{"id":43752,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/tax-separation-agreement-pitney-bowes-inc-and-imagistics.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"tax-separation-agreement-pitney-bowes-inc-and-imagistics","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/tax-separation-agreement-pitney-bowes-inc-and-imagistics.html","title":{"rendered":"Tax Separation Agreement &#8211; Pitney Bowes Inc. and Imagistics International Inc."},"content":{"rendered":"<pre>                            TAX SEPARATION AGREEMENT\n\n                                     between\n\n                               Pitney Bowes Inc.,\n                               on behalf of itself\n                                 and the members\n                            of the Pitney Bowes Group\n\n                                       and\n\n                         Imagistics International Inc.,\n                               on behalf of itself\n                                 and the members\n                             of the Imagistics Group\n\n\n                            TAX SEPARATION AGREEMENT\n\n     This Tax Separation Agreement (the \"Agreement\") is entered into as of the\n1st day of November, 2001 between Pitney Bowes Inc. (\"PBI\"), a Delaware\ncorporation, on behalf of itself and the members of PBI Group, and Imagistics\nInternational Inc. (\"Imagistics\"), a Delaware corporation, on behalf of itself\nand the members of Imagistics Group.\n\n                              W I T N E S S E T H:\n\n     WHEREAS, pursuant to the tax laws of various jurisdictions, certain members\nof Imagistics Group, as defined below, will file certain tax returns on a\nstand-alone basis as well as on an affiliated, consolidated, combined, unitary,\nfiscal unit or other group basis (including as permitted by Section 1501 of the\nInternal Revenue Code of 1986, as amended (the \"Code\") with certain members of\nPBI Group, as defined below, for taxable periods beginning prior to the\nDistribution, as defined below;\n\n     WHEREAS, PBI and Imagistics intend that PBI distribute to its shareholders\nall of the Imagistics common stock held by PBI (the \"Distribution\");\n\n     WHEREAS, PBI has received a private letter ruling from the Internal Revenue\nService confirming the qualification of the Distribution as tax-free to PBI and\nits shareholders, which, together with the underlying Ruling Request, as defined\nbelow, has been provided to, and reviewed by, Imagistics;\n\n     WHEREAS, PBI and Imagistics desire to set forth their agreement on the\nrights and obligations of PBI, Imagistics and the members of PBI Group and\nImagistics Group, respectively, with respect to the handling and allocation of\nfederal, state, local and foreign taxes incurred in taxable periods beginning\nprior to the Distribution Date, as defined below, and various other tax matters;\n\n     NOW, THEREFORE, in consideration of the mutual covenants and agreements\nhereinafter set forth, the parties agree as follows:\n\n     1. Definitions.\n\n     (a) As used in this Agreement:\n\n     \"2001 Short Year\" shall mean the short taxable year beginning on the first\nday of Imagistics' first taxable period in 2001 and ending on the Distribution\nDate.\n\n     \"After-Tax Amount\" shall mean an additional amount necessary to reflect the\nhypothetical tax consequences of the receipt or accrual of any payment\n\n\n\n\nthat is treated as income of the recipient of such payment, using the maximum\nstatutory tax rate (or tax rates, in the case of an item that affects more than\none tax) applicable to the recipient of such payment for the relevant year. The\nAfter-Tax Amount shall reflect, for example, the effect of the deductions\navailable for interest paid or accrued and for taxes such as state and local\nincome taxes.\n\n     \"Combined Income Tax\" shall mean, with respect to each state, local or\nforeign taxing jurisdiction, any income, franchise or similar tax (together with\nany related interest or penalty) payable to such state, local or foreign taxing\njurisdiction in which a member of Imagistics Group files tax returns with a\nmember of PBI Group, on a consolidated, combined or unitary basis.\n\n     \"Distribution Agreement\" shall mean the Distribution Agreement between\nPitney Bowes Inc. and Imagistics, dated as of November 1, 2001.\n\n     \"Distribution Date\" shall mean the date on which the Distribution is\neffected.\n\n     \"Federal Tax\" shall mean any tax imposed under Subtitle A of the Code and\nany related interest or penalty imposed under Subtitle F of the Code.\n\n     \"Final Determination\" shall mean (i) with respect to Federal Taxes, a\n\"determination\" as defined in Section 1313(a) of the Code or execution of an IRS\nForm 870AD and, with respect to taxes other than Federal Taxes, any final\ndetermination of liability in respect of a tax that, under applicable law, is\nnot subject to further appeal, review or modification through proceedings or\notherwise, (ii) any final disposition of a tax issue by reason of the expiration\nof a statute of limitations or (iii) the payment of tax by PBI with respect to\nany item disallowed or adjusted by any taxing authority where PBI determines in\ngood faith that no action should be taken to recoup such payment.\n\n     \"Imagistics 2001 Federal Tax Liability\" shall mean the Federal Tax\nliability of the Imagistics Group for the 2001 Short Year computed as if the\nImagistics Group were not and never were part of any consolidated group,\nprovided, however, that transactions with members of PBI Group shall be\nreflected according to the provisions of the consolidated return regulations\npromulgated under the Code governing intercompany transactions, and that the\nDistribution will trigger any deferred amounts or similar items. The Imagistics\n2001 Federal Tax Liability shall be determined (i) without regard to the income,\ndeductions (including net operating loss and capital loss deductions) and\ncredits in any year of any member of PBI Group that is not a member of\nImagistics Group, (ii) as though the highest rate of tax specified in subsection\n(b) of Section 11 of the Code (or any other similar rates applicable to specific\ntypes of income) were the only rates set forth in that subsection, and with\nother similar adjustments as described in Section 1561 of the Code, (iii)\nreflecting the positions, elections and accounting methods used by PBI in\npreparing the consolidated federal income tax return for PBI Consolidated Group,\nand (iv) by not permitting Imagistics Group\n\n\n                                       3\n\n\nany compensation deductions arising in respect of any exercise of options on PBI\nstock by, or the issuance or vesting of PBI restricted stock to, any employee of\nImagistics Group.