EXHIBIT 2.10
TAX SHARING AGREEMENT
THIS AGREEMENT is entered into as of March 31, 2001 (the "Effective Date")
between Millipore Corporation ("Millipore") and Millipore MicroElectronics, Inc.
("MMI").
WHEREAS, certain members of the Millipore Group (as defined below) and the
MMI Group (as defined below) are part of an Affiliated Group filing consolidated
federal income tax returns and certain consolidated, combined and unitary state
or local income tax returns;
WHEREAS, the parties hereto wish to set forth their agreement with respect
to the allocation and payment of Taxes (as defined below) attributable to them,
and to allocate responsibility for the preparation and filing of returns, other
tax-related obligations, and the maintenance of records for all periods through,
or which include, the Distribution (as defined below) of MMI; and
WHEREAS, pursuant to the Master Separation and Distribution Agreement
between Millipore and MMI effective as of March 31, 2001 (the "Master
Agreement"), Millipore has transferred certain operations conducted by it to MMI
(the "Separation") and will distribute the stock of MMI to Millipore
shareholders (the "Distribution") in a transaction intended to qualify as a tax-
free transaction under sections 368(a)(1)(D) and 355 of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereby agree,
effective as of the Effective Date, as follows:
1. DEFINITIONS.
As used in this Agreement:
"Affiliated Company" shall mean any entity that controls, is
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controlled by, or is under common control with such person. As used
herein, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of such entity, whether through ownership of voting securities or
other interests, by contract or otherwise.
"Affiliated Group" shall mean an affiliated group of corporations
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within the meaning of section 1504(a) of the Code for the taxable year
in question.
"Distribution Date" shall mean the date of the Distribution of MMI
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stock to Millipore shareholders.
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"Federal Income Tax" shall mean any U.S. federal income tax (including
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any alternative minimum tax), including any interest, penalty or
addition thereto, whether disputed or not.
"Foreign Restructuring Tax" shall mean any Tax imposed on Millipore,
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or any member of the Millipore Group, or MMI, or any member of the MMI
Group, and other damages suffered (including reasonable attorneys'
fees and disbursements in connection with the investigation, defense,
or settlement of any action or threatened action) in connection with
the transactions set forth in the Non-US Plan.
"Market Valuation" shall mean as of the Distribution Date (i) with
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respect to MMI, the fair market value of all of its outstanding stock
(measured using the mean of the high and low of the public trading
price) as of such date, or (ii) with respect to Millipore, the fair
market value of all of its outstanding stock (measured using the mean
of the high and low of the public trading price) as of such date.
"Member" shall mean, during the period that such member is includable,
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each includable member of the Millipore Group for such year.
"Millipore Affiliated Group" shall mean, for any taxable year of
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Millipore, the Affiliated Group of which Millipore is the common
parent for such year.
"Millipore Group" shall mean Millipore, each subsidiary and Affiliated
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Company of Millipore (other than any member of the MMI Group), after
giving effect to the Non-US Plan, and each Company that becomes a
subsidiary or Affiliated Company of Millipore.
"MMI Affiliated Group" shall mean, for any taxable year of MMI, the
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Affiliated Group of which MMI is the common parent for such year or
would be the common parent if it were not a subsidiary of Millipore.
To the extent an entity was a member of the Millipore Affiliated Group
prior to becoming part of the MMI Affiliated Group, the term MMI
Affiliated Group covers the entity only for the period during which it
is a member of the MMI Affiliated Group.
"MMI Group" shall mean MMI, each subsidiary and Affiliated Company of
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MMI (other than any member of the Millipore Group), after giving
effect to the Non-US Plan, and each Company that becomes a subsidiary
or Affiliated Company of MMI.
"Non-U.S. Plan" shall mean the plan for the separation of the
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Separated Business outside the United States as described in Exhibit H
to the Master Separation and Distribution Agreement.
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"Other Income Tax" shall mean any state, local or foreign income tax,
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including any interest, penalty or addition thereto, whether disputed
or not.
