DYN » Topics » Section 5.6 Tax Matters .

This excerpt taken from the DYN 8-K filed May 31, 2007.

Section 5.6 Tax Matters.

(a) All excise, sales, use, transaction, conveyance, stock transfer, value added, transfer (including real property transfer or gains), stamp, documentary, filing, recordation and other similar Taxes, levies or assessments (“Transfer Taxes”), together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties, resulting directly from the sale and transfer by Seller and/or by its Affiliates to Buyer of the Membership Interests as contemplated by this Agreement, shall be borne by Buyer. Buyer and Seller shall each prepare and file in a timely manner any and all Tax Returns or other documentation relating to such Transfer Taxes which such Parties are required to file pursuant to applicable law; provided, however, that, to the extent required by applicable law, Seller, the Company and their respective Affiliates will join in the execution of any such Tax Returns for such Transfer Taxes or other documentation relating to any such Transfer Taxes. The party filing any Tax Return described above shall provide to the other party, and the Company copies of each Tax Return described in the proviso in the preceding sentence for such Transfer Taxes at least thirty (30) days prior to the date such Tax Return is required to be filed. Neither Seller nor

 

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the Company (and their Affiliates) shall file any refund request, protest, or petition for reassessment, or take any similar action with respect to property Taxes imposed on any of the property of the Company without the consent of Buyer.

(b) Seller, at its cost and in accordance with past practices, shall prepare and file, or cause to be prepared and filed, any Tax Returns of the Company for any taxable period ending on or before the Closing Date. Buyer shall prepare and file, or cause to be prepared and filed, any Tax Return of the Company for any taxable period ending after the Closing Date. Each Party shall provide the other Party with such assistance as may reasonably be requested by the other Party in connection with the preparation of any Tax Return, any audit or other examination by any taxing authority, or any judicial or administrative proceedings relating to liability for Taxes, and each Party shall retain and provide the other Party with any records or information that may be relevant to any such return, audit, examination or proceedings and each shall provide the other Party with any final determination of any such audit or examination, proceeding or determination that affects any amount required to be shown on any return of the other Party for any period. Any information obtained pursuant to this Section 5.6(b) or pursuant to any other Section hereof providing for the sharing of information or review of any Tax Return or other instrument relating to Taxes shall be kept confidential by the Parties as provided in Section 5.7 hereof.

(c) In the event Buyer receives notice of any examination, claim, adjustment or other proceeding relating to the liability for Taxes of or with respect to the Company for any period prior to the Closing Date, Buyer shall notify Seller in writing as soon as possible but in no event later than thirty (30) days of receiving notice thereof. As to any such Taxes for which Seller is or may be liable, Seller shall at Seller’s expense control or settle the contest of such examination, claim, adjustment or other proceeding. In the event Seller receives notice of any examination, claim, adjustment or other proceeding relating to the liability for Taxes of or with respect to the Company that may have any effect for any period after the Closing Date, Seller shall notify Buyer in writing as soon as possible but in no event later than thirty (30) days of receiving notice thereof. As to any such Taxes for which Buyer is or may be liable, Buyer shall at Buyer’s expense control or settle the contest of such examination, claim, adjustment or other proceeding. The Parties shall cooperate with each other and with their respective Affiliates in the negotiations and settlement of any proceeding described in this Section 5.6.

(d) Prior to the Closing Date, Seller shall cause the Company to be converted, merged or liquidated into a Delaware (or such other jurisdiction in the United States of America as Buyer may reasonably request) limited liability company that is treated as a partnership for U.S. federal income tax purposes pursuant to Treas. Reg. section 301.7701-3 (collectively, the “Conversion”).

(e) All ad valorem Taxes, both real and personal, or similar taxes, levied upon the Company or the Business, shall be prorated between Buyer and Seller for that portion of the applicable Tax period prior to and after the Closing Date.

(f) Seller shall indemnify, defend and hold harmless the Buyer Indemnitees from and against any and all claims, demands or suits by any Person, and all losses, liabilities, damages, obligations, payments, costs and expenses (including reasonable legal fees and

 

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expenses and including costs and expenses incurred in connection with investigations and settlement proceedings) relating to the following Taxes: (i) all Taxes imposed on Seller or any Affiliate thereof (other than the Company), (ii) Taxes of or relating to the Company for, or allocable to, Tax periods (or portions thereof) beginning before and ending on or before the Closing Date, and (iii) Income Taxes imposed on or payable by the Company solely by reason of being severally liable for the Income Tax of any other person pursuant to Treasury Regulation Section 1.1502-6 or any analogous state or local Tax Law.