\n\n     \"Imagistics Group\" shall mean, at any time, Imagistics and each of its\ndirect or indirect corporate subsidiaries.\n\n     \"Imagistics Tax Liability\" shall mean, with respect to any taxable year\nthat includes any date in 2001 and any jurisdiction, the sum of (i) Imagistics\n2001 Federal Tax Liability and (ii) the amount of Combined Income Taxes plus the\namount of Separate Income Taxes determined in accordance with the principles set\nforth in the definition of Imagistics 2001 Federal Tax Liability.\n\n     \"Imagistics UK\" shall mean Pitney Bowes Office Systems Limited, a wholly\nowned direct subsidiary of Imagistics incorporated in the United Kingdom and\nthat will purchase certain assets from Pitney Bowes Limited under the Agreement\nfor the Sale and Purchase of the Office Systems Division of Pitney Bowes\nLimited.\n\n     \"Income Tax\" shall mean Federal Tax, Combined Income Tax and Separate\nIncome Tax.\n\n     \"IRS\" shall mean the Internal Revenue Service.\n\n     \"Non-Income Taxes\" shall mean all taxes, levies, charges or fees including,\nwithout limitation, gross receipts, transfer, excise, property, sales, use,\nvalue-added, goods and services, license, payroll, withholding, social security\nor other governmental taxes or charges (including any interest, penalties or\nadditional taxes attributable thereto), imposed by the United States or any\nstate, county, local or foreign government, but excluding any Income Taxes.\n\n     \"PBI Consolidated Group\" shall mean PBI and each direct and indirect\ncorporate subsidiary, including a member of Imagistics Group, that is eligible\nto join with PBI or a member of the PBI Group in the filing of (i) for Federal\nTax purposes, a consolidated federal income tax return, and (ii) for Combined\nIncome Tax purposes, a Combined Income Tax Return.\n\n     \"PBI Group\" shall mean, at any time, PBI and each of its direct and\nindirect corporate subsidiaries other than those subsidiaries that are members\nof Imagistics Group.\n\n     \"Post-Distribution Tax Period\" means (i) any tax period beginning after the\nDistribution Date and (ii) with respect to a tax period that begins on or before\nand ends after the Distribution Date, the portion of the tax period that\ncommences on the day immediately after the Distribution Date.\n\n\n                                       4\n\n\n     \"Pre-Distribution Tax Period\" means (i) any tax period ending before or on\nthe Distribution Date and (ii) with respect to a period that begins before and\nends after the Distribution Date, the portion of the tax period ending on and\nincluding the Distribution Date.\n\n     \"Prime\" shall mean, the rate announced from time to time as \"prime\" as\nreported in the Wall Street Journal's Money Rates table as the prime rate with\nrespect to the applicable currency.\n\n     \"Return\" shall mean any tax return, statement, report or form (including\nestimated tax returns and reports, extension requests and forms, and information\nreturns and reports) required to be filed with any taxing authority.\n\n     \"Ruling Request\" shall mean the request for rulings under Sections 355 and\n368(a)(1)(D) of the Code filed by PBI with the Internal Revenue Service on\nDecember 19, 2000, together with all supplemental materials subsequently filed\nwith the IRS in connection therewith.\n\n     \"Separate Income Tax\" shall mean, with respect to each state, local or\nforeign taxing jurisdiction, any income, franchise or similar tax (together with\nany related interest or penalty) payable to such state, local or foreign taxing\njurisdiction in which a member of Imagistics Group files a separate tax return.\n\n     \"Tax Asset\" shall mean any net operating loss, net capital loss, investment\ntax credit, foreign tax credit, deduction or any loss, credit or tax attribute\nthat could be carried forward or back to reduce taxes (including without\nlimitation deductions and credits related to alternative minimum taxes).\n\n     \"Tax Benefit\" shall mean an amount derived with respect to a Tax Asset that\nis equal to the excess of (A) the amount of Federal Taxes, or Combined Income\nTaxes, as the case may be, that would have been payable by the recipient of the\nTax Benefit without the use a Tax Asset (including, but not limited to, a\ncarryback, carryforward, or reattribution of the Tax Asset), over (B) the amount\nof Federal Taxes or Combined Income Taxes, as the case may be, actually payable\nby such recipient. In the case of a tax refund arising out the use of a Tax\nAsset, the Tax Benefit shall be equal to the amount of the refund that was\nactually received over the amount of the refund that would have been received in\nthe absence of such Tax Asset.\n\n     \"Tax Packages\" shall mean one or more packages of information that are (i)\nreasonably necessary for the purpose of preparing tax Returns of PBI\nConsolidated Group with respect to any tax period in which the information is\nrelevant, and (ii) completed in all material respects in accordance with the\nstandards that PBI has established for its subsidiaries.\n\n     \"Tax Proceeding\" shall mean any tax audit, dispute or proceeding (whether\nadministrative or judicial).\n\n\n                                       5\n\n\n     (b) Any term used in this Agreement that is not defined in this Agreement\nshall, to the extent the context requires, have the meaning assigned to it in\nthe Code or the applicable Treasury regulations promulgated thereunder (as\ninterpreted in administrative pronouncements and judicial decisions) or in\ncomparable provisions of applicable law.\n\n     2. Administrative and Compliance Matters.\n\n     (a) Sole Tax Sharing Agreement. Any and all existing tax sharing agreements\nor arrangements, written or unwritten, between any member of PBI Group and any\nmember of Imagistics Group shall be terminated as of the date of this Agreement.\nAs of the date of this Agreement, neither the members of Imagistics Group nor\nthe members of PBI Group shall have any further rights or liabilities under any\nsuch preexisting tax sharing agreements, and this Agreement shall be the sole\ntax sharing agreement between the members of Imagistics Group and the members of\nPBI Group.