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EXHIBIT 10.2
AMENDED AND RESTATED TAX SHARING AGREEMENT
AMENDED AND RESTATED TAX SHARING AGREEMENT (the "Agreement") entered
into as of May 2, 2000, amended and restated as of June 4, 2001, by and among
AT&T Corp., a New York corporation ("AT&T"), AWG LLC, a Delaware limited
liability company ("AWG"), AT&T Wireless Services, Inc., a Delaware corporation
("Wireless"), AT&T Wireless PCS, LLC, a Delaware limited liability company
("Wireless PCS"), each other entity that is a signatory hereto (the "Other
Signatories"), any entities which become parties hereto pursuant to Section 21
hereof and each of the Subsidiaries of AWG, Wireless, Wireless PCS and the Other
Signatories.
WHEREAS Wireless desires to be included, and AWG, Wireless, Wireless
PCS and the Other Signatories desire that their Subsidiaries be included in the
filing of consolidated federal income Tax returns on behalf of the AT&T
Affiliated Group;
WHEREAS AT&T, AWG, Wireless, Wireless PCS, the Other Signatories,
and their respective Subsidiaries wish to allocate and settle among themselves
in an equitable manner the consolidated federal income Tax liability of the AT&T
Affiliated Group;
WHEREAS Wireless desires, to the extent required by applicable
state, local or foreign law to be included, and AWG, Wireless, Wireless PCS and
the Other Signatories desire that their Subsidiaries be included, in combined,
consolidated and unitary state, local and foreign Tax returns on behalf of the
AT&T Affiliated Group;
WHEREAS AT&T, AWG, Wireless, Wireless PCS, the Other Signatories and
their respective Subsidiaries wish to allocate and settle among themselves in an
equitable manner the state, local or foreign Tax liability in connection with
such combined, consolidated and unitary state, local and foreign Tax returns;
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WHEREAS AT&T and Wireless have entered into a Separation and
Distribution Agreement, dated June 4, 2001, providing for the separation of the
Wireless Group from AT&T (the "Separation and Distribution Agreement");
WHEREAS pursuant to the terms of the Separation and Distribution
Agreement, (i) AT&T will contribute all of the assets and liabilities of the
Wireless Group not currently held by Wireless or any of its Subsidiaries to
Wireless, (ii) all the issued and outstanding shares of AT&T Wireless Group
Tracking Stock will be redeemed in exchange for shares of common stock of
Wireless (the "Exchange") and (iii) AT&T's remaining interest in Wireless will
be distributed pro rata to holders of AT&T Common Stock (the "Distribution");
WHEREAS, for federal income Tax purposes, it is intended that the
transfer of assets by AT&T to Wireless, the Exchange and the Distribution
(collectively, the "Separation Transactions") constitute a tax-free spin-off
under the provisions of Sections 355, 361(c) and 368(a)(1)(D) of the Internal
Revenue Code of 1986, as amended (the "Code");
WHEREAS, at the end of the day on which the Distribution occurs (the
"Distribution Date"), the taxable year of Wireless and its Subsidiaries shall
close for U.S. federal income Tax purposes;
WHEREAS AT&T, AWG, Wireless, Wireless PCS, the Other Signatories and
their respective Subsidiaries wish to provide for the principles and
responsibilities of the parties to this Agreement regarding future Adjustments
with respect to Taxes, Tax Proceedings and other related Tax matters; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby agree as follows:
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1. Definitions. For purposes of this Agreement, the following terms
shall be defined as follows:
1.1. "Adjustment" shall mean the deemed increase or decrease in a Tax,
determined on an issue-by-issue or transaction-by-transaction basis, as
appropriate, and using the assumptions set forth in the next sentence, resulting
from an adjustment made or proposed by a Governmental Authority with respect to
any amount reflected or required to be reflected on any Tax Return relating to
such Tax. For purposes of determining such deemed increase or decrease in a Tax,
the following assumptions will be used: (a) in the case of any income Tax, the
highest marginal Tax rate or, in the case of any other Tax, the highest
applicable Tax rate, in each case in effect with respect to that Tax for the
taxable period or any portion of the taxable period to which the adjustment
relates; and (b) such determination shall be made without regard to whether any
actual increase or decrease in such Tax will in fact be realized with respect to
the Tax Return to which such adjustment relates. A "Adjustment" shall also mean
a change in one or more apportionment factors used for determining any state or
local consolidated, combined or unitary income or franchise Taxes which are
required to be reported on a Joint Return.
1.2. "Agreement" shall have the meaning set forth in the first paragraph
hereof.
1.3. "Allocated Taxable Income (Loss)" shall mean, with respect to the
Common Stock Group or the Wireless Group, the amount equal to (i) such Group's
contribution to the gross income of the Hypothetical Common Stock/Wireless
Affiliated Group, net of (ii) the aggregate of all losses, deductions and other
Tax attributes of such Group to the extent the same may be used by any member of
the Hypothetical Common Stock/Wireless Affiliated Group. For purposes of the
federal alternative minimum Tax ("AMT"), Allocated Taxable Income (Loss) shall
mean, with respect to the Common Stock Group or the Wireless Group, the amount
equal to
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(i) such Group's contribution to the gross income for AMT purposes of the
Hypothetical Common Stock/Wireless Affiliated Group, net of (ii) the aggregate
of all losses, deductions and other Tax attributes for AMT purposes of such
Group to the extent the same may be used by any member of the Hypothetical
Common Stock/Wireless Affiliated Group. In the case of any state or local
consolidated, combined or unitary income or franchise Taxes which are required
to be reported on a Joint Return, the amount of Allocated Taxable Income (Loss)
of the Common Stock Group or the Wireless Group shall be equal to the product of
such Group's income (loss) and the apportionment factors (property, payroll,
sales), calculated on a consolidated basis, unless such amount is determined
pursuant to another allocation method that is agreed with or mandated by a
specific jurisdiction. For purposes of the preceding sentence, the apportionment
factors shall be determined for each taxable period.
1.4. "AMT" shall have the meaning set forth in the definition of
"Allocated Taxable Income (Loss)."
1.5. "AMTI" shall have the meaning set forth in Section 3.2(d) hereof.
1.6. "AMTL" shall have the meaning set forth in Section 3.2(d) hereof.
1.7. "Associated" shall have the meaning set forth in Section 2 hereof.
1.8. "AT&T" shall have the meaning set forth in the first paragraph
hereof.
1.9. "AT&T Affiliated Group" shall mean (i) the affiliated group, within
the meaning of Section 1504(a) of the Code, consisting of AT&T and its
Subsidiaries, (ii) any combined, consolidated or unitary group for state, local
or foreign Tax purposes that includes AT&T or any of its Subsidiaries and (iii)
for any taxable period, any True Legal Entity that files Joint Returns for such
taxable period.
1.10. "AT&T Charter" shall mean the Amended Certificate of
Incorporation of AT&T.
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1.11. "AT&T Common Stock" shall mean the common stock, par value $1.00
per share, of AT&T.
1.12. "AT&T Wireless Group Tracking Stock" shall have the meaning ascribed
to such term in the Proxy Statement.
1.13. "AWG" shall have the meaning set forth in the first paragraph
hereof.
1.14. "Code" shall have the meaning set forth in the recitals hereto.
1.15. "Common Stock Group" shall mean (i) the Hypothetical Legal Entity
Associated with AT&T pursuant to Section 2(c) and (ii) each of the other Legal
Entities that were at any time owned directly or indirectly by AT&T
(Hypothetical Legal Entities Associated with any Mixed Entity other than AT&T
being treated for this purpose as owned directly or indirectly by AT&T) other
than any member of the Liberty Group or the Wireless Group.
1.16. "Common Stock Indemnitee" shall mean each Legal Entity that is a
member of the Common Stock Group and their respective directors, officers,
employees, affiliates, agents, successors and assigns.
1.17. "Controlling Party" shall mean AT&T or any other member of the
Common Stock Group or Wireless or any other member of the Wireless Group, as the
case may be, that filed or, if no such Tax Return has been filed, was required
to file, a Tax Return that is the subject of any Tax Proceeding, or any
successor and/or assign of any of the foregoing; provided, however, that in the
case of any consolidated or combined return, the person that actually filed such
consolidated or combined return (or any successor and/or assign of such person)
will be the Controlling Party.
1.18. "Designated Rate" shall mean the underpayment rate as defined in
Section 6621 of the Code.
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1.19. "Disputed Adjustment" shall have the meaning set forth in Section
9(d)(ii) hereof.
1.20. "Distribution" shall have the meaning set forth in the recitals
hereto.
1.21. "Distribution Date" shall have the meaning set forth in the
recitals hereto.
1.22. "Exchange" shall have the meaning set forth in the recitals
hereto.
1.23. "Federal CNOL" shall have the meaning set forth in Section
3.2(a)(ii) hereof.
1.24. "Federal Tax Allocation Agreement" shall mean the Federal Tax
Allocation Agreement dated as of February 1, 1996, by and among AT&T and each of
its subsidiaries.
1.25. "Final Determination" shall mean a closing agreement with the
Internal Revenue Service or the relevant state or local Governmental
Authorities, an agreement contained in Internal Revenue Service Form 870-AD or
other comparable form, an agreement that constitutes a determination under
Section 1313(a)(4) of the Code, a claim for refund which has been allowed, a
deficiency notice with respect to which the period for filing a petition with
the Tax Court or the relevant state or local tribunal has expired or a decision
of any court of competent jurisdiction that is not subject to appeal or as to
which the time for appeal has expired.
1.26. "Governmental Authority" shall have the meaning set forth in the
definition of "Tax."
1.27. "Group" shall mean any of the Common Stock Group, the Wireless
Group and the Liberty Group.
1.28. "Hypothetical Common Stock/Wireless Affiliated Group" shall have
the meaning set forth in Section 3.2(a)(i) hereof.
1.29. "Hypothetical Legal Entity" shall mean a hypothetical corporation,
partnership, limited liability company or other legal entity.
