TAX SHARING AGREEMENT
This Tax Sharing Agreement (the "Agreement") dated as
of_______________, 1997, by and among ▇▇▇▇▇▇▇ Corporation, a Delaware
corporation ("▇▇▇▇▇▇▇"), Midas Group, Inc., a Delaware corporation ("Midas")
and Midas International Corporation, a Delaware corporation ("International").
WHEREAS, the parties have entered into a Distribution and Indemnity
Agreement of even date herewith (the Distribution Agreement");
WHEREAS, pursuant to the Distribution Agreement all of the issued and
outstanding common stock of Midas and of Hussmann International, Inc., a
Delaware corporation ("Hussmann"), will be distributed by ▇▇▇▇▇▇▇ (pro rata)
to the holders of its common stock (the "Distribution");
WHEREAS, Midas was incorporated on August 29, 1997, and, at the time of
the Distribution, Midas will own all of the issued and outstanding shares of
common stock of International;
WHEREAS, ▇▇▇▇▇▇▇ and International are parties to certain tax allocation
agreements (collectively referred to as the "Tax Allocation Agreements")
which deal with the payment of U.S. federal, state and foreign income taxes
and other taxes; and
WHEREAS, the Tax Allocation Agreements did not contemplate the
Distribution;
NOW, THEREFORE, ▇▇▇▇▇▇▇, on behalf of itself and its former, present and
future direct or indirect subsidiaries, other than the members of the Midas
Group, as hereinafter defined (hereinafter referred to as the "▇▇▇▇▇▇▇
Group"), and Midas and International, on behalf of themselves and their
former, present and future direct or indirect subsidiaries, other than those
subsidiaries which, immediately after the Distribution, will be direct or
indirect subsidiaries of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ (hereinafter referred to as the
"Midas Group"), enter into this Agreement for the purposes of replacing and
superseding the Tax Allocation Agreements and to define the rights of the
parties hereto with respect to certain potential tax controversies, all as
hereinafter provided.
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
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following meanings (such meanings to be equally applicable to both the
singular and the plural forms of the terms defined):
"Code" means the U.S. Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Distribution Date" means the date of the Distribution. For all
purposes of this Agreement, the Distribution shall be deemed effective as of
the close of business on the Distribution Date.
"Foreign" means outside the United States of America.
"Midas Businesses" means the former, present and future subsidiaries,
divisions and businesses of any member of the Midas Group.
"Regulations" means any U.S. Treasury regulations under the Code and any
other state, foreign, or local regulations with respect to taxes.
"Restructuring Taxes" means any Taxes, including, without limitation,
any Taxes imposed pursuant to or as a result of Code Section 311 (together
with related interest, penalties and additions to Tax), resulting from the
transfer or other disposition of stock, assets, or debt including the
Distribution and from those transactions undertaken to separate the Midas
Businesses from the ▇▇▇▇▇▇▇ Businesses as contemplated by the Distribution
Agreement.
"Tax" or "Taxes" means all forms of taxation, whenever created or
imposed, and whether of the United States of America or otherwise, and
whether imposed by a local, municipal, governmental, state, federation or
other body, and without limiting the generality of the foregoing, shall
include income, sales, use, ad valorem, gross receipts, value added,
franchise, transfer, recording, withholding, payroll, employment, excise,
occupation, premium or property taxes, together with any related interest,
penalties and additions to tax, or additional amounts imposed by any taxing
authority (domestic or foreign) upon the Midas Group, the ▇▇▇▇▇▇▇ Group or
any of their respective members or divisions or branches.
"Tax Benefit" means the amount by which any item, including, but not
limited to, any item of income or deduction, gain or loss or tax credit,
decreases the liability for Taxes on or with respect to a Tax Return.
"Tax Detriment" means the amount by which any item, including, but not
limited to, any item of income or deduction, gain or loss, or tax credit,
increases the liability for Taxes on or with respect to a Tax Return.
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"Tax Return" means any return, filing, questionnaire, or other document
required to be filed, including amended returns that may be filed, for any
period with any taxing authority (whether U.S. domestic or foreign) in
connection with any Tax or Taxes (whether or not a payment is required to be
made with respect to such filing).
"▇▇▇▇▇▇▇ Businesses" means the former, present and future subsidiaries,
divisions and businesses of any member of the ▇▇▇▇▇▇▇ Group which are not, or
are not contemplated by the Distribution Agreement to be, part of the Midas
Group immediately after the Distribution.