\n\n     (b) Designation of Agent. Imagistics and each member of Imagistics Group\nhereby irrevocably authorizes and designates PBI as its agent, coordinator, and\nadministrator, for the purpose of taking any and all actions (including the\nexecution of waivers of applicable statutes of limitation) necessary or\nincidental to the filing of any Return, any amended Return, or any claim for\nrefund (even where an item or Tax Asset giving rise to an amended Return or\nrefund claim arises in a Post-Distribution Tax Period), credit or offset of tax\nor any other proceedings, and for the purpose of making payments to, or\ncollecting refunds from, any taxing authority, in each case relating only to any\nPre-Distribution Tax Period.\n\n     (c) Pre-Distribution Tax Period Returns.\n\n          (i) Preparation of Income Tax Returns. PBI will prepare and file, with\n     the assistance of Imagistics Group, all Returns of PBI Consolidated Group\n     and all Separate Income Tax Returns of any member of that group for all\n     Pre-Distribution Tax Periods. PBI shall have the right with respect to such\n     Returns to determine (A) the manner in which such returns, documents or\n     statements shall be prepared and filed, including, without limitation, the\n     manner in which any item of income, gain, loss, deduction or credit shall\n     be reported, (B) whether any extensions should be requested, and (C) the\n     elections that will be made by any member of PBI Group or Imagistics Group;\n     provided, however, that PBI will consult with Imagistics regarding the\n     manner in which items related to Imagistics Group will be reflected in such\n     returns and will undertake in good faith to prepare such Returns in a\n     manner that PBI determines may be substantively beneficial to the\n     Imagistics Group for any Post-Distribution Tax Period, but only to the\n     extent that such manner of preparing Returns has no adverse impact on PBI.\n\n          (ii) Audits and Refunds. With respect to all Returns of PBI\n     Consolidated Group and all Separate Income Tax Returns of any member of\n     that\n\n\n                                       6\n\n\n     group for all Pre-Distribution Tax Periods, except as otherwise provided in\n     Section 8, PBI shall have the right to (A) contest, compromise or settle\n     any adjustment or deficiency proposed, asserted or assessed as a result of\n     any audit of any such return, (B) file, prosecute, compromise or settle any\n     claim for refund, and (C) determine whether any refunds to which any member\n     of PBI Group may be entitled shall be received by way of refund or credit\n     against tax liability.\n\n          (iii) Delivery of Tax Packages. No later than 60 days after the\n     Distribution Date, Imagistics shall prepare and deliver to PBI Tax Packages\n     that include information of Imagistics Group for the Pre-Distribution Tax\n     Period.\n\n     (d) Allocation. Immediately after the Distribution, PBI and the Imagistics\nGroup will close their books utilizing a \"cut off\" method and the provisions of\n1.1502-76(b)(1)(ii)(A), End of Day Rule, shall be applied to the 2001 Short\nYear.\n\n     (e) Non-Income Tax Returns and Post-Distribution Tax Period Income Tax\nReturns of Imagistics Group. Imagistics shall be solely responsible for the\npreparation and filing of (i) Income Tax Returns of Imagistics Group for all\nPost-Distribution Tax Periods and (ii) the Returns of Imagistics Group for\nNon-Income Taxes for any tax period.\n\n     (f) 2001 Short-Year State, Local and Foreign Returns. PBI and Imagistics\nagree that Combined Income Tax Returns and Separate Income Tax Returns filed for\ntax periods that begin prior to the Distribution Date will reflect a short\ntaxable year for Imagistics ending on the Distribution Date in any state, local\nor foreign taxing jurisdiction in which such tax year is allowed by\nadministrative practice, whether or not required by law.\n\n     3. Tax Sharing.\n\n     (a) General. For each Taxable period during which income, profits, gains,\nnet worth, receipts, sales, loss or credit against tax of at least one member of\neach of the PBI Group and Imagistics Groups are includible in a Return of PBI\nConsolidated Group, (i) no later than 45 days after the Distribution Date the\nImagistics Group shall pay to the PBI Group an amount equal to the Imagistics\nTax Liability for such Taxable period, if any, and (ii) at the time the PBI\nGroup realizes any such benefit, the PBI Group shall pay to the Imagistics Group\nthe Tax Benefit received by PBI Consolidated Group from the use of any net\noperating loss of Imagistics Group arising in such period.\n\n     (b) True-Up When Return Filed. At the time PBI files PBI Consolidated\nGroup's consolidated Federal Tax Returns for the calendar year ended December\n31, 2001, PBI shall deliver to Imagistics a copy of the portion of such returns\nrelating to Imagistics together with a statement setting forth the difference\nbetween (A) Imagistics 2001 Federal Tax Liability and (B) the aggregate amount\nof payments with respect to the Imagistics 2001 Federal Tax\n\n\n                                       7\n\n\nLiability made by Imagistics to PBI prior to that time. At the time PBI files\nany Combined Income Tax Return and any Separate Income Tax Return prepared by\nPBI in accordance with Section 2(c) that include any member of Imagistics Group,\nPBI shall deliver a copy of such Return to Imagistics, together with a statement\nsetting forth the difference between (C) the Imagistics Tax Liability for such\nReturn and (D) the aggregate amount of payments with respect to the Imagistics\nTax Liability for such Return made by Imagistics to PBI prior to that time. Any\namount shown as payable on any statement described in this Section 3(b) shall be\npaid pursuant to Section 9.\n\n     (c) Carrybacks From Post-Distribution Years.\n\n          (i) Imagistics agrees not to carry back any Tax Asset of Imagistics\n     Group from a Post-Distribution Tax Period without the advance written\n     consent of PBI, which shall not be unreasonably withheld. If PBI consents\n     to such carryback, PBI agrees to pay to Imagistics the Tax Benefit received\n     by PBI Consolidated Group from the use in any Pre-Distribution Tax Period\n     of a carryback of any Tax Asset of Imagistics Group from a\n     Post-Distribution Tax Period.