EXHIBIT 10.12
TAX SHARING AGREEMENT
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THIS TAX SHARING AGREEMENT is made and entered into this 3rd day of
November, 2004 (this "Agreement"), by and among TAL International Group, Inc., a
Delaware corporation (the "Company"), Transamerica Leasing Inc., a Delaware
corporation ("Leasing"), Trans Ocean Ltd., a Delaware corporation ("Trans
Ocean"), and each corporation, other than the Company, Leasing and Trans Ocean,
which is a signatory to this Agreement (Leasing, Trans Ocean and such other
corporations shall collectively be referred to as the "Subsidiaries" and
individually referred to as a "Subsidiary").
WITNESSETH:
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WHEREAS, the Company owns directly or indirectly capital stock of each
of the Subsidiaries which represents at least 80 percent of the vote and value
of each of the Subsidiaries and may, therefore, include the income and expense
of each of the Subsidiaries in the Company's consolidated federal income tax
returns; and
WHEREAS, the parties hereto desire to consolidate such returns upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree as
follows:
1. Filing and Preparation of Future Returns. Each of the Subsidiaries
agrees to consent to joining with the Company and its consolidated Subsidiaries
(the Company and each of the Subsidiaries being herein collectively referred to
as the "Group") in the filing of the consolidated federal income tax returns for
any taxable year for which a consolidated return can be filed and each taxable
year thereafter, in accordance with applicable income tax laws and regulations.
The Company agrees that it will prepare and file in a timely manner all federal
income tax returns required to be filed on behalf of the Company and its
consolidated Subsidiaries and will pay the taxes shown to be due thereon.
2. Tax Payments; Estimated Tax Payments.
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( a) For each taxable year ending after the date hereof during
which a Subsidiary is included in a consolidated Federal income tax return with
the Company, each Subsidiary will pay to the Company an amount equal to its
Subsidiary Tax Liability, as defined in the next sentence. Subsidiary Tax
Liability means the hypothetical Federal income tax liability of a Subsidiary
for a taxable year determined as if such Subsidiary had filed its own separate
Federal income tax return for such taxable year and all prior taxable years
ending after the date hereof, except that such Subsidiary shall be treated as
having available as loss or credit carryovers for purposes of computing such
Subsidiary's Subsidiary Tax Liability all losses or credits previously generated
by it and utilized by other Subsidiaries, other than any such losses or credits
that were previously taken into account in computing such Subsidiary's
Subsidiary Tax Liability, each such Subsidiary shall be treated as though such
Subsidiary made an election specified in Section 172(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code") to forgo the carryback period for
net operating losses and all credits and other tax attributes shall also be
carried forward
only, and shall not be carried back to prior taxable years. Such hypothetical
Federal income tax liability shall be determined at the end of the taxable year
and shall reflect any tax elections, conventions, treatments or methods which
are actually utilized by the Group in filing its consolidated Federal income tax
return. Such hypothetical Federal income tax liability shall not be less than
zero. To the extent that the obligation to pay such amount has not fully
satisfied pursuant to paragraph 2(b) of this Agreement, such Subsidiary shall
pay any such remaining amount to the Company on the last date on which the
Company is required to make its final payment of Federal income taxes for the
taxable year without incurring any penalties or additions to tax.
(b) On any date on which the Company is required to make an
estimated payment of the consolidated Federal income tax of the Group under
Section 6655 of the Code, each Subsidiary will make estimated payments to the
Company in an amount equal to such Subsidiary's hypothetical estimated
consolidated Federal income tax liability for a Subsidiary determined in
accordance with the principles of paragraph 2(a). If the total of such estimated
payments made by such Subsidiary to the Company with respect to a taxable year
shall be in excess of the liability of such Subsidiary to the Company pursuant
to paragraph 2(a) of this Agreement for such taxable year, the Company shall pay
the amount of such excess to such Subsidiary no later than the date on which the
Company files the consolidated Federal income tax return for the Group.
3. Adjustments to Liability.
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(a) If the Subsidiary Tax Liability of a Subsidiary is changed as
the result of any final administrative or judicial determination (including a
final "determination" as defined in Section 1313(a) of the Code) with respect to
consolidated Federal income tax returns actually filed by the Group, then the
amount of the payments required from such Subsidiary to the Company under
paragraph 2(a) shall be recomputed by substituting the amount of such
Subsidiary's Subsidiary Tax Liability after the adjustments described above in
place of such Subsidiary's Subsidiary Tax Liability, provided that the
principles of paragraph 2(a) shall be applied in connection with such
recomputation notwithstanding any contrary determination. If such final
determination results in an increase in the Subsidiary Tax Liability, such
Subsidiary shall, subject to the reduction provided for in the next sentence,
pay to the Company not later than five days after such final determination an
amount equal to the excess of the new Subsidiary Tax Liability over the amount
previously paid to the Company by such Subsidiary. If such final determination
results in a reduction in such Subsidiary's Subsidiary Tax Liability for a
taxable year, such reduction shall first be applied to offset any increase to
such Subsidiary's Subsidiary Tax Liability for any other taxable year to which
such final determination applies, and any remaining amount of such reduction
shall be carried forward and credited against such Subsidiary's Subsidiary Tax
Liability for succeeding taxable years. The parties recognize that such new
liability for any taxable year is not necessarily such Subsidiary's final
liability for that year, and may be recomputed more than once.
(b) Payments made pursuant to paragraph 2(a) shall bear interest
in the same manner as any late payment or refund of Federal income tax.
4. Other Taxes. In the event there shall be imposed on the Company or
any of the Subsidiaries any foreign, federal, state or local tax to which
principles of consolidated taxation
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may be applied and practical, each of the Company and each of the Subsidiaries
agree that this Agreement shall also be applicable with respect to such taxes.