ARTICLE II
PREPARATION AND FILING OF TAX RETURNS
SECTION 2.01. MANNER OF PREPARATION. All Tax Returns filed after the
Distribution Date shall be prepared on a basis which is consistent with the
income tax rulings obtained from the U.S. Internal Revenue Service ("IRS") or
any other governmental authority in connection with the restructuring of
▇▇▇▇▇▇▇ contemplated by the Distribution Agreement (in the absence of a
controlling change in law or circumstances) and shall be filed on a timely
basis by the party responsible for such filing under this Agreement. To the
extent that an inconsistent position taken by one party hereto or a member of
its group would result in a Tax Detriment to the other party hereto or a
member of its group, and in the absence of a controlling change in law or
circumstances, all Tax Returns filed after the date of this Agreement shall
be prepared on a basis consistent with the elections, accounting methods,
conventions, and principles of taxation used for the most recent taxable
periods for which Tax Returns involving similar items have been filed.
Subject to the provisions of this Agreement, all decisions relating to the
preparation and filing of Tax Returns and any audit or other review of such
Tax Returns shall be made in the sole discretion of the party responsible
under this Agreement for such filing.
SECTION 2.02. PREPARATION AND FILING OF AND ELECTIONS WITH RESPECT TO
PRE-DISTRIBUTION TAX RETURNS AND TAX RETURNS FOR PERIODS THROUGH, TO AND
INCLUDING THE DISTRIBUTION DATE.
(a) CONSOLIDATED U.S. FEDERAL INCOME AND OTHER U.S. FEDERAL TAX RETURNS.
All consolidated U.S. federal income and other U.S. federal (including
excise, withholding, fuel and payroll) Tax Returns which include a member of
the ▇▇▇▇▇▇▇ Group and the Midas Group that are required to be filed for
periods beginning on or before the Distribution Date shall be prepared and
filed by ▇▇▇▇▇▇▇. Midas shall, for each of its taxable periods for which it
and/or International is included in the consolidated federal income tax
return of the ▇▇▇▇▇▇▇ Group, provide ▇▇▇▇▇▇▇ with (i) a true and correct
consolidated federal income tax return for the Midas Group, (ii) separate
federal income tax returns for each member of the Midas Group and (iii) a
reconciliation of book income to federal taxable income for each member of
the Midas Group. Midas hereby agrees to and
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shall utilize the Fast-Tax system for U.S. federal income tax return
preparation in preparing the aforesaid returns and computations and shall use
its best efforts to provide ▇▇▇▇▇▇▇ with such returns and computations on or
before the first day of the sixth month following the end of the period to
which such returns and computations relate but in any event Midas shall
provide such returns and computations no later than the fifteenth day of the
sixth month following the end of the period to which such returns and
computations relate. Simultaneously with providing the aforesaid returns and
computations, Midas shall pay to ▇▇▇▇▇▇▇ the amount of total U.S. federal
income tax liability shown on the above-referenced consolidated federal
income tax return for the Midas Group, reduced by all estimated payments
theretofore made by Midas or International to ▇▇▇▇▇▇▇ on account of such
liability, or if such estimated payments in the aggregate exceed the federal
income tax liability of the Midas Group, ▇▇▇▇▇▇▇ shall pay such excess to
Midas within five (5) days of the filing by ▇▇▇▇▇▇▇ of its consolidated
federal income tax return. Anything herein to the contrary notwithstanding,
Midas for itself and the members of the Midas Group shall calculate in
accordance with past practice and shall remit to ▇▇▇▇▇▇▇ at least five (5)
days prior to the due date of each ▇▇▇▇▇▇▇ estimated quarterly federal income
tax payment the quarterly estimated federal income tax payment that ▇▇▇▇▇▇▇
is required to remit on behalf of the Midas Group. In no event will any
member of the Midas Group receive any tax benefit for purposes of this
Section unless ▇▇▇▇▇▇▇ recognizes and obtains said benefit on its
consolidated federal income tax return.
(b) STATE OF ILLINOIS CORPORATE INCOME TAX RETURNS.
