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EXHIBIT 2.11
K&L DRAFT: 11/9/00
TAX SHARING AND INDEMNIFICATION AGREEMENT,
dated as of September 29, 2000
between
MRV COMMUNICATIONS, INC.
and
OPTICAL ACCESS, INC.
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS -....................................................................1
"AFFILIATED PERSON"..................................................................2
"ASSOCIATES".........................................................................2
"AUDIT"..............................................................................2
"CODE"...............................................................................2
"COMBINED GROUP".....................................................................2
"COMBINED RETURN"....................................................................2
"CONSOLIDATED GROUP".................................................................2
"CONSOLIDATED RETURN"................................................................2
"ESTIMATED TAX INSTALLMENT DATE".....................................................2
"FEDERAL INCOME TAX".................................................................3
"FEDERAL TAX"........................................................................3
"FINAL DETERMINATION"................................................................3
"GROSS ASSET VALUE"..................................................................3
"GROUP"..............................................................................3
"INCOME TAX".........................................................................3
"INTEREST ACCRUAL PERIOD"............................................................3
"IPO"................................................................................3
"MRV AFFILIATE"......................................................................3
"MRV GROUP"..........................................................................3
"MASTER SEPARATION AGREEMENT"........................................................4
"NON-FEDERAL COMBINED TAX"...........................................................4
"NON-FEDERAL SEPARATE TAX"...........................................................4
"NON-FEDERAL SEPARATE TAX RETURN"....................................................4
"NON-FEDERAL TAX"....................................................................4
"OPTICAL ACCESS AFFILIATE"...........................................................4
"OPTICAL ACCESS BUSINESS"............................................................4
"OPTICAL ACCESS GROUP"...............................................................4
"OPTICAL ACCESS GROUP COMBINED RETURNS"..............................................4
"OPTICAL ACCESS GROUP COMBINED TAX LIABILITY"........................................4
"OPTICAL ACCESS GROUP CONSOLIDATED RETURNS"..........................................4
"OPTICAL ACCESS GROUP FEDERAL INCOME TAX LIABILITY"..................................4
"OPTICAL ACCESS GROUP FEDERAL INCOME TAXES"..........................................5
"OPTICAL ACCESS GROUP NON-FEDERAL COMBINED TAXES"....................................5
"OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE RETURNS"..................................5
"OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAX LIABILITY"............................5
"OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAXES"....................................5
"PAYMENT PERIOD".....................................................................5
"PERSON".............................................................................5
"POST-SEPARATION PERIOD".............................................................5
"PRE-SEPARATION PERIOD"..............................................................5
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"PRIVILEGE"..........................................................................5
"PRO FORMA OPTICAL ACCESS GROUP COMBINED RETURN".....................................5
"PRO FORMA OPTICAL ACCESS GROUP CONSOLIDATED RETURN".................................5
"PRO FORMA OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAX RETURNS"....................6
"RETAINED BUSINESS"..................................................................6
"SEPARATE RETURN"....................................................................6
"SEPARATION".........................................................................6
"SEPARATION DATE"....................................................................6
"SEPARATION TAX".....................................................................6
"SERVICE"............................................................................6
"STRADDLE PERIOD"....................................................................6
"TAX"................................................................................6
"TAX ASSET"..........................................................................6
"TAX AUTHORITY"......................................................................6
"TAX ITEM"...........................................................................7
"TAX PERIOD".........................................................................7
"TAX RETURN".........................................................................7
"TREASURY REGULATIONS"...............................................................7
SECTION 2. PREPARATION AND FILING OF TAX RETURNS............................................7
2.1 IN GENERAL........................................................................7
2.2 MANNER OF PREPARING AND FILING TAX RETURNS........................................7
2.3 AGENT.............................................................................8
SECTION 3. PAYMENT OF TAXES TO TAX AUTHORITIES..............................................8
3.1 FEDERAL INCOME TAXES..............................................................8
3.2 NON-FEDERAL COMBINED TAXES........................................................8
3.3 NON-FEDERAL SEPARATE TAXES........................................................8
3.4 OTHER FEDERAL TAXES...............................................................8
SECTION 4. ALLOCATION OF TAXES..............................................................8
4.1 OPTICAL ACCESS LIABILITY FOR FEDERAL INCOME TAXES AND NON-FEDERAL COMBINED
TAXES....................................................................................8
4.2 OPTICAL ACCESS GROUP FEDERAL INCOME TAX LIABILITY.................................9
4.3 OPTICAL ACCESS GROUP COMBINED TAX LIABILITY.......................................9
4.4 OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAX LIABILITY..........................10
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4.5 COOPERATION......................................................................10
4.6 TAX SHARING INSTALLMENT PAYMENTS.................................................10
4.7 TAX SHARING TRUE UP PAYMENTS.....................................................11
4.8 REDETERMINATION AMOUNTS..........................................................11
SECTION 5. ADDITIONAL OBLIGATIONS..........................................................12
5.1 PROVISION OF INFORMATION AND MUTUAL COOPERATION..................................12
5.2 INDEMNIFICATION..................................................................13
5.3 TAX CONSEQUENCES OF PAYMENTS.....................................................14
5.4 INTEREST.........................................................................14
5.5 OUTSIDE FEES.....................................................................14
SECTION 6. AUDITS..........................................................................14
6.1 IN GENERAL.......................................................................15
6.2 NOTICE...........................................................................15
6.3 FAILURE TO NOTIFY................................................................15
6.4 REMEDIES.........................................................................15
SECTION 7. IPO.............................................................................15
7.1 IPO RELATED ITEMS................................................................15
7.2 TAX REPORTING OF IPO RELATED ITEMS...............................................16
7.3 AUDITS RELATING TO SEPARATION....................................................16
7.4 PROVISION OF INFORMATION AND MUTUAL COOPERATION..................................16
7.5 PRESS RELEASES...................................................................16
SECTION 8. MISCELLANEOUS...................................................................17
8.1 EFFECTIVENESS....................................................................17
8.2 NOTICES..........................................................................17
8.3 CHANGES IN LAW...................................................................17
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8.4 SUCCESSORS AND ASSIGNS...........................................................17
8.5 AUTHORIZATION, ETC...............................................................17
8.6 COMPLETE AGREEMENT...............................................................18
8.7 INTERPRETATION...................................................................18
8.8 GOVERNING LAW....................................................................18
8.9 COUNTERPARTS.....................................................................18
8.10 LEGAL ENFORCEABILITY.............................................................18
8.11 NO THIRD PARTY BENEFICIARIES.....................................................18
8.12 JURISDICTION; FORUM..............................................................18
8.13 AMENDMENT AND MODIFICATION.......................................................19
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TAX SHARING AND INDEMNIFICATION AGREEMENT
TAX SHARING AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as
of September 29, 2000, by and among MRV Communications, Inc. ("MRV"), a Delaware
corporation, and Optical Access, Inc. ("Optical Access"), a Delaware corporation
and wholly owned subsidiary of MRV.
