Marvell Technology Group (MRVL)

5.09         Allocation of Expenses; Tax Matters.

(a)   Allocation of Non-Tax Operating Expenses.  All utility charges, gas charges, electric charges, water charges, water rents and sewer rents, if any, shall be apportioned between Buyer and Seller as of the Closing Date (Seller being liable for that portion of the period up to and including the day before the Closing Date, and Buyer being liable for that portion of the period on and after the Closing Date), computed on the basis of the most recent meter charges or, in the case of annual charges, on the basis of the established fiscal year.  All Prepayments (including lease expenses but excluding Taxes) paid by Seller prior to the Closing Date and all other operating expenses paid by Buyer with respect to the operation of the Business on or after the Closing shall be apportioned between Buyer and Seller as of the Closing Date computed on the basis of the applicable time period to which expenses apply.  Within a reasonable period after the Closing, Seller and Buyer shall present a statement to the other setting forth the amount of reimbursement to which each is entitled under this Section 5.09(a), together with such supporting evidence as is reasonably necessary to calculate the proration amount.  Such amount shall be paid by the Party owing it to the other within ten (10) days after delivery of such statement.

(b)   Allocation of Property Taxes.  With respect to Seller and each Subsidiary of Seller other than Transferred Sub, all real property taxes, personal property taxes and similar ad valorem obligations levied with respect to the Transferred Assets for a taxable period that includes (but does not end on) the Closing Date shall be apportioned between Seller and Buyer as of the Closing Date based on the number of days of such taxable period included in the Pre-Closing Tax Period and the number of days of such taxable period included in the Post-Closing Tax Period.  Seller shall be liable for the proportionate amount of such Taxes that is attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the proportionate amount of such Taxes that is attributable to the Post-Closing Tax Period.  Within a reasonable period after the Closing, Seller and Buyer shall present a statement to the other setting forth the amount of reimbursement to which each is entitled under this Section 5.09(b), together with such supporting evidence as is reasonably necessary to calculate the proration amount.  The proration amount shall be paid by the Party owing it to the other within ten (10) days after delivery of such statement.  Thereafter, Seller shall notify Buyer upon receipt of any bill for personal property taxes relating to the Transferred Assets, part or all of which are attributable to the Post-Closing Tax Period, and shall promptly deliver such bill to Buyer who shall pay the same to the appropriate taxing authority; provided, that if such bill covers any part of the Pre-Closing Tax Period, Seller shall also remit prior to the due date of such taxes to Buyer payment for the proportionate amount of such bill that is attributable to the Pre-Closing Tax Period.  In the event that either Seller or Buyer shall thereafter make a payment for which it is entitled to reimbursement under this Section 5.09(b), the other Party shall make such reimbursement promptly, but in no event later than thirty (30) days after the presentation of a statement setting

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forth the amount of reimbursement to which the presenting Party is entitled along with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement.  Any payment required under this Section 5.09(b) and not made when due shall bear interest at the rate of ten percent (10%) per annum.

(c)   Payment of Taxes.  Taxes described in Section 5.09(b), Section 5.09(f) or Section 5.09(h) shall be timely paid, and all applicable filings, reports and returns shall be filed, as provided by Applicable Law.  The paying Party shall be entitled to reimbursement from the non-paying Party in accordance with Section 5.09(b), Section 5.09(f) or Section 5.09(h), as the case may be.  Upon payment of such Tax, the paying Party shall present a statement to the non-paying Party setting forth the amount of reimbursement to which the paying Party is entitled under Section 5.09(b), Section 5.09(f) or Section 5.09(h), as the case may be, along with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement.  Any payment required under this Section 5.09(c) and not made when due shall bear interest at the rate of ten percent (10%) per annum.

(d)   Cooperation.  As to the Taxes that are subject to Section 5.09(b), Section 5.09(f) or Section 5.09(h) from and after the Closing Date, the Parties hereto agree to furnish or cause to be furnished to one another, upon request, as promptly as practicable, such information and assistance relating to the Transferred Assets, Transferred Sub and the Business as is reasonably necessary for the filing of all Tax Returns, the preparation for any audit by any taxing authority, and the prosecution or defense of any claim or Proceeding relating to any Tax Return.  The Parties hereto shall cooperate with each other in the conduct of any audit or other Proceeding related to Taxes involving the Business and each shall execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 5.09(d).