\n\n          (ii) If, subsequent to the payment by PBI Group to Imagistics Group of\n     any amount, there is (A) a Final Determination that results in a\n     disallowance or a reduction of the Tax Asset so carried back or (B) a\n     reduction in the amount of the benefit realized by PBI Consolidated Group\n     from such Tax Asset as a result of a Final Determination or the use by PBI\n     Consolidated Group of a Tax Asset of PBI Group, Imagistics Group shall\n     repay to PBI, within 30 days of such event described in (A) or (B) (an\n     \"Event\"), any amount which would not have been payable to Imagistics Group\n     pursuant to the subparagraph 3(c)(i) had the amount of the benefit been\n     determined in light of such Event. In addition, Imagistics Group shall hold\n     each member of PBI Group harmless from any penalty or interest payable by\n     any member of PBI Group as a result of any such Event. Any such amount\n     shall be paid by Imagistics Group within 30 days of the payment by PBI\n     Group of any such interest or penalty. Nothing in this Section 3(c) shall\n     require PBI to file a claim for refund of Federal Taxes or Combined Income\n     Taxes that PBI, in its sole discretion, has determined is not more likely\n     than not to succeed. Provisions of this subparagraph 3(c)(ii) shall be\n     carried out consistently with provisions of Sections 7, 9 and 11.\n\n     (d) Audit Payments.\n\n          (i) Responsibility for Payment. Except as provided in paragraph\n     (d)(ii) below or in Section 8, PBI shall be responsible for any payment due\n     to any taxing authority as a result of an audit adjustment to any Income\n     Tax Return which relates solely to a Pre-Distribution Tax Period.\n     Imagistics shall be responsible for any payment due to any taxing authority\n     as a result of an adjustment to any Return of Imagistics Group which\n     relates solely to a Post-Distribution Tax Period. In the case of any\n     adjustment not covered in the\n\n\n                                       8\n\n\n     preceding sentence, PBI shall determine the amount to be paid by each party\n     in a manner consistent with the principles of this Agreement and with past\n     practice.\n\n          (ii) Timing Differences. To the extent that any audit adjustment of an\n     Income Tax Return relating to a Pre-Distribution Tax Period is attributable\n     to timing differences attributable to Imagistics, PBI shall pay to\n     Imagistics, or Imagistics shall pay to PBI, as appropriate, an amount\n     reflecting the timing differences. In the case of Federal Tax Return, this\n     amount shall be equal to the actual amount of the adjustment to PBI's tax\n     liability which is attributable to the timing differences as determined by\n     PBI with the consent of Imagistics, which consent may not be unreasonably\n     withheld. In the case of Combined Income Tax Return or Separate Income Tax\n     Return, the amount shall be equal to the difference between the tax\n     actually due on the adjusted Return and the amount that would have been due\n     on the adjusted Return had Imagistics not been included as a member of PBI\n     Consolidated Group.\n\n     4. Certain Representations and Covenants.\n\n     (a) (i) Imagistics Representations. Imagistics and each member of\nImagistics Group represent as of the date hereof, and covenant that on the\nDistribution Date, there is no plan or intention (A) to liquidate Imagistics or\nto merge or consolidate Imagistics, or any member of Imagistics Group with any\nother person subsequent to the Distribution, (B) to sell or otherwise dispose of\nany asset of Imagistics or any member of Imagistics Group subsequent to the\nDistribution, except in the ordinary course of business, (C) to take any action\ninconsistent with the information and representations furnished to the Internal\nRevenue Service in connection with the Ruling Request or (D) to enter into any\nnegotiations, agreements, or arrangements with respect to transactions or events\n(including stock issuances, pursuant to the exercise of options or otherwise,\noption grants, capital contributions, or acquisitions, but not including the\nDistribution) that may cause the Distribution to be treated as part of a plan\npursuant to which one or more persons acquire directly or indirectly Imagistics\nstock representing a \"50-percent or greater interest\" within the meaning of\nSection 355(d)(4) of the Code.\n\n          (ii) PBI Representations. PBI represents as of the date hereof, and\n     covenants that on the Distribution Date, there is no plan or intention to\n     take any action inconsistent with the information and representations\n     furnished to the Internal Revenue Service in connection with the Ruling\n     Request.\n\n          (iii) Imagistics and PBI Representations. Each of Imagistics, PBI and\n     the members of Imagistics Group, respectively, represent as of the date\n     hereof, and covenant that on the Distribution Date, neither Imagistics, PBI\n     nor the members of Imagistics Group, respectively (as applicable), is aware\n     of any present plan or intention by the current shareholders of PBI to\n     sell, exchange, transfer by gift, or otherwise dispose of any of their\n     stock in, or securities of, PBI\n\n\n                                       9\n\n\n     or Imagistics subsequent to the Distribution, other than pursuant to open\n     market transactions.\n\n     (b) Imagistics Covenants. Imagistics covenants to PBI that, except as\nprovided in paragraph (c) below, during the two-year period following the\nDistribution Date:\n\n          (i) neither Imagistics nor any member of Imagistics Group will\n     liquidate, merge or consolidate with any other person;\n\n          (ii) Imagistics will not sell, exchange, distribute or otherwise\n     dispose of its assets or those of any member of Imagistics Group, except in\n     the ordinary course of business;\n\n          (iii) Imagistics will continue the active conduct of the historic\n     business that was conducted by Imagistics throughout the five year period\n     prior to the Distribution;\n\n          (iv) Imagistics will not, nor will it permit any member of Imagistics\n     Group, to take any action inconsistent with the information and\n     representations furnished to the Internal Revenue Service in connection\n     with the Ruling Request;\n\n          (v) Imagistics will not repurchase stock of Imagistics in a manner\n     contrary to the requirements of Revenue Procedure 96-30 or in a manner\n     contrary to the representations made in connection with the Ruling Request\n     and\n\n          (vi) Imagistics will not enter into any transaction or make any change\n     in equity structure (including stock issuances, pursuant to the exercise of\n     options, option grants or otherwise, capital contributions, or\n     acquisitions, but not including the Distribution) that may cause the\n     Distribution to be treated as part of a plan pursuant to which one or more\n     persons acquire directly or indirectly Imagistics stock representing a\n     \"50-percent or greater interest\" within the meaning of Section 355(d)(4) of\n     the Code.