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1.30. "Inconsistent Position" shall have the meaning set forth in
Section 11(b)(ii) hereof.
1.31. "Independent Third Party" means a nationally recognized law firm
or any of the following accounting firms or their successors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& Co.; Ernst & Young; KPMG Peat Marwick; Deloitte & Touche; and
PricewaterhouseCoopers.
1.32. "Initial Determination" shall have the meaning set forth in
Section 9(e)(ii)(I).
1.33. "Interested Party" shall mean AT&T or any other member of the Common
Stock Group or Wireless or any other member of the Wireless Group (including any
successor and/or assign of any of each of the foregoing), as the case may be, to
the extent (a) such person is not the Controlling Party with respect to a Tax
Proceeding; and (b) such person (i) may be liable for, or required to make, any
indemnity payment, reimbursement or other payment pursuant to the provisions of
this Agreement with respect to such Tax Proceeding; or (ii) may be entitled to
receive any indemnity payment, reimbursement or other payment pursuant to the
provisions of this Agreement with respect to such Tax Proceeding; provided,
however, that in no event shall a member of either the Common Stock Group or the
Wireless Group, as the case may be, be an Interested Party in a Tax Proceeding
in which another member of its Group is the Controlling Party with respect to
the Tax Proceeding. For the avoidance of doubt, (i) in no event shall a member
of the Common Stock Group be an Interested Party with respect to any Tax
Proceeding relating to the Wireless Group (or any member thereof) with respect
to a Post-Distribution Taxable Period and (ii) in no event shall a member of the
Wireless Group be an Interested Party with respect to any Tax Proceeding
relating to the Common Stock Group (or any member thereof) with respect to a
Post-Distribution Taxable Period.
1.34. "Interested Party Notice" shall have the meaning set forth in
Section 9(d)(ii).
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1.35. "Interests" shall have the meaning set forth in Section 3.2(e)(i)
hereof.
1.36. "Issue Date" shall mean the date on which AT&T Wireless Group
Tracking Stock was initially issued.
1.37. "Joint Return" shall mean any Tax Return that includes information
related to at least two Legal Entities, of which one Legal Entity is a member of
the Wireless Group and the other Legal Entity is a member of a different Group.
1.38. "Legal Entity" shall mean a True Legal Entity or a Hypothetical
Legal Entity.
1.39. "Liberty AMT Sharing Payment" shall have the meaning set forth in
Section 3.2(d)(ii) hereof.
1.40. "Liberty Federal Tax Sharing Payment" shall have the meaning set
forth in Section 3.2(a)(ii) hereof.
1.41. "Liberty Group" shall mean the Legal Entities that own or owned the
assets, and are or were primarily responsible for the liabilities, (a) tracked
(or to be tracked) by Liberty Media Group Tracking Stock or (b) otherwise
included (or to be included) in the Liberty Media Group (as defined in the AT&T
Charter) under the AT&T Charter, including any Legal Entity that owned such
assets and was primarily responsible for such liabilities on or prior to the
Issue Date.
1.42. "Liberty Media Group Tracking Stock" shall have the meaning ascribed
to such term in the Proxy Statement.
1.43. "Liberty State, Local or Foreign Tax Sharing Payment" shall have the
meaning set forth in Section 3.2(b)(ii) hereof.
1.44. "Losses" shall mean costs, expenses, fees, liabilities,
obligations and losses.
1.45. "Mixed Entity" shall have the meaning set forth in Section 2
hereof.
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1.46. "Non-Income Taxes" shall mean all Taxes (as defined in Section 1.59
hereof) other than any Tax which is based upon, measured by, or calculated with
respect to (i) net income or profits (including, but not limited to, any capital
gains, gross receipts, value added or minimum Tax) or (ii) multiple bases
(including, but not limited to, corporate franchise, doing business or
occupation Taxes) if one or more of the bases upon which such Tax may be based,
by which it may be measured, or with respect to which it may be calculated is
described in clause (i) hereof. For the avoidance of doubt, Non-Income Taxes
shall include, but not be limited to, sales, use, real property gains, real or
personal property, transfer or similar Taxes.
1.47. "Other Signatories" shall have the meaning set forth in the first
paragraph hereof.
1.48. "Post-Distribution Taxable Period" shall mean a taxable period that,
to the extent it relates to a member of the Wireless Group, begins after the
Distribution Date and the portion beginning after the Distribution Date of any
taxable period that includes (but does not end) on such day.
1.49. "Pre-Closing Taxable Period" for any Legal Entity shall mean any
taxable period that ends, with respect to such entity, on or prior to the Issue
Date.
1.50. "Pre-Distribution Taxable Period" shall mean a taxable period that,
to the extent it relates to a member of the Wireless Group, ends after the Issue
Date and on or prior to the Distribution Date and the portion ending on the
Distribution Date of any taxable period that includes (but does not end) on such
day.
1.51. "Proxy Statement" shall mean the Proxy Statement/Prospectus of
AT&T dated January 26, 2000.
1.52. "R&E" shall have the meaning set forth in Section 3.2(c) hereof.
1.53. "Separate Return" shall mean any Tax Return that is not a Joint
Return.
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1.54. "Separation and Distribution Agreement" shall have the meaning
set forth in the recitals hereto.
1.55. "Separation Transactions" shall have the meaning set forth in the
recitals hereto.
1.56. "State and Local Income Tax Allocation Agreement" shall mean the
State and Local Income Tax Allocation Agreement dated as of the first day of the
combined return taxable year beginning January 1, 1995 by and among AT&T and
each of its subsidiaries.
1.57. "State, Local or Foreign CNOL" shall have the meaning set forth
in Section 3.2(b)(ii) hereof.
1.58. "Subsidiary" shall mean, with respect to any True Legal Entity, any
other True Legal Entity of which at least (i) 50% of the equity and (ii) 50% of
the voting interests are owned, directly or indirectly, by such first True Legal
Entity.
1.59. "Tax" shall mean all forms of taxes, fees, imposts, levies or other
assessments whenever created or imposed, and whether of the United States or
elsewhere, and whether imposed by a local, municipal, governmental, state,
foreign, federation or other body (a "Governmental Authority"), and, without
limiting the generality of the foregoing, shall include income, gross receipts,
business and occupation, property, sales, use, license, excise, franchise,
capital stock, employment, payroll, unemployment insurance, social security,
stamp, environmental, value added, Telecom Pass Through Tax, alternative or
added minimum, ad valorem, trade, recording, withholding, occupation or transfer
tax, custom or duty or other like governmental assessment or charge of any kind
whatsoever, whether computed on a separate, consolidated, unitary, combined or
any other basis, together with any related interest, penalties and additions
imposed by any Governmental Authority.
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1.60. "Tax Item" shall mean any item of income, gain, loss, deduction,
credit, recapture of credit or any other item which increases or decreases Taxes
(including Non-Income Taxes) paid or payable, including an adjustment under Code
Section 481 resulting from a change in accounting method.
1.61. "Tax Proceeding" shall mean any Tax audit, examination, controversy
or litigation with or against any Governmental Authority.
1.62. "Tax Return" shall mean any report, return or other information
(including any attached schedules or any amendments to such report, return or
other information) required to be supplied to or filed with a Governmental
Authority with respect to any Tax, including an information return, claim for
refund, amended return or declaration or estimated Tax return.
1.63. "Telecom Pass Through Taxes" shall mean federal excise Taxes on
telecommunications services, and those state, local and municipal Taxes which
are passed through to end-user customers, including but not limited to gross
receipts taxes, 911 excise Taxes, utility user Taxes, sales and use Taxes,
street utility business charges, telephone device for deaf and hearing impaired
charges or Taxes and universal lifeline telephone service Taxes, or any other
Taxes or charges imposed by public utility commissions and other similar
governmental agencies.
1.64. "Treasury Regulations" shall mean the Treasury Regulations
promulgated under the Code.
1.65. "True Legal Entity" shall mean a corporation, partnership, limited
liability company or other entity under state or other applicable organizational
law, other than a disregarded entity (i.e., such term shall mean an entity under
state or other applicable
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organizational law other than an entity that is not treated as an entity
separate from its owner under Section 301.7701-3 of the Treasury Regulations).
1.66. "Ultimate Determination" shall have the meaning set forth in
Section 9(e)(ii)(III) hereof.
1.67. "Wireless" shall have the meaning set forth in the first
paragraph hereof.
1.68. "Wireless Group" shall mean the Legal Entities that own or owned the
assets, and are or were primarily responsible for the liabilities, (a) tracked
(or to be tracked) by the AT&T Wireless Tracking Stock or (b) otherwise included
(or to be included) in the Wireless Group (as defined in the AT&T Charter) under
the AT&T Charter, including any Legal Entity that owned such assets and was
primarily responsible for such liabilities on or prior to the Issue Date
1.69. "Wireless Inconsistent Position" shall have the meaning set forth
in Section 11(b)(ii) hereof.
1.70. "Wireless Indemnitee" shall mean each Legal Entity that is a member
of the Wireless Group and their respective directors, officers, employees,
affiliates, agents, successors and assigns.
1.71. "Wireless Parties" shall have the meaning set forth in Section 10
hereof.
1.72. "Wireless PCS" shall have the meaning set forth in the first
paragraph hereof.
