{"id":43755,"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-sharing-agreement-applied-digital-solutions-inc-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"tax-sharing-agreement-applied-digital-solutions-inc-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/tax-sharing-agreement-applied-digital-solutions-inc-and.html","title":{"rendered":"Tax Sharing Agreement &#8211; Applied Digital Solutions Inc. and Intellesale.com Inc."},"content":{"rendered":"<pre>\n                        APPLIED DIGITAL SOLUTIONS, INC.\/\n                              INTELLESALE.COM, INC.\n                              TAX SHARING AGREEMENT\n\n\n                  THIS  AGREEMENT  dated as of October  __,  1999,  by and among\nAPPLIED   DIGITAL   SOLUTIONS,    INC.,   a   Missouri    corporation   (\"ADS\"),\nIntellesale.com, Inc., a Delaware corporation (\"Intellesale\"), and Intellesale's\ndomestic   affiliates  that  are   signatories  to  this  Agreement   (each,  an\n\"Intellesale Subsidiary\"). Defined terms are set forth in Article I.\n\n                  WHEREAS,  ADS is the  common  parent  of the ADS  Consolidated\nGroup and such group includes  Intellesale  and other members of the Intellesale\nSub Group.  The ADS Consolidated  Group files a Consolidated  Federal Income Tax\nReturn;\n\n                  WHEREAS,  ADS  expects  that,  as a result  of the sale of the\ncommon stock of  Intellesale,  pursuant to an initial public  offering  (\"IPO\"),\nIntellesale will cease to be a member of the ADS Consolidated Group; and\n\n                  WHEREAS,  ADS  and  Intellesale  desire  to  set  forth  their\nagreement on the proper  allocation among ADS,  Intellesale and their respective\nAffiliates  of  foreign,  federal,  state and local  Taxes  incurred  in taxable\nperiods  beginning  prior  to  (and  in  certain  respects,  subsequent  to) the\nDeconsolidation Date and their respective obligations in respect of the same;\n\n                  NOW, THEREFORE, in consideration of their mutual promises, the\nparties hereby agree as follows:\n\n                  1.       Definitions.\n\n                           (a)      As used in this Agreement:\n\n                  \"ADS  Consolidated  Group\" means,  with respect to any taxable\nperiod,   the  corporations  which  are  members  of  the  affiliated  group  of\ncorporations  of which ADS is the common  parent  (within the meaning of Section\n1504 of the Code).\n\n                  \"ADS  Income  Tax  Liability\"  means  (i) the ADS Sub  Group's\nallocable share of the liability for Federal Taxes of the ADS Consolidated Group\nfor all periods that the ADS Sub Group were members of such group  determined as\nif the  members  of  the  ADS  Sub  Group  were  the  only  members  of the  ADS\nConsolidated Group; (ii) the ADS Sub Group's allocable share of the Consolidated\nNon-Federal  Tax  liability  of the ADS Sub Group for all periods they joined in\nthe filing of a Tax Return in respect of a Consolidated Non-Federal Tax with ADS\ndetermined as if the members of the ADS Sub Group were the only members included\nin such Tax Return;  and (iii) any liability  resulting from any Income Taxes of\nthe ADS Sub Group  with  respect to any  Post-Deconsolidation  Tax Period or any\nIncome Taxes of the ADS Sub Group  allocated  to such group  pursuant to Section\n2(c) hereof.  The parties intend that the ADS Sub Group's allocable share of the\n\n\n\nliability for Federal Taxes or Consolidated  Non-Federal  Taxes as determined in\nclause (i) or (ii) above,  when added to the Intellesale  Sub Group's  allocable\nshare of the liability for Federal Taxes or Consolidated  Non-Federal  Taxes for\nthe same period will equal 100% of the  liability  for Federal  Taxes of the ADS\nConsolidated  Group or Consolidated  Non-Federal Taxes for such period, and that\nany difference shall be allocated  between the ADS Sub Group and the Intellesale\nSub Group in proportion to the amount  determined under clause (i) or (ii) above\nwith respect to both the ADS Sub Group and the Intellesale Sub Group.\n\n                  \"ADS Indemnitee\" means ADS and its Affiliates.\n\n                  \"ADS  Sub  Group\"  means,  jointly  and  severally,   the  ADS\nConsolidated Group, but does not include any corporation that is a member of the\nIntellesale Sub Group.\n\n                  \"Affiliate\"  of any  person  means  any  person,  corporation,\npartnership or other entity directly or indirectly controlling, controlled by or\nunder  common  control  with  such  person  excluding  any  shareholder  of ADS.\nReferences  herein to an  Affiliate  of ADS  shall  mean any  Affiliate  of ADS,\nexcluding on or after the Deconsolidation Date, Intellesale, any subsidiaries of\nIntellesale, of which Intellesale owns at least fifty percent (50%) of the total\ncombined voting power, and all shareholders of Intellesale. References herein to\nan Affiliate of Intellesale shall exclude ADS, all subsidiaries of ADS which are\nnot subsidiaries of Intellesale and all shareholders of Intellesale.\n\n                  \"After-Tax  Amount\" means an amount that shall be equal to the\nhypothetical  after-tax  amount of the indemnity  payment due hereunder,  taking\ninto account the  hypothetical  Tax  consequences of the payments or accruals of\nthe  amounts  which  give  rise  to  the  indemnity  obligation.  