All State of Illinois corporate income tax returns that may be or are
required to be filed by ▇▇▇▇▇▇▇ for periods beginning on or before the
Distribution Date shall be prepared and filed by ▇▇▇▇▇▇▇ on a unitary group
basis and shall include members of the Midas Group. To permit ▇▇▇▇▇▇▇ to
prepare and file such returns, Midas or International shall, for each taxable
period for which it is included in the Illinois state income tax return of
▇▇▇▇▇▇▇'▇ unitary group, provide ▇▇▇▇▇▇▇ with (i) a computation of the
Illinois corporate income tax liability of each member of the Midas Group,
prepared on both a separate company basis as well as on a unitary basis which
includes all members of the Midas Group; (ii) a reconciliation of its
separate company Illinois corporate taxable income to its separate taxable
income for U.S. federal income tax purposes (as determined pursuant to
Section 2.02(a) above); and (iii) the apportionment factors prescribed by
Illinois law and all other information necessary or appropriate for the
proper apportionment of the unitary group income. Each member of the Midas
Group shall use its best efforts to provide ▇▇▇▇▇▇▇ with the above material
on or before the first day of the sixth month following the end of each such
period, but in any event such material shall be provided no later than the
fifteenth day of such sixth month. Simultaneously with providing the
aforesaid material, Midas shall pay to ▇▇▇▇▇▇▇ the lesser of (x) the
aggregate amount of the separate company Illinois tax liability
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of each member of the Midas Group for each such period, or (y) the Illinois
corporate income tax liability as computed above for the Midas Group on a
unitary basis, in either case reduced by all estimated payments theretofore
made to ▇▇▇▇▇▇▇ on account of such liability, or if such estimated payments
in the aggregate exceed the aggregate Illinois tax liability for the Midas
Group, ▇▇▇▇▇▇▇ shall pay such excess to International within five (5) days of
filing by ▇▇▇▇▇▇▇ of its Illinois corporate income tax return for such
period. Anything herein to the contrary notwithstanding, Midas or
International on behalf of all of the members of the Midas Group shall make
estimated Illinois corporate income tax payments to ▇▇▇▇▇▇▇ at such time and
in such amount as shall permit ▇▇▇▇▇▇▇ to remit the same to the appropriate
authority on a timely basis, but in any event each such payment shall be made
within five (5) days of ▇▇▇▇▇▇▇'▇ written demand for the same.
(c) NETHERLANDS CORPORATE INCOME TAX, CAPITAL DUTY TAX AND WITHHOLDING TAX
RETURNS.
Any tax returns required to be filed that include ▇▇▇▇▇▇▇ Netherlands
B.V., Finanza I B.V., Finanza II B.V., any members of the ▇▇▇▇▇▇▇ Group and
any members of the Midas Group in the Netherlands for corporate income tax,
capital duty tax or withholding tax purposes for periods beginning on or
before the Distribution Date shall be prepared, reviewed and filed under the
direction of ▇▇▇▇▇▇▇ consistent with the positions taken by ▇▇▇▇▇▇▇ in any
tax rulings obtained from the U.S. Internal Revenue Service and the
Netherlands taxing authorities in a timely manner in accordance with the law
of the Netherlands. Midas or International shall, for each taxable period
for which a member of the Midas Group is included in the consolidated income
tax return (also referred to as a "fiscal unity" return in the Netherlands)
with members of the ▇▇▇▇▇▇▇ Group, provide ▇▇▇▇▇▇▇ with (i) a true and
correct Netherlands income tax return for such Midas Group members which are
required to file in the Netherlands, (ii) separate Netherlands income tax
returns for such Midas Group members and (iii) a reconciliation of book
income to Netherlands taxable income for such Midas Group members. Midas
agrees to utilize ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ to prepare the income tax returns in
the Netherlands for this purpose and shall use its best efforts to provide
▇▇▇▇▇▇▇ with such returns and computations on or before sixty (60) days
before the tax returns must be filed (including extensions to file granted by
the Netherlands). Simultaneously with providing the aforesaid returns and
computations, Midas shall pay ▇▇▇▇▇▇▇ the amount of total Netherlands income
taxes (and any other applicable taxes) shown on the above-referenced
consolidated Netherlands income tax return due and payable relating to the
members of the Midas Group, reduced by all estimated tax payments theretofore
made by Midas Group members to ▇▇▇▇▇▇▇ on account of such Netherlands tax
liabilities. If such estimated payments in the aggregate exceed the
Netherlands tax liability of the Midas Group members, ▇▇▇▇▇▇▇ shall pay such
excess to Midas within ten (10) days of the filing by ▇▇▇▇▇▇▇ of the
consolidated Netherlands income tax return which included members of the
▇▇▇▇▇▇▇ Group. Anything herein to the contrary notwithstanding, Midas for
itself and for members of the Midas Group shall remit to ▇▇▇▇▇▇▇ at least ten
(10) days prior to the due date of each ▇▇▇▇▇▇▇ estimated
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Netherlands income tax payment (also known as "preliminary assessments" in
the Netherlands) the estimated Netherlands tax payment that ▇▇▇▇▇▇▇ (or a
▇▇▇▇▇▇▇ Group member) is required to remit on behalf of Midas Group members.
