Looking for an agreement? Search from over 1 million agreements now.

Tax Sharing Agreement

This is an actual contract by Centex Development Co.
Browse the agreement preview below and buy the entire agreement for $35
Search This Document
EXECUTION COPY)


TAX SHARING AGREEMENT


BY AND AMONG


CENTEX CORPORATION


AND ITS AFFILIATES


AND


CAVCO INDUSTRIES, INC.


Dated June 30, 2003


This TAX SHARING AGREEMENT (the "Agreement") dated as of June 30, 2003, by and among Centex Corporation ("Centex"), a Nevada corporation and each Centex Affiliate (as defined below), and Cavco Industries, Inc. ("Cavco"), a newly formed Delaware corporation and indirect, wholly owned subsidiary of Centex, is entered into in connection with the Distribution (as defined below).


RECITALS


WHEREAS, the Centex Board of Directors has determined, subject to certain conditions, that it is appropriate and desirable to make a pro rata distribution of one hundred percent (100%) of the stock of Cavco to its common shareholders, with cash distributed in lieu of any fractional shares of Cavco, on the Distribution Date, as defined below (the "Public Distribution"); and


WHEREAS, in order to consummate the Public Distribution, it is necessary and desirable for AAA Holdings, Inc. ("AAA"), a Delaware corporation and currently the direct parent of Cavco Industries, LLC ("Cavco LLC") to form Cavco and to then merge Cavco LLC with and into Cavco (the "Merger"); and


WHEREAS, in order to consummate the Public Distribution, it is necessary and desirable for AAA to make a pro rata distribution of one hundred percent (100%) of the stock of Cavco to its sole shareholder, Centex Real Estate Corporation ("CREC") (the "Internal Distribution 1"); and


WHEREAS, in order to consummate the Public Distribution, it is necessary and desirable for CREC to make a pro rata distribution of one hundred percent (100%) of the stock of Cavco to its sole shareholder, Centex International, Inc. ("International") (the "Internal Distribution 2"); and


WHEREAS, in order to consummate the Public Distribution, it is necessary and desirable for International to make a pro rata distribution of one hundred percent (100%) of the stock of Cavco to its sole shareholder, Centex (the "Internal Distribution 3"); and


WHEREAS, the Merger is intended to qualify as a reorganization under section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the "Code"), and the Public Distribution and Internal Distributions 1 through 3 (collectively the "Internal Distributions") are intended to qualify as tax free distributions under Code section 355; and


WHEREAS, it is appropriate and desirable to set forth the principles and responsibilities of the parties to this Agreement regarding the allocation of Tax (as defined below) and other related liabilities and adjustments with respect to Taxes, Tax contests and other related Tax matters; and


WHEREAS, to that end, the parties wish to enter into this Tax Sharing Agreement;


AGREEMENT


NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


ARTICLE 1
DEFINITIONS


"Audit" includes any audit, assessment of Taxes, other examination by any Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial.


"Centex Affiliate" means any corporation or other entity directly or indirectly controlled by Centex, excluding Cavco.


"Centex Group" means the affiliated group of corporations as defined in Section 1504 (a) of the Code, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which Centex is the common parent, and any corporation or other entity which may be, may have been or may become a member of such group from time to time, but excluding Cavco.


"Combined Group" means a group of corporations or other entities that files a Combined Return.


"Combined Return" means any Tax Return with respect to Non-Federal Taxes filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination) or unitary basis wherein Cavco joins in the filing of such Tax Return (for any taxable period or portion thereof) with Centex or one or more Centex Affiliates.


"Consolidated Group" means an affiliated group of corporations within the meaning of Section 1504 (a) of the Code that files a Consolidated Return.


2


"Consolidated Return" means any Tax Return with respect to Federal Income Taxes filed on a consolidated basis wherein Cavco joins in the filing of such Tax Return (for any taxable period or portion thereof) with Centex or one or more Centex Affiliates.


"Distribution" means the Internal Distributions and/or the Public Distribution.


"Distribution Date" means the close of business on the date on which the Public Distribution is effected.


"Federal Income Tax" means any Tax imposed under Subtitle A of the Code (including the Taxes imposed by Sections 11, 55, 59A, and 1201(a) of the Code), and any interest, additions to Tax or penalties applicable or related thereto, and any other income-based United States federal Tax which is hereinafter imposed upon corporations.


