Tax Allocation Agreement - The Dun & Bradstreet Corp. and The New Dun & Bradstreet Corp.
TAX ALLOCATION AGREEMENT
This TAX ALLOCATION AGREEMENT is dated as of June 30, 1998,
between THE DUN & BRADSTREET CORPORATION, a Delaware corporation (the
"Corporation") and THE NEW DUN & BRADSTREET CORPORATION, a Delaware corporation
("New D&B") (collectively, the "Parties").
WHEREAS, as of the date hereof, the Corporation is the common
parent of an affiliated group of domestic corporations within the meaning of
Section 1504(a) of the Code, including Dun & Bradstreet, Inc. ("D&B Opco Inc."),
Dun & Bradstreet International, Ltd. ("D&B International"), Moody's Investors
Service, Inc. ("Moody's"), The Reuben H. Donnelley Corporation ("RHD"), and
others, and the members of the affiliated group have heretofore joined in filing
consolidated federal income tax returns;
WHEREAS, the Board of Directors of the Corporation has
determined that it is appropriate, desirable and in the best interests of the
holders of shares of common stock, par value $1.00 per share, of the Corporation
(the "D&B Common Stock") to take certain steps to reorganize the Corporation's
Subsidiaries (as defined herein) and businesses and to distribute to the holders
of D&B Common Stock all the outstanding shares of common stock of New D&B (the
"New D&B Common Shares"), together with associated Rights;
WHEREAS, as a result of the Reorganization (as defined herein)
and Distribution (as defined herein), New D&B, D&B Opco Inc., D&B International,
Moody's, and others, will not be included in the consolidated federal income tax
return of the Corporation for the portion of the year following the Distribution
or in future years;
WHEREAS, the Parties desire to allocate the tax burdens and
benefits of transactions which occurred on or prior to the Distribution Date and
to provide for certain other tax matters, including the assignment of
responsibility for the preparation and filing of tax returns, the payment of
taxes, and the prosecution and defense of any tax controversies;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the Parties hereby agree
as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. General. Capitalized terms used in this Agreement
and not defined herein shall have the meanings that such terms have in the
Distribution Agreement. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Agreement" shall mean this Tax Allocation Agreement.
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(b) "Ancillary Agreements" shall mean all of the written
agreements, instruments, assignments or other arrangements (other than this
Agreement) entered into in connection with the transactions contemplated hereby,
including, without limitation, the Distribution Agreement, the Conveyancing and
Assumption Instruments, the Employee Benefits Agreement, the Shared Transaction
Services Agreement, the Transition Services Agreement, the Amended and Restated
Transition Services Agreement, the Data Services Agreement and the Intellectual
Property Agreement.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
(d) "Consolidated Return" shall mean the consolidated federal
income tax return of the Corporation for the period commencing on January 1,
1998, and including the members of the New D&B Group through the Distribution
Date.
(e) "Controlled Entity" shall mean any corporation,
partnership or other entity of which another entity (i) owns, directly or
indirectly, ownership interests sufficient to elect a majority of the Board of
Directors (or persons performing similar functions) (irrespective of whether at
the time any other class or classes of ownership interests of such corporation,
partnership or other entity shall or might have such voting power upon the
occurrence of any contingency) or (ii) is a general partner or an entity
performing similar functions (e.g., a trustee).
(f) "Deferred Compensation Deduction" shall mean a deduction
with respect to deferred compensation payments and/or the exercise of stock
options in the Corporation by any former employee of the Pre-Distribution D&B
Group if such deduction is disallowed for a member of the New D&B Group and may
be claimed by any member of the RHD Group.
(g) "Distribution" shall mean the distribution on the
Distribution Date to holders of record of shares of D&B Common Stock as of the
Distribution Record Date of the New D&B Common Shares owned by the Corporation
on the basis of one New D&B Common Share for each outstanding share of D&B
Common Stock.
(h) "Distribution Agreement" shall mean the agreement between
the Corporation and New D&B, dated as of June 30, 1998, to, among other things,
allocate certain assets and allocate and assign responsibility for certain
liabilities of the Corporation and its current and former Subsidiaries.
(i) "Distribution Date" shall mean June 30, 1998.
