000 shall be disregarded
for this purpose.
"Xxxxxxx 2000 Currently Payable State Income Tax Expense" means the amount
of U.S. state income tax liability attributable to the Xxxxxxx Business for
items reported in Xxxxxx'x 2000 state income tax returns as filed, computed at
an 8% tax rate. This amount shall be determined in good faith by Baxter, after
consulting with Xxxxxxx, on the basis of Xxxxxxx Business items as such items
are reported (or should properly have been reported) on the tax packages and
other information provided by Xxxxxxx under section 2.05 of this Agreement.
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"Xxxxxxx 2000 Estimated Currently Payable State Income Tax Expense" means
the U.S. state income tax expense attributable to the Xxxxxxx Business through
the Distribution Date, less the net increase (or plus the net decrease) in the
deferred state income tax liabilities attributable to the Xxxxxxx Business
through the Distribution Date, as reported in Xxxxxxx' consolidated balance
sheet as of the Distribution Date and consolidated income statement through the
Distribution Date. Any adjustments to Xxxxxxx' deferred tax liabilities for
periods ending prior to January 1, 2000 shall be disregarded for this purpose.
"Final Determination" means, with respect to any issue or item for any
taxable period the earliest to occur of the following: (i) a decision by a court
of competent jurisdiction, but only after such decision has become final and
unappealable; (ii) the expiration of the time for filing a claim for refund or,
if a refund claim has been timely filed, the time for instituting a suit in
respect of such refund claim, provided that no further adjustment to the items
of income, gain, loss, deduction or credit for such period may thereafter be
made; (iii) the execution by or on behalf of the taxpayer and the IRS of a
closing agreement under Section 7121 of the Code or comparable agreements under
the laws of other jurisdictions; (iv) the acceptance by the IRS or its counsel
of a tender pursuant to an offer in compromise under Section 7122 of the Code,
or comparable agreements under the laws of other jurisdictions; (v) the
execution of a Form 870 or Form 870AD and the subsequent payment of the tax
deficiency or the receipt of the refund reflected therein; or (vi) any other
final and irrevocable determination of the tax liability of a party to this
Agreement for any taxable period.
"IRS Adjustments" means any adjustments made by the Internal Revenue
Service ("IRS") with respect to any United States ("U.S.") Federal income Tax
Returns of Baxter (or any member of the Xxxxxx Group) in which any part of
Xxxxxxx is included for taxable periods beginning before the Distribution Date.
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"Sales, Use, or Property Tax" means any sales, use, or property tax (and
any related interest or penalties) relating to the Xxxxxxx Businesses conducted
in the United States.
"Section 423 Xxxxxxx Stock" means Xxxxxxx Stock received as a distribution
on Section 423 Baxter Stock pursuant to the Reorganization Agreement.
"Section 423 Baxter Stock" means Baxter stock acquired pursuant to the
Baxter Qualified Employee Stock Purchase Plan, adopted pursuant to the 1987
Incentive Compensation Program.
"Tax" means any of the Taxes.
"Taxes" means taxes arising from all forms of taxation, whenever created or
imposed, and whether of the United States of America or elsewhere, and whether
imposed by a local, municipal, governmental, state, federation or other body,
and without limiting the generality of the foregoing, shall include income,
sales, use, ad valorem, gross receipts, value added, franchise, transfer, stamp,
recording, withholding, payroll, employment, excise, occupation, premium or
property taxes, together with any related interest, penalties and additions to
tax, or additional amounts imposed by any taxing authority (domestic or foreign)
upon the Xxxxxxx Group, the Xxxxxx Group or any of their respective members or
divisions or branches.
A "Tax Benefit" arises whenever a member's liability for Taxes may be
reduced in future periods as a result of an adjustment by a taxing authority in
the year under examination, whether or not such reduction is presently assured.
Examples of a Tax Benefit include the Taxes associated with an increase in the
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basis of an asset or the deferral of a deduction or the reallocation upon audit
of a deduction within the same taxable period between Xxxxxxx and Baxter. A Tax
Benefit does not include a change in the amount of a tax credit available. The
amount of any Tax Benefit shall be computed using a tax rate of 35% for federal
income tax purposes and 5.2% (8% state income tax rate less a 35% federal
benefit) for state income tax purposes.
A "Tax Detriment" arises whenever a member's liability for Taxes may be
increased in future periods as a result of an adjustment by a taxing
jurisdiction in the year under examination, whether or not such increase is
presently assured. Examples of a Tax Detriment include the Taxes associated with
a decrease in the basis of an asset or the acceleration of a deduction or the
reallocation upon audit of a deduction within the same taxable period between
Xxxxxxx and Baxter. A Tax Detriment does not include a change in the amount of a
tax credit available. The amount of a Tax Detriment shall be computed using a
tax rate of 35% for federal income tax purposes and 5.2% (8% state income tax
rate less a 35% federal benefit) for state income tax purposes.
"Tax Return" means any return, filing, questionnaire or other document
required to be filed, including amended returns that may be filed, for any
period with any taxing authority (whether domestic or foreign) in connection
with any Tax or Taxes (whether or not a payment is required to be made with
respect to such filing).