In no event will any member of the Midas Group receive any tax benefit for
purposes of this Section unless a member of the ▇▇▇▇▇▇▇ Group recognizes and
obtains said benefit on its consolidated Netherlands income tax return.
(d) CERTAIN DISTRIBUTIONS.
Notwithstanding any provision of this Agreement to the contrary,
International shall be responsible and pay for any tax liabilities imposed as
a result of any distributions of cash by Midas France S.A., Midas Canada,
Inc., Midas Canada Holdings, Ltd., or Finanza II B.V. in anticipation of the
Distribution, and Midas shall be entitled to any subsequent refunds of any
such taxes.
(e) OTHER TAX RETURNS.
All Tax Returns of any member of the ▇▇▇▇▇▇▇ Group or the Midas Group,
other than (1) the consolidated U.S. federal income tax returns, (2) the
State of Illinois corporate income tax returns and (3) the corporate income
tax, the capital duty tax and the withholding tax returns filed in the
Netherlands, required to be filed for periods beginning on or before the
Distribution Date shall be filed by the member of the ▇▇▇▇▇▇▇ Group or the
Midas Group, as the case may be, which filed the corresponding Tax Return for
the most recent period for which such a Tax Return has been filed, or, if no
such corresponding Tax Return has been filed, by the appropriate member in
accordance with local law or custom.
SECTION 2.03. FILING OF POST-DISTRIBUTION TAX RETURNS. All Tax Returns
for periods beginning after the Distribution Date shall be the responsibility
of the ▇▇▇▇▇▇▇ Group if such Tax Returns relate to ▇▇▇▇▇▇▇ Businesses, and
shall be the responsibility of the Midas Group if such Tax Returns relate to
Midas Businesses.
SECTION 2.04. CERTIFICATION. Each tax return and computation of tax
liability required to be provided to ▇▇▇▇▇▇▇ by any member of the Midas Group
pursuant to either Section 2.02(a), Section 2.02(b) or Section 2.02(c) hereof
shall be accompanied by a statement signed by the Chief Financial Officer of
Midas to the effect that such officer has reviewed for completeness and
accuracy the tax return and computation of the tax liability and the
documentation in support thereof and has determined that such return and
computation properly reflect the taxable income (or loss), tax liability and
tax credits of the entity or entities, as the case may be, to which such tax
return and computation relate for the period covered thereby.
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ARTICLE III
DEFICIENCIES AND REFUNDS OF TAXES
SECTION 3.01. PAYMENT OF DEFICIENCIES BY MIDAS GROUP MEMBERS.
If any adjustments are made with respect to any Tax Returns of ▇▇▇▇▇▇▇
(or any member of the ▇▇▇▇▇▇▇ Group) in which any member of the Midas Group
is included for taxable periods beginning on or before the Distribution Date,
and such adjustments are either consented to by ▇▇▇▇▇▇▇ or are upheld on
administrative appeal or litigation, to the extent that such adjustments
increase the tax liability with respect to any taxing jurisdiction or taxing
authority attributable to any member of the Midas Group, then each member of
the Midas Group shall be jointly and severally liable to ▇▇▇▇▇▇▇ for such
increases, including interest and penalties thereon. If any member of the
Midas Group shall have any liability as a result of this Section 3.01, the
amount thereof shall be paid by Midas to ▇▇▇▇▇▇▇ within ten (10) days of the
receipt by Midas of written notice of such liability, together with a
computation of the amount due and supporting documentation in such detail as
Midas may reasonably request to verify the computation of the amount due.
SECTION 3.02. PAYMENT OF REFUNDS TO MIDAS GROUP MEMBERS.
If any adjustments are made with respect to any Tax Returns of ▇▇▇▇▇▇▇
(or any member of the ▇▇▇▇▇▇▇ Group) in which any member of the Midas Group
is included for any taxable period beginning on or before the Distribution
Date, and such adjustments are either consented to by ▇▇▇▇▇▇▇ or are upheld
on administrative appeal or litigation, to the extent that such adjustments
decrease the tax liability attributable to any member of the Midas Group as
determined and calculated under this Agreement and result in a Tax Benefit
for ▇▇▇▇▇▇▇ or for other members of the ▇▇▇▇▇▇▇ Group, then ▇▇▇▇▇▇▇ shall
remit to Midas any refunds of Taxes, together with any interest thereon,
received by it as a result of the adjustments attributable to a member of the
Midas Group. ▇▇▇▇▇▇▇ shall pay any amounts due from it to Midas as a result
of this Section 3.02 within ten (10) days of receipt of the relevant refund
from the respective taxing authority. Such payments shall be accompanied by
a computation of the amount due and supporting documentation in such detail
as Midas may reasonably request to verify the computation of the amount due.