"Other Tax" shall mean any state, local or foreign tax, assessment or
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other governmental charge, including income, estimated, business,
occupation, franchise, property, sales, use, excise, employment,
unemployment, payroll, social security, ad valorem, transfer, gains,
profits, capital stock, license, gross receipts, stamp, real estate,
severance, withholding and custom, including any interest, penalty or
addition thereto, whether disputed or not, but excluding Federal
Income Tax and Other Income Tax.
"Pre-Separation Period" shall mean any period (or portion thereof)
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ending on or prior to the date of the Separation.
"Pre-Separation Year" shall mean a taxable year of the Millipore
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Affiliated Group or other relevant Millipore group beginning prior to
(and including) the Separation.
"Pre-Distribution Year" shall mean a taxable year of the Millipore
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Affiliated Group or other relevant Millipore group beginning prior to
(and including) the Distribution.
"Post-Separation Period" shall mean any period (or portion thereof)
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beginning after the date of the Separation.
"Separate Return Tax Liability" shall mean, with respect to the MMI
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Affiliated Group for any Pre-Distribution Year, the sum of the Federal
Income Tax for each member of the MMI Affiliated Group for such year
determined by using the method described in section 1.1502-
32(b)(3)(iv)(D) of the Treasury Regulations.
"Separated Business" shall mean the business (including assets,
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liabilities, employees and all other tangible and intangible
property), whether originally formed or acquired by Millipore,
contributed by Millipore to MMI and not distributed back to Millipore.
"Spin Damages," shall mean, with respect to the Distribution, Taxes
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and other damages suffered (including reasonable attorneys' fees and
disbursements in connection with the investigation, defense or
settlement of any action or threatened action) attributable either to
the failure of such Distribution to qualify under section 355 or
368(a)(1)(D) of the Code or attributable to the application of section
355(e) with respect to such Distribution, or application of section
355(f).
"Tax" shall mean Federal Income Tax, Other Income Tax and Other Tax.
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"Tax Benefit" shall mean a reduction in the Tax liability of a
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taxpayer (or of the group of which it is a member) for any taxable
period. Except as otherwise provided in this Agreement, a Tax Benefit
shall be deemed to have been realized or received from a Tax item in a
taxable period only if and to the extent that the Tax liability of the
taxpayer (or of the group of which it is a member) for such period and
all prior periods, is less than it would have been if such Tax
liability were determined without regard to such Tax item.
"Tax Returns" and "Returns" shall include all returns, other forms or
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statements in respect of Taxes which are filed or required to be filed
with a taxing authority.
"Treasury Regulations" shall mean the income tax regulations
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promulgated under the Code applicable to the taxable year in question.
(a) Other defined terms shall have the meaning assigned to them in
the preamble to and text of this Agreement. Any term that is not defined in
this Agreement shall, unless the context otherwise requires, have the
meaning assigned in the Code or the Treasury Regulations. References to
provisions of the Code or Treasury Regulations shall include a reference to
any successor provision.
2. FILING OF TAX RETURNS.
(a) For Pre-Distribution Years, Millipore shall file, and shall make
all determinations with respect to, all consolidated Federal Income Tax
Returns and all other consolidated, combined, unitary or similar Tax
Returns required to be filed by it on behalf of the Millipore Affiliated
Group or other relevant Millipore group for such year (collectively, the
"Pre-Distribution Group Returns"). On or before April 15 of 2002 and April
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15 of all subsequent years, MMI shall furnish to Millipore (i) draft Tax
returns for the previous taxable year for the members of the MMI Affiliated
Group or other relevant MMI Group and all supporting information and
documentation necessary in preparing the relevant Pre-Distribution Group
Return and (ii) such additional Tax information and documents as Millipore
may reasonably request. MMI shall cooperate in connection with the
preparation of any Pre-Distribution Group Returns.
(b) The Pre-Distribution Group Returns shall include all of the
income, gain, loss, deductions, credits and similar items of all Members of
the Millipore Affiliated Group or other relevant Millipore group, including
all income, gain, loss, deductions, credits and similar items of all
members of the MMI Affiliated Group or other relevant MMI group through its
Distribution Date. Millipore shall prepare such Pre-Distribution Group
Returns and shall have the right to exercise all the powers of, and shall
have all the duties of, a common parent or agent as are conferred upon it
by the Code and Treasury Regulations or similar authority with respect to
such Pre-Distribution Group Returns.
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All Members of the Millipore Affiliated Group or other relevant Millipore
group for a Pre-Distribution Year shall execute and file such consents,
elections and other documents as may be necessary or appropriate for the
proper filing of the Pre-Distribution Group Returns. However, MMI shall
have the right to reasonably request that any elections or accounting
methods be used by Millipore in its preparation of Pre-Distribution Group
Returns where such election or method may impact MMI's liability for Taxes
in the present, or any subsequent, taxable year; Millipore shall not
unreasonably refuse any such request by MMI.
(c) For all periods beginning before the Distribution Date, MMI shall
file each member of the MMI Group's Tax Returns not filed on a
consolidated, combined, unitary or similar basis by Millipore under
paragraph (a) above (the "Separate Returns"), and shall include on the
Separate Returns all of its income, gains, loss, deductions, credits and
similar items for all periods covered by the Separate Returns. For all
periods beginning before the Distribution Date, Millipore shall file each
member of the Millipore Group's Tax Returns not filed on a consolidated,
combined, unitary or similar basis by Millipore under paragraph (a) above
(the "Separate Returns"), and shall include on the Separate Returns all of
its income, gains, loss, deductions, credits and similar items for all
periods covered by the Separate Returns.
(d) Any Tax Return filed by Millipore or MMI with respect to a Pre-
Distribution Period will be filed in conformance with Millipore's existing
intercompany pricing guidelines and rulings, unless Millipore agrees
otherwise.
3. PAYMENT OF TAX.
(a) Millipore shall pay all Tax shown as due on the Pre-Distribution
Group Returns. MMI shall upon thirty (30) days' notice pay to Millipore an
amount equal to the Separate Return Tax Liability (or similar liability
calculated for state, local or foreign purposes) for each member of the MMI
Group or other relevant MMI group for all Post-Separation Periods.
(b) Within ninety (90) days of the filing of the Pre-Distribution
Group Returns, Millipore shall be required to pay to MMI any payments
required as a result of a Tax Benefit attributable to a Post-Separation
Period and realized by Millipore (or a Member of the Millipore Group or
other relevant Millipore group not included in the MMI Group) from the use
of any member of the MMI Group's Tax attributes, calculated on a company-
by-company basis by Millipore in its sole discretion in accordance with the
principles regarding the determination of Separate Return Tax Liability (or
similar liability calculated for state, local or foreign purposes).
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(c) Millipore shall be entitled to receive any overpayment of Tax
shown on any Pre-Distribution Group Return, as originally filed.
(d) The members of the MMI Group shall pay all Tax shown as due on
its Separate Returns and all other Taxes for which any member of the MMI
Group is liable. The members of the Millipore Group shall pay all Tax shown
as due on its Separate Returns and all other Taxes for which any member of
the Millipore Group is liable.
4. ADJUSTMENTS TO TAX LIABILITIES.
(a) Millipore shall be responsible for, and control all decisions as
to, Tax audits of, and proceedings regarding the Pre-Distribution Group
Returns and other Tax Returns filed by it. MMI shall be responsible for,
and control all decisions as to, Tax audits of, and proceedings regarding
its Separate Returns.
(b) Subject to paragraph (d) of this Section 4 and Section 6 below,
if the Tax liability on any Pre-Distribution Group Return which Millipore
files is adjusted, whether by means of an amended Return, claim for refund,
or after a Tax audit, Millipore shall pay all additional Tax due and shall
be entitled to receive all refunds of Tax except:
1. Subject to, and to the extent provided in, Section 7, MMI
shall be entitled to refunds of the MMI Group's or any of its
members' Tax for Pre-Distribution Years attributable to
carrybacks originating in years beginning after the Separation
Date;
2. MMI shall within thirty (30) days' notice pay to Millipore
the additional Separate Return Tax Liability (or similar
liability calculated for state, local or foreign purposes) of a
member of the MMI Group with respect to its Pre-Distribution
Group Returns to the extent the liability relates to a Post-
Separation Period.
(c) If the Tax liability with respect to the Separate Return of a
company is adjusted, as well as any other Taxes for which the company is
liable, whether by means of an amended Return, claim for refund, or after a
Tax audit, the company shall pay all additional Tax due and shall be
entitled to receive all refunds of Tax.
(d) Each party responsible for an audit or proceeding under paragraph
(a) shall keep the other currently informed as to the status of any Tax
audit or proceeding as to which the other party may be required to make a
payment (or otherwise account) to the responsible party under this Section
4 and shall provide the other party with copies of any correspondence or
other written materials which the responsible party either receives or
provides to the Internal Revenue Service or similar taxing authority
concerning such a
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Tax audit or proceeding. The party which may be required to make a payment
under this Section 4 shall have the right to participate at its expense in
any such Tax audit or proceeding, but this right shall not derogate from
the responsible party's power to control all decisions as to the Tax audit
or proceeding as provided in paragraph (a); provided, however, that the
responsible party shall seek consent from any participating party with
respect to any decision that may increase such participating party's Tax
liability pursuant to this Section 4, which consent shall not be
unreasonably withheld.
5. FOREIGN RESTRUCTURING TAXES
(a) In General. Notwithstanding any other provision of this
agreement, Foreign Restructuring Tax shall be allocated in the following
manner:
(i) 100% to Millipore and 0% to MMI for amounts imposed on any
country in Europe,
(ii) 7% to Millipore and 93% to MMI for amounts imposed on
Japan,
(iii) 28% to Millipore and 72% to MMI for amounts imposed on any
country in Asia other than Japan, and
(iv) 59% to Millipore and 41% to MMI for amounts imposed on any
country in North, Central or South America.
(b) Foreign Tax Credits Attributable to Foreign Restructuring Taxes.
Any Tax Benefit, attributable to an increase in foreign tax credits
resulting from a Foreign Restructuring Tax, shall be allocated in the same
manner and proportion as the allocation of such Foreign Restructuring Tax
pursuant to Section 5(a) above.
(c) Subsequent Adjustments. If taking into account subsequent events
(including, for example, carrybacks of other foreign tax credits and
adjustments that affect foreign tax credit computations) one of the parties
determines that it did not receive any portion of the Tax Benefit that it
is entitled to receive pursuant to Section 5(b), MMI shall pay Millipore,
or Millipore shall pay MMI, as appropriate, an amount such that the net
payment (if any) equals the portion of the net Tax Benefit (taking into
account such subsequent events) specified in paragraph (b) Section 5.
6. TAX RELATED INDEMNITIES.
(a) MMI shall indemnify and hold harmless the Millipore Group against
any and all Taxes for which it or any member of the MMI Group is
responsible under this Agreement. Subject to the foregoing, Millipore shall
indemnify and hold the MMI Group
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harmless against any and all Taxes the Millipore Group is required to bear
under this Agreement, including, without limitation, any liability under
section 1.1502-6 of the Treasury Regulations.
(b) If (i) for any reason a member or members of the MMI Group or a
shareholder of such member or members is solely responsible for the
Distribution's failure to qualify under section 355 of the Code, or (ii)
the stock of MMI is acquired by one or more persons, whether directly or
indirectly, such that section 355(e) of the Code causes such stock not to
be treated as "qualified property" for purposes of section 361(c)(2) of the
Code, the MMI Group shall be responsible for and MMI shall indemnify the
Millipore Group against all Spin Damages relating to such Distribution.
