EXHIBIT 10.3
AGREEMENT FOR THE ALLOCATION
OF UNITED STATES FEDERAL INCOME TAXES
This AGREEMENT, made effective as of January 1, 2005, is by and between
General Motors Acceptance Corporation, a Delaware corporation (hereinafter
referred to as "GMAC") and Residential Capital Corporation, a Delaware
corporation (hereinafter referred to as "ResCap").
WHEREAS, General Motors Corporation (hereinafter referred to as "GM")
is the common parent corporation of the GM Group (as hereinafter defined), an
affiliated group of corporations within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986, as amended (hereinafter referred to as the
"Code"), which Group includes the GMAC Group (as hereinafter defined); and
WHEREAS, GMAC is the common parent corporation of the GMAC Group (as
hereinafter defined), an affiliated group of corporations within the meaning of
Section 1504(a) of the Code, which Group includes the ResCap Group (as
hereinafter defined); and
WHEREAS, GMAC and ResCap agree that it would be mutually beneficial to
file consolidated Federal income tax returns in the United States and to provide
for the allocation of the consolidated Federal income tax liability between GMAC
and ResCap;
NOW THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, GMAC and ResCap agree as follows:
Section 1 - Definitions
1.01 Application of Code. Unless otherwise indicated, the terms and
concepts used in this AGREEMENT shall be given the same definitions and meaning
ascribed to them by the Code, as amended from time to time, and by the
regulations promulgated thereunder from time to time (hereinafter referred to as
the "Regulations"). Any alteration, modification, addition, or other change in
the consolidated return provisions of the Code or the Regulations shall
automatically be applicable to this AGREEMENT mutatis mutandis. Unless otherwise
indicated, all references herein to a particular section of the Code or
Regulations shall include any successor provision designated by a different or
additional section reference.
1.02 Internal Revenue Service. In the administration of this agreement,
where ResCap, as common parent of the ResCap Group (as hereinafter defined)
would have dealt with the Internal Revenue Service (IRS), if ResCap were not a
member of the GMAC Group (as hereinafter defined), GMAC shall stand in place of
the IRS for all purposes.
1.03 General Terms. For purposes of this AGREEMENT, the terms set forth
below shall have the following meanings:
A. "GM Group" means GM and all corporations that join with GM
in filing a consolidated Federal income tax return for any taxable year
with GM as the common parent of such group.
B. "GMAC Group" means GMAC and all corporations that would be
required to join with GMAC in filing a consolidated Federal income tax
return for any taxable year with GMAC as the common parent of such
group if GMAC were not a member of the GM Group.
C. "ResCap Group" means ResCap and all corporations that would
be required to join with ResCap in filing a consolidated Federal income
tax return for any taxable year with ResCap as the common parent of
such group if ResCap were not a member of the GMAC Group.
D "GM Group Tax Liability" means the consolidated Federal
income tax liability of the GM Group for any taxable year for which the
GM Group files a consolidated Federal income tax return, determined in
accordance with Section 1501 et. seq. of the Code.
E. "Separate GMAC Group Tax Liability" means the hypothetical
consolidated Federal income tax liability of the GMAC Group for any
taxable year determined in accordance with Section 1501 et. seq. of the
Code as if the GMAC Group were a separate affiliated group of
corporations filing a consolidated Federal income tax return, including
any elections and accounting methods available under existing facts
which have been or could be made by GMAC pursuant to the Code and
Regulations and other administrative promulgations, as determined under
the Agreement for the Allocation of United States Federal Income Taxes
between GM and GMAC dated December 8, 1994, as modified by subsequent
amendments thereto.
F. "Separate ResCap Group Tax Liability" means the
hypothetical consolidated Federal income tax liability of the ResCap
Group for any taxable year determined in accordance with Section 1501
et. seq. of the Code as if the ResCap Group were a separate affiliated
group of corporations filing a consolidated Federal income tax return,
including any elections and accounting methods available under existing
facts that have been or could be made by ResCap pursuant to the Code
and Regulations and other administrative promulgations, except as
otherwise provided in this paragraph. If ResCap generates (a) foreign
tax credits, (b) capital losses, or (c) net operating losses that may
be utilized by ResCap on a future basis but that generate current tax
benefits in the determination of both the GM Group Tax Liability and
the Separate GMAC Group Tax Liability, GMAC will reimburse ResCap for
those benefits. If ResCap generates (a) foreign tax credits, (b)
capital losses, or (c) net operating losses that may be utilized by
ResCap on a current basis but that do not generate current tax benefits
in the determination of both the GM Group Tax Liability and the
Separate GMAC Group Tax Liability, the Separate ResCap Group Tax
Liability will not be reduced for such credits or losses until such
time as the credits or losses are utilized in the determination of both
the GM Group Tax Liability and the Separate GMAC Group Tax Liability.