(e)   Responsibility for Payment of Taxes.  Taxes attributable to the Transferred Assets or the Business other than those treated specifically in Section 5.09(b) and Section 5.09(f), and Section 5.09(h), shall be borne by the Party incurring such Taxes (other than solely by reason of successor liability or similar provisions of law) under Applicable Law, and each Party shall indemnify, defend and hold the other Party harmless from and against all Taxes for which such Party is liable pursuant to this Section 5.09(e).  Other than with respect to Tax Returns of the Transferred Sub, responsibility for which is governed by Section 5.09(h), Buyer shall prepare and file (or cause to be prepared and filed) on a timely basis all Tax Returns with respect to the Business or the Transferred Assets (other than Tax Returns that are required to be filed by Selling Parties under Applicable Law) for all taxable periods beginning on or after the Closing Date, shall pay all Taxes shown to be due on such Tax Returns, and shall indemnify and hold Seller harmless against, from and in respect of all Taxes (i) for any taxable year or period commencing on the Closing Date and (ii) for any taxable period beginning on or before and ending after the Closing Date, other than Taxes attributable to the Pre-Closing Tax Period and Taxes that are the responsibility of Seller pursuant to Sections 5.09(b), 5.09(f) and 5.09(h).  The provisions of Section 5.09(c) regarding payment, verification, and interest shall apply to the Taxes that are subject to this Section 5.09(e).

(f)    Sales and Use Taxes.  All excise, value added, registration, stamp, recording, documentary, conveyancing, transfer, sales, use and any other similar Taxes arising out of the transfer of the Transferred Assets, the Business, the Transferred Shares or the assumption of the

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Assumed Liabilities (the “Sales Tax”) shall be determined as soon as practicable after Closing and fifty percent (50%) of such Sales Tax shall be paid by Buyer and one half (50%) of such Sales Tax shall be paid by Seller; provided, however, that Buyer or its Affiliates shall pay one hundred percent (100%) of all Sales Taxes to the extent the payment thereof by Buyer or such Affiliates gives rise to a right to claim a refund of or credit against Taxes otherwise payable by Buyer or its Affiliates under Applicable Law (“Buyer Sales Tax”).  To the extent permitted by Applicable Law, Buyer and Seller shall cooperate fully in minimizing the Sales Tax, including arranging for the electronic transfer of any Transferred Assets where not unduly burdensome.  To the extent a taxing authority provides notice to a Party of an audit of the Sales Tax (other than a notice to Buyer solely with respect to a Buyer Sales Tax), such Party shall immediately notify the other Party and Seller and Buyer shall each assume responsibility for such audit and shall each pay when due one half of any additional Sales Tax ultimately assessed with respect to the transactions contemplated by this Agreement, except that Buyer shall pay one hundred percent (100%) of any Buyer Sales Tax resulting from such audit.  Buyer shall have authority to control, settle or defend any proposed adjustment to the Sales Tax subject to Seller’s approval, and Seller shall cooperate as reasonably requested by Buyer in its defense or settlement of any proposed adjustment to the Sales Tax.

(g)   Withholding.  In the event that any Party is prohibited by Applicable Law from making payments to the other Party unless the paying Party deducts or withholds Taxes therefrom and remits such Taxes to the local taxing jurisdiction, then such paying Party shall duly withhold and remit such Taxes and shall pay to the other Party the remaining net amount after the Taxes have been withheld.  The paying Party shall promptly furnish the other Party with a copy of an official Tax receipt or other appropriate evidence of any Taxes imposed on payments made under this Agreement.  Each Party is responsible for its own respective income taxes or taxes based upon gross revenues, including business and occupation taxes.  Nothing in this Section 5.09(g) shall reduce or diminish the Parties’ obligations under Section 5.09(f), the intent of which is to cause each of Buyer and Seller to bear fifty percent (50%) of all Sales Tax other than Buyer Sales Tax, and for Buyer to bear one hundred percent (100%) of all Buyer Sales Tax, and any withholding of Sales Tax under this Section 5.09(g) shall be taken into account in applying Section 5.09(f).