2. Treatment of Legal Entities That Would be Members of More Than One
Group. In the event that a True Legal Entity which is a member of the AT&T
Affiliated Group would otherwise be a member of both the Wireless Group and
another Group (a "Mixed Entity"), (a) each of the assets and liabilities of the
True Legal Entity tracked by AT&T Wireless Group Tracking Stock (and related Tax
attributes) shall be assigned to one Hypothetical Legal Entity, (b) each of the
assets and liabilities of the True Legal Entity tracked by Liberty Media Group
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Tracking Stock (and related Tax attributes) shall be assigned to a second
Hypothetical Legal Entity and (c) the remaining assets, liabilities and Tax
attributes shall be assigned to a third Hypothetical Legal Entity (such
Hypothetical Legal Entities being referred to herein as the Hypothetical Legal
Entities "Associated" with the Mixed Entity). Each Hypothetical Legal Entity
shall be treated as owning the assets, being primarily responsible for the
liabilities, and having the Tax attributes of, and the Tax and legal personality
comparable to those of, the Mixed Entity with which the Hypothetical Legal
Entity is Associated. The stock in a Hypothetical Legal Entity shall be treated
as represented by the stock in the Mixed Entity with which the Hypothetical
Legal Entity is Associated. In the event that an asset, liability or Tax
attribute cannot be Associated with the business or investments of a single
Group, it shall be reasonably allocated between the Hypothetical Legal Entities
taking into account the nature of the asset, liability or Tax attribute.
3. Wireless Tax Sharing Payments.
3.1. In General. In determining a party's liability and/or
obligation to make, or the right to receive, any indemnity payment,
reimbursement or other payment in respect of any Tax under this Agreement, any
taxable period or portion of a taxable period that includes the Distribution
Date shall be deemed to include and end on such Distribution Date, and no party
shall have any liability and/or obligation to make, or right to receive any
indemnity payment, reimbursement or other payment in respect of any Tax under
this Agreement with respect to any taxable period or portion of a taxable period
that begins or is deemed to begin after the Distribution Date.
3.2. Tax Sharing Payments with respect to Pre-Distribution Taxable
Periods.
(a) Federal Income Taxes (other than AMT).
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(i) If the hypothetical affiliated group consisting of the
Common Stock Group and the Wireless Group (the "Hypothetical Common
Stock/Wireless Affiliated Group") has consolidated federal taxable income for
such taxable period, then (I) if the Wireless Group has Allocated Taxable
Income, Wireless, as agent for the Wireless Group, shall pay AT&T the federal
income Tax on the Wireless Group's Allocated Taxable Income for the taxable
period and (II) if the Wireless Group has an Allocated Taxable Loss for the
taxable period, AT&T shall pay Wireless, as agent for the Wireless Group, the
amount by which the Hypothetical Common Stock/Wireless Affiliated Group's
federal income Taxes would be reduced for the taxable period by reason of the
Wireless Group's Allocated Taxable Loss.
(ii) If the Hypothetical Common Stock/Wireless Affiliated
Group has a consolidated NOL for federal income Tax purposes ("Federal CNOL")
for such taxable period, then (I) if the Common Stock Group and the Wireless
Group each have Allocated Taxable Losses, the federal income Tax refund or other
Tax benefit arising from the Federal CNOL (and any payment from Liberty Group in
respect of Liberty Group federal taxable income with respect to such taxable
period (a "Liberty Federal Tax Sharing Payment")) shall be shared between the
Common Stock Group and the Wireless Group in proportion to their respective
Allocated Taxable Losses for the taxable period, (II) if the Wireless Group has
an Allocated Taxable Loss and the Common Stock Group has Allocated Taxable
Income, then AT&T shall pay Wireless, as agent for the Wireless Group, the
amount by which the Hypothetical Common Stock/Wireless Affiliated Group's
federal income Taxes for the taxable period would be reduced by reason of the
Wireless Group's Allocated Taxable Loss and the federal income Tax refund or
other Tax benefit arising from the Federal CNOL and any Liberty Federal Tax
Sharing Payment shall be allocated to the Wireless Group and (III) if the
Wireless Group has Allocated Taxable Income
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and the Common Stock Group has an Allocated Taxable Loss, then Wireless, as
agent for the Wireless Group, shall pay AT&T the amount by which the
Hypothetical Common Stock/Wireless Affiliated Group's Taxes for the taxable
period would be reduced by reason of the Common Stock Group's Allocated Taxable
Loss and the Common Stock Group shall retain the federal income Tax refund or
other Tax benefit arising from the Federal CNOL (and any Liberty Federal Tax
Sharing Payment).
(iii) If Section 3.2(a)(ii)(I) applies, then AT&T shall first
carry back the Federal CNOL of the Hypothetical Common Stock/Wireless Affiliated
Group for the taxable period, to the extent permitted by applicable law, and
then shall carry forward such CNOL. Such carryback or carryforward, as the case
may be, shall be treated as applied (a) for each applicable taxable period in
proportion to the respective Allocated Taxable Losses of the Common Stock Group
and the Wireless Group for the taxable period of the Federal CNOL and (b)
beginning with the earliest taxable period permitted by applicable law. To the
extent AT&T obtains a Tax refund or other Tax benefit arising from such
carryback or carryforward (or a Liberty Federal Tax Sharing Payment), AT&T shall
compensate the Wireless Group for the Tax refund or other Tax benefit received
(and any Liberty Federal Tax Sharing Payment) in an amount which is
proportionate to the Wireless Group's Allocated Taxable Loss included in the
Federal CNOL so applied within ten (10) days of AT&T's receipt of such Tax
refund (or Liberty Federal Tax Sharing Payment) or within ten (10) days of
AT&T's filing the Tax return with respect to which it claims such other Tax
benefit. For the avoidance of doubt, if AT&T obtains no Tax refund or other Tax
benefit with respect to a Federal CNOL described in this paragraph (and no
Liberty Federal Tax Sharing Payment), AT&T shall make no payment to Wireless in
respect of the Wireless Group's Allocated Taxable Loss for the taxable period of
the CNOL.
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(b) Consolidated State, Local and Foreign Taxes. With respect
to a Joint Return for a state, local or foreign jurisdiction:
(i) If the Hypothetical Common Stock/Wireless Affiliated Group
has consolidated, combined or unitary taxable income in such jurisdiction for
such taxable period, then (I) if the Wireless Group has Allocated Taxable Income
for the taxable period, Wireless, as agent for the Wireless Group, shall pay
AT&T the Tax on the Wireless Group's Allocated Taxable Income for the taxable
period and (II) if the Wireless Group has an Allocated Taxable Loss for the
taxable period, AT&T shall pay Wireless, as agent for the Wireless Group, the
amount by which the Hypothetical Common Stock/Wireless Affiliated Group's Taxes
would be reduced for the taxable period by reason of the Wireless Group's
Allocated Taxable Loss.
(ii) If the Hypothetical Common Stock/Wireless Affiliated
Group has a consolidated, combined or unitary NOL in such jurisdiction ("State,
Local or Foreign CNOL") for such taxable period, then (I) if the Common Stock
Group and the Wireless Group each have Allocated Taxable Losses, the Tax refund
or other Tax benefit arising from the State, Local or Foreign CNOL (and any
payment from Liberty Group in respect of Liberty Group taxable income in such
jurisdiction calculated on a stand-alone basis with respect to such taxable
period (a "Liberty State, Local or Foreign Tax Sharing Payment")) shall be
shared between the Common Stock Group and the Wireless Group in proportion to
their respective Allocated Taxable Losses for the taxable period, (II) if the
Wireless Group has an Allocated Taxable Loss and the Common Stock Group has
Allocated Taxable Income, then AT&T shall pay Wireless, as agent for the
Wireless Group, the amount by which the Hypothetical Common Stock/Wireless
Affiliated Group's Taxes for the taxable period would be reduced by reason of
the Wireless Group's Allocated Taxable Loss and the Tax refund or other Tax
benefit arising from the State,
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Local or Foreign CNOL (and any Liberty State, Local or Foreign Tax Sharing
Payment) shall be allocated to the Wireless Group and (III) if the Wireless
Group has Allocated Taxable Income and the Common Stock Group has an Allocated
Taxable Loss, then Wireless, as agent for the Wireless Group, shall pay AT&T the
amount by which the Hypothetical Common Stock/Wireless Affiliated Group's Taxes
for the taxable period would be reduced by reason of the Common Stock Group's
Allocated Taxable Loss and the Common Stock Group shall retain the Tax refund or
other Tax benefit arising from the State, Local or Foreign CNOL (and any Liberty
State, Local or Foreign Tax Sharing Payment).
(iii) If Section 3.2(b)(ii)(I) applies, then AT&T shall first
carry back the State, Local or Foreign CNOL of the Hypothetical Common
Stock/Wireless Affiliated Group for the taxable period, to the extent permitted
by applicable law, and then shall carry forward such CNOL. Such carryback or
carryforward, as the case may be, shall be treated as applied (a) for each
applicable taxable period in proportion to the respective Allocated Taxable
Losses of the Common Stock Group and the Wireless Group for the taxable period
of the State, Local or Foreign CNOL and (b) beginning with the earliest taxable
period permitted by applicable law. To the extent AT&T obtains a Tax refund or
other Tax benefit arising from such carryback or carryforward (or a Liberty
State, Local or Foreign Tax Sharing Payment), AT&T shall compensate the Wireless
Group for the Tax refund or other Tax benefit received (and any Liberty State,
Local or Foreign Tax Sharing Payment) in an amount which is proportionate to the
Wireless Group's Allocated Taxable Loss included in the State, Local or Foreign
CNOL so applied within ten (10) days of AT&T's receipt of such Tax refund (or
Liberty State, Local or Foreign Tax Sharing Payment) or within ten (10) days of
AT&T's filing the Tax return with respect to which it claims such other Tax
benefit. If the Hypothetical Common Stock/Wireless
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Affiliated Group has a State, Local or Foreign CNOL in a particular jurisdiction
for more than one taxable period, then the foregoing shall apply to each such
CNOL, beginning with the CNOL in the earliest such taxable period. For the
avoidance of doubt, if AT&T obtains no Tax refund or other Tax benefit with
respect to a State, Local or Foreign CNOL described in this paragraph (and no
Liberty State, Local or Foreign Tax Sharing Payment), AT&T shall make no payment
to Wireless in respect of the Wireless Group's Allocated Taxable Loss for the
taxable period of the CNOL.