(j) "Distribution Record Date" shall mean such date as may be
determined by the Corporation's Board of Directors as the record date for the
Distribution.
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(k) "Final Determination" shall mean the final resolution of
liability for any Tax for any taxable period, including any related interest or
penalties, by or as a result of: (i) a final and unappealable decision,
judgment, decree or other order by any court of competent jurisdiction; (ii) a
closing agreement or accepted offer in compromise under Section 7121 or 7122 of
the Code, or comparable agreement under the laws of other jurisdictions which
resolves the entire Tax liability for any taxable period; (iii) any allowance of
a refund or credit in respect of an overpayment of Tax, but only after the
expiration of all periods during which such refund may be recovered by the
jurisdiction imposing the Tax; or (iv) any other final disposition, including by
reason of the expiration of the applicable statute of limitations.
(l) "Governmental Authority" shall mean any federal, state,
local, foreign or international court, government, department, commission,
board, bureau, agency, official or other regulatory, administrative or
governmental authority.
(m) "Income Tax Return" shall mean any Tax Return relating to
Income Taxes.
(n) "Income Taxes" shall mean any federal, state or local
Taxes determined by reference to income, net worth, gross receipts or capital or
any federal, state or local Taxes imposed in lieu of income Taxes.
(o) "Indemnifying Party" shall have the meaning as defined in
Section 3.5.
(p) "Indemnitee" shall have the meaning as defined in Section
3.5.
(q) "IRS" shall mean the Internal Revenue Service.
(r) "New D&B Group" shall mean New D&B, New D&B Opco Inc., D&B
International, Moody's and each corporation, partnership, limited liability
company, or other entity (other than any member of the RHD Group) that is a
Subsidiary of the Corporation immediately prior to the Distribution.
(s) "New D&B Opco Inc." shall mean a newly formed Delaware
corporation and wholly owned subsidiary of New D&B created to hold the assets
and liabilities related to, and to operate, the business of supplying business,
commercial-credit and business-marketing information services and receivables
management services.
(t) "Nonperforming Party" shall have the meaning as defined in
Section 5.2.
(u) "Other Taxes" shall mean any federal, state or local Taxes
other than Income Taxes.
(v) "Person" shall mean any natural person,
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corporation, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
(w) "Pre-Distribution D&B Group" shall mean the Corporation
and all of its Subsidiaries (direct and indirect, domestic and foreign) at any
time prior to the Distribution.
(x) "Reorganization" shall mean the series of contributions
and distributions of Controlled Entities and assets, transfers and assumptions
of liabilities, and other transactions whereby the New D&B Group and the RHD
Group are formed and all Controlled Entities of the Corporation prior to the
Distribution (other than New D&B and the members of the RHD Group) are placed
under the control of New D&B in preparation for the Distribution.
(y) "Reorganization Tax Payment" shall mean the payment of any
Tax for which New D&B is liable pursuant to Section 3.3 of this Agreement and
the imposition and/or payment of which will permit the other Party or any of its
Subsidiaries to increase deductions, losses or Tax credits or decrease income,
gains or recapture of Tax credits for any taxable period or periods beginning
after or including but not ending on the Distribution Date.
(z) "RHD Group" shall mean the Corporation, RHD and each
corporation, partnership, limited liability company or other entity contemplated
to remain or become a Subsidiary of the Corporation after the Distribution.
(aa) "Separate Company State or Local Income Tax Return" shall
mean any state or local Income Tax Return initially filed on a separate basis
(whether or not it is subsequently determined that such Income Tax Return should
have been filed on a combined basis).
(ab) "Subsidiary" shall mean any entity of which another
entity's ownership satisfies the 80-percent voting and value test defined in
Section 1504(a)(2) of the Code, whether directly or indirectly.
(ac) "Tax" or "Taxes" whether used in the form of a noun or
adjective, shall mean taxes on or measured by income, capital, net worth,
franchise, gross receipts, sales, use, excise, payroll, personal property, real
property, ad-valorem, value-added, leasing, leasing use or other taxes, levies,
imposts, duties, charges or withholdings of any nature. Whenever the term "Tax"
or "Taxes" is used (including, without limitation, regarding any duty to
reimburse another Party for indemnified taxes or refunds or credits of taxes) it
shall include penalties, fines, additions to tax and interest thereon.
