TAX SHARING AGREEMENT
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BETWEEN
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XXXXXXX PURINA COMPANY
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AND
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AGRIBRANDS INTERNATIONAL, INC.
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THIS AGREEMENT (the "Agreement") dated as of April 1, 1998 is made by and
between XXXXXXX PURINA COMPANY ("Xxxxxxx"), a corporation organized under the
laws of the State of Missouri, and Agribrands International, Inc.
("Agribrands"), a corporation organized under the laws of the State of
Missouri.
WHEREAS, Xxxxxxx is the common parent of an affiliated group of domestic
corporations within the meaning of Section 1504(a) of the U. S. Internal
Revenue Code of 1986, as amended (the "Code"), which group includes Agribrands
(such corporations hereinafter referred to collectively as the "Xxxxxxx
Domestic Subsidiaries" and individually as a "Xxxxxxx Domestic Subsidiary",
and such affiliated group shall be referred to as the "Xxxxxxx Group");
WHEREAS, Xxxxxxx is also the parent of certain directly or
indirectly-owned foreign corporations (such corporations hereinafter referred
to collectively as the "Xxxxxxx Foreign Affiliates", and individually as a
"Xxxxxxx Foreign Affiliate"), as more specifically defined below.
WHEREAS, Agribrands will become the common parent of an affiliated group
of domestic corporations within the meaning of Code Section 1504(a) (such
corporations hereinafter referred to collectively as the "Agribrands Domestic
Subsidiaries" and individually as a "Agribrands Domestic Subsidiary", and such
affiliated group shall be referred to as the "Agribrands Group");
WHEREAS, Agribrands will also become the parent of certain directly or
indirectly-owned foreign corporations (such corporations hereinafter referred
to collectively as the "Agribrands Foreign Affiliates" and individually as the
"Agribrands Foreign Affiliate"), as more specifically defined below.
WHEREAS, Xxxxxxx intends to distribute to its shareholders all of its
stock in Agribrands (the "Distribution") under the Agreement and Plan of
Reorganization between Xxxxxxx and Agribrands dated April 1, 1998 (the "Plan
of Reorganization") on April 1, 1998 (the "Distribution Date") subject to the
receipt of a favorable ruling from the Internal Revenue Service ("IRS") that
the Distribution qualifies as a tax-free distribution of stock of a controlled
corporation under Code Section 355; and
WHEREAS, Xxxxxxx and Agribrands believe that it is in their mutual best
interests to set forth in this Agreement the rights and duties of each party
with respect to various tax matters relating to the Agribrands Group and the
Agribrands Foreign Affiliates, which may arise as a result of the
Distribution.
NOW, THEREFORE, in consideration of the premises and of the agreements
herein set forth, Xxxxxxx, (on its own behalf and on behalf of the Xxxxxxx
Domestic Subsidiaries and the Xxxxxxx Foreign Affiliates) and Agribrands (on
its own behalf and on behalf of the Agribrands Domestic Subsidiaries and the
Agribrands Foreign Affiliates), hereby agree as follows:
ARTICLE I. DEFINITIONS
(a) Agribusiness. Agribusiness shall mean Xxxxxxx'x direct or
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indirect ownership of (i) the international business of the manufacture,
distribution, and sale of feeds for commercial livestock, commercial poultry,
laboratory animals, zoo animals, wild birds and game, and fish and shellfish
raised in commercial aquaculture facilities; and operation of hatcheries; (ii)
pet food manufacturing operations in Korea and sale and distribution of such
locally manufactured pet food products; (iii) pet food manufacturing
operations in Canada at Strathroy, Ontario, and the sale and distribution of
such locally manufactured products; and (iv) all joint ventures involving or
associated with the businesses described in (i) through (iii) above.
(b) Audit. As used herein, the term "Audit(s)" shall mean any audit
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or examination undertaken by a Tax authority with respect to Taxes.
(c) Controversy. As used herein, the term "Controversy(ies)" shall
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mean any action involving a Tax authority before any administrative or
judicial body which results from a disagreed Tax adjustment proposed during
the course of an Audit.
(d) Domestic. As used herein to modify the terms "Tax", "Taxes" or
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"Return", the term "Domestic" shall mean with respect to any U.S. federal,
territorial, state or local government.
