THIRD AMENDMENT TO THE
TAX SHARING AGREEMENT
This Third Amendment ("Third Amendment") to the Tax Sharing Agreement is
made and entered into this 1st day of November, 1998 to have the respective
effective dates as set forth herein.
WHEREAS, the Tax Sharing Agreement was entered into by and between KSL
Recreation Corporation, a California corporation ("REC") and each of the
entities described on Schedule A annexed thereto (the "Signator Corporations")
dated April 30, 1997, to be effective November 1, 1996 (the "Agreement"), and as
amended, such amendment to be effective the date of incorporation of KSL
Recreation Group, Inc., March 14, 1997 (the "First Amendment"), and as amended,
such amendment to be effective November 1, 1997 (the "Second Amendment");
WHEREAS, the Parent, as defined in the Agreement, desires to amend and/or
supplement certain Schedules to the Agreement as set forth herein; and
WHEREAS, the Parent desires to amend certain provisions of the Agreement as
set forth herein;
NOW THEREFORE, in consideration of the promises and conditions set forth
herein, the parties agree to amend the Agreement as follows:
1. The capitalized terms contained in this Third Amendment shall have the same
meaning as that set forth in the Agreement.
2. Pursuant to Section 2.5 Future Members of the Agreement, a new Subgroup of
the REC Group shall be designed as the Restricted Grand Wailea Subgroup and
shall include the following corporations: KSL Hawaii Holdings I, Inc., KSL
Hawaii Holdings II, Inc., KSL Hawaii Holdings III, Inc., KSL Hawaii
Holdings IV, Inc., KSL Hawaii Holdings V, Inc., and KSL Grand Wailea
Hospitality Corporation, and said corporations shall be deemed Members of
the REC Group and Signator Corporations under the Agreement effective the
date of incorporation of each such corporation. KSL Hawaii Holdings I, Inc.
will be designated as the Subgroup Agent for the Restricted Grand Wailea
Subgroup.
3. Pursuant to Section 2.5 of the Agreement, a new Subgroup of the REC Group
shall be designated as the Unrestricted Grand Wailea Subgroup and shall
consist of KSL Grand Wailea Resort, Inc. and said corporation shall be
deemed a Member of the REC Group and Signator Corporations under the
Agreement effective the date of incorporation of such corporation.
4. Pursuant to Section 2.5 of the Agreement, KSL Florida Development Corp.
shall be added as a Member of the REC Group and Florida Subgroup, and a
Signator Corporation under the Agreement effective with the incorporation
of such corporation.
5. Pursuant to Section 2.5 of the Agreement, KSL Fairways/Virginia Corporation
shall be added as a Member of the REC Group and Fairways Subgroup, and a
Signator Corporation under the Agreement effective with the incorporation
of such corporation.
6. Income and franchise taxes of the REC Group shall not be applicable to new
Members and/or Subgroups for periods preceding their stated effective dates
as Members and/or Subgroups and Signator Corporations under the Agreement.
7. Pursuant to the First Amendment, the Restricted Grand Wailea Subgroup shall
also be added to and deemed Members of the Bond Subgroup effective as of
the earliest incorporation date of such corporations and, as such, will be
treated as a single Subgroup along with KSL Recreation Group, Inc., and the
Landmark, Fairways, Florida, Georgia and Grand Traverse Subgroups,
comprising the Bond Subgroup.
8. Pursuant to the Agreement, First Amendment, Second Amendment and the
changes and additions described herein this Third Amendment, revised
schedules (the "Schedules") to the Agreement are attached hereto as Exhibit
A and shall replace the schedules to the Agreement in their entirety.
9. Exhibit II to the Agreement has been revised and is attached hereto as
Exhibit II to this Second Amendment and shall replace Exhibit II to the
Agreement in its entirety.
10. All other terms, covenants and conditions set forth in the Agreement, the
First Amendment, and the Second Amendment shall be and remain in full force
and effect. In the event of any conflict between the provisions of this
Third Amendment and the provisions of the Agreement and/or the First
Amendment and/or Second Amendment, the provisions of this Third Amendment
shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
to become effective as of the respective dates set forth herein.
KSL Recreation Corporation
KSL Recreation Group, Inc.
KSL Land Holdings, Inc.
KSL Desert Resorts, Inc.
Las Casitas Corporation
KSL Real Estate Company
KSL Travel, Inc.