RECITALS
WHEREAS, MRV is the common parent corporation of an affiliated group of
corporations within the meaning of Section 1504(a) of the Code (as defined
herein) and of consolidated, combined, unitary and other similar groups as
defined under similar laws of other jurisdictions, and Optical Access and
certain Optical Access Affiliates (as defined herein) are members of such
groups;
WHEREAS, the groups of which MRV is the common parent and Optical Access
and the Optical Access Affiliates are members file or intend to file
Consolidated Returns, Combined Returns and Separate Returns (as defined herein);
WHEREAS, in addition to its other businesses, MRV has been engaged
through Optical Access and its various subsidiaries and divisions in the Optical
Access Business (as defined herein);
WHEREAS, the Boards of Directors of MRV and Optical Access have each
determined that it would be appropriate and desirable for MRV to contribute and
transfer to Optical Access, and for Optical Access to receive and assume,
directly or indirectly, the assets and liabilities (including contingent
liabilities) of MRV and its Subsidiaries associated with the Optical Access
Business to the extent not contributed and transferred to Optical Access prior
to the date hereof (the "Separation");
WHEREAS, MRV and Optical Access currently contemplate that, following
the Separation, Optical Access will make an initial public offering ("IPO") of
an amount of its common stock pursuant to a registration statement on Form S-1
under the Securities Act of 1933, as amended that will reduce MRV's ownership
interest in Optical Access to not less than 80.1% of the outstanding common
stock of Optical Access; and
WHEREAS, it is appropriate and desirable to set forth the principles and
responsibilities of the parties to this Agreement regarding the allocation of
Taxes (as defined herein) and other related liabilities and adjustments with
respect to Taxes, Audits (as defined herein) and other related Tax matters.
NOW, THEREFORE, in consideration of the premises or promises and the
mutual covenants contained herein and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS - Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Master Separation Agreement (as
defined herein). As
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used in this Agreement, capitalized terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined).
"AFFILIATED PERSON" has the meaning ascribed to such term in the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated
thereunder.
"ASSOCIATES" has the meaning ascribed to such term in the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"AUDIT" includes any audit, assessment of Taxes, other examination by any Tax
Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether
administrative or judicial (including without limitation any determination with
respect to a claim for refund).
"BENEFICIAL OWNERSHIP" has the meaning ascribed to such term in the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
"CODE" means the United States Internal Revenue Code of 1986, as amended, or any
successor statute.
"COMBINED GROUP" means a group of corporations or other entities that files a
Combined Return or a corporation or other entity that files a Combined Return
described in clause (ii) or clause (iii) of the definition of "Combined Return."
"COMBINED RETURN" means any Tax Return with respect to Non-Federal Taxes (i)
filed on a consolidated, combined (including nexus combination, worldwide
combination, domestic combination, line of business combination or any other
form of combination) or unitary basis wherein Optical Access or one or more
Optical Access Affiliates join in the filing of such Tax Return (for any taxable
period or portion thereof) with MRV or one or more MRV Affiliates, (ii) filed on
a separate basis that includes Tax Items relating to, or arising from, both the
Optical Access Business and the Retained Business, or (iii) pursuant to which
Tax Items or Tax Assets of (A) MRV (or any MRV Affiliate) are included on a
separate Tax Return of Optical Access (or any Optical Access Affiliate) or (B)
Optical Access (or any Optical Access Affiliate) are included on a separate Tax
Return of MRV (or any MRV Affiliate).
"CONSOLIDATED GROUP" means an affiliated group of corporations within the
meaning of Section 1504(a) of the Code that files a Consolidated Return.
"CONSOLIDATED RETURN" means any Tax Return with respect to Federal Income Taxes
filed on a consolidated basis wherein Optical Access or one or more Optical
Access Affiliates join in the filing of such Tax Return (for any taxable period
or portion thereof) with MRV or one or more MRV Affiliates.
"ESTIMATED TAX INSTALLMENT DATE" means, in the case of Federal Income Tax, the
installment due dates prescribed in Section 6655(c) of the Code (presently April
15, June 15, September 15 and December 15) together with due date for applying
for an extension of time to file a return prescribed in Section 6072 of the Code
or such other dates as may be prescribed by relevant provisions by statute or
regulation with respect to other Federal and Non-Federal Taxes.
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"FEDERAL INCOME TAX" means any Tax imposed under Subtitle A of the Code or any
other provision of United States federal Income Tax law (including the Taxes
imposed by Sections 11, 55, 59A, and 1201(a) of the Code), and any interest,
additions to Tax or penalties applicable or related thereto.
"FEDERAL TAX" means any Tax imposed under the Code or otherwise under United
States federal Tax law.
"FINAL DETERMINATION" means the final resolution of any Tax (or other matter)
for a taxable period, including related interest or penalties, that, under
applicable law, is not subject to further appeal, review or modification through
proceedings or otherwise, including (1) by the expiration of a statute of
limitations or a period for the filing of claims for refunds, amending Tax
Returns, appealing from adverse determinations, or recovering any refund
(including by offset), (2) by a decision, judgment, decree, or other order by a
court of competent jurisdiction, which has become final and unappealable, (3) by
a closing agreement or an accepted offer in compromise under Section 7121 or
7122 of the Code, or comparable agreements under laws of other jurisdictions,
(4) by execution of an Internal Revenue Service Form 870 or 870AD, or by a
comparable form under the laws of other jurisdictions (excluding, however, with
respect to a particular Tax Item for a particular taxable period any such form
that reserves (whether by its terms or by operation of law) the right of the
taxpayer to file a claim for refund and/or the right of the Tax Authority to
assert a further deficiency with respect to such Tax Item for such period), or
(5) by any allowance of a refund or credit, but only after the expiration of all
periods during which such refund or credit may be recovered (including by way of
offset).
"GROSS ASSET VALUE" means, when used with respect to a specified Person, the
fair market value of such Person's assets unencumbered by any liabilities.
"GROUP" means either the MRV Group or the Optical Access Group, as the context
provides.
"INCOME TAX" means (a) any Tax based upon, measured by, or calculated with
respect to (1) net income or profits (including, without limitation, any capital
gains Tax, minimum Tax and any Tax on items of Tax preference, but not including
sales, use, real or personal property, gross or net receipts, transfer or
similar Taxes) or (2) multiple bases if one or more of the bases upon which such
Tax may be based, measured by, or calculated with respect to, is described in
clause (1) above, or (b) any United States state or local franchise Tax.
"INTEREST ACCRUAL PERIOD" has the meaning set forth in Section 6.4 of this
Agreement.
"IPO" has the meaning set forth in the Recitals.
"MRV AFFILIATE" means any corporation or other entity in which MRV owns more
than fifty percent (50%) of the total combined voting power (at any time after
the completion of the Separation), other than Optical Access or any Optical
Access Affiliate.
