CA, Inc.'s Answer and Counterclaim - Reed Smith

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comEFiled: Apr 17 2009 10:53AM EDTTransaction ID 24743004Case No. 4195-CCIN THE COURT OF CHANCERY OF THE STATE OF DELAWAREGARY M. PFEIFFER, in his capacity as theDelaware Secretary of Finance and theDelaware State Escheator; and theDEPARTMENT OF FINANCE, DIVISIONOF REVENUE FOR THE STATE OFDELAWARE,C.A. No. 4195-CCPlaintiffs,v.CA, INC. andPLATINUM TECHNOLOGYINTERNATIONAL INC.,Defendants.DEFENDANTS' ANSWER, AFFIRMATIVE DEFENSES ANDAMENDED COUNTERCLAIMIn response to the allegations of the Verified Amended Complaint of Plaintiffs Gary M.Pfeiffer, in his capacity as the Delaware Secretary of Finance and the Delaware State Escheator;and the Department of Finance, Division of Revenue for the State of Delaware (collectively the"State"), Defendants, CA, Inc. ("CA") and Platinum Technology International, Inc. ("Platinum")(collectively "CA"), hereby: 11. States that the allegations set forth in Paragraph 1 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA denies the allegations contained in Paragraph 1 of the VerifiedAmended Complaint.1 CA hereby denies any and all headings and subheadings in the State's Verified Amended Complaint on the basisthat they contain legal and factual characterizations and conclusions.

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com2. Admits in response to the allegations contained in Paragraph 2 of the VerifiedAmended Complaint only that CA participated in the State's Voluntary Disclosure Program("VDA") and that CA initiated a lawsuit against the State in the matter captioned CA, Inc. v.Cordrey, et. al., Civil Action No. 4111-CC. Further answering, CA denies any and all remainingallegations contained in Paragraph 2 of the Verified Amended Complaint.3. States that the allegations set forth in Paragraph 3 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). To the extent an answer isdeemed necessary, CA denies the allegations contained in Paragraph 3 of the Verified AmendedComplaint.4. States that the allegations set forth in Paragraph 4 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA states thatthe documents referenced in Paragraph 4 of the Verified Amended Complaint speak forthemselves. To the extent an answer is deemed necessary, CA denies the allegations containedin Paragraph 4 of the Verified Amended Complaint.5. States that the allegations set forth in Paragraph 5 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). To the extent an answer isdeemed necessary, CA admits only that CA advised the State that its records for accountsreceivable, accounts payable, and payroll documentation for the VDA period were complete andaccurate to the best of CA's knowledge. CA denies the remaining allegations contained inParagraph 5 of the Verified Amended Complaint.- 2 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com6. States that the allegations set forth in the first sentence of Paragraph 6 of theVerified Amended Complaint represent immaterial, impertinent, or scandalous matter that shouldbe stricken from the State's pleading pursuant to Court of Chancery Rule 12(f). Furtheranswering, CA admits only that CA represented to the State based on records available at thetime that it owed $684,035.94 in escheat liability, and denies any and all remaining allegationscontained in Paragraph 6 of the Verified Amended Complaint.7. States that the allegations regarding compliance with the Abandoned PropertyLaw set forth in Paragraph 7 of the Verified Amended Complaint amount to conclusions of lawto which no response is required. Further answering, CA states that the documents referenced inParagraph 7 of the Verified Amended Complaint speak for themselves, and that the Court hadnot ordered CA to produce any "standard accounting documents" at the time that the VerifiedAmended Complaint was served on CA. To the extent a further answer is deemed necessary, CAdenies the allegations contained in Paragraph 7 of the Verified Amended Complaint.8. States that CA is without sufficient knowledge regarding the subjective intent ofthe State to enable it to respond to the allegations contained in Paragraph 8 of the VerifiedAmended Complaint. To the extent an answer is deemed necessary, CA denies the allegationscontained in Paragraph 8 of the Verified Amended Complaint.9. States that CA is without sufficient knowledge regarding the State's reasons forinitiating this litigation to enable it to respond to the allegations contained in the first sentence ofParagraph 9 of the Verified Amended Complaint. Further answering, CA states that theallegations in the second and third sentences of Paragraph 9 of the Verified Amended Complaintrepresent prayers for relief to which no response is required. To the extent an answer is deemednecessary, CA denies any and all remaining allegations contained in Paragraph 9 of the VerifiedAmended Complaint.- 3 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com10. Admits in response to the allegations contained in Paragraph 10 of the VerifiedAmended Complaint only that 12 Del. C. §§ 1156(a) provides for jurisdiction as set forth therein.Further answering, CA states that the allegations set forth in Paragraph 10 of the VerifiedAmended Complaint amount to conclusions of law to which no response is required.11. States that CA is without sufficient knowledge to enable it to respond to theallegations contained in Paragraph 11 of the Verified Amended Complaint.12. States that CA is without sufficient knowledge to enable it to respond to theallegations contained in Paragraph 12 of the Verified Amended Complaint.13. Admits the allegations contained in Paragraph 13 of the Verified AmendedComplaint.14. States that the allegations set forth in Paragraph 14 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA denies theallegations contained in Paragraph 14 of the Verified Amended Complaint.15. States that the allegations set forth in Paragraph 15 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA states thatthe article referenced in Paragraph 15 of the Verified Amended Complaint speaks for itself, anddenies any and all remaining allegations contained in Paragraph 15 of the Verified AmendedComplaint.16. States that the allegations set forth in Paragraph 16 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA states thatthe article referenced in Paragraph 16 of the Verified Amended Complaint speaks for itself, and- 4 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comdenies any and all remaining allegations contained in Paragraph 16 of the Verified AmendedComplaint.17. States that the allegations set forth in Paragraph 17 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA admitsonly that Kumar and Zar were sent to prison and/or ordered to pay fines and restitution relativeto allegations of alleged fraud. CA denies the remainder of the allegations contained inParagraph 17 of the Verified Amended Complaint.18. States that the allegations set forth in Paragraph 18 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA states thatthe article referenced in Paragraph 18 of the Verified Amended Complaint speaks for itself, anddenies any and all remaining allegations contained in Paragraph 18 of the Verified AmendedComplaint.19. States that the allegations set forth in Paragraph 19 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). To the extent an answer isdeemed necessary, CA admits only that CA advised the State that its records for accountsreceivable, accounts payable, and payroll documentation for the VDA period were complete andaccurate to the best of CA's knowledge. Further answering, CA denies the remainder of theallegations contained in Paragraph 19 of the Verified Amended Complaint.20. Admits in response to the allegations contained in Paragraph 20 of the VerifiedAmended Complaint only that on November 17, 2004 CA entered into a Form AP DE-1 with theState, said document speaking for itself. Further answering, CA states that the allegations set- 5 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comforth in Paragraph 20 of the Verified Amended Complaint amount to conclusions of law towhich no response is required. To the extent a further answer is deemed necessary, CA deniesthe remaining allegations contained in Paragraph 20 of the Verified Amended Complaint.21. Admits in response to the allegations contained in Paragraph 21 of the VerifiedAmended Complaint only that on November 17, 2004 CA entered into a Form AP DE-1 with theState, said document speaking for itself. Further answering, CA states that it is without sufficientknowledge regarding the manner in which the State first became aware of certain facts to enableit to respond to the remaining allegations set forth in Paragraph 21 of the Verified AmendedComplaint.22. Admits in response to the allegations contained in Paragraph 22 of the VerifiedAmended Complaint only that on November 17, 2004 that CA and the State entered into a FormAP DE-1, said document speaking for itself. Further answering, CA states that the documentreferred to by the State in Paragraph 22 of the Verified Amended Complaint is the best evidenceof its own contents and, therefore, CA denies the State's attempt to summarize or characterize thedocument's contents and states that no further response to the allegations in this paragraph isrequired. To the extent a further answer is deemed necessary, CA denies any and all remainingallegations contained in Paragraph 22 of the Verified Amended Complaint.23. Admits in response to the allegations contained in Paragraph 23 of the VerifiedAmended Complaint only that on November 17, 2004 that CA and the State entered into a FormAP DE-1, said document speaking for itself. Further answering, CA states that the documentreferred to by the State in Paragraph 23 of the Verified Amended Complaint is the best evidenceof its own contents and, therefore, CA denies the State's attempt to summarize or characterize thedocument's contents and states that no further response to the allegations in this paragraph isrequired. To the extent a further answer is deemed necessary, CA denies that CA's conduct was- 6 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com"extreme" in this case, admits that the State extends time typically in the VDA process, andstates that it is without sufficient knowledge to enable it to respond to the remaining allegationsset forth in Paragraph 23 of the Verified Amended Complaint.24. Admits in response to the allegations contained in Paragraph 24 of the VerifiedAmended Complaint only that on November 17, 2004 that CA and the State entered into a FormAP DE-1, said document speaking for itself. Further answering, CA states that the document andregulations referred to by the State in Paragraph 24 of the Verified Amended Complaint are thebest evidence of their own contents and, therefore, CA denies the State's attempt to summarize orcharacterize the contents of the documents and regulations, and states that no further response tothe allegations in this paragraph is required. To the extent a further answer is deemed necessary,CA states that it is without sufficient knowledge to enable it to respond to the remainingallegations set forth in Paragraph 24 of the Verified Amended Complaint.25. States that the allegations set forth in Paragraph 25 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA admits only that CA entered into a voluntary disclosureagreement with the State in connection with abandoned and unclaimed property, that CAconducted a self-audit and made submissions of voluminous materials to the State pursuant tothat agreement, and has offered to pay millions of dollars to the State in connection with saidagreement. CA also states that the document referenced in Paragraph 25 speaks for itself and isthe best evidence of its own content and, therefore, CA denies the State's attempt to summarizeor characterize the contents of those documents, and states that no further response to theallegations in this paragraph is required. Further answering, CA denies any and all remainingallegations contained in Paragraph 25 of the Verified Amended Complaint.- 7 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com26. Admits in response to the allegations contained in Paragraph 26 of the VerifiedAmended Complaint only that on November 17, 2004 that CA and the State entered into a FormAP DE-1, said document speaking for itself. Further answering, CA states that the documentsreferred to by the State in Paragraph 26 of the Verified Amended Complaint are the bestevidence of their own contents and, therefore, CA denies the State's attempt to summarize orcharacterize the contents of those documents, and states that no further response to theallegations in this paragraph is required. To the extent a further answer is deemed necessary, CAstates that it is without sufficient knowledge to enable it to respond to the remaining allegationsset forth in Paragraph 26 of the Verified Amended Complaint.27. Admits in response to the allegations contained in Paragraph 27 of the VerifiedAmended Complaint only that on November 17, 2004 that CA and the State entered into a FormAP DE-1, said document speaking for itself. Further answering, CA denies any and allremaining allegations contained in Paragraph 27 of the Verified Amended Complaint.28. Admits in response to the allegations contained in Paragraph 28 of the VerifiedAmended Complaint only that on or around September 9, 2003, CA engaged Ernst & Young toanalyze CA's potential unclaimed property liability, that some of the Ernst & Young advisorssubsequently left the company to work at Abandoned Property Services, LLC ("APS"), and thatCA engaged APS to analyze CA's potential unclaimed property liability. Further answering, CAdenies any and all remaining allegations contained in Paragraph 28 of the Verified AmendedComplaint.29. Admits in response to the allegations contained in Paragraph 29 of the VerifiedAmended Complaint only that CA and the State entered into a Form AP DE-1, said documentspeaking for itself. CA also states that the document referred to by the State in Paragraph 29 ofthe Verified Amended Complaint is the best evidence of its own contents and, therefore, CA- 8 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comdenies the State's attempt to summarize or characterize the document's contents and states that nofurther response to the allegations in this paragraph is required. CA also states that CA requestedadditional time from the State to complete its self-audit, which the State granted. Furtheranswering, CA denies any and all remaining allegations contained in Paragraph 29 of theVerified Amended Complaint.30. Admits in response to the allegations contained in Paragraph 30 of the VerifiedAmended Complaint that CA requested additional time from the State to complete its self-audit,which the State granted. Further answering, CA states that it is without sufficient knowledge toenable it to respond to the allegation that the State was unaware of the date on which Ernst &Young was retained, and denies any and all remaining allegations contained in Paragraph 30 ofthe Verified Amended Complaint.31. Admits in response to the allegations set forth in Paragraph 31 of the VerifiedAmended Complaint only that CA presented its initial VDA presentation to the State on or aboutJuly 28, 2005, said document speaking for itself. CA also states that the document referred to bythe State in Paragraph 31 of the Verified Amended Complaint is the best evidence of its owncontents and, therefore, CA denies the State's attempt to summarize or characterize thedocument's contents and states that no further response to the allegations in this paragraph isrequired. Further answering, CA denies any and all remaining allegations contained inParagraph 31 of the Verified Amended Complaint.32. Admits in response to the allegations set forth in Paragraph 32 of the VerifiedAmended Complaint only that the State requested that CA provide it with additional information,which CA provided to the State. Further answering, CA denies that it failed to timely providethe documents requested by the State, and states that it is without sufficient knowledge to enable- 9 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comit to respond to the remaining allegations set forth in Paragraph 32 of the Verified AmendedComplaint.33. States that the documents referred to by the State in Paragraph 33 of the VerifiedAmended Complaint are the best evidence of its own contents and, therefore, CA denies theState's attempt to summarize or characterize the contents of those documents and states that nofurther response to the allegations in this paragraph is required. To the extent a further answer isdeemed necessary, CA denies the allegations set forth in Paragraph 33 of the Verified AmendedComplaint.34. Denies the allegations contained in Paragraph 34 of the Verified AmendedComplaint.35. Admits in response to the allegations set forth in Paragraph 35 of the VerifiedAmended Complaint only that APS sent the State an e-mail communication on November 18,2005, said document speaking for itself. Further answering, CA states that the documentreferred to by the State in Paragraph 35 of the Verified Amended Complaint is the best evidenceof its own content and, therefore, CA denies the State's attempt to summarize or characterize thedocument's purpose or contents and states that no further response to the allegations in thisparagraph regarding the document is required. Further answering, CA denies any and allremaining allegations contained in Paragraph 35 of the Verified Amended Complaint.36. Admits in response to the allegations set forth in Paragraph 36 of the VerifiedAmended Complaint only that the State sent an e-mail communication to APS on November 22,2005, said document speaking for itself. Further answering, CA states that the documentreferred to by the State in Paragraph 36 of the Verified Amended Complaint is the best evidenceof its own content and, therefore, CA denies the State's attempt to summarize or characterize thedocument's purpose or contents and states that no further response to the allegations in this- 10 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comparagraph regarding the document is required. Further answering, CA denies any and allremaining allegations contained in Paragraph 36 of the Verified Amended Complaint.37. Admits in response to the allegations set forth in Paragraph 37 of the VerifiedAmended Complaint only that the State sent an e-mail communication to APS on January 20,2006 said document speaking for itself. Further answering, CA states that the document referredto by the State in Paragraph 37 of the Verified Amended Complaint is the best evidence of itsown content and, therefore, CA denies the State's attempt to summarize or characterize thedocument's purpose or contents and states that no further response to the allegations in thisparagraph regarding the document is required. Further answering, CA denies any and allremaining allegations contained in Paragraph 37 of the Verified Amended Complaint.38. Denies the allegations contained in Paragraph 38 of the