(e) Foreign. As used herein to modify the terms "Tax", "Taxes" or
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"Return", the term "Foreign" shall mean with respect to any government which
is not any U.S. federal, territorial, state or local government.
(f) Agribrands Foreign Affiliate. As used herein, "Agribrands
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Foreign Affiliate" shall mean any subsidiary which on the Distribution Date is
owned directly or indirectly by Agribrands, and is incorporated under the laws
of a government other than the United States, its states or territories.
(g) Former Agribusiness. As used herein "Former Agribusiness" shall
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mean all of the following international businesses and operations heretofore,
but not currently, owned and conducted directly or indirectly by Xxxxxxx: (i)
former international businesses of producing and distributing commercial feeds
for livestock and poultry and rations for laboratory animals, zoo animals, and
wild birds and game; and operation of hatcheries; (ii) former pet food
manufacturing operations in Korea, and sale and distribution in Korea of pet
foods formerly locally manufactured; (iii) poultry processing; (iv) finished
poultry products; (v) manufacture and sale of silos; (vi) manufacture and
distribution of livestock and poultry health products; (vii) commercial egg
production (fertile and infertile); (viii) vitamins for human consumption;
(ix) raising of laboratory rats; (x) professional services in ocean sciences
and technology; (xi) fishmeal processing; (xii) oilseed processing other than
soy processing; (xiii) sale and lease of breeding hogs; (xiv) other businesses
managed or directed by employees of the Agribusiness, other than cereal, baked
goods, tuna processing, and soy protein businesses; and (xv) all joint
ventures involving or associated with the businesses described in (i) through
(xiv) above or the Agribusiness.
all of the businesses and operations (i) heretofore, but not currently,
conducted by any former or current member of the Agribusiness Group or by an
Agribrands Foreign Affiliate, or (ii) currently conducted by any such former
member or former Foreign Affiliate; except that the cereal business formerly
conducted by Purina Korea, Inc. shall not be deemed a Former Agribusiness.
(h) Former Xxxxxxx Business. As used herein "Former Xxxxxxx
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Business" shall mean all businesses and operations heretofore, but not
currently, directly or indirectly owned and conducted by Xxxxxxx, other than a
Former Agribusiness.
(i) Xxxxxxx Business. As used herein "Xxxxxxx Business" shall mean
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all of the businesses owned, directly and indirectly, by Xxxxxxx and conducted
immediately prior to the Distribution Date, other than the Agribusiness.
(j) Xxxxxxx Foreign Affiliate. As used herein, "Xxxxxxx Foreign
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Affiliate" shall mean any subsidiary which on the Distribution Date is owned
directly or indirectly by Xxxxxxx, is incorporated under the laws of a
government other than the United States, its states or territories, and is not
a Agribrands Foreign Affiliate.
(k) Tax or Taxes. As used herein, "Tax" or "Taxes" shall mean all
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taxes, however denominated, including any interest, penalties or other
additions that may become payable, in respect thereof, that are imposed, (or
with respect to Foreign Taxes allocated among the Xxxxxxx Business, the
Agribusiness, any Former Xxxxxxx Business, or any Former Agribusiness
currently or formerly conducted by a single Foreign Affiliate, the taxes that
would have been imposed had the Agribusiness or Former Agribusiness been the
sole business of a single Foreign Affiliate in accordance with Article III
1(b) hereof) by any governmental entity, whether foreign or domestic, federal,
territorial, state or local, or any agency or political subdivision of any
such governmental entity, including, but not limited to, all income or profits
taxes, payroll and employee withholding taxes, unemployment insurance, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise
taxes, gross receipt taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, transfer taxes, value-added tax, and
other governmental charges, and other government obligations of the same or of
a similar nature to any of the foregoing, which any member of the Xxxxxxx
Group or Agribrands Group, or any Xxxxxxx Foreign Affiliate or Agribrands
Foreign Affiliate, is required to pay, withhold or collect.
(l) Tax Return or Return. As used herein, "Tax Return" or "Return"
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shall mean any return, filing, questionnaire, information report or other
document required to be filed, including amended returns that may be filed,
for any Tax period with any Tax authority (domestic or foreign) in connection
with any Tax or Taxes (whether or not payment is required to be made with
respect to such filing). As used herein, "Consolidated Tax Return" shall mean
a U.S. federal income Tax Return described in Code Section 1501.