(c) Consolidated Tax Credits. Except as set forth below with
respect to the research and experimentation ("R&E") Tax credit and except as set
forth in paragraph (d)(iii) hereof with respect to consolidated federal AMT
credits, Tax credits will be allocated to each of the Wireless Group and the
Common Stock Group contributing to the credit on a pro rata basis in an amount
equal to such Group's contribution to each consolidated Tax credit determined to
be available to the Hypothetical Common Stock/Wireless Affiliated Group for each
taxable period, except to the extent that the Code or Treasury Regulations
require a different allocation. The contribution of the Wireless Group and the
Common Stock Group to each consolidated Tax credit generally will be determined
without regard to the amount of Tax credit that would have been allowed if a
Separate Return had been filed. In the case of the R&E Tax credit, however, the
total available R&E Tax credit for a taxable period (determined without regard
to any carryovers and carrybacks of R&E tax credits from other taxable periods)
shall be allocated pro rata between the Common Stock Group and the Wireless
Group based on the amount of qualified research expenditures that each such
Group generates during such taxable period and without regard to whether (i)
such Group would have generated a R&E Tax credit on a Separate Return basis; and
(ii) such Group would have been able to utilize a R&E Tax credit on a Separate
Return
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basis. Any Tax credit allocated to the Wireless Group or the Common Stock Group
under subparagraph (c) or subparagraph (d) hereof shall be taken into account in
determining the amount of any payment to be made by the Wireless Group or the
Common Stock Group under Section 3.2 or Section 3.3 hereof.
(d) Alternative Minimum Tax.
(i) If the Hypothetical Common Stock/Wireless Affiliated Group
has a consolidated federal AMT liability for such taxable period, then (I) if
the Wireless Group has Allocated Taxable Income for AMT purposes ("AMTI"),
Wireless, as agent for the Wireless Group, shall pay AT&T the AMT attributable
to the Wireless Group's AMTI for the taxable period and (II) if the Wireless
Group has an Allocated Taxable Loss for AMT purposes ("AMTL"), AT&T shall pay
Wireless, as agent for the Wireless Group, the amount by which the Hypothetical
Common Stock/Wireless Affiliated Group's AMT liability would be reduced for the
taxable period by reason of the Wireless Group's AMTL.
(ii) If the Hypothetical Common Stock/Wireless Affiliated
Group has an NOL for consolidated federal AMT purposes ("AMT NOL") for such
taxable period, then (I) if the Common Stock Group and the Wireless Group each
have AMTLs, the federal AMT refund or other Tax benefit arising from the
consolidated federal AMT NOL (and any payment from the Liberty Group in respect
of Liberty Group alternative minimum taxable income with respect to such taxable
period (a "Liberty AMT Sharing Payment")) shall be shared between the Common
Stock Group and the Wireless Group in proportion to their respective AMTLs for
the taxable period, (II) if the Wireless Group has an AMTL and the Common Stock
Group has AMTI, then AT&T shall pay Wireless, as agent for the Wireless Group,
the amount, if any, by which the Hypothetical Common Stock/Wireless Affiliated
Group's consolidated federal AMT for the
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taxable period would be reduced by reason of the Wireless Group's AMTL and the
federal AMT refund or other Tax benefit arising from the AMT NOL and any Liberty
AMT Sharing Payment shall be allocated to the Wireless Group and (III) if the
Wireless Group has AMTI and the Common Stock Group has an AMTL, then Wireless,
as agent for the Wireless Group, shall pay AT&T the amount, if any, by which the
Hypothetical Common Stock/Wireless Affiliated Group's consolidated federal AMT
for the taxable period would be reduced by reason of the Common Stock Group's
AMTL and the Common Stock Group shall retain the AMT refund or other Tax benefit
arising from the AMT NOL (and any Liberty AMT Sharing Payment).
(iii) Any Tax benefit arising from a utilization by the
Hypothetical Common Stock/Wireless Affiliated Group of a consolidated federal
AMT credit shall be allocated to the Group which paid the AMT that generated
such AMT credit. The AMT credit will be treated as used on a "FIFO" basis.
(iv) The principles set forth in subparagraphs (i)-(iii) above
shall apply, mutatis mutandis, with respect to any Joint Return for a state,
local or foreign jurisdiction that imposes an AMT, unless otherwise agreed with
or mandated by a specific jurisdiction.
(e) Special Rules.
(i) Treatment of Certain Preferred Stock and Debt. The $3
billion of 9% cumulative preferred interests issued by AWG to AT&T, the $1.9
billion of AWG indebtedness held by the Common Stock Group and any preferred
stock resulting from a conversion of any portion of such indebtedness (such debt
and preferred, the "Interests") will, for federal, state and local income tax
purposes, be treated as intercompany debt instruments, each with an issue price
equal to its face amount. Notwithstanding the fact that Interests may be
disregarded for U.S. tax purposes, for all purposes of this Agreement (including
the calculation of gain or loss with
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respect to such Interests), such Interests shall be considered assets of the
Common Stock Group and liabilities of the Wireless Group. For the avoidance of
doubt, dividend payments on the preferred stock and interest payments on the
debt will be treated as interest expense to the Wireless Group and interest
income to the Common Stock Group.
(ii) Final Adjustment of Intercompany Account; Final
Post-Distribution Tax-Sharing True-Ups. Prior to the Distribution Date, AT&T
shall adjust the intercompany account between AT&T and the Wireless Group to
reflect either party's liability for or right to receive (as the case may be)
any unpaid amount determined under this Agreement with respect to (a) any
taxable period ending on the Distribution Date (such determination to be based
on an accrual, consistent with past practice under Section 3.2 hereof, of the
federal and state income Tax on the Wireless Group's Allocated Taxable Income
(Loss) through the Distribution Date) and (b) any other Pre-Distribution Taxable
Period and any resulting balance in the intercompany account shall be paid. No
later than sixty (60) days after the date that the Tax Return of the AT&T
Affiliated Group that includes a Pre-Distribution Taxable Period is due
(including extensions), (I) AT&T shall determine the differences, if any,
between the taxable income or loss used to calculate any amounts described in
clause (a) of the preceding sentence and the Wireless Group's Allocated Taxable
Income (Loss) determined in connection with filing the consolidated federal
income Tax Return of the AT&T Affiliated Group that includes such
Pre-Distribution Taxable Period, and (II) final tax sharing true-up payments
shall be made by AT&T to the Wireless Group or by the Wireless Group to AT&T, as
the case may be, to reflect the amount of such differences. For the avoidance of
doubt, amounts payable or receivable hereunder shall not include or be impacted
by any amounts treated for financial reporting purposes (i.e., US GAAP and FAS
109) as a deemed equity transaction in order to reconcile the Wireless Group's
tax
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liability to the stand alone tax provision reflected in the Wireless Group
separate company US GAAP financial statements.
(iii) Liability for Spin-Off Disqualification. Notwithstanding
anything in this Agreement to the contrary, Wireless' obligation to indemnify
AT&T for any "Tax-Related Losses" as a result of a "Spin-Off Disqualification"
(as those terms are defined in Section 7.2(b) and (d) of the Separation and
Distribution Agreement) shall be determined exclusively under the provisions of
the Separation and Distribution Agreement.
(iv) Employee Compensation. The allocation of Tax Items
related to employee compensation and employee benefits between the Common Stock
Group and the Wireless Group shall be determined exclusively under the
provisions of the Employee Benefits Agreement by and between the parties hereto
dated as of the date hereof.
(v) Certain Items for Wireless' Account. Any Tax Item
resulting from, arising out of, relating to, in the nature of or caused by any
asset or other interest tracked by the AT&T Wireless Group Tracking Stock shall
be for the account of the Wireless Group as provided hereunder. Without
limitation, and for the avoidance of any doubt, Tax Items arising out of or
relating to the following shall be part of the Allocated Taxable Income (Loss)
of the Wireless Group or, in the case of Non-Income Taxes, shall give rise to a
Non-Income Tax liability for the account of the Wireless Group: (A) the
transactions contemplated by that certain Agreement and Plan of Merger, dated as
of March 3, 2000, by and between AT&T, AT&T Wireless Acquisition I, Inc.,
Comcast Corporation and Comcast WCS Communications, Inc., or any other agreement
entered into in connection therewith, (B) the transactions contemplated by that
certain Investment Agreement, dated as of April 25, 1999, among British
Telecommunications plc, BT (Netherlands) Holdings B.V., AT&T and Japan Telecom
Co., Ltd.
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and the ownership interest in Froghall B.V. arising as a result of that
transaction (limited, in the case of this clause (B) to 50 percent of any such
Tax, as the remainder of Froghall B.V. is an asset of the Common Stock Group),
(C) the treatment of AT&T Wireless Group Tracking Stock as anything other than
common stock of AT&T, (D) the actual or deemed disposition of the Wireless Group
or of the stock or assets of any Legal Entity which is a member of the Wireless
Group arising out of or relating to the issuance of AT&T Wireless Group Tracking
Stock, (E) any distribution of the stock of any company the assets of which are
tracked by the AT&T Wireless Group Tracking Stock or, notwithstanding any other
provision in this Agreement, any transaction undertaken in connection therewith,
(F) the attribution and/or transfer to the Wireless Group of all or a portion
of, as the case may be, AT&T's indirect interests in Binariang SDN BHD, Atlantic
West BV, PT Aria West International, MediaOne BPL JV, Japan Telecom Co., Ltd.,
AT&T BT Canada ▇▇ ▇▇, Birla Communications Ltd., and any other assets which are
attributed and/or transferred to the Wireless Group, and (G) any transfer of
assets (including interests in entities) or liabilities to Wireless or between
entities that are members of the Wireless Group in a Pre-Distribution Taxable
Period.