This excerpt taken from the DYN 8-K filed Feb 2, 2007.

Section 6.6 Tax Matters.

(a) All Transfer Taxes incurred in connection with this Agreement and the Ancillary Agreements and the Transactions (whether imposed on Seller or Purchaser) shall be borne by Seller and Dynegy. Seller and Dynegy shall timely prepare and file, to the extent required by applicable Law, all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and timely pay the amount shown as due on such Tax Returns to the applicable Governmental Authority.

(b) With respect to Property Taxes to be prorated in accordance with Section 3.4, Purchaser shall prepare and timely file all Tax Returns required to be filed after the Closing with respect to the Purchased Assets, if any, and shall duly and timely pay all such Taxes shown to be due on such Tax Returns. Purchaser’s preparation of any such Tax Returns shall be subject to Seller’s approval, which approval shall not be unreasonably withheld or delayed. Purchaser shall make such Tax Returns available for Seller’s review and approval no later than twenty (20) Business Days prior to the due date for filing such Tax Returns, it being understood that Seller’s failure to approve any such Tax Returns shall not limit Purchaser’s obligation to timely file such Tax Returns and duly and timely pay all Taxes shown to be due thereon. Not less than five (5) Business Days prior to the due date of any such Taxes, Seller and Dynegy shall pay to Purchaser the portion of the amount shown as due on such Tax Returns that is, as determined in accordance with Section 3.4, the responsibility of Seller and, to the extent required by Law, Seller and Dynegy shall join in the execution of any such Tax Returns.

(c) With respect to prorated Property Taxes to be paid by Seller and Dynegy, Seller’s or Dynegy’s preparation of any Tax Return relating to a lien for Property Taxes on or related to the Purchased Assets that will arise after the Closing Date shall be subject to Purchaser’s approval, which approval shall not be unreasonably withheld or delayed. Seller and Dynegy shall make such Tax Returns available for Purchaser’s review and approval no later than twenty (20) Business Days prior to the due date for filing such Tax Return, it being understood that Purchaser’s failure to approve any such Tax Return shall not limit Seller’s and Dynegy’s obligation to timely file such Tax Returns and duly and timely pay all Taxes shown to be due thereon. Not less than five (5) Business Days prior to the due date of any such Taxes, Purchaser shall pay to Seller the portion of the amount shown as due on such Tax Returns that is, as determined in accordance with Section 3.4, the responsibility of Purchaser and, to the extent required by Law, Purchaser or any of its Affiliates shall join in the execution of any such Tax Returns. In preparing and reviewing such Tax Returns, the Parties shall cooperate and act in good faith to resolve any disagreement related to such Tax Returns as between the Parties or as between either Party and any Governmental Authority.

 

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(d) From and after the Closing, Purchaser, Seller, and Dynegy shall provide the other Party with such cooperation and assistance, and shall cause their agents and representatives, if any, to provide the other Party with such cooperation and assurance, as may reasonably be requested by the other Party in connection with the preparation or filing of any Tax Return, any audit or other examination by any Tax authority, or any judicial or administrative proceedings relating to liability for Taxes, or any claim for refund of Taxes (if not inconsistent with this Agreement) and each shall retain and provide the requesting Party with any records or information which may be relevant to such return, audit or examination, or proceedings and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Any information obtained pursuant to this Section 6.6 or pursuant to any other Section providing for the sharing of information relating to or review of any Tax Return or other schedule relating to Taxes shall be kept confidential by the Parties.

(e) Any refund received of Taxes paid or payable with respect to Taxes attributable to any of the Purchased Assets shall be promptly paid as follows (or to the extent payable but not paid due to offset against other Taxes shall be promptly paid by the Party receiving the benefit of the offset as follows): (i) to Seller and Dynegy if attributable to Taxes with respect to any Tax year or portion thereof ending on or before the Closing Date (or for any Tax year beginning before and ending after the Closing Date to the extent allocable to the portion of such period beginning before and ending on the Closing Date); and (ii) to Purchaser if attributable to Taxes with respect to any Tax year or portion thereof beginning after the Closing Date (or for any Tax year beginning before and ending after the Closing Date to the extent allocable to the portion of such period ending after the Closing Date).

(f) In the event that a dispute arises between the Parties as to the amount of Taxes, the Parties shall attempt in good faith to resolve such dispute, and any amount so agreed upon shall be paid to the appropriate Party.

EXCERPTS ON THIS PAGE:

8-K
May 31, 2007
8-K
Feb 2, 2007
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