For purposes of this Agreement, the term taxes shall include, but is not limited
to, all net income, capital gains, gross income, gross receipts, sales, use,
transfer, franchise, profits, license, capital, payroll, excise, value added or
other taxes and any related interest or governmental charge.
5. Payment. Any payment required by a Subsidiary to the Company under
Sections 2, 3 or 4 of this Agreement shall be made first by reducing the amount
of any account payable created under the next sentence (but not below zero), and
then by entering or increasing an account payable to the Company on the books of
account of such Subsidiary. Any payment required by the Company to a Subsidiary
under this Agreement shall be made first by reducing the amount of any account
payable created under the prior sentence (but not below zero), and then by
entering or increasing an account payable to such Subsidiary on the books of
account of the Company. Any account payable created under this paragraph shall
be due in whole or in part on five days' notice by a Subsidiary or the Company,
as the case may be, and shall be payable by the party whose liability such
account payable is positive, and any due but unpaid amounts shall bear interest
from and after such due date at the rate of interest then most recently
announced by Citibank, N.A. as its Prime rate, plus two percent (2%) per annum.
6. Limitation of Liability. The Company shall have no liability to
the Subsidiaries on account of (a) any advice which it renders to the
Subsidiaries or any of their direct or indirect subsidiaries, provided the
Company believed in good faith that such advice was useful or beneficial to the
Subsidiaries or any of their direct or indirect subsidiaries at the time it was
rendered, (b) the Subsidiaries' inability to obtain financing or achieve other
results desired by the Subsidiaries (or any of their direct or indirect
subsidiaries) or the Company's failure to render services to the Subsidiaries at
any particular time or from time to time, or (c) the failure of any acquisition,
divestiture, financing or business plan to meet the financial, operating or
other expectations of the Subsidiaries or any of its direct or indirect
subsidiaries. The Subsidiaries' and any of their direct or indirect
subsidiaries' sole remedy for any claim under this Agreement shall be
termination of this Agreement.
7. Indemnification. The Subsidiaries will, and will cause each of
their direct and indirect subsidiaries to, indemnify and hold harmless to the
fullest extent permitted by applicable law, the Company, its affiliates and
associates, and each of the respective owners, partners, officers, directors,
employees and agents of each of the foregoing, from and against any loss,
liability, damage, claim or expenses (including the fees and expenses of
counsel) arising as a result or in connection with this Agreement, the Company's
services hereunder or other activities on behalf of the Subsidiaries and their
direct and indirect subsidiaries.
8. No Set-Off. Any payments paid by the Subsidiaries under this
Agreement shall not be subject to set-off and shall be increased by the amount,
if any, of any taxes (other than income taxes) or other governmental charges
levied in respect of such payments, so that the Company is made whole for such
taxes or charges.
9. Additional Subsidiaries. If at any time after the date upon which
this Agreement is executed, any party to this Agreement acquires or creates one
or more Subsidiary corporations, companies, partnerships or other entities that
are either includible in the Group or the separate
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existence of which is disregarded (collectively referred to as "Subsidiary
Entities" and individually referred to as "Subsidiary Entity"), either the
Company or a Subsidiary shall cause such Subsidiary Entity to be subject to this
Agreement and all references to either Group or a Subsidiary herein shall
thereafter be interpreted to refer to the Company, the Subsidiaries and such
Subsidiary Entity or Subsidiary Entities, or to a Subsidiary and such Subsidiary
Entity or Subsidiary Entities respectively.
10. Successors and Assigns. This Agreement shall be binding on and
inure to the 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 the Company or a Subsidiary succeeding to the tax attributes of
each under Section 381 of the Code), to the same extent as if such successor had
been an original party to this Agreement.
11. Termination. This Agreement shall continue in effect until
terminated by written agreement between all the parties hereto.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes and cancels any and all such previous written or oral agreements
between the parties hereto. This Agreement may not be modified, waived,
terminated or amended except expressly by an instrument in writing signed by the
Company and the Subsidiaries.
13. Severability. In the event that any provision of this Agreement
shall be held to be void or unenforceable in whole or in part, the remaining
provisions of this Agreement and the remaining portion of any provision held
void or unenforceable in part shall continue in full force and effect.
14. Notice. Except as otherwise specifically provided herein, notice
given hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.
15. Obligations Joint and Several. Each Subsidiary shall be jointly
and severally liable and obligated hereunder with respect to each obligation,
responsibility and liability of the Subsidiaries, as if a direct obligation of
such Subsidiary.
16. No Waiver. No waiver by any party of any breach of any provision
of this Agreement shall be deemed a continuing waiver or a waiver of any
preceding or succeeding breach of such provision or of any other provision
herein contained.
17. Governing Law. This Agreement shall be governed by the internal
laws of the State of New York.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
TAL INTERNATIONAL GROUP, INC.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Vice President
TRANSAMERICA LEASING INC.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN LTD.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN CONTAINER
CORPORATION
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANSAMERICA LEASING DO BRASIL LTDA.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN CONTAINER CORPORATION
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
SPACEWISE INC.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANSAMERICA LEASING N.V.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANSAMERICA LEASING SRL
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
ICS TERMINALS (UK) LIMITED
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN LEASING (DEUTSCHLAND) GMBH
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN MANAGEMENT S.A.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN REGIONAL CORPORATE HOLDINGS
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANS OCEAN MANAGEMENT CORPORATION
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANSAMERICA LEASING PTY. LTD.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANSAMERICA LEASING GMBH
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
TRANSAMERICA LEASING (HK) LTD.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
GREYBOX LOGISTICS SERVICES INC.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
INTERMODAL EQUIPMENT INC.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
GREYBOX SERVICES LTD.
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Authorized Officer
