EXHIBIT 10.24
TAX ALLOCATION AGREEMENT
BETWEEN
FIDELITY NATIONAL FINANCIAL, INC.,
FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK
AND
NATIONAL TITLE INSURANCE OF NEW YORK, INC.
TAX ALLOCATION AGREEMENT
This Agreement is entered into as of December 13, 1999 between Fidelity National
Financial, Inc. ("FNFI") and Fidelity National Title Insurance Company of New
York ("Group Member").
I. RECITAL
WHEREAS, FNFI and all 80 percent or more owned subsidiaries shall file
their federal income tax return on a consolidated basis; and
WHEREAS, it will be necessary to allocate such consolidated tax liability
or benefit among the consolidated group membership; and
WHEREAS, such allocated tax liability or benefit should represent the
liability or benefit that would have been incurred or received by each
consolidated group member as if such group member filed a separate federal
income tax return; and
WHEREAS, FNFI will act as a clearinghouse to collect allocated tax
liabilities from profitable group members and redistribute allocated tax
benefits to loss group members.
NOW, THEREFORE, the parties hereby agree as follows:
II. DEFINITIONS
(a) "Group Member" shall include only such corporations which are included in
the FNFI affiliated group as defined in section 1504 of the Internal
Revenue Code, as amended.
(b) "Consolidated Federal Income Tax Liability" shall be the amount of actual
tax liability which is due for the taxable period under determination as
reflected on the consolidated federal income tax return.
(c) "Consolidated Group" shall mean the group of corporations which meet the
definition of affiliate as set forth in Section II (a) above.
(d) "Federal Taxable Income (Loss)" shall be the taxable income or loss
determined on a consolidated federal return basis as computed under
Treasury Regulation Section 1.1502-11.
(e) "Separate Taxable Income (Loss)" shall be the taxable income or loss
determined on a separate return basis as computed under Treasury Regulation
Section 1.1502-12 and includes both regular and alternative minimum taxable
income (loss).
(f) "IRC Section" shall refer to the Internal Revenue Code sections referenced
in this Agreement or any amendment thereto applicable during the term of
this Agreement.
(g) "Consolidated Return" shall refer only to the consolidated federal return.
(h) "Effective Date" shall be the date defined under paragraph (a) of Section
V.
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III. TAX LIABILITY
(a) Group member shall calculate its tax liability under the provisions of New
York Circular Letter 1979-33.3(A) - Method A, as described in this Section.
(b) Group member shall calculate separate taxable income or net operating loss
as if such member filed a separate federal income tax return for the
taxable year except as provided in paragraph (d) of this section and is to
include a separate computation of the taxable income and the tax charge or
tax refund under:
i) regular federal income tax provisions: and
ii) alternative minimum tax provisions.
(c) Group member shall determine the following consolidated return tax
attributes on its separate return as appropriate without consideration of
any impact on the consolidated return. These attributes include, but are
not limited to:
i) IRC Section 172 net operating loss;
ii) IRC Section 56 alternative minimum tax net operating loss;
iii) IRC Section 1212 capital loss;
iv) IRC Section 56 alternative minimum tax capital loss;
v) IRC Section 1231 net loss;
vi) Charitable contribution and related carryover; and
vii) Dividends received deduction.
(d) Any election made by FNFI for any item on the consolidated return is deemed
to be made by the Group Member for purposes of the computation of separate
taxable income or net operating loss. Any limitation imposed upon FNFI with
respect to any tax attribute related to the acquisition of the Group Member
is similarly imposed upon that tax attribute in the computation of the
member's separate taxable income or net operating loss.
(e) The carryback and carryforward provision provided in the Internal Revenue
Code for the items enumerated under paragraph (c) of this Section are
deemed to apply except as outlined under paragraphs (d) and (f) of this
Section.
(f) Only for purposes of application of this Agreement, Group Member consents
to relinquish the entire carryback period for items under paragraph (c) of
this Section for the first year Group Member is subject to the terms of
this Agreement. Thereafter, any carryback period is limited to the period
this Agreement has been effective.
(g) If taxable income, special deductions or credits reported in the
consolidated federal income tax return are revised by the Internal Revenue
Service or other appropriate authority, a recalculation of the tax
liability for all parties to the Agreement shall be made as appropriate
under the provisions of this Section.
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IV. ADMINISTRATION AND SETTLEMENT
(a) This Agreement shall be administered and interpreted by the Chief Financial
Officer of FNFI or by the individual or group of individuals designated by
the Chief Financial Officer of FNFI.
(b) FNFI's Tax Department shall make a preliminary calculation of the Group
Member's separate taxable income or net operating loss under paragraph (a)
of Section III, in accordance with audited financial statements prepared by
FNFI's independent certified accounts, within one hundred twenty (120) days
from the end of each calendar year that this Agreement remains in effect.
(c) FNFI shall make a preliminary notification to the Group Member of the
liability or benefit based upon the preliminary computation. In no event is
the preliminary calculation under paragraph (b) of this Section deemed to
establish a liability or require settlement between FNFI and the Group
Member. Final payment between FNFI and the Group Member is to be made only
in accordance with the terms set forth in paragraphs (d) and (e) of this
section.
(d) FNFI shall deposit or deduct cash or other admitted assets in the amount of
the benefit or liability, respectively, attributable to Group Member into
or from the Group Member's cash management accounts, based upon the final
calculation of the member's taxable income or net operating loss included
in the consolidated return.