"Federal Tax" means any Tax imposed or required to be withheld by any Tax Authority of the United States.


"Final Determination" means any of (a) the final resolution of any Tax (or other matter) for a taxable period, including related interest or penalties, that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise, including (1) by the expiration of a statute of limitations or a period for the filing of claims for refunds, amending Tax Returns, appealing from adverse determinations, or recovering any refund (including by offset), (2) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable, (3) by a closing agreement or an accepted offer in compromise under Section 7121 or 7122 of the Code, or comparable agreements under laws of other jurisdictions, (4) by execution of an Internal Revenue Service Form 870 or 870AD, or by a comparable form under the laws of other jurisdictions (excluding, however, with respect to a particular Tax Item for a particular taxable period any such form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the Tax Authority to assert a further deficiency with respect to such Tax Item for such period), or (5) by any allowance of a refund or credit, but only after the expiration of all periods during which such refund or credit may be recovered (including by way of offset), or (b) the payment of Tax by any member of the Consolidated Group or Combined Group with respect to any Tax Item disallowed or adjusted by a Tax Authority provided that Centex determines that no action should be taken to recoup such payment.


"Income Taxes" means (a) any Tax based upon, measured by, or calculated with respect to (1) net income or profits (including any capital gains Tax, minimum Tax and any Tax on items of Tax preference, but not including sales, use, real or personal property, gross or net receipts, transfer or similar Taxes) or (2) multiple bases if one or more of the bases upon which such Tax may be based, measured by, or calculated with respect to, is described in clause (1) above, or (b) any U.S. state or local franchise Tax.


"Interest Accrual Period" has the meaning set forth in Section 6.4 of this Agreement.


3


"Non-Federal Combined Tax" means any Non-Federal Tax with respect to which a Combined Return is filed.


"Non-Federal Separate Tax" means any Non-Federal Tax other than a Non-Federal Combined Tax.


"Non-Federal Tax" means any Tax other than a Federal Tax.


"Payment Period" has the meaning set forth in Section 5.3 of this Agreement.


"Post-Distribution Period" means a taxable period beginning after the Distribution Date.


"Pre-Distribution Period" means a taxable period beginning on or before the Distribution Date.


"Privilege" means any privilege that may be asserted under applicable law including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege, and any privilege relating to internal evaluation processes.


"Restructuring Tax" means any Tax imposed upon Centex or a Centex Affiliate and reasonable professional fees that are attributable to, or result from, the failure of the Distribution to qualify under Section 355 of the Code (including any Tax attributable to the application of Section 355(e) or Section 355(f) of the Code to the Distribution) or corresponding provisions of the laws of other jurisdictions. Each Tax referred to in the preceding sentence shall be determined using the highest marginal corporate Tax rate for the relevant taxable period (or any portion thereof). For the avoidance of doubt, Restructuring Tax does not include an amount described in this paragraph that is imposed upon a shareholder of Centex in its capacity as a shareholder of Centex.


"Ruling Documents" means (a) the request for a ruling under Section 355 and various other sections of the Code, filed with the Service on November 5, 2002, together with any supplemental filings or ruling requests or other materials subsequently submitted on behalf of Centex, its subsidiaries and shareholders to the Service, the appendices and exhibits thereto, and any rulings issued by the Service to Centex (or any Centex Affiliate) in connection with the Distribution or (b) any similar filings submitted to, or rulings issued by, any other Tax Authority in connection with the Distribution.


"Separate Return" means any Tax Return with respect to Non-Federal Separate Taxes filed by Centex, Cavco, or any of their respective affiliates.


"Service" means the Internal Revenue Service.


"Tax" means any charges, fees, levies, imposts, duties, or other assessments of a similar nature, including income, alternative or add-on minimum, gross receipts, profits, lease, service, service use, wage, wage withholding, employment, workers compensation, business occupation,


4


occupation, premiums, environmental, estimated, excise, employment, sales, use, transfer, license, payroll, franchise, severance, stamp, occupation, windfall profits, withholding, social security, unemployment, disability, ad valorem, estimated, highway use, commercial rent, capital stock, paid up capital, recording, registration, property, real property gains, value added, business license, custom duties, or other tax or governmental fee of any kind whatsoever, imposed or required to be withheld by any Tax Authority including any interest, additions to tax, or penalties applicable or related thereto.


