TAX SHARING AGREEMENT
This Tax Sharing Agreement (the "Agreement") dated as of ______________,
1997, by and among ▇▇▇▇▇▇▇ Corporation, a Delaware corporation ("▇▇▇▇▇▇▇"),
Hussmann International, Inc., a Delaware corporation ("International") and
Hussmann Corporation, a Missouri corporation ("Hussmann").
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 International and of Midas Group, Inc., a
Delaware corporation ("Midas"), will be distributed by ▇▇▇▇▇▇▇ (pro rata) to
the holders of its common stock (the "Distribution");
WHEREAS, International was incorporated on August 29, 1997, and, at the
time of the Distribution, International will own all of the issued and
outstanding shares of common stock of Hussmann;
WHEREAS, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ 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
Hussmann Group, as hereinafter defined (hereinafter referred to as the
"▇▇▇▇▇▇▇ Group"), and International and Hussmann, 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 Midas (hereinafter referred to as the
"Hussmann 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.
"Hussmann Businesses" means the former, present and future subsidiaries,
divisions and businesses of any member of the Hussmann 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 Hussmann
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 Hussmann 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
Hussmann 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 Hussmann Group that are required to be filed for
periods beginning on or before the Distribution Date shall be prepared and
filed by ▇▇▇▇▇▇▇. International shall, for each of its taxable periods for
which it and/or Hussmann 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 Hussmann Group, (ii) separate
federal income tax returns for each member of the Hussmann Group and (iii) a
reconciliation of book income to federal taxable income for each member of
the Hussmann Group. International
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hereby agrees to and 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 International 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, International 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 Hussmann
Group, reduced by all estimated payments theretofore made by International or
Hussmann to ▇▇▇▇▇▇▇ on account of such liability, or if such estimated
payments in the aggregate exceed the federal income tax liability of the
Hussmann Group, ▇▇▇▇▇▇▇ shall pay such excess to International within five
(5) days of the filing by ▇▇▇▇▇▇▇ of its consolidated federal income tax
return. Anything herein to the contrary notwithstanding, International for
itself and the members of the Hussmann 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 Hussmann Group. In no event will any member of the
Hussmann 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 Hussmann Group. To permit ▇▇▇▇▇▇▇ to
prepare and file such returns, International or Hussmann 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 Hussmann Group,
prepared on both a separate company basis as well as on a unitary basis which
includes all members of the Hussmann 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 Hussmann 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,
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International shall pay to ▇▇▇▇▇▇▇ the lesser of (x) the aggregate amount of
the separate company Illinois tax liability of each member of the Hussmann
Group for each such period, or (y) the Illinois corporate income tax
liability as computed above for the Hussmann 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 Hussmann 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, International or Hussmann on
behalf of all of the members of the Hussmann 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 other members of the
▇▇▇▇▇▇▇ Group and any members of the Hussmann 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. International or Hussmann shall, for each taxable
period for which a member of the Hussmann 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 Hussmann Group members which
are required to file in the Netherlands, (ii) separate Netherlands income tax
returns for such Hussmann Group members and (iii) a reconciliation of book
income to Netherlands taxable income for such Hussmann Group members.
International 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, International 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 Hussmann Group, reduced by all estimated tax payments
theretofore made by Hussmann Group members to ▇▇▇▇▇▇▇ on account of such
Netherlands tax liabilities. If such estimated payments in the aggregate
exceed the Netherlands tax liability of the Hussmann Group members, ▇▇▇▇▇▇▇
shall pay such excess to International within ten (10) days of the filing by
▇▇▇▇▇▇▇ of the consolidated Netherlands income tax return which included
members of the
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▇▇▇▇▇▇▇ Group. Anything herein to the contrary notwithstanding,
International for itself and for members of the Hussmann Group shall remit to
▇▇▇▇▇▇▇ at least ten (10) days prior to the due date of each ▇▇▇▇▇▇▇
estimated 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
Hussmann Group members. In no event will any member of the Hussmann 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) OTHER TAX RETURNS.
All Tax Returns of any member of the ▇▇▇▇▇▇▇ Group or the Hussmann
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, which are required to be filed for periods beginning on or
before the Distribution Date shall be filed by the member of the ▇▇▇▇▇▇▇
Group or the Hussmann 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 Hussmann Group if such Tax Returns relate
to Hussmann Businesses.
Section 2.04. CERTIFICATION. Each tax return and computation of tax
liability required to be provided to ▇▇▇▇▇▇▇ by any member of the Hussmann
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 International 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 HUSSMANN 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 Hussmann
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 Hussmann Group, then each member
of the Hussmann Group shall be jointly and severally liable to ▇▇▇▇▇▇▇ for
such increases, including interest and penalties thereon. If any member of
the Hussmann Group shall have any liability as a result of this Section 3.01,
the amount thereof shall be paid by International to ▇▇▇▇▇▇▇ within ten (10)
days of the receipt by International of written notice of such liability,
together with a computation of the amount due and supporting documentation in
such detail as International may reasonably request to verify the computation
of the amount due.