"MRV GROUP" means the affiliated group of corporations as defined in Section
1504(a) of the Code, or similar group of entities as defined under corresponding
provisions of the laws of other jurisdictions, of which MRV is the common
parent, and any corporation or other entity which is
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a member of such group for the relevant taxable period or portion thereof, but
excluding any member of the Optical Access Group.
"MASTER SEPARATION AGREEMENT" means the Master Separation Agreement, dated as of
____________, 2000 by and between MRV and Optical Access.
"NON-FEDERAL COMBINED TAX" means any Non-Federal Tax with respect to which a
Combined Return is filed.
"NON-FEDERAL SEPARATE TAX" means any Non-Federal Tax other than a Non-Federal
Combined Tax.
"NON-FEDERAL SEPARATE TAX RETURN" means any Tax Return filed with respect to
Non-Federal Separate Taxes.
"NON-FEDERAL TAX" means any Tax other than a Federal Tax.
"OPTICAL ACCESS AFFILIATE" means any corporation or other entity in which
Optical Access owns at least fifty percent (50%) of the total combined voting
power (at any time after the completion of the Separation).
"OPTICAL ACCESS BUSINESS" has the meaning set forth in the Master Separation
Agreement.
"OPTICAL ACCESS GROUP" means the affiliated group of corporations as defined in
Section 1504(a) of the Code, or similar group of entities as defined under
corresponding provisions of the laws of other jurisdictions following the
completion of the Separation, of which Optical Access would be the common parent
if it were not a subsidiary of MRV, and any corporation or other entity which
would be a member of such group for the relevant taxable period or portion
thereof.
"OPTICAL ACCESS GROUP COMBINED RETURNS" means, any tax return with respect to
Non-Federal Taxes filed on a consolidated, combined (including nexus
combination, worldwide combination, domestic combination, line of business
combination or any other form of combination) or unitary basis wherein Optical
Access and one or more Optical Access Affiliates join in the filing of such Tax
Return.
"OPTICAL ACCESS GROUP COMBINED TAX LIABILITY" means, with respect to any taxable
period, the Optical Access Group's liability for Non-Federal Combined Taxes as
determined under Section 4.3 of this Agreement.
"OPTICAL ACCESS GROUP CONSOLIDATED RETURNS" means, any Tax Return with respect
to Federal Income Taxes filed on a consolidated basis wherein Optical Access and
one or more Optical Access Affiliates join in the filing of such Tax Return (for
any taxable period or portion thereof).
"OPTICAL ACCESS GROUP FEDERAL INCOME TAX LIABILITY" means, with respect to any
taxable period, the Optical Access Group's liability for Federal Income Taxes as
determined under Section 4.2 of this Agreement.
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"OPTICAL ACCESS GROUP FEDERAL INCOME TAXES" means, means any Tax imposed under
Subtitle A of the Code or any other provision of United States federal Income
Tax law (including the Taxes imposed by Sections 11, 55, 59A, and 1201(a) of the
Code), and any interest, additions to Tax or penalties applicable or related
thereto that are assessed against Optical Access or any Optical Access
Affiliate.
"OPTICAL ACCESS GROUP NON-FEDERAL COMBINED TAXES" means, any Non-Federal Tax
with respect to which a Combined Return is filed by the Optical Access Group.
"OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE RETURNS" means, any tax return filed
with respect to Non-Federal Separate Taxes by Optical Access or any member of
the Optical Access Group.
"OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAX LIABILITY" means, with respect to
any taxable period, the Optical Access Group's liability for Non-Federal
Separate Taxes as determined under Section 4.4 of this Agreement.
"OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAXES" means, any Non-Federal Tax
other than a Non-Federal Combined Tax assessed again Optical Access or any
member of the Optical Access Group.
"PAYMENT PERIOD" has the meaning set forth in Section 5.4 of this Agreement.
"PERSON" means any natural person, corporation, limited liability company,
business trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
"POST-SEPARATION PERIOD" means any taxable period with respect to a Consolidated
Return or Combined Return, as the case may be, beginning after the Separation
Date.
"PRE-SEPARATION PERIOD" means any taxable period with respect to a Consolidated
Return or Combined Return, as the case may be, beginning and ending on or before
the Separation Date.
"PRIVILEGE" means any privilege that may be asserted under applicable law
including, any privilege arising under or relating to the attorney-client
relationship (including the attorney-client and work product privileges), the
accountant-client privilege, and any privilege relating to internal evaluation
processes.
"PRO FORMA OPTICAL ACCESS GROUP COMBINED RETURN" means a pro forma Non-Federal
Combined Tax return or other schedule prepared pursuant to Section 4.3 of this
Agreement.
"PRO FORMA OPTICAL ACCESS GROUP CONSOLIDATED RETURN" means a pro forma
consolidated Federal Income Tax return or other schedule prepared pursuant to
Section 4.2 of this Agreement.
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"PRO FORMA OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAX RETURNS" means a pro
forma Non-Federal Separate Tax return or other schedule prepared pursuant to
Section 4.4 of this Agreement.
"RETAINED BUSINESS" means all lines of business retained by MRV following any
Separation.
"SEPARATE RETURN" means any Tax Return with respect to Non-Federal Separate
Taxes filed by MRV, Optical Access, or any of their respective affiliates.
"SEPARATION" has the meaning set forth in the Recitals.
"SEPARATION DATE" has the meaning set forth in the Master Separation Agreement.
"SEPARATION TAX" means any Tax (net of any current benefit arising from any Tax
Asset) resulting from the Separation imposed upon MRV or any MRV Affiliate or
Optical Access or any Optical Access Affiliate; provided that, such term shall
not refer to the collateral Tax effects of the Separation (including, without
limitation, relating to the tax basis of assets comprising the Optical Access
Business or the amount, if any, of Tax Assets or earnings and profits of Optical
Access or any Optical Access Affiliate following the Separation).
"SERVICE" means the Internal Revenue Service or any successor agency or
authority.
"STRADDLE PERIOD" means any taxable period with respect to a Consolidated
Return, Combined Return or Separate Return, as the case may be, beginning on or
before the Separation Date and ending after the Separation Date.
"TAX" means any charges, fees, levies, imposts, duties, or other assessments of
a similar nature, including income, alternative or add-on minimum, gross
receipts, profits, lease, service, service use, wage, wage withholding,
employment, workers compensation, business occupation, occupation, premiums,
environmental, estimated, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, occupation, windfall profits, withholding,
social security, unemployment, disability, ad valorem, highway use, commercial
rent, capital stock, paid up capital, recording, registration, property, real
property gains, value added, business license, custom duties, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
any Tax Authority including any interest, additions to tax, or penalties
applicable or related thereto.
"TAX ASSET" means any Tax Item that could reduce a Tax, including a net
operating loss, net capital loss, investment tax credit, foreign tax credit,
charitable deduction or credit related to alternative minimum tax or any other
Tax credit.