SECTION 3.03. RESTRUCTURING TAXES.
(a) WITH RESPECT TO TRANSACTIONS OCCURRING ON OR BEFORE THE DISTRIBUTION DATE.
If as a result of any transaction occurring on or before the
Distribution Date and involving either the stock, assets or debt (or any
combination thereof) of any member of the Midas Group, any Restructuring
Taxes are imposed upon any member of the Midas Group, then ▇▇▇▇▇▇▇ shall pay
and shall indemnify and hold harmless Midas and each member of the Midas
Group from and against all Restructuring Taxes, including, without
limitation, any Restructuring Taxes at any time paid by Midas or any member
of the Midas Group. Such payment and indemnification shall be made by ▇▇▇▇▇▇▇
no later than fifteen (15) days after the
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later to occur of: (a) written notice from Midas, which notice shall be
accompanied by a computation of the amounts due; or (b) a final determination
of said Restructuring Taxes is made after exhausting any informal,
administrative, arbitration or judicial remedies.
(b) TRANSACTIONS OCCURRING AFTER THE DISTRIBUTION DATE.
If as a result of any transaction occurring after the Distribution Date
and involving either the stock, assets or debt (or any combination thereof)
of Midas or of any member of the Midas Group (including any transactions of
the type described in Section 4.05 below), any Restructuring Taxes are
imposed upon ▇▇▇▇▇▇▇ or any other member of the ▇▇▇▇▇▇▇ Group, then Midas
shall pay and shall indemnify and hold harmless ▇▇▇▇▇▇▇ and each member of
the ▇▇▇▇▇▇▇ Group from and against all such Restructuring Taxes at any time
paid by ▇▇▇▇▇▇▇ or any member of the ▇▇▇▇▇▇▇ Group. Such payment and
indemnification shall be made by Midas no later than fifteen (15) days after
the later to occur of: (a) written notice from ▇▇▇▇▇▇▇, which notice shall be
accompanied by a computation of the amounts due; or (b) a final determination
of said Restructuring Taxes is made after exhausting any informal,
administrative, arbitration or judicial remedies.
(c) TAX BENEFITS REGARDING BASIS DETERMINATIONS RELATING TO RESTRUCTURING
TAXES.
To the extent that ▇▇▇▇▇▇▇ shall pay or indemnify Midas and/or any
member of the Midas Group with respect to Restructuring Taxes pursuant to
Section 3.03(a) above, the basis of the stock, assets or debt which are the
subject of the Restructuring Taxes payable increases, and such stock, assets
or debt are transferred by Midas or any member of the Midas Group in a
taxable transaction to which the basis increase is reflected in the
computation of the gain or loss on such taxable transaction during any
taxable year which includes the Distribution Date and the five (5) taxable
years immediately following the taxable year in which the Distribution Date
falls, then Midas shall promptly notify ▇▇▇▇▇▇▇ in writing of such taxable
transaction and of the amount of the Tax Benefit resulting from such basis
increase. Such notice shall include supporting documentation in such detail
as ▇▇▇▇▇▇▇ may need to verify the computation of the amount. The amount of
such Tax Benefit shall be payable by Midas to ▇▇▇▇▇▇▇ within ten (10) days of
sending to ▇▇▇▇▇▇▇ written notice of such amount due. In order to verify the
amount of such Tax Benefit, ▇▇▇▇▇▇▇ shall have access to inspect the Tax
Returns for the taxable years of Midas and any members of the Midas Group
covered by this section upon written request directed to the Chief Financial
Officer of Midas. Midas shall comply with such request to make a copy of the
Tax Returns in question available at a reasonable place during normal
business hours within thirty (30) days of receiving said request and ▇▇▇▇▇▇▇
may make copies of portions of the Tax Returns which it deems relevant to
this inquiry.
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ARTICLE IV
TAX AUDITS, TRANSACTIONS AND OTHER MATTERS
SECTION 4.01. TAX AUDITS AND CONTROVERSIES.