ARTICLE II. DOMESTIC TAXES
1. DOMESTIC TAXES - PREPARATION AND FILING OF TAX RETURNS, PAYMENTS OF
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TAXES, ADJUSTMENTS, AUDITS AND CONTROVERSIES.
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(a) (i) Preparation and Filing of Domestic Return. The
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preparation and filing of any Domestic Tax Return for Agribrands or the
Agribrands Domestic Subsidiaries for any Tax period beginning on or prior to
the Distribution Date shall be the responsibility of Xxxxxxx. Xxxxxxx shall
consistently prepare and file such Domestic Tax Returns in accordance with its
historical practices.
(ii) Agribrands hereby designates, and Agribrands agrees to
cause each of the Agribrands Domestic Subsidiaries to designate, Xxxxxxx
irrevocably as its agent for the purpose of taking any and all action
necessary or incidental to the filing of any Consolidated Return or any other
Domestic Tax Return, as necessary for any Tax period beginning on or prior to
the Distribution Date.
(iii) The preparation and filing of any Domestic Tax Return for
Agribrands or the Agribrands Domestic Subsidiaries for any Tax period
beginning after the Distribution Date shall be the responsibility of
Agribrands.
(b) Liability for Domestic Taxes.
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(i) Xxxxxxx shall be liable for, shall hold the Agribrands Group
harmless against, and shall make payment of any Domestic Tax which is
attributable to the Agribrands Group, for any and all Tax periods ending on or
prior to the Distribution Date, including any such liabilities resulting from
the Audit or other adjustment to previously filed Domestic Tax Returns.
Xxxxxxx shall be entitled to any refund of such Domestic Taxes for any such
Tax period.
(ii) Agribrands shall be liable for, shall hold the Xxxxxxx
Group harmless against, and make payment of any Domestic Tax due which is
attributable to the Agribrands Group for all Tax periods beginning after the
Distribution Date, and shall be entitled to any refund of such Taxes for any
such Tax period.
(iii) If, as a result of operations for periods commencing after
the Distribution Date, Agribrands, or any Agribrands Domestic Subsidiary,
shall have, for Domestic Tax purposes, any losses or credits which may be
carried back to the Tax periods commencing prior to the Distribution Date,
Agribrands shall be entitled to any refunds as a result of such carrybacks and
any Tax refunds (plus interest) received by Xxxxxxx or the Xxxxxxx Domestic
Subsidiaries as a result of such carrybacks shall be promptly remitted to
Agribrands. Xxxxxxx agrees to cooperate with Agribrands to obtain such
refunds and Agribrands agrees to reimburse Xxxxxxx for expenses related
thereto.
(c) Domestic Audits and Controversies.
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(i) Xxxxxxx shall exclusively control and direct any Tax Audit
or Controversy as to any Domestic Taxes for a Tax period which begins on or
prior to the Distribution Date. Agribrands, however, shall have the right to
participate in any such Audit or Controversy to the extent such Audit or
Controversy would impact the Domestic Taxes for which Agribrands is liable in
accordance with this Agreement, as determined by Xxxxxxx and Xxxxxxx shall not
consent to any resolution, compromise or conclusion of such Audit or
Controversy without the written approval of Agribrands, which approval shall
not be unreasonably withheld. Notwithstanding the foregoing, in the event
Xxxxxxx shall compromise or settle any such deficiency of Domestic Tax without
the prior consent of Agribrands, Xxxxxxx shall hold Agribrands and any
Agribrands Domestic Subsidiary harmless against any losses, costs, or damages,
including Taxes resulting from such compromise or settlement.
(ii) Agribrands shall exclusively control and direct any Audit
or Controversy with respect to any Domestic Taxes attributable to the
Agribrands Group for a Tax period which begins after the Distribution Date.
Xxxxxxx, however, shall have the right to participate in any such Audit or
Controversy to the extent such Audit or Controversy would impact the Domestic
Taxes for which Xxxxxxx is liable in accordance with this Agreement, as
determined by Xxxxxxx and Agribrands shall not consent to any resolution,
compromise or conclusion of such Audit or Controversy without the written
approval of Xxxxxxx, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, in the event Agribrands shall compromise or
settle any such deficiency of Domestic Tax without the prior consent of
Xxxxxxx, Agribrands shall hold Xxxxxxx and any Xxxxxxx Domestic Subsidiary
harmless against any losses, costs, or damages, including Taxes resulting from
such Audit of Controversy.