\n\n     Further, Imagistics covenants to PBI that:\n\n          (vii) it will not, nor will it permit any member of Imagistics Group,\n     to make or change any tax accounting method, change its taxable year, amend\n     any tax Return or take any tax position on any Return, take any other\n     action, omit to take any action or enter into any transaction that results\n     in any increased tax liability or reduction of any Tax Asset of PBI\n     Consolidated Group or any member thereof in respect of any Pre-Distribution\n     Tax Period;\n\n          (viii) it will file federal consolidated returns, to the extent\n     applicable, with its subsidiaries for the tax period that begins\n     immediately after the Distribution Date, and\n\n\n                                       10\n\n\n          (ix) it will execute all necessary forms, including powers of\n     attorney, requested by PBI in connection with exercise of PBI's rights and\n     responsibilities under this Agreement, including those described in Section\n     2(b).\n\n     (c) Exceptions. Notwithstanding the foregoing, Imagistics and the members\nof Imagistics Group may take actions inconsistent with the covenants contained\nin Section 4(b)(i) through (vi) above, if:\n\n          (i) Imagistics notifies PBI of its proposal to take such action and\n     Imagistics and PBI obtain a ruling from the IRS to the effect that such\n     actions will not result in the Distribution being taxable to PBI or its\n     shareholders, provided that Imagistics agrees in writing to bear any\n     expenses associated with obtaining such a ruling and, provided further,\n     that Imagistics shall not be relieved of any liability under Section 5 of\n     this Agreement by reason of seeking or having obtained such a ruling; or\n\n          (ii) Imagistics notifies PBI of its proposal to take such action and\n     obtains an opinion of counsel recognized as an expert in federal income tax\n     matters and acceptable to PBI to the same effect as in subparagraph\n     4(c)(i), provided that such opinion is acceptable to PBI in its sole\n     discretion.\n\n     (d) Deductions and Certain Taxes Related to Options.\n\n     PBI shall file Returns claiming (i) the tax deductions attributable to the\nexercise of options to purchase stock of PBI or the vesting of PBI restricted\nstock that are held by employees or former employees of Imagistics Group or (ii)\nany other similar stock-based compensation-related tax deductions. The Returns\nof PBI Group and Imagistics Group shall reflect the entitlement of PBI Group to\nsuch deductions. To the extent such deductions are disallowed because a taxing\nauthority determines that Imagistics Group should have claimed such deductions,\nas consideration for PBI's issuance of shares of its stock as a result of the\nexercise described in clause (i) of the preceding sentence, Imagistics Group\nshall in good faith and to the extent permitted by law, file all applicable\nreturns or claims for refund claiming such deductions and pay to PBI Group an\namount equal to the Tax Benefit if any, actually received by Imagistics with\nrespect to the applicable returns or claims for refund. Notwithstanding the\nforegoing, Imagistics Group shall not be required to pay to PBI Group any amount\nwith respect to deductions attributable to a year for which, at the time PBI\nnotifies Imagistics of its claim pursuant to this Section 4(d), the applicable\nstatute of limitations has run or which is otherwise closed. Upon the exercise\nof any option or the vesting of any restricted stock described in clause (i), or\nthe occurrence of any other event that would result in a compensation-related\ntax deduction, as the case may be, PBI shall prepare and file all applicable\nReturns and pay the applicable tax liability under the Federal Insurance\nContributions Act, the Federal Unemployment Tax Act or any state employment tax\nlaw in connection with such event.\n\n\n                                       11\n\n\n     5. Indemnities.\n\n     (a) Imagistics Indemnity. Imagistics and each member of Imagistics Group\nwill jointly and severally indemnify PBI and the members of PBI Group against\nand hold them harmless from:\n\n          (i) any liability or damage resulting from a breach by Imagistics or\n     any member of Imagistics Group of any representation or covenant made by\n     Imagistics herein,\n\n          (ii) any tax liability resulting from the Distribution and\n     attributable to any action of Imagistics or any member of Imagistics Group,\n     without regard to whether PBI or any agent or officer of PBI has consented\n     to such action, and\n\n          (iii) all liabilities, costs, expenses (including, without limitation,\n     reasonable expenses of investigation and attorneys' fees and expenses),\n     losses, damages, assessments, settlements or judgments arising out of or\n     incident to the imposition, assessment or assertion of any tax liability or\n     damage described in (i) or (ii) of this Section 5(a), including those\n     incurred in the contest in good faith in appropriate proceedings relating\n     to the imposition, assessment or assertion of any such tax, liability or\n     damage.\n\n     (b) PBI Indemnity. PBI will indemnify Imagistics and the members of\nImagistics Group against and hold them harmless from:\n\n          (i) any tax liability of PBI Group and any tax liability resulting\n     from the Distribution, other than any such liabilities described in Section\n     5(a),\n\n          (ii) any liability or damage resulting from a breach by PBI or any\n     member of PBI Group of any representation or covenant made by PBI herein,\n     and\n\n          (iii) all liabilities, costs, expenses (including, without limitation,\n     reasonable expenses of investigation and attorneys' fees and expenses),\n     losses, damages, assessments, settlements or judgments arising out of or\n     incident to the imposition, assessment or assertion of any tax liability or\n     damage described in paragraphs (i) and (ii) of this Section 5(b), including\n     those incurred in the contest in good faith in appropriate proceedings\n     relating to the imposition, assessment or assertion of any such tax,\n     liability or damage.