Verified AmendedComplaint.39. States that CA is without sufficient knowledge to enable it to respond to theallegations contained in Paragraph 39 of the Verified Amended Complaint concerning the State'salleged state of mind. Further answering, CA admits in response to the allegations set forth inParagraph 39 of the Verified Amended Complaint only that the State sent an e-mailcommunication to APS on March 21, 2006, said document speaking for itself. CA also statesthat the document referred to by the State in Paragraph 39 of the Verified Amended Complaint isthe best evidence of its own content and, therefore, CA denies the State's attempt to summarizeor characterize the document's purpose or contents and states that no further response to theallegations in this paragraph regarding the document is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 39 of the Verified Amended Complaint.40. Admits in response to the allegations set forth in Paragraph 40 of the VerifiedAmended Complaint only that the State requested a statement from CA regarding the records in- 11 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comits possession relating to unclaimed property, and that CA provided the State with the requestedstatement. Further answering, CA denies any and all remaining allegations contained inParagraph 40 of the Verified Amended Complaint.41. States that CA is without sufficient knowledge to enable it to respond to theallegations contained in Paragraph 41 of the Verified Amended Complaint regarding the State'salleged state of mind. Further answering, CA admits in response to the allegations set forth inParagraph 41 of the Verified Amended Complaint only that the State sent APS questionnairerequesting additional information from CA in connection with its VDA, to which CA responded.CA also admits in response to the allegations set forth in Paragraph 41 of the Verified AmendedComplaint only that the State sent an e-mail communication to APS on April 18, 2006, saiddocument speaking for itself. Further answering, CA states that the documents referred to by theState in Paragraph 41 of the Verified Amended Complaint are the best evidence of their owncontent and, therefore, CA denies the State's attempt to summarize or characterize thedocuments' purpose or contents and states that no further response to the allegations in thisparagraph regarding the documents is required. Further answering, CA denies any and allremaining allegations contained in Paragraph 41 of the Verified Amended Complaint.42. Admits in response to the allegations set forth in Paragraph 42 of the VerifiedAmended Complaint only that CA completed the State's questionnaire and sent its response tothe State, said document speaking for itself. Further answering, CA denies any and all remainingallegations contained in Paragraph 42 of the Verified Amended Complaint.43. States that the documents referred to by the State in Paragraph 43 of the VerifiedAmended Complaint are the best evidence of their own content and, therefore, CA denies theState's attempt to summarize or characterize the documents' purpose or contents and states thatno further response to the allegations in this paragraph regarding the documents is required.- 12 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comFurther answering, CA denies any and all remaining allegations contained in Paragraph 43 of theVerified Amended Complaint.44. Denies the allegations contained in Paragraph 44 of the Verified AmendedComplaint.45. Denies the allegations contained in Paragraph 45 of the Verified AmendedComplaint.46. Admits only that CA has produced aging reports and bank reconciliations to theState. Further answering, CA states that the documents referred to by the State in Paragraph 46of the Verified Amended Complaint are the best evidence of their own content and, therefore,CA denies the State's attempt to summarize or characterize the documents' purpose or contents,and denies the remaining allegations set forth in Paragraph 46 of the Verified AmendedComplaint.47. Admits in response to the allegations set forth in Paragraph 47 of the VerifiedAmended Complaint only that, on or about August 7, 2007, CA provided the State with anupdated calculation of the abandoned and unclaimed property allegedly owed to the State by CA,said documents speaking for themselves. CA also states that the documents referred to by theState in Paragraph 47 of the Verified Amended Complaint are the best evidence of their owncontent and, therefore, CA denies the State's attempt to summarize or characterize thedocuments' purpose or contents and states that no further response to the allegations in thisparagraph regarding the documents is required. Further answering, CA denies any and allremaining allegations contained in Paragraph 47 of the Verified Amended Complaint.48. Admits in response to the allegations set forth in Paragraph 48 of the VerifiedAmended Complaint only that CA received an e-mail communication from the State on January15, 2008, said document and attachments speaking for themselves. CA also states that the- 13 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comdocuments referred to by the State in Paragraph 48 of the Verified Amended Complaint are thebest evidence of their own content and, therefore, CA denies the State's attempt to summarize orcharacterize the documents' purpose or contents and states that no further response to theallegations in this paragraph regarding the documents is required. Further answering, CA statesthat it is without sufficient knowledge to enable it to respond to the allegations regarding theState's alleged state of mind or calculation methodologies, and denies any and all remainingallegations contained in Paragraph 48 of the Verified Amended Complaint.49. Admits in response to the allegations set forth in Paragraph 49 of the VerifiedAmended Complaint only that the State sent CA e-mail communications on January 15, 2008,said documents speaking for themselves. CA also states that the documents referred to by theState in Paragraph 49 of the Verified Amended Complaint are the best evidence of their owncontent and, therefore, CA denies the State's attempt to summarize or characterize thedocuments' purpose or contents and states that no further response to the allegations in thisparagraph regarding the documents is required. Further answering, CA states that it is withoutsufficient knowledge to enable it to respond to the allegations regarding the State's alleged stateof mind, and denies any and all remaining allegations contained in Paragraph 49 of the VerifiedAmended Complaint.50. Admits in response to the allegations set forth in Paragraph 50 of the VerifiedAmended Complaint only that CA, through its counsel, sent a letter to the State on or aboutJanuary 22, 2008, said document speaking for itself. Further answering, CA sent a letter to theState on or about February 12, 2008, said document speaking for itself. CA also states that thedocuments referred to by the State in Paragraph 50 of the Verified Amended Complaint are thebest evidence of their own content and, therefore, CA denies the State's attempt to summarize orcharacterize the documents' purpose or contents and states that no further response to the- 14 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 50 of the Verified Amended Complaint.51. Admits in response to the allegations set forth in Paragraph 51 of the VerifiedAmended Complaint only that CA disputed the amount demanded by the State, but continued towork with the State over the course of the next several months in good faith in an attempt tocome to a resolution of this matter. Further answering, CA denies any and all remainingallegations contained in Paragraph 51 of the Verified Amended Complaint.52. Admits in response to the allegations set forth in Paragraph 52 of the VerifiedAmended Complaint only that CA disputed the amount demanded by the State, but continued towork with the State over the course of the next several months in good faith in an attempt tocome to a resolution of this matter. CA also admits in response to the allegations set forth inParagraph 52 of the Verified Amended Complaint only that the State sent CA's counsel an e-mailcommunication on April 8, 2008, said document speaking for itself. Further answering, CAstates that the documents referred to by the State in Paragraph 52 of the Verified AmendedComplaint are the best evidence of their own content and, therefore, CA denies the State'sattempt to summarize or characterize the documents' purpose or contents and states that nofurther response to the allegations in this paragraph regarding the documents is required. Furtheranswering, CA denies any and all remaining allegations contained in Paragraph 52 of theVerified Amended Complaint.53. States that CA is without sufficient knowledge to enable it to respond to theallegations contained in Paragraph 53 of the Verified Amended Complaint as to the State'salleged expenditure of time and resources. Further answering, CA admits in response to theallegations set forth in Paragraph 53 of the Verified Amended Complaint only that CA disputedthe amount demanded by the State, but continued to work with the State over the course of the- 15 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comnext several months in good faith in an attempt to come to a resolution of this matter. CA alsoadmits in response to the allegations set forth in Paragraph 53 of the Verified AmendedComplaint that, on or about June 3, 2008, the State sent a letter to CA, said document speakingfor itself. CA also states that the document referred to by the State in Paragraph 53 of theVerified Amended Complaint is the best evidence of its own content and, therefore, CA deniesthe State's attempt to summarize or characterize the document's purpose or contents and statesthat no further response to the allegations in this paragraph regarding the documents is required.In addition, CA admits in response to the allegations contained in Paragraph 53 of the VerifiedAmended Complaint only that the State assessed interest against CA on June 3, 2008, but deniesthe validity of said assessment and the State's right to assess interest against CA. Furtheranswering, CA denies any and all remaining allegations contained in Paragraph 53 of theVerified Amended Complaint.54. Admits in response to the allegations set forth in Paragraph 54 of the VerifiedAmended Complaint only that CA sent a letter to the State on or about June 26, 2008 in thecontext of settlement and/or compromise, said document speaking for itself. Further answering,CA states that the document referred to by the State in Paragraph 54 of the Verified AmendedComplaint is the best evidence of its own content and, therefore, CA denies the State's attempt tosummarize or characterize the document's purpose or contents and states that no further responseto the allegations in this paragraph regarding the document is required. Further answering, CAstates that the State did not accept CA's offered payment made in settlement and/or compromiseand denies any and all remaining allegations contained in Paragraph 54 of the Verified AmendedComplaint.55. Admits in response to the allegations set forth in Paragraph 55 of the VerifiedAmended Complaint only that the State selected CA for audit in July 2008, sent CA a letter dated- 16 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comJuly 17, 2008, said document speaking for itself, and that CA has initiated a lawsuit against theState in the matter captioned CA, Inc. v. Cordrey, et. al., Civil Action No. 4111-CC. Furtheranswering, CA states that the documents referred to by the State in Paragraph 55 of the VerifiedAmended Complaint are the best evidence of their own content and, therefore, CA denies theState's attempt to summarize or characterize the documents' purpose or contents and states thatno further response to the allegations in this paragraph regarding the documents is required.Further answering, CA denies any and all remaining allegations contained in Paragraph 55 of theVerified Amended Complaint.56. States that CA is without sufficient knowledge to enable it to respond to theallegations contained in Paragraph 56 of the Verified Amended Complaint regarding the State'salleged state of mind. Further answering, CA denies any and all remaining allegations containedin Paragraph 56 of the Verified Amended Complaint.57. States that the allegations set forth in Paragraph 57 of the Verified AmendedComplaint represent immaterial, impertinent, or scandalous matter that should be stricken fromthe State's pleading pursuant to Court of Chancery Rule 12(f). Further answering, CA states thatthe documents referred to by the State in Paragraph 57 of the Verified Amended Complaint arethe best evidence of their own content and, therefore, CA denies the State's attempt to summarizeor characterize the documents' purpose or contents and states that no further response to theallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 57 of the Verified Amended Complaint.58. Admits only that CA submitted master files to the State, and states that thedocuments referred to by the State in Paragraph 58 of the Verified Amended Complaint are thebest evidence of their own content and, therefore, CA denies the State's attempt to summarize orcharacterize the documents' purpose or contents and states that no further response to the- 17 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 58 of the Verified Amended Complaint.59. States that the documents referred to by the State in Paragraph 59 of the VerifiedAmended Complaint are the best evidence of their own content and, therefore, CA denies theState's attempt to summarize or characterize the documents' purpose or contents and states thatno further response to the allegations in this paragraph regarding the documents is required.Further answering, CA denies any and all remaining allegations contained in Paragraph 59 of theVerified Amended Complaint.60. Admits only that the acquisition referenced in Paragraph 60 of the VerifiedAmended Complaint does not form the basis for any portion of the unclaimed property liabilitythat CA owes to the State. Further answering, CA states that the documents referred to by theState in Paragraph 60 of the Verified Amended Complaint are the best evidence of their owncontent and, therefore, CA denies the State's attempt to summarize or characterize thedocuments' purpose or contents and states that no further response to the allegations in thisparagraph regarding the documents is required. Further answering, CA denies any and allremaining allegations contained in Paragraph 60 of the Verified Amended Complaint.61. Admits only that the acquisition referenced in Paragraph 61 of the VerifiedAmended Complaint does not form the basis for any portion of the unclaimed property liabilitythat CA owes to the State. Further answering, CA states that it is without sufficient informationto enable it to respond to the allegations regarding the date on which the State became aware ofthe acquisition referenced in Paragraph 61 of the Verified Amended Complaint, and states thatthe documents referred to by the State in Paragraph 61 of the Verified Amended Complaint arethe best evidence of their own content and, therefore, CA denies the State's attempt to summarizeor characterize the documents' purpose or contents and states that no further response to the- 18 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 61 of the Verified Amended Complaint.62. States that the documents referred to by the State in Paragraph 62 of the VerifiedAmended Complaint are the best evidence of their own content and, therefore, CA denies theState's attempt to summarize or characterize the documents' purpose or contents and states thatno further response to the allegations in this paragraph regarding the documents is required.Further answering, CA denies any and all remaining allegations contained in Paragraph 62 of theVerified Amended Complaint.63. Denies the allegations contained in Paragraph 63 of the Verified AmendedComplaint.64. Denies the allegations contained in Paragraph 64 of the Verified AmendedComplaint.65. Admits only that the some of the spreadsheets produced by CA to the State werecreated by running electronic queries within CA's computer system, and states that thedocuments referred to by the State in Paragraph 65 of the Verified Amended Complaint are thebest evidence of their own content and, therefore, CA denies the State's attempt to summarize orcharacterize the documents' purpose or contents and states that no further response to theallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 65 of the Verified Amended Complaint.66. Admits only that the some of the spreadsheets produced by CA to the State werecreated by running electronic queries within CA's "TOPS" computer system, and states that thedocuments referred to by the State in Paragraph 66 of the Verified Amended Complaint are thebest evidence of their own content and, therefore, CA denies the State's attempt to summarize orcharacterize the documents' purpose or contents and states that no further response to the- 19 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 66 of the Verified Amended Complaint.67. Admits only that the unclaimed property analysis set forth in the spreadsheetsproduced by CA to the State is accurate and complete. Further answering, CA states that thedocuments referred to by the State in Paragraph 67 of the Verified Amended Complaint are thebest evidence of their own content and, therefore, CA denies the State's attempt to summarize orcharacterize the documents' purpose or contents and states that no further response to theallegations in this paragraph regarding the documents is required. Further answering, CA deniesany and all remaining allegations contained in Paragraph 67 of the Verified Amended Complaint.68. States that the allegations set forth in Paragraph 68 of the Verified AmendedComplaint regarding purported accounting fraud and criminal activity represent immaterial,impertinent, or scandalous matter that should be stricken from the State's pleading pursuant toCourt of Chancery Rule 12(f). Further answering, CA states that it is without sufficientinformation to enable it to respond to the allegations regarding the State's alleged state of mind,and states that the documents referred to by the State in Paragraph 68 of the Verified AmendedComplaint are the best evidence of their own content and, therefore, CA denies the State'sattempt to summarize or characterize the documents' purpose or contents and states that nofurther response to the allegations in this paragraph regarding the documents is required. Furtheranswering, CA denies any and all remaining allegations contained in Paragraph 68 of theVerified Amended Complaint.69. States that the allegations set forth in Paragraph 69 of the Verified AmendedComplaint regarding purported accounting fraud and criminal activity represent immaterial,impertinent, or scandalous matter that should be stricken from the State's pleading pursuant to- 20 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comCourt of Chancery Rule 12(f). Further answering, CA denies any and all remaining allegationscontained in Paragraph 69 of the Verified Amended Complaint.70. States that CA is without sufficient information to enable it to respond to theallegations regarding the State's knowledge of KPMG activities. Further answering, CA statesthat the documents referred to by the State in Paragraph 70 of the Verified Amended Complaintare the best evidence of their own content and, therefore, CA denies the State's attempt tosummarize or characterize the documents' purpose or contents and states that no further responseto the allegations in this paragraph regarding the documents is required. Further answering, CAdenies any and all remaining allegations contained in Paragraph 70 of the Verified AmendedComplaint.71. Denies the allegations contained in Paragraph 71 of the Verified AmendedComplaint.72. Denies the allegation contained in Paragraph 72 of the Verified AmendedComplaint regarding CA's alleged liability, and states that CA is without sufficient knowledge toenable it to respond to the remaining allegations contained in Paragraph 72 of the VerifiedAmended Complaint.73. Denies the allegations contained in Paragraph 73 of the Verified AmendedComplaint regarding CA's alleged abandoned property liability for accounts payable, payroll,accounts receivable, healthcare benefits, and acquisitions. Further answering, CA states that theremaining allegations contained in Paragraph 73 of the Verified Amended Complaint representstatements of future intent to which no response is required. To the extent a further answer isdeemed necessary, CA denies any and all remaining allegations contained in Paragraph 73 of theVerified Amended Complaint.