(d) Domestic Tax Adjustments
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(i) If the IRS, or any state or local taxing authority, shall
make an adjustment to any Domestic Tax Return of the Xxxxxxx Group, any
Xxxxxxx Domestic Subsidiary, Agribrands, or any Agribrands Domestic Subsidiary
for any Tax period beginning prior to the Distribution Date, and such
adjustment (including adjustments to tax basis determination, a tax accounting
method with respect to its property and accounts included in and carried
forward from Xxxxxxx or the Xxxxxxx Domestic Subsidiaries prior to the
Distribution Date), consistently applied would require Agribrands or the
Agribrands Domestic Subsidiaries to make a corresponding adjustment to their
Domestic Tax Returns for periods after the Distribution Date, then,
(A) if such corresponding adjustment in a Domestic Tax
Return of Agribrands or any Agribrands Domestic Subsidiary results in an
actual diminution of any Domestic Taxes for such period, whether or not an
actual amended return is filed, Agribrands shall pay Xxxxxxx the amount of
such Domestic Tax either (I) when such refund and related interest are
received and required to be remitted within the period provided in Article VI
3 hereof, or (II) within thirty (30) days of written notice by Xxxxxxx to
Agribrands of such corresponding adjustment, if an amended return is not
filed.
(B) if such corresponding adjustment in a Domestic Tax
Return of Agribrands or a Agribrands Domestic Subsidiary results in an
increase of any Domestic Tax for Agribrands for such period, and an actual
diminution of any Domestic Tax for Xxxxxxx, Xxxxxxx shall pay Agribrands the
amount of such Domestic Tax, either due (I) when such refund and related
interest are received and required to be remitted within the period provided
in Article VI 3 hereof, or (II) within thirty (30) days of written notice by
Agribrands to Xxxxxxx of such corresponding adjustment, if an amended return
is not filed.
(e) Domestic Transfer Taxes. Xxxxxxx shall pay any and all Domestic
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Taxes or similar charges required (or which may, in the future, be required)
by federal, state, or local authorities upon, or by virtue of, (a) the
Distribution and (b) the transfer of property to the Agribrands Group
including the transfer of shares of stock of Agribrands Foreign Affiliates in
connection with the Distribution.
(f) Domestic Tax Attributes.
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(i) Any Domestic Tax attribute generated by Xxxxxxx or
Agribrands shall, to the extent permitted by the applicable law of the Tax
jurisdiction in question, remain with Xxxxxxx or Agribrands, respectively, or
the appropriate entity. In any case where the applicable law of the Tax
jurisdiction in question requires such Tax attribute to be allocated between
Xxxxxxx and Agribrands, such allocation shall be made as provided by the law
of such jurisdiction.
(ii) Any excess Foreign Tax credits of the Xxxxxxx Group, as of
the Distribution Date, as finally determined by Xxxxxxx in accordance with
Code Section 904, shall be allocated between the Xxxxxxx Group and the
Agribrands Group, in accordance with Regs. 1.1502-79.
(iii) Any earnings and profits of the Xxxxxxx Group as of the
Distribution Date, as finally determined by Xxxxxxx, shall be allocated
between the Xxxxxxx Group and the Agribrands Group in accordance with Regs.
1.312-10(a).
ARTICLE III. FOREIGN TAXES
1. PREPARATION AND FILING OF TAX RETURNS, PAYMENT OF TAXES, ADJUSTMENTS,
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AUDITS AND CONTROVERSIES.
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(a) Preparation and Filing of Foreign Returns.
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(i) Agribrands shall be responsible for the preparation and
filing of any Foreign Tax Return of any Agribrands Foreign Affiliate for all
Tax Periods.
(ii) Xxxxxxx shall be responsible for the preparation and filing
of any Foreign Tax Return of any Xxxxxxx Foreign Affiliate for all Tax
Periods.
(b) Liability for Foreign Taxes.
