EXHIBIT 10.16
AMENDED AND RESTATED FEDERAL INCOME TAX SHARING AGREEMENT
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This Amended and Restated Federal Income Tax Sharing Agreement (the
"Agreement") is made and entered into as of the 10th day of August, 1999, by and
among Hollywood Casino Corporation, a Delaware corporation ("HCC"), HWCC
Development Corporation, a Texas corporation, Hollywood Management, Inc., a
Texas corporation, HWCC-Tunica, Inc., a Texas corporation, HWCC-Golf Course
Partners, Inc., a Delaware corporation, Hollywood Casino-Aurora, Inc., an
Illinois corporation, HWCC-Shreveport, Inc., a Louisiana corporation,
HWCC-Argentina, Inc., a Texas corporation, HWCC-Louisiana, Inc., a Louisiana
corporation, HWCC-Holdings, Inc., a Texas corporation, HWCC-Aurora Management,
Inc., an Illinois corporation, HWCC-Transportation, Inc., a Texas corporation,
HCS I, Inc., a Louisiana corporation and HCS II, Inc., a Louisiana corporation
(each corporation other than HCC, a "Subsidiary" and together, the
"Subsidiaries").
RECITALS
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WHEREAS, HCC and the Subsidiaries are members of an affiliated group of
corporations, as defined in Section 1504(a) of the Internal Revenue Code of
1986, as amended (the "Code"), of which HCC is the common parent (the "Company
Group");
WHEREAS, HCC files and will continue to file consolidated federal income
tax returns with the Subsidiaries; and
WHEREAS, the parties hereto wish to provide for the allocation among
them of consolidated federal income tax liability for taxable years and certain
related matters;
AGREEMENTS
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NOW THEREFORE, in consideration of the foregoing promises and of the
mutual covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS
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(a) Terms used in this Agreement shall have the meanings ascribed to
them in, and shall be interpreted in accordance with, the relevant provisions of
the Code and the regulations and rulings issued thereunder, as from time to time
in effect.
(b) For purposes of this Agreement, the terms set forth below shall be
defined as follows:
(i) Determination - The term "Determination" means and includes
any determination within the meaning of Section 1313(a) of the Code and any of
the events specified in Sections 6213(b) or (d) of the Code.
(ii) Hypothetical Tax Liability - The term "Hypothetical Tax
Liability" as it relates to any Subsidiary is the federal income tax liability
and federal estimated tax payments determined by HCC in its reasonable
discretion and computed as if such Subsidiary had filed its own separate federal
income tax returns or had been required to make its own separate estimated tax
payments (taking into account loss, deduction and credit carryforwards), but
subject to the modifications specified in Treas. Reg. Section
1.1552-1(a)(2)(ii), provided, that (i) such liability shall be computed using
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the highest marginal corporate tax rate in effect for such taxable year; and
(ii) if for any taxable year a Tax would be imposed on such Subsidiary pursuant
to Section 55 of the Code, such Subsidiary's Hypothetical Tax Liability shall be
increased by the amount of Tax that would be imposed under such section,
computed using the alternative minimum
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tax rates set forth in Section 55(b)(1) of the Code and taking into account
items specified in Section 55(b)(2) of the Code attributable to such Subsidiary.
2. ALLOCATION OF CONSOLIDATED
FEDERAL INCOME TAX LIABILITY
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(a) If a consolidated federal income tax return is filed by HCC on
behalf of the Company Group for any taxable year, each Subsidiary shall pay to
HCC an amount equal to its Hypothetical Tax Liability for such taxable year. HCC
shall provide to each Subsidiary a schedule that sets forth in reasonable detail
the calculation of its Hypothetical Tax Liability for such taxable year.
(b) For purposes of the payment of such Hypothetical Tax Liability, HCC
shall calculate an amount that would be required to be paid under the estimated
tax requirements of Section 6655 of the Code and any other relevant sections of
the Code for each Subsidiary. The amount required to be paid by each Subsidiary
to HCC pursuant to this paragraph for such taxable year shall be paid on a
current basis not later than the date on which the Company Group's consolidated
federal income tax quarterly estimated tax payments are due to be paid for such
quarter of such taxable year. To the extent that any Subsidiary's Hypothetical
Tax Liability for a given year exceeds the aggregate of the quarterly estimated
tax payments made by such Subsidiary for such year, such Subsidiary shall make
an additional tax payment (together with any and all interest, additions to tax,
fines and penalties with respect thereto) under the requirements of Section 6151
of the Code. Such final tax payment shall be made to HCC no later than the date
the Company Group consolidated final tax payment is due. To the extent that the
quarterly estimated tax payments made by a Subsidiary during a particular tax
year exceed its Hypothetical
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Tax Liability for such year, the excess shall be refunded by HCC or credited
toward such Subsidiary's subsequent year's estimated tax payment.
(c) Each Subsidiary shall provide HCC with all of the tax related
information necessary for HCC to compute (i) such Subsidiary's quarterly
estimated tax payments no later than fifteen (15) days before the Company
Group's consolidated federal income tax quarterly estimated tax payments are due
for a particular quarter and (ii) such Subsidiary's share of the Company Group's
final tax payment for a taxable year no later than February 28 of the next
succeeding taxable year of the Company Group.