Section 2 - Other Agreements regarding Elections,
Filing Positions and Transactions with Significant Tax Effects
2.01 Advance Notice and Consultation. Not less than thirty (30) days
prior to the filing of a tax election, the adoption of a tax return filing
position (either in a final return or for the purpose of calculating a quarterly
estimated tax payment pursuant to paragraph 4.01), or the execution of a
transaction with a significant tax effect that is inconsistent with the
elections, positions or transactions of GM or GMAC or which has a material
impact on the Separate ResCap Group Tax Liability, ResCap shall provide notice
to GM and GMAC of the proposed election, position or transaction and shall
consult with GM and GMAC prior to taking final action on such election, filing
position or transaction.
2.02 Other Agreements. This AGREEMENT relates to the allocation of the
consolidated Federal income tax liability of the GMAC Group determined under
existing facts. Any other agreement between GMAC and ResCap binding either party
to act or to forbear from acting in a manner which would alter either or both of
their respective group tax liabilities is beyond the scope of this agreement.
Such other agreement must be executed independently between the parties and
shall be effective only after review by the GM Tax Staff, the GMAC Legal Staff
and the GMAC Controller's Staff as detailed below:
A. The tax consequences of the proposed agreement for GMAC and
ResCap shall be analyzed by GM Tax Staff.
B. GMAC Controller's Staff will review the proposed agreement
in light of Tax Staff's analysis and opine upon the agreement's
compliance with Generally Accepted Accounting Principles.
C. GMAC Legal Staff will review the proposed agreement in
light of the analyses of Tax Staff and Controller's Staff and opine
upon the agreement's compliance with pertinent legal requirements,
including compliance with securities law.
D. If, upon receipt of Controller's Staff and Legal Staff
opinions, a controversy remains, GMAC Executive Vice President and
Chief Financial Officer will advise the GM Tax Staff whether the
proposed agreement is appropriate from a business perspective.
E. If, upon receipt of Controller's Staff and Legal Staff
opinions, no controversy remains, the GM Tax Staff and/or GMAC
Controller's Staff will implement the proposed agreement.
Section 3 - Agreement to File
Consolidated Returns and Pay Tax
3.01 Agreement to File. As long as ResCap is a member of the GMAC
Group, GMAC and ResCap (and all members of the ResCap Group) hereby agree to
file consolidated Federal income tax returns in the United States, and to
execute such documents and take such action as is necessary or appropriate in
connection therewith.
3.02 Elections. All elections that are available to the GM Group or any
of its members under the Code and Regulations relating to the filing of
consolidated Federal income tax returns shall be made by GM at its sole
discretion in determining the GM Group Tax Liability.
3.03 Payment of Tax. For each taxable year covered by this AGREEMENT,
GMAC will pay to GM, or to such other payee as may be required by the Code, the
Separate GMAC Group Tax Liability. ResCap will pay to GMAC the Separate ResCap
Group Tax Liability.
Section 4 - Certain Payments
Required Under This AGREEMENT
4.01 Estimated Tax Payments. Not less than ten (10) business days prior
to the date on which GM is required to make payments of estimated tax (as
determined in Section 6655 of the Code) on behalf of the GM Group, for any
quarter in which the ResCap Group is includable in the GMAC Group, ResCap shall
submit to GMAC a calculation of the Separate ResCap Group estimated tax,
determined on the basis of the estimated Separate ResCap Group Tax Liability.
4.02 Payment of Separate Group Tax Liability. Within thirty (30) days
following the filing of the GM Group consolidated Federal income tax return for
any taxable year during which the ResCap Group is includable in such return,
GMAC shall notify ResCap of the amount of the Separate ResCap Group Tax
Liability. Within fifteen (15) days after such notification, ResCap shall pay to
GMAC or GMAC shall pay to ResCap as the circumstances warrant, the difference
between the Separate ResCap Group Tax Liability and the estimated tax payments
previously made by ResCap.
4.03 Method of Payment. Unless otherwise mutually agreed by the parties
hereto, all payments required by this AGREEMENT shall be made by wire transfer
to the appropriate bank account as may from time to time be designated by the
parties for such purposes, provided that on the date of such wire transfer
notice of the transfer is given to the recipient thereof in accordance with
Section 6.06 of this AGREEMENT.