\n\n     (d) Tax Benefits. If an indemnification obligation of any member of PBI\nGroup or any member of Imagistics Group, as the case may be, under this Section\n5 with respect to PBI Consolidated Group arises in respect of an adjustment that\nmakes allowable to a member of Imagistics Group or a member of PBI Group,\nrespectively, any Tax Benefit that would not, but for such adjustment, be\nallowable, then any payment by any member of PBI Group or any member of\nImagistics Group, respectively, pursuant to this Section 5 shall be an amount\nequal to (A) the amount otherwise due but for this subsection (d), minus (B) the\ntax savings actually realized as a result of such Tax Benefit.\n\n\n                                       12\n\n\n     6. Subsidiaries.\n\n     PBI agrees and acknowledges that PBI shall be responsible for the\nperformance by each member of PBI Group of the obligations hereunder applicable\nto such member. Imagistics agrees and acknowledges that Imagistics shall be\nresponsible for the performance by each member of Imagistics Group of the\nobligations hereunder applicable to such member.\n\n     7. Communication and Cooperation.\n\n     (a) Consult and Cooperate. Imagistics and PBI shall consult and cooperate\n(and shall cause each member of Imagistics Group or PBI Group, respectively, to\ncooperate) fully at such time and to such extent as are reasonably requested by\nthe other party in connection with all matters subject to this Agreement. Such\ncooperation shall include, without limitation:\n\n          (i) the retention and provision on reasonable request of any and all\n     information including all books, records, documentation or other\n     information pertaining to tax matters (including Income Taxes and\n     Non-Income Taxes) relating to PBI Group and Imagistics Group, any necessary\n     explanations of information, and access to personnel, in each case until\n     two years after the expiration of the applicable statute of limitation\n     (giving effect to any extension, waiver, or mitigation thereof);\n\n          (ii) the execution of any document that may be necessary or helpful in\n     connection with any required Return or in connection with any audit,\n     proceeding, suit or action and\n\n          (iii) the use of the parties' best efforts to obtain any documentation\n     from a governmental authority or a third party that may be necessary or\n     helpful in connection with the foregoing.\n\n     (b) Provide Information. PBI and Imagistics shall keep each other fully\ninformed with respect to any material development relating to the matters\nsubject to this Agreement.\n\n     (c) Tax Attribute Matters. PBI and Imagistics shall advise each other with\nrespect to any proposed tax adjustments relating to a Pre-Distribution Tax\nPeriod, which are the subject of an audit or investigation, or are the subject\nof any proceeding or litigation, and which may affect any tax liability or any\ntax attribute of PBI, Imagistics, PBI Group, Imagistics Group or any member of\nImagistics Group or PBI Group (including, but not limited to, basis in an asset\nor the amount of earnings and profits). Except as otherwise provided herein, PBI\nshall in good faith determine the apportionment of tax attributes between PBI\nGroup and Imagistics Group in accordance with applicable laws.\n\n\n                                       13\n\n\n     8. Audits and Contest.\n\n     (a) PBI Control. Notwithstanding anything in this Agreement to the\ncontrary, except to the extent provided in paragraphs (b) and (c) below, PBI\nshall have the right to control all matters relating to any tax Return or any\nTax Proceeding with respect to any tax matters of PBI Consolidated Group or any\nmember of PBI Consolidated Group, other than Non-Income Tax Returns relating to\nthe Imagistics business and any Tax Proceedings related to them. PBI shall have\nabsolute discretion with respect to any decisions to be made, or the nature of\nany action to be taken, with respect to any Income Tax matter described in the\npreceding sentence provided, however, that PBI shall keep Imagistics informed of\nall material developments and events relating to such matters to the extent they\naffect the Imagistics Tax Liability or may give rise to a claim for indemnity by\nPBI against Imagistics under Section 5(a) of this Agreement; and at its own cost\nand expense, Imagistics shall have the right to participate in (but not to\ncontrol) the defense of any such tax claim. In cases where an audit adjustment\nor refund claim related to a Pre-Distribution Tax Period is reasonably likely to\nhave the effect of increasing the tax liability of Imagistics in a Post\nDistribution Tax Period, PBI shall consult with Imagistics and to the extent\npracticable, avoid taking any action that is reasonably likely to have a\nmaterial adverse effect on Tax Returns, Tax Assets or Tax liabilities of\nImagistics Group for any Post-Distribution Tax Period.\n\n     (b) Imagistics Assumption of Control; Non-Section 355 Matters. If PBI\ndetermines that the resolution of any matter relating to a Tax Return or Tax\nProceeding (other than a Tax Proceeding relating to the qualification of the\nDistribution under Section 355 of the Internal Revenue Code) is reasonably\nlikely to have an adverse effect on Imagistics Group with respect to any\nPost-Distribution Tax Period, PBI shall permit Imagistics Group to elect to\nassume control over disposition of such matter at Imagistics' sole cost and\nexpense provided, however, that if Imagistics so elects, it will (i) be\nresponsible for the payment of any liability arising from the disposition of\nsuch matter notwithstanding any other provision of this Agreement to the\ncontrary and (ii) indemnify PBI Group for any increase in a liability and any\nreduction of a Tax Asset of PBI Group arising from such matter.