"Transaction Taxes" means all sales, use, transfer, VAT, stamp,
registration, capital gains, income tax, ad valorem, gross receipts, recording,
withholding (other than payroll tax withholding), and similar taxes or fees
(including, without limitation, all real estate, patent, copyright and trademark
transfer taxes and recording fees) payable in connection with the transactions
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contemplated in the Reorganization Agreement and the transfer of the Xxxxxxx
Business, together with any related interest, penalties, or additions to tax.
ARTICLE II
PREPARATION AND FILING OF TAX RETURNS
-------------------------------------
Section 2.01. Manner of Preparation. All Tax Returns for taxable periods
---------------------
beginning before the Distribution Date which are filed after the Distribution
Date shall be prepared on a basis consistent with prior return treatment
(provided such basis does not have an adverse effect on the elections,
accounting methods, conventions, and principles of taxation used for any taxable
period ending on or before the Distribution Date), and shall be filed on a
timely basis by the party responsible for such filing under this Agreement.
Subject to the provisions of this Agreement, all decisions relating to the
preparation and filing of Tax Returns and any audit or other review of such Tax
Returns shall be made in the sole discretion of the party responsible under this
Agreement for such filing.
Section 2.02. Pre-Distribution Consolidated U.S. Federal Income Tax
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Returns. Baxter shall prepare and file all consolidated U.S. federal income
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Tax Returns that include both a member of the Xxxxxx Group and part of the
Xxxxxxx Business, and that are required to be filed for periods beginning before
the Distribution Date. Baxter agrees to pay to the IRS the consolidated U.S.
federal income tax liabilities reported on these returns on a timely basis.
Baxter shall refund to Xxxxxxx any excess of: (i) Xxxxxxx 1999 Estimated
Currently Payable Federal Income Tax Expense, over (ii) Xxxxxxx 1999 Currently
Payable Federal Income Tax Expense. Xxxxxxx shall refund to Baxter
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any excess of: (i) Xxxxxxx 1999 Currently Payable Federal Income Tax Expense,
over (ii) Xxxxxxx 1999 Estimated Currently Payable Federal Income Tax Expense.
Payments under this section shall be due within 30 days after the due date
(including extensions) of Xxxxxx'x 1999 consolidated U.S. federal income tax
return.
Baxter shall refund to Xxxxxxx any excess of: (i) Xxxxxxx 2000 Estimated
Currently Payable Federal Income Tax Expense, over (ii) Xxxxxxx 2000 Currently
Payable Federal Income Tax Expense. Xxxxxxx shall refund to Baxter any excess
of: (i) Xxxxxxx 2000 Currently Payable Federal Income Tax Expense, over (ii)
Xxxxxxx 2000 Estimated Currently Payable Federal Income Tax Expense. Payments
under this section shall be due within 30 days after the due date (including
extensions) of Xxxxxx'x 2000 consolidated U.S. federal income tax return.
Section 2.03 Pre-Distribution U.S. State Income Tax Returns. All U.S.
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state income tax returns (whether consolidated, unitary, combined, or separate)
of a member of the Xxxxxx Group which:
(i) include part of the Xxxxxxx Business, and
(ii) are required to be filed for periods beginning before the Distribution Date
shall be filed by the Baxter member. The Baxter member shall also be responsible
for paying the tax liability shown on the return to the appropriate taxing
authority.
Baxter shall refund to Xxxxxxx any excess of: (i) Xxxxxxx 1999 Estimated
Currently Payable State Income Tax Expense, over (ii) Xxxxxxx 1999 Currently
Payable State Income Tax Expense. Xxxxxxx shall refund to Baxter any excess of:
(i) Xxxxxxx 1999 Currently Payable State Income Tax Expense, over (ii)
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Xxxxxxx 1999 Estimated Currently Payable State Income Tax Expense. Payments
under this section shall be due within 30 days after the due date (including
extensions) of the relevant state income tax return.
Baxter shall refund to Xxxxxxx any excess of: (i) Xxxxxxx 2000 Estimated
Currently Payable State Income Tax Expense, over (ii) Xxxxxxx 2000 Currently
Payable State Income Tax Expense. Xxxxxxx shall refund to Baxter any excess of:
(i) Xxxxxxx 2000 Currently Payable State Income Tax Expense, over (ii) Xxxxxxx
2000 Estimated Currently Payable State Income Tax Expense. Payments under this
section shall be due within 30 days after the due date (including extensions) of
the relevant state income tax return.
Section 2.04 International Tax Returns- Xxxxxxx Entities. Except as
-------------------------------------------
provided in Section 3.03(c) Xxxxxxx shall be responsible for filing Tax
Returns and paying all Tax Liabilities with respect to the following entities
and their successors for all taxable periods:
Baxter Participacoes e Commercial Ltda. (Brazil)
Macchi Engenharia Ltda. (Brazil)
Baxter Cardiovascular Private Limited (India)
Xenomedica A.G
PAS Xxxxxx GmbH and Co. KG
PAS Xxxxxx Verwaltungs GmbH
Xxxxxxx shall also be responsible for filing Tax Returns and paying all Tax
Liabilities with respect to Xxxxxxx entities that are formed pursuant to the
Reorganization Agreement.
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Section 2.05 Other Pre-Distribution Tax Returns. All Tax Returns (except
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as provided hereunder or in Sections 2.02, 2.03 or 2.04 above) which:
(i) include or are filed by a member of the Xxxxxx Group or the Xxxxxxx
Group, and
(ii) are required to be filed for periods beginning before the Distribution Date
shall be filed by the appropriate Baxter or Xxxxxxx member in accordance with
local law or custom as finally determined in good faith by Baxter after
consultation with Xxxxxxx. The party filing such return shall also be
responsible for paying the tax liability shown on the return to the appropriate
taxing authority.