4.04 Interest. If any payment required by this AGREEMENT is not timely
paid, interest shall accrue on the unpaid amount at the rate provided by Section
6621 of the Code with respect to deficiencies or refunds under the Code. For
this purpose, a payment will be deemed to be timely paid only if actually
received by the payee on or before the due date thereof.
Section 5 - Recomputations and Adjustments
5.01 IRS Adjustments of GMAC Group Tax Liability. If any item of
income, loss, expense, or credit that enters into the computation of the GMAC
Group Tax Liability is changed or adjusted by the IRS and such change or
adjustment is part of a final determination, as that term is defined in Section
1313(a) of the Code, then the parties hereto shall make such payments to each
other (which payments shall include interest computed under Section 4.04 of this
AGREEMENT), as may be necessary and appropriate to reflect such adjustment and
the intent of this AGREEMENT.
5.02 Other Recomputations. If there is any change of or adjustment to
any item relating to the computation of payments under this AGREEMENT of a type
not provided for in Section 5.01 above (such as a recomputation of amounts due
hereunder to reflect a carryback of an item of loss or credit, or a correction
of any erroneous calculation previously made hereunder), then the parties
thereto shall make such payments to each other in such manner and at such time
as may be necessary and appropriate to reflect the intent of this AGREEMENT.
5.03 Settlement Dates. All payments required by Section 5 of this
AGREEMENT shall be made by the due date of the additional liability to the IRS,
or in the case of a mutually agreed change or adjustment by the parties hereto,
within thirty (30) days of the date of the agreed change or adjustment;
provided, however, that where a refund is due to GMAC from the Internal Revenue
Service, GMAC may defer the payment due to ResCap on behalf of any member or
members of the ResCap Group to within thirty (30) days of receipt of such
refund. All such payments shall be made in the manner provided in Section 4.03
of this AGREEMENT.
Section 6 - Miscellaneous Provisions
6.01 Additional Members. The parties hereto specifically recognize that
from time to time other corporations may become members of the GMAC Group and/or
the ResCap Group during the term of this AGREEMENT, and they hereby agree to use
their best efforts to cause such corporations to be bound by all of the terms
and conditions hereof.
6.02 Other Jurisdictional Taxes. It is the intent of the parties hereto
that the concepts and methods defined herein for allocation of United States
Federal income taxes be applied in a similar manner to tax liability assessed by
state, local, or foreign taxing jurisdictions where there is combined tax
liability between GM, GMAC and ResCap or between GMAC and ResCap, as required
under local law.
6.03 Successors and Assigns. This AGREEMENT shall bind and inure to the
respective successors and assigns of the parties hereto, but no assignment shall
relieve any party's obligations hereunder without the written consent of the
other party.
6.04 Entire Understanding. This AGREEMENT contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein. This AGREEMENT may not be amended without the written consent of each of
the parties hereto. The parties recognize and acknowledge their intention to
enter into additional agreements from time to time with respect to the
allocation of taxes not covered by this AGREEMENT.
6.05 Conflict of Law. The validity, interpretation, and performance of
this AGREEMENT shall be controlled and construed under the laws of the State of
Michigan.
6.06 Notices. Every notice, request, statement, or xxxx provided for in
this AGREEMENT shall be in writing directed to the party to whom given, made, or
delivered to such party at the following address (or at such other address as
such party shall from time to time designate as the address for such purpose):
To GMAC: To ResCap:
Controller General Counsel
General Motors Acceptance Corporation Residential Capital Corporation
200 Renaissance Center 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxxx, Xxxxxxxxx 00000
6.07 Counterparts. This AGREEMENT may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.08 Effective Date. This AGREEMENT shall be effective as of January 1,
2005, and shall continue in effect until the ResCap Group is no longer included
in the consolidated Federal income tax return of the GMAC Group, in which case
the AGREEMENT shall nevertheless continue to apply to all years and that part of
a year ending prior to the date of termination.
6.09 Disagreements. In the event of any disagreement between GMAC and
ResCap with respect to the application or interpretation of the AGREEMENT or to
the computation of any tax liability hereunder, a determination of such
application, interpretation, or computation shall be made by the Chief Tax
Officer of GM.
IN WITNESS WHEREOF, the parties hereto have duly executed this
AGREEMENT the day and year indicated.
GENERAL MOTORS RESIDENTIAL CAPITAL
ACCEPTANCE CORPORATION CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxxxxxx Xxxxx X. Xxxxx
Vice President and Controller Chief Financial Officer and Director
Date: June 24, 2005 Date: June 24, 2005
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