(vi) Certain Items for AT&T's Account. Any Tax Item resulting
from, arising out of, relating to, in the nature of or caused by any asset or
other interest which is not tracked by the AT&T Wireless Group Tracking Stock
shall be for the account of AT&T. Without limitation, and for the avoidance of
any doubt, Tax Items arising out of or relating to the following shall be part
of the Allocated Taxable Income (Loss) of the Common Stock Group or, in the case
of Non-Income Taxes, shall give rise to a Non-Income Tax liability for the
account of AT&T: (A) a transfer by the Wireless Group of the investment in
▇▇▇▇▇.▇▇▇, Inc., (B) a transfer
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by the Wireless Group of the investment in Metromedia Fiber Network Inc., and
(C) a transfer by the Wireless Group of the investment in Metrocall, Inc.
(vii) Other Transactions. Except as otherwise provided in
(iii), (iv), (v) and (vi) hereof, in the case of any other transaction involving
the assets of the Wireless Group or the Common Stock Group, respectively,
undertaken to facilitate a transaction of the Common Stock Group or the Wireless
Group, respectively, AT&T and Wireless shall in good faith negotiate the
appropriate allocation of Tax Items arising in connection with such transaction.
(viii) For the avoidance of doubt, any AT&T Common Stock, AT&T
Wireless Tracking Stock or AT&T Liberty Media Group Stock that is outstanding
for Tax purposes and is an asset of the Common Stock Group, the Liberty Media
Group or the Wireless Group (each as defined in the AT&T Charter) under the AT&T
Charter shall be treated as an asset of, and held by a Legal Entity that is a
member of, the Common Stock Group, the Liberty Group or the Wireless Group,
respectively, for purposes of this Agreement.
3.3. Wireless Tax Sharing Payments with respect to Pre-Closing Taxable
Periods. Except as set forth below, with respect to Pre-Closing Taxable Periods,
Wireless will be responsible for all Taxes attributable to the Wireless Group as
determined under the principles set forth in Section 3.2. The responsibility of
Wireless to pay AT&T for consolidated income Taxes attributable to the Wireless
Group, and AT&T's responsibility to pay Wireless for Tax benefits attributable
to the Wireless Group, will be considered to have been settled for Pre-Closing
Taxable Periods; provided, however, that the principles of this Agreement
(including, without limitation, Sections 3.2(a) and 3.2(b)) shall apply (A) to
the extent that the taxable income or loss used to calculate the consolidated
income Tax asset or liability accruals for Taxes currently payable set forth on
the financial statements of the Wireless Group differ from the
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Wireless Group taxable income or loss reflected in the 1999 income Tax Return of
the AT&T Affiliated Group and (B) to the extent set forth in Section 5 hereof.
3.4. Wireless Tax Sharing Payments with respect to Post-Distribution
Taxable Periods. With respect to Post-Distribution Taxable Periods, Wireless
will be responsible for all Taxes attributable to the Wireless Group.
4. Time of Payment; Joint and Several Liability.
(a) The payments required pursuant to Section 3.2 or Section
3.3 shall be made on an estimated basis no later than the fifth day after the
date an estimated Tax payment is due (including extensions), and a true-up
payment shall be made no later than sixty (60) days after the date that the Tax
Return for the taxable period is due (including extensions).
(b) Every member of the Wireless Group shall be jointly and
severally liable for all obligations of any member of the Wireless Group arising
under this Agreement, and every member of the Common Stock Group shall be
jointly and severally liable for all obligations of any member of the Common
Stock Group arising under this Agreement.
5. Adjustments.
(a) In the event of any redetermination of the consolidated
federal income Tax liability of the AT&T Affiliated Group for any taxable period
(or of a Tax liability with respect to any Joint Return for any taxable period)
as the result of an audit by the Internal Revenue Service (or the relevant
state, local or foreign Governmental Authority), a claim for refund or
otherwise, the Liberty Federal Tax Sharing Payment, the Liberty State, Local or
Foreign Tax Sharing Payment, and the Wireless Group's and Common Stock Group's
respective shares of the Hypothetical Common Stock/Wireless Affiliated Group's
Taxes, shall be recomputed for such taxable period and any prior and subsequent
taxable periods to take into account such
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redetermination, and payments due pursuant to Section 3.2 or Section 3.3 hereof
shall be appropriately adjusted. Notwithstanding anything in this Section to the
contrary, in the event of a redetermination of an income Tax liability reflected
on a state or local combined, consolidated or unitary income or franchise Tax
Return that is a Joint Return for a Pre-Closing Taxable Period, including a
determination that any or all of the members of the Wireless Group or the Common
Stock Group are not entitled to file a Joint Return, such Group's respective
shares of the Hypothetical Common Stock/Wireless Affiliated Group's Taxes, shall
be recomputed under the provisions of the State and Local Income Tax Allocation
Agreement to take into account such redetermination, and payments pursuant to
such agreement shall be appropriately adjusted. For the avoidance of doubt, in
the event of a redetermination of an income Tax liability reflected on a state
or local combined, consolidated or unitary income or franchise Tax Return that
is a Joint Return for a taxable period other than a Pre-Closing Taxable Period
and that results from an adjustment to one or more apportionment factors
(whether arising from an adjustment to the factors of the Wireless Group, the
Common Stock Group or both groups), the liability of both the Common Stock Group
and the Wireless Group shall be recalculated using the revised apportionment
factors (property, payroll, sales), calculated on a consolidated basis.
(b) Any payment by AT&T or Wireless required by such
adjustment shall be paid within thirty (30) days after the date of a Final
Determination with respect to such redetermination or as soon as such adjustment
can practicably be calculated, if later.
(c) For all Tax purposes, except as otherwise mandated by
applicable law, the parties hereto agree to treat, and to cause their respective
affiliates to treat (i) any payment to a party required by this Agreement as
either a contribution by AT&T to Wireless or a distribution by Wireless to AT&T,
as the case may be, occurring immediately prior to the Distribution and
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(ii) any payment of interest (or non-federal income Taxes) by or to the Internal
Revenue Service (or the relevant state, local or foreign Governmental Authority)
as taxable or deductible, as the case may be, to the party entitled under this
Agreement to retain such payment or required under this Agreement to make such
payment; provided, that in the event it is determined as a result of a Final
Determination that any such treatment described in clause (i) hereof is not
permissible, the payment in question shall be adjusted to place the parties in
the same after-tax position they would have enjoyed absent such Final
Determination.
6. Separate Returns. Any Separate Return that includes only members of
the Wireless Group and any Taxes with respect to such Separate Return shall be
the responsibility of the Wireless Group, provided, however, that in the event
that the Wireless Group does not timely file such Separate Returns or pay the
Taxes due with respect thereto for any Pre-Distribution Taxable Period, Wireless
shall indemnify AT&T with respect to such Separate Return as provided in Section
8 and, notwithstanding any other provision hereof, AT&T shall be entitled to
file (or cause to be filed) such Separate Return in any manner it chooses in its
sole discretion. For the avoidance of doubt, Wireless shall be responsible for
(i) preparing and filing or causing to be prepared and filed all Tax Returns and
exemption certificates required to be filed by Wireless or any member of the
Wireless Group for any Post-Distribution Taxable Period and (ii) paying the Tax
liability due with respect to such Tax Returns. For the further avoidance of
doubt any liability or overpayment of Non-Income Taxes arising from an audit
conducted by a Governmental Authority with respect to the business activities of
the Wireless Group or the Common Stock Group, respectively, for any
Pre-Distribution Taxable Period, including any liability arising from the
failure to properly collect and remit Telecom Pass Through Taxes, shall be for
the account of the Wireless Group or the Common Stock Group, as the case may be.
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6A. Carrybacks and Apportionment of Tax Attributes.
(a) Except to the extent otherwise consented to by AT&T or
prohibited by applicable law, the Wireless Group shall relinquish, waive or
otherwise forego all carrybacks of a Tax attribute (including, without
limitation, a net operating loss, a net capital loss or a Tax credit) by a
member of the Wireless Group from a Post-Distribution Taxable Period to a
Pre-Distribution Taxable Period; provided, however, that A&T will not
unreasonably withhold its consent to a carryback of a significant net operating
loss of the Wireless Group (provided further that the cost of any such carryback
be borne by the Wireless Group)..
(b) AT&T shall provide to the Wireless Group (i) no later than 90
days prior to the due date for filing (including extensions) the federal income
Tax Return of the AT&T Affiliated Group for the taxable period that includes the
Distribution Date, a schedule setting forth an estimate of all federal, state,
or local consolidated or combined losses, credits and other Tax attributes
allocable to the Wireless Group for Post-Distribution Taxable Periods, and (ii)
no later than 90 days after filing the relevant federal income Tax Return, a
final copy of such schedule, after considering in good faith all comments of the
Wireless Group on the schedule provided pursuant to clause (i). The allocation
of Tax attributes set forth in such schedule shall be binding on the Wireless
Group and, except as otherwise required pursuant to a Final Determination,
neither Wireless nor any member of the Wireless Group shall take a position on
any Tax Return for a Post-Distribution Taxable Period that is inconsistent with
the information contained in such schedule. Wireless shall prepare or cause to
be prepared and file or cause to be filed all income Tax Returns for which it is
responsible under this Agreement so as to take into account, to the extent
permitted by applicable law, any Tax attribute apportioned to Wireless or any
member of the Wireless Group hereunder. Until such time as any such Tax
attribute has
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been utilized by Wireless or any member of the Wireless Group, Wireless shall,
in connection with each income Tax Return filed by or on behalf of a member of
the Wireless Group, provide AT&T with a statement setting forth in reasonable
detail a calculation of the extent to which any such Tax attribute was utilized
on such income Tax Return.
7. Interest on Unpaid Amounts. In the event that any party fails to pay
any amount owed to another party pursuant to this Agreement on the date when
due, interest shall accrue on any unpaid amount, from the due date until such
amounts are fully paid, at the Designated Rate in effect during that time.