(ad) "Tax Benefit" shall mean the sum of the amount by which
the Tax liability (after giving effect to any alternative minimum or similar
Tax) of a corporation or group of affiliated
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corporations to an applicable taxing authority is reduced (including, without
limitation, by deduction, entitlement to refund, credit or otherwise, whether
available in the current taxable year, as an adjustment to taxable income in any
other taxable year or as a carryforward or carryback, as applicable) plus any
interest from such government or jurisdiction relating to such Tax liability.
(ae) "Tax Detriment" shall mean the sum of the amount by which
the Tax liability (after giving effect to any alternative minimum or similar
Tax) of a corporation or group of affiliated corporations to an applicable
taxing authority is increased plus any interest or penalties due to such
government or jurisdiction relating to such Tax liability.
(af) "Tax Item" shall mean any item of income, capital gain,
net operating loss, capital loss, deduction, credit or other Tax attribute
relevant to the calculation of a Tax liability.
(ag) "Tax Returns" shall mean all reports or returns
(including information returns) required to be filed or that may be filed for
any period with any taxing authority (whether domestic or foreign) in connection
with any Tax or Taxes (whether domestic or foreign).
(ah) "Timing Adjustment" shall mean any adjustment which (x)
decreases deductions, losses or credits or increases income (including any
increases in income where no income was previously reported), gains or recapture
of Tax credits for the period in question, and for which either Party is liable
pursuant to this Agreement, and (y) will permit an increase in deductions,
losses or Tax credits or a decrease in income, gains or recapture of Tax credits
for another taxable period, and with respect to which the other Party benefits.
SECTION 1.2. References; Interpretation. References in this
Agreement to any gender include references to all genders, and references to the
singular include references to the plural and vice versa. The words "include",
"includes" and "including" when used in this Agreement shall be deemed to be
followed by the phrase "without limitation". Unless the context otherwise
requires, references in this Agreement to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, such Agreement. Unless the context otherwise requires, the
words "hereof", "hereby" and "herein" and words of similar meaning when used in
this Agreement refer to this Agreement in its entirety and not to any particular
Article, Section or provision of this Agreement.
ARTICLE II. PREPARATION AND FILING OF TAX RETURNS
SECTION 2.1. Predistribution Tax Returns.
(a) All federal Income Tax Returns of the Pre-
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Distribution D&B Group that are required to be filed for periods beginning
before the Distribution Date shall be prepared by New D&B and filed by the
Corporation.
(b) All combined state and local Income Tax Returns of the
Pre-Distribution D&B Group that may be or are required to be filed for periods
beginning before the Distribution Date shall be prepared by New D&B and filed by
the Corporation.
(c) In the case of Tax Returns for foreign, non-combined state
and local Income Taxes and Other Taxes of any member of the Pre-Distribution D&B
Group that may be or are required to be filed for any period beginning before
the Distribution Date, New D&B shall prepare and file such Tax Returns (or shall
cause such Tax Returns to be prepared and filed) if they relate to a member of
the New D&B Group and the Corporation shall prepare and file such Tax Returns
(or shall cause such Tax Returns to be prepared and filed) if they relate to a
member of the RHD Group.
(d) In the case of any partnership in which a member of the
Pre-Distribution D&B Group is the designated tax matters partner, the
Corporation or New D&B, as the case may be, shall cause such entity to prepare
and file such partnership's Tax Returns for all periods beginning prior to the
Distribution Date.
SECTION 2.2. Post-Distribution Tax Returns.
(a) The filing of all Tax Returns for periods beginning on or
after the Distribution Date shall be the responsibility of the Corporation if
they relate to any member of the RHD Group and shall be the responsibility of
New D&B if they relate to any member of the New D&B Group.
(b) In the case of any partnership in which a member of the
Pre-Distribution D&B Group is the designated tax matters partner, the
Corporation or New D&B, as the case may be, shall cause such entity to continue
to prepare and file such partnership's Tax Returns.
SECTION 2.3. Manner of Preparation.