"TAX AUTHORITY" means a U. S. or foreign governmental authority or any
subdivision, agency, commission or authority thereof or any quasi-governmental
or private body having jurisdiction over the assessment, determination,
collection or imposition of any Tax (including, without limitation, the
Service).
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"TAX ITEM" means any item of income, gain, loss, deduction or credit, or other
attribute that may have the effect of increasing or decreasing any Tax.
"TAX PERIOD" means any Pre-Separation Period, Post-Separation Period or Straddle
Period.
"TAX RETURN" means any return, report, certificate, form or similar statement or
document (including, any related or supporting information or schedule attached
thereto and any information return, amended tax return, claim for refund or
declaration of estimated tax) required to be supplied to, or filed with, a Tax
Authority in connection with the determination, assessment or collection of any
Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.
"TREASURY REGULATIONS" means the final, temporary and proposed income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
SECTION 2. PREPARATION AND FILING OF TAX RETURNS
2.1 IN GENERAL. (a) For any Pre-Separation Period, MRV shall have the sole and
exclusive responsibility for the preparation and filing of: (1) all Consolidated
Returns, (2) all Combined Returns and (3) all Separate Returns.
(b) For the Straddle Period, MRV shall have the sole and exclusive
responsibility for the preparation and filing of: (1) all Consolidated Returns,
(2) all Combined Returns and (3) all Separate Returns.
(c) For all Post-Separation Periods, MRV shall have the sole and
exclusive responsibility for the preparation and filing of: (1) all Consolidated
Returns, (2) all Combined Returns, and (3) all Non-Federal Separate Returns. For
all Post-Separation Periods, Optical Access shall pay MRV an amount equal to any
expenses paid by MRV in preparing any Tax Return or portion thereof that
pertains to Optical Access.
2.2 MANNER OF PREPARING AND FILING TAX RETURNS. (a) All Tax Returns filed after
the date of this Agreement by MRV or any MRV Affiliate, shall be (1) prepared in
a manner that is consistent with (i) Section 5.1 of this Agreement, and (2)
filed on a timely basis (taking into account applicable extensions) by MRV.
(b) MRV shall have the exclusive right, in its sole discretion, with
respect to any Tax Return relating to any Tax Period to determine (1) the manner
in which such Tax Return shall be prepared and filed, including the elections,
methods of accounting, positions, conventions and principles of taxation to be
used and the manner in which any Tax Item shall be reported, (2) whether any
extensions may be requested, (3) the elections that will be made by MRV, any MRV
Affiliate, Optical Access, and any Optical Access Affiliate on such Tax Return,
(4) whether any amended Tax Returns shall be filed, (5) whether any claims for
refund shall be made, (6) whether any refunds shall be paid by way of refund or
credited against any liability for the related Tax, and (7) whether to retain
outside firms to prepare or review such Tax Return. MRV agrees to provide
Optical Access with a copy of each such Tax Return prior to the due date for the
filing of any such Tax Return (giving effect to applicable extensions) for such
taxable
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years sufficiently in advance of such date to allow Optical Access the
opportunity to review and comment on any such Tax Return.
(c)(1). Optical Access shall be responsible for providing financial,
transactional, legal and other information in a timely manner as necessary for
the preparation of the returns described in Sections 2.1(a),(b) or (c) of this
Agreement. Information shall be requested and submitted by way of annual tax
workpaper packages (due no later than March 31, for the preceding tax year ended
December 31), sales and use tax reports (submitted as required to meet reporting
deadlines in accordance with the continuation of the current process), other
miscellaneous information requests and other supporting documentation. Such
information shall be submitted within 30 days of written request in accordance
with MRV's normal information request practices and due dates.
2.3 AGENT. Subject to the other applicable provisions of this Agreement, Optical
Access hereby irrevocably designates, and agrees to cause each Optical Access
Affiliate to so designate, MRV as its sole and exclusive agent and
attorney-in-fact to take such action (including execution of documents) as MRV,
in its sole discretion, may deem appropriate in any and all matters (including
Audits) relating to any Tax Return described in Sections 2.1(a), (b) or (c) of
this Agreement.
SECTION 3. PAYMENT OF TAXES TO TAX AUTHORITIES
3.1 FEDERAL INCOME TAXES. MRV shall pay (or cause to be paid) to the Service all
Federal Income Taxes with respect to any Consolidated Return due and payable for
all Tax Periods.
3.2 NON-FEDERAL COMBINED TAXES. MRV shall pay (or cause to be paid) to the
appropriate Tax Authorities all Non-Federal Combined Taxes with respect to any
Combined Return due and payable for all Tax Periods.
3.3 NON-FEDERAL SEPARATE TAXES. MRV shall pay (or cause to be paid) to the
appropriate Tax Authorities all Non-Federal Separate Taxes due and payable for
all Tax Periods.
3.4 OTHER FEDERAL TAXES. The parties shall each pay (or cause to be paid) to the
appropriate Tax Authorities all of their respective Federal Taxes (excluding
Federal Income Taxes for all Tax Periods which are governed by Section 3.1 of
this Agreement).
SECTION 4. ALLOCATION OF TAXES
4.1 OPTICAL ACCESS LIABILITY FOR FEDERAL INCOME TAXES AND NON-FEDERAL COMBINED
TAXES. Within ten (10) days after completion of the IPO, Optical Access shall
pay to MRV the cumulative amount of the Optical Access Group Federal Income Tax
Liability, the Optical Access Group Combined Tax Liability and the Optical
Access Group Separate Tax Liability for all Consolidated Returns, Combined
Returns and Separate Returns for all Pre-Separation Periods and the Straddle
Period, including estimated tax payments. Thereafter, within ten (10) days after
the payment of Taxes by MRV to any Taxing Authority with respect to any
Post-Separation Period, Optical Access shall pay to MRV the cumulative
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amount of the Optical Access Group Federal Income Tax Liability, the Optical
Access Group Combined Tax Liability and the Optical Access Group Separate Tax
Liability for all Consolidated Returns, Combined Returns and Separate Returns
filed for such Post-Separation Period.
4.2 OPTICAL ACCESS GROUP FEDERAL INCOME TAX LIABILITY. With respect to each Tax
Period, the Optical Access Group Federal Income Tax Liability for such taxable
period shall be the Optical Access Group's liability for Federal Income Taxes
for such taxable period, as determined on a Pro Forma Optical Access Group
Consolidated Return prepared:
(i) on a basis consistent with the preparation of the Consolidated
Return for such period, determined by including only Tax Items of members of the
Optical Access Group which are included in the Consolidated Return and by
allocating Tax Assets to the Optical Access Group to the extent that the Tax
Asset was created by a member of the Optical Access Group and such Tax Asset was
actually utilized on the relevant Consolidated Return; and
(ii) applying the highest statutory marginal corporate income Tax rate
in effect for such taxable period (or portion thereof); provided that, in the
event that the federal alternative minimum Tax applies to the Consolidated
Return, the Optical Access Group Federal Income Tax Liability shall equal the
lesser of (i) the alternative minimum Tax liability with respect to the
Consolidated Return that would result by including only Tax Items and Tax Assets
of members of the Optical Access Group included in the Consolidated Return or
(ii) the aggregate Tax liability payable with respect to such Consolidated
Return.