8. Indemnification.
(a) From and after the Issue Date, each Legal Entity that is a
member of the Wireless Group shall indemnify and hold harmless each Common Stock
Indemnitee from and against (i) any Taxes with respect to a Pre-Distribution
Taxable Period which such member of the Wireless Group is required to pay to a
Governmental Authority (without any right of reimbursement from any Legal Entity
that is not a member of the Wireless Group) or in respect of which Wireless is
required to make a payment to AT&T and (ii) any Losses incurred by any Common
Stock Indemnitee by reason of a breach by any member of the Wireless Group of
its obligations or covenants hereunder.
(b) From and after the Issue Date, each Legal Entity that is a
member of the Common Stock Group shall indemnify and hold harmless each Wireless
Indemnitee from and against (i) any Taxes with respect to a Pre-Distribution
Taxable Period which such member of the Common Stock Group is required to pay to
a Governmental Authority (without any right of reimbursement from any Legal
Entity that is not a member of the Common Stock Group) or in respect of which
AT&T is required to make a payment to Wireless and (ii) any Losses incurred
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by any Wireless Indemnitee by reason of a breach by any member of the Common
Stock Group of its obligations or covenants hereunder.
9. Tax Proceedings.
(a) Notification of Tax Proceedings. The Controlling Party
shall notify all Interested Parties within ten (10) business days of (i) the
commencement of any Tax Proceeding pursuant to which such Interested Parties may
be required to make or entitled to receive an indemnity payment, reimbursement
or other payment under this Agreement; and (ii) as required and specified in
Section 9(d) hereof, any Final Determination made with respect to any Tax
Proceeding pursuant to which such Interested Parties may be required to make or
entitled to receive any indemnity payment, reimbursement or other payment under
this Agreement. The failure of a Controlling Party to timely notify any
Interested Party as specified in the preceding sentence shall not relieve any
such Interested Party of any liability and/or obligation which it may have to
the Controlling Party under this Agreement except to the extent that the
Interested Party was prejudiced by such failure, and in no event shall such
failure relieve the Interested Party from any other liability or obligation
which it may have to such Controlling Party.
(b) Tax Proceeding Settlement Rights. The Controlling Party
shall have the sole right to contest, litigate, compromise and settle any
Adjustment that is made or proposed in a Tax Proceeding without obtaining the
prior consent of any Interested Party; provided, however, that unless waived by
the parties in writing, the Controlling Party shall, in connection with any
proposed or assessed Adjustment in a Tax Proceeding for which an Interested
Party may be required to make or entitled to receive an indemnity payment,
reimbursement or other payment under this Agreement (i) keep all such Interested
Parties informed in a timely manner of all actions taken or proposed to be taken
by the Controlling Party; and (ii) provide all such
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Interested Parties with copies of any correspondence or filings submitted to any
Governmental Authority or judicial authority, in each case in connection with
any contest, litigation, compromise or settlement relating to any such
Adjustment in a Tax Proceeding. The failure of a Controlling Party to take any
action as specified in the preceding sentence with respect to an Interested
Party shall not relieve any such Interested Party of any liability and/or
obligation which it may have to the Controlling Party under this Agreement
except to the extent that the Interested Party was prejudiced by such failure,
and in no event shall such failure relieve the Interested Party from any other
liability or obligation which it may have to such Controlling Party. The
Controlling Party may, in its sole discretion, take into account any suggestions
made by an Interested Party with respect to any such contest, litigation,
compromise or settlement of any Adjustment in a Tax Proceeding and shall act in
good faith as if it were the only party in interest. All costs of any Tax
Proceeding are to be borne by the Controlling Party; provided, however, that (x)
any costs related to an Interested Party's attendance at any meeting with a
Governmental Authority or hearing or proceeding before any judicial authority
pursuant to Section 9(c) hereof, and (y) the costs of any legal or other
representatives retained by an Interested Party in connection with any Tax
Proceeding that is subject to the provisions of this Agreement, shall be borne
by such Interested Party.
(c) Tax Proceeding Participation. Unless waived by the parties
in writing, the Controlling Party shall provide an Interested Party with written
notice reasonably in advance of, and such Interested Party shall have the right
to attend, any formally scheduled meetings with Governmental Authorities or
hearings or proceedings before any judicial authorities in connection with any
contest, litigation, compromise or settlement of any proposed or assessed
Adjustment that is the subject of any Tax Proceeding pursuant to which such
Interested Party
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may be required to make or entitled to receive an indemnity payment,
reimbursement or other payment under this Agreement. In addition, unless waived
by the parties in writing, the Controlling Party shall provide each such
Interested Party with draft copies of any correspondence or filings to be
submitted to any Governmental Authority or judicial authority with respect to
such Adjustments for such Interested Party's review and comment. The Controlling
Party shall provide such draft copies reasonably in advance of the date that
they are to be submitted to the Governmental Authority or judicial authority and
the Interested Party shall provide its comments, if any, with respect thereto
within in a reasonable time before such submission. The failure of a Controlling
Party to provide any notice, correspondence or filing as specified in this
Section 9(c) to an Interested Party shall not relieve any such Interested Party
of any liability and/or obligation which it may have to the Controlling Party
under this Agreement except to the extent that the Interested Party was
prejudiced by such failure, and in no event shall such failure relieve the
Interested Party from any other liability or obligation which it may have to
such Controlling Party.
(d) Tax Proceeding Waiver.
(i) The Controlling Party shall promptly provide written
notice, sent postage prepaid by United States mail, certified mail, return
receipt requested, to all Interested Parties in a Tax Proceeding (A) that a
Final Determination has been made with respect to such Tax Proceeding; and (B)
enumerating the amount of the Interested Party's share of each Adjustment
reflected in such Final Determination of the Tax Proceeding for which such
Interested Party may be required to make or entitled to receive an indemnity
payment, reimbursement or other payment under this Agreement.
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(ii) Within ninety (90) days after an Interested Party
receives the notice described in Section 9(d)(i) hereof from the Controlling
Party, such Interested Party shall execute a written statement giving notice to
the Controlling Party (A) that the Interested Party agrees with each Adjustment
(and its share thereof) enumerated in the notice described in Section 9(d)(i)
hereof except with respect to those Adjustments (and/or its shares thereof)
that, in the good faith judgment of the Interested Party, it disagrees with and
has specifically enumerated its disagreement with, including the amount of such
disagreement, in the statement (each such disagreed Adjustment (and/or share
thereof) hereinafter referred to as a "Disputed Adjustment"); and (B) that the
Interested Party thereby waives its right to a determination by an Independent
Third Party pursuant to the provisions of Section 9(e) hereof with respect to
all Adjustments to which it agrees with its share (the "Interested Party
Notice"). The failure of an Interested Party to provide the Interested Party
Notice to the Controlling Party within the ninety (90) day period specified in
the preceding sentence shall be deemed to indicate that such Interested Party
agrees with its share of all Adjustments enumerated in the notice described in
Section 9(d)(i) hereof and that such Interested Party waives its right to a
determination by an Independent Third Party with respect to all such Adjustments
(and its shares thereof) pursuant to Section 9(e) hereof.
(iii) During the ninety (90) day period immediately following
the Controlling Party's receipt of the Interested Party Notice described in
Section 9(d)(ii) above, the Controlling Party and the Interested Party shall in
good ▇▇▇▇▇ ▇▇▇▇▇▇ with each other to resolve any disagreement over each Disputed
Adjustment that was specifically enumerated in such Interested Party Notice. At
the end of the ninety (90) day period specified in the preceding sentence,
unless otherwise extended in writing by the mutual consent of the parties, the
Interested Party shall be deemed to agree with all Disputed Adjustments that
were specifically enumerated in the
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Interested Party Notice and waive its right to a determination by an Independent
Third Party pursuant to Section 9(e) hereof with respect to all such Disputed
Adjustments unless, and to the extent that, at any time during such ninety (90)
day (or extended) period, either the Controlling Party or the Interested Party
has given the other party written notice that it is seeking a determination by
an Independent Third Party pursuant to Section 9(e) hereof regarding the
propriety of any such Disputed Adjustment.
(e) Tax Proceeding Dispute Resolution.
(i) In the event that either a Controlling Party or an
Interested Party has given the other party written notice as required in Section
9(d)(iii) hereof that it is seeking a determination by an Independent Third
Party pursuant to this Section 9(e) with respect to any Disputed Adjustment that
was enumerated in an Interested Party Notice, then the parties shall, within ten
(10) days after a party has received such notice, jointly select an Independent
Third Party to make such determination. In the event that the parties cannot
jointly agree on an Independent Third Party to make such determination within
such ten (10) day period, then the Controlling Party and the Interested Party
shall each immediately select an Independent Third Party and the Independent
Third Parties so selected by the parties shall jointly select, within ten (10)
days of their selection, another Independent Third Party to make such
determination.
(ii) In making its determination as to the propriety of any
Disputed Adjustment, the Independent Third Party selected pursuant to Section
9(e)(i) above shall assume that the Interested Party is not required or entitled
under applicable law to be a member of any consolidated return. In addition, the
Independent Third Party shall make its determination according to the following
procedure:
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(I) The Independent Third Party shall first analyze
each Disputed Adjustment for which a determination is sought pursuant to this
Section 9(e) on a stand alone basis to determine whether the actual outcome
reached with respect to such Disputed Adjustment as reflected in the Final
Determination of the Tax Proceeding was fair and appropriate taking into account
the following exclusive criteria: (A) the facts relating to such Adjustment; (B)
the applicable law, if any, with respect to such Adjustment; (C) the position of
the applicable Governmental Authority with respect to compromise, settlement or
litigation of such Adjustment; (D) the strength of the factual and legal
arguments made by the Controlling Party in reaching the outcome with respect to
such Adjustment as reflected in the Final Determination of the Tax Proceeding;
and (E) the strength of the factual and legal arguments being made by the
Interested Party for the alternative outcome being asserted by such Interested
Party (including the availability of facts, information and documentation to
support such alternative outcome). Based on this analysis, the Independent Third
Party shall determine what is the fair and appropriate outcome (hereinafter
referred to as the "Initial Determination") with respect to each such Disputed
Adjustment.