\n\n     (c) Imagistics Assumption of Control; Section 355 Matters. In the event of\na Tax Proceeding relating to the qualification of the Distribution under Section\n355 of the Internal Revenue Code, PBI shall have the right to control the\ndefense of the matter in all proceedings before the Internal Revenue Service,\nprovided that PBI shall keep Imagistics fully informed of all material\ndevelopments and shall permit Imagistics a reasonable opportunity to participate\nin the defense of the matter. If the issues relating to the qualification of the\nDistribution under Section 355 of the Internal Revenue Code (x) do not involve\nSection 355(e) of the Internal Revenue Code, (y) are not favorably resolved in\nproceedings before the Internal Revenue Service and (z) PBI has determined that\nImagistics would be required to indemnify PBI as a result of the\ndisqualification of the Distribution, PBI shall permit Imagistics Group to elect\nto assume control over final disposition of such\n\n\n                                       14\n\n\nmatter pursuant to judicial proceedings at Imagistics' sole cost and expense\nprovided, however, that if Imagistics so elects, it will (i) be responsible for\nthe payment of any liability arising from the disposition of such matter\nnotwithstanding any other provision of this Agreement to the contrary and (ii)\nindemnify PBI Group for any increase in a liability and any reduction of a Tax\nAsset of PBI Group arising from such matter.\n\n     (d) Imagistics Control. Imagistics shall have full control over all matters\nrelating to any Tax Proceeding with respect to Returns of Imagistics Group\nrelating to any Post-Distribution Tax Period.\n\n     9. Payments.\n\n     (a) Timing, After-tax Amounts. All payments to be made hereunder shall be\nmade in immediately available funds. Except as otherwise provided, all payments\nrequired to be made pursuant to this Agreement will be due 30 days after the\nreceipt of notice of such payment or, where no notice is required, 30 days after\nthe fixing of liability or the resolution of a dispute. Payments shall be deemed\nmade when received. Any payment that is not made when due shall bear interest at\na rate equal to Prime for each day until paid. If, pursuant to a Final\nDetermination, any amount paid by PBI or the members of PBI Group, or Imagistics\nor the members of Imagistics Group, as the case may be, pursuant to this\nAgreement results in any increased tax liability or reduction of any Tax Asset\nof Imagistics or any member of Imagistics Group, or PBI or any member of PBI\nGroup, respectively, then PBI or Imagistics, as appropriate, shall indemnify the\nother party and hold it harmless from any interest or penalty attributable to\nsuch increased tax liability or the reduction of such Tax Asset and shall pay to\nthe other party, in addition to amounts otherwise owed, the After-Tax Amount.\n\n     (b) Netting of Payments. If, on the day payment is due under this\nAgreement, each of Imagistics and PBI (each, a \"Party\") owes an amount to the\nother Party pursuant to this Agreement and any other agreement between the\nParties, including, without limitation, the Distribution Agreement and any\nAncillary Agreement, as defined in the Distribution Agreement, the Parties shall\nsatisfy their respective obligations to each other by netting the aggregate\namounts due to one Party against the aggregate amounts due to the other Party,\nwith the Party, if any, owning the greater aggregate amount paying the other\nParty the difference between the amounts owed. Such net payment shall be made\npursuant to the provision of Section 9(a).\n\n     10. Injunction.\n\n     The parties hereto agree that the payment of monetary compensation would\nnot be an adequate remedy to a breach of the obligations contained in Section\n4(b) hereof, and Imagistics consents to the issuance and entry of an injunction\nto prevent a breach of those obligations; provided, however, that the\n\n\n                                       15\n\n\nforegoing shall be without prejudice to and shall not constitute waiver of any\nother remedy either party may be entitled to at law or at equity hereunder.\n\n     11. U.K. Tax Separation Agreement.\n\n     (a) Imagistics UK Returns. Notwithstanding anything in this Agreement to\nthe contrary, Imagistics UK shall be solely responsible for (i) preparing and\nfiling of all Returns for any taxes payable by it to any tax authorities in the\nUnited Kingdom for all Tax Periods, (ii) paying any taxes shown on such Returns,\n(iii) contesting, compromising or settling adjustment or deficiency proposed,\nasserted or assessed as a result of any audit of any such Return and (iv)\nfiling, prosecuting, compromising or settling any claim for refund with respect\nto taxes shown on such Returns.\n\n     (b) Any matters related to taxes other than those described in Section\n11(a) above shall be resolved in accordance with the provisions of the Agreement\nfor the Sale and Purchase of the Office Systems Division of Pitney Bowes Limited\nbetween Pitney Bowes Limited and Imagistics UK.\n\n     12. Notices.\n\n     Any notice, demand, claim, or other communication under this Agreement\nshall be in writing and shall be deemed to have been given upon the delivery or\nmailing thereof, as the case may be, if delivered personally or sent by\ncertified mail, return receipt requested, postage prepaid, to the parties at the\nfollowing addresses (or at such other address as a party may specify by notice\nto the other):\n\n     If to PBI:\n\n     Pitney Bowes Inc.\n     One Elmcroft Road\n     Stamford, CT 06926-0700\n     Attn: Arlen F. Henock\n     Vice President-Finance\n\n     with copies to:\n     Executive Director, Global Tax Planning &amp; General Tax Counsel and\n     Director of Tax Compliance and Audits\n\n     If to Imagistics:\n\n     Imagistics International Inc.\n     100 Oakview Drive\n     Trumbull, CT 06611\n     Attn: Joseph Skrzypczak\n     Chief Financial Officer\n\n\n                                       16\n\n\n     with copies to:\n     General Counsel\n     and Vice President-Taxes\n\n     13. Costs and Expenses.\n\n     (a) Reimbursement for Certain Services. PBI shall provide services in\nconnection with this Agreement, including determination of Imagistics Tax\nLiability as described in Sections 2 and 3 and other services described in\nServices Agreement between Imagistics and PBI (the \"Transition Services\nAgreement\"). Payments for these services shall be made consistent with the\ninvoice and payment procedures provided for in the Transition Services\nAgreement.\n\n     (b) Others. Except as expressly set forth in this Agreement, each party\nshall bear its own costs and expenses incurred pursuant to this Agreement. For\npurposes of this Agreement, \"out-of-pocket\" expenses shall include reasonable\nattorneys' fees, accountant fees and other related professional fees and\ndisbursements.\n\n     14. Effectiveness; Termination and Survival.