- 21 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com74. States that CA is without sufficient information to enable it to respond to theallegations regarding the State's calculation of CA's alleged unclaimed property liability. Furtheranswering, CA denies any and all remaining allegations contained in Paragraph 74 of theVerified Amended Complaint.75. Denies the allegations contained in Paragraph 75 of the Verified AmendedComplaint.76. States that CA is without sufficient information to enable it to respond to theallegations contained in Paragraph 76 of the Verified Amended Complaint.77. States that the allegations regarding the Abandoned Property Law contained inParagraph 77 of the Verified Amended Complaint amount to conclusions of law to which noresponse is required. Further answering, CA admits only that it has offered to pay millions ofdollars to the State in connection with its alleged unclaimed property liability, states that it iswithout sufficient information to enable it to respond to the allegations regarding the State'salleged state of mind, and states that the documents referred to by the State in Paragraph 77 ofthe Verified Amended Complaint are the best evidence of their own content and, therefore, CAdenies the State's attempt to summarize or characterize the documents' purpose or contents andstates that no further response to the allegations in this paragraph regarding the documents isrequired. To the extent a further answer is deemed necessary, CA denies any and all remainingallegations contained in Paragraph 77 of the Verified Amended Complaint.78. Admits only that CA has made payments to other states in connection with CA'sunclaimed property liabilities in those jurisdictions. Further answering, CA denies theallegations contained in Paragraph 78 of the Verified Amended Complaint regarding CA'salleged escheat liability, and states that the remaining allegations contained in Paragraph 78 ofthe Verified Amended Complaint amount to conclusions of law to which no response is required.- 22 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comTo the extent a further answer is deemed necessary, CA denies any and all remaining allegationscontained in Paragraph 78 of the Verified Amended Complaint.79. States that the allegations contained in Paragraph 79 of the Verified AmendedComplaint amount to prayers for relief to which no response is necessary. To the extent a furtheranswer is deemed necessary, CA denies the allegations contained in Paragraph 79 of the VerifiedAmended Complaint.COUNT I80. CA repeats, restates and incorporates by reference herein, in response to theallegations of Paragraph 80 of the Verified Amended Complaint, its responses to Paragraphs 1through 79 of the Verified Amended Complaint, inclusive.81. States that the allegations set forth in Paragraph 81 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA states that the referenced statute speaks for itself, and deniesany and all remaining allegations contained in Paragraph 81 of the Verified Amended Complaint.82. States that the allegations set forth in Paragraph 82 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA states that the referenced statute speaks for itself, and deniesany all remaining allegations contained in Paragraph 82 of the Verified Amended Complaint.83. States that the allegations set forth in Paragraph 83 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA denies any and all allegations contained in Paragraph 83 of theVerified Amended Complaint.84. States that the allegations set forth in Paragraph 84 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent an- 23 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comanswer is deemed necessary, CA denies any and all allegations contained in Paragraph 84 of theVerified Amended Complaint.COUNT II85. CA repeats, restates and incorporates by reference herein, in response to theallegations of Paragraph 85 of the Verified Amended Complaint, its responses to Paragraphs 1through 84 of the Verified Amended Complaint, inclusive.86. States that the allegations set forth in Paragraph 86 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA states that the referenced statute speaks for itself, and deniesany and all remaining allegations contained in Paragraph 86 of the Verified Amended Complaint.87. Admits in response to the allegations set forth in Paragraph 87 of the VerifiedAmended Complaint only that CA received a letter purporting to be a notice of audit from theState dated July 17, 2008 for the period 1981 to present. Further answering, CA denies any andall remaining allegations contained in Paragraph 87 of the Verified Amended Complaint.88. Denies the allegations contained in Paragraph 88 of the Verified AmendedComplaint.89. Admits only that the State seeks an Order as set forth in Paragraph 89 of theVerified Amended Complaint but denies that the State is entitled to the relief sought.90. States that the allegations set forth in Paragraph 90 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA denies any and all allegations contained in Paragraph 90 of theVerified Amended Complaint.- 24 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comCOUNT III91. CA repeats, restates and incorporates by reference herein, in response to theallegations of Paragraph 91 of the Verified Amended Complaint, its responses to Paragraphs 1through 90 of the Verified Amended Complaint, inclusive.92. States that the allegations set forth in Paragraph 92 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA denies any and all allegations contained in Paragraph 92 of theVerified Amended Complaint.93. States that the allegations set forth in Paragraph 93 of the Verified AmendedComplaint regarding purported accounting fraud represent immaterial, impertinent, orscandalous matter that should be stricken from the State's pleading pursuant to Court ofChancery Rule 12(f). Further answering, CA states that the allegations set forth in Paragraph 93of the Verified Amended Complaint amount to conclusions of law to which no response isrequired. To the extent an answer is deemed necessary, CA denies any and all allegationscontained in Paragraph 93 of the Verified Amended Complaint.COUNT IV94. CA repeats, restates and incorporates by reference herein, in response to theallegations of Paragraph 94 of the Verified Amended Complaint, its responses to Paragraphs 1through 93 of the Verified Amended Complaint, inclusive.95. States that the allegations set forth in Paragraph 95 of the Verified AmendedComplaint amount to conclusions of law to which no response is required. To the extent ananswer is deemed necessary, CA states that the referenced statute speaks for itself, and deniesany and all remaining allegations contained in Paragraph 95 of the Verified Amended Complaint.- 25 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com96. States that the allegations set forth in Paragraph 96 of the Verified AmendedComplaint regarding purported accounting fraud represent immaterial, impertinent, orscandalous matter that should be stricken from the State's pleading pursuant to Court ofChancery Rule 12(f). Further answering, CA states that the allegations set forth in Paragraph 96of the Verified Amended Complaint amount to conclusions of law to which no response isrequired. To the extent an answer is deemed necessary, CA denies any and all allegationscontained in Paragraph 96 of the Verified Amended Complaint.97. Denies the allegations contained in Paragraph 97 of the Verified AmendedComplaint.98. Denies the allegations contained in Paragraph 98 of the Verified AmendedComplaint.- 26 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comAFFIRMATIVE DEFENSESFIRST AFFIRMATIVE DEFENSEThe Verified Amended Complaint fails to state a claim upon which relief can be grantedincluding, without limitation, the State's claim that the CA has engaged in equitable fraud and/ornegligent misrepresentation.SECOND AFFIRMATIVE DEFENSEThe State has failed to mitigate its damages, if any.THIRD AFFIRMATIVE DEFENSEThe State's unreasonable refusal to accept CA's offered payment and to ignore thedispositive self-audit was the cause of any injury, loss or damage complained of by the State.FOURTH AFFIRMATIVE DEFENSEThe State's claims are barred because the CA's conduct concerning the voluntarydisclosure agreement and program was proper, lawful, supported by good faith, and wasjustified.FIFTH AFFIRMATIVE DEFENSEThe State, by its own actions and by virtue of the VDA, has waived its right to assessinterest and penalties against CA in connection with the abandoned and unclaimed property atissue in this litigation.SIXTH AFFIRMATIVE DEFENSEThe State's claims for equitable relief are barred because the State has an adequateremedy at law.- 27 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comSEVENTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred by the State's failure to comply with the conditionsprecedent to its voluntary disclosure agreement with CA and its VDA program.EIGHTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred by the doctrines of unclean hands, estoppel, waiverand laches.NINTH AFFIRMATIVE DEFENSECA has been released from its obligations to pay the State interest and penalties relatingto claims for abandoned and unclaimed property.TENTH AFFIRMATIVE DEFENSEAttorneys' fees are not recoverable by the State by reason of the claims for relief allegedin the Verified Amended Complaint.ELEVENTH AFFIRMATIVE DEFENSEThe State, by its own actions, is estopped from assessing interest and penalties againstCA in connection with the abandoned and unclaimed property at issue in this litigation.TWELFTH AFFIRMATIVE DEFENSEThe State, by its own actions, abused its discretion in assessing interest against CA inconnection with the abandoned and unclaimed property at issue in this litigation.THIRTEENTH AFFIRMATIVE DEFENSEThe voluntary disclosure agreement between the State and CA is valid and enforceableand, as such, waives the State's ability to assess interest and penalties against CA.- 28 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comFOURTEENTH AFFIRMATIVE DEFENSEThe State, by its own actions, admits that a voluntary disclosure agreement existsbetween the State and CA and is thereby estopped from denying that said agreement should beenforced.FIFTEENTH AFFIRMATIVE DEFENSEThe State's claims in this action are barred by the State's failure to follow its ownregulations regarding its VDA Program.SIXTEENTH AFFIRMATIVE DEFENSEThe State's statutory claims for abandoned and unclaimed property are barred by theexisting and enforceable voluntary disclosure agreement between CA and the State.SEVENTEENTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred by CA's offered payment to the State pursuant tothe voluntary disclosure agreement between CA and the State.EIGHTEENTH AFFIRMATIVE DEFENSEThe State's abandoned and unclaimed property statute is unconstitutional as it does notprovide procedural due process to holders in violation of both the U.S. Constitution and theDelaware Constitution.NINETEENTH AFFIRMATIVE DEFENSEThe State, by its own actions, has waived its right to assess interest and penalties againstCA in connection with the abandoned and unclaimed property at issue in this litigation.TWENTIETH AFFIRMATIVE DEFENSEThe State, by its own actions, is estopped from claiming delay by CA with regards to thevoluntary disclosure agreement between CA and the State.- 29 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comTWENTY-FIRST AFFIRMATIVE DEFENSEThe State, by its own actions, waived any claimed delay by CA with regards to thevoluntary disclosure agreement between CA and the State.TWENTY-SECOND AFFIRMATIVE DEFENSEThe State fails to state a claim for relief to compel an audit for the period 1991 to presentby its own actions, including but not limited to its request for an award of monetary relief for thatperiod of time.TWENTY-THIRD AFFIRMATIVE DEFENSEThe State fails to state a claim for relief to compel an audit for the period 1981 to 1990 byits own actions, including but not limited to entering into an enforceable voluntary disclosureagreement with CA and/or failing to follow its own regulations regarding auditing procedures.TWENTY-FOURTH AFFIRMATIVE DEFENSEThe State's claim in this action to compel an audit for 1991 forward is barred by theState's failure to follow its own regulations regarding auditing procedures.TWENTY-FIFTH AFFIRMATIVE DEFENSEThe State's abandoned and unclaimed property statute is unconstitutional as it does notprovide equal protection to holders in violation of both the U.S. Constitution and the DelawareConstitution.TWENTY-SIXTH AFFIRMATIVE DEFENSEThe State's claims are barred because its own regulations do not require holders toproduce specific documents during the course of a self-audit.TWENTY-SEVENTH AFFIRMATIVE DEFENSEThe State's claims for equitable fraud and/or negligent misrepresentation are barred bythe specific statutory remedies provided for in the Abandoned Property Statute.- 30 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comTWENTY-EIGHTH AFFIRMATIVE DEFENSEThe State lacks standing to pursue its claims for relief.TWENTY-NINTH AFFIRMATIVE DEFENSEThe State's claims are barred as wrongful and unconstitutional taking of funds that aredue and owing to other states.THIRTIETH AFFIRMATIVE DEFENSEThe State's claims relative to abandoned property allegedly owed from 2004 to thepresent fail to state a claim as a matter of law because the Abandoned Property Statute providesfor a five-year dormancy period.THIRTY-FIRST AFFIRMATIVE DEFENSEThe State's claims relative to amounts of abandoned property allegedly owed from 1981to 1991 fail to state a claim as a matter of law because CA entered into a voluntary disclosureagreement with the State.THIRTY-SECOND AFFIRMATIVE DEFENSEThe State's prayer for damages must be offset by amounts of unclaimed property that CAhas escheated to other states.THIRTY-THIRD AFFIRMATIVE DEFENSEThe State's prayer for damages must be offset by amounts of unclaimed property that CAhas reunited with claimants.THIRTY-FOURTH AFFIRMATIVE DEFENSEThe State's prayer for damages includes improperly monies that are subject to anEmployment Retirement Income Security Act ("ERISA") plan and, therefore, preempted by 29U.S.C. Sec. 1144(a).- 31 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comTHIRTY-FIFTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because under the priority rulesas expressed in Texas v. New Jersey and Delaware v. New York, the State has no right, claim, ortitle to abandoned property where the claimant's address is unknown and the holder is notincorporated in Delaware.THIRTY-SIXTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because neither the AbandonedProperty Statute nor the common law provide the State with any right, claim, or title toabandoned property from a foreign county.THIRTY-SEVENTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because under the priority rulesas expressed in Texas v. New Jersey and Delaware v. New York, the State has no right, claim, ortitle to abandoned property that can be identified by a claimant's address as owed to anotherstate.THIRTY-EIGHTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because where a holder presentsthe State with records and books reflecting the names and addresses for claimants of abandonedproperty during relevant years, the State may not use estimations in order to calculate the amountof abandoned property that is allegedly due.THIRTY-NINTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the State may notdemand that a holder produce information beyond its books and records as a pretext to justify theuse of estimates to calculate the amount of abandoned property that is allegedly due.