To help assure the Group Member's enforceable right to recoup federal
income taxes in the event of future net losses, an escrow account
consisting of assets eligible as an investment to Group Member shall be
established and maintained by FNFI in an amount equal to the excess of the
amount paid by Group Member to FNFI for federal income taxes over the
actual payment made by FNFI to the Internal Revenue Service.
Such escrow assets may be released to FNFI from the escrow account at such
time as the permissible period for carrybacks has elapsed.
(e) In no event is settlement, as defined under paragraph (d) of this Section,
to occur any later than on or before thirty (30) days after the earlier of
these two dates:
i) the actual date the consolidated return is filed; or
ii) the maximum extended due date for the consolidated return as then
permitted under the Internal Revenue Code.
V. TERM AND TERMINATION
(a) This Agreement shall be effective and applicable to each party's taxable
year, or short taxable year, beginning with the year the member first
becomes a part of the FNFI affiliated group and each taxable year
thereafter.
(b) This Agreement may be amended at any time by mutual agreement or for cause.
All amendments, unless designated as prospective to January 1 of the
following taxable year,
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signed during a taxable year are effective as of January 1 of such taxable
year of amendment.
(c) This Agreement may only be terminated by mutual agreement or for cause. If
a party desires to terminate the Agreement for cause, that party must
provide at least six (6) months written notice specifying the nature of the
other party's material breach of the Agreement. This Agreement shall
terminate if the other party has not taken reasonable action to remedy its
breach of the Agreement within such six (6) month period. Any action to
dispute such termination, in accordance with the procedure described in
Article VI of this Agreement, shall extend this Agreement beyond such six
(6) month period, provided the party disputing the proposed termination has
initiated an action pursuant to that Article within such six (6) month
period.
(d) This Agreement shall be terminated if (a) the parties agree in writing to
such termination; (b) membership in the affiliated group or consolidated
group ceases or is terminated for any reason whatsoever; or (c) the
affiliated group fails to file a consolidated return for any taxable year.
(e) Notwithstanding the termination of the Agreement, its provisions will
remain in effect with respect to any period of time during the tax year in
which termination occurs, for which the income of the terminating party
must be included in the consolidated return.
VI. DISPUTES
(a) Any dispute between the parties shall be explained in writing and submitted
to the other party if it cannot be resolved through informal discussion.
The party receiving a complaint shall provide a written response within
ninety (90) days.
(b) If the party is not satisfied with that response, the dispute will be
submitted to binding arbitration in accordance with the rules and
regulations of the American Arbitration Association.
VII. MISCELLANEOUS PROVISIONS
(a) The terms, covenants, conditions, and provisions of this Agreement replace
all prior Agreements relating to the subject matter of this Agreement as of
the effective date of this Agreement.
(b) The terms, covenants, conditions, and provisions of this Agreement shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. Neither party shall assign its rights or delegate its obligations
under this Agreement without the express written consent of the other
party, which consent shall not be unreasonably withheld.
(c) This Agreement contains the entire agreement between the parties, and any
representations or agreements, oral or otherwise, between the parties not
embodied in or attached to this Agreement shall have no force and effect
unless in writing and signed by the parties.
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(d) Neither party shall be deemed to be in violation of this Agreement if it is
prevented from performing any of its obligations hereunder for any reasons
beyond its control, including without limitation, acts of God or of the
public enemy, flood or storm, strikes, statutes or regulations, rule or
action or any Federal, State or Local government, or any agency thereof.
(e) Any waiver by either party for the violation of any provision of this
Agreement shall not bar an action for subsequent violations of the
Agreement.
(f) This Agreement shall be governed by New York law.
(g) This Agreement is intended for the exclusive benefit of the parties hereto
and their respective successors and assigns. Nothing contained in this
Agreement shall be construed as creating any rights or benefits in any
third party.
(h) The captions of the various sections of this Agreement are for purposes of
identification and are not to be considered as part of the text when
construing this Agreement.
(i) The unenforceability or invalidity of any provision of this Agreement shall
not affect the enforceability and validity of the remainder of this
Agreement.
(j) If any provision to the Agreement is rendered or declared to be invalid or
unenforceable by applicable statues, regulations or decisions by a court of
competent jurisdiction, the remaining provisions shall remain in full force
and effect unless the severance of that provision shall substantially
deprive the parties of the benefit of their bargain. The FNFI tax
department shall be responsible for reviewing and preparing amendments to
the Agreement as may be appropriate to comply with such statute,
regulation, or court decision.
(k) FNFI, by entering into and performing its obligations to this Agreement,
does not assume, either implicitly or explicitly, any of the Group Member's
existing or future obligations, liabilities, or debts to any third party.
(l) All notices required by this Agreement shall be in writing, sent by
certified mail, effective upon receipt, and sent to the following address:
TO: FNFI Tax Department
-------------------------
Xxxxx Xxxxxxx, XX 00000
or to such other address as may be designated by notice given during the
term of this Agreement by one party to the other.
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IN WITNESS WHEREOF, the parties have executed this Agreement intending to be
bound from and after
Fidelity National Financial Inc.
BY: /s/
------------------------------------
TITLE: Authorized Officer
Fidelity National Title Insurance
Company of New York
BY: /s/
------------------------------------
TITLE: Authorized Officer
National Title Insurance of New York,
Inc.
BY: /s/
------------------------------------
TITLE: Authorized Officer
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