Section 2.06 Sales, Use, or Property Tax Returns. Sales, Use, or Property
-----------------------------------
Tax Returns and all liability for payment of Sales, Use or Property Tax relating
to the Xxxxxxx Business for all periods shall be the responsibility of the
Xxxxxxx Group. $600,000 of existing Sales Use and Property tax reserves relating
to the Xxxxxxx Group will be transferred to Xxxxxxx.
Section 2.07 Franchise Tax Returns. U.S. state franchise taxes and tax
---------------------
returns for all periods beginning before the Distribution Date shall be the
responsibility of the Xxxxxx Group. Notwithstanding the foregoing, U.S. state
franchise taxes and tax returns for entities formed pursuant to the
Reorganization Agreement shall be the responsibility of the Xxxxxxx Group.
Section 2.08 Tax Packages and Other Information. Xxxxxxx shall provide
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Baxter with: (i) domestic and foreign income tax packages prepared for 1999 and
2000 on a basis consistent with prior treatment, (ii) any and all information,
documentation, working papers and schedules relating to the Xxxxxxx Businesses
and the Xxxxxxx Group reasonably requested by Baxter for use in connection with
the preparation and filing of any Tax Return required to be filed
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by Baxter, and (iii) a reconciliation of book income to U.S. federal taxable
income for the Xxxxxxx Businesses for 1999 and the period January 1, 2000
through the Distribution Date.
Xxxxxxx shall use its best efforts to provide Baxter with such tax
packages, information, documentation, working papers, schedules and book-tax
reconciliation on or before the first day of the fourth month following the end
of the period to which they relate, but in any event shall provide them no
later than the fifteenth day of the sixth month following the end of the period
to which they relate.
Section 2.09. Post-Distribution Date Tax Returns. To the extent not
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covered above, all Tax Returns and liability for payment of Taxes for periods
ending after the Distribution Date shall be the responsibility of the Xxxxxx
Group if such Tax Returns or Taxes relate to Baxter Businesses, and shall be the
responsibility of the Xxxxxxx Group if such Tax Returns or Taxes relate to the
Xxxxxxx Business.
Section 2.10. Allocation of Tax Attributes.
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(a) Foreign Tax Credit Related Items. Earnings and profits and foreign
--------------------------------
taxes paid shall be allocated between Baxter and Xxxxxxx in accordance with
applicable Treasury Regulations as interpreted in good faith by Baxter.
(b) Research Credit Base. For purposes of the research and
--------------------
experimentation tax credit under section 41 of the Code, the parties agree to
allocate a portion of the Xxxxxx Group's gross receipts and qualified research
expenses to the Xxxxxxx Group as set forth in the attached schedule, pursuant to
section 41(f)(3)(B) of the Code. No adjustments or payments shall be made if a
subsequent audit or other event results in a determination that this allocation
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was not correct. Baxter has provided documentation to Xxxxxxx to support such
gross receipts and qualified research expenses, and will provide Xxxxxxx with
access to the original tax packages and Tax Returns as necessary for audit
purposes.
(c) Other Tax Attributes. All other tax attributes of the Xxxxxx Group
--------------------
(including, but not limited to, net operating loss carryforwards) shall remain
with the Xxxxxx Group and shall not be allocated in whole or in part to the
Xxxxxxx Group If pursuant to a Final Determination, any portion of the
consolidated AMT credit or other tax attribute is allocated to Xxxxxxx (the
"Excess Item"), an amount equal to the Excess Item shall be paid by Xxxxxxx to
Baxter at the time of such Final Determination.
Section 2.11. Employee Stock Incentives Other Than Restricted Stock.
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Baxter shall be entitled to all tax deductions arising by reason of any
Disqualifying Disposition by: (i) Baxter Employees of Section 423 Xxxxxxx Stock
or Section 423 Baxter Stock, or (ii) Xxxxxxx Employees of Section 423 Baxter
Stock. Xxxxxxx shall be entitled to all tax deductions arising by reason of any
Disqualifying Disposition by Xxxxxxx Employees of Section 423 Xxxxxxx Stock.
Baxter shall be responsible to make all reports required to be made to the
relevant tax authorities with respect to Disqualifying Dispositions where Baxter
is entitled to the corresponding tax deductions hereunder. Xxxxxxx shall be
responsible to make all reports required to be made to the relevant tax
authorities with respect to Disqualifying Dispositions where Xxxxxxx is entitled
to the corresponding tax deductions hereunder.
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Xxxxxxx shall report to Baxter, in no case later than 30 days after the end
of each calendar month, any Disqualifying Disposition made by Baxter Employees
during such month of Section 423 Xxxxxxx Stock.
Baxter shall be entitled to all tax deductions arising by reason of any
exercises of nonqualified stock options to purchase Baxter shares of stock.
The party entitled to tax deductions under this Section 2.11 shall also be
responsible for any employment related taxes and governmental filings associated
with the tax deduction being claimed.
