EXHIBIT 10.23
TAX SHARING AGREEMENT
AGREEMENT, dated as of January 31, 2005 by and between Fidelity
National Financial, Inc., a Delaware corporation ("FNF and its subsidiaries"),
Alamo Title Holding Company ("Alamo and its subsidiaries") and Alamo Title
Insurance ("Alamo"), a Texas 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
Alamo and any corporation that is or subsequently becomes a member of an
"affiliated group" of which Alamo would be the "common parent," as such terms
are defined in Section 1504(a) of the Code, if Alamo were owned by individuals
(Alamo and any present or future member of its affiliated group being referred
to herein as the "Alamo Group"); and
WHEREAS, FNF and Alamo desire to agree on an equitable basis for
determining the amount to be paid by Alamo to FNF on account of the Alamo Group
which includes Alamo Title Insurance'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. Alamo agrees to join, and shall cause each
other member of the Alamo Group which includes Alamo Title Insurance to join, in
the filing of the FNF Group's consolidated federal income tax return for each
taxable year for which Alamo is eligible to join in such filing. Alamo agrees
to, and agrees to cause each member of the Alamo Group which includes Alamo
Title Insurance to, file such consents, elections, and other
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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 Alamo 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 Alamo. 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 Alamo Group's Hypothetical Tax. For purposes of this Agreement,
the "Alamo Group which includes Alamo Title Insurance's hypothetical tax" for
any taxable year covered by this Agreement shall be the federal income tax
liability that the Alamo Group which includes Alamo Title Insurance would have
had for such taxable year if the Alamo Group which includes Alamo Title
Insurance 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 Alamo Group which includes Alamo Title Insurance (or any
member thereof) that are available in such taxable year of the Alamo Group which
includes Alamo Title Insurance, or would have been so available if the Alamo
Group which includes Alamo Title Insurance had filed its own consolidated (or
where applicable, separate) federal income tax returns for such other taxable
years, and the Alamo Group which includes Alamo Title Insurance was subject to
tax on all of its taxable income at the applicable maximum rate specified in the
Code but without the benefit of any surtax exemption. In computing the Alamo
Group which includes Alamo Title Insurance's
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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 Alamo Group which includes Alamo Title Insurance 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 Alamo Group
which includes Alamo Title Insurance'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 Alamo Group which includes Alamo Title
Insurance shall be taken into account by the Alamo Group which includes Alamo
Title Insurance in the year, and to the extent, that such Consolidated Item is
taken into account by the FNF Group.
3. Payment. With respect to each taxable year for which Alamo is at
any time a member of the FNF Group:
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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), Alamo
shall pay to FNF the federal income tax imposed by Subtitle A and
F of the Code on the Alamo Group which includes Alamo Title
Insurance's hypothetical tax that would have been payable on such
date if the Alamo Group which includes Alamo Title Insurance were
filing its own consolidated federal income tax return for such
taxable year. In computing Alamo's estimated federal income tax
payments, each payment shall be sufficient to avoid incurring any
addition to tax by the Alamo Group which includes Alamo Title
Insurance 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 Alamo.
b. On or prior to the date the FNF Group consolidated return is
actually filed for a taxable year, Alamo shall pay to FNF, or FNF
shall pay to Alamo, as the case may be, the difference between
the Alamo Group which includes Alamo Title Insurance's
hypothetical tax for such taxable year and the amount paid by
Alamo to FNF pursuant to paragraph 3(a) hereof for such taxable
year. If the Alamo Group which includes Alamo
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Title Insurance for such taxable year has a loss or credit which
could be carried back to and which would reduce the Alamo Group
which includes Alamo Title Insurance's hypothetical tax (as
adjusted) for any earlier taxable year for which the Alamo Group
which includes Alamo Title Insurance 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 Alamo on the date the
FNF Group consolidated return is actually filed for such taxable
year the amount by which the Alamo Group which includes Alamo
Title Insurance'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 Alamo on
the date any refund of tax is actually received the amount by
which the Alamo Group which includes Alamo Title Insurance'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 Alamo Group which includes Alamo
Title Insurance the amounts due and owing within 30 days the
receipt of the refund.
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d. All payments required to be made by Alamo 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 Alamo under this Agreement, such
amounts shall be paid under the same standards and conditions as
required of Alamo.
e. To help assure Alamo Group which includes Alamo Title
Insurance'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 a Texas insurance company
shall be established and maintained by FNF in an amount equal to
the excess of the amount paid by Alamo Group which includes Alamo
Title Insurance 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.
f. Adjustments. Alamo 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,
agreeing to, contesting, or settling any adjustments to the FNF
Group's federal income tax liability for any
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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 Alamo
Group which includes Alamo Title Insurance'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, ALAMO shall pay to FNF or FNF
shall pay to Alamo, as the case may be, the amount necessary to
reflect all adjustments in the Alamo Group which includes Alamo
Title Insurance's hypothetical tax for any taxable year, together
with any interest and penalties fairly attributable thereto.
g. Resolution of Disputes as to the ALAMO Group's Hypothetical
Tax. In the event of a disagreement between the parties hereto as
to the amount of the Alamo Group which includes Alamo Title
Insurance'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.
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h. FNF Indemnity. Provided that Alamo has made the payments
required of Alamo under this Agreement, FNF shall be liable for,
and shall indemnify and hold harmless Alamo and each member of
the Alamo Group which includes Alamo Title Insurance from and
against any liabilities for the taxes imposed by Subtitle A or F
of the Code on the FNF Group for each taxable year for which
Alamo joined in the filing of the FNF Group consolidated federal
income tax return.
i. 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.
j. 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 Alamo Group which includes Alamo Title Insurance and
members of the Alamo Group which
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includes Alamo Title Insurance (a "Combined Tax"), such
Combined Tax shall be allocated between members of the FNF
Group other than members of the Alamo Group which includes
Alamo Title Insurance and members of the Alamo Group which
includes Alamo Title Insurance 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
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 Alamo Group and members of the
Alamo Group which includes Alamo Title Insurance shall be
made at the times and in the amounts otherwise consistent
with the provisions of Section 3 hereof.
4. 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.
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b. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
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 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.
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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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ALAMO TITLE HOLDING COMPANY
By: /s/
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Title: Authorized Officer
Date:
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Attest:
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ALAMO TITLE INSURANCE
By: /s/
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Title: Authorized Officer
Date:
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Attest:
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