(a) Unless otherwise required by the IRS, any Governmental
Authority or a court, the Parties hereby agree to file all Tax Returns, and to
take all other actions, in a manner consistent with the position that the last
day on which any member of the New D&B Group was included in the
Pre-Distribution D&B Group is the Distribution Date. For any period that
includes but does not end on the Distribution Date, to the extent permitted by
law or administrative practice, the taxable year of each member of the
Pre-Distribution D&B Group and any group of such members shall be treated as
ending on the Distribution Date.
(b) In the case of federal Income Tax Returns and combined
state and local Income Tax Returns, the Corporation shall prepare, in a manner
consistent with prior practice, a tax
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package for each member of the RHD Group included in the relevant Tax Return and
shall provide such tax package to New D&B at least 90 days prior to the due date
(including extensions) of the Tax Return. New D&B shall submit any part of the
Tax Return that relates to a member of the RHD Group to the Corporation at least
30 days prior to the date on which such Tax Return is due (including
extensions). The Corporation shall submit its comments to New D&B within 10 days
of receipt of the relevant portions of such Tax Return. New D&B shall not be
required to alter the Tax Return to reflect such comments unless the Corporation
receives an opinion of tax counsel, which counsel shall be reasonably acceptable
to New D&B, to the effect that failure to make such alteration would create a
significant risk of the imposition of a penalty on the Corporation or any other
member of the RHD Group.
(c) With regard to Tax Returns to be prepared and filed by the
Corporation or any other member of the RHD Group with respect to which New D&B
has liability under section 3.1 hereof, the Corporation shall submit such Tax
Return to New D&B at least 30 days prior to the date on which such Tax Return is
due (including extensions). New D&B shall submit its comments to the Corporation
within 10 days of receipt of such Tax Return. The Corporation shall alter the
Tax Return to reflect the comments of New D&B unless the Corporation receives an
opinion of tax counsel, which counsel shall be reasonably acceptable to New D&B,
to the effect that such alteration would create a significant risk of the
imposition of a penalty on the Corporation or any other member of the RHD Group.
(d) All Tax Returns filed on or after the Distribution Date
shall be prepared on a basis that is consistent with the rulings obtained from
the IRS or any other Governmental Authority in connection with the
Reorganizations or Distribution (in the absence of a controlling change in law
or circumstances) and shall be filed on a timely basis (including pursuant to
extensions) by the Party responsible for such filing under this Agreement. In
the absence of a controlling change in law or circumstances and unless deviation
from past practice would have no adverse effect on either Party, all Tax Returns
filed after the date of this Agreement shall be prepared on a basis consistent
with the elections, accounting methods, conventions, assumptions and principles
of taxation used for the most recent taxable periods for which Tax Returns
involving similar Tax Items have been filed. In the event of a deviation from
such past practices by the Corporation, the Corporation shall not be in breach
of this agreement, but, notwithstanding Article III, New D&B shall have no
liability for any Taxes resulting from such deviation and the Corporation shall
hold New D&B harmless from any such increased tax liability; provided, however,
either Party filing any Tax Return that does not conform to such past practices
shall not be liable for any additional Tax liability imposed (subject to Section
3.1), in whole or in part, as a result of such deviation from past practice if:
(i) for Tax Returns filed within three years of the Distribution Date, 30 days
prior to the filing of such Tax Return, the Party filing
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such Tax Return notifies the other Party; and (ii) the Party filing such Tax
Return establishes that conformity with past practice involves a significant
risk of the imposition of a penalty.
ARTICLE III. PAYMENT OF TAXES
SECTION 3.1. Predistribution Taxes.
(a) New D&B shall be liable for and shall pay all federal,
state, local and foreign Income Taxes (or receive all refunds) for all members
of the Pre-Distribution D&B Group for all periods ending on or prior to the
Distribution Date, including Taxes arising as a result of an audit adjustment;
provided, however, that in the case of any Separate Company State or Local
Income Tax Return, the RHD Group and the New D&B Group shall be liable for and
shall pay their own liabilities (or receive their own refunds) arising from any
audit adjustment (including any state or local audit adjustment resulting from a
federal audit adjustment).