If, pursuant to a Final Determination, all or any part of a tax deduction
described in this section is disallowed to Baxter, then Xxxxxxx shall reimburse
Baxter for any additional Taxes owed by reason of such disallowance, but only to
the extent that, as a result of such disallowance, Xxxxxxx is allowed a tax
deduction attributable to such Disqualifying Disposition. In such case, Xxxxxxx
shall report the allowed tax deduction and shall reimburse Baxter at the time
Xxxxxxx receives a refund attributable to such deduction or otherwise realizes
the economic benefit thereof.
Section 2.12 Restricted Stock. Baxter shall be entitled to all tax
----------------
deductions arising with respect to the vesting of, or the release of
restrictions upon, on or after the Distribution Date any shares of Baxter
restricted stock which are owned by Baxter Employees or Xxxxxxx Employees.
Section 2.13 Abandoned/Unclaimed Property. Baxter will retain liability
----------------------------
for abandoned and unclaimed property reported to it by Xxxxxxx as of the
Distribution Date in accordance with the Baxter corporate policy for reporting
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unclaimed property. Xxxxxxx will retain liability for abandoned and unclaimed
property of Xxxxxxx not reported to Baxter as of the Distribution Date.
ARTICLE III
TAX DEFICIENCIES AND OVERPAYMENTS
---------------------------------
Section 3.01. General Rule. Except as otherwise provided in this
------------
Agreement, Xxxxxx is responsible for paying all Taxes (and entitled to receive
all refunds and interest) resulting from any adjustment made by any taxing
authority with respect to any Tax Return of Baxter (or any member of the Xxxxxx
Group) in which any member of the Xxxxxxx Group is included.
Pursuant to Sections 3.02 through 3.08 hereof, Baxter is entitled to cash
reimbursements from Xxxxxxx, or must make cash payments to Xxxxxxx, in certain
circumstances described below.
No cash reimbursements or payments are required with respect to adjustments
made by any taxing authority relating to the returns of any member of the
Xxxxxxx Group which do not include Baxter or a member of the Xxxxxx Group.
Section 3.02. Payments by Xxxxxxx.
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(a) U.S. Federal or State Income Tax Adjustments-Pre Distribution Date
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Taxable Periods. To the extent that any IRS Adjustment or similar adjustment by
---------------
a state tax authority of a Tax Return filed by a member of the Xxxxxx Group that
includes any part of the Xxxxxxx Business for taxable periods beginning before
the Distribution Date 1.) results in a Tax Benefit to any member of the Xxxxxxx
Group, or 2.) results in additional Taxes to Baxter and is attributable
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solely to Xxxxxxx failure to provide timely sufficient documentation under
Section 4.03 of this Agreement, Xxxxxxx shall pay Baxter the amount of such Tax
Benefit or additional Taxes as the case may be. Where any such adjustment is
attributable solely to Xxxxxxx failure to provide timely documentation pursuant
to the request of the IRS or any state tax authority, Xxxxxxx shall also pay
Baxter any interest, penalties, or additions to tax attributable to such
adjustment (per Section 3.02(a)(2)). The amount of such Tax Benefit shall be
determined in good faith by Baxter, after consulting with Xxxxxxx.
(b.) U.S. Federal or State Income Tax Adjustments- Post Distribution
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Date Taxable Periods. To the extent that any IRS Adjustment or similar
--------------------
adjustment by a state tax authority of a Tax Return filed by a member of the
Xxxxxx Group for taxable periods ending after the Distribution Date results in a
Tax Benefit to any member of the Xxxxxxx Group. Xxxxxxx shall pay Baxter the
amount of such Tax Benefit. The amount of such Tax Benefit shall be determined
in good faith by Baxter, after consulting with Xxxxxxx.
(c) Other Tax Adjustments-Pre Distribution Date Taxable Periods. If any
------------------------------------------------------------
adjustments (including the filing of an amended return to reflect any such
adjustments) are made by any taxing authority with respect to any Tax Returns
(other than U.S. federal or state income tax returns) of Baxter (or any member
of the Xxxxxx Group) in which any part of the Xxxxxxx Business is included for
taxable periods beginning before the Distribution Date, then to the extent that
such adjustments:
i) are attributable to part of the Xxxxxxx Business; or
ii.) the transfer thereof, and
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iii.) may decrease the net taxable income of, or increase the net taxable loss
or tax credits of, any member of the Xxxxxxx Business for taxable
periods beginning on or after the Distribution Date, and
iv.) result in a greater Tax liability for Baxter or any member of the Xxxxxx
Group (in either case without regard to any offsetting adjustments to
other members of the Xxxxxx Group),
Xxxxxxx and each other member of the Xxxxxxx Group shall pay Baxter the
difference between the Tax liability on the respective Baxter Tax Return before
and after taking into account the adjustment, determined without regard to any
interest, penalties, or additions to tax, unless such interest, penalties, or
additions to tax are attributable to failure to provide timely sufficient
documentation under Section 4.03 of this Agreement by any member of the Xxxxxxx
Group. The amount of such adjustment shall be determined in good faith by
Baxter, after consulting with Xxxxxxx, and be payable under Section 3.02(e)
except for any amounts payable pursuant to Section 3.02(c)(ii) which shall be
payable under Section 3.02(f).