(iii) The principles of Treasury Regulation Section 1.1502-33(d)(3) also
shall apply to the allocation set forth in Sections 4.2(i) and (ii). If the
amount of the consolidated federal income tax liability due under any
Consolidated Return is less than the sum of the aggregate separate return tax
liabilities of the Optical Access Group and the MRV Group (as computed pursuant
to Sections 4.2(i) and (ii) above) due to losses or tax credits of one Group
(including losses or tax credits carried over from prior years), the decrease in
tax liability resulting therefrom shall be allocated 100 percent to that Group.
A Group thus may have a "negative" income tax liability as a result of such an
allocation (a "Loss Group"). If a Loss Group exists, the other Group shall pay
to the Loss Group in a timely manner an amount equal to such "negative" income
tax liability. In other words, if Tax attributes (e.g., losses or tax credits)
of one Group are utilized by the other Group to reduce taxable income or Tax, as
the case may be, the Group utilizing such Tax attributes shall pay to the other
Group, with respect to losses, an amount equal to such reduction in taxable
income resulting from the utilization of such losses multiplied by the top
marginal federal corporate income Tax rate actually used by the Group utilizing
the losses in calculating its deemed Tax liability (prior to the application of
Tax credits against such liability) under Sections 4.2(i) and (ii) for the
taxable period during which such losses are utilized and, with respect to Tax
credits, an amount equal to the actual amount by which the deemed Tax liability
calculated pursuant to Sections 4.2(i) and (ii) is reduced by such Tax credits
for the taxable period during which such Tax credits are utilized.
4.3 OPTICAL ACCESS GROUP COMBINED TAX LIABILITY. With respect to any Tax Period,
the Optical Access Group Combined Tax Liability shall be the sum for such
taxable period of the Optical Access Group's liability for each Non-Federal
Combined Tax, as
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determined on Pro Forma Optical Access Group Combined Returns prepared in a
manner consistent with the principles and procedures set forth in Sections
4.2(i) and (ii) hereof. The Pro Forma Optical Access Group Combined Returns
relating to Tax Returns described in clauses (ii) and (iii) of the definition of
"Combined Return" shall be prepared by including only Tax Items and Tax Assets
relating to or arising from the Optical Access Business. The principles of
Section 4.2(iii) shall also apply to this section 4.3.
4.4 OPTICAL ACCESS GROUP NON-FEDERAL SEPARATE TAX LIABILITY. With respect to any
Tax Period, the Optical Access Group Non-Federal Separate Tax Liability shall be
the sum for such taxable period of the Optical Access Group's liability for each
Non-Federal Separate Tax, as determined on Pro Forma Optical Access Group
Non-Federal Separate Returns prepared in a manner consistent with the principles
and procedures set forth in Section 4.2 hereof. The Pro Forma Optical Access
Group Non-Federal Separate Returns shall be prepared by including only Tax Items
and Tax Assets relating to or arising from the Optical Access Business.
4.5 COOPERATION. (a) MRV and Optical Access agree to cooperate in good faith in
connection with the preparation of such pro forma tax returns and agree to make
reasonably available any documents, information or employees in connection
therewith. However, with respect to any Tax Period, MRV shall have the sole and
exclusive responsibility for the preparation of any Pro Forma Optical Access
Group Consolidated Returns, Pro Forma Optical Access Group Combined Returns and
Pro Forma Optical Access Group Non-Federal Separate Returns and MRV shall have
the exclusive right, in its sole discretion, to determine the proper application
of the requirements set forth in Section 4.2 hereof.
(b) The Pro Forma Optical Access Group Consolidated Returns, Pro Forma
Optical Access Group Combined Returns and Pro Forma Optical Access Group
Non-Federal Separate Returns, workpapers and other supporting documentation
shall be completed no later than thirty (30) business days prior to the date on
which the related Consolidated Return, Combined Return or Separate Return, as
the case may be, is filed with the appropriate Tax Authority.
4.6 TAX SHARING INSTALLMENT PAYMENTS. (a) FEDERAL INCOME TAXES. Not later than
two (2) business days prior to each Estimated Tax Installment Date with respect
to any Tax Period, the parties shall, consistent with MRV's current period
annualization election and past practice, determine under the principles of
Section 6655 of the Code the estimated amount of the related installment of the
Optical Access Group Federal Income Tax Liability. Optical Access shall pay to
MRV the amount thus determined on or before such Estimated Tax Installment Date.
(b) NON-FEDERAL COMBINED TAXES. MRV shall, in connection with any
installment payment (payable with respect to any Combined Return prepared and
filed by MRV) with respect to Non-Federal Combined Taxes for any Tax Period,
consistent with MRV's current period annualization elections and past practice,
determine the estimated amount of the related installment of the Optical Access
Group Combined Tax Liability. From time to time, MRV may provide Optical Access
with a written statement setting forth amounts owed by Optical Access in
connection with any installment payments with respect to Non-Federal
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Combined Taxes made by MRV for the immediately preceding month and any other
month for which a statement has not previously been provided by MRV. Optical
Access shall pay the amounts set forth on any statement upon receipt of such
statement.
(c) NON-FEDERAL SEPARATE TAXES. MRV shall, in connection with any
installment payment (payable with respect to any Separate Return prepared and
filed by MRV) with respect to Non-Federal Separate Taxes for any Tax Period,
consistent with MRV's current period annualization elections and past practice,
determine the estimated amount of the related installment of the Optical Access
Group Non-Federal Separate Tax Liability. From time to time, MRV may provide
Optical Access with a written statement setting forth amounts owed by Optical
Access in connection with any installment payments with respect to Non-Federal
Separate Taxes made by MRV for the immediately preceding month and any other
month for which a statement has not previously been provided by MRV. Optical
Access shall pay the amounts set forth on any statement upon receipt of such
statement.
4.7 TAX SHARING TRUE UP PAYMENTS. (a) FEDERAL INCOME TAXES. Not later than
thirty (30) business days following the completion of any Pro Forma Optical
Access Group Consolidated Return, Optical Access shall pay to MRV, or MRV shall
pay to Optical Access, as appropriate, an amount equal to the difference, if
any, between the Optical Access Group Federal Income Tax Liability for any Tax
Period and the aggregate amount paid by Optical Access with respect to such
period under Section 4.6(a) of this Agreement.