- 32 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comFORTIETH AFFIRMATIVE DEFENSEThe State lacks standing to claim any right, claim, or title to abandoned property that canbe identified by a claimant's address as due to another state or to a claimant located in anotherstate based upon the books and records maintained by CA.FORTY-FIRST AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the estimation methodutilized by the State to calculate the amount of abandoned property allegedly due was employedin an arbitrary and capricious manner, and fails to allocate properly the estimated property thatwould be due to other states based upon CA's books and records.FORTY-SECOND AFFIRMATIVE DEFENSEThe State's claims for relief are barred by the applicable statutes of limitations, includinglimitations applicable to owner's rights in the property dispute and the four-year statute oflimitations set forth in 6 Del. C. § 2-725.FORTY-THIRD AFFIRMATIVE DEFENSEThe State's claims for relief are barred under Court of Chancery Rule 19 by its failure tojoin one or more indispensable parties. In particular, the State's claims seek to recoverunclaimed property that CA has already escheated to other states. These other states arenecessary parties to this action because complete relief cannot be accorded in their absence,because the ability of those states to protect the unclaimed property in their possession isimpaired by their non-joinder, and because CA's escheatment of unclaimed property to thesenon-party states will subject CA to a substantial risk of incurring double, multiple or otherwiseinconsistent obligations in this litigation. Furthermore, these states are indispensable parties tothis action because a judgment entered in their absence will prejudice CA, because that prejudicecannot be avoided by the shaping of relief in this action, because a judgment rendered in their- 33 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comabsence will be inadequate, and because the State will have adequate remedies if its claims aredismissed. Accordingly, the State's claims for relief are barred because this action cannotproceed in equity and good conscience without joinder of the other states to whom CA hasescheated unclaimed property.FORTY-FOURTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred, in part, as a matter of law because the State has noright, claim, or title to amounts due to the federal government as a result of federal preemption.FORTY-FIFTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred, in part, as a matter of law because the State has noright, claim, or title to amounts due for credits owed to businesses with addresses in Illinois,Indiana, Iowa, Kansas, Maryland, Massachusetts, North Carolina, Ohio, Virginia, and Wisconsinas credits issued by a business to business are not subject to escheat in these states.FORTY-SIXTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred, in part, as a matter of law because the State has noright, claim, or title to amounts due for credits owed to businesses with whom CA has a currentrelationship with addresses in Arizona, Tennessee, and Texas as credits issued by a business tobusiness with whom CA has a current relationship are not subject to escheat in these states.FORTY-SEVENTH AFFIRMATIVE DEFENSEThe State's prayer for damages must be offset by mathematical errors contained in theState's calculation of alleged amounts owed.FORTY-EIGHTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred because the Abandoned Property Statute isunconstitutional and unenforceable to the extent that it permits the State to impair valid,- 34 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comenforceable contracts, including the right by the State to escheat property to which the owner nolonger has a legal right or interest pursuant to the relevant contract with the holder.FORTY-NINTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because neither the AbandonedProperty Statute nor the common law provide the State with any right, claim, or title toabandoned property owed to a foreign citizen.FIFTIETH AFFIRMATIVE DEFENSEThe State's claims for relief are barred by the doctrine of accord and satisfaction.FIFTY-FIRST AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the State's defined lookback period to 1981 when auditing and/or demanding amounts allegedly owed by holders isarbitrary and capricious.FIFTY-SECOND AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the estimation methodutilized by the State to calculate the amount of abandoned property allegedly due utilizesarbitrary "growth factors" that have no basis in fact or law.FIFTY-THIRD AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the estimation methodutilized by the State to calculate the amount of abandoned property allegedly due utilizesarbitrary extrapolation techniques that have no basis in law or fact.FIFTY-FOURTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the estimation methodutilized by the State to calculate the amount of abandoned property allegedly due utilizesarbitrary annualization techniques that have no basis in law or fact.- 35 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comFIFTY-FIFTH AFFIRMATIVE DEFENSEThe State's abandoned and unclaimed property statute is unconstitutional to the extent itpermits the State to impair valid contracts by, among other ways, unilaterally invalidating theapplicability of Delaware's and other states' statutes of limitations.FIFTY-SIXTH AFFIRMATIVE DEFENSEThe State's claims for relief are barred as a matter of law because the State's demandincludes amounts for which the purported owner of the abandoned and/or unclaimed propertyonly has a contingent or unperfected right and, therefore, the State has not established that thepurported owner's interest is valid and enforceable in order to escheat the amounts sought.FIFTY-SEVENTH AFFIRMATIVE DEFENSECA intends to add and rely upon such other and further defenses as may become apparentduring the discovery of this action, and reserves its right to amend this answer to assert suchdefenses.WHEREFORE, Defendants CA, Inc. and Platinum Technology International, Inc.respectfully pray:a. That judgment enter on its behalf on all counts of the Verified AmendedComplaint;b. That it be awarded its costs, including attorneys' fees, incurred in connection withthe defense in this action; andc. That it be awarded such other and further relief as this Court deems just andproper.AMENDED COUNTERCLAIMThe Defendants/Plaintiffs-in-counterclaim, CA, Inc. ("CA") and Platinum TechnologyInternational, Inc. ("Platinum") (collectively CA and Platinum shall hereinafter be referred to as- 36 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com"CA") for their claims against the Plaintiffs/Defendants-in-counterclaim Gary M. Pfeiffer, in hiscapacity as the Delaware Secretary of Finance and the Delaware State Escheator, and theDepartment of Finance, Division of Revenue for the State of Delaware (collectively the "State"),bring this counterclaim and allege as follows:1. CA brings this action to challenge: (a) the State's practice of estimating amountsallegedly owed for unclaimed and abandoned property liability, (b) the State's practice ofescheating unclaimed and abandoned property back to 1981, (c) the State's practice of escheatingunclaimed and abandoned property owed to other states, (d) the State's practice of escheatingunclaimed and abandoned property already reunited with rightful owners, (e) the State's practiceof escheating unclaimed and abandoned property owed to residents of foreign countries and/or toforeign countries themselves, (f) the practice of escheating unclaimed and abandoned propertyowed to the federal government, (g) the State's practice of escheating unclaimed and abandonedproperty that is governed by ERISA, (h) the State's practice of escheating unclaimed andabandoned property where that claim is preempted by federal law, and (i) the State's improperand unsupportable estimation techniques and methodology employed in calculating abandonedand unclaimed property liability.2. In addition, CA brings this action to: (a) challenge the constitutionality of certainstatutory sections of 12 Del. C. § 1101, et seq. that permit the State to deprive CA of propertywithout due process of law, including the failure to provide holders a full and fair opportunity tobe heard and to appeal, and (b) challenge the constitutionality of 12 Del. C. § 1101, et seq. to theextent it permits the State to impair valid contracts by, among other ways, unilaterallyinvalidating the applicability of other states’ statutes of limitations.3. In addition, CA brings this action to: (a) specifically enforce the terms of anagreement to which it entered with the State relative to the reporting of abandoned and- 37 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comunclaimed property, (b) challenge the assessment of interest against it by the State relative toamounts allegedly owed for abandoned and unclaimed property, and (c) obtain a declaration thatCA properly reported its alleged abandoned property liability based upon its books and records.THE PARTIES4. CA is a corporation organized under the laws of the State of Delaware with itsprincipal place of business in Islandia, NY.5. Platinum is corporation organized under the laws of the State of Delaware with itsprincipal place of business in Islandia, NY.6. Gary M. Pfeiffer is the Delaware Secretary of Finance and acts as the DelawareState Escheator, with a mailing address of 820 North French Street, Wilmington, Delaware.7. The Delaware Department of Finance, Division of Revenue, is located in NewCastle County at the Carvel State Office Building, 820 North French Street, Wilmington,Delaware.JURISDICTION8. The Court has jurisdiction over certain claims of CA pursuant to 12 Del. C.§ 1156(b).9. The Court has jurisdiction in equity over CA's equitable claims pursuant to 10Del. C. § 341, and it has jurisdiction over CA's related legal claims pursuant to the equity cleanupdoctrine.STATEMENT OF FACTSDelaware’s Abandoned or Unclaimed Property Statute10. Pursuant to Delaware’s Abandoned or Unclaimed Property Statute, 12 Del. C.§§ 1130-1176, 1197-1212 (the “Statute”), the State monitors and regulates abandoned and- 38 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comunclaimed property allegedly owed to the State through its Department of Finance, Division ofRevenue and the State Escheator.11. The State monitors the reporting of unclaimed and abandoned property allegedlydue to the State by "Holders." A "Holder" is defined by the Statute at 12 Del. C. § 1197(7) as“any person having possession, custody, or control of the property of another person.”12. Under the Statute, “Owners” of lost and abandoned property are defined as thosepersons “having the legal or equitable title” to the abandoned property.13. Under the Statute, the State may escheat “all property . . . the title of which hasfailed and the power of alienation suspended by reason of . . . the same having been abandonedby the owner thereof.”14. Under the Statute, abandonment occurs if the Owner has “ceased, failed orneglected to exercise dominion or control over property” for five continuous years.15. The purpose of the Statute is to reunite “owners,” as defined by the Statute, withlost or forgotten property held by business entities. Through state escheat statutes such as 12Del. C. §§ 1130 et seq., business entities report abandoned and unclaimed property where thebeneficial owners cannot be identified or located. The State then attempts to reunite the propertywith its rightful owners. The intention behind these escheat statutes is, first and foremost, tolocate owners of funds, and not to generate revenue for the states. By rule of law, monies areonly escheated for the benefit of the general public if the rightful owner cannot be identified orlocated.16. Nevertheless, as reflected on the State's website and discussed more fully herein,the State touts its ability to retain for itself funds that might otherwise be directed to their trueOwners. The State's Finance Department, Division of Revenue website links the public to anunclaimed property database hosted by the News Journal called "Delaware Online," which- 39 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comconfirms the State's practice of using abandoned and unclaimed property law to generate moneyfor itself rather than reunite with owners, stating that "Delaware . . . took in $370 million[abandoned property liability] in 2007, and gave back just $4 million."Delaware’s Voluntary Disclosure Program17. In connection with the reporting of unclaimed and abandoned property, the Statehas created a "voluntary disclosure agreement" program ("VDA"), which is designed toencourage voluntary compliance by Holders with the State's abandoned and unclaimed propertylaw.18. To induce Holders to use the voluntary program, the State makes a number ofpromises to Holders that are willing to comply voluntarily with the State. Specifically, the Statehas advised the public that the VDA program functions as an amnesty agreement betweenHolders and the State, whereby Holders agree to calculate and pay over abandoned andunclaimed property to the State and, in exchange, the State agrees to release Holders from allclaims, demands, interest, penalties or actions related to all property reported under the terms ofthe VDA. In addition, the State agrees to limit significantly the look back period for which aHolder needs to report alleged abandoned and unclaimed property liability.19. The VDA program involves two written forms that are prepared by the State andto be executed by both the Holder and the State to memorialize their mutual promises. The firstwritten form is known as a Form AP DE-1, and is entitled "Disclosure and Notice of Intent toVoluntarily Comply with Abandoned Property Law" ("VDA Notice of Intent"). The secondwritten form is known as a Form AP DE-2, and is entitled "Voluntary Self DisclosureAgreement" ("VDA Agreement"). Together, these standard forms recite and memorialize theterms of the parties' agreement and mutual obligations with respect to the voluntary disclosureagreement program, or VDA.- 40 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comCA's Participation in the Voluntary Disclosure Agreement Program20. In 2004, voluntarily, without prompting, and under no threat of audit, CAcontacted the State regarding its desire to participate in the State's VDA program.21. When CA decided to come forward to report its alleged abandoned and unclaimedproperty liability, it did so because it believed that its actions were consistent with the supposedintent of the State's VDA program, namely, to allow amnesty to those Holders to report amountsdue, especially Holders like CA who were not withholding amounts intentionally or willfully.22. To memorialize the agreement of CA and the State relative to CA’s participationin the program, in or around November 2004, the State and CA executed a standard VDANotice of Intent that had been prepared by the State. A true and accurate copy of the VDANotice of Intent is attached hereto as Exhibit A.23. Pursuant to the terms of the VDA Notice of Intent, CA was required to: (1)complete a self-audit of its books and records for a certain amount of years and to calculate allabandoned or unclaimed property due for those years; (2) file certain abandoned property"reports" with the State; and (3) pay over all abandoned or unclaimed property to the State inaccordance with its self-audit.24. CA completed each of the first two obligations in full, pursuant to the terms of theVDA Notice of Intent, and proffered payment repeatedly in order to fulfill the third obligation.As a result of the State’s bad faith demand for more money than the amount to which it isentitled, the State has refused to accept that proffer.25. In exchange for CA's performance as described above, the State was obligated bythe VDA Notice of Intent to waive any interest or penalties that might otherwise have been owedby CA in connection with its payment of abandoned and unclaimed property. Additionally, the- 41 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comState was obligated to accept payments for the reporting period of 1991 to 2001, and not seekamounts allegedly due prior to 1991.26. The VDA Notice of Intent further obligated the State to memorialize its promisesto CA by executing a standard VDA Agreement.27. In particular, pursuant to the standard VDA Agreement contemplated by the VDANotice of Intent, the State agreed expressly to release CA "from all claims, demands, interest,penalties, actions or causes of actions" that the State may have for the reporting period of 1991 to2001. As well, the State agreed to release CA "from any further reporting requirements of theDelaware Abandoned Property Law for the abandoned or unclaimed property identified, paidand delivered pursuant to this agreement, for [1991 to 2001] . . ., and for all preceding reportingyears."28. Further, the State agreed to "maintain the confidentiality of informationvoluntarily disclosed [by CA] and disclose only such information as provided in Section 1141,Chapter 11 of Title 12 of Delaware Code, or as otherwise required by law."29. Based upon the State's promulgated regulations regarding the VDA program, CAunderstood that, if it acted in good faith, the State would seek only those amounts of moneyproperly owed by CA to the State under the relevant escheatment laws. As CA has come tolearn, however, rather than operating in good faith to ascertain the amount of money actuallyowed, the State instead engaged in a bad faith and wholly inappropriate campaign of fabricatinginflated demands for the purpose of coercing CA to pay more than it rightfully owes the State.30. The State has failed to meet its obligations under the VDA, despite CA’s havingmet all of its obligations. Instead, and as set forth more fully herein, the State consistently hasasked CA to provide volumes of information that the State had no intention of reviewing, and- 42 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.commade demands in an arbitrary and capricious manner and without basis in law or fact, in order tocoerce CA to escheat more money to the State than the State knew was owed.CA's Self-Audit31. In order to help fulfill its obligations under the VDA, and to ensure that it wastaking all necessary and proper steps, CA retained independent consultants, originally with Ernst& Young LLP ("E&Y") and later Abandoned Property Services LLC (collectively "APS"), toconduct CA's self-audit and calculate the amount of abandoned and unclaimed property owed byCA to the State under the VDA.32. Despite knowing that the expense would be considerable, CA retained E&Y andlater APS to review and analyze CA's voluminous books and records for the relevant period inorder to report properly the amount of alleged abandoned and unclaimed property owed for therelevant period. CA had no obligation to do anything other than self-report its potentialobligations on its own. CA felt, however, that utilizing an experienced consultant would benefitboth the State and CA by providing for the most efficient resolution to the VDA.33. In addition, CA itself expended considerable time, effort and manpower inconnection with its self-audit. Specifically, a number of CA's finance department employeesdevoted significant resources to assist APS in calculating CA's alleged abandoned and unclaimedproperty liability, and temporary employees were hired in finance to expedite the review.34. On or about May 2005, given the size and extent of the task, CA requestedadditional time from the State to complete its self-audit, which the State readily granted.Although the VDA forms contemplate that the process is to be completed in six months, it rarelyif ever is the case that VDA processes are completed in that period of time. In normal instances,the VDA take much longer, often many years, before the process is complete.