(d) Other Tax Adjustments-Post Distribution Date Taxable Periods. If
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any adjustments (including the filing of an amended return to reflect any such
adjustments) are made by any taxing authority with respect to any Tax Returns
(other than U.S. federal or state income tax returns) of Baxter (or any member
of the Xxxxxx Group) in which any part of the Xxxxxxx Business is included for
taxable periods ending after the Distribution Date, then to the extent that such
adjustments:
i.) are attributable to the transfer of the Xxxxxxx Business; or
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ii.) are attributable to the operations of the Xxxxxxx Business after the
Distribution Date, and
iii.) result in a greater Tax liability for Baxter or any member of the Xxxxxx
Group (in either case without regard to any offsetting adjustments to
other members of the Xxxxxx Group),
Xxxxxxx shall pay Baxter the difference between the Tax liability on the
respective Baxter Tax Return before and after taking into account the
adjustment, determined without regard to any interest, penalties, or additions
to tax. Also, in the event that any joint venture governed by this paragraph is
the subject of an income tax audit, the parties agree to allocate any resulting
taxable income adjustment in proportion to their profit allocation percentages
in the relevant operations. In either case, the amount of such adjustment shall
be determined in good faith by Baxter, after consulting with Xxxxxxx and be
payable under Section 3.02(e) except for any amounts payable pursuant to Section
3.02(d)(i) which shall be payable under Section 3.02(f).
(e) Manner of Payment. If Xxxxxxx shall have any liability as a result
------------------
of this Section 3.02, the amount thereof shall be paid by Xxxxxxx to Baxter
within thirty (30) days after the receipt by Xxxxxxx of written notice of such
liability, together with a computation of the amount due and supporting
documentation in such detail as Xxxxxxx may reasonably request to verify the
computation of the amount due. Baxter may give such written notice to Xxxxxxx
only after a Final Determination has occurred.
(f) Timing of Reimbursement-Exception. Notwithstanding Paragraph
---------------------------------
3.02(e) above, any liability of Xxxxxxx to Baxter arising under Paragraph
3.02(c)(ii) or Paragraph 3.02(d)(i) shall be payable by Xxxxxxx only at such
time as it realizes the economic benefit of any increase in tax basis arising
from
22
the transfer of the Xxxxxxx Business (Basis Increase). For purposes of
determining the amount of any economic benefit (Tax Reduction) under this
Section, Xxxxxxx shall prepare three separate income tax returns for the
jurisdiction in which the relevant Basis Increase is available. One return shall
be prepared in accordance with local law and filed with the local tax
authorities (Actual Return). A proforma return shall be prepared on the same
basis as the Actual Return but which shall also exclude any tax deductions or
credits arising out of tax strategies which occur after the Distribution Date
(such as material changes in accounting policies, changes in capital structure
to increase leverage, and acquisitions or reorganizations which produce tax
deductions greater than their operating income) (First Pro Forma Return).
Another pro forma return shall be prepared on the same basis as the First Pro
Forma Return but which shall also exclude any tax deductions or credits
associated with the Basis Increase (Second Pro Forma Return). The excess of the
tax liability on the Second Pro Forma Return over the tax liability on the First
Pro Forma Return shall be considered as the Tax Reduction under this Section.
The Tax Reduction shall be determined in good faith by Xxxxxxx, after consulting
with Baxter and shall be reimbursed by Xxxxxxx to Baxter within 30 days after
the last extended legal due date for filing of the Actual Return. Xxxxxxx'
liability to Baxter hereunder shall continue until the Basis Increase no longer
constitutes an allowable deduction for tax purposes in the relevant
jurisdiction.
The delayed timing of reimbursement provided by this Section as an
exception to Section 3.02(e) shall apply only to those Tax liabilities otherwise
subject to reimbursement hereunder which individually (i.e. on a per country
basis) exceed $3,000,000.
Section 3.03. Payments by Baxter. (a) U.S. Federal or State Income Tax
------------------ --------------------------------
Adjustments. To the extent that any IRS Adjustment or similar adjustment by a
-----------
state tax authority of a Tax Return filed by a member of the Xxxxxx Group
23
that includes any part of the Xxxxxxx Business for taxable periods beginning
before the Distribution Date results in a Tax Detriment to any member of the
Xxxxxxx Group, Baxter shall remit to Xxxxxxx the amount of such Tax Detriment,
determined without regard to any interest, penalties, or additions to tax. The
amount of such Tax Detriment shall be determined in good faith by Baxter, after
consulting with Xxxxxxx.
(b) Other Tax Adjustments-Pre Distribution Date Taxable Periods. If any
-----------------------------------------------------------
adjustments (including the filing of an amended return to reflect any such
adjustments) are made by any taxing authority with respect to any Tax Returns
(other than U.S. federal or state tax returns) of Baxter (or any member of the
Xxxxxx Group) in which any part of the Xxxxxxx Business is included for taxable
periods beginning before the Distribution Date, then to the extent that such
adjustments are attributable to part of the Xxxxxxx Business;
i) result in a reduced Tax liability for Baxter (without regard to any
offsetting adjustments to other members of the Xxxxxx Group),and
ii.) may increase the net taxable income of, or decrease the net taxable loss or
tax credits of, any member of the Xxxxxxx Business for taxable periods
beginning on or after the Distribution Date,
then Baxter shall pay to Xxxxxxx the difference between the Tax liability on the
respective Tax Return before and after taking into account the adjustment,
determined without regard to any interest, penalties, or additions to tax. The
amount of such adjustment shall be determined in good faith by Baxter, after
consulting with Xxxxxxx.