\n\n     This Agreement shall become effective upon the consummation of the\nDistribution. All rights and obligations arising hereunder with respect to a\nPre-Distribution Tax Period shall survive until they are fully effectuated or\nperformed. Notwithstanding anything in this Agreement to the contrary, this\nAgreement shall remain in effect and its provisions shall survive for the full\nperiod of all applicable statutes of limitation (giving effect to any extension,\nwaiver or mitigation thereof).\n\n     15. Headings.\n\n     The headings contained in this Agreement are inserted for convenience only\nand shall not constitute a part hereof or in any way affect the meaning or\ninterpretation of this Agreement.\n\n     16. Entire Agreement; Amendments and Waivers; Severability.\n\n     (a) Entire Agreement. This Agreement contains the entire understanding of\nthe parties hereto with respect to the subject matter contained herein. No\nalteration, amendment, modification, or waiver of any of the terms of this\nAgreement shall be valid unless made by an instrument signed by an authorized\nofficer of each of PBI and Imagistics, or in the case of a waiver, by the party\nagainst whom the waiver is to be effective.\n\n     (b) Amendments and Waivers. No failure or delay by any party in exercising\nany right, power or privilege hereunder shall operate as a waiver thereof nor\nshall any single or partial exercise thereof preclude any other or\n\n\n                                       17\n\n\nfurther exercise thereof, or the exercise of any right, power or privilege. This\nAgreement shall not be waived, amended or otherwise modified except as in\nwriting, duly executed by all of the parties hereto.\n\n     (c) Severability. If any provision of this Agreement or the application of\nany such provision to any party or circumstances shall be determined by any\ncourt of competent jurisdiction to be invalid, illegal or unenforceable to any\nextent, the remainder of this Agreement or such provision or the application of\nsuch provision to such party or circumstances, other than those determined to be\nso invalid, illegal or unenforceable, shall remain in full force and effect to\nthe fullest extent permitted by law and shall not be affected by such\ndetermination, unless such a construction would be unreasonable.\n\n     17. Governing Law and Interpretation.\n\n     This Agreement has been made in, and shall be construed and enforced in\naccordance with the laws of, the State of New York without giving effect to laws\nand principles relating to conflicts of law.\n\n     18. Dispute Resolution.\n\n     The parties shall endeavor in good faith promptly to resolve any\ndisagreement or dispute relating to this Agreement. If the parties are unable to\nresolve any disagreement or dispute relating to the matters referred to in\nparagraph (d)(ii) of Section 3 or in paragraphs (a), (b) or (c) of Section 4, or\nthe related indemnities, of this Agreement within 20 days, such disagreement or\ndispute shall be resolved by PBI acting in good faith and so as to avoid a\nwindfall to either party. Any such resolution shall be binding on the parties to\nthis Agreement without further recourse.\n\n     19. Counterparts.\n\n     This Agreement may be executed in any number of counterparts, each of which\nshall be deemed an original, but all of which together shall constitute one and\nthe same Agreement.\n\n     20. Assignments; Third Party Beneficiaries.\n\n     Except as provided below, this Agreement shall be binding upon and shall\ninure only to the benefit of the parties hereto and their respective successors\nand assigns, by merger, acquisition of assets or otherwise (including but not\nlimited to any successor of a party hereto succeeding to the tax attributes of\nsuch party under applicable law). This Agreement is not intended to benefit any\nperson other than the parties hereto and such successors and assigns, and no\nother person shall be a third party beneficiary hereof.\n\n\n                                       18\n\n\n     21. Further Assurances.\n\n     PBI and Imagistics shall execute, acknowledge and deliver, or cause to be\nexecuted, acknowledged and delivered, such instruments and take such other\naction as may be necessary or advisable to carry out their obligations under\nthis Agreement and under any exhibit, document or other instrument delivered\npursuant hereto.\n\n     22. Authorization.\n\n     Each of the parties hereto hereby represents and warrants that it has the\npower and authority to execute, deliver and perform this Agreement, that this\nAgreement has been duly authorized by all necessary corporate action on the part\nof such party, that this Agreement constitutes a legal, valid and binding\nobligation of each such party and that the execution, delivery and performance\nof this Agreement by such party does not contravene or conflict with any\nprovision or law or of its charter or bylaws or any agreement, instrument or\norder binding on such party.\n\n\n                                       19\n\n\n     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement\nas of the day and year first written above.\n\n\n                              PBI on its own behalf and on behalf of each\n                              member of PBI Group.\n\n                              By: \/s\/ Arlen F. Henock\n                                 ----------------------------------\n                              Name: Arlen F. Henock\n                              Title: Vice President-Finance\n\n\n\n                              Imagistics on its own behalf and on behalf\n                              of each member of Imagistics Group.\n\n                              By: \/s\/ Joseph D. Skrzypczak\n                                 ----------------------------------\n                              Name: Joseph D. Skrzypczak\n                              Title: Chief Financial Officer\n\n\n                                       20\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7831,8530],"corporate_contracts_industries":[9454],"corporate_contracts_types":[9622,9628],"class_list":["post-43752","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-imagistics-international-inc","corporate_contracts_companies-pitney-bowes-inc","corporate_contracts_industries-manufacturing__industrial","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43752"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43752"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43752"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}