Casitas Plaza Corporation
KSL Golf Holdings, Inc.
KSL Fairways Golf Corporation
KSL Fairways/Virginia Corporation
KSL Florida Holdings, Inc.
KSL Hotel Corp.
KSL Silver Properties, Inc.
KSL Florida Development Corp.
KSL Georgia Holdings, Inc.
KSL Lake Xxxxxx, Inc.
KSL Grand Traverse Holdings, Inc.
KSL Grand Traverse Land, Inc.
KSL Grand Traverse Realty, Inc.
KSL Grand Traverse Resort, Inc.
KSL Water Works, Inc.
KSL Hawaii Holdings I, Inc.
KSL Hawaii Holdings II, Inc.
KSL Hawaii Holdings III, Inc.
KSL Hawaii Holdings IV, Inc.
KSL Hawaii Holdings V, Inc.
KSL Grand Wailea Hospitality Corporation
KSL Grand Wailea Resort, Inc.
KSL Land Corporation
KSL Citrus Properties, Inc.
KSL Development Corporation
KSL Land II Corporation
KSL Land III Corporation
KSL Land IV Corporation
Landaq, Inc.
Delaware corporations
By: /s/Xxxx X. Xxxx, Xx.
---------------------------------------
Name: Xxxx X. Xxxx, Xx.
Title: Vice President
EXHIBIT A
(Attached)
SCHEDULE A
SIGNATOR CORPORATIONS
KSL Recreation Corporation
KSL Recreation Group, Inc.
KSL Land Holdings, Inc. (formerly Xochimilco Properties, Inc.)
KSL Desert Resorts, Inc.
Las Casitas Corporation (formerly KSL Vacation Resorts, Inc.)
KSL Real Estate Company (formerly Wild West Desert Properties, Inc.)
KSL Travel, Inc.
Casitas Plaza Corporation
KSL Golf Holdings, Inc.
KSL Fairways Golf Corporation
KSL Fairways/Virginia Corporation
KSL Florida Holdings, Inc.
KSL Hotel Corp.
KSL Silver Properties, Inc.
KSL Florida Development Corp.
KSL Georgia Holdings, Inc.
KSL Lake Xxxxxx, Inc.
KSL Land Corporation
KSL Citrus Properties, Inc.
KSL Development Corporation
KSL Land II Corporation
KSL Land III Corporation
KSL Land IV Corporation
Landaq, Inc.
KSL Grand Traverse Holdings, Inc.
KSL Grand Traverse Land, Inc.
KSL Grand Traverse Realty, Inc.
KSL Grand Traverse Resort, Inc.
KSL Water Works, Inc.
KSL Hawaii Holdings I, Inc.
KSL Hawaii Holdings II, Inc.
KSL Hawaii Holdings III, Inc.
KSL Hawaii Holdings IV, Inc.
KSL Hawaii Holdings V, Inc.
KSL Grand Wailea Hospitality Corporation
KSL Grand Wailea Resort, Inc.
SCHEDULE B
REC GROUP MEMBERS
KSL Recreation Corporation
KSL Land Holdings, Inc. (formerly Xochimilco Properties, Inc.)
KSL Recreation Group, Inc.
KSL Desert Resorts, Inc.
Las Casitas Corporation (formerly KSL Vacation Resorts, Inc.)
KSL Real Estate Company (formerly Wild West Desert Properties, Inc.)
KSL Travel Inc.
Casitas Plaza Corporation
KSL Golf Holdings, Inc.
KSL Fairways Golf Corporation
KSL Fairways/Virginia Corporation
KSL Florida Holdings, Inc.
KSL Hotel Corp.
KSL Silver Properties, Inc.
KSL Florida Development Corp.
KSL Georgia Holdings, Inc.
KSL Lake Xxxxxx, Inc.
KSL Grand Traverse Holdings, Inc.
KSL Grand Traverse Land, Inc.
KSL Grand Traverse Realty, Inc.
KSL Grand Traverse Resort, Inc.
KSL Water Works, Inc.
KSL Hawaii Holdings I, Inc.
KSL Hawaii Holdings II, Inc.
KSL Hawaii Holdings III, Inc.
KSL Hawaii Holdings IV, Inc.
KSL Hawaii Holdings V, Inc.
KSL Grand Wailea Hospitality Corporation
KSL Grand Wailea Resort, Inc.