(II) The Interested Party shall not be entitled to
modification of its share of a Disputed Adjustment under this Section 9(e) if,
as the case may be, either (A) the amount that would be paid by the Interested
Party under the Initial Determination with respect to such Disputed Adjustment
is 80% or more than the amount that would be paid by the Interested Party with
respect to such Disputed Adjustment under the actual outcome reached with
respect to such Disputed Adjustment; or (B) the amount that would be received by
the Interested Party under the Initial Determination with respect to such
Disputed Adjustment is 120% or less than the amount that the Interested Party
would receive with respect to such Disputed Adjustment
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under the actual outcome reached with respected to such Disputed Adjustment. The
Independent Third Party will provide notice to the Controlling Party and the
Interested Party in the event the Interested Party is not entitled to
modification of its share of the Disputed Adjustment pursuant to this paragraph
(II).
(III) If the modification of an Interested Party's
share of a Disputed Adjustment under this Section 9(e) is not prohibited
pursuant to paragraph (II) above, then the independent Third Party shall
determine what is the fair and appropriate outcome (hereinafter referred to as
the "Ultimate Determination") to the Interested Party with respect to such
Disputed Adjustment in the context of the entire Tax Proceeding as it relates to
the Interested Party. In making this determination, the Independent Third Party
shall consider the Disputed Adjustment as if it were raised in an independent
audit of the Interested Party by the appropriate Governmental Authority and the
Independent Third Party shall take into account and give appropriate weight in
its sole discretion to the following exclusive criteria: (A) the strength of the
legal and factual support for other potential, non-frivolous Adjustments with
respect to matters that were actually raised and contested by the applicable
Governmental Authority in the Tax Proceeding for which the Interested Party
could have been liable under this Agreement but which were eliminated or reduced
as a result of the Controlling Party agreeing to the Disputed Adjustment as
reflected in the Final Determination of the Tax Proceeding; (B) the effect of
the actual outcome reached with respect to the Disputed Adjustment on other
Taxable periods and on other positions taken or proposed to be taken in Returns
filed or proposed to be filed by the Interested Party; (C) the realistic
possibility of avoiding examination of potential, non-frivolous issues for which
the Interested Party could be liable under this Agreement and that were
contemporaneously identified in writings by the party or parties during the
course of the Tax
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Proceeding but which had not been raised and contested by the applicable
Governmental Authority in the Tax Proceeding; and (D) the benefits to the
Interested Party in reaching a Final Determination, and the strategy and
rationale with respect to the Interested Party's Disputed Adjustment that the
Controlling Party had for agreeing to such Disputed Adjustment in reaching the
Final Determination, in each case that were contemporaneously identified in
writings by the party or parties during the course of the Tax Proceeding.
(IV) The Interested Party shall only be entitled to
modification of its share of a Disputed Adjustment under this Section 9(e) if,
as the case may be, either (A) the amount that would be paid by the Interested
Party under the Ultimate Determination with respect to such Disputed Adjustment
is less than 80% of the amount that would be paid by the Interested Party with
respect to such Disputed Adjustment under the actual outcome reached with
respect to such Disputed Adjustment; or (B) the amount that would be received by
the Interested Party under the Ultimate Determination with respect to such
Disputed Adjustment is more than 120% of the amount that the Interested Party
would receive with respect to such Disputed Adjustment under the actual outcome
reached with respect to such Disputed Adjustment. If an Interested Party is
entitled to modification of its share of any Disputed Adjustment under the
preceding sentence, the amount the Interested Party is entitled to receive, or
is required to pay, as the case may be, with respect to such Disputed Adjustment
shall be equal to the amount of the Ultimate Determination of such Disputed
Adjustment. The Independent Third Party will provide notice to the Controlling
Party and the Interested Party stating whether the Interested Party is entitled
to modification of its share of the Disputed Adjustment pursuant to this
paragraph (IV) and, if the Interested Party is entitled to such modification,
the amount as determined in the preceding
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sentence that the Interested Party is entitled to receive from, or required to
pay to, the Controlling Party with respect to such Disputed Adjustment.
(iii) Any determination made or notice given by an Independent
Third Party pursuant to this Section 9(e) shall be (A) in writing; (B) made
within sixty (60) days following the selection of the Independent Third Party as
set forth in Section 9(e)(i) of this Agreement unless such period is otherwise
extended by the mutual consent of the parties; and (C) final and binding upon
the parties. The costs of any Independent Third Party retained pursuant to this
Section 9(e) shall be shared equally by the parties. The Controlling Party and
the Interested Party shall provide the Independent Third Party jointly selected
pursuant to Section 9(e)(i) hereof with such information or documentation as may
be appropriate or necessary in order for such Independent Third Party to make
the determination requested of it. Upon issuance of an Independent Third Party's
notice under Section 9(e)(ii)(II) or Section 9(e)(ii)(IV) hereof, the
Controlling Party or the Interested Party, as the case may be, shall pay as
specified in Section 5 of this Agreement, the amount, if any, of the Disputed
Adjustment to the appropriate party.
10. Appointment of AT&T as Agent. Each of AWG, Wireless, Wireless PCS,
the Other Signatories, each of their respective Subsidiaries and any entities
which become parties hereto pursuant to Section 21 hereof (collectively, the
"Wireless Parties") hereby appoints AT&T (or its designee) as its agent for the
purpose of filing consolidated federal income Tax returns and for making any
election or application or taking any action in connection with any such return
on behalf of any of the Wireless Parties for any Pre-Distribution Taxable Period
consistent with the terms of this Agreement. Each of the Wireless Parties hereby
appoints AT&T (or its designee) as its agent for the purpose of filing any
combined, consolidated or unitary state, local or foreign Tax returns that
includes any Legal Entity that is a member of the Wireless Group, and for
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making any election or application or taking any action in connection with any
such return on behalf of any of the Wireless Parties for any Pre-Distribution
Taxable Period consistent with the terms of this Agreement. Each of the Wireless
Parties hereby consents to the filing of such consolidated federal income Tax
returns and combined, consolidated or unitary state, local or foreign Tax
Returns, and to the making of such elections and applications. Each of the
Wireless Parties agrees that each of the Wireless Parties that is or becomes a
corporation for federal income Tax purposes shall be included in the filing of
consolidated federal income Tax Returns on behalf of the AT&T Affiliated Group
for each Pre-Distribution Taxable Period during which such Wireless Party is a
corporation for federal income Tax purposes.
11. Cooperation, Exchange of Information and Payment of Tax.
(a) Cooperation. The parties shall cooperate with one another
in all matters relating to Taxes.
(b) Exchange of Information.
(i) The Wireless Group shall, at its sole cost and expense,
provide AT&T with such cooperation and information as is necessary in order to
enable AT&T to satisfy its Tax, accounting and other legitimate requirements
with respect to Pre-Distribution Taxable Periods. Such cooperation and
information by the Wireless Group shall include making available its respective
knowledgeable employees during normal business hours, providing the information
required by AT&T's customary Tax and accounting practices, including
questionnaires (at the times and in the format required by AT&T or its
Subsidiaries), providing complete Tax Return work papers and supporting
documentation prepared in a manner that is reasonably consistent with AT&T's
past practice, maintaining such books and records and providing such information
as may be necessary or useful in the filing of Joint Returns and
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Separate Returns, and executing any documents and taking any actions which AT&T
may reasonably request in connection therewith. With respect any
Pre-Distribution Taxable Period, the Wireless Group shall provide the
information required hereunder no later than 120 days after the Distribution
Date.
(ii) In the event the Wireless Group desires to take any
position on a Joint Return for a Pre-Distribution Taxable Period with respect to
a specific Tax Item that is directly inconsistent with a position taken on a
previously filed Tax Return of or which included a member of the Wireless Group
for a Pre-Distribution Taxable Period (an "Inconsistent Position") it shall
notify AT&T of that desire. If the Inconsistent Position solely relates to the
Wireless Group's line of business and is not relevant for the Common Stock Group
(a "Wireless Inconsistent Position"), the Wireless Group shall provide to AT&T,
at least (90) days prior to the due date (with extensions) of the relevant Joint
Return, information sufficient to establish that such Wireless Inconsistent
Position would have a likelihood of success under the law that is at least
33-1/3 percent (the "Reporting Standard"). Within thirty (30) business days of
receipt of such information, AT&T shall notify the Wireless Group in writing (a)
if such information is not reasonably satisfactory to AT&T or (b) if AT&T, in
its sole discretion, determines that the Wireless Inconsistent Position could
reasonably be expected to have an adverse effect on AT&T. The item will be
reported by AT&T in accordance with AT&T's past practice unless, within ten
business days of receipt of the written notice described in clause (a) of the
preceding sentence, the Wireless Group provides AT&T with an opinion of a
nationally recognized law firm confirming, in form and substance reasonably
satisfactory to AT&T, that the Wireless Inconsistent Position would meet the
Reporting Standard. Any expenses related to obtaining such an opinion shall be
borne by the Wireless Group. For the avoidance of doubt, if the
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Wireless Group requests that AT&T take an Inconsistent Position (which is not a
Wireless Inconsistent Position) with respect to a Wireless Group item, AT&T may
determine in its sole discretion (and without regard to the procedures in this
subsection (ii)) whether to report any Wireless Group Tax Item which is an
Inconsistent Position (and not a Wireless Inconsistent Position) in accordance
with the request of the Wireless Group
(iii) In any Tax Return for a Post-Distribution Taxable
Period, the Wireless Group agrees to act in good faith in reporting its Tax
Items and not to claim any deduction, refund or credit which has been claimed
(or which in accordance with past practice will be claimed) on a Tax Return of
or which included a member of the Wireless Group for a Pre-Distribution Taxable
Period , except as required as a result of a Final Determination.