(c) If the Distribution fails to qualify under section 355 of the
Code and if such failure is the responsibility of or is by reason of both
the Millipore Group and either a member of the MMI Group or a shareholder
of such member then (I) the MMI Group shall be responsible for and MMI
shall indemnify the Millipore Group against a percentage of the Spin
Damages relating to such Distribution equal to the quotient of (x) MMI's
Market Valuation, divided by (y) the sum of (i) MMI's Market Valuation, and
(ii) Millipore's Market Valuation, and (II) Millipore shall be responsible
for and indemnify MMI against a percentage of the Spin Damages relating to
such Distribution equal to the quotient of (x) Millipore's Market
Valuation, divided by (y) the sum of (i) MMI's Market Valuation, and (ii)
Millipore's Market Valuation.
(d) If (i) for any reason Millipore is solely responsible for the
Distribution's failure to qualify under section 355 of the Code, or (ii)
the stock of Millipore is acquired by one or more persons, whether directly
or indirectly, such that section 355(e) of the Code causes the stock of MMI
not to be treated as "qualified property" for purposes of section 361(c)(2)
of the Code, Millipore shall be responsible for and indemnify MMI against
all Spin Damages relating to such Distribution.
7. CARRYBACKS.
If a member of the MMI Affiliated Group incurs a net operating loss in a
year which begins after the Distribution Date, the MMI Affiliated Group shall
elect under section 172(b)(3) of the Code to relinquish the carryback of the net
operating loss to any Pre-Distribution Taxable Year unless Millipore consents in
writing to such carryback. If Millipore consents to such a carryback or if a
member of the MMI Affiliated Group incurs in such a year a net capital loss,
unused general business tax credit, unused foreign tax credit or any other item
that is carried back to a Pre-Distribution Taxable Year, Millipore shall pay
such member an amount equal to the Tax refund received by Millipore as a direct
result of the carryback. Millipore shall cooperate fully in obtaining such a
refund, but any out-of-pocket
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expenses incurred by Millipore in connection with such efforts shall be borne
MMI. In the event a subsequent audit or proceeding increases or reduces the
carryback, Millipore shall promptly pay MMI the amount of any additional Tax
refund received by Millipore resulting from such an increase and MMI shall
promptly pay (or otherwise account to) Millipore the amount of any deficiency in
Tax assessed against Millipore.
8. GROSS-UP FOR TAXES ON REQUIRED PAYMENTS
If the receipt or accrual of any payment required by this Agreement is
subject to any Tax, the payor shall pay an additional amount so that the total
amount received by the payee, net of any applicable Taxes, equals the amount of
the required payment.
9. TIMELY PAYMENTS
Any payments required by this Agreement that are not paid when due under
the terms of this Agreement shall accrue interest at the current LIBOR rate
plus two percentage points, accrued thereon until the date of full payment.
10. MUTUAL COOPERATION
(a) Each member of the Millipore Group and the MMI Group shall
provide each other with such assistance as may be reasonably requested by
either of them in connection with the preparation and execution of any Tax
Return, any audit or other examination by any taxing authority, or any
judicial or administrative proceedings relating to any Tax liability, and
each will, upon the request of the other, provide the other with any
records or information which may be relevant to such Return, audit or
examination proceedings.
(b) Each party will retain all Tax Returns, schedules and work
papers, and all material records and other documents relating thereto,
until the later of (i) the time the applicable statutes of limitations for
assessment of Tax for the year has expired, and (ii) the time a final
settlement of all payments which may be required under this Agreement is
made for the year.
11. NOTICES
All notices, requests, demands and other communications to any party
hereunder shall be duly given, made or served, if in writing and delivered
personally or sent by registered mail, postage prepaid to the address set forth
below or such other address as either party shall give written notice to the
other:
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If to the Millipore Affiliated Group:
Millipore Corporation
00 Xxxxx Xxxx,
Xxxxxxx, XX 00000
Attn: General Counsel and Tax Director
Telecopier No.: 000-000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
If to the MMI Affiliated Group:
Millipore MicroElectronics, Inc.