- 43 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com35. On or about July 28, 2005, CA made its initial VDA presentation to the State incompliance with the VDA.36. The State purported to be dissatisfied with CA’s calculations and demanded thatCA increase its calculated liability.37. From 2005 through July 2007, the State further extended the time limit for CA'sperformance under the VDA by requesting additional information and/or materials from CA inconnection with CA's VDA. CA provided the requested materials to the State.38. During the two-year period where time extensions were granted by the State toCA, CA repeatedly and in good faith kept the State apprised of its progress in locating theinformation and materials requested by the State. Because of the years involved and theextensive records requested, it took CA considerable time to locate the records sought by theState.CA's Updated Submission and Offer of Payment39. In or about August 2007, CA provided the State with an updated calculation ofthe abandoned and unclaimed property owed to the State by CA in compliance with the VDA(the "Updated Submission").40. The Updated Submission identified the amount of abandoned and unclaimedproperty potentially owed by CA to the State pursuant to the VDA as $2,323,880.08. Thisamount contained within it many compromises that CA was prepared to make in the State’sfavor in order to come to a resolution with the State.41. Upon receipt of CA's Updated Submission, the State purported to remaindissatisfied with CA's fulfillment of its obligations under the VDA program. Once again, despitethe fact that CA had provided detailed information from its books and records to support the- 44 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comUpdated Submission, the State demanded even more information concerning CA's accountsreceivable and acquisitions.The State's Efforts to Take Money Owed to Other States42. In preparing reports and gathering information in connection with the VDA, CAaccumulated books and records regarding obligations owed to other states in connection withabandoned and unclaimed property.43. The priority rules of escheatment are clearly set forth by the United StatesSupreme Court in Texas v. New Jersey, 379 U.S. 674 (1965) and Delaware v. New York, 507U.S. 490 (1993). Pursuant to those cases, to the extent Owners of abandoned property cannot belocated, a Holder first is obligated to escheat abandoned and unclaimed property to the state ofthe Owner’s last known address, as shown by the Holder’s books and records. Only if theHolder’s books and records do not disclose an Owner’s address does the Holder escheat theabandoned and unclaimed property to its state of incorporation, which in this case, for CA, isDelaware.44. This Court follows the same principle, as stated in Nellius v. Tampax, Inc., 394A.2d 233 (Ct. Chancery 1978), where the Court ruled that the State Escheator must give priorityto the state of the last known address of the creditor "as shown by the debtor's books andrecords," and that the State may not demand monies by "resort[ing] to evidence beyond thedebtor's books and records."45. Yet, throughout the VDA process, the State has, in an arbitrary and capriciousmanner and without basis in fact or law, demanded that these clear rules of priority be ignored.46. Among other things, without any authority under the law, on April 18, 2006, theState, through Mark Udinski, demanded that CA "not file prior year liabilities with the otherstates until [CA] has resolved [its] liability with [the State]." The State did not explain how or- 45 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comwhy CA should withhold funds that the State knew belonged to other states, which would havebeen in direct contravention of Supreme Court case law and the law of this Court.47. The State's demand left CA in the untenable position of determining whether itshould ignore the State's demand, providing the State a basis to claim that CA was notcooperating during the VDA process, or accede to the State's demand and ignore its obligationsunder the law to other states, thus subjecting CA to the potential of significant interest andpenalties in forty-nine other states.48. CA properly ignored the State’s wholly inappropriate demand and, based upon thedetailed books and records that CA maintained, it escheated approximately $8,372,749 to statesother than Delaware for the reporting period ending in 2008.49. During the VDA process, the State’s monetary demands included propertyproperly escheatable to states other than Delaware.50. The State demanded specific property be paid to the State notwithstanding thatCA had provided the State with the names of the Owners entitled to said property, along with theOwners' complete addresses, and said addresses were not Delaware addresses.51. The State also performed estimates of the amount of property that could beescheatable, and demanded that 100% of the estimate be paid to the State, notwithstanding thatthe documents used by the State for purposes of estimation do not support the State's contentionthat 100% of the escheatable property would have been due to the State for the periods for whichestimation was performed.52. Consistent with its actions under the VDA, in this lawsuit, the State now asks thisCourt to compel CA to pay money owed by CA to other states, putting CA at risk of having topay monies twice or, alternatively, depriving other states of monies to which they are legallyentitled without giving notice or opportunity to be heard to those states.- 46 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comThe State's Improper Demand for Documents and Use of Estimation53. During the VDA process, it became apparent to CA that the State’s goal was nolonger to act as its citizens’ custodian to reunite property owners with their property, but insteadthe State has used the Statute to attempt to maximize state revenue through baseless andunsupportable demands.54. This goal of maximizing revenue, rather than determining the proper amountactually owed by CA, is reflected in the State's ever-changing demands for information from CAduring the VDA process, all for the purpose of creating a pretext to estimate funds allegedlyowed to the State, rather than determining the actual funds owed to the State pursuant to CA’sbooks and records.55. As previously described, under the Supreme Court’s priority rules, where acompany’s records indicate the last known address of the Owner of abandoned property, thatproperty escheats first to the state of that address.56. In the many instances where CA's books and records show the last known addressfor the property now in dispute, only a small percentage of those addresses are located inDelaware.57. Since CA’s clear records would result in an “unacceptable” payment to the State,however, the State has simply refused, without any basis in fact or law and in an arbitrary andcapricious manner, to accept CA's books and records as proof of CA's abandoned propertyliability. Instead, regardless of what information CA has provided to the State, the State hasdemanded more, raising the bar to the point that it is nearly, if not entirely, impossible for CA tosatisfy the State's demands. Ironically, the State deems reliable any information that CAprovides which indicates that an estimation is warranted.- 47 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com58. Indeed, the State has conceded that it would never be satisfied with CA’sdocuments, no matter what was produced. In fact, while the State now complains that CA didnot provide enough documents, its internal documents, prepared by the State's Senior TaxAuditor, Camilla Ridgeway, to the State's Audit Manager, Mark Udinski, in March 2008, revealthat the State was, in actuality, "not interested in receiving/reviewing" additional documentsprovided by CA, even as the State demanded them. Camilla Ridgeway reiterated the State'sposition on this point during telephone conferences with representatives of CA.59. Nevertheless, even though CA had no obligation to do so and even though itbecame increasingly apparent that nothing would satisfy the State, CA provided the State withadditional information throughout the VDA process.60. The VDA process appears to be designed for Holders to fail, such that the Staterepeatedly demands increasingly more aged records, and when a Holder cannot produce each andevery aged record for periods in excess of ten or twenty years – an unreasonable standard for anycorporation to maintain – the State decides arbitrarily and capriciously that the records are"incomplete" and "unreliable," and that “estimation” techniques must be used to calculateliability – techniques that, not surprisingly, substantially increase the amount of money allegedlydue to the State.61. The State enforces its VDA program in a way that does not provide a Holder withpredictability, consistency, fairness or finality in regard to the VDA process or its audits,regardless of the legitimacy of the State's requests and demands.62. Ultimately, the State forces Holders like CA into an untenable situation. Eitherthe Holder agrees to estimate, despite the accuracy of its books and records, or it faces theassessment of interest, penalties, audit and/or litigation. The State's goal of maximizing itsrevenue from the abandoned property processes appears to have eclipsed the State's obligation to- 48 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comfulfill the purpose of escheat law, which is to reunite owners with their lost or unclaimedproperty. That purpose derives from the custodial nature of escheat laws, which are not intendedto act as revenue generators, like tax statutes.63. In addition, the State has modified the VDA program from a voluntary self-auditby Holders into a full-fledged audit of a Holder's books and records, with the intention tounreliably estimate liability even where the Holder has produced names and addressesaccounting for that unclaimed and abandoned property.64. For instance, CA has provided the State with its books and records for certaincategories of properties, and those records contain complete names and addresses for all relevantyears. Specifically, with respect to amounts allegedly owed for the categories of accountsreceivable "direct" and accounts receivable "indirect," CA provided the State with detailedrecords evidencing clearly the names and addresses for the vast majority of credits on its booksfrom 1991 to 2001.65. Despite this uncontroverted evidence, the State has chosen to ignore the clearbooks and records maintained by CA that set forth the credits owed and the owners of thosecredits, including their last known addresses, by demanding higher amounts from CA.66. Further, the State has taken the inconsistent position of saying, on the one hand,that the books and records of CA are too unreliable and incomplete to allow CA to determine itsescheat liability but, at the same, the State relies expressly upon those very books and records inestimating CA's alleged escheat liability on its own.67. The State's efforts to disregard CA's detailed books and records are in directviolation of the law as set forth by the United States Supreme Court in Texas v. New Jersey andDelaware v. New York, and by the Court of Chancery in Nellius v. Tampax, Incorporated.- 49 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comThe State's Bad Faith Demand68. On or about January 15, 2008, the State purported to conclude its review of CA'sUpdated Submission. As a result of its "review," the State demanded that CA pay $7,628,106.11to the State. A true and accurate copy of an email from Camilla M. Ridgeway to CA, datedJanuary 15, 2008, with attached VDA Agreement and revised Summary prepared by the State, isattached hereto as Exhibit B.69. In its January 15, 2008 correspondence, the State acknowledged the existence ofthe VDA with CA. The State did not attempt to nullify the VDA or attempt to initiate its ownaudit of CA's books and records before demanding that CA pay $7,628,106.11 to the State.70. The State's demand, which utilizes unsupportable estimation techniques, wasarbitrary and capricious and not supported by fact or law. In fact, based upon documentsobtained during discovery, wherein the State's Audit Manger Mark Udinski was provided awritten estimate of CA's alleged liability from the State's finance department, the State's demandfor $7,628,106.11 represents an almost fifty percent (50%) increase in what the State calculatedthat CA owed only one month earlier. Yet, the State received no supplemental documentationfrom CA or APS during that intervening month that would have caused an alleged increasedliability of over $3.6 million.71. Certainly, the documents provided by CA to the State pursuant to the VDA didnot support the State's calculation of the amount owed to it by CA, an amount that exceededCA's calculation by approximately $5,000,000.00.The State's Improper Methodology72. Not only is the State's improper use of estimation in direct violation of SupremeCourt and Court of Chancery precedent, the State's estimation methodology also is arbitrary andcapricious, and is not supportable in fact or law.- 50 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com73. In addition to basic calculation errors consistently resulting in a benefit to theState, the State's methodology also improperly includes demands for abandoned and unclaimedproperty that the State has no right to claim.74. Among the many problems with the methodology used by the State in calculatinghow much property is to be escheated to the State by CA are the following:a. Property owed to other states. Documents provided by the Statedemonstrate that the State's calculation of CA's alleged abandoned andunclaimed property liability includes a specific demand for property that isproperly escheatable to other states. Those demands ignore wellestablishedprecedent and, instead, would escheat to the State abandonedand unclaimed property that has previously been repaid to other states.b. Property with addresses in foreign countries. Documents provided by theState demonstrate that the State's calculation of CA's alleged abandonedand unclaimed property liability includes a specific demand for propertythat is owed to owners with addresses in foreign countries and/or isproperly escheatable to foreign countries. The State's own abandoned andunclaimed property statute does not allow for the collection of propertyowed to foreign citizens, and federal law prohibits a state's reach outsideof its borders without express authorization.c. Business to business credits. Documents produced by the Statedemonstrate that the State's calculation of CA's alleged abandoned andunclaimed property liability includes a specific demand for credits owed tobusinesses with addresses in Illinois, Indiana, Iowa, Kansas, Maryland,Massachusetts, North Carolina, Ohio, Virginia, and Wisconsin. The State- 51 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comdemands that CA ignore well-established precedent in these states thatcredits issued by a business to a business are not subject to escheatment.d. Credits owed to businesses with current relationships. Documentsproduced by the State demonstrate that the State's calculation of CA'salleged abandoned property liability includes a specific demand for creditsowed to businesses with which CA has a current relationship, withaddresses in Arizona, Tennessee and Texas. The State demands that CAignore well-established precedent in these states that credits issued by abusiness to a business with which CA has a current relationship are notsubject to escheat.e. ERISA. Documents produced by the State demonstrate that the State'scalculation of CA's alleged abandoned and unclaimed property liabilityincludes a specific demand for property that relates to employee benefitsplans subject to 29 U.S.C. Sec. 1144(a) (2008) (The Employee RetirementIncome Security Act "ERISA"). Well-established precedent regarding thepreemption of the State's abandoned and unclaimed property statute byfederal law with respect to employee benefit plan funds, however,establishes that the State is not entitled to ERISA-related property.f. Federal funds. The State improperly demands that CA pay to the Stateamounts that are due to the federal government, despite federalpreemption.g. Subsidiaries. The State demands that CA ignore well-establishedprecedent requiring CA to escheat alleged abandoned and unclaimed- 52 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comproperty of a subsidiary to that subsidiary’s state of incorporation whenthe Owner is not identifiable by name and address.h. Crediting other payments. The State's estimation methodology fails tocredit CA the amounts CA reunited with rightful owners from 1991 to2001, and amounts escheated to the other forty-nine (49) states from 1991to 2001.i. Growth assumptions. The State's estimation methodology utilizesarbitrary "growth factors" created by the State's employees to inflate theamount of the demand, without providing any rationale for departing fromthe actual records provided, and without providing the bases supportingthe growth factors.j. Extrapolation techniques. The State's estimation methodology is notobjective, in that the State arbitrarily chooses the approach to eachindividual estimate it performs, rather than utilizing a clear, consistentmethodology which is likely to demonstrate a reliable estimation ofpotential liability. Although the State has articulated its preferredmethodology for estimating, the State departed from this purportedmethod whenever it produces a lower liability than some other method.k. Improper annualization techniques. The State's estimation methodologyinaccurately reflects CA's actual liabilities in all instances where the State"annualizes" the amounts due as escheatable property, rather thanaccepting the reality that escheatable items need not arise in each month ofeach year.- 53 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com75. The State's demands for property to which it is not entitled under the law isconsistent with the State's practice of utilizing its Statute as a source of generating substantialrevenue for the State in an arbitrary and capricious manner and without any basis in law or fact.76. The State's demand for abandoned and unclaimed property to which it is notentitled constitutes a taking from CA.77. Based in part upon the fact that the State knows that many of its demands areimproper under well-established legal principles, the State is acting arbitrarily and capriciouslyin seeking to maximize state revenue at the expense of the corporations that chose to organize inDelaware.CA's Response to the State's Improper Demands78. CA requested additional time to assess the State's January 15 th demand andanalyze the discrepancy between the State's demand and CA's calculation of the amount owed tothe State, which was based on CA's self-audit and records.79. On or about February 12, 2008, CA notified the State that it disputed the amountof abandoned property identified by the State as being owed to it, and provided materials to theState in support of its calculation of the amount owed to the State. A true and accurate copy of aletter from CA to Camilla M. Ridgeway, dated February 12, 2008, is attached hereto as ExhibitC.80. CA agreed to pay some of the increased amount reflected in the State's demand ina showing of good faith and in an effort to compromise and resolve its differences with the State.CA also specifically addressed the inaccuracies contained in the State's calculation in manycategories of property, and provided additional information to the State in order to clarify thoseissues for the State.