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(i) Subject to (A) the Foreign Transfer Taxes described in
subparagraph (c) below, and (B) any Foreign Taxes with respect to the Italian
Usufruct transaction described in the Agreement between Xxxxxxx Purina
International, Inc. and Fiduciaria Shearson Xxxxxx Brothers, SpA, dated
December 4, 1989, Agribrands shall be liable for, shall hold the Xxxxxxx Group
and the Xxxxxxx Foreign Affiliates harmless against, and shall make payment
of, all Foreign Taxes attributable to the Agribusiness and Former
Agribusiness, for any and all Tax periods commencing before, on, or after the
Distribution Date, including any such liabilities resulting from an Audit or
other adjustment to previously filed Tax Returns. Agribrands shall be
entitled to any refund of such Foreign Taxes for any such Tax period. The
allocation of any such Foreign Taxes among the Xxxxxxx Business, the
Agribusiness, the Former Xxxxxxx Business or any Former Agribusiness,
currently or formerly conducted by a single Xxxxxxx Foreign Affiliate, shall
be determined in accordance with the books and records of Xxxxxxx and the
Xxxxxxx Foreign Affiliate, as though the Agribusiness or Former Agribusiness
were deemed to have been conducted as the sole business of a single Foreign
Affiliate.
(ii) Xxxxxxx shall be liable for, shall hold the Agribrands
Group and the Agribrands Foreign Affiliates harmless against, and shall make
payments of, all Foreign Taxes owed by any Xxxxxxx Businesses and Former
Xxxxxxx Business, for any and all Tax Periods commencing before, on, or after
the Distribution Date, including any such liabilities resulting from an Audit
or other adjustment to previously filed Tax Returns. Xxxxxxx shall be
entitled to any refund of such Foreign Taxes for any Tax period. The
allocation of any such Foreign Taxes among the Xxxxxxx Businesses and the
Agribusiness, the Former Xxxxxxx Business, or any Former Agribusiness
conducted by a single Xxxxxxx Foreign Affiliate shall be in accordance with
the books and records of Xxxxxxx and the Xxxxxxx Foreign Affiliate, as though
the Agribusiness or Former Agribusiness were deemed to have been conducted as
the sole business of a single Foreign Affiliate.
(iii) If, in accordance with Article III 1(b), hereof, either
Xxxxxxx or Agribrands is liable for any portion of the Foreign Taxes payable
in connection with any Foreign Tax Return to be filed by the other, the party
responsible for filing such Return (the "Preparer") shall prepare and deliver
to the other party (the "Payor") a copy of such return and any schedules, work
papers and other documentation then available that are relevant to the
preparation of the portion of such return for which the Payor is or may be
liable hereunder not later than the earlier of twenty (20) days prior to the
due date for such Tax Return (including applicable extensions) (the "Due
Date") or when the information is available in the normal course of business.
The Preparer shall not file such return until the earlier of either the
receipt of written notice from the Payor indicating the Payor's consent
thereto, or five (5) days prior to the Due Date to ensure timely receipt of
the return by the taxing jurisdiction.
The Payor shall have the option of providing to the
Preparer, at any time at least ten (10) days prior to the Due Date, written
instructions as to how the Payor wants any, or all, of the items for which it
may be liable in full reflected on such Tax Return. Failure by the Payor to
give written instructions at least ten (10) days prior to the Due Date shall
constitute a waiver by the Payor of its right to provide instructions, to the
extent such failure is prejudicial to the Preparer.
The Preparer shall, in preparing such Return, cause the
items for which the Payor is liable hereunder to be reflected in accordance
with the Payor's instructions unless the Preparer determines that such manner
of reporting is in contravention of applicable law. In the absence of having
received instructions from Payor, such items shall be reported in the manner
determined by the Preparer, which is not in contravention of applicable law,
and consistent with historic business practices, as applicable.
(c) Foreign Transfer Taxes. Xxxxxxx shall pay any and all Foreign
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Taxes or similar charges required by any Foreign authorities upon, or by
virtue of, any transfer of property contemplated under the Plan of
Reorganization, including the transfer of shares of stock of Agribrands
Foreign Affiliates to Agribrands in connection with the Distribution. Foreign
Tax Returns required to be prepared and filed by Agribrands relating to the
transfer of shares of stock of Agribrands Foreign Affiliates to Agribrands,
must be provided to Xxxxxxx by Agribrands at least ten (10) days prior to the
due date for such Tax Returns so that Xxxxxxx may timely make any payment of
Foreign Transfer Taxes due with respect to such Foreign Tax Return.