SCHEDULE C
LAND GROUP MEMBERS
KSL Land Corporation
KSL Citrus Properties, Inc.
KSL Development Corporation
KSL Land II Corporation
KSL Land III Corporation
KSL Land IV Corporation
Landaq, Inc. (formerly KSL Casitas Corporation)
SCHEDULE D
DESERT RESORTS SUBGROUP
(formerly Landmark Subgroup)
KSL Desert Resorts, Inc. (formerly KSL Landmark Corporation)
Las Casitas Corporation (formerly KSL Vacation Resorts, Inc.)
KSL Real Estate Company (formerly Wild West Desert Properties, Inc.)
KSL Travel, Inc.
Casitas Plaza Corporation
SCHEDULE E
FLORIDA SUBGROUP
KSL Florida Holdings, Inc.
KSL Hotel Corp.
KSL Silver Properties, Inc.
KSL Florida Development Corp.
SCHEDULE F
FAIRWAYS SUBGROUP
KSL Golf Holdings, Inc.
KSL Fairways Golf Corporation
KSL Fairways/Virginia Corporation
SCHEDULE G
GEORGIA SUBGROUP
KSL Georgia Holdings, Inc.
KSL Lake Xxxxxx, Inc.
SCHEDULE H
LAND HOLDINGS SUBGROUP
(formerly Xochimilco Subgroup)
KSL Land Holdings, Inc. (formerly Xochimilco Properties, Inc.)
SCHEDULE I
BOND SUBGROUP
KSL Recreation Group, Inc.
Desert Resorts Subgroup
Fairways Subgroup
Florida Subgroup
Georgia Subgroup
Grand Traverse Subgroup
Restricted Grand Wailea Subgroup
SCHEDULE J
GRAND TRAVERSE SUBGROUP
KSL Grand Traverse Holdings, Inc.
KSL Grand Traverse Land, Inc.
KSL Grand Traverse Realty, Inc.
KSL Grand Traverse Resort, Inc.
KSL Water Works, Inc.
SCHEDULE K
RESTRICTED GRAND WAILEA SUBGROUP
KSL Hawaii Holdings I, Inc.
KSL Hawaii Holdings II, Inc.
KSL Hawaii Holdings III, Inc.
KSL Hawaii Holdings IV, Inc.
KSL Hawaii Holdings V, Inc.
KSL Grand Wailea Hospitality Corporation
SCHEDULE L
UNRESTICTED GRAND WAILEA SUBGROUP
KSL Grand Wailea Resort, Inc.
EXHIBIT II
ILLUSTRATION OF THE CALCULATION REQUIRED PURSUANT TO PARAGRAPH 4.2(a)
(After Effective Date of the Third Amendment)
UNRESTRICTED LAND
BOND GRAND WAILEA HOLDINGS
ENTITY SUBGROUP REC SUBGROUP SUBGROUP TOTAL
-------------------------------------------------------------------------------------------------
KSL Recreation, Inc. 150,000
Unrestricted Grand Wailea Subgroup 200,000
Desert Resorts Subgroup (158,000)
Florida Subgroup 75,000
Restricted Grand Wailea Subgroup 80,000
Fairways Subgroup 4,000
Grand Traverse Subgroup 12,500
Georgia Subgroup 276,500
KSL Recreation Group, Inc. 10,000
Land Holdings Subgroup (800,000)
-------- -------- -------- -------- --------
Taxable Income/(Loss) 300,000 150,000 200,000 (800,000) (150,000)
Federal Tax Rate 34% 34% 34% 34% 34%
-------- -------- -------- -------- --------
Tax Affect of Income/(Loss) 102,000 51,000 68,000 (272,000) (51,000)
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Allocation of Loss
to Subgroups** (300,000) (150,000) (200,000) (150,000) (800,000)
Income/(Loss) as if Subgroups
Filed Separate Tax Returns 300,000 150,000 200,000 (800,000) (150,000)
-------- -------- -------- -------- --------
Difference in Allocation Resulting
from Consolidated Tax Return 300,000 150,000 200,000 650,000 (150,000)
Federal Tax Rate 34% 34% 34% 34% 34%
-------- -------- -------- -------- --------
Tax on Difference 102,000 51,000 68,000 221,000 (51,000)
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Intercompany Receivable/Payable (102,000) (51,000) (68,000) 221,000 0
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