References  to\n\"After-Tax basis\",  \"hypothetical Tax consequences\" and \"hypothetical  After-Tax\namount\" refer to calculations of Tax at the maximum statutory rate (or rates, in\nthe  case of an item  that  affects  more  than one  Tax)  applicable  to an ADS\nIndemnitee or an  Intellesale  Indemnitee,  as the case may be, for the relevant\nyear. Such After-Tax  Amount shall take into account the benefit or detriment in\na subsequent  period of an item of adjustment  which gives rise to an Indemnitee\npayment.\n\n                  \"Applicable Rate\" means the interest rate determined under the\nprovisions of sections 6621 and 6622 of the Code.\n\n                  \"Code\" means the Internal Revenue Code of 1986, as amended.\n\n                  \"Consolidated  Non-Federal  Tax\" means,  with  respect to each\nforeign, state or local taxing jurisdiction, any income or franchise Tax payable\nto any such jurisdiction in which Intellesale or any of its Affiliates is or may\nbe liable for such Tax on a consolidated,  combined or unitary basis with ADS or\nany of its Affiliates.\n\n                  \"Consolidated  Federal Income Tax Return\" means any Tax Return\nwith  respect  to  Federal  Income  Taxes  filed on a  consolidated  basis  when\nIntellesale or one or more of its Affiliates join in filing such Tax Return with\nADS or one or more ADS Affiliate.\n\n                                       2\n\n\n                  \"Deconsolidation\"  shall  mean  any  event  pursuant  to which\nIntellesale ceases to be a member of the ADS Consolidated Group.\n\n                  \"Deconsolidation  Date\" means the date that Intellesale ceases\nto be a member of the ADS Consolidated Group as determined under Treas. Reg. ss.\n1.1502-76(b).\n\n                  \"Federal   Tax\"   means  any   United   States   net   income,\nenvironmental, excise, alternative or add-on minimum Tax.\n\n                  \"Final  Determination\"  means:  (i) with  respect  to  Federal\nTaxes, (A) a  \"determination\"  as defined in section 1313(a) of the Code, or (B)\nthe date of acceptance by or on behalf of the Internal  Revenue  Service of Form\n870-AD (or any successor  form  thereto) as a final  resolution of tax liability\nfor any taxable  period,  except that a Form 870-AD (or successor  form thereto)\nthat  reserves the right of the  taxpayer to file a claim for refund  and\/or the\nright of the Internal  Revenue Service to assert a further  deficiency shall not\nconstitute a Final  Determination with respect to the item or items so reserved;\n(ii) with respect to Taxes other than Federal Taxes, any final  determination of\nliability in respect of a Tax provided for under applicable law; (iii) any final\ndisposition  by  reason  of  the   expiration  of  the  applicable   statute  of\nlimitations; and (iv) the payment of Tax by the ADS Sub Group or the Intellesale\nSub Group,  whichever is  responsible  for payment of such Tax under  applicable\nlaw, with respect to any item  disallowed by a Taxing  Authority,  provided that\nthe  provisions  of Section  6(b) hereof have been  complied  with,  or, if such\nSection 6(b) is inapplicable, that the party responsible under the terms of this\nAgreement  for such Tax is  notified  by the party  paying  such Tax that it has\ndetermined  that no action should be taken to recoup such  disallowed  item, and\nthe other party agrees with such determination.\n\n                  \"Income Taxes\" means any Federal Tax, foreign,  state or local\nincome or  franchise  tax or other tax  measured  by income and all other  taxes\nreported on returns  which include  federal,  state or local income or franchise\ntaxes or other taxes measured by income,  together with any interest,  penalties\nor additions to tax imposed with respect thereto.\n\n                  \"Income Tax Return\" means any foreign, federal, state or local\nconsolidated  or  separate  Tax  Return  which  reports  Income  Taxes  of  ADS,\nIntellesale or their Affiliates.\n\n                  \"Intellesale  Income Tax Liability\"  means (i) the Intellesale\nSub  Group's  allocable  share of the  liability  for  Federal  Taxes of the ADS\nConsolidated  Group for all periods that the  Intellesale Sub Group were members\nof such group determined as if the members of the Intellesale Sub Group were the\nonly members of the ADS  Consolidated  Group;  (ii) the  Intellesale Sub Group's\nallocable share of the Consolidated Non-Federal Tax liability of the Intellesale\nSub Group for all  periods  they joined in the filing of a Tax Return in respect\nof a Consolidated  Non-Federal Tax with ADS, determined as if the members of the\nIntellesale Sub Group were the only members  included in such Tax Return;  (iii)\nany liability  resulting from any Income Taxes of the Intellesale Sub Group with\nrespect  to any  Post-Deconsolidation  Tax  Period  or any  Income  Taxes of the\nIntellesale Sub Group allocated to such party for any taxable period  commencing\nat the  Deconsolidation  Date  pursuant  to Section  2(c)  hereof;  and (iv) any\nFederal Tax  liability  or any other  Income Tax  liability of any member of the\n\n                                       3\n\n\nIntellesale Sub Group attributable to any period prior to the date any member of\nthe Intellesale  Sub Group became a member of the ADS  Consolidated  Group.  