24
(c) Other Income Tax Adjustments- Brazil. Notwithstanding Section 3.04,
------------------------------------
if any adjustments (including the filing of an amended return to reflect any
such adjustments) are made by Brazilian taxing authorities with respect to
income Tax Returns of Baxter Participacoes e Commercial Ltda. (Brazil) or Macchi
Engenharia Ltda. or their successors for taxable periods up to the Distribution
Date; such adjustments do not result in a Tax Benefit to Xxxxxxx; and such
adjustments exceed the total net operating losses available for carryforward
against such adjustments, Baxter will pay to Xxxxxxx an amount equal to the
product of: 1.) the excess of such adjustments over the net operating loss
carryforwards and 2.) the statutory tax rate in Brazil in effect for the taxable
period in which such adjustments exceed the net operating loss carryforwards.
(d) Manner of Payment. Baxter shall pay amounts due from it to Xxxxxxx
-----------------
as a result of this Section 3.03 within thirty (30) days after a Final
Determination. Such payments shall be accompanied by a computation of the amount
due and supporting documentation in such detail as Baxter may reasonably request
to verify the computation of the amount due.
Section 3.04 Manner of Payments-Legal Entities. Any reimbursements
---------------------------------
made pursuant to this Article III with respect to income tax liabilities shall
be made between the legal entities of Xxxxxx International Inc. and Xxxxxxx
Lifesciences Corporation (including their respective successors, if any) and
shall be considered as an adjustment to the assets transferred to Xxxxxxx
Lifesciences Corporation by Xxxxxx International Inc. pursuant to the
Reorganization Agreement.
Section 3.05. Transaction Taxes. Except as otherwise provided in this
-----------------
Agreement, Xxxxxxx is responsible for the payment of all Transaction Taxes,
25
provided however that patent, copyright and trademark transfer taxes and
recording fees shall be the responsibility of Baxter.
Section 3.06. Puerto Rico Filing Obligations. During the course of
------------------------------
preparing for the Distribution, Baxter and Xxxxxxx became aware of heretofore
unsatisfied filing obligations with respect to the operations of Xxxxxxx
perfusion business in Puerto Rico. The purpose of this Section 3.06 is to
allocate responsibility between Xxxxxxx and Baxter for such filing obligations
and associated taxes.
(a) Xxxxxxx will prepare local Tax Returns for its perfusion business in
Puerto Rico, pay the appropriate taxes, interest and penalties, if any, to
Puerto Rico and provide Baxter with copies of the local Tax Returns and
underlying documentation. Xxxxxxx shall file such returns within 6 months
following the Distribution Date.
(b) Baxter will refund to Xxxxxxx any increase in foreign tax credits
(Extra Credits) allowable to Baxter as a result of taxes paid pursuant to the
local Tax Returns prepared by Xxxxxxx under Section 3.06(a).
(c) Any amounts payable by Baxter hereunder shall be paid to Xxxxxxx
within seven months after Xxxxxxx files related Tax Returns under Section
3.06(a).
(d) Xxxxxxx and Baxter agree to share equally professional fees incurred
in the preparation of local Tax Returns under Section 3.05(a) above.
(e) If, pursuant to a Final Determination, any Extra Credits are
disallowed to Baxter on the basis that the Extra Credits are attributable to
Xxxxxxx,
26
Xxxxxxx shall reimburse Baxter an amount equal to the Extra Credits so
disallowed within 30 days after the related Final Determination.
Section 3.07 Harbor Maintenance Taxes Baxter and Xxxxxxx agree to
------------------------
cooperate with each other in filing for refund claims to which they may be
entitled with respect to Harbor Maintenance Taxes. Any refunds received pursuant
to such claims shall be allocated to Baxter and CVG in proportion to their
respective original tax payments with respect to which the refund claims are
allowed.
Section 3.08. No Other Payments. Anything to the contrary notwithstanding,
-----------------
except as provided in this Article III or the Reorganization Agreement, no
member of the Xxxxxxx Group shall be entitled to any payment from any member of
the Xxxxxx Group, and no member of the Xxxxxx Group shall be entitled to any
payment from any member of the Xxxxxxx Group, as a result of any IRS Adjustment
or adjustment by any other taxing authority.
ARTICLE IV
TAX AUDITS AND ADMINISTRATIVE MATTERS
-------------------------------------
Section 4.01. Tax Audits and Controversies. (a) U.S. Federal Income Taxes.
---------------------------- -------------------------
Except as otherwise provided in this Section 4.01, Baxter shall have the
exclusive authority and obligation to represent each member of the Xxxxxxx Group
before the IRS or any other governmental agency or authority or before any court
with respect to any matter affecting the U.S. federal income tax liability of
any member of either the Xxxxxx Group or the Xxxxxxx Group for any tax period
beginning before the Distribution Date, in each such case (i) consulting with
Xxxxxxx with regard to any such administrative or judicial proceeding and any
proposed compromise or settlement thereof, and (ii) acting in good faith.
27
Such representation shall include, but shall not be limited to exclusive control
over (i) any response to any examination by the IRS of U.S. federal income Tax
Returns and (ii) any contest through a Final Determination of any issue included
in any U.S. federal income Tax Return that includes a member of the Xxxxxx
Group, including, but not limited to (A) whether and in what forum to conduct
such contest, and (B) whether and on what basis to settle such contest.