Except as otherwise provided in this Section 4.01, ▇▇▇▇▇▇▇, at its own
expense, shall have the exclusive authority to represent each member of the
Midas Group before the IRS or any other governmental agency or authority or
before any court with respect to any matter affecting the U.S. federal income
or other U.S. federal tax liability or any other tax liability (whether
state, local or foreign) of any member of the ▇▇▇▇▇▇▇ Group or the Midas
Group for any tax period beginning on or before the Distribution Date. Such
representation shall include, but shall not be limited to exclusive control
over (i) any response to any examination by the IRS or any other taxing
authorities of U.S. federal income tax returns, other U.S. federal tax
returns or the tax returns of other taxing jurisdictions and (ii) any contest
through a final determination of any issue included in any Tax Return that
includes a member of the ▇▇▇▇▇▇▇ Group, including, but not limited to (A)
whether and in what forum to conduct such contest, and (B) whether and on
what basis to settle such contest. ▇▇▇▇▇▇▇ shall give timely notice to Midas
of any inquiry, the assertion of any claim or the commencement of any suit,
action or proceeding in respect of which indemnity for U.S. federal taxes or
any other taxes may be sought under this Agreement against Midas or any
member of the Midas Group and will give Midas such information with respect
thereto as Midas may reasonably request. Upon notice to ▇▇▇▇▇▇▇, Midas may
at its own expense participate in any such inquiry, audit or other
administrative proceeding and assume the defense or prosecution, as the case
may be, of any suit, action or proceeding; provided, that each Midas
representative is satisfactory to ▇▇▇▇▇▇▇, and Midas shall thereafter consult
with ▇▇▇▇▇▇▇ upon ▇▇▇▇▇▇▇'▇ request for such consultation from time to time
with respect to such inquiry, suit, action or proceeding. ▇▇▇▇▇▇▇ is
authorized and empowered to settle any claim, suit, action or proceeding in
respect of which indemnity for U.S. federal taxes or any other taxes may be
sought against Midas or any member of the Midas Group. Anything in this
Section 4.01 to the contrary notwithstanding, if ▇▇▇▇▇▇▇ determines to
terminate Midas' participation in any such inquiry or in the defense of any
such suit, action or proceeding, then upon receipt of notice from ▇▇▇▇▇▇▇ to
such effect, Midas shall have no further right to commence or continue such
discussions or submissions with respect to the matter, and ▇▇▇▇▇▇▇ shall have
the right to close and to cause Midas to close such audit or contest.
Anything in this Section 4.01 or elsewhere in this Agreement to the
contrary notwithstanding, if ▇▇▇▇▇▇▇ permits Midas to litigate any U.S.
federal tax issue or other tax issue in any forum, Midas shall pay and shall
indemnify and hold harmless each member of the ▇▇▇▇▇▇▇ Group from any and all
costs, expenses and/or liabilities of any type or nature, including, without
limitation, any tax liability (including interest and penalties thereon),
that are incurred by or imposed upon ▇▇▇▇▇▇▇ or any member of the ▇▇▇▇▇▇▇
Group which ▇▇▇▇▇▇▇ or such ▇▇▇▇▇▇▇ Group member would not otherwise have
incurred.
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SECTION 4.02. CODE SECTION 355 DISTRIBUTION RELATED PROFESSIONAL
AND CONSULTING FEES.
The Tax Benefits arising out of any professional fees or consulting fees
in connection with the Code section 355 Distribution of Midas or other
members of the Midas Group that are paid for by ▇▇▇▇▇▇▇ or by members of the
▇▇▇▇▇▇▇ Group which are allowed as a deduction to Midas or to any other
member of the Midas Group, rather than as a deduction to ▇▇▇▇▇▇▇ or to a
member of the ▇▇▇▇▇▇▇ Group which paid for such professional or consulting
fees in question, shall be reimbursed to ▇▇▇▇▇▇▇ or to the member of the
▇▇▇▇▇▇▇ Group that actually made the payment of such professional or
consulting fees. The amount thereof shall be payable by Midas to ▇▇▇▇▇▇▇
within ten (10) days of the receipt by Midas of written notice of such item,
together with a computation of the amount due and supporting documentation in
such detail as Midas may reasonably request to verify the computation of the
amount due.
SECTION 4.03. RETENTION OF BOOKS AND RECORDS.
Midas and ▇▇▇▇▇▇▇ each agrees that they will take provisions to insure
that both they and the members of the Midas Group and the members of the
▇▇▇▇▇▇▇ Group, respectively, will retain all Tax Returns, related schedules
and workpapers, and all material records and other documents relating thereto
existing on the date hereof or created through or with respect to taxable
periods beginning on or before the Distribution Date, until the later of (a)
the expiration of the statute of limitations (including extensions) of the
taxable years to which such Tax Returns and other documents relate, or (b)
September 16, 2008.
SECTION 4.04. COOPERATION WITH RESPECT TO TAX RETURN FILINGS,
EXAMINATIONS AND TAX RELATED CONTROVERSIES.
(a) MIDAS' OBLIGATIONS.