"Tax Authority" means governmental authority or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the Service).


"Tax Item" means any item of income, gain, loss, deduction or credit, or other attribute that may have the effect of increasing or decreasing any Tax.


"Tax Return" means any return, report, certificate, form or similar statement or document (including, any related or supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Tax Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.


ARTICLE 2
PREPARATION AND FILING OF TAX RETURNS


2.1 In General.


(a) Centex shall have the sole and exclusive responsibility for
the preparation and filing of the following Tax Returns: (1)
all Consolidated Returns for any Pre-Distribution Period, (2)
all Combined Returns for any Pre-Distribution Period, and (3)
any Separate Return for any Pre-Distribution Period beginning
before and ending on or before the Distribution Date
(specifically including, but not limited to, any Texas
franchise tax returns for the fiscal year ending March 31,
2003).


(b) Except as provided in Section 2.1(a) of this Agreement, Cavco
shall have the sole and exclusive responsibility for the
preparation and filing of all other Tax Returns for Cavco (or
which relate to its businesses, assets or activities) which
are required to be filed for any Pre-Distribution Period
(including (i) any Pre-Distribution Period beginning before
and ending on or before the Distribution Date and (ii) any
Pre-Distribution Period beginning before and ending after the
Distribution Date) and any Post-Distribution Period.


2.2 Manner of Filing Tax Returns.


(a) All Tax Returns filed after the date of this Agreement by
Centex, any Centex Affiliate, or Cavco shall be


5


(1) prepared in a manner that is consistent with the
Ruling Documents, and


(2) filed on a timely basis (including extensions) by the
party responsible for such filing under Section 2.1
of this Agreement.


(b) Centex and Cavco agree to file all Tax Returns for any
Pre-Distribution Period, as provided for in Section 2.1, and
to take all other actions in a manner consistent with the
position that Cavco is part of any Consolidated Group and any
Combined Group for all days through and including the
Distribution Date.


(c) Except as otherwise provided in this Section 2.2, Centex shall
have the exclusive right, in its sole discretion, with respect
to any Tax Return described in Section 2.1(a) of this
Agreement to determine:


(1) the manner in which such Tax Return shall be prepared
and filed, including the elections, methods of
accounting, positions, conventions and principles of
taxation to be used and the manner in which any Tax
Item shall be reported;


(2) whether any extensions maybe requested;


(3) the elections that will be made by Centex, any Centex
Affiliate, and Cavco in such Tax Return;


(4) whether any amended Tax Returns shall be filed;


(5) whether any claims for refund shall be made;


(6) whether any refunds shall be paid by way of refund or
credited against any liability for the related Tax;
and


(7) whether to retain outside specialists to prepare such
Tax Return, whom to retain for such purpose and the
scope of any such retainer.


(d) In the event that a Tax Item is includable in a Tax Return
described in Section 2.1(a) of this Agreement and also in a
Tax Return described in Section 2.1(b) of this Agreement that
is filed after the date of this Agreement, Cavco preparing, or
causing the preparation of, such Tax Return under Section
2.1(b) of this Agreement shall conform the treatment of such
Tax Item in such Tax Return described in Section 2.1(b) of
this Agreement to the treatment of such Tax Item in the
applicable Tax Return described in Section 2.1(a) of this
Agreement.


(e) Any Tax Return described in (1) Section 2.1(a) of this
Agreement (but only with respect to Tax Items of Cavco) or (2)
Section 2.1(b) of this Agreement in either case which Tax
Return is filed after the date of this Agreement, shall be
prepared on


6


a basis consistent with the elections, methods of accounting,
positions, conventions and principles of taxation and the
manner in which any Tax Item or other information is reported
as reflected on the most recently filed Tax Returns involving
similar matters. The preceding sentence shall not apply (1) to
the extent otherwise required by Section 2.2(a)(1) of this
Agreement or (2) if (i) Cavco obtains Centex's prior written
consent (which consent shall not be unreasonably withheld),
(ii) there has been a controlling change in law or
circumstances, or (iii) the failure to be consistent will not
result in an inc
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |