EXHIBIT 10.21
TAX SHARING AGREEMENT
AGREEMENT, dated as of May 13, 2004, by and between Fidelity National
Financial, Inc., a Delaware corporation ("FNF and its subsidiaries"), Chicago
Title and Trust Company, an Illinois corporation ("CT&T and its subsidiaries")
and Chicago Title Insurance Company of Oregon, a Oregon corporation.
WITNESSETH:
WHEREAS, FNF is the common parent corporation of an "affiliated group"
of corporations (the "FNF Group"), as that term is defined in section 1504(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), which group includes
CT&T and any corporation that is or subsequently becomes a member of an
"affiliated group" of which CT&T would be the "common parent," as such terms are
defined in Section 1504(a) of the Code, if CT&T were owned by individuals (CT&T
and any present or future member of its affiliated group being referred to
herein as the "CT&T Group"); and
WHEREAS, FNF and CT&T desire to agree on an equitable basis for
determining the amount to be paid by CT&T to FNF on account of the CT&T Group
which includes Chicago Title Insurance Company of Oregon's inclusion in the FNF
Group's consolidated federal income tax returns.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Inclusion in FNF Return. CT&T agrees to join, and shall cause each
other member of the CT&T Group which includes Chicago Title Insurance Company of
Oregon to join, in the filing of the FNF Group's consolidated federal income tax
return for each taxable year for which CT&T is eligible to join in such filing.
CT&T agrees to, and agrees to cause each member of the CT&T Group which includes
Chicago Title Insurance Company of Oregon Inc.
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 this
Agreement. FNF agrees that FNF shall timely file the FNF Group's consolidated
federal income tax return for each taxable year that CT&T is a member of the FNF
Group, and FNF shall pay the amount of tax imposed by Subtitle A or F of the
Code as reflected thereon or due with respect thereto.
In all matters relating to the FNF Group's consolidated tax liability,
FNF is the agent for each member of the FNF Group, including CT&T. As said
agent, FNF has the sole authority and discretion to make any election for each
member, including any election that must be made to determine a member's
separate taxable income for purposes of computing the consolidated taxable
income of the FNF Group.
2. The CT&T Group's Hypothetical Tax. For purposes of this Agreement,
the "CT&T Group which includes Chicago Title Insurance Company of Oregon Inc.'s
hypothetical tax" for any taxable year covered by this Agreement shall be the
federal income tax liability that the CT&T Group which includes Chicago Title
Insurance Company of Oregon Inc. would have had for such taxable year if the
CT&T Group which includes Chicago Title Insurance Company of Oregon had filed
its own consolidated federal income tax return for such taxable year, taking
into account any carryovers to, or carrybacks from, other taxable years of the
CT&T Group which includes Chicago Title Insurance Company of Oregon (or any
member thereof) that are available in such taxable year of the CT&T Group which
includes Chicago Title Insurance Company of Oregon, or would have been so
available if the CT&T Group which includes Chicago Title Insurance Company of
Oregon had filed its own consolidated (or where applicable, separate) federal
income tax returns for such other taxable years, and the CT&T Group which
includes Chicago Title Insurance Company of Oregon was subject to tax on all of
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its taxable income at the applicable maximum rate specified in the Code but
without the benefit of any surtax exemption. In computing the CT&T Group which
includes Chicago Title Insurance Company of Oregon's hypothetical tax: (i) there
will be eliminated from taxable income any intercompany dividends that would be
eliminated under Treasury Regulation Section 1.1502-14(a); (ii) intercompany
transactions between members of the FNF Group that would be deferred under
Treasury Regulation Section 1.1502-13 shall be deferred; (iii) in the case of
any item of income, gain, loss deduction or credit that is computed or subject
to a limitation only on a consolidated basis, including but not limited to,
charitable contributions, capital losses, foreign tax credits, research and
experimentation credit and Section 1231 gains and losses ("Consolidated Items"),
such Consolidated Items shall be taken into account by the CT&T Group which
includes Chicago Title Insurance Company of Oregon only if, and to the extent
(determined by FNF on any reasonable basis), that a Consolidated Item is taken
into account and actually affects the amount of the tax liability of the FNF
Group; and (iv) in the case of the treatment of an item subject to an election
made only on a consolidated basis, the treatment will be governed by the
election made by FNF on the consolidated return. All intercompany transactions
(as defined in Treasury Regulation Section 1.1502-13(a)) between members of the
FNF Group will be taken into account in computing the CT&T Group which includes
Chicago Title Insurance Company of Oregon's hypothetical tax at the time when
such transactions are required to be recognized by the FNF Group under Treasury
Regulation Section 1.1502-13, and any Consolidated Item not initially taken into
account in computing the tax of the CT&T Group which includes Chicago Title
Insurance Company of Oregon shall be taken into account by the CT&T Group which
includes Chicago Title Insurance Company of Oregon in the year, and to the
extent, that such Consolidated Item is taken into account by the FNF Group.
