TAX SHARING AGREEMENT
This Tax Sharing Agreement (the "Agreement") dated as of December 31, 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, 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
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As used in this Agreement, the following terms shall have the 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
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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.
"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
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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 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
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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 an
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, 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
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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., Midas Automotive International 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 ▇▇▇▇▇▇▇ 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
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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.
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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 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
9
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.
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
10
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.
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
11
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, necessary or useful in connection with
any tax inquiry, audit, examination, investigation, dispute, litigation or any
other matter.
(b) ▇▇▇▇▇▇▇'▇ Obligation.
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
12
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 continue and
shall cause ▇▇▇▇▇▇▇ 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
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issuances would not exceed (when aggregated with prior issuances) twenty percent
(20%) of the issued and outstanding stock 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
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
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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.
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
15
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.
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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Vice President-Taxes
HUSSMANN INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Chief Financial Officer
HUSSMANN CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Chief Financial Officer
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