In addition to any obligations imposed pursuant to the Distribution
Agreement, Midas and each other member of the Midas Group shall fully
cooperate with ▇▇▇▇▇▇▇ and its representatives, in a prompt and timely
manner, in connection with (i) the preparation and filing of and (ii) any
inquiry, audit, examination, investigation, dispute, or litigation involving,
any Tax Return filed or required to be filed by or for any member of the
▇▇▇▇▇▇▇ Group for any taxable period beginning on or before the Distribution
Date. Such cooperation shall include, but not be limited to, (x) the
execution and delivery to ▇▇▇▇▇▇▇ by the appropriate Midas Group member of
any power of attorney required to allow ▇▇▇▇▇▇▇ and its counsel to represent
Midas or such other Midas Group member in any controversy which ▇▇▇▇▇▇▇ shall
have the right to control pursuant to the terms of Section 4.01 of this
Agreement, and (y) making available to ▇▇▇▇▇▇▇, during normal business hours,
and within sixty (60) days of any request therefor, all books, records and
information, and the assistance of all officers and employees, necessary or
useful in connection with any tax inquiry, audit, examination, investigation,
dispute, litigation or any other matter.
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(b) ▇▇▇▇▇▇▇'▇ OBLIGATIONS.
Except as otherwise provided in this Article IV, ▇▇▇▇▇▇▇ shall fully
cooperate with Midas and its representatives, in a prompt and timely manner,
in connection with (i) the preparation and filing of and (ii) any inquiry,
audit, examination, investigation, dispute, or litigation involving, any Tax
Return filed or required to be filed by or for any member of the Midas Group
which includes ▇▇▇▇▇▇▇ or any other member of the ▇▇▇▇▇▇▇ Group. Such
cooperation shall include, but not be limited to, (x) the execution and
delivery to Midas by ▇▇▇▇▇▇▇ of any power of attorney required to allow Midas
and its counsel to participate on behalf of Midas or other Midas Group
members in any inquiry, audit or other administrative proceeding and to
assume the defense or prosecution, as the case may be, of any suit, action or
proceeding pursuant to the terms of and subject to the conditions set forth
in Section 4.01 of this Agreement, (y) making available to Midas, during
normal business hours, and within sixty (60) days of any request therefor,
all books, records and information, and the assistance of all officers and
employees, necessary or useful in connection with any tax inquiry, audit,
examination, investigation, dispute, litigation or any other matter.
(c) REMEDY FOR FAILURE TO COMPLY.
If ▇▇▇▇▇▇▇ reasonably determines that Midas is not for any reason
fulfilling its obligations under Section 4.04(a), or if Midas reasonably
determines that ▇▇▇▇▇▇▇ is not for any reason fulfilling its obligations
under Section 4.04(b), then ▇▇▇▇▇▇▇ or Midas, as the case may be, shall have
the right to appoint, at the expense of the other, an independent entity such
as a nationally-recognized public accounting firm to assist the other in
meeting its obligations under this Section 4.04. Such entity shall have
complete access, during normal business hours, to all books, records and
information, and the complete cooperation of all officers and employees, of
Midas or ▇▇▇▇▇▇▇, as the case may be. The remedy provided in this Section
4.04(c) shall not be deemed exclusive.
SECTION 4.05. CERTAIN POST-DISTRIBUTION DATE TRANSACTIONS.
(a)WITH RESPECT TO U.S. FEDERAL INCOME TAXES.
Midas shall, and shall cause each Midas Group member to, comply with
each representation and statement made, or to be made, to the IRS or other
governmental authority in connection with any rulings obtained, or to be
obtained, by ▇▇▇▇▇▇▇ with respect to the Distribution, and any other
transaction contemplated by this Agreement. Midas further agrees that during
the three-year period following the Distribution Date, it (i) shall cause
International to continue to be engaged in an active trade or business within
the meaning of Section 355(b)(2) of the Code, (ii) shall not issue any shares
of, or options with respect to, its stock, except that it may issue shares
of, or options with respect to, its stock if such issuances would not exceed
(when aggregated with prior issuances) twenty percent (20%) of the issued and
outstanding stock of Midas immediately following the Distribution, (iii)
shall not purchase any shares of its stock other than through stock purchases
permitted by the ruling issued to ▇▇▇▇▇▇▇ by the IRS regarding the
Distribution, (iv) shall not liquidate or merge with any other corporation or
transfer
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substantially all of its assets to any other corporation, and (v) shall not
recommend to its shareholders that they agree to an acquisition of their
stock in Midas by another entity. Anything in this Section 4.05 to the
contrary notwithstanding, an act or omission otherwise inconsistent with the
representations herein shall be permitted if, in the unqualified opinion of
nationally recognized counsel to Midas, which counsel shall be satisfactory
to ▇▇▇▇▇▇▇, or pursuant to a supplemental ruling letter obtained from the IRS
and satisfactory to ▇▇▇▇▇▇▇, such act or omission would not adversely affect
the rulings issued by the IRS or by any other governmental authority with
respect to the Distribution. Nothing in this Section 4.05 should be
interpreted as altering the obligations of Midas or of any other member of
the Midas Group under Section 3.03(b) of this Agreement.