(iv) AT&T, at its election and expense, shall be permitted to
retain an Independent Third Party to review the information provided by the
Wireless Group pursuant to subsection (b)(i) or (b)(ii), as the case may be, for
completeness and accuracy, and to determine whether such information is
consistent with AT&T's past practice or, to the extent it relates to a Wireless
Inconsistent Position, sufficient to satisfy the Reporting Standard. The
Wireless Group shall cooperate fully with such third-party review and shall make
available any of the information described in subsection (b)(i) or (b)(ii), as
the case may be, as reasonably requested by AT&T or its representatives.
(v) AT&T shall provide Wireless, upon request, with copies of
relevant portions of relevant Joint Returns (or, at AT&T's discretion, pro
formas of such Joint Returns showing only Wireless Group Tax Items) filed by
AT&T that include any member of the Wireless Group promptly after such Joint
Returns are filed.
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(c) Payment of Tax. For each Pre-Distribution Taxable Period,
AT&T shall (i) prepare and file, or cause to be prepared and filed and (ii)
timely pay or discharge, or cause to be timely paid or discharged, the
consolidated Federal income Tax liability of the AT&T Affiliated Group for such
taxable period and the combined state, local or foreign Tax liability shown on
any Joint Return that AT&T or any other member of the Common Stock Group elects
or is required to file.
12. Resolution of Disputes. Except as otherwise expressly provided
herein, any dispute concerning the calculation or basis of determination of any
payment provided for hereunder, including payments under Section 15 hereof,
shall be resolved by an Independent Third Party selected in a manner similar to
the procedure set forth in Section 9(e) (i), whose judgment shall be conclusive
and binding upon the parties, in the absence of mathematical error.
13. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon AT&T and the Wireless Parties. This Agreement shall inure to the
benefit of, and be binding upon, any successors or assigns of the parties hereto
(including, without limitation, any Subsidiary that becomes a party hereto
pursuant to Section 21). AT&T, Wireless, and each other party hereto may assign
their right to receive payments under this Agreement but may not assign or
delegate their obligations hereunder.
14. Interpretation. This Agreement is intended to calculate and
allocate certain Federal, state, local and foreign Tax liabilities of the
members of the AT&T Affiliated Group, the Common Stock Group, and the Wireless
Group, and any situation or circumstance concerning such calculation and
allocation that is not specifically contemplated hereby or provided for herein
shall be dealt with in a manner consistent with the underlying principles of
calculation and allocation in this Agreement.
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15. Legal and Accounting Fees. Except as otherwise provided in Section
11 hereof, any fees or expenses for legal, accounting or other professional
services rendered in connection with the preparation of a Joint Return or the
conduct of any Tax Proceeding shall be allocated between AT&T and Wireless in a
manner resulting in AT&T and Wireless, respectively, bearing a reasonable
approximation of the actual amount of such fees or expenses hereunder reasonably
related to, and for the benefit of, their respective Groups.
16. Effect of the Agreement. This Agreement shall determine the
liability of AT&T, Wireless and the members of their respective Groups to each
other as to the matters provided for herein, whether or not such determination
is effective for purposes of the Code or of state, local or foreign Tax laws, or
for financial reporting purposes or for any other purposes.
17. Entire Agreement.
(a) This Agreement embodies the entire understanding among the
parties relating to its subject matter and supersedes and terminates any prior
agreements and understandings among the parties with respect to such subject
matter. Any and all prior correspondence, conversations and memoranda are merged
herein and shall be without effect hereon. No promises, covenants or
representations of any kind, other than those expressly stated herein, have been
made to induce either party to enter into this Agreement. This Agreement,
including this provision against oral modification, shall not be modified or
terminated except by a writing duly signed by each of the parties hereto, and no
waiver of any provisions of this Agreement shall be effective unless in a
writing duly signed by the party sought to be bound.
(b) Notwithstanding Section 17(a), (i) the State and Local
Income Tax Allocation Agreement shall remain fully in effect with respect to any
Adjustments under Section 5 of this Agreement that relates to a state or local
combined, consolidated or unitary income or franchise
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Tax Return that is a Joint Return for any Pre-Closing Taxable Period, (ii) the
Federal Tax Allocation Agreement and the State and Local Income Tax Allocation
Agreement shall remain fully in effect with respect to all Legal Entities that
are members of the Common Stock Group, (iii) the Tax Sharing Agreement by and
among AT&T, Lucent Technologies Inc. and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ dated as of February 1,
1996, shall remain fully in effect, (iv) the Tax Sharing Agreement between AT&T
and Liberty Media Corporation dated as of March 9, 1999, as amended, shall
remain fully in effect and (v) the Separation and Distribution Agreement shall
remain fully in effect.
18. Code References. Any references to the Code or Treasury Regulations
shall be deemed to refer to the relevant provisions of any successor statute or
regulation and shall refer to such provisions as in effect from time to time.
19. Notices. Any payment, notice or communication required or permitted
to be given under this Agreement shall be in writing (including telecopy
communication) and mailed, telecopied or delivered:
If to AT&T:
AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President--Law and Secretary
If to Wireless:
AT&T Wireless Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
or to any other address as a AT&T or Wireless shall furnish in writing to one
another. All such notices and communications shall be effective when received.
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20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
21. New Members. Each of the parties to this Agreement recognizes that
from time to time, new Subsidiaries of AT&T, AWG, Wireless, Wireless PCS or the
Other Signatories may be added to the Wireless Group. Each of the parties agrees
that any such new Subsidiary shall, without the express written consent of the
other parties, become a party to this Agreement for all purposes of this
Agreement with respect to taxable periods ending after such Subsidiary was added
to the Wireless Group, and, with respect to Separate Returns, prior taxable
periods.
22. Nature of Obligations. Each of AT&T and Wireless acknowledges and
agrees that its respective obligations under this Agreement shall not be
affected by any impossibility, illegality, impracticability, frustration of
purpose, force majeure, act of government, bankruptcy or insolvency of any party
to this Agreement, failure or refusal of any party to this Agreement to perform
its obligations hereunder, dispute, setoff or counterclaim, change in amount,
composition or terms of the assets, liabilities or equity of AT&T or Wireless or
any other party to this Agreement, or any other defense or right which AT&T or
Wireless or any other party to this Agreement has or may have that might have
the effect of releasing AT&T or Wireless or any other party to this Agreement as
the case may be, from such obligations.
23. Parent Restructuring. Wireless recognizes and agrees, for itself
and on behalf of the members of the Wireless Group, that the Parent Group (as
defined in the Separation and Distribution Agreement) contemplates a
Restructuring (as defined below) in a series of transactions. In connection with
the Restructuring or any part thereof, notwithstanding anything herein to the
contrary, Parent shall be entitled to assign all or any portion of its rights
and
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obligations under this Agreement to any other entity resulting from the
Restructuring or any part thereof, provided however that, at the time of such
assignment, Parent reasonably determines that the assignee is operationally and
financially capable of performing the assigned obligations. In each case, the
applicable entity or entities will assume the related obligations set forth in
this Agreement. In the case of any of the foregoing, effective upon any such
assumption, and without any further action required by the parties hereto,
Parent and the applicable members of the Parent Group shall automatically be
fully released and discharged with respect to the assigned obligations. Parent
will give Wireless written notice of the terms of any assignment pursuant to
this Section at least 10 days prior to the effectiveness thereof. For purposes
hereof, the term "Restructuring" shall mean the various restructuring plans
announced by Parent on October 25, 2000 and thereafter, and any amendments,
modifications or adjustments thereto, whereby generally Parent would split-off
the AT&T Wireless Group from Parent; distribute all the stock it holds in
Liberty Media Corporation in exchange for all the outstanding shares of Liberty
Media Group Tracking Stock; fully separate, or issue separate tracking stocks
intended to reflect the financial performance and economic value of, each of
Parent's other major units: AT&T Broadband, AT&T Business Services and AT&T
Consumer Services; and engage in a number of related activities in connection
therewith, including any potential combinations with one or more third parties
involving any of the entities resulting from the foregoing (which third parties
shall be deemed entities resulting from the Restructuring for purposes hereof)
and including any of the deleveraging activities such as the disposition of
AT&T's ownership interests in various cable properties and investments. In the
event that either Parent or Wireless desires to make any other assignment of all
or any portion of its obligations (or the obligations of any member of its
Group) under this Agreement, neither party may do so without the consent of
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the other, such consent not to be unreasonably withheld. In any such event,
effective upon any such assumption, and without any further action required by
the parties hereto, the applicable assignor and the applicable members of its
Group shall automatically be fully released and discharged with respect to the
assigned obligations.
24. Termination. This Agreement shall terminate at such time as all
obligations and liabilities of the parties hereto have been satisfied. The
obligations and liabilities of the parties arising under this Agreement shall
continue in full force and effect until all such obligations have been met and
such liabilities have been paid in full, whether by expiration of time,
operation of law, or otherwise. The obligations and liabilities of each party
are made for the benefit of, and shall be enforceable by, the other parties and
their successors and permitted assigns.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed by its respective duly authorized officer as of the
date first set forth above.
AT&T CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Taxes & Tax Counsel
AWG LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Jr.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Jr.
Title: CFO
AT&T WIRELESS SERVICES, INC.
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
-------------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General
Counsel and Assistant Secretary
AT&T WIRELESS PCS, LLC
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
-------------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General
Counsel and Assistant Secretary
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AT&T CELLULAR SERVICES, INC.
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
AT&T WIRELESS ACQUISITIONS 1, INC.
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
AT&T WIRELESS INTERESTS, INC.
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
LOUISIANA MOBILE SYSTEMS, INC.
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
▇▇▇▇▇ CELLULARCOMMUNICATIONS, INC.
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
NEVADA COUNTY CELLULAR CORPORATION
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
WINSTON, INC.
on behalf of itself and each of its Subsidiaries
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By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
AT&T WIRELESS ASSET MANAGEMENT, LLC
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
AWS NATIONAL ACCOUNTS, LLC
on behalf of itself and each of its Subsidiaries
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇, III
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇, III
Title: Vice President, Associate General Counsel
and Assistant Secretary
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