Baxter shall give timely notice to Xxxxxxx of any inquiry, the assertion
of any claim or the commencement of any suit, action or proceeding in respect of
which any member of the Xxxxxxx Group may incur any then known (by Baxter)
future U.S. federal income Tax liability or in respect of which indemnity for
U.S. federal corporate income taxes may be sought under this Agreement against
Xxxxxxx or any member of the Xxxxxxx Group and will give Xxxxxxx such
information with respect thereto as Xxxxxxx may reasonably request.
(b) Other Taxes. Except as otherwise provided in this Section 4.01,
------------
the party responsible for filing any Tax Return (other than U.S. federal income
Tax Returns) pursuant to Sections 2.03 through 2.07 hereof shall, at its own
expense, have the exclusive authority to represent each member of the Xxxxxx
Group and of the Xxxxxxx Group before any governmental agency or authority or
before any court with respect to any matter affecting the Tax liability of 1.)
any member of either the Xxxxxx Group or the Xxxxxxx Group for any tax period
beginning before the Distribution Date and ending after the Distribution Date
and 2.) any member of the Baxter group which includes part of the Xxxxxxx
Business for periods after the Distribution Date, in each case (i) consulting
with the other group and the other group's tax counsel with regard to any such
administrative or judicial proceeding and any proposed compromise or settlement
thereof, and (ii) acting in good faith. The Xxxxxx Group shall have, at its own
expense, the exclusive authority as described above to represent each member of
the Xxxxxxx Group for periods ending on or before the Distribution Date.
However,
28
with respect to taxable periods after the Distribution Date Xxxxxx'x actions
under this Section 4.01 shall be subject to dispute resolution under Section
5.10.
Section 4.02. Retention of Books and Records. In accordance with
-------------------------------
Xxxxxx'x records retention guidelines as of the date hereof, Xxxxxxx will retain
(for 10 years or longer as required) all information with respect to Baxter in
the possession of any member of the Xxxxxxx Group on the Distribution Date which
is needed to support Tax Returns and Tax audits. Xxxxxxx shall ensure that it
retains access to any equipment necessary to read any of the information to be
retained by Xxxxxxx pursuant to this section 4.02. Xxxxxxx will provide Baxter
(and afford Baxter full access to, and the right to inspect and copy at any
reasonable time) such information and use of such equipment upon Xxxxxx'x
reasonable request, at no cost to Baxter (other than reasonable out-of-pocket
expenses of Xxxxxxx). At the expiration of the applicable records retention
period, Xxxxxxx may dispose of the information upon prior notice to Baxter. For
a period of 45 days immediately following such notice, Baxter shall have the
right to remove and take title to all such information (in any form including,
without limitation, books, records, computer tapes, and computer disks).
This section 4.02 is in addition to any records retention requirements
contained in the Reorganization Agreement. In the event of any conflict, the
provisions of this Tax Sharing Agreement shall govern.
Section 4.03. Cooperation regarding Return Filing, Examinations and
-----------------------------------------------------
Controversies. (a) Xxxxxxx Obligations. In addition to any obligations
-------------- --------------------
imposed pursuant to the Reorganization Agreement, Xxxxxxx and each other member
of the Xxxxxxx Group shall fully cooperate with Baxter and its representatives,
in a prompt and timely manner, in connection with the preparation and filing of
and any inquiry, audit, examination, investigation, dispute, or litigation
involving any Tax Return filed or required to be filed by or
29
for any member of the Xxxxxx Group for any taxable period beginning before the
Distribution Date, and relating to issues involving the Xxxxxxx Business. Such
cooperation shall include, but not be limited to, making available to Baxter,
during normal business hours, and within thirty (30) days after any request
therefor, all books, records and information, and the assistance of all officers
and employees, necessary or useful in connection with any tax inquiry, audit,
examination, investigation, dispute, litigation, or any other matter. Baxter and
Xxxxxxx will share on an equitable basis professional fees with respect to
audits of post Distribution Date taxable periods of any Baxter legal entity that
includes part of the Xxxxxxx Business. The sharing shall be based upon the
proportionate amount of professional time spent on matters relating to the
Xxxxxxx Business.
Xxxxxxx agrees on behalf of itself and each member of the Xxxxxxx Group
to execute and deliver to Baxter, when so requested by Baxter, any power of
attorney required to allow Baxter and its counsel to represent Xxxxxxx or such
other Xxxxxxx Group member in any controversy which Baxter shall have the right
to control pursuant to the terms of Section 4.01 of this Agreement.
(b) Xxxxxx'x Obligations. In addition to any obligations imposed
---------------------
pursuant to the Reorganization Agreement, Baxter shall fully cooperate with
Xxxxxxx and its representatives, in a prompt and timely manner, in connection
with (i) the preparation and filing of and (ii) any inquiry, audit, examination,
investigation, dispute, or litigation involving, any Tax Return filed or
required to be filed by or for any member of the Xxxxxxx Group. Such
cooperation shall include, but not be limited to, making available to Xxxxxxx,
during normal business hours, and within thirty (30) days after any request
therefor, all books, records and information, and the assistance of all officers
and employees, necessary or useful in connection with any tax inquiry, audit,
examination, investigation, dispute, litigation or any other matter.
30
Baxter agrees on behalf of itself and each member of the Xxxxxx Group to
execute and deliver to Xxxxxxx, when so requested by Xxxxxxx, any power of
attorney required to allow Xxxxxxx and its counsel to represent Baxter or such
other Xxxxxx Group member in any controversy which Xxxxxxx shall have the right
to control pursuant to the terms of Section 4.01(b) of this Agreement.