3. TAX SAVINGS
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(a) No payments shall be made by HCC to any Subsidiary for any loss,
deduction or credit generated by such Subsidiary in a taxable year, except if
such Subsidiary could carry back (under applicable principles of tax law), had
it filed a federal income tax return separate from the Company Group, all or a
portion of such loss, deduction or credit to a prior taxable year in respect of
which the Subsidiary had made payments to HCC pursuant to Section 2 hereof, and
if the carryback of such loss, deduction or tax credit would reduce (but not
below zero) the amount of such payments (the "Hypothetical Tax Reduction").
(b) The payments described in this Section 3 shall be paid by HCC to the
applicable Subsidiary five (5) days after the date on which the Company Group
consolidated federal income tax return is required to be filed (taking into
account any extension thereof) for the taxable year in which the conditions in
Section 3(a) above are met. The amount of the payment described in this Section
3 shall be equal to the Hypothetical Tax Reduction.
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4. ADJUSTMENTS TO CONSOLIDATED
FEDERAL INCOME TAX LIABILITY
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If pursuant to a Determination, the filing of an amended tax return
or a claim for refund, a change or adjustment is made to items reported on a
consolidated federal income tax return of the Company Group, then the amount of
the payments required to be made pursuant to Section 2 hereof shall be
recomputed for such taxable year in accordance with the provisions of Section 2
hereof, taking into account such change or adjustment. The parties recognize
that the recomputed liability is not necessarily the final tax liability and
that there may be additional recomputations. Not later than (i) five (5) days
before the due date for any additional payment of tax by HCC, (ii) five (5) days
after the receipt of a refund or (iii) promptly following the event giving rise
to the recomputation if such event will not result in the payment of additional
tax or the receipt of a refund, HCC shall pay to the applicable Subsidiary or
Subsidiaries, or the applicable Subsidiary or Subsidiaries shall pay to HCC, as
the case may be, the difference between the amount originally paid under Section
2 hereof and the recomputed amounts.
5. NEW MEMBERS
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If sufficient stock of any corporation is acquired hereafter by any
member of the Company Group so that the corporation becomes a member of the
Company Group (the "New Member"), the New Member shall become a party to this
Agreement by delivering to HCC a written instrument to such effect. HCC and/or
such members of the Company Group which own stock of the New Member shall use
their best efforts to cause the delivery of such written instrument and the
execution of Form 1122, Authorization and Consent of Subsidiary Corporation to
be included in a
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Consolidated Income Tax Return. The parties hereto hereby agree to the inclusion
of any such New Member as a party to this Agreement.
6. TERM OF AGREEMENT
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This Agreement shall continue in effect until sixty days after the
expiration of the applicable statute of limitations (including all periods of
extension, whether automatic or permissive) with respect to the final taxable
year of the Company Group which includes any Subsidiary or New Member.
7. INTEREST ON LATE PAYMENTS
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Any payment due and owing by one party hereto to another which is not
paid on or before the due date (if any) specified herein shall bear interest at
the blended rate in effect under Section 6621(a)(1) of the Code for the period
beginning on the day after the date the payment is due hereunder to the date on
which the payment is made.
8. EFFECTIVE DATE
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This Agreement shall be effective as of May 14, 1992.
9. MISCELLANEOUS PROVISIONS
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(a) This Agreement supersedes all prior written or oral understandings
between the parties hereto relating to the subject matter hereof and contains
the entire understanding of the parties hereto with respect to such subject
matter. 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 party hereto.
(b) This Agreement has been made in, and shall be construed and enforced
in accordance with the laws of, the State of Texas, without regard to Texas's
conflict of law principles.
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(c) As between the parties hereto, the provisions of this Agreement
shall fix the liability of each to the other as to the matters provided for
herein, regardless of whether such provisions are controlling for federal
income tax or other purposes (including, without limitation, computations of
earnings and profits).
(d) This Agreement shall be binding upon, enforceable by and
against, and inure to the benefit of, the parties hereto and their respective
successors and assigns, and no assignment shall relieve any party's obligation
hereunder without the written consent of the other party.
(e) In case any provision of this Agreement shall be held invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.
(f) All determinations required hereunder for each taxable year
shall be made by HCC. Such determination shall be final and binding upon the
parties for the purposes hereof.
In witness whereof, the parties hereto have caused this Agreement to be
duly executed as of the 10th day of August, 1999.
HOLLYWOOD CASINO CORPORATION
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
HWCC DEVELOPMENT CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. XxXxxxx, III
Title: Vice President
HOLLYWOOD MANAGEMENT, INC.
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
HWCC-TUNICA, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. XxXxxxx III
Title: Vice President
HWCC-GOLF COURSE PARTNERS, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. XxXxxxx, III
Title: Vice President
HOLLYWOOD CASINO-AURORA, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. XxXxxxx, III
Title: Vice President
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HWCC-ARGENTINA, INC.
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
HWCC-SHREVEPORT, INC.
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
HWCC-LOUISIANA, INC.
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
HWCC-HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
HWCC-AURORA MANAGEMENT, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. XxXxxxx, III
Title: Vice President
HWCC-TRANSPORTATION, INC.
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
HCS I, INC.
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
HCS II, INC.
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