(b) NON-FEDERAL COMBINED TAXES. Not later than thirty (30) business days
following the completion of any Pro Forma Optical Access Group Combined Return,
Optical Access shall pay to MRV, or MRV shall pay to Optical Access, as
appropriate, an amount equal to the difference, if any, between the Optical
Access Group Combined Tax Liability for any Tax Period and the amounts paid by
Optical Access with respect to such period under Section 4.6(b) of this
Agreement.
(c) NON-FEDERAL SEPARATE TAXES. Not later than thirty (30) business days
following the completion of any Pro Forma Optical Access Group Separate Return,
Optical Access shall pay to MRV, or MRV shall pay to Optical Access, as
appropriate, an amount equal to the difference, if any, between the Optical
Access Group Separate Tax Liability for any Tax Period and the amounts paid by
Optical Access with respect to such period under Section 4.6(c) of this
Agreement.
4.8 REDETERMINATION AMOUNTS. For any Tax Period, in the event of a
redetermination of any Tax Item of any member of a Consolidated Group or
Combined Group as a result of a Final Determination, the filing of a Tax refund
claim or the filing of an amended Tax Return pursuant to which Taxes are paid to
a Tax Authority or a refund of Taxes is received from a Tax Authority, MRV shall
prepare, in accordance with the principles and procedures set forth in this
Section 4, revised Pro Forma Optical Access Group Consolidated Returns, revised
Pro Forma Optical Access Group Combined Returns and/or revised Pro Forma Optical
Access Group Non-Federal Separate Returns, as appropriate, to reflect the
redetermination of such Tax Item as a result of such Final Determination, filing
of a Tax refund claim or filing of an amended Tax Return. Following the
preparation of such revised pro forma tax returns, Optical Access's payment
obligations under Sections 4.2, 4.3 and 4.4 hereof shall be redetermined to
reflect
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Optical Access's Tax liability pursuant to the revised Pro Forma Optical Access
Group Consolidated Returns, revised Pro Forma Optical Access Group Combined
Returns and/or revised Pro Forma Optical Access Group Non-Federal Separate
Returns prepared pursuant to this Section 4.8. Optical Access shall pay to MRV
the amount by which the Tax liability reflected on the revised Pro Forma Optical
Access Group Consolidated Returns, revised Pro Forma Optical Access Group
Combined Returns and/or revised Pro Forma Optical Access Group Non-Federal
Separate Returns exceeds the Tax liability reflected on the original Pro Forma
Optical Access Group Consolidated Returns, original Pro Forma Optical Access
Group Combined Returns and/or original Pro Forma Optical Access Group
Non-Federal Separate Returns, and MRV shall pay to Optical Access the amount by
which the Tax liability reflected on the original Pro Forma Optical Access Group
Consolidated Returns, original Pro Forma Optical Access Group Combined Returns
and/or original Pro Forma Optical Access Group Non-Federal Separate Returns
exceeds the Tax liability reflected on the revised Pro Forma Optical Access
Group Consolidated Returns, revised Pro Forma Optical Access Group Combined
Returns and or revised Pro Forma Optical Access Group Non-Federal Separate
Returns.
SECTION 5. ADDITIONAL OBLIGATIONS
5.1 PROVISION OF INFORMATION AND MUTUAL COOPERATION. (a) MRV and Optical Access
shall, and shall cause their respective affiliates to, (1) furnish to the other
in a timely manner such information, documents and other materials as the other
may reasonably request for purposes of (i) preparing any Tax Return (or pro
forma Tax Return prepared in accordance with Section 4 hereof) or portion
thereof for which the other has responsibility for preparing under this
Agreement, (ii) contesting or defending any Audit (including the provision of
such information, documents and other materials as may be requested by any Tax
Authority), and (iii) making any determination or computation necessary or
appropriate under this Agreement, (2) make its employees available to the other
to provide explanations of documents and materials and such other information as
the other may reasonably request in connection with any of the matters described
in subclauses (i), (ii) and (iii) of clause (1) above, (3) reasonably cooperate
in connection with any Audit. For purposes of this Agreement, "timely" shall
mean furnishing such information, documents and other materials or making its
employees available within thirty (30) days of the time a request therefor is
made by the other.
(b) In the event that either MRV or Optical Access or their respective
affiliates shall fail for any reason to timely comply with any written request
pursuant to Section 6.1, MRV or Optical Access, as the case may be, may, in its
sole discretion, have its employees or agents fulfill such request and charge
the non-complying party for its costs incurred in fulfilling such request at the
highest hourly rate then shown on the Appendix attached hereto but not less than
$5,000 for each such request. For purposes of this Section 6.1(b), each written
request made by any Tax Authority and properly forwarded by one party to the
other for action shall be deemed a separate request.
(c) MRV and Optical Access shall, and shall cause their respective
affiliates to, retain and provide on reasonable demand books, records,
documentation or other information relating to any Tax Return or Audit, with
respect to any taxable period in which MRV owns, directly or indirectly, 50% or
more (by vote or value) of the outstanding stock of Optical Access, until the
later of (i) the expiration of the applicable statute of limitations (after
giving effect to
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any extension, waiver, or mitigation thereof) and (ii) in the event any claim is
made under this Agreement or by any Tax Authority for which such information is
relevant, until a Final Determination is reached with respect to such claim.
Notwithstanding anything to the contrary included in this Agreement, the parties
will comply in all respects with the requirements of any applicable record
retention agreement with the Service or other Tax Authority.
(d) Notwithstanding any other provision of this Agreement, no member of
the MRV Group shall be required to provide Optical Access or any Optical Access
Affiliate access to or copies of (1) any Tax information that relates
exclusively to any member of the MRV Group, (2) any Tax information as to which
any member of the MRV Group is entitled to assert the protection of any
Privilege, or (3) any Tax information as to which any member of the MRV Group is
subject to an obligation to maintain the confidentiality of such information.
MRV shall use reasonable efforts to separate any such information from any other
information to which Optical Access is entitled to access or to which Optical
Access is entitled to copy under this Agreement, to the extent consistent with
preserving its rights under this Section 6.1(d).
(e) Notwithstanding any other provision of this Agreement, with respect
to Tax information that relates to any taxable period in which Optical Access is
no longer included in the Consolidated Group of which MRV is the common parent
and no Combined Return is filed, no member of the Optical Access Group shall be
required to provide MRV or any MRV Affiliate access to or copies of (1) any Tax
information as to which any member of the Optical Access Group is entitled to
assert the protection of any Privilege or (2) any Tax information as to which
any member of the Optical Access Group is subject to an obligation to maintain
the confidentiality of such information. Optical Access shall use reasonable
efforts to separate any such information from any other information to which MRV
is entitled to access or to which MRV is entitled to copy under this Agreement,
to the extent consistent with preserving its rights under this Section 6.1(e).
(f) The parties agree to give the other party reasonable written notice
prior to destroying or discarding any records pertaining to the
Pre-Deconsolidation Period or Straddle Period records, and if the other party so
requests, the party shall allow the other party to take possession of such tax
records. Tax records shall include, inter alia, journal vouchers, cash vouchers,
general ledgers, material contracts, authorizations for expenditures, and copies
of returns.