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3. Payment. With respect to each taxable year for which CT&T is at any
time a member of the FNF Group:
a. On each due date for payment of any required installment of
estimated federal income tax (determined under Section 6655 of the
Code) and on the due date (determined without regard to any
extensions) for filing the FNF Group consolidated federal income tax
return (determined under Section 6072 of the Code), CT&T shall pay to
FNF the federal income tax imposed by Subtitle A and F of the Code on
the CT&T Group which includes Chicago Title Insurance Company of
Oregon's hypothetical tax that would have been payable on such date if
the CT&T Group which includes Chicago Title Insurance Company of
Oregon were filing its own consolidated federal income tax return for
such taxable year. In computing CT&T's estimated federal income tax
payments, each payment shall be sufficient to avoid incurring any
addition to tax by the CT&T Group which includes Chicago Title
Insurance Company of Oregon under Section 6655 of the Code by reason
of an underpayment by a "large corporation" within the meaning of
Section 6655(g)(2) of the Code and shall be consistent with the
elections permitted to be made under Section 6655(d) and (e) of the
Code as actually made by FNF, in its sole discretion, for such taxable
year and communicated to CT&T.
b. On or prior to the date the FNF Group consolidated return is
actually filed for a taxable year, CT&T shall pay to FNF, or FNF shall
pay to CT&T, as the case may be, the difference between the CT&T Group
which includes Chicago Title Insurance Company of Oregon's
hypothetical tax for such
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taxable year and the amount paid by CT&T to FNF pursuant to paragraph
3(a) hereof for such taxable year. If the CT&T Group which includes
Chicago Title Insurance Company of Oregon for such taxable year has a
loss or credit which could be carried back to and which would reduce
the CT&T Group which includes Chicago Title Insurance Company of
Oregon's hypothetical tax (as adjusted) for any earlier taxable year
for which the CT&T Group which includes Chicago Title Insurance
Company of Oregon Inc. was included in the FNF Group, then (x) if and
to the extent that such loss or credit is utilized to actually reduce
the FNF Group's tax liability for such current taxable year, FNF shall
pay to CT&T on the date the FNF Group consolidated return is actually
filed for such taxable year the amount by which the CT&T Group which
includes Chicago Title Insurance Company of Oregon's hypothetical tax
in such earlier taxable year is reduced by reason of such carryback or
(y) if and to the extent that such loss or credit is actually carried
back to an earlier taxable year of the FNF Group, FNF shall pay to
CT&T on the date any refund of tax is actually received the amount by
which the CT&T Group which includes Chicago Title Insurance Company of
Oregon's hypothetical tax in such earlier year is reduced by reason of
such carryback together with any applicable interest.
c. All settlements under this Agreement shall be made within 30
days of the filing of the applicable estimated or actual consolidated
federal corporate income tax return with the Internal Revenue Service,
except where a refund is due FNF, in which case, FNF will pay to CT&T
Group which includes Chicago Title
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Insurance Company of Oregon the amounts due and owing within 30 days
the receipt of the refund.
d. All payments required to be made by CT&T to FNF shall be made
by (i) either by wire transfer or the deposit of "immediately
available funds" on the required date of payment to the appropriate
bank account as may be designated by FNF for that purpose, provided
that telephonic notice of any transfer is provided to FNF, or (ii) any
other method agreed to by the parties; provided that, such method
reflects an attempt in good faith to make a required payment on the
day when due. In the case of amounts payable by FNF to CT&T under this
Agreement, such amounts shall be paid under the same standards and
conditions as required of CT&T.
e. To help assure CT&T Group which includes Chicago Title
Insurance Company of Oregon'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 for an Oregon insurance
company shall be established and maintained by FNF in an amount equal
to the excess of the amount paid by CT&T Group which includes Chicago
Title Insurance Company of Oregon to FNF for federal income taxes over
the actual payment made by FNF to the Internal Revenue Service. Escrow
assets shall be released to FNF from the escrow account at such time
as the permissible period for loss carrybacks has elapsed.
4. Adjustments. CT&T agrees that FNF alone shall be responsible for,
and shall have sole and absolute discretion with respect to, claiming any
deductions or credits not claimed on the FNF Group consolidated return as filed,
the filing of any amended returns,
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agreeing to, contesting, or settling any adjustments to the FNF Group's federal
income tax liability for any taxable year covered by this Agreement, and FNF
shall pay any deficiencies in, or receive any refunds of, the FNF Group's
federal income tax liability for any such taxable year resulting from a final
determination by the Internal Revenue Service or the courts, or from carrybacks
or carryovers of the FNF Group from or to other taxable years. On or prior to
the date of payment or receipt or, if there is to be no payment or receipt, then
on or prior to the date on which there is an adjustment in the CT&T Group which
includes Chicago Title Insurance Company of Oregon's hypothetical tax resulting
from a final determination by the Internal Revenue Service or the courts, or
from carrybacks or carryovers of the FNF Group from other taxable years, CT&T
shall pay to FNF or FNF shall pay to CT&T, as the case may be, the amount
necessary to reflect all adjustments in the CT&T Group which includes Chicago
Title Insurance Company of Oregon's hypothetical tax for any taxable year,
together with any interest and penalties fairly attributable thereto.