ARTICLE V
TAX ALLOCATION AGREEMENTS TERMINATED
SECTION 5.01 COMPLETE AGREEMENT AND TERMINATION OF TAX ALLOCATION
AGREEMENTS.
This Agreement shall constitute the entire agreement between the parties with
respect to the subject matter hereof and shall supersede all previous
negotiations and commitments and the prior Tax Allocation Agreements, which
shall be replaced and superseded in their entirety by this Agreement and
shall be of no further force and effect.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable, the
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
SECTION 6.02. MODIFICATION OF AGREEMENT. No modification, amendment or
waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by each of the parties hereto and then such
modification, amendment or waiver shall be effective only in the specific
instance and for the purpose for which given.
SECTION 6.03. CONFLICT WITH THE DISTRIBUTION AGREEMENT. In the event
and to the extent that there shall be a conflict between the provisions of
this Agreement and the Distribution Agreement, the provisions of this
Agreement shall control.
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SECTION 6.04. NOTICES. All notices or other communications required or
permitted under this Agreement shall be delivered by hand, mailed by
certified or registered mail, postage prepaid with return receipt requested,
or sent by cable, telegram, telex or telecopy (confirmed by regular,
first-class mail), to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice) and shall be
deemed given on the date on which such notice is received:
(a) In the case of ▇▇▇▇▇▇▇, to
▇▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(b) In the case of Midas and International:
Midas Group, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
SECTION 6.05. APPLICATION TO PRESENT AND FUTURE SUBSIDIARIES. This
Agreement is being entered into by ▇▇▇▇▇▇▇, Midas and International on behalf
of themselves and each member of the ▇▇▇▇▇▇▇ Group and the Midas Group,
respectively. This Agreement shall constitute a direct obligation of each
such member and shall be deemed to have been readopted and affirmed on behalf
of any corporation which becomes a member of the ▇▇▇▇▇▇▇ Group or of the
Midas Group in the future. ▇▇▇▇▇▇▇, Midas and International hereby guarantee
the performance of all actions, agreements and obligations provided for under
this Agreement of each member of the ▇▇▇▇▇▇▇ Group and the Midas Group,
respectively. ▇▇▇▇▇▇▇, Midas and International shall, upon the written
request of the other, cause any of their respective group members formally to
execute this Agreement. This Agreement shall be binding upon, and shall
inure to the benefit of, the successors, assigns and persons controlling any
of the corporations bound hereby.
SECTION 6.06. TERM. This Agreement shall commence on the date of
execution indicated above and shall continue in effect until otherwise agreed
to in writing by the parties hereto, or their respective successors or
assigns.
SECTION 6.07. TITLES AND HEADINGS. Titles and headings to sections
herein are inserted for the convenience of reference only and are not
intended to be a part or to affect the meaning or interpretation of this
Agreement.
SECTION 6.08. SINGULAR AND PLURAL. As used herein, the singular shall
include the plural and vice versa.
SECTION 6.09. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Delaware.
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SECTION 6.10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become a binding agreement when one or more counterparts
have been signed by each party and delivered to the other parties.
SECTION 6.11. FORM OF PAYMENTS AND LATE PAYMENTS. Any payment owed by
one party to another under this Agreement shall be made in the currency in
which the tax to which such payment relates, and shall be paid in immediately
available funds and in such other manner as the party to whom such payment is
owed may reasonably request. Any payments required by this Agreement that
are not made when due shall bear interest at the prime rate plus six percent
(6%) from the due date of the payment to the date paid.
SECTION. 6.12 TREATMENT OF PAYMENTS. The parties agree that, in the
absence of any change in law or fact, any indemnification payments made under
this Agreement shall be treated, for tax purposes, as occurring before the
Distribution Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year
first above written.
▇▇▇▇▇▇▇ CORPORATION
By:_____________________________
Vice President-Taxes
MIDAS GROUP, INC.
By:_____________________________
Chief Financial Officer
MIDAS INTERNATIONAL CORPORATION
By:_____________________________
Chief Financial Officer
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