The\nparties intend that the Intellesale Sub Group's allocable share of the liability\nfor Federal Taxes or Consolidated  Non-Federal Taxes as determined in clause (i)\nor (ii) above when added to the ADS Sub Group's allocable share of the liability\nfor Federal  Taxes or  Consolidated  Non-Federal  Taxes for the same period will\nequal 100% of the liability for Federal Taxes of the ADS  Consolidated  Group or\nConsolidated  Non-Federal Tax for such period,  and that any difference shall be\nallocated  between the Intellesale Sub Group and the ADS Sub Group in proportion\nto the amount determined under clause (i) or (ii) above with respect to both the\nIntellesale Sub Group and the ADS Sub Group.\n\n                  \"Intellesale  Indemnitee\"  means  Intellesale  and each of its\nAffiliates.\n\n                  \"Intellesale   Sub  Group\"  means,   jointly  and   severally,\nIntellesale  and any  subsidiaries  of Intellesale  which would be members of an\naffiliated  group of corporations if Intellesale  were the common parent (within\nthe meaning of Section 1504 of the Code).\n\n                  \"Other Taxes\" means taxes other than Income Taxes.\n\n                  \"Post-Deconsolidation Tax Period\" means a tax period beginning\nafter the Deconsolidation Date.\n\n                  \"Pre-Deconsolidation   Tax   Period\"   means  any  tax  period\nbeginning before the Deconsolidation Date.\n\n                  \"Tax\" means (A) any net income, alternative or add-on minimum,\ngross  income,  gross  receipts,  sales,  use, ad valorem,  franchise,  profits,\nlicense,   withholding,   payroll,  employment,   excise,  transfer,  recording,\nseverance, stamp, occupation, premium, property, environmental,  custom duty, or\nother  tax,  governmental  fee or other  like  assessment  or charge of any kind\nwhatsoever,  together  with any  interest  and any  penalty,  addition to tax or\nadditional  amount imposed by any  governmental  authority  responsible  for the\nimposition of any such domestic or foreign tax (a \"Taxing  Authority\");  and (B)\nany liability of Intellesale,  ADS or any of their Affiliates (or, in each case,\nany successor in interest  thereto by merger or otherwise),  as the case may be,\nfor the  payment  of any  amounts  of the type  described  in clause (A) for any\ntaxable period  resulting from the  application of Treasury  Regulation  Section\n1.1502-6  or,  in the case of any  Consolidated  Non-Federal  Tax,  any  similar\nprovision applicable under State law.\n\n                  \"Tax  Assets\"  means any Tax Item that could reduce the amount\nof Tax liability,  including a net operating loss, net capital loss,  investment\nTax credit,  foreign  Tax credit,  charitable  deduction  or credit  relative to\nalternative minimum tax or any other Tax credit.\n\n                  \"Tax Item\" means any item of income,  gain, loss, deduction or\ncredit or other attribute that may increase or decrease a Tax.\n\n                                       4\n\n\n                  \"Tax  Return\"  means  all  reports,   estimates,   extensions,\ninformation statements and returns relating to or required by law to be filed in\nconnection with the determination,  assessment or collection of any Taxes and in\nthe case of consolidated or combined tax returns,  by ADS,  Intellesale or their\nAffiliates on behalf of the Intellesale Sub Group,  and all information  returns\n(e.g.,  Form W-2, Form 1099) and reports  relating to Taxes and employee benefit\nplans of ADS, Intellesale or their Affiliates.\n\n                           (b) Any  term  used in this  Agreement  which  is not\ndefined in this Agreement shall, to the extent the\ncontext  requires,  have the meaning  assigned  to it in the Code or  applicable\nTreasury Regulations thereunder.\n\n                  2.       Income Taxes.\n\n                           (a)      Applicable  Agreements.  On  and  after  the\nDeconsolidation  Date,  this  Agreement  shall  constitute  the sole Tax Sharing\nAgreement between the ADS Sub Group and the Intellesale Sub Group, and except as\notherwise  provided in this  Agreement,  all such  agreements,  if any, shall be\nterminated  effective  as of the  end  of the  Deconsolidation  Date.  Any  such\ntermination  shall not be effective as to any right or obligation of the ADS Sub\nGroup or the Intellesale Sub Group with respect to any third party.\n\n                           (b)      Filing Returns.\n\n                                    (i)  ADS  shall  prepare  (or  cause  to  be\n                                    prepared)  and file (or  cause to be  filed)\n                                    for all taxable periods ending with or prior\n                                    to the Deconsolidation Date all Consolidated\n                                    Federal  Income Tax Returns for ADS, the ADS\n                                    Consolidated  Group,  the ADS Sub Group, the\n                                    Intellesale   Sub   Group   and  all   other\n                                    consolidated,   combined   or  unitary   Tax\n                                    Returns for such entities. Included as a Tax\n                                    Return  to be filed by ADS  pursuant  to the\n                                    preceding   sentence  is  the   Consolidated\n                                    Federal   Income   Tax  Return  of  the  ADS\n                                    Consolidated  Group for the year of the IPO,\n                                    which  will  include  all income and loss of\n                                    ADS for such year and the income and loss of\n                                    the Intellesale Sub Group for the portion of\n                                    such  year  ending  on  the  Deconsolidation\n                                    Date.\n\n                                    (ii)  Intellesale  shall be responsible  for\n                                    preparing  and filing all Income Tax Returns\n                                    required  to be filed by or on behalf of the\n                                    Intellesale  Sub  Group,   for  all  taxable\n                                    periods beginning after the  Deconsolidation\n                                    Date.\n\n                                    (iii)  Those   Income  Tax  Returns  of  the\n                                    Intellesale  Sub  Group  which  include  any\n                                    taxable period  beginning  before and ending\n                                    after  the  Deconsolidation  Date  shall  be\n                                    prepared   by   Intellesale   and  filed  by\n                                    Intellesale  on a basis which is  consistent\n                                    with  the   manner   in  which  ADS  or  its\n\n                                       5\n\n\n                                    Affiliates  filed  such Tax  Returns  in the\n                                    past,   unless  a  contrary   treatment   is\n                                    required by law.\n\n                                    (iv)  The   Intellesale   Sub  Group  hereby\n                                    irrevocably designates ADS as its agent (and\n                                    the agent of all Intellesale Affiliates) for\n                                    the  purpose of taking  any and all  actions\n                                    necessary or incidental to the filing of any\n                                    Tax  Return  required  to be  filed  by  ADS\n                                    pursuant  to this  Agreement  or filing  any\n                                    amended   Consolidated  Federal  Income  Tax\n                                    Return  or   Consolidated   Non-Federal  Tax\n                                    Return in respect of any  adjustment  of Tax\n                                    attributable  to  any  period  during  which\n                                    Intellesale   was  a   member   of  the  ADS\n                                    Consolidated   Group  or  any   Consolidated\n                                    Non-Federal  Group.  ADS shall fully  inform\n                                    Intellesale in writing, prior to taking such\n                                    actions,  of  all  actions  to be  taken  on\n                                    behalf  of  Intellesale.  Intellesale  shall\n                                    provide  ADS  with a Power  of  Attorney  in\n                                    respect  of  the  filing  of  such  returns.\n                                    Notwithstanding   any   indication   to  the\n                                    contrary   in  this   Section   2(b)(iv)  or\n                                    elsewhere in this  Agreement,  ADS shall not\n                                    have  the   authority   as  agent   for  the\n                                    Intellesale  Sub Group  (or any  Intellesale\n                                    Affiliate)  or  pursuant  to  the  Power  of\n                                    Attorney to take a position  with respect to\n                                    a Tax Item,  on a Tax Return  required to be\n                                    filed by ADS  pursuant to this  Agreement or\n                                    any amended  Consolidated Federal Income Tax\n                                    Return  or   Consolidated   Non-Federal  Tax\n                                    Return,   that  is  inconsistent   with  the\n                                    position  taken in the past with  respect to\n                                    such Tax Item or that  could  reasonably  be\n                                    expected to affect adversely the Intellesale\n                                    Sub Group or any Intellesale  Affiliate with\n                                    respect  to  Tax  Returns  filed  after  the\n                                    Deconsolidation Date.\n\n                           (c)      Allocation of Tax Liability.  For   purposes\nof  allocation  of  Income  Tax  liability,  between  the ADS Sub  Group and the\nIntellesale Sub Group for purposes of this  Agreement,  the  deconsolidation  of\nIntellesale   shall  be  effective   for  Income  Tax  purposes  in  all  taxing\njurisdictions as of the end of the Deconsolidation Date (even though the laws of\na particular Taxing  jurisdiction do not recognize a short Tax period in respect\nto the  issuance  of common  stock of  Intellesale  for  purposes  of defining a\nConsolidated Group). For purposes of this Section 2(c), the Income Taxes for the\nportion of the taxable period up to and including the Deconsolidation Date shall\nbe determined  on the basis of an interim  closing of the books as of the end of\nthe Deconsolidation Date.\n\n                           (d)      Tax Refunds.  Intellesale  shall be entitled\nto,  and ADS  agrees to  promptly  pay to  Intellesale,  an amount  equal to all\nforeign,  federal,  state and local Tax refunds and interest thereon, if any was\npaid or credited (including,  without limitation,  as a credit or offset against\nany other Taxes) (collectively \"Refunds\"),  received by the ADS Sub Group to the\nextent  attributable to any Taxes for which  Intellesale has indemnified the ADS\nSub Group pursuant to this Agreement.\n\n                                       6\n\n\n                           (e)      ADS  Indemnification.  The ADS   Sub   Group\nwill jointly and severally  indemnify each  Intellesale  Indemnitee  against and\nhold it harmless  from (i) any ADS Income Tax  Liability  and (ii) all liability\nfor fees, costs and expenses (including but not limited to reasonable attorneys'\nfees) arising out of or incident to any proceeding  before any Taxing  Authority\nor any judicial authority with respect to any amount  indemnifiable under clause\n(i) of this section 2(e).\n\n                           (f)      Intellesale Indemnification. The Intellesale\nSub Group will jointly and severally  indemnify each ADS Indemnitee  against and\nhold it harmless  from (i) any  Intellesale  Income Tax  Liability  and (ii) all\nliability  for  fees,  costs  and  expenses  (including,  but  not  limited  to,\nreasonable attorneys' fees) arising out of or incident to any proceedings before\nany  Taxing  Authority  or any  judicial  authority  with  respect to any amount\nindemnifiable  under  clause (i) of this Section 2(f) or with respect to Section\n3(c).\n\n                           (g)      Indemnification  Payments.  ADS, the ADS Sub\nGroup and the  Intellesale Sub Group shall  discharge  their  obligations  under\nSections  2(e) and 2(f) hereof by paying an After-Tax  Amount  within 30 days of\ndemand therefor.  Notwithstanding  the foregoing,  if either  Intellesale or ADS\ndisputes  the fact or the amount of an  obligation  under  Section 2(e) or 2(f),\nthen no payment shall be required  until any such good faith dispute is resolved\nin accordance with Section 13(b) hereof; provided,  however, that any amount not\npaid within 30 days of demand  therefor  shall bear  interest at the  Applicable\nRate from the date on which such demand was made until the date of payment.\n\n                           (h) Taxes on Issuance.  Any tax  liability for Income\nTaxes  attributable to the issuance by Intellesale of Intellesale stock shall be\nand remain the sole  liability  of  Intellesale  and the ADS Sub Group shall not\nhave any responsibility therefor.\n\n                  3.       Carrybacks; Other Tax Adjustments.\n\n                           (a)      If allowable by applicable law,  Intellesale\nwill permit,  in it's sole discretion,  the use in any  Pre-Deconsolidation  Tax\nPeriod  of the  Intellesale  Sub  Group  of any Tax  Asset by ADS  arising  in a\nPost-Deconsolidation  Tax Period.  Likewise, if allowable by applicable law, ADS\nwill permit,  in it's sole discretion,  the use in any  Pre-Deconsolidation  Tax\nPeriod  of the ADS Sub  Group  or  Intellesale  Sub  Group  of any Tax  Asset by\nIntellesale arising in a Post-Deconsolidation  Tax Period. The benefit from such\nTax Assets shall be considered  equal to (i) the excess of the amount of Federal\nTaxes or  Consolidated  Non-Federal  Taxes,  as the case may be, that would have\nbeen  payable  by  the  ADS  Consolidated  Group  or any  relevant  Consolidated\nNon-Federal  Group in the  absence  of such  carryback  over (ii) the  amount of\nFederal or Consolidated  Non-Federal Taxes, as the case may be, actually payable\nby the ADS Consolidated  Group or relevant  Consolidated  Non-Federal Group. ADS\nshall pay to  Intellesale  50% of the benefit of such Tax Asset.  Payment of the\namount of such benefit shall be made within 30 days of the receipt by ADS of any\nrefund,  credit or other offset attributable  thereto. Such amount payable shall\nnot exceed 50% of the amount that would have been  received  if the  Intellesale\nSub Group or the ADS Sub  Group,  as the case may be,  had  filed as a  separate\nconsolidated group.\n\n\n                                       7\n\n\n                           (b)  At  either  ADS  or  Intellesale's  request  and\nexpense,  the other party shall undertake those actions reasonably  necessary to\nenable such party to receive the benefit of any Tax Asset.\n\n                           (c)  If,   subsequent   to  the  payment  by  ADS  to\nIntellesale of any amount referred to in Section 3(a) above,  there shall be (A)\na Final  Determination  under applicable law of a deficiency of Federal Taxes or\nConsolidated  Non-Federal  Taxes of the ADS  Consolidated  Group or the relevant\ngroup filing  Consolidated  Non-Federal Tax Returns, on the grounds that the Tax\nAsset giving rise to such payment was in fact not available in whole or in part,\nor (B) a Final  Determination  resulting  from an audit of the  Intellesale  Sub\nGroup (or any successor  thereto)  which results in a reduction of any Tax Asset\nso carried back,  Intellesale  shall repay to ADS,  within 30 days of such Final\nDetermination,  an After-Tax  Amount  reflecting the amount which would not have\nbeen  payable to  Intellesale  pursuant to this  Section 3 had the amount of the\nbenefit been determined in light of such event.\n\n                           (d) ADS and the members of the ADS Sub Group agree to\npay  Intellesale  the detriment to the  Intellesale  Sub Group (or any successor\nthereto) from an adjustment to the ADS Income Tax Liability  which results in an\nincrease  of  Intellesale  liability  for any  Post-Deconsolidation  Tax Period.\nIntellesale  and the members of the  Intellesale  Sub Group agree to pay ADS the\nbenefit received by the Intellesale Sub Group (or any successor thereto) from an\nadjustment  to the ADS Income Tax  Liability  which  results in a  reduction  of\nIntellesale   liability   for  any   Post-Deconsolidation   Tax   Period.   Such\ndetriment\/benefit shall be considered equal to the difference between the amount\nof Federal Taxes or Non-Federal  Taxes, as the case may be, that would have been\npayable  by the  Intellesale  Sub  Group  and the  amount  of  Federal  Taxes or\nNon-Federal  Taxes, as the case may be, actually  payable by the Intellesale Sub\nGroup,  taking into account such adjustment.  Payment of such  detriment\/benefit\nshall  be made  within  30 days  of the  filing  of the  applicable  Tax  Return\n(including, without limitation, any amended or estimated return) for the taxable\nperiod for which the  benefit is  utilized.  Intellesale  agrees to file such an\napplicable Tax Return as soon as practicable  after receiving notice from ADS to\nthe effect  that such an  adjustment  to the ADS Income Tax  Liability  had been\nmade.\n\n                  4.       Other Taxes.\n\n                  Liability  for  Other  Taxes  of  the  Intellesale  Sub  Group\n(including any Tax liability in respect of the operations of the Intellesale Sub\nGroup prior to the  Deconsolidation  Date  whether or not such  operations  were\nconducted  as a  division  of  ADS)  shall  be the  sole  responsibility  of the\nIntellesale Sub Group,  and liability for all Other Taxes that are  attributable\nto the ADS Sub Group (other than any  operations of any of the  Intellesale  Sub\nGroup operated as a division of ADS) shall be the sole responsibility of the ADS\nSub  Group.  The ADS Sub Group and the  Intellesale  Sub  Group  each  agrees to\nindemnify and hold the other harmless in accordance with such undertaking.\n\n                  Any Tax liabilities (including, but not limited to, sales Tax,\nstock  transfer  Tax,  documentary  Tax and start-up  Tax)  attributable  to the\nDeconsolidation,  including a public offering of Intellesale stock, shall be the\n\n                                       8\n\n\nsole  responsibility of Intellesale and none of the members of the ADS Sub Group\nshall have any responsibility therefor.\n\n                  5.       Additional Covenants.\n\n                           (a)  Intellesale  and ADS shall  cooperate (and shall\ncause  each of their  Affiliates  to  cooperate)  fully at such  time and to the\nextent  reasonably  requested  by the  other  parties  in  connection  with  the\npreparation  and filing of any  return,  claim for a refund or other  claim with\nrespect  to Taxes or the  conduct  of any audit,  dispute,  proceeding,  suit or\naction  concerning  any return,  amounts  indemnifiable  hereunder  or any other\nmatter  contemplated   hereunder.   Such  cooperation  shall  include,   without\nlimitation,  the  following:  (i) the retention and provision for  inspection on\nreasonable  request  of  books,  records,  documentation  or  other  information\nrelating  to any  return  until the  expiration  of the  applicable  statute  of\nlimitation (giving effect to any extension,  waiver or mitigation thereof); (ii)\nthe provision of additional  information  and  explanation of material  provided\nunder clause (i) of this Section 5(a);  (iii) the execution of any document that\nmay be necessary or helpful in connection  with the filing of any return by ADS,\nIntellesale or any Affiliate of either, or any audit, proceeding, suit or action\naddressed  in the  preceding  sentence;  and (iv) the use of the  parties'  best\nefforts to obtain any  documentation  from a  governmental  authority or a third\nparty that may be necessary or helpful in connection with the foregoing.