(b) The RHD Group and the New D&B Group shall be responsible
for their own Other Taxes for all periods.
(c) Straddle Periods
(i) In the case of any tax period including but ending after
the Distribution Date, New D&B shall be liable for and shall pay all Income
Taxes (or receive all refunds) of all members of the Pre-Distribution D&B Group
attributable to the period up to the Distribution Date (any such Income Taxes,
"Pre-Distribution Income Taxes"). The RHD Group and the New D&B Group shall be
responsible for their own Tax liabilities (or be entitled to their own refunds)
attributable to the portion of the tax period after the Distribution Date. Such
apportionment will be done on a closing of the books basis, except that Tax
Items that are calculated on an annual basis shall be apportioned on a time
basis.
(ii) The amount of Pre-Distribution Income Taxes payable by
New D&B pursuant to Section 3.1(c)(i) above shall be reduced by the amount of
any estimated Income Taxes paid by the Pre-Distribution D&B Group (or any member
thereof) prior to the Distribution Date. If the amount of any such estimated
Income Tax payments exceeds the amount of Pre-Distribution Income Taxes, RHD
shall pay New D&B the amount of such excess.
SECTION 3.2. Post-Distribution Taxes. Unless otherwise
provided in this Agreement:
(a) New D&B shall pay all Taxes and shall be entitled to
receive and retain all refunds of Taxes with respect to tax periods beginning on
or after the Distribution Date that are attributable to the New D&B Group or any
member thereof; and
(b) The Corporation shall pay all Taxes and shall be
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entitled to receive and retain all refunds of Taxes with respect to tax periods
beginning on or after the Distribution Date that are attributable to the RHD
Group or any member thereof.
SECTION 3.3. Restructuring Taxes. Notwithstanding any
statement to the contrary in this Agreement and except as otherwise provided in
the Distribution Agreement, to the extent that any Taxes are found to arise out
of the Reorganization, then any such Tax liability incurred by the Parties (or
any of their Subsidiaries) shall be the responsibility of New D&B; provided,
however, that to the extent specific cash allocations for such Taxes are made in
connection with the Distribution, New D&B shall be relieved of its liability for
such Taxes.
SECTION 3.4. Gain Recognition Agreements. New D&B shall
prepare all documentation required to be filed with any Tax Returns, including
required annual certifications, relating to gain recognition agreements under
Section 367(a) of the Code entered into with respect to transactions between
members of the Pre-Distribution D&B Group occurring before the Distribution Date
and shall deliver such documentation to the Corporation. The Corporation shall
be obligated to file such documentation with the appropriate Tax Returns.
SECTION 3.5. Indemnification.
(a) Indemnification by New D&B. New D&B shall indemnify,
defend and hold harmless the Corporation and RHD (and their respective
affiliates) from and against any and all Tax liabilities allocated to New D&B by
this Agreement.
(b) Indemnification by the Corporation. The Corporation shall
indemnify, defend and hold harmless New D&B, New D&B, Inc. and Moody's (and
their respective affiliates) from and against any and all Tax liabilities
allocated to the Corporation by this Agreement.
(c) Indemnity Payments.
(i) To the extent that one Party (the "Indemnifying Party")
owes money to another Party (the "Indemnitee") pursuant to this Section 3.5, the
Indemnitee shall provide the Indemnifying Party with its calculations of the
amount required to be paid pursuant to this Section 3.5, showing such
calculations in sufficient detail so as to permit the Indemnifying Party to
understand the calculations. The Indemnifying Party shall pay the Indemnitee, no
later than the later of 30 business days prior to the due date (including
extensions) of the relevant Tax Returns and 14 business days after the
Indemnifying Party receives the Indemnitee's calculations, the amount that the
Indemnifying Party is required to pay or indemnify the Indemnitee under this
Section 3.5 unless the Indemnifying Party disagrees with the Indemnitee's
calculations (in which case any dispute regarding such calculations shall be
resolved in accordance with Section 5.4 of this Agreement).
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(ii) All indemnity payments shall be calculated on an
after-Tax basis and shall be treated as contributions to capital and/or
dividends immediately prior to the Distribution.