(c) Remedy for Failure to Comply. If Baxter reasonably determines
-----------------------------
that Xxxxxxx is not for any reason fulfilling its obligations under Section 4.03
(a), or if Xxxxxxx reasonably determines that Baxter is not for any reason
fulfilling its obligations under Section 4.03(b), then Baxter or Xxxxxxx, as the
case may be, shall have the right to appoint, at the expense of the other, an
independent entity such as a nationally-recognized public accounting firm to
assist the other in meeting its obligations under this Section 4.03. Such
entity shall have complete access to all books, records and information, and the
complete cooperation of all officers and employees, of Xxxxxxx or Baxter, as the
case may be.
Section 4.04. Interest on Late Payments. Any amount payable under
--------------------------
this Agreement by Xxxxxxx to Baxter, or by Baxter to Xxxxxxx, shall (if not paid
within ten (10) business days after the due date specified in this Agreement)
bear interest from such due date until the date paid, at the rate of one percent
(1%) per month, or portion thereof, until received.
Section 4.05. Character and Effect of Payments. All amounts paid
---------------------------------
pursuant to this Agreement by one party to another party (other than interest
payable under Section 4.04, above) shall be treated by such parties as
intercompany settlements or liabilities existing on the Distribution Date for
income tax and other tax purposes.
31
Section 4.06. Agency. It is understood and acknowledged that in
-------
accordance with Reg. 1.1502-77, Baxter shall be the agent for the Xxxxxx Group
(including the Xxxxxxx Group with respect to taxable years ending on or before
the Distribution Date) with respect to all matters referred to therein.
ARTICLE V
MISCELLANEOUS
-------------
Section 5.01. Severability. In case any one or more of the
-------------
provisions contained in this Agreement should be invalid, illegal or
unenforceable, the enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
Section 5.02. Modification of Agreement. No modification, amendment
--------------------------
or waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by each of the parties hereto and then such
modification, amendment or waiver shall be effective only in the specific
instance and for the purpose for which given.
Section 5.03. Conflict with the Reorganization Agreement or Other
---------------------------------------------------
Tax Agreements. Anything in the Reorganization Agreement to the contrary
---------------
notwithstanding, in the event and to the extent that there shall be a conflict
between the provisions of this Agreement and the Reorganization Agreement or any
other agreement, the provisions of this Agreement shall control. This Agreement
supersedes any tax sharing, tax indemnity or similar agreement that may have
previously existed between any member of the Xxxxxx Group and any member of the
Xxxxxxx Group.
32
Section 5.04. Notices. All notices or other communications
--------
required or permitted under this Agreement shall be delivered by hand, mailed by
certified or registered mail, postage prepaid and return receipt requested, or
sent by cable, telegram, telex or telecopy (confirmed by regular, first-class
mail), to the parties at the following addresses (or at such other addresses for
a party as shall be specified by like notice) and shall be deemed given on the
date on which such notice is received:
(a) In the case of Baxter, to:
Xxxxxx International Inc.
Xxx Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Vice President - Taxes
(b) In the case of Xxxxxxx, to:
Xxxxxxx Lifesciences Corporation
00000 Xxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Vice President or Director - Taxes
Section 5.05. Application to Present and Future Subsidiaries. This
-----------------------------------------------
Agreement is being entered into by Baxter and Xxxxxxx on behalf of themselves
and each member of the Xxxxxx Group and the Xxxxxxx Group, respectively. This
Agreement shall constitute a direct obligation of each such member and shall be
deemed to have been readopted and affirmed on behalf of any corporation which
becomes a member of the Xxxxxx Group or the Xxxxxxx Group in the future. Baxter
and Xxxxxxx hereby guarantee the performance of
33
all actions, agreements and obligations provided for under this Agreement of
each member of the Xxxxxx Group and the Xxxxxxx Group, respectively. Baxter and
Xxxxxxx shall, upon the written request of the other, cause any of their
respective group members formally to execute this Agreement. This Agreement
shall be binding upon, and shall inure to the benefit of, the successors,
assigns and persons controlling any of the corporations bound hereby.
Section 5.06. Term. This Agreement shall commence on the date of
-----
execution indicated above and shall continue in effect until otherwise agreed to
in writing by Baxter and Xxxxxxx, or their successors.
Section 5.07. Titles and Headings. Titles and headings to sections
--------------------
herein are inserted for the convenience of reference only and are not intended
to be a part of to affect the meaning or interpretation of this Agreement.
Section 5.08. Singular and Plural. As used herein, the singular
--------------------
shall include the plural and vice versa.
Section 5.09. Governing Law. This Agreement shall be governed by
--------------
the laws of the state of Illinois, without regard to the principles of conflicts
of laws thereof.
Section 5.10 Dispute Resolution. Dispute Resolution under this Tax
-------------------
Sharing Agreement shall be governed by the provisions of Article XVI of the
Reorganization Agreement.
Section 5.11. Counterparts. This Agreement may be executed in one
-------------
or more counterparts, all of which shall be considered one and the same
34
agreement, and shall become a binding agreement when one or more counterparts
have been signed by each party and delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year first
above written.
XXXXXX INTERNATIONAL INC.
By:____________________________
Its
Xxxxxxx Lifesciences Corporation
By________________________
Its
35