- 54 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com81. CA also expressly reserved its rights regarding payment of certain fundsdemanded by the State, but which CA questioned the State's ability to claim.82. CA also disputed the State's use of estimates in the calculation of potentialliability owed to the State for distinct periods of time for which CA had detailed and accuraterecords. Specifically, CA told the State that it had provided the State with detailed and accuraterecords identifying the names and addresses of Owners allegedly owed credits at issue forperiods in which the State sought to use estimates to calculate the amount owed to it by CA.83. As a result of those detailed records, CA informed the State that the amount itowed the State was significantly smaller than that being claimed by the State, and that theremaining amounts had been paid to the individuals identified in the records and/or escheated tothe states of their last known address pursuant to the priority rules articulated in Texas v. NewJersey, 379 U.S. 674 (1965), Delaware v. New York, 507 U.S. 490 (1993), and Nellius v.Tampax, Inc., 394 A.2d 233 (Ct. Chancery 1978).84. CA and the State engaged in discussions spanning several months concerning thecalculation of the amount owed by CA to the State pursuant to the VDA.85. On or about April 24, 2008, in an effort to further demonstrate the reliability andcompleteness of the books and records it presented to the State, and to satisfy the State'sincreasingly onerous demands, CA presented the State with the results of testing it conducted ofits books and records. By use of random testing, CA demonstrated to the State the reliability ofthose records, showing that aged credits from earlier years either remained on the records reliedupon by CA, or the credits were resolved with the relevant customer.86. Without any basis, the State ignored the testing results and continued to questionthe validity of the records relied upon by CA, notwithstanding that CA was so confident the- 55 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comrecords were reliable, CA repaid millions of dollars to its customers and other states in relianceupon these records.87. Once again, in an attempt to continue to satisfy the State and in an effort toresolve the VDA, CA offered to allow the State to pull its own testing from aging reports inorder to satisfy themselves as to the completeness of the master files. The State refused theoffer, even though by doing so it could have resolved the dispute.88. Instead, the State confirmed that it was "not interested in receiving/reviewing"further records that CA was willing to provide which would demonstrate the reliability of CA'sprevious submissions, including the names and addresses of the rightful owners of the property.State's Unlawful Demand and Imposition of Interest89. Without justification and inconsistent with the terms of the VDA, on or aboutJune 3, 2008, the State sent CA a statement of findings and request for payment in the amount of$8,218,410.46 (the "June 2008 Demand"). A true and accurate copy of a letter from Camilla M.Ridgeway to CA, dated June 3, 2008, is attached hereto as Exhibit D.90. Only six months after it estimated that CA owed nearly fifty percent less, andafter CA provided the State with further proof of the validity of its books and records, the Stateagain changed its position on the amount CA allegedly owed, claiming it was $6,794,530.20 inprincipal plus $1,423,880.26 in interest.91. In its June 3, 2008 correspondence, the State acknowledged the existence of theVDA with CA.92. The State calculated its June 2008 Demand based on its review of the compliancereview report provided to the State by APS on CA's behalf. Once again, the State took theinconsistent position of accepting CA's books and records as valid in order to estimate liability,but incomplete and insufficient for CA's calculation of alleged liability.- 56 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com93. The State did not nullify the VDA or attempt to initiate an audit of CA's booksand records beyond the review already conducted by the States' three employee auditors beforedemanding that CA pay $8,218,410.46 to the State in the June 2008 Demand.94. The State's June 2008 Demand included over one million dollars in interest incontravention of its agreement with CA to waive the payment of such interest.95. In its June 2008 Demand, the State did not cite to any provisions of the VDAallowing the State to disregard the amount identified by CA as being owed to it or the basis fordisregarding said amount.96. In its June 2008 Demand, the State did not identify any failure by CA to fulfill itsobligations under the VDA.97. In its June 2008 Demand, the State did not state that CA had delayed the VDA oracted in bad faith.98. The June 2008 Demand provided no explanation for the State's assessment ofinterest on CA and did not request that CA provide the State with any additional information inconnection with the VDA.99. The June 2008 Demand did not identify any outstanding information, previouslyrequested by the State in connection with CA's VDA, that had not been provided to the State byCA.Further Offer of Amounts Due100. On or about June 26, 2008, CA outlined its objections to the amount demanded bythe State, including its objection to the inclusion of interest by the State in its calculation and theuse of estimates to calculate the amount owed the State for periods for which CA had detailedrecords ("June 26, 2008 Proposal"). A true and accurate copy of a letter from CA to MarkUdinski, dated June 26, 2008, is attached hereto as Exhibit E.- 57 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com101. CA offered to pay the State $3,585,978.00 in resolution of all unclaimed propertyliabilities potentially owed to the State, said amount including monies demanded by the Statethat were not owed to it, but which CA agreed to pay to the State in the interest of expedientlyresolving all open issues relating to CA's VDA.102. Upon its offer of payment to the State in the amount of $3,585,978.00, andnumerous times previously, CA had fully performed its contractual obligations under the VDA.103. Despite CA's full performance under the VDA, the State failed and refused tofulfill its corresponding obligations under the VDA. In particular, the State did not execute theVDA Agreement as the parties had agreed, and did not waive the assessment of interest andpenalties as the parties had agreed. In addition, the State continued to demand more than theamount it knew it was entitled to receive.104. The State did not respond to CA's June 26, 2008 Proposal and, to date, hasrefused to accept CA's offer of payment in the amount of $3,585,978.00.Retaliatory Audit105. Instead of accepting CA's offered payment and executing the VDA Agreement,on or about July 17, 2008, the State sent CA a notice of audit ("Notice of Audit"). A true andaccurate copy of a letter from Mark Udinski to Nancy E. Cooper, dated July 17, 2008, is attachedhereto as Exhibit F.106. The Notice of Audit stated that the State intended to audit CA for the periods1981 through the present, a period greater than that covered by CA's VDA.107. The Notice of Audit did not void or even mention CA's VDA.108. Prior to July 17, 2008, the State repeatedly admitted in correspondence to CA thatCA's VDA was in full force and effect.- 58 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com109. Prior to July 17, 2008, the State did not advise CA that CA was not in compliancewith the VDA.110. Prior to July 17, 2008, the State did not advise CA that the VDA had expired orwas void.111. Upon information and belief, the State initiated the audit as retaliation for CA'sunwillingness to pay more money to the State than it legally owed.112. The very threat of an audit, with the inherent additional drain on CA's time,resources and funds, was designed to intimidate CA into agreeing to pay the State a highernumber than the State was owed.113. The State's use of its audit powers to intimidate CA is contrary to its ownregulations and repugnant to public policy.114. Pursuant to the State's own regulations, the State could have accepted CA's offerof over $3,500,000, and conducted a complete audit at any time in the ensuing eighteen months.115. If such an audit disclosed that CA owed any additional funds to the State, CAwould have been required to pay those amounts, and would have been subject to interest,penalties and the nullification of its VDA.116. The State chose not to avail itself of this authorized avenue of relief in favor of itsattempt to intimidate CA with the hope of extracting a larger payment without the need for thesecond audit.117. In addition to violating its own VDA and regulations, the retaliatory audit is not inthe best interests of the State in that the second audit must find at least the amount originallyoffered by CA, plus additional amounts at least equal to the auditors' fees and the time value ofmoney, or else the State will actually have lost revenue.- 59 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comInducement to Enter into VDA/Harm to CA118. CA relied on the representations made by the State in connection with the VDA,including, but not limited to, a limited review of its records, the State's promise to waive interestand penalties, and the State's promise to execute the VDA Agreement.119. CA entered into the VDA with the State so that it would have the benefits of theVDA, including, but not limited to, waiver of interest and penalties, a look-back period limited toliabilities created from 1991 to 2001 and no time prior, limited auditing of CA's books andrecords by the State, and avoidance of an independent audit conducted by the State in accordancewith its usual practice with regard to Holders who do not participate in the VDA program.120. CA's reliance on the State's promises in the VDA included expendingconsiderable time, effort, funds and manpower in connection with its self-audit and respondingto the State's requests for additional information.121. CA entered into the VDA with the understanding that the State would complywith the terms thereof, including the waiver of interest and penalties, and execution of the VDAAgreement after CA performed its obligations under the VDA.122. Had CA understood that the State did not intend to comply with the terms of theVDA, CA would not have entered into the VDA, and instead would have permitted the State toconduct its own independent audit in accordance with its usual practice with regard to Holderswho do not participate in the VDA program.123. At all times, CA acted in good faith and in compliance with the terms of theVDA.124. Despite CA's good faith compliance with the VDA, the State did not accept thepayment offered by CA pursuant to the VDA and instead demanded a larger, unsupportableamount and wrongfully assessed interest against CA.- 60 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com125. Despite CA's good faith compliance with the terms of the VDA, the State did notexecute a VDA Agreement.126. Despite the terms of the VDA and CA's good faith in painstakingly making itsrecords available to the State and explaining the records to the State, the State is attempting toconduct a retaliatory "second audit" of CA, and is transforming the VDA from a self-audit to anactual audit of CA through its repeated requests for information.127. The State's proposed "second audit" purports to be for a period of time in excessof what the VDA allows.128. This proposed "second audit" stands to further harm CA, including but not limitedto the loss of additional time and effort by its employees in responding to said audit and exposureto ten years of additional claims by the State.129. As a result, CA incurred and will continue to incur harm as a result of the State'srecent and proposed actions.The State's Improper Conduct Under the Unclaimed and Abandoned Property Statute HasBeen Confirmed by the State and Third Party Organizations130. The primary purpose of the Statute is to reunite owners with their lost or forgottenproperty. Nevertheless, the State has improperly utilized the Statute and its VDA programprimarily to raise revenue that is not properly owed to the State.131. In this litigation, the State has admitted that it derives a significant amount of itsrevenue from unclaimed and abandoned property. More specifically, revenue generated fromunclaimed and abandoned property constitutes the third largest revenue source for the State.132. Documents produced by the State demonstrate the State's improper efforts toincrease its revenue through use of the VDA program and audit program for abandoned andunclaimed property. The State has admitted that the total collection for unclaimed property- 61 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comrevenue receipts approximately doubled between 2002 and 2004. The State also has admittedthat it generates the fourth highest revenue from abandoned and unclaimed property out of allfifty (50) states, despite having an extremely small staff which, when compared to the threestates that exceed it, is more than ninety percent (90%) smaller.133. A fundamental tenet of an audit is the requirement that the audit be conducted byan objective party, who has no preconception or interest in the outcome of the audit. The Statepays its auditors a percentage of their findings, which removes even the appearance ofobjectivity, as the auditor now has a financial interest in the outcome.134. In 2007, the State appears to have paid its contingent fee auditors in excess of $11million.135. The State's arbitrary and capricious treatment of Holders concerning abandonedproperty liability under the Statute and the VDA program was highlighted in connection with adetailed survey published by the Council on State Taxation ("COST") in January 2009. In thatsurvey, out of all fifty states surveyed, Delaware was the only state to receive a grade of "F"regarding the equity and fairness of the State's abandoned and unclaimed property statute.136. Specifically, the State was noted to: (a) not have an independent tribunal, judicialor non-judicial, to ensure fair and equitable unclaimed property administration, (b) not have anystatute of limitations period with respect to unclaimed property reporting requirements, (c) notimpose interest and penalties equitably, and (d) employ contingent fee auditors in a way thatencourages the auditors to be overly aggressive and interpret state laws to their own advantage.137. Consistent with the State's goal to increase its revenues exponentially throughaggressive and unlawful enforcement of the Statute, the VDA program and/or the audit program,COST noted that "[f]ifteen years ago . . . unclaimed property comprised [only] 2.4% ofDelaware's total state revenue, behind inheritance taxes and hospital board and treatment fees.- 62 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comBy 2004, proceeds from unclaimed property exceeded monies collected by Delaware from theState Lottery, bank franchise taxes, and business and occupation gross receipt taxes. Now,unclaimed property makes up 11.1% of Delaware's total general fund revenue and has evolved tobecome the State's third largest source of revenue."CA's Inability to Appeal the State's Calculation of Abandoned Property138. The State's June 2008 Demand requested payment from CA in the amount of$8,218,410.46.139. CA's June 26, 2008 Proposal offered payment to the State in the amount of$3,585,978.00.140. There difference between the amount demanded by the State in its June 2008what CA actually owes relative to its unclaimed and abandoned property liability constitutes theamount in dispute between the parties (the "Disputed Amount").141. Under the Statute, CA has no right or ability to appeal the State's calculation ofCA's abandoned property or the State’s efforts to collect the Disputed Amount to an objectiveadministrative tribunal because 29 Del. C. § 10161 does not include the Department of Financeor Division of Revenue as agencies that are subject to the Administrative Procedures Act.142. Similarly, CA has no right or ability to appeal the State's calculation of CA'sabandoned property liability, or its efforts to collect the Disputed Amount from CA, to aDelaware court. Although 12 Del. C. § 1156(b) provides CA with the right to "bring an action inthe Court of Chancery for the purpose of showing an abuse of discretion by the State Escheatorin making the determination that penalty or interest was due," the remainder of the Statute doesnot create any similar right with respect to the State's calculation of CA's abandoned property.- 63 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com143. The absence of an appeal provision has allowed the State to continually demandmore than the amounts to which it is entitled, without any fear that it will ever have to answer foror justify its clear abuse of discretion and abuse of the Statute.144. The Disputed Amount represents property that is owned by CA.145. Pursuant to the applicable Delaware regulations and statutes, CA has no ability tobe heard or to otherwise present an appeal before an administrative or judicial tribunal regardingthe State's improper efforts to deprive CA of its property.146. The State has waived any claim of sovereign immunity with respect to CA'sstatutory cause of action, because 12 Del. C. § 1156(b) explicitly permits the State to be sued inconnection with its efforts to collect interest and penalties from Holders. See e.g., Sandt v.Delaware Solid Waste Auth., 640 A.2d 1030, 1035 (Del. 1994).147. The State has waived any claim of sovereign immunity with respect to CA's claimfor declaratory relief because "a party contracting with an agency of the State authorized by lawto enter into contracts has all the remedies under the contract which any private citizen hasagainst another private citizen." George & Lynch, Inc. v. State, 197 A.2d 734, 737 (Del. 1964).148. Prior to the litigation, the State was aware that it failed to provide Holders withdue process to challenge or otherwise appeal a decision of the State relative to alleged abandonedproperty liability and failed to address this deficiency.The Statute’s Unconstitutional Abrogation of the Statue of Limitations149. A substantial amount of the property presently in dispute comprises creditsallegedly owed to businesses with whom CA has or is conducting business, where the businesses(the "Businesses") have not asked to receive the credit and have not sued for recovery of thatcredit.- 64 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com150. The Businesses’ rights to those credits are predicated on principles of contract,and their rights are in many instances uncertain, unliquidated and not enforceable. TheBusinesses only have the right to receive these disputed credits based upon an alleged contractualobligation by CA to honor those credits, and only to the extent the Businesses are able toestablish that the credits are valid and owed to them.151. Upon information and belief, in each of the states where the contracts wereformed, the Businesses' contractual rights to the credits are limited by, among other limitations,applicable statutes of limitations.152. Under the law of contract, to the extent the Businesses fail to seek the right to thatcredit within the applicable statute of limitations, the Businesses’ contractual rights to thosecredits are extinguished.153. Upon the extinguishment of those contractual rights, all right, title and interest inthe credits resides with CA, who is the true owner of the credits.154. Upon the extinguishment of those contractual rights, the Businesses no longerconstitute "Owners" as that term is defined in the Statute.155. Upon the extinguishment of those contractual rights, the credits do not constitute"Abandoned Property" as that term is defined in the Statute.156. Upon the extinguishment of those contractual rights, the "title" of the credits hasnot "failed" and the "power of alienation" has not been "suspended," as required by the Statutebefore the State may escheat property.157. Upon information and belief, for all or substantially all of the credits that the Statenow seeks to escheat, the statute of limitations applicable to those credits has expired, and theBusinesses have failed to enforce or establish their rights to those credits.