ARTICLE IV. TAX ATTRIBUTES, TIMING ADJUSTMENTS AND REORGANIZATION TAX PAYMENTS
SECTION 4.1. Carrybacks. In the event any net operating loss,
capital loss or credit of the Corporation for any taxable period ending on or
after the Distribution Date is eligible to be carried back to a taxable period
beginning prior to the Distribution Date (any such amount, an "Eligible
Amount"), the Corporation may, to the extent permitted under applicable Tax law,
elect not to carry back such Eligible Amount. To the extent any Eligible Amount
is carried back and used by the Corporation for a taxable period beginning prior
to the Distribution Date, the Corporation shall be obligated to pay any refund
that it receives to New D&B; provided, that in the case of any taxable period
including but ending after the Distribution Date, the Corporation shall not be
obligated to pay any such refund to New D&B to the extent the refund is
attributable to the portion of the taxable period after the Distribution Date
(determined in accordance with the principles of Section 3.1(c)). Upon request
by New D&B, the Corporation shall, within 90 days of such request, deliver an
officer's certificate to New D&B stating whether or not the Corporation has any
Eligible Amount.
SECTION 4.2. Timing Adjustments, Reorganization Tax Payments,
and Deferred Compensation Deductions.
(a) If an audit or other examination of any federal, state or
local Tax Return (other than a Separate Company State or Local Income Tax Return
with respect to which the RHD Group is liable for audit adjustments pursuant to
Section 3.1(a)) (x) for any period beginning prior to the Distribution Date
shall result (by settlement or otherwise) in a Timing Adjustment in favor of the
RHD Group or any member thereof, or (y) for any taxable period shall result (by
settlement or otherwise) in a Deferred Compensation Deduction in favor of the
RHD Group or any member thereof, or if any Reorganization Tax Payment in favor
of the RHD Group or any member thereof is made by New D&B, then:
(i) The Corporation shall pay New D&B the amount of any Tax
Benefit that results from such Timing Adjustment, Reorganization Tax Payment, or
Deferred Compensation Deduction within 30 business days of the date such Tax
Benefits are realized; and
(ii) Notwithstanding the foregoing, the Corporation shall only
be required to take steps to obtain such Tax Benefit or to pay New D&B if, in
the opinion of the Corporation's tax counsel, which counsel shall be reasonably
acceptable to New D&B, the reporting of such Tax Benefit shall not expose the
Corporation to the imposition of a penalty.
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(b) If an audit or other examination of any federal, state or
local Tax Return for any period beginning prior to the Distribution Date shall
result (by settlement or otherwise) in a Timing Adjustment to the Tax Detriment
of the RHD Group or any member thereof after the Distribution Date, then New D&B
shall pay the Corporation the lesser of (i) the amount of any such Tax Detriment
and (ii) the actual Tax Benefit to New D&B that results from such Timing
Adjustment.
(c) Realization of Tax Benefits.
(i) For purposes of this Section 4.3, a Tax Benefit shall be
deemed to have been realized at the time any refund of Taxes is received or
applied against other Taxes due, or at the time of filing of a Tax Return
(including any Tax Return relating to estimated Taxes) on which a loss,
deduction or credit is applied in reduction of Taxes which would otherwise be
payable. Where a Party has other losses, deductions, credits or similar items
available to it, such deductions, credits or similar items of such Party may
only be applied after the use of any Timing Adjustment, Reorganization Tax
Payment, or Deferred Compensation Deduction.
(ii) The Corporation may, at its election, pay the amount of
any Tax Benefit to New D&B rather than filing amended returns or otherwise
reflecting adjustments or taking positions on its Tax Returns. If such an
election is made, the Corporation will be treated as having realized a Tax
Benefit at the time it would have realized a Tax Benefit had it chosen to file
amended returns or otherwise to reflect adjustments or to take positions on its
Tax Returns.
(d) Tax Benefits Subsequently Denied. If any Tax Benefit
realized pursuant to Section 4.3(c)(i) is subsequently denied, then the
Corporation or New D&B, as the case may be, shall refund the amount of any
payment for such Tax Benefit within 30 business days of its notification that a
Final Determination has been reached denying the claimed Tax Benefit.