(d) Foreign Audits and Controversies
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(i) Agribrands shall exclusively control and direct any Audit or
Controversy with respect to any Agribrands Foreign Affiliate. Xxxxxxx,
however, shall have the right to participate in any such Audit or Controversy
to the extent such Audit or Controversy would impact the Foreign Taxes for
which Xxxxxxx is liable in accordance with this Agreement. Agribrands shall
not consent to any resolution, compromise or conclusion of such Audit or
Controversy without the written approval of Xxxxxxx, which approval shall not
be unreasonably withheld. Notwithstanding the foregoing, in the event
Agribrands shall compromise or settle any such deficiency of Foreign Tax
without the prior consent of Xxxxxxx, Agribrands shall hold Xxxxxxx and any
Xxxxxxx Foreign Affiliate harmless against any losses, costs, or damages,
including Taxes resulting from such Audit or Controversy.
(ii) Xxxxxxx shall exclusively control and direct any Tax Audit
or Controversy as to any Foreign Tax with respect to any Xxxxxxx Foreign
Affiliate. Agribrands, however, shall have the right to participate in any
such Audit or Controversy to the extent such Audit or Controversy would impact
the Foreign Taxes for which Agribrands is liable in accordance with this
Agreement. Xxxxxxx shall not consent to any resolution, compromise or
conclusion of such Audit or Controversy without the written approval of
Agribrands, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, in the event Xxxxxxx shall compromise or settle
any such deficiency of Foreign Tax without the prior consent of Agribrands,
Xxxxxxx shall hold Agribrands and any Agribrands Foreign Affiliate harmless
against any losses, costs, or damages, including Taxes resulting from such
compromise or settlement.
(e) Foreign Tax Attributes.
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Subject to subparagraph (c) above regarding Foreign Transfer Taxes,
any Foreign Tax attribute generated by Xxxxxxx or Agribrands shall, to the
extent permitted by the applicable law of the Tax jurisdiction in question,
remain with Xxxxxxx or Agribrands, respectively, or the appropriate entity.
In any case where the applicable law of the Tax jurisdiction in question
requires such Tax attribute to be allocated between Xxxxxxx and Agribrands,
such allocation shall be made as provided by the law of such jurisdiction. In
the event the applicable law of the Tax jurisdiction requires that such Tax
Attribute be allocated between the parties based on a method of allocation
agreed to by the parties, Xxxxxxx and Agribrands shall apply an allocation
method reasonably agreed to by both parties.
ARTICLE IV. ARBITRATION
For the purposes of this Agreement, all computations or recomputations of
Tax liability, and all computations or recomputations of any amount or any
payment (including, but not limited to, computations of the amount of the tax
liability, any loss or credit or deduction, statutory tax rate for a year,
interest payments, and adjustments) and all determinations of payments or
repayments, or determination of any other nature required to be made pursuant
to this Agreement, shall be based on the assumptions and conclusions of the
party making the computations. If either Xxxxxxx or Agribrands objects thereto
in writing, addressed to the other party, the provisions of Article XI the
Plan of Reorganization shall be applicable to resolve any issues under this
Tax Sharing Agreement.
ARTICLE V. AGRIBRANDS POST-DISTRIBUTION TRANSACTIONS
1. Agribrands shall, and shall cause each member of the Agribrands
Group and each Agribrands Foreign Affiliate to comply with each representation
and statement made, or to be made, to the IRS in connection with any ruling
obtained, or to be obtained, by Xxxxxxx from the IRS with respect to any
transaction contemplated by the Plan of Reorganization. Neither Agribrands
nor any member of the Agribrands Group shall for a period of three years
following the Distribution Date engage in any of the following transactions,
unless, in the sole discretion of Xxxxxxx, either (a) an opinion in form and
substance satisfactory to Xxxxxxx is obtained from counsel to Agribrands , the
selection of which counsel is agreed to by Xxxxxxx or (b) a supplemental
ruling is obtained from the IRS, in either case to the effect that such
transactions would not adversely affect the tax consequences of the
transactions described in Articles II and IV of the Plan of Reorganization to
(i) Xxxxxxx or any member of the Xxxxxxx Group, (ii) Agribrands or any member
of the Agribrands Group, or (iii) the Xxxxxxx shareholders. The transactions
subject to this provision include, but are not limited to: (i) making a
material disposition (including transfers from one member of the Agribrands
Group to another member of the Agribrands Group), by means of a sale or
exchange of assets or shares of stock, a distribution to shareholders, or
otherwise, of any of its assets (other than the transactions contemplated by
this Agreement) except in the ordinary course of business; (ii) repurchasing
any Agribrands Shares, unless such repurchase satisfies the requirements of
Section 4.05(1)(b) of Revenue Procedure 96-30, (iii) issuing any Agribrands
shares of stock that in the aggregate exceeds twenty percent (20%) of the
issued and outstanding stock of Agribrands immediately following the
Distribution; (iv) liquidating or merging with any other corporation
(including a member of the Agribrands Group); or (v) ceasing to engage in the
active conduct of a trade or business within the meaning of Section 355(b)(2)
of the Code. Agribrands hereby represents that neither Agribrands nor any
member of the Agribrands Group has any present intention to undertake any of
the transactions set forth in above, except as set forth in ruling request
submitted to the IRS with respect to the Distribution.
