This excerpt taken from the OSTK 8-K filed Apr 25, 2007.
(a) Section 338(h)(10) Election.
(i) Within 60 days of the Closing the Seller will deliver a duly executed IRS Form 8023 authorizing a Code Section 338(h)(10) election with respect to the Company and each of the Companys Subsidiaries to the Buyer.
(ii) At the request of Buyer, Buyer and Seller shall timely make joint elections (collectively the 338(h)(10) Election) with respect to the purchase of the Shares (and any resulting deemed purchase of the shares of any Company Subsidiary) under (A) Section 338(h)(10) of the Code and (B) any analogous election with respect to state, local or foreign income Taxes, to the extent that such election is separately available, in each state, local and foreign jurisdiction where the Company or any of the Companys Subsidiaries currently files income Tax Returns.
(iii) Buyer and Seller agree that, except as Buyer and Seller may otherwise agree in writing or as may be required otherwise pursuant to a final determination within the meaning of Section 1313(a) of the Code or corresponding provision of state, local or foreign income Tax law, for United States federal income Tax purposes, the amount of the adjusted deemed sale price (as determined pursuant to Treasury Regulations §1.338-4) for the assets of the Company and the assets of any Company Subsidiary for which a 338(h)(10) Election is made (collectively the Tax Purchase Price) deemed acquired pursuant to a 338(h)(10) election shall be allocated in accordance with Treasury Regulations §§1.338-6 and 1.338-7. Except as Buyer and Seller may otherwise agree or as may be required otherwise pursuant to a final determination within the meaning of Section 1313(a) of the Code, the allocation required pursuant to the immediately preceding sentence shall be binding on Seller and Buyer for all Tax reporting purposes. The allocation of the Tax Purchase Price pursuant this Section 8.1(a), as it may be modified by any agreement of Buyer and Seller or any final determination within the meaning of Section 1313(a) of the Code or corresponding provision of state, local or foreign income Tax law, is referred to herein as the Allocation. Buyer may not file any 338(h)(10) Election that does not reflect the Allocation, provided that if Buyer and Seller have not agreed on the Allocation by September 15, 2007 that all open issues with respect to the Allocation shall be referred to the Accounting Firm whose determination shall be final.
(b) Tax Returns; Cooperation on Tax Matters. Buyer and Seller shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant hereto and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other partys request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding. Such cooperation shall also include notification of the other party of any
audit or other issues, (including tax allocations and return positions) that may affect the Tax treatment of an Item for a year relevant to that other party. Where such audit or other issues, if sustained, could reasonably be expected to result in liability of Seller under Article VII or other provisions of this Agreement, or adversely affect the Tax position of the other party, Seller and Buyer shall jointly control and participate in such audit and any related litigation or other proceeding, and no settlement will be agreed upon with any taxing authority nor tax election or return position taken without the consent of such other party, which consent shall not be unreasonably withheld. The Company and Seller agree (i) to retain all books and records with respect to the Tax matters pertinent to the Company or the Companys Subsidiaries relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (including extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records.
8.2. OTravel Mark Buyer acknowledges that all right, title and interest in and to (i) the Mark OTravel and to any derivations thereof (collectively, the OTravel Mark), and (ii) any other Mark with the letter O as the first letter of the Mark (including Overstock.com and any derivations thereof (collectively, O Marks), other than any Mark with O being the first letter of a the Mark as a word in its standard usage, are exclusively owned by Seller, and that neither the Company nor Buyer has or shall acquire pursuant to this Agreement any rights whatsoever to the OTravel Mark or any O Mark other than as set forth in the License Agreement. Notwithstanding the foregoing, Seller and its Affiliates (including any company or other entity controlled by or under common control with Seller (whether currently existing or hereafter acquired or formed)) shall not, directly or indirectly, use or otherwise exploit, or permit any other Person to use or otherwise exploit (whether as principal, agent, partner, shareholder, or otherwise, whether alone or in association with any other Person) the OTravel Mark in any manner whatsoever (the Use Restriction) during the period of five (5) years from and after Closing. Seller agrees to that as a condition to the sale, assignment, or other transfer of the O Marks by Seller to any Person (including in connection with the sale of all or substantially all of Sellers assets or stock) that such Person will agree in writing to be bound by the restriction above and the terms and conditions of the License Agreement, unless a Use Payment has been made pursuant to Section 6.4. For the avoidance of doubt, nothing in this Agreement shall be deemed to prohibit or otherwise restrict Buyer or the Company (or their respective Affiliates or licensees) from using in a Mark or otherwise the word travel or any word beginning with the letter O, except in connection with (x) the word overstock or any derivations thereof or (y) the words otravel, ocruise or (z) other words with the letter O as the first letter of the word where O is used in the word in manner other than in its standard usage.