5.2 INDEMNIFICATION. (a) GENERAL. MRV shall be liable for (and indemnify Optical
Access and each Optical Access Affiliate against) Taxes of the MRV Group and its
Affiliates (including the Optical Access Group) not specifically allocated to
Optical Access and the Optical Access Affiliates under this Agreement, and
Optical Access shall be liable for and indemnify the MRV Group against Taxes
which are specifically allocated to Optical Access and the Optical Access
Affiliates under this Agreement.
(b) FAILURE TO PAY. MRV and each MRV Affiliate shall jointly and
severally indemnify and hold Optical Access and each Optical Access Affiliate
harmless from and against any Tax that is attributable to, or results from the
failure of MRV or any MRV Affiliate to make any payment required to be made by
them under this Agreement, including without limitation any Tax for all Tax
Periods (other than any Tax described in the succeeding
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sentence). Optical Access and each Optical Access Affiliate shall jointly and
severally indemnify and hold MRV and each MRV Affiliate harmless from and
against any Tax that is attributable to, or results from, the failure of Optical
Access or any Optical Access Affiliate to make any payment required to be made
under this Agreement.
(c) INACCURATE OR INCOMPLETE INFORMATION. MRV and each MRV Affiliate
shall jointly and severally indemnify Optical Access and hold Optical Access and
each Optical Access Affiliate harmless from and against any Tax or loss
attributable to the negligence of MRV or any MRV Affiliate in supplying Optical
Access or any Optical Access Affiliate with inaccurate or incomplete
information, in connection with the preparation of any Tax Return or any Audit.
Optical Access and each Optical Access Affiliate shall jointly and severally
indemnify and hold MRV and each MRV Affiliate harmless from and against any Tax
or loss attributable to the negligence of Optical Access or any Optical Access
Affiliate in supplying MRV or any MRV Affiliate with inaccurate or incomplete
information, in connection with the preparation of any Tax Return or any Audit.
5.3 TAX CONSEQUENCES OF PAYMENTS. For all Tax purposes and notwithstanding any
other provision of this Agreement, to the extent permitted by applicable law,
the parties hereto shall treat any payment made pursuant to this Agreement
(other than any payment made in satisfaction of an intercompany obligation) as a
capital contribution or dividend distribution, as the case may be, immediately
prior to the Separation Date and, accordingly, as not includible in the taxable
income of the recipient. If, as a result of a Final Determination, it is
determined that the receipt or accrual of any payment made under this Agreement
is taxable to the recipient, the payor shall pay to the recipient an amount
equal to any increase in the Income Taxes of the recipient as a result of
receiving the payment from the payor (grossed up to take into account such
payment, if applicable).
5.4 INTEREST. Payments pursuant to this Agreement that are not made within the
period prescribed in this Agreement or, if no period is prescribed, within
thirty (30) business days after demand for payment is made (the "Payment
Period") shall bear interest for the period from and including the date
immediately following the last date of the Payment Period through and including
the date of payment (the "Interest Accrual Period") at a per annum rate equal to
the prime rate (as quoted in the Wall Street Journal) in effect on the last day
of such Payment Period, plus 500 basis points. Such interest will be payable at
the same time as the payment to which it relates and shall be calculated on the
basis of a year of 365 days and the actual number of days for which due.
5.5 OUTSIDE FEES. For any Tax Period, Optical Access and all Optical Access
Affiliates will be allocated their proportional share of all outside fees as
determined by MRV. For purposes of this Section 6.5, outside fees will be
allocated to the period to which they relate (as MRV shall in its sole
discretion determine) and not the period in which they may be incurred. Outside
fees include (but are not limited to) accounting, legal and other fees for
preparation and filing of Tax Returns, Tax research, planning, strategy, and
assistance with Tax Audits. The allocated amount will be billed to the Optical
Access Group and is due upon receipt.
SECTION 6. AUDITS
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6.1 IN GENERAL. (a) MRV shall have the exclusive right, in its sole discretion,
to control, contest, and represent the interests of MRV, any MRV Affiliate,
Optical Access or any Optical Access Affiliate in any Audit relating to any Tax
Return described in Sections 2.1(a), (b) or (c) of this Agreement and to
resolve, settle or agree to any deficiency, claim or adjustment proposed,
asserted or assessed in connection with or as a result of any such Audit. MRV's
rights shall extend to any matter pertaining to the management and control of an
Audit, including, without limitation, execution of waivers, choice of forum,
scheduling of conferences and the resolution of any Tax Item.
(b) MRV shall keep Optical Access informed of all material developments
and events pertaining to any Audit that relates directly to any Tax Item
included in any Consolidated Return or Combined Return for which Optical Access
is responsible for the resulting tax liability. Optical Access shall have the
right to review at its own expense any materials that it may reasonably request
that pertain to any Audit that relates directly to any Tax Item included in any
Consolidated Return or Combined Return for which Optical Access is responsible
for the resulting tax liability.
6.2 NOTICE. If MRV or any member of the MRV Group receives written notice of, or
relating to, an Audit from a Tax Authority that asserts, proposes or recommends
a deficiency, claim or adjustment that, if sustained, would result in the
redetermination of a Tax Item of a member of the Optical Access Group, MRV shall
promptly provide a copy of such notice to Optical Access (but in no event later
than thirty (30) business days following the receipt of such notice). If Optical
Access or any member of the Optical Access Group receives written notice of, or
relating to, an Audit from a Tax Authority with respect to a Tax Return
described in Section 2.1(a), (b) or (c) of this Agreement, Optical Access shall
promptly provide a copy of such notice to MRV (but in no event later than thirty
(30) business days following the receipt of such notice).
6.3 FAILURE TO NOTIFY. The failure of MRV or Optical Access to notify the other
of any matter relating to a particular Tax for a taxable period or to take any
action specified in this Agreement shall not relieve such other party of any
liability and/or obligation which it may have under this Agreement with respect
to such Tax for such taxable period except to the extent that such other party's
rights hereunder are materially prejudiced by such failure.
6.4 REMEDIES. Optical Access agrees that no claim against MRV and no defense to
Optical Access' liabilities to MRV under this Agreement shall arise from the
resolution by MRV of any deficiency, claim or adjustment relating to the
redetermination of any Tax Item of MRV or a MRV Affiliate.
SECTION 7. IPO
7.1 IPO RELATED ITEMS. (a) LIABILITY FOR SEPARATION TAXES. Only except as
provided in Section 8.1(b) hereof, MRV shall be responsible for the payment of,
and shall indemnify and hold Optical Access harmless from and against, any
Separation Taxes.