- 65 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com158. The State has no right or ability to escheat credits allegedly owed to theBusinesses that have not sought to enforce or establish their rights with respect to those credits.159. The Statute purports to remove applicable statute of limitations as a bar for theescheatment of property, stating that "[t]he expiration of any period of time specified by lawduring which an action or proceeding may be commenced or enforced to secure payment of aclaim for money or recovery of property shall not prevent any money or property from beingdeemed abandoned property …."160. Such a statutory provision is unenforceable and unconstitutional, and stands inconflict with the statutes of Delaware and other states, which have valid and enforceable statuteof limitations provisions.161. Such a provision unlawfully changes the contractual and legal relationshipbetween Holders and their customers and business partners by effectively extending the statuteof limitations indefinitely and creating liquidated liabilities where only contingent liabilitiesexisted before, particularly but not exclusively to the extent that customers and business partnersthat previously could take no title or interest to credits now may seek those credits from theState.The State’s Arbitrary and Capricious Look-Back Period162. The Statute does not establish the earliest date for which the State may "lookback" when auditing companies for their alleged failure to comply with the Statute.163. The Division of Revenue and the State Escheator have the authority to promulgaterules and regulations for unclaimed property that are necessary to implement their powerspursuant to 12 Del. C. § 1154.164. The State has not promulgated a regulation or a rule regarding the appropriatelook-back period for abandoned property audits.- 66 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com165. Despite the fact that the State did not adopt its current compliance process until2001, the State has arbitrarily and capriciously decided, without following its own policies,procedures, regulations or laws, that the State may "look back" to 1981 when auditing forabandoned property.166. The State has failed at any time to engage in any public process when setting thelook back period as 1981, and such a period is without basis, fact, logic, evidence or reasoning.Among other factors, the period exceeds the period for which reporting is due the State,substantially exceeds accepted document retention periods and, upon information and belief,substantially exceeds the look back period employed by any other state's abandoned propertydivision and by other divisions within the State government.167. The State has never offered any reason or explanation for its defined look backperiod, and such a period is arbitrary and capricious, including at least to the extent that the Stateis aware that Holders do not typically preserve their books and records for that period of time.The State's Efforts to Claim Property Rights Greater thanThe Rights of the Property Owners168. The State's rights to abandoned and unclaimed property under the Statute arederivative in nature, in that the State may only take subject to the rights of the Owner of theabandoned and unclaimed property.169. During the VDA process, in its proposed second audit and through this litigation,the State has demanded that CA escheat property for which a purported Owner has only acontingent or unperfected right, such as the State's demands for credits where the State has notestablished that the purported Owner's interest in the credit is valid or enforceable.- 67 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com170. The State does not have the right under the law or the Constitution to demand thatCA escheat property where the State purports to enforce rights that are greater than the rights ofthe purported Owner of that property.herein.COUNT I(Statutory Cause of Action - 12 Del. C. § 1156(b))171. CA repeats and realleges paragraphs 1 through 171 above, as if fully set forth172. The statute codified at 12 Del. C. § 1156(b) provides that a Holder that disputeswhether reasonable cause exists for abating a penalty or interest determination by the StateEscheator may bring an action in the Court of Chancery for the purpose of showing an abuse ofdiscretion by the State Escheator in making the determination that a penalty or interest is due.173. Pursuant to the VDA, CA and the State agreed that CA is not subject to interest orpenalties in connection with the abandoned and unclaimed property at issue.174. Pursuant to the VDA, the State agreed to waive interest and penalties for CA.175. At all times, CA acted in good faith and provided the State with all of theinformation that it requested in connection with the VDA.176. During the VDA process, the State acted in bad faith and demanded that CA payamounts that it knew in good faith were not owed to the State.177. Despite CA's good faith and cooperation with the State, in addition to demandingmore than it knows it is owed, the State is attempting to assess interest against CA in connectionwith the State’s claims for abandoned and unclaimed property.178. The State's imposition of interest and/or penalties on CA is not reasonable and isan abuse of discretion.- 68 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com179. The State's attempt to assess interest against CA violates the VDA and isactionable under 12 Del. C. § 1156(b).180. As a result of the State's actions, CA has suffered damage and loss, including, butnot limited to, the expenses incurred in disputing the imposition of interest on CA.herein.COUNT II(Declaratory Relief Pursuant to 10 Del. C. § 6501 et seq.)181. CA repeats and realleges paragraphs 1 through 181 above, as if fully set forth182. A bona fide, actual and present controversy exists with respect to the rights andobligations of CA and the State concerning the VDA, the Notice of Audit and the property thatthe State seeks to escheat under the Statute.183. An actual controversy exists concerning whether the State may impose interestand penalties on CA, may refuse to execute a VDA Agreement, and may refuse to accept CA'soffered payment in the amount of $3,585,978.00.184. An actual controversy exists as to whether the State may conduct a "second audit"of CA in light of the terms of the VDA.185. An actual controversy exists as to whether the State's detailed review, analysis,and reliance on CA's self-audit constituted an "audit" for the purposes of the VDA, and therebyprecludes any additional audit of CA's books and records by the State.186. An actual controversy exists as to whether, if the State may audit the books andrecords of CA, what the scope of said audit should be, specifically, whether said audit should belimited to the period of time covered by the VDA.187. An actual controversy exists as to whether the State may disregard the VDA afterCA finished its self-audit, submitted its supporting materials, and offered payment to the State.- 69 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com188. An actual controversy exists as to whether the State may use and/or demand thatCA accept estimates of amounts owed to the State for periods where CA has records identifyingthe names and addresses of all customers' potentially owed credits.189. An actual controversy exists as to whether the State's calculations relating to theamount demanded from CA in connection with alleged abandoned and unclaimed property wereperformed incorrectly in that the calculations were based upon errors of fact and law.190. An actual controversy exists as to whether the State's calculations relating to theamount demanded from CA in connection with alleged abandoned and unclaimed property wereperformed incorrectly in that the calculations include arithmetic errors.191. An actual controversy exists as to whether the State's calculations relating to theamount demanded from CA in connection with alleged abandoned and unclaimed property wereperformed incorrectly in that the calculations rely upon assumptions that are not supportable infact or law.192. An actual controversy exists as to whether the State may escheat allegedabandoned and unclaimed property that has previously been repaid to rightful owners.193. An actual controversy exists as to whether the State may escheat allegedabandoned and unclaimed property that is owed to or already has been escheated to other statesin accordance with Texas v. New Jersey, Delaware v. New York and Nellius v. Tampax, Inc.194. An actual controversy exists as to whether the State may escheat allegedabandoned and unclaimed property that is potentially owed to individuals and corporations withaddresses outside of the United States.195. An actual controversy exists as to whether the State may escheat allegedlyabandoned and unclaimed property that is preempted by ERISA.- 70 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com196. An actual controversy exists as to whether the State may escheat allegedlyabandoned and unclaimed property that is due to the federal government and, therefore,preempted by federal law.197. An actual controversy exists as to whether the State may escheat allegedlyabandoned and unclaimed property that is potentially due to other states as the principal place ofincorporation of a CA subsidiary.198. An actual controversy exists as to whether the State may escheat allegedlyabandoned and unclaimed property that is not subject to escheat based upon business to businessexemptions in other states.199. An actual controversy exists as to whether the State may escheat allegedlyabandoned and unclaimed property where that property is comprised of credits owed tobusinesses with whom CA is presently doing business.200. An actual controversy exists as to whether the State may escheat allegedlyabandoned and unclaimed property that CA has reunited with rightful owners.201. An actual controversy exists as to whether the State has used proper methodologyin its estimation techniques, including but not limited to its growth assumptions, statement ofliabilities, and extrapolation techniques.202. An actual controversy exists as to whether the State, in contravention of the law,demanded that CA provide evidence beyond its books and records to substantiate its positionregarding the amount of alleged abandoned and unclaimed property owed to the State.203. An actual controversy exists as to whether the State can use a look back period ofmore than twenty-eight years for purposes of conducting compliance audits.204. An actual controversy exists as to whether the State can make demands whichimpair valid contracts.- 71 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com205. An actual controversy exists as to whether the State can assert rights in propertythat are greater than the rights of the purported Owner to that property.206. An actual controversy exists as to whether the State can retroactively apply itscurrent compliance posture to any period prior to a public adoption of said compliance goals.207. An actual controversy exists as to the amount that CA owes the State inconnection with the VDA.208. These actual controversies present a need for a declaration by the Court relative tothe rights of CA and the State with respect to the Statute, the State’s implementation of theStatute, the VDA, the State’s implementation of the VDA, and the State’s audit policies and theNotice of Audit.209. The resolution of these disputes by the entry of judgment declaring the rights ofthe parties is necessary and appropriate under the existing facts and circumstances.210. The judgment sought will serve a useful purpose in clarifying and settling thelegal rights and obligations owed by the parties with respect to the VDA and the Notice of Audit.211. The judgment sought does not involve an advisory opinion as to a legal injurybased on hypothetical facts.212. The judgment will afford CA relief from the uncertainty, insecurity andcontroversy giving rise to this controversy.213. The actions by the State regarding the issues described above were arbitrary andcapricious and not properly grounded in either fact or law.214. CA requests that the Court declare the amount owed to the State pursuant to theVDA.- 72 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comCOUNT III(Injunctive Relief)215. CA repeats and realleges paragraphs 1 through 215, above, as if fully set forthherein.216. Through the VDA, CA and the State entered into a binding contract that specifiesall of the material and essential terms of the parties' agreement.217. The VDA limited CA's reporting period to the State for abandoned and unclaimedproperty, waived interest and penalties for CA, and contemplated the execution of a VDAAgreement by the State.218. The VDA allowed for an audit of a Holder such as CA only after the execution ofthe VDA Agreement and payment of funds to the State.219. The VDA provided that an audit by the State initially would be limited to theVDA and may only be expanded beyond that period if the Holder did not act in good faith ormaterially failed to disclose the full amount owed to the State.220. CA fully complied with its obligations under the VDA, acted in good faith, anddisclosed the full amount that it owed to the State.221. The State's conduct and/or Notice of Audit constitutes one or more materialbreaches of the VDA.222. The State concluded its review of CA's VDA and used CA's self-audit as the basisfor its claims for the payment.223. Despite already having "audited" CA's VDA, the State now seeks to conduct a"second audit" of CA for a period in excess of the VDA and seeks to assess interest against CA.224. CA will suffer irreparable harm if the State is allowed to avoid the VDA, notexecute a VDA Agreement, and proceed with its Notice of Audit.- 73 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com225. In balancing the equities, the harm to CA if injunctive relief is not granted willoutweigh any harm to the State if the injunctive relief is granted.226. Equitable relief is warranted because there is no adequate remedy at law toprevent the irreparable harm CA will suffer if the State is not enjoined.herein.COUNT IV(Specific Performance)227. CA repeats and realleges paragraphs 1 through 228, above, as if fully set forth228. Through the VDA, CA and the State entered into a binding contract that specifiesall of the material and essential terms of the parties' agreement.229. The material and essential terms of the parties' agreement are explicitly set forthin two standard forms – the VDA Notice of Intent and VDA Agreement – that were drafted bythe State.230. Pursuant to the material and essential terms of the parties' agreement, CA wasrequired to (1) complete a self-audit of its books and records for a certain amount of years tocalculate all abandoned or unclaimed property due to the State; (2) file certain abandonedproperty "reports" with the State; and (3) pay over all abandoned or unclaimed property to theState in accordance with its self-audit.231. Pursuant to material and essential terms of the parties' agreement, the State wasrequired to (1) waive any interest or penalties that might otherwise have been owed by CA inconnection with its payment of abandoned and unclaimed property for the years covered by itsself-audit and all preceding years; and (2) execute a standard VDA Agreement with CA thatwould memorialize its release of CA from any obligation to pay interest and penalties and limit- 74 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comCA's time period for reporting alleged unclaimed and abandoned property liability from 1991 to2001.232. CA performed all of its obligations under the VDA, including, but not limited to,retaining an independent auditor, conducting a detailed self-audit, filing reports with the Stateregarding the self-audit, providing an Updated Submission to the State, providing additionalinformation requested by the State, and offering payment to the State pursuant to the VDA.233. The State breached the VDA, including, but not limited to, by not executing aVDA Agreement, by failing to waive the payment of interest and penalties by CA, by attemptingto collect interest from CA, by failing to accept CA's payment, by using estimations of amountsowed to the State where detailed records exist, and by preparing to conduct an unsupported andretaliatory audit of CA.234. CA is entitled to specific performance of all of the terms of the VDA, including,but not limited to, its right to have its liability resolved by the VDA, having a VDA Agreementexecuted by the State that memorializes its release of CA from any obligation to pay interest andpenalties, and having its offered payment accepted by the State.235. CA has no adequate remedy at law to compensate it for its losses resulting fromthe State's failure to execute the VDA Agreement, failure to accept payment, and the initiation ofa proposed "second audit" as said losses cannot be remedied by money damages.herein.COUNT V(Promissory Estoppel)236. CA repeats and realleges paragraphs 1 through 236, above, as if fully set forth237. Knowing that CA would rely thereon, the State made certain promises andrepresentations to CA in order to induce it to enter into the VDA.