00 Xxxxx Xxxx,
Xxxxxxx, XX 00000
Attn: General Counsel and Tax Director
Telecopier No.: 000-000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
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12. MISCELLANEOUS.
(a) Binding Effect; Assignment. Except by operation of law or in
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connection with the sale of all or substantially all the assets of a party
hereto, this Agreement shall not be assignable, in whole or in part,
directly or indirectly, by any party hereto without the written consent of
the other party; and any attempt to assign any rights or obligations
arising under this Agreement without such consent shall be void; provided,
however, that the provisions of this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns, but no assignment shall
relieve any party's obligations hereunder without the written consent of
the other party. Nothing in this Agreement, express or implied, is intended
to confer upon any other person or entity any rights or remedies of any
nature whatsoever under or by reason of this Agreement. This Agreement may
be enforced separately by each member of the Millipore Group and each
member of the MMI Group.
(b) Further Assurances. Subject to the provisions hereof, the parties
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hereto shall make, execute, acknowledge and deliver such other instruments
and documents, and take all such other actions, as may be reasonably
required in order to effectuate the purposes of this Agreement and to
consummate the transactions contemplated hereby. Subject to the provisions
hereof, each of the parties shall, in connection with entering into this
Agreement, performing its obligations hereunder and taking any and all
actions relating hereto, comply with all applicable laws, regulations,
orders and decrees, obtain all required consents and approvals and make all
required filings with any governmental agency, other regulatory or
administrative agency, commission or similar authority and promptly provide
the other parties with all such information as they may reasonably request
in order to be able to comply with the provisions of this paragraph.
(c) Parties in Interest. Except as herein otherwise specifically
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provided, nothing in this Agreement expressed or implied is intended to
confer any right or benefit upon any person, firm or corporation other than
the parties and their respective successors and permitted assigns.
(d) Waivers, Etc. No failure or delay on the part of the parties in
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exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this
Agreement nor consent to any departure by the parties therefrom shall in
any event be effective unless the same shall be in writing, and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
(e) Setoff. All payments to be made by any party under this Agreement
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shall, except to the extent otherwise specifically provided herein, be made
without setoff, counterclaim or withholding, all of which are expressly
waived.
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(f) Prior Tax-Sharing Agreements; Effect on Earnings and Profits
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Election. This Agreement constitutes the entire agreement between the
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parties and shall supersede any other Tax-sharing or Tax-allocation
agreement or arrangement in effect between the parties hereto prior to the
Effective Date with respect to the matters expressly dealt with herein.
Nothing in this Agreement is intended to change or otherwise affect any
election made by the Millipore Affiliated Group with respect to the
calculation of earnings and profits under section 1552 of the Code or the
Treasury Regulations.
(g) Amendment. This Agreement may not be altered, changed, modified,
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or terminated orally, and any modification or revision of this Agreement
shall be accomplished only through a writing clearly denominated as an
amendment to this Agreement signed by both Millipore and MMI.
(h) Confidentiality. The parties to this Agreement shall be bound by
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Article VI of the Master Separation and Distribution Agreement.
(i) Dispute Resolution. Any dispute, controversy or claim arising
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between or among two or more parties relating to the interpretation or
performance of this Agreement shall be handled in accordance with Article
IX of the Master Separation and Distribution Agreement.
(j) Headings. Descriptive headings are for convenience only and shall
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not control or affect the meaning or construction of any provision of this
Agreement.
(k) Governing Law. This Agreement is intended to take effect as a
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sealed instrument governed by the laws of Commonwealth of Massachusetts
(without giving effect to any choice or conflict of law provision or rule
that would cause the application of the laws of any other jurisdiction).
[The remainder of this page is intentionally left blank.]
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IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers, each of whom is duly authorized, all as
of the day and year first above written.
Millipore Corporation
By: _________________________
Title:
Millipore MicroElectronics, Inc.
By: _________________________
Title:
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