(b) LIABILITY FOR UNDERTAKING CERTAIN ACTIONS. Notwithstanding Section
8.1(a) of this Agreement, Optical Access and each member of the
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Optical Access Group shall be jointly and severally responsible for, and shall
indemnify and hold MRV harmless from and against, any Separation Taxes that are
attributable to, or result from, (i) any action taken by Optical Access or any
member of the Optical Access Group that was not contemplated by the parties in
connection with the Separation or (ii) the failure by Optical Access or any
member of the Optical Access Group to take any action that Optical Access is
responsible for taking under this Agreement, the Master Separation Agreement or
any other agreement related to the Separation or the IPO. Each of the parties
hereto agrees to act in good faith and without negligence in connection with the
Tax reporting of and all other aspects related to the Tax consequences of the
Separation and shall be responsible for any Taxes or losses arising from any
failure to act in good faith or any negligent act or omission with respect
thereto.
7.2 TAX REPORTING OF IPO RELATED ITEMS. SEPARATION TAXES. Any Tax Return (or
portion thereof) that includes any Tax Item resulting from the Separation shall
be prepared and filed by MRV.
7.3 AUDITS RELATING TO SEPARATION. Notwithstanding any other provision of this
Agreement, MRV shall have the exclusive right, in its sole discretion, to
control, contest, and represent the interests of MRV, any MRV Affiliate, Optical
Access or any member of the Optical Access Group in any Audit with respect to
Tax Items related to the Separation, and to resolve, settle or agree to any
deficiency, claim or adjustment proposed, asserted or assessed in connection
with or as a result of any such Audit. MRV's rights shall extend to any matter
pertaining to the management and control of an Audit, including execution of
waivers, choice of forum, scheduling of conferences and the resolution of any
Tax Item.
7.4 PROVISION OF INFORMATION AND MUTUAL COOPERATION. In addition to the parties'
respective obligations under Section 5.1 and subject to the provisions of
Section 5.1(b) of this Agreement, MRV and Optical Access shall, and shall cause
their respective Affiliates to, cooperate with respect to all aspects of the
Separation including, without limitation, by (1) furnishing to the other in a
timely manner such information, documents and other materials as the other may
reasonably request for purposes of (i) preparing any Tax Return that includes
Tax Items relating to or arising from the Separation and (ii) contesting or
defending any Audit with respect to Tax Items relating to or arising from the
Separation and (2) make its employees available to the other to provide
explanations of documents and materials and such other information as the other
may reasonably request in connection with any of the matters described in
subclauses (i) and (ii) of clause (1) above.
7.5 PRESS RELEASES. Notwithstanding any other provision of this Agreement to the
contrary, MRV shall have the exclusive right, in its sole discretion, to review
and approve all press releases and other public communications with respect to
the subjects to which this Agreement relates prior to their release. Optical
Access shall provide all such press releases or other public communication to
MRV no later than one (1) day prior to their proposed release date at the place
and manner specified in Section 8.2 of this Agreement.
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SECTION 8. MISCELLANEOUS
8.1 EFFECTIVENESS. This Agreement shall become effective on the Separation Date.
8.2 NOTICES. All notices, requests, demands and other communications under this
Agreement shall be in writing and, unless otherwise provided herein, shall be
deemed to have been duly given (i) on the date of service if served personally
on the party to whom notice is given, (ii) on the day of transmission if sent
via facsimile transmission to the facsimile number given below; provided,
telephonic confirmation of receipt is obtained promptly after completion of
transmission, (iii) on the business day after delivery to an overnight courier
service or the Express mail service maintained by the United States Postal
Service; provided, receipt of delivery has been confirmed, or (iv) on the fifth
day after mailing; provided, receipt of delivery is confirmed, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, properly addressed and return-receipt requested, to
the party as follows:
If to MRV or any MRV Affiliate, to:
MRV Communications, Inc.
____________________
____________________
____________________
Facsimile: _____________
Attention: _____________
If to Optical Access or any Optical Access Affiliate to:
Optical Access, Inc.
____________________
____________________
____________________
Facsimile: _____________
Attention: _____________
Any party may change its address or fax number by giving the other party written
notice of its new address or fax number in the manner set forth above.
8.3 CHANGES IN LAW. Any reference to a provision of the Code or a law of another
jurisdiction shall include a reference to any applicable successor provision or
law.
8.4 SUCCESSORS AND ASSIGNS. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party without the prior written consent of the other party.
8.5 AUTHORIZATION, ETC. Each of the parties hereto hereby represents and
warrants that it has the power and authority to execute, deliver and perform
this Agreement, that this Agreement has been duly authorized by all necessary
corporate action on the part of such party, that this Agreement constitutes a
legal, valid and binding obligation of each such party and that the execution,
delivery and performance of this Agreement by such party does not contravene or
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conflict with any provision of law or of its charter or bylaws or any agreement,
instrument or order binding on such party.
8.6 COMPLETE AGREEMENT. This Agreement shall constitute the entire agreement
between MRV or any MRV Affiliate and Optical Access or any Optical Access
Affiliate with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter. Unless the context indicates otherwise, any reference to Optical Access
in this Agreement shall refer to Optical Access and the Optical Access
Affiliates and any reference to MRV in this Agreement shall refer to MRV and the
MRV Affiliates.
8.7 INTERPRETATION. The Section headings contained in this Agreement are solely
for the purpose of reference, are not part of the agreement of the parties and
shall not in any way affect the meaning or interpretation of this Agreement.
Whenever any words are used herein in the masculine gender, they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply.
8.8 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California (regardless of
the laws that might otherwise govern under applicable principles of conflicts
law) as to all matters, including, without limitation, matters of validity,
construction, effect, performance and remedies.
8.9 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
8.10 LEGAL ENFORCEABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.11 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the benefit of
MRV, the MRV Affiliates, Optical Access and the Optical Access Affiliates, and
is not intended to confer upon any other person any rights or remedies
hereunder.
8.12 JURISDICTION; FORUM. (a) By the execution and delivery of this Agreement,
MRV and Optical Access submit and agree to cause the MRV Affiliates and Optical
Access Affiliates, respectively, to submit to the personal jurisdiction of any
state or federal court in the State of California in any suit or proceeding
arising out of or relating to this Agreement.
(b) To the extent that MRV, Optical Access, any MRV Affiliate or any
Optical Access Affiliate has or hereafter may acquire any immunity from
jurisdiction of any California court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, MRV or Optical
Access, as the case may be, hereby irrevocably waives, and agrees to cause the
MRV Affiliates and the Optical Access Affiliates, respectively, to waive such
immunity in respect of its obligations with respect to this Agreement.
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(c) The parties hereto agree that an appropriate and convenient,
non-exclusive forum for any disputes between any of the parties hereto or the
MRV Affiliates and the Optical Access Affiliates arising out of this Agreement
shall be in any state or federal court in the State of California.
8.13 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified or
supplemented only by written agreement of the parties.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by a duly authorized officer as of the date first above written.
MRV CORPORATION
on behalf of itself and its affiliates
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
OPTICAL ACCESS, INC.
on behalf of itself and its affiliates
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
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