- 75 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com238. Specifically, the State promised and represented to CA that: (1) the VDAAgreement would be executed; (2) the VDA Agreement would be executed upon CA'scompletion of a self-audit, CA's presentation of materials to the State pursuant to the self-audit,and CA's offering to make full payment to the State of the amount set forth in the self-audit;(3) CA would not be subject to interest or penalties pursuant to the VDA; (4) the VDA wouldlimit the years that CA would be required to report for purposes of abandoned and unclaimedproperty; and (5) the State would not conduct an independent audit of CA during the VDA.239. The State expected or reasonably should have expected that CA would rely on itspromises and representations.240. CA reasonably relied on the State's promises and representations to its detriment,including, but not limited to, executing the VDA Notice of Intent, complying with the terms ofthe VDA, expending significant time, resources and monies relative to conducting the self-audit,providing additional information to State when requested, and offering payment to the State.241. Injustice can only be avoided by enforcement of the State's promises andrepresentations.242. Accordingly, the State should be estopped from contesting the terms of the VDA,failing to execute a VDA agreement, failing to waive the payment of interest and penalties byCA, attempting to collect interest from CA, failing to accept CA's offered payment, and fromconducting its proposed second audit.herein.COUNT VI(Breach of Agreement)243. CA repeats and realleges paragraphs 1 through 243, above, as if fully set forth- 76 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com244. Through the VDA, CA and the State entered into a binding contract that specifiesall of the material and essential terms of the parties' agreement.245. The material and essential terms of the parties' agreement are explicitly set forthin two standard forms – the VDA Notice of Intent and VDA Agreement – that were drafted bythe State.246. Pursuant to the material and essential terms of the parties' agreement, CA wasrequired to (1) complete a self-audit of its books and records for a certain amount of years tocalculate all abandoned or unclaimed property due to the State; (2) file certain abandonedproperty "reports" with the State; and (3) pay over all abandoned or unclaimed property to theState in accordance with its self-audit.247. Pursuant to material and essential terms of the parties' agreement, the State wasrequired to (1) waive any interest or penalties that might otherwise have been owed by CA inconnection with its payment of abandoned and unclaimed property for the years covered by itsself-audit and all preceding years; and (2) execute a standard VDA Agreement with CA thatmemorializes its release of CA from any obligation to pay interest and penalties.248. The conduct of the State, including, but not limited to, not accepting CA's offeredpayment, not executing the VDA Agreement, seeking to conduct a "second audit" of CA, andseeking to impose interest on CA, constitute one or more material breaches of the VDA.249. As a result of the State's conduct, CA suffered and will continue to suffersubstantial damage.250. As a direct and proximate result of the State's breach of contract, the State isliable to CA in an amount to be determined by the Court, together with interest, costs andattorneys' fees.- 77 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comCOUNT VII(Breach of Agreement Through Breach of the Implied Covenant of Good Faith and FairDealing)herein.251. CA repeats and realleges paragraphs 1 through 251, above, as if fully set forth252. Through the VDA, CA and the State entered into a binding contract that specifiesall of the material and essential terms of the parties' agreement.253. The agreement between CA and the State carries with it an implied covenant ofgood faith and fair dealing.254. The State's conduct, including, but not limited to, not accepting the paymentoffered by CA, not executing a VDA Agreement, seeking to conduct a "second audit" of CA, andseeking to impose interest on CA, constitute one or more material breaches of the impliedcovenant of good faith and fair dealing resulting in substantial damage to CA.255. As a direct and proximate result of the State's breach of the VDA, which occurredthrough its breaches of the implied covenant of good faith and fair dealing, the State is liable toCA in an amount to be determined by the Court, together with interest, costs and attorneys' fees.COUNT VIII(Declaratory Judgment – Unconstitutionality of 29 Del. C. § 10161 and Title 12, Chapter 11of the Delaware Code as to Individual Defendants)herein.256. CA repeats and realleges paragraphs 1 through 256, above, as if fully set forth257. Pursuant to the Fifth and Fourteenth Amendments to the United StatesConstitution, the State cannot deprive CA of property without due process of law.258. Pursuant to Sections 7 through 9 of Article I of the Constitution of the State, theState cannot deprive CA of property without due process of law.259. The Disputed Amount represents property that is owned by CA.- 78 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com260. By virtue of its June 2008 Demand, the State is attempting to deprive CA ofproperty in the form of the Disputed Amount.261. The State's effort to collect the Disputed Amount deprives CA of due process oflaw because CA has no right to appeal the State's calculation of CA's abandoned property, or itsefforts to collect the Disputed Amount from CA, to an administrative tribunal.262. The State's effort to collect the Disputed Amount further deprives CA of dueprocess of law because CA has no right to appeal the State's calculation of CA's abandonedproperty, or its efforts to collect the Disputed Amount from CA, to a Delaware court.263. Pursuant to the applicable Delaware regulations and statutes, CA therefore has noability to be heard or to otherwise present an appeal before an administrative or judicial tribunalregarding the State's improper efforts to deprive CA of its property.264. A bona fide, actual and present controversy exists with respect to the question ofwhether 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Code deprive CA ofproperty without due process of law because they do not provide CA with the ability to be heardor to otherwise present an appeal regarding the State's efforts to deprive CA of property.265. The Statute purports to abrogate the statutes of limitations of Delaware and everyother state, to the extent the Statute authorizes the State to escheat property that is no longerowned by a purported Owner because that Owner's rights in the property has expired due to theapplicable statute of limitations.266. The Statute purports to authorize the State to escheat property in such a mannerthat the State may exert rights greater than the rights of the purported Owners of the property.267. The Statute unconstitutionally impairs a Holder's right to contract, in violation ofthe Fifth and Fourteenth Amendments and the Contract Clause of the United State Constitution.- 79 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com268. These actual controversies present a need for a declaration by the Court relative tothe constitutionality of 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Code.269. The resolution of these disputes by the entry of judgment declaring the rights ofthe parties is necessary and appropriate under the existing facts and circumstances.270. The judgment sought will serve a useful purpose in clarifying and settling theconstitutionality of 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Code.271. The judgment sought does not involve an advisory opinion as to a legal injurybased on hypothetical facts.272. The judgment will afford CA relief from the uncertainty, insecurity, andcontroversy giving rise to this controversy.273. The State has waived any claim of sovereign immunity with respect to CA'sconstitutional claim because unconstitutional takings of property represent self-executingwaivers of sovereign immunity. See, e.g., State v. 0.24148, 0.23831 and 0.12277 Acres of Land,171 A.2d 228, 231 (Del. 1961).274. CA requests that the Court declare 29 Del. C. § 10161 and Title 12, Chapter 11 ofthe Delaware Code unconstitutional insofar as those statutes allow the State to deprive CA ofproperty without due process of law.COUNT IX(Injunctive Relief – Unconstitutionality of 29 Del. C. § 10161 and Title 12, Chapter 11 of theDelaware Code As to Individual Defendants)herein.275. CA repeats and realleges paragraphs 1 through 275, above, as if fully set forth276. Pursuant to the Fifth and Fourteenth Amendments of the United StatesConstitution, the State cannot deprive CA of property without due process of law.- 80 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com277. Pursuant to Sections 7 through 9 of Article I of the Constitution of the State, theState cannot deprive CA of property without due process of law.278. The Disputed Amount represents property that is owned by CA.279. By virtue of its June 2008 Demand, the State is attempting to deprive CA ofproperty in the form of the Disputed Amount.280. The State's effort to collect the Disputed Amount deprives CA of due process oflaw because CA has no right to appeal the State's calculation of CA's abandoned property, or itsefforts to collect the Disputed Amount from CA, to an administrative tribunal.281. The State's effort to collect the Disputed Amount further deprives CA of dueprocess of law because CA has no right to appeal the State's calculation of CA's abandonedproperty, or its efforts to collect the Disputed Amount from CA, to a Delaware court.282. Pursuant to the applicable Delaware regulations and statutes, CA therefore has noability to be heard or to otherwise present an appeal before an administrative or judicial tribunalregarding the State's improper efforts to deprive CA of its property.283. The Statute purports to abrogate the statutes of limitations of Delaware and everyother state, to the extent the Statute authorizes the State to escheat property that is no longerowned by a purported Owner because that Owner's rights in the property has expired due to theapplicable statute of limitations.284. The Statute purports to authorize the State to escheat property in such a mannerthat the State may exert rights greater than the rights of the purported Owners of the property.285. The Statute unconstitutionally impairs a Holder's right to contract, in violation ofthe Fifth and Fourteenth Amendments and the Contract Clause of the United States Constitution.- 81 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com286. CA will suffer irreparable harm if the State is allowed to apply 29 Del. C. § 10161and Title 12, Chapter 11 of the Delaware Code to deprive CA of property without due process oflaw.287. In balancing the equities, the harm to CA if injunctive relief is not granted willoutweigh any harm to the State if the injunctive relief is granted.288. Equitable relief is warranted because there is no adequate remedy at law toprevent the irreparable harm CA will suffer if the State is not enjoined.Complaint.289. Thus, CA requests that the Court grant the injunctive relief requested in thisWHEREFORE, the Defendants/Plaintiffs-in-counterclaim CA, Inc. and PlatinumTechnology International Inc. respectfully request that the Court:1. Enter judgment in favor of CA on all of the Counts set forth above;2. With respect to the VDA, declare that the State:a. must execute a Voluntary Self Disclosure Agreement (Form AP DE-2)with CA, and has acted in an arbitrary and capricious manner by failing todo so;b. must abide by the terms of the VDA, and has acted in an arbitrary andcapricious manner by failing to do so;c. may not, pursuant to the terms of the VDA, conduct a new audit of CA,and has acted in an arbitrary and capricious manner by attempting to doso;d. may not, pursuant to the VDA, impose interest, penalties or othersanctions against CA, and has acted in an arbitrary and capricious mannerby attempting to do so;3. With respect to the State's improper demands for payment, declare that the State:a. may not seek amounts from CA for property owed to foreign citizens orescheatable to foreign countries, and has acted in an arbitrary andcapricious manner by attempting to do so;- 82 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comb. may not seek amounts from CA for property that is properly escheatable toowners in other states, and has acted in an arbitrary and capricious mannerby attempting to do so;c. may not seek amounts from CA for property that is properly escheatable toother states, and has acted in an arbitrary and capricious manner byattempting to do so;d. may not seek amounts from CA for property that is properly escheatable tothe federal government, and has acted in an arbitrary and capriciousmanner by attempting to do so;e. may not seek amounts from CA for property that is preempted by ERISA,and has acted in an arbitrary and capricious manner by attempting to doso;f. may not seek business to business credits that are exempt fromescheatment in other states, and has acted in an arbitrary and capriciousmanner by attempting to do so;g. may not require CA to provide information beyond its books and recordsfor determining potential abandoned and unclaimed property liability, andhas acted in an arbitrary and capricious manner by attempting to do so;h. may not use estimates to calculate amounts owed to Delaware for timeperiods in which CA furnished the State with records identifying thenames and addresses of all customers potentially owed credits, and hasacted in an arbitrary and capricious manner by attempting to do so;i. must accept CA's records with names and addresses as complete andaccurate for determination of abandoned and unclaimed property liability,and has acted in an arbitrary and capricious manner by failing to do so;j. must give CA credit for amounts reunited to rightful owners and escheatedto other states if estimations are allowed, and has acted in an arbitrary andcapricious manner by failing to do so;k. may not, pursuant to 12 Del. C. § 1156(b), abrogate the statutes oflimitations of other states, and has acted in an arbitrary and capriciousmanner by attempting to do so;l. may not purport to use a look back period starting from 1981, and hasacted in an arbitrary and capricious manner by attempting to do so;m. may not attempt to exercise rights greater than the rights of the purportedOwners of the property, and has acted in an arbitrary and capriciousmanner by attempting to do so;- 83 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comn. may not impose interest or other sanctions against CA, and has acted in anarbitrary and capricious manner by attempting to do so;o. may not, pursuant to Chapter 11 of Title 12 of the Delaware Code, imposeinterest on property that is not due to the State, and has acted in anarbitrary and capricious manner by attempting to do so; andp. may not use improper estimation techniques, including improper growthassumptions and extrapolation techniques, and has acted in an arbitraryand capricious manner by attempting to do so.4. With respect to the State's acts and practices with regard to its efforts to escheatabandoned and unclaimed property, declare that the State acts in an arbitrary and capriciousmanner by:a. attempting to escheat property owed to foreign citizens or escheatable toforeign countries;b. attempting to escheat property that is properly escheatable to owners inother states;c. attempting to escheat property that is properly escheatable to other states;d. attempting to escheat property that is properly escheatable to the federalgovernment;e. attempting to escheat property that is preempted by ERISA;f. attempting to escheat business to business credits that are exempt fromescheatment in other states;g. attempting to employ information beyond a Holder's books and records fordetermining potential abandoned and unclaimed property liability;h. attempting to employ estimation techniques to calculate amounts owed fortime periods in which a Holder has furnished the State with recordsidentifying the names and addresses of all customers potentially owedcredits;i. attempting to escheat property where the purported Owner's right andinterest in the property has been extinguished by the applicable statutes oflimitations of other states;j. attempting to escheat property starting from a look back period beginningin 1981;- 84 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comk. attempting to escheat property where to do so would allow the State toexercise rights greater than the rights of the purported Owners of theproperty;l. attempting to impose interest on property that is not due to the State; andm. employing improper and unsupportable estimation techniques, includingimproper growth assumptions and extrapolation techniques.5. With respect to the Statute, declare that:a. Declare 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Codeunconstitutional under the United State Constitution and Sections 7through 9 of Article I of the Constitution of the State insofar as thosestatutes allow the State to deprive CA of property without due process oflaw;b. Declare 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Codeunconstitutional under the United State Constitution and Sections 7through 9 of Article I of the Constitution of the State insofar as thosestatutes abrogate the application of the statutes of limitations of thevarious states of the United States;c. Declare 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Codeunconstitutional under the United State Constitution and Sections 7through 9 of Article I of the Constitution of the State insofar as thosestatutes do not impose any restraints or limitations on the period that theState may "look back" for purposes of conducting an audit for abandonedand unclaimed property.d. Declare 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Codeunconstitutional under the United State Constitution and Sections 7through 9 of Article I of the Constitution of the State insofar as thosestatutes allow the State to assert rights that are greater than the rights ofthe purported Owners of the abandoned and unclaimed property.6. Declare the amount owed to the State pursuant to the VDA;7. Temporarily and/or permanently enjoin the State from conducting a further auditof CA relative to unclaimed property reported under portions of the Delaware Escheat Laws,Subchapters, 12 Del. C. §§ 1130-1176, 1197-1212;- 85 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com4. Declare 29 Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Codeunconstitutional under the United State Constitution and Sections 7through 9 of Article I of the Constitution of the State insofar as thosestatutes allow the State to assert rights that are greater than the rights ofthe purported Owners of the abandoned and unclaimed property.5. Declare the amount owed to the State pursuant to the VDA;6. Temporarily and/or permanently enjoin the State from conducting afurther audit of CA relative to unclaimed property reported under portionsof the Delaware Escheat Laws, Subchapters, 12 Del. C. §§ 1130-1176,1197-1212;7. Permanently enjoin the State from conducting a further audit of CA for aperiod greater than that stated in the VDA relative to unclaimed propertyreported to the State pursuant to said VDA;8. Temporarily and/or permanently enjoin the State from enforcing 29Del. C. § 10161 and Title 12, Chapter 11 of the Delaware Code to depriveCA of property without due process of law;9. Award CA its attorneys’ fees and costs in having to prosecute this matter;and10. Grant CA such other and further relief as the Court deems just and proper.OF COUNSEL:Joshua KrumholzJennifer BordenBrett D. CarrollHOLLAND & KNIGHT LLP10 St. James AvenueBoston, MA 02116(617) 523-2700Dated: April 16, 2009/s/ M. Duncan GrantM. Duncan Grant (Del. Bar No. 2994)Matthew A. Kaplan (Del. Bar No. 4956)PEPPER HAMILTON LLP1313 North Market Street, Suite 5100Wilmington, DE 19899-1709(302) 777-6500Attorneys for CA, Inc. and PlatinumTechnology International, Inc.- 86 –

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com