ARTICLE V. TAX AUDITS, TRANSACTIONS AND OTHER MATTERS
SECTION 5.1. Tax Audits and Controversies.
(a) In the case of any audit, examination or other proceeding
("Proceeding") brought against the Corporation (or a Subsidiary) with respect to
Taxes for which New D&B is or may be liable pursuant to this Agreement, the
Corporation shall promptly inform New D&B and shall execute or cause to be
executed any powers of attorney or other documents necessary to enable New D&B
to take all actions desired with respect to such Proceeding. Each Party shall
have the right to control, at its own expense, the portion of any such
Proceeding that relates to Taxes for which such Party is or may be liable
pursuant to this Agreement; provided, however, that New D&B shall have the right
to control, at its own expense, all Proceedings in respect of the
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Consolidated Return and 1998 combined state and local Income Tax Returns.
(b) The Party in control of a Proceeding or any part thereof
pursuant to Section 5.1(a) above shall consult with the other Party with respect
to any issue that may affect such other Party (or Subsidiary). The Party in
control of such Proceeding or any part thereof shall not enter into any final
settlement or closing agreement that may adversely affect the other Party (or
Subsidiary) without the consent of such other Party, which consent may not
unreasonably be withheld. Where consent to any final settlement or closing
agreement is withheld, the Party withholding consent shall continue or initiate
further proceedings, at its own expense, and the liability of the Party in
control of such Proceeding shall not exceed the liability that would have
resulted from the proposed closing agreement or final settlement (including
interest, additions to Tax and penalties which have accrued at that time).
SECTION 5.2. Cooperation. The Corporation and New D&B shall
cooperate with each other in the filing of any Tax Returns and the conduct of
any audit or other proceeding and each shall execute and deliver such powers of
attorney and other documents and make available such information and documents
as are necessary to carry out the intent of this Agreement. To the extent such
cooperation involves the services of officers, directors, employees, or agents
of either Party, such services shall be made available in accordance with
Section 2.9 of the Distribution Agreement. Each Party agrees to notify the other
Party of any audit adjustment that does not result in Tax liability but can
reasonably be expected to affect Tax Returns of the other Party or any of its
Subsidiaries. Notwithstanding any other provision of this Agreement, if a Party
(the "Nonperforming Party") fails to give its full cooperation and use its best
efforts in the conduct of an audit or other proceeding as provided by this
Section 5.2, and such failure results in the imposition of additional Taxes for
the period or periods involved in the audit or other proceeding, the
Nonperforming Party shall be liable in full for such additional Taxes.
SECTION 5.3. Retention of Records; Access.
(a) The Corporation and New D&B shall, and shall cause each of
their Controlled Entities to, retain adequate records, documents, accounting
data and other information (including computer data) necessary for the
preparation and filing of all Tax Returns required to be filed by any member of
the Pre-Distribution D&B Group or any combination of such members and for any
audits and litigation relating to such Tax Returns or to any Taxes payable by
any member of the Pre-Distribution D&B Group or any combination of such members.
(b) The Corporation and New D&B shall, and shall cause each of
their Controlled Entities to, give to the other Party reasonable access to (i)
all records, documents, accounting data and other information (including
computer data) necessary for the
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preparation and filing of all Tax Returns required to be filed by any member of
the Pre-Distribution D&B Group or any combination of such members and for any
audits and litigation relating to such Tax Returns or to any Taxes payable by
any member of the Pre-Distribution D&B Group or any combination of such members
and (ii) its personnel and premises, for the purpose of the review or audit of
such reports or returns to the extent relevant to an obligation or liability of
a Party under this Agreement and in accordance with the procedures provided in
Article IV of the Distribution Agreement.
(c) The obligations set forth above in Sections 5.3(a) and
5.3(b) shall continue until the final conclusion of any litigation to which the
records and information relate or until expiration of all applicable statutes of
limitations, whichever is longer. For purposes of the preceding sentence, each
Party shall assume that no applicable statute of limitations has expired unless
such Party has received notification or otherwise has knowledge that such
statute of limitations has expired.