\n\n                           (b) ADS and Intellesale  shall advise each other with\nrespect to any proposed Tax adjustments  relating to the ADS Consolidated  Group\nor any other consolidated, combined or unitary group of which Intellesale or its\nAffiliates have filed with ADS or any of its Affiliates which are the subject of\nany Internal Revenue Service or other Tax authority, audit or investigation,  or\nare the subject of any  proceeding or  litigation,  and which may affect any Tax\nattribute of any of the Intellesale  Sub Group or the ADS Sub Group  (including,\nbut not limited to, basis in an asset or the amount of earnings and profits).\n\n                           (c) ADS and  Intellesale,  as the case may be,  shall\npromptly  furnish to the other upon receipt a copy of any revenue agent's report\nor  similar  report,  notice of  proposed  adjustment,  or notice of  deficiency\nreceived  by  ADS,  any  Affiliate  of ADS,  Intellesale,  or any  Affiliate  of\nIntellesale,  as the  case  may  be,  relating  to the  other  party's  (or  its\nAffiliate's)  obligations  under  Sections  2 or 3  hereof,  or  any  adjustment\nreferred to in Section 5(c) hereof.  ADS and Intellesale shall cooperate to keep\neach other  fully  informed  with  respect to any  development  relating  to all\nmatters described in this Agreement.\n\n                           (d) ADS shall not without the prior  written  consent\nof  Intellesale  modify or make any  election  (except as  required by law) with\nrespect to Taxes  affecting or binding on  Intellesale  or any of its Affiliates\nfor any taxable period  beginning after the  Deconsolidation  Date.  Intellesale\nshall not, without the prior written consent of ADS, modify or make any election\n(except as required by law) with  respect to Taxes  affecting  or binding on the\nADS Sub Group for any taxable period.\n\n                                       9\n\n\n                  6.       Cooperation and Contest.\n\n                           (a) ADS  shall  have  control  over  all  matters  in\nrespect of any Tax Return filed by ADS, or any Tax audit,  dispute or proceeding\n(whether  administrative or judicial)  relating to any Tax matters in respect of\nany Tax  Return  filed by ADS.  ADS shall  promptly  notify  Intellesale  of any\ninquiries  from the Internal  Revenue  Service or any other Tax authority  which\nrelate to matters  described  in  Sections  2(f) and 3.  Intellesale  shall have\ncontrol  over all matters in respect of any Tax Return filed by  Intellesale  or\nany Tax audit,  dispute  or  proceeding  (whether  administrative  or  judicial)\nrelating to any Tax matters in respect of any Tax Return  filed by  Intellesale.\nIntellesale shall promptly notify ADS of any inquiries from the Internal Revenue\nService  or any other  Tax  authority  which  relate  or may  relate to  matters\ndescribed in Sections 2(e) and 3.\n\n                           (b) No settlement of any Internal  Revenue Service or\nother Tax  authority  audit  relating to any matter  which would cause a payment\nunder Sections 2(e), 2(f) or 3 shall be accepted or entered into by or on behalf\nof the party  entitled  to receive a payment  under  Sections  2(e),  2(f) or 3,\nwhichever is  applicable  (the  \"Indemnitee\"),  unless (x) the party  ultimately\nresponsible  for such  payment  under  Sections  2(e),  2(f) or 3,  whichever is\napplicable (the \"Indemnitor\"),  consents thereto in writing (which consent shall\nnot be unreasonably withheld), or (y) the Indemnitor does not consent and it has\nprovided the Indemnitee with an opinion of its counsel that there is substantial\nauthority for the Indemnitor's position.\n\n                           (c) In the event that a judgment of the United States\nTax  Court or other  court  of  competent  jurisdiction  results  in an  adverse\ndetermination with respect to any issue which would cause Intellesale to pay ADS\nany amount under Sections 2(f) or 3,  Intellesale  shall have the right to cause\nADS to appeal  from such  adverse  determination  at  Intellesale's  expense  if\nIntellesale  delivers to ADS an opinion  from its counsel  that such appeal will\nmore likely than not succeed.\n\n                  7.       Payments.\n\n                  All Payments to be made hereunder shall be made in immediately\navailable funds and, unless  otherwise  provided  herein,  within 30 days of the\ndate determined herein.\n\n                  8.       Notices.\n\n                  All notices,  demands,  claims, or other  communications under\nthis  Agreement  shall be in writing and shall be deemed to have been given upon\nthe delivery or mailing thereof, as the case may be, if delivered  personally or\nsent by certified  mail,  return  receipt  requested,  postage  prepaid,  to the\nparties at the  following  addresses  (or at such  other  address as a party may\nspecify by notice to the other):\n\n                                       10\n\n              If to ADS, to:\n\n                                    APPLIED DIGITAL SOLUTIONS, INC.\n                                    400 Royal Palm Way, Suite 410\n                                    Palm Beach , Florida  33480\n                                    Attention:  Chief Financial Officer\n                                    Fax:  (561) 366-0002\n\n              If to Intellesale, to:\n\n                                    INTELLESALE.COM, INC.