Exhibit 10.21
TAX SHARING AGREEMENT
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THIS AGREEMENT made as of October 1, 1988 by and between ENERGYNORTH, INC.,
a New Hampshire corporation (EnergyNorth); ENERGYNORTH NATURAL GAS, INC., a New
Hampshire Corporation (ENGI); CONCORD GAS SERVICE, (a subsidiary of ENGI), a
New Hampshire corporation (Concord Service); ENERGYNORTH PROPANE, INC., a New
Hampshire corporation (Propane); and ENERGYNORTH REALTY, INC., a New Hampshire
corporation (Realty).
W I T N E S S E T H T H A T:
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WHEREAS, the term "AFFILIATES" as used herein shall be deemed to refer to
ENGI, Concord Service, Propane, Realty together with any other corporation which
becomes a subsidiary of EnergyNorth, the term 'CONSOLIDATED AFFILIATES" shall be
deemed to refer to the AFFILIATES together with EnergyNorth, and the
CONSOLIDATED AFFILIATES as a collective tax paying unit is sometimes referred to
as the "GROUP"; and
WHEREAS, EnergyNorth owns at least 80 percent of the issued and outstanding
shares of each class of voting common stock of ENGI, Realty and Propane; and
Concord Service is a wholly-owned subsidiary of ENGI: each of the CONSOLIDATED
AFFILIATES is a member of an affiliated group within the meaning of Section 1504
of the Internal Revenue Code of 1986, as amended (the "Code"), of which
EnergyNorth is the common parent corporation; and EnergyNorth proposes to
include each of the
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AFFILIATES in filing a consolidated Federal income tax return for the fiscal
year ending September 30, 1989, and thereafter.
NOW, THEREFORE, EnergyNorth and the AFFILIATES agree as follows:
1. Consolidated Return Election. If at any time and from time to time
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EnergyNorth so elects, each of the AFFILIATES will join in the filing of a
consolidated Federal income tax return for the fiscal year ending September 30,
1989 and for any subsequent period for which the Group is required or permitted
to file such a return. EnergyNorth agrees to file such consents, elections and
other documents and to take such other action as may be necessary or appropriate
to carry out the purposes of the Section 1. Any period for which any of the
AFFILIATES is included in a consolidated Federal income tax return filed by
EnergyNorth is referred to in this Agreement as a "Consolidated Return Year".
2. Affiliates' Liability to EnergyNorth for Consolidated Return Year.
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Within 90 days after the filing of each consolidated return by EnergyNorth, each
of the AFFILIATES included therein shall pay to EnergyNorth the amount, if any,
of the Federal income tax for which the AFFILIATE would have been liable for
that year, computed in accordance with Treasury Regulations, Section 1.1552-1(a)
(2) (ii) as though that AFFILIATE had filed a separate return for such year,
giving effect to any net operating loss carryovers, capital loss carryovers,
investment tax credit carryovers, foreign tax credit carryovers, capital loss
carryovers or other similar items, incurred by that AFFILIATE for any period
ending on or before the date of this Agreement.
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The foregoing allocation of Federal Income tax liability is being made in
accordance with Treasury Regulations, Sections 1.1552-1(a) (2) and 1.1502-33(d)
(2) (ii), and no amount shall be allocated to any CONSOLIDATED AFFILIATE in
excess of the amount permitted under Treasury Regulations, Section 1.1502-33(d)
(2) (ii). Accordingly, after taking into account the allocable portion of the
Group's Federal income tax liability, no amount shall be allocated to any
CONSOLIDATED AFFILIATE in excess of the amount permitted in accordance with
Treasury Regulations, Section 1.1502-33(d) (2) (ii) (b).
3. Affiliate's Liability to EnergyNorth for Estimated Tax Payments.
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Within 90 days following the payment by EnergyNorth of any estimated taxes on
behalf of any affiliate the affiliate will pay to EnergyNorth the amount of any
such estimated tax payment. The computation of such payment shall be consistent
with the formula set out in Section 2, above, and the liability of each
affiliate to EnergyNorth for consolidated return payments will be adjusted to
reflect all estimated payments made by or on behalf of any member of the
CONSOLIDATED AFFILIATES.