(d) Notwithstanding any other provision of this Agreement, if
a Party fails to comply with any of its obligations set forth in this Section
5.3 and such failure results in the imposition of additional Taxes, such
nonperforming Party shall be liable in full for such additional Taxes.
SECTION 5.4. Dispute Resolution. Any dispute or claim arising
out of, in connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement, shall be resolved in the manner set
forth in Article VI of the Distribution Agreement.
SECTION 5.5. Confidentiality; Ownership of Information;
Privileged Information. The provisions of Article IV of the Distribution
Agreement relating to confidentiality of information, ownership of information,
privileged information and related matters shall apply with equal force to any
records and information prepared and/or shared by and among the Parties in
carrying out the intent of this Agreement.
ARTICLE VI. MISCELLANEOUS
SECTION 6.1. Complete Agreement; Construction. This
Agreement, including the Exhibits and Schedules, and the Ancillary Agreements
shall constitute the entire agreement between the Parties with respect to the
subject matter hereof and shall supersede all previous negotiations, commitments
and writings with respect to such subject matter. In the event of any
inconsistency between this Agreement and any Schedule hereto, the Schedule shall
prevail.
SECTION 6.2. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by both
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Parties.
SECTION 6.3. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the Parties
contained in this Agreement shall survive the Distribution Date.
SECTION 6.4. Expenses. Except as otherwise set forth in this
Agreement, all costs and expenses incurred on or prior to the Distribution Date
(whether or not paid on or prior to the Distribution Date) in connection with
the preparation, execution, delivery and implementation of this Agreement shall
be charged to and paid by New D&B. Except as otherwise set forth in this
Agreement, each Party shall bear its own costs and expenses incurred after the
Distribution Date.
SECTION 6.5. Notices. All notices and other communications
hereunder shall be in writing and hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to the
Parties at the following addresses (or at such other addresses for a Party as
shall be specified by like notice) and will be deemed given on the date on which
such notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, N.Y. 10577
Attn: General Counsel
To New D&B:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974
Attn: General Counsel
SECTION 6.6. Waivers. The failure of any Party to require
strict performance by the other Party of any provision in this Agreement will
not waive or diminish that Party's right to demand strict performance thereafter
of that or any other provision hereof.
SECTION 6.7. Amendments. This Agreement may not be modified
or amended except by an agreement in writing signed by the Parties hereto.
SECTION 6.8. Assignment. This Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any Party hereto
without the prior written consent of the other Party hereto, and any attempt to
assign any rights or obligations arising under this Agreement without such
consent shall be void.
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SECTION 6.9. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties and their respective successors and permitted assigns.
SECTION 6.10. Termination. This Agreement may be terminated,
amended, modified or abandoned at any time prior to the Distribution by and in
the sole discretion of the Corporation without the approval of New D&B or the
stockholders of the Corporation. In the event of such termination, no Party
shall have any liability of any kind to any other Party or any other person.
After the Distribution, this Agreement may not be terminated except by an
agreement in writing signed by the Parties.
SECTION 6.11. Controlled Entities. Each of the Parties hereto
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations set forth herein to be performed by any
Controlled Entity of such Party or by any entity that is contemplated to be a
Controlled Entity of such Party on and after the Distribution Date.
SECTION 6.12. Third Party Beneficiaries. This Agreement is
solely for the benefit of the Parties hereto and their respective Subsidiaries
and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
SECTION 6.13. Title and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
SECTION 6.14. Exhibits and Schedules. The Exhibits and
Schedules shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
SECTION 6.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
SECTION 6.16. Consent to Jurisdiction. Without limiting the
provisions of Section 5.4 hereof, each of the Parties irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Each of the
Parties agrees to commence any action, suit or proceeding relating hereto either
in the United States District Court for the Southern District of New York or if
such suit, action or other proceeding may not be brought in such
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court for jurisdictional reasons, in the Supreme Court of the State of New York,
New York County. Each of the Parties further agrees that service of any process,
summons, notice or document by U.S. registered mail to such Party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 6.16. Each of the Parties irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 6.17. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The Parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to
be duly executed as of the day and year first above written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
----------------------------
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
----------------------------
Name: Volney Taylor
Title: Chairman and Chief
Executive Officer