2. Xxxxxxx shall, and shall cause each member of the Xxxxxxx Group
and each Xxxxxxx Foreign Affiliate to refrain from taking any action which
would adversely impact any ruling obtained, or to be obtained, by Xxxxxxx from
the IRS with respect to any transaction contemplated by the Agreement of
Reorganization.
ARTICLE VI. MISCELLANEOUS PROVISIONS
1. Mutual Cooperation. Xxxxxxx and Agribrands shall, and shall cause
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each of their Domestic Subsidiaries and Foreign Affiliates to, cooperate with
each other in filing any Tax Returns or consent contemplated by this Agreement
and to take such action as the other party may reasonably request, including
but not limited to the following: (a) provide data for the preparation of Tax
Returns, including schedules, and make elections that may be required by the
other party; (b) provide required documents and data and cooperate in Audits
or investigations of Tax Returns and execute appropriate powers of attorney in
favor of the other party and/or its agents; (c) file protests or otherwise
contest proposed or asserted tax deficiencies, including filing petitions for
redetermination or prosecuting actions for refund in court, and pursuing the
appeal of such actions; (d) take any of the actions of the type described in
Regulation Section 1.1502-77(a) of the Code (describing the scope of the
agency of the common parent of a group of affiliated corporations); and (v)
file requests for the extension of time within which to file Tax Returns.
2. Maintenance of Books and Records. Until the applicable statute of
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limitations (including periods of waiver), or statute of similar import, has
expired in accordance with laws governing Domestic or Foreign Taxes and Tax
Returns, Xxxxxxx and Agribrands shall, and shall cause each Domestic
Subsidiary and Foreign Affiliate to, retain all Tax workpapers and related
materials used in its possession and under its control in the preparation of
any Tax Return for Tax periods commencing prior to or on the Distribution
Date.
3. Payment. Failure to make any payment required under this
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Agreement will result in the accrual of interest on such amount due. Any
interest payment required hereunder shall be calculated from the same date and
at the rate used by the IRS, any foreign, state, or local tax authority, as
applicable, in computing the interest payable by it or to it. Unless
otherwise provided, all payments required to be made under this Agreement from
one party to another shall be made within thirty (30) days after the event
which gives rise to the requirement for payment occurs. Any payments made
pursuant to this Agreement are to be adjusted in the event that future events
or new information would, had they occurred or been known at the time of a
payment, have altered the amount of such payment, so that at the time of such
future events or knowledge of such information, appropriate adjustments shall
be made retroactively to include the consequences of such event or information
in the original computation.
4. Governing Law. This Agreement shall be governed and construed in
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accordance with the laws of the State of Missouri and shall be binding on the
successors and assigns of the parties hereto.
5. Entire Agreement. Unless otherwise specified, this Agreement
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contains the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior written agreements, memoranda,
negotiations and oral understandings, if any, and may not be amended,
supplemented or discharged except by performance or by an instrument in
writing signed by all of the parties hereto.
6. Controlling Agreement. In the case of a conflict between the Plan
---------------------
of Reorganization and this Agreement, this Agreement shall control.
7. Counterpart. This Agreement may be executed simultaneously in two
-----------
or more counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
XXXXXXX PURINA COMPANY
BY ___________________________________
AGRIBRANDS INTERNATIONAL, INC.
BY ___________________________________
H:\RCWINTER\WINWORD\PRCWAGR3.DOC