4. EnergyNorth's Liability to Each Affiliate for Consolidated Return
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Year. If for any Consolidated Return Year, any AFFILIATE included in the
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consolidated return filed by EnergyNorth for such year has available a net
operating loss, capital loss, foreign tax credit, investment tax credit or
similar item (computed by taking into account carryovers of such items from
periods ending on or before the date of this agreement) that reduces the
consolidated tax liability of the Group below the amount that would have been
payable if that AFFILIATE did not have such item available, EnergyNorth shall
pay the
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amount of the reduction attributable to such AFFILIATE within 90 days after the
filing of the consolidated return for such year.
The amount of such reduction shall be equal to a portion of the excess of
(i) the total of the separate return tax liabilities of each of the CONSOLIDATED
AFFILIATES computed in accordance with Section 2 of this Agreement, over (ii)
the Federal income tax liability of the Group for the year. The portion of such
reduction attributable to an AFFILIATE shall be computed by multiplying the
total reduction by a fraction, the numerator of which is the value of the tax
benefits contributed by the AFFILIATE to the Group and the denominator of which
is the value of the total value of such benefits contributed by all CONSOLIDATED
AFFILIATES during the year.
For purposes of the foregoing paragraph a deduction or credit generated by
a CONSOLIDATED AFFILIATE which is in excess of the amount required to eliminate
its separate tax return liability but which is utilized in the computation of
the Federal income tax liability of the Group shall be deemed to be a tax
benefit contributed by the CONSOLIDATED AFFILIATE to the Group. The value of a
deduction which constitutes such a benefit shall be determined by applying the
then current corporate income tax rate to the amount of deduction. The value of
a credit that constitutes such a benefit shall be the tax saving. The value of
capital losses used to offset capital gains shall be computed at the then
current tax rate applicable to capital gains for corporations.
5. Affiliates' Liability for Separate Return Years. If any of the
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AFFILIATES leaves the Group and files separate Federal income tax returns, it
shall pay to EnergyNorth within 120 days of the end of each of the first five
taxable years for which it files such
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returns, the excess, if any, of (a) the Federal income tax that such AFFILIATE
would have paid for such year (on separate return basis giving effect to its net
operating loss carryovers) if it never had been a member of the Group, over (b)
the amount of Federal income tax such AFFILIATE has actually paid or will
actually pay for such years.
6. Tax Adjustments. In the event of any adjustments to the tax returns
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of any of the CONSOLIDATED AFFILIATES as filed (by reason of an amended return,
a claim for refund or an audit by the Internal Revenue Service), the liability,
if any, of each of the AFFILIATES under Sections 2, 3, 4 and 5 shall be
redetermined to give effect to any such adjustment as if it had been made as
part of the original computation of tax liability, and payments between
EnergyNorth and the appropriate AFFILIATES shall be made within 120 days after
any such payments are made or refunds are received, or, in the case of contested
proceedings, within 120 days after a final determination of the contested
proceedings. Interest and penalties, if any, attributable to such an adjustment
shall be paid by each AFFILIATE to EnergyNorth in proportion to the increase in
such AFFILIATE'S separate return tax liability computed under Section 2 of this
Agreement that it is required to be paid to EnergyNorth.
7. Subsidiaries of Affiliates. If at any time, any of the AFFILIATES
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acquires or creates one or more subsidiary corporations that are includable
corporations of the Group, they shall be subject to this agreement and all
references to the AFFILIATES herein shall be interpreted to include such
subsidiaries as a group.
8. Successors. This Agreement shall be binding on and inure to the
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benefit of any successor, by merger, acquisition of assets or otherwise, to any
of the parties hereto
(including but not limited to any successor of EnergyNorth or any of the
AFFILIATES succeeding to the tax attributes of such corporation under Section
381 of the Code) to the same extent as of such successor had been an original
party to this Agreement.
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have set their hands this 4th day of August 1989.
ENERGYNORTH, INC.
By: /s/ N. Xxxxxx Xxxxxxxx
Title: President and CEO
ENERGYNORTH NATURAL GAS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
Title: Senior Vice President
CONCORD GAS SERVICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
Title: Senior Vice President
ENERGYNORTH PROPANE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: President
ENERGYNORTH REALTY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