5. Resolution of Disputes as to the CT&T Group's Hypothetical Tax. In
the event of a disagreement between the parties hereto as to the amount of the
CT&T Group which includes Chicago Title Insurance Company of Oregon's
hypothetical tax for any taxable year covered by this Agreement, such amount
shall be determined by the independent certified public accountants who audit
FNF's certified financial statements at the time such dispute arises, and the
determination of such accountants shall be final and binding on the parties
hereto.
6. FNF Indemnity. Provided that CT&T has made the payments required of
CT&T under this Agreement, FNF shall be liable for, and shall indemnify and hold
harmless CT&T and each member of the CT&T Group which includes Chicago Title
Insurance Company of Oregon from and against any liabilities for the taxes
imposed by Subtitle A or F of the Code
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on the FNF Group for each taxable year for which CT&T joined in the filing of
the FNF Group consolidated federal income tax return.
7. Earnings and Profits and Characterization of Payments. Earnings and
profits of each member of the FNF Group shall be calculated by allocating the
federal income tax liability of the FNF Group to each member in accordance with
the method described in Section 1552(a)(2) of the Code and the applicable
Treasury Regulations thereunder.
8. Certain Combined State Taxes.
a. In the case of any tax imposed by a State or political
subdivision thereof which (i) is imposed on, or measured by, gross or
net receipts, income, capital or net worth, including State and local
franchise or similar taxes measured by net income, excluding any
telecommunications, gross receipts (other than taxes on gross receipts
that are imposed in lieu of a tax on net receipts) and other
transactional taxes and (ii) are computed on a consolidated, unitary
or combined basis by reference to the income and/or activities of
members of the FNF Group other than members of the CT&T Group which
includes Chicago Title Insurance Company of Oregon and members of the
CT&T Group which includes Chicago Title Insurance Company of Oregon
Inc. (a "Combined Tax"), such Combined Tax shall be allocated between
members of the FNF Group other than members of the CT&T Group which
includes Chicago Title Insurance Company of Oregon Inc. and members of
the CT&T Group which includes Chicago Title Insurance Company of
Oregon Inc. first on the basis of, and to the extent that, the
receipts, income, capital or net worth of a member resulted in, or
increased, such Combined Tax, with any remaining Combined Tax
allocated among the members
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on the basis which each member's relative attribute (positive or
negative) was taken into account in determining the amount of the
Combined Tax.
b. Payments of Combined Tax among members of the FNF Group other
than members of the CT&T Group and members of the CT&T Group which
includes Chicago Title Insurance Company of Oregon Inc. shall be made
at the times and in the amounts otherwise consistent with the
provisions of Section 3 hereof.
9. Miscellaneous Provisions.
a. Entire Understanding. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter
hereof. No alteration, amendment or modification of any of the terms
of this Agreement shall be valid unless made by an instrument signed
in writing by an authorized officer of each of the parties hereto and
approved by the Department of Insurance.
b. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon
applicable to agreements made and to be performed entirely within such
state.
c. Further Assurances. The parties hereto shall execute and
deliver such further instruments and do such further acts and things
(including, without limitation, by causing their subsidiaries to
execute and deliver such instruments and to do such acts and things)
as may be required to carry out the intent and purpose of this
Agreement. The parties each shall cooperate with the other with
respect to the preparation and filing of any tax return or the conduct
of any tax audit or other tax proceeding. If any party has possession
of documents or
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records which relate to, or could affect, any item of income, loss,
deduction, credit, tax basis or other tax attributes of any other
party hereto, such party shall take reasonable steps to preserve such
documents or records for the same period and to the same extent as
such party preserves and protects its own similar tax documents, and
prior to destroying or discarding any such records shall notify the
party to whom the records relate and offer such party the opportunity,
at such parties' expense, to take possession or control of such
documents.
d. Termination. 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.
Notwithstanding its termination, all material including, but
not limited to returns, supporting schedules, work papers,
correspondence and other documents relating to the consolidated return
shall be made available to any party to the agreement during regular
business hours.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date indicated by their duly authorized officers effective as
of the date first above written, with execution in counterparts permitted.
FIDELITY NATIONAL FINANCIAL, INC.
By: /s/
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Title: Authorized Officer
Date:
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Attest:
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Chicago Title Insurance Company Of
Oregon
By: /s/
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Title: Authorized Officer
Date:
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Attest:
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