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Exhibit 10.15
TAX SHARING AGREEMENT
This Tax Sharing Agreement (this "Agreement") is among
UNIFRAX HOLDING CO. ("Unifrax") and its subsidiary, UNIFRAX
CORPORATION ("Subsidiary").
WHEREAS, Unifrax owns 90% of the outstanding shares of stock
of Subsidiary;
WHEREAS, Unifrax and Subsidiary have chosen to file
consolidated federal income tax returns ("Consolidated Returns") and various
consolidated, combined, or unitary state or local income or franchise tax
returns ("Combined Returns"); and
WHEREAS, the parties hereto desire to (i) set forth the basis
on which the tax liabilities determined under the Consolidated Returns and
Combined Returns will be allocated among them and other corporations (if any)
that join in the filing of such returns and (ii) provide for a payment mechanism
to compensate members whose deductions, net operating losses, or credits are
used by another member;
NOW, THEREFORE, in consideration of the premises, covenants,
and agreements contained herein, the parties hereto agree as follows:
(1) The Subsidiary (a) agrees to join with Unifrax in the
filing of Consolidated Returns and (b) agrees to continue such consolidated
return filings for each taxable year during which (i) Unifrax is the "common
parent" corporation of an "affiliated group" of corporations (the "Unifrax
Group") (as those terms are used in section 1504 of the Internal Revenue Code of
1986, as amended (the "Code")) and (ii) the Subsidiary is eligible to join in
the filing of such return;
(2) The Subsidiary hereby irrevocably designates Unifrax as
its agent for the purpose of taking any and all action necessary or incidental
to the filing of Consolidated Returns. The Subsidiary agrees to furnish Unifrax
with any and all information requested by Unifrax in order to carry out the
provisions of this Agreement; to cooperate with Unifrax in filing any return or
consent contemplated by this Agreement; to take such action with respect to such
returns as Unifrax may request, including, but not limited to, the filing of all
elections and the filing of requests for the extension of time within which to
file tax returns; and to cooperate in connection with any audit or refund claim;
(3) The Unifrax Group will elect upon the filing of its first
consolidated return (i) basic method 2 as described in Section 1552(a)(2) of the
Code, and (ii) the percentage method (using 100 percent) under Section
1.1502-33(d) of the regulations. Notwithstanding the foregoing and
notwithstanding
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any other provision of this Agreement, for purposes of determining the separate
tax liability of Subsidiary, any deduction relating to the Covenant not to
Compete dated as of the date hereof between British Petroleum Company p.l.c.
(acting for itself and jointly and severally on behalf of its affiliates) and
Unifrax Holding Co. shall be treated as a deduction of Subsidiary.
(4) (a) Unifrax shall prepare or cause to be prepared the
Consolidated Returns of the Unifrax Group and shall pay all taxes (including
penalties and interest) reported on such returns to the Internal Revenue Service
(the "IRS"). Not later than ten (10) days before Unifrax makes a payment to the
IRS of any taxes due with respect to a Consolidated Return of the Unifrax Group
(including estimated taxes), Subsidiary shall pay to Unifrax an amount equal to
(i) its share of such tax liability as determined in paragraph (3) above, plus
(ii) additional amounts, if any (and if not already paid for under this
paragraph (4)(a)), owed as a result of using deductions, net operating losses or
tax credits of another member as set forth in paragraph (4)(b) below.
(b) For any taxable period for which a Consolidated Return
is filed for the Unifrax Group pursuant to this Agreement, Unifrax shall pay
those members of the Unifrax Group whose deductions, net operating losses or tax
credits are absorbed or otherwise used by another member of the group pursuant
to the method described in Paragraph (3) above, in a consistent manner
determined by Unifrax that reasonably reflects the value of such deductions, net
operating losses or tax credits.
(c) If the federal income tax liability of the Unifrax
Group as reported on a Consolidated Return filed pursuant to this Agreement is
adjusted for any taxable period, whether by means of an amended return, claim
for refund, or audit by the IRS, the liability of each member of the Unifrax
Group shall be recomputed under the relevant section of this Agreement to give
effect to those adjustments as if such adjustments (including interest and
penalties, if any) had been part of the original determination hereunder. In the
case of a refund, Unifrax shall make payment to each party of its share of the
refund within ten (10) days after the refund is received by Unifrax and, in the
case of an increase in tax liability, each party shall pay to Unifrax its
allocable share of such increased tax liability at least ten (10) days prior to
the date that Unifrax reasonably expects to pay such liability to the IRS. If
any interest is to be paid or received as a result of any tax deficiency or
refund, that interest shall be allocated by Unifrax to the members in the ratio
that each member's change in income tax liability bears to the total change in
the income tax liability of the Unifrax Group. If any penalty is to be paid or
received as a result of any tax deficiency or refund, that penalty shall be
allocated by
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Unifrax to the members that are responsible for the imposition of such penalty.
(5) This Agreement shall not apply with respect to the
carryback of any net operating loss, tax credit, or other tax benefit generated
by a party and attributable to a taxable year beginning after the date hereof in
which such party is not a member of the Unifrax Group.
(6) The Subsidiary agrees at the request of Unifrax to join
with Unifrax or any direct or indirect subsidiary of Unifrax in any
consolidated, combined, or unitary state or local income or franchise tax return
for any taxable year in which Unifrax or any direct or indirect subsidiary of
Unifrax elects to file a Combined Return that includes the Subsidiary. If at any
time after the date of this Agreement, the liability for any state or local
income or franchise tax of Unifrax, the Subsidiary and/or any other affiliated
corporation is determined on a unitary, consolidated, or combined basis, this
Agreement shall be applied by Unifrax to such state or local tax in like manner
as it is applied to matters relating to federal income taxes, after taking into
consideration the extent to which each party has been included in a Combined
Return that relates to those taxes.
(7) Absent bad faith or gross misconduct, Unifrax shall have
no liability for any action taken or omitted to be taken by it in connection
with this Agreement.
(8) This Agreement shall be binding upon and inure to the
benefit of any successor to any party. If for any reason the Subsidiary no
longer is a member of the Unifrax Group, its rights and obligations under this
Agreement with respect to periods during which it was a member of the Unifrax
Group shall survive and be fully enforceable.
(9) This Agreement embodies the entire understanding among the
parties as to the subject matter hereof, and no change or modification may be
made except in writing signed by each of the parties.
(10) The waiver of a breach of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any other breach of
the same or any other term or condition.
(11) This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.
(12) This Agreement is entered into in and shall be construed
in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties have caused this Tax
Allocation Agreement to become effective as of October____, 1996.
UNIFRAX HOLDING CO.
By:
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Name:
Title:
UNIFRAX CORPORATION
By:
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Name:
Title:
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