Section 3.02. PAYMENT OF REFUNDS TO HUSSMANN 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 Hussmann
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
Hussmann 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 International any refunds of Taxes, together with any
interest thereon, received by it as a result of the adjustments attributable
to a member of the Hussmann Group. ▇▇▇▇▇▇▇ shall pay any amounts due from it
to International 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 International 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 Hussmann Group, any Restructuring
Taxes are imposed upon any member of the Hussmann Group, then ▇▇▇▇▇▇▇ shall
pay and shall indemnify and hold harmless International and each member of
the Hussmann Group from and against all Restructuring Taxes, including,
without limitation, any Restructuring Taxes at any time paid by International
or any member of the Hussmann Group. Such payment and indemnification shall
be made by ▇▇▇▇▇▇▇ no later than fifteen (15) days after the later to occur
of: (a) written notice from International, which notice shall be accompanied
by a computation of the amounts
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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 International or of any member of the Hussmann 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
International 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 International 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 International
and/or any member of the Hussmann 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 International or any member of the Hussmann
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 International 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 International 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 International and any members of the Hussmann
Group covered by this section upon written request directed to the Chief
Financial Officer of International. International 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 Hussmann 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
Hussmann 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 International 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 International or any member of
the Hussmann Group and will give International such information with respect
thereto as International may reasonably request. Upon notice to ▇▇▇▇▇▇▇,
International 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
International representative is satisfactory to ▇▇▇▇▇▇▇, and International
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 International or any member of the
Hussmann Group. Anything in this Section 4.01 to the contrary notwithstanding,
if ▇▇▇▇▇▇▇ determines to terminate International's 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, International 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
International to close such audit or contest.
Anything in this Section 4.01 or elsewhere in this Agreement
to the contrary notwithstanding, if ▇▇▇▇▇▇▇ permits International to litigate
any U.S. federal tax issue or other tax issue in any forum, International 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
International or other members of the Hussmann Group that are paid for by
▇▇▇▇▇▇▇ or by members of the ▇▇▇▇▇▇▇ Group which are allowed as a deduction to
International or to any other member of the Hussmann 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
International to ▇▇▇▇▇▇▇ within ten (10) days of the receipt by International
of written notice of such item, together with a computation of the amount due
and supporting documentation in such detail as International may reasonably
request to verify the computation of the amount due.
Section 4.03. RETENTION OF BOOKS AND RECORDS.
International and ▇▇▇▇▇▇▇ each agrees that they will take
provisions to insure that both they and the members of the Hussmann 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) INTERNATIONAL'S OBLIGATIONS.
In addition to any obligations imposed pursuant to the
Distribution Agreement, International and each other member of the Hussmann
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 Hussmann Group member
of any power of attorney required to allow ▇▇▇▇▇▇▇ and its counsel to represent
International or such other Hussmann 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,
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necessary or useful in connection with any tax inquiry, audit, examination,
investigation, dispute, litigation or any other matter.
(b) ▇▇▇▇▇▇▇'▇ OBLIGATIONS.
Except as otherwise provided in this Article IV, ▇▇▇▇▇▇▇ shall
fully cooperate with International 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 Hussmann 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 International by ▇▇▇▇▇▇▇ of any power of attorney
required to allow International and its counsel to participate on behalf of
International or other Hussmann 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 International, 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 International is not for
any reason fulfilling its obligations under Section 4.04(a), or if
International reasonably determines that ▇▇▇▇▇▇▇ is not for any reason
fulfilling its obligations under Section 4.04(b), then ▇▇▇▇▇▇▇ or
International, 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 International 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.
International shall, and shall cause each Hussmann 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. International further
agrees that during the three-year period following the Distribution Date, it
(i) shall cause Hussmann and ▇▇▇▇▇▇▇ Netherlands B.V. 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
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outstanding common of International 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 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 International 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 International, 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
International or of any other member of the Hussmann 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.
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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.
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 International and Hussmann:
Hussmann International, Inc.
▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Section 6.05. APPLICATION TO PRESENT AND FUTURE SUBSIDIARIES.
This Agreement is being entered into by ▇▇▇▇▇▇▇, International and Hussmann on
behalf of themselves and each member of the ▇▇▇▇▇▇▇ Group and the Hussmann
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
Hussmann Group in the future. ▇▇▇▇▇▇▇, International and Hussmann hereby
guarantee the performance of all actions, agreements and obligations provided
for under this Agreement of each member of the ▇▇▇▇▇▇▇ Group and the Hussmann
Group, respectively. ▇▇▇▇▇▇▇, International and Hussmann 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.
Section6.06. 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.
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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.
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.
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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
HUSSMANN INTERNATIONAL, INC.
By:
----------------------------
Chief Financial Officer
HUSSMANN CORPORATION
By:
----------------------------
Chief Financial Officer
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