\n                                    2047 Route 130 North\n                                    Burlington, New Jersey  08016\n                                    Attention:  Chief Financial Officer\n                                    Fax:  (973) 694-1616\n\n                  9.       Costs and Expenses.\n\n                  Except as expressly  set forth in this  Agreement,  each party\nshall bear its own costs and expenses incurred  pursuant to this Agreement.  ADS\nshall receive  reimbursement  for any expenses in respect of any Return filed by\nADS on behalf of Intellesale. Such expenses shall include any services performed\nby ADS on behalf of Intellesale at the rate of $150 per hour for officers of ADS\nand $50 per hour for non-officers of ADS.\n\n                  10.      Termination and Survival.\n\n                  Notwithstanding  anything in this  Agreement to the  contrary,\nthis Agreement  shall remain in effect and its provisions  shall survive for the\nfull period of all  applicable  statutes  of  limitation  (giving  effect to any\nextension, waiver or mitigation thereof).\n\n                  11.      Section Headings.\n\n                  The  section  headings  contained  in this  Agreement  are for\nreference  purposes  only  and  shall  not in any  way  affect  the  meaning  or\ninterpretation of this Agreement.\n\n                  12.      Amendments; No Waivers.\n\n                           (a) Any provision of this Agreement may be amended or\nwaived if, and only if, such  amendment  or waiver is in writing and signed,  in\nthe case of an amendment, by ADS and Intellesale or, in the case of a waiver, by\nthe party against whom the waiver is to be effective.\n\n                           (b) 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 further\nexercise thereof or the exercise of any other right, power or privilege.\n\n                                       11\n\n\n                  13.      Governing Law and Interpretation.\n\n                           (a) This Agreement shall be governed by and construed\nin accordance with the laws of the State of Missouri.\n\n                           (b) Any disagreement  between the parties hereto with\nrespect to this  Agreement,  other than Sections 2 and 3, not resolved by mutual\nagreement  of the  parties  shall be settled by  arbitration  in the City of St.\nLouis,  State  of  Missouri  in  accordance  with  the  Rules  of  the  American\nArbitration Association,  and judgment upon the award so rendered may be entered\nin any court having jurisdiction thereof.\n\n                  14.      Counterparts.\n\n                  This  Agreement  may be executed in one or more  counterparts,\neach of which shall be deemed to be an original, but all of which together shall\nconstitute one and the same instrument.\n\n                  15.      Assignment.\n\n                  This  Agreement  shall be binding  upon and shall inure to the\nbenefit of the parties hereto and their respective successors,  provided that no\nparty  may  assign,  delegate  or  otherwise  transfer  any  of  its  rights  or\nobligations  under this  Agreement  without  the  consent  of the other  parties\nhereto.\n\n\n                        --------------------------------\n\n\n                                       12\n\n\n\n        THIS AGREEMENT CONTAINS BINDING ARBITRATION PROVISIONS WHICH MAY\n                          BE ENFORCED BY THE PARTIES.\n\n                  IN WITNESS  WHEREOF,  the  parties  hereto have  executed  and\ndelivered this Agreement as of the day and year first above written.\n\nAPPLIED DIGITAL SOLUTIONS, INC.                  PORT PARTIES, LTD.\n\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\nIntellesale.COM, INC.                            BLUE STAR ELECTRONICS, INC.\n\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\nPIZARRO RE-MARKETING, INC.                       CONSOLIDATED MICRO\n                                                 COMPONENTS, INC.\n\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\nNORCOM RESOURCES, INC.                           DATA PATH TECHNOLOGIES, INC.\n\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\nCYBERTECH STATION, INC.                          INTERNET MARKETING AND\n                                                 RESEARCH, INC.\n\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\n                                       13\n\n\nGDB SOFTWARE SERVICES, INC.                      BOSTEK, INC.\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\nSERVICE TRANSPORT COMPANY                        FISCAL ADVANTAGE CORPORATION\n\n\n\nBy: ___________________________                  By: ___________________________\n    Its:  President                                  Its:  President\n\n\n\n\n\n\n                                       14\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6727],"corporate_contracts_industries":[],"corporate_contracts_types":[9622,9628],"class_list":["post-43755","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-applied-digital-solutions-inc","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\/43755","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=43755"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43755"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43755"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}