[EXECUTION COPY] TAX SHARING AGREEMENT BY AND AMONG

 

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                                                                   EXHIBIT 10.10

 

                                                                [EXECUTION COPY]

 

                              TAX SHARING AGREEMENT

 

                                   BY AND AMONG

 

                               CENTEX CORPORATION

 

                               AND ITS AFFILIATES

 

                                       AND

 

                             CAVCO INDUSTRIES, INC.

 

Dated June 30, 2003

 

      This TAX SHARING AGREEMENT (the "Agreement") dated as of June 30, 2003, by

and among Centex Corporation ("Centex"), a Nevada corporation and each Centex

Affiliate (as defined below), and Cavco Industries, Inc. ("Cavco"), a newly

formed Delaware corporation and indirect, wholly owned subsidiary of Centex, is

entered into in connection with the Distribution (as defined below).

 

                                    RECITALS

 

      WHEREAS, the Centex Board of Directors has determined, subject to certain

conditions, that it is appropriate and desirable to make a pro rata distribution

of one hundred percent (100%) of the stock of Cavco to its common shareholders,

with cash distributed in lieu of any fractional shares of Cavco, on the

Distribution Date, as defined below (the "Public Distribution"); and

 

      WHEREAS, in order to consummate the Public Distribution, it is necessary

and desirable for AAA Holdings, Inc. ("AAA"), a Delaware corporation and

currently the direct parent of Cavco Industries, LLC ("Cavco LLC") to form Cavco

and to then merge Cavco LLC with and into Cavco (the "Merger"); and

 

      WHEREAS, in order to consummate the Public Distribution, it is necessary

and desirable for AAA to make a pro rata distribution of one hundred percent

(100%) of the stock of Cavco to its sole shareholder, Centex Real Estate

Corporation ("CREC") (the "Internal Distribution 1"); and

 

      WHEREAS, in order to consummate the Public Distribution, it is necessary

and desirable for CREC to make a pro rata distribution of one hundred percent

(100%) of the stock of Cavco to its sole shareholder, Centex International, Inc.

("International") (the "Internal Distribution 2"); and

 

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      WHEREAS, in order to consummate the Public Distribution, it is necessary

and desirable for International to make a pro rata distribution of one hundred

percent (100%) of the stock of Cavco to its sole shareholder, Centex (the

"Internal Distribution 3"); and

 

      WHEREAS, the Merger is intended to qualify as a reorganization under

section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the

"Code"), and the Public Distribution and Internal Distributions 1 through 3

(collectively the "Internal Distributions") are intended to qualify as tax free

distributions under Code section 355; and

 

       WHEREAS, it is appropriate and desirable to set forth the principles and

responsibilities of the parties to this Agreement regarding the allocation of

Tax (as defined below) and other related liabilities and adjustments with

respect to Taxes, Tax contests and other related Tax matters; and

 

      WHEREAS, to that end, the parties wish to enter into this Tax Sharing

Agreement;

 

                                    AGREEMENT

 

      NOW, THEREFORE, in consideration of the mutual covenants and promises

contained herein, and other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties agree as follows:

 

                                    ARTICLE 1

                                   DEFINITIONS

 

      "Audit" includes any audit, assessment of Taxes, other examination by any

Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes,

whether administrative or judicial.

 

      "Centex Affiliate" means any corporation or other entity directly or

indirectly controlled by Centex, excluding Cavco.

 

      "Centex Group" means the affiliated group of corporations as defined in

Section 1504 (a) of the Code, or similar group of entities as defined under

corresponding provisions of the laws of other jurisdictions, of which Centex is

the common parent, and any corporation or other entity which may be, may have

been or may become a member of such group from time to time, but excluding

Cavco.

 

      "Combined Group" means a group of corporations or other entities that

files a Combined Return.

 

      "Combined Return" means any Tax Return with respect to Non-Federal Taxes

filed on a consolidated, combined (including nexus combination, worldwide

combination, domestic combination, line of business combination or any other

form of combination) or unitary basis wherein Cavco joins in the filing of such

Tax Return (for any taxable period or portion thereof) with Centex or one or

more Centex Affiliates.

 

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      "Consolidated Group" means an affiliated group of corporations within the

meaning of Section 1504 (a) of the Code that files a Consolidated Return.

 

      "Consolidated Return" means any Tax Return with respect to Federal Income

Taxes filed on a consolidated basis wherein Cavco joins in the filing of such

Tax Return (for any taxable period or portion thereof) with Centex or one or

more Centex Affiliates.

 

      "Distribution" means the Internal Distributions and/or the Public

Distribution.

 

      "Distribution Date" means the close of business on the date on which the

Public Distribution is effected.

 

      "Federal Income Tax" means any Tax imposed under Subtitle A of the Code

(including the Taxes imposed by Sections 11, 55, 59A, and 1201(a) of the Code),

and any interest, additions to Tax or penalties applicable or related thereto,

and any other income-based United States federal Tax which is hereinafter

imposed upon corporations.

 

      "Federal Tax" means any Tax imposed or required to be withheld by any Tax

Authority of the United States.

 

      "Final Determination" means any of (a) the final resolution of any Tax (or

other matter) for a taxable period, including related interest or penalties,

that, under applicable law, is not subject to further appeal, review or

modification through proceedings or otherwise, including (1) by the expiration

of a statute of limitations or a period for the filing of claims for refunds,

amending Tax Returns, appealing from adverse determinations, or recovering any

refund (including by offset), (2) by a decision, judgment, decree, or other

order by a court of competent jurisdiction, which has become final and

unappealable, (3) by a closing agreement or an accepted offer in compromise

under Section 7121 or 7122 of the Code, or comparable agreements under laws of

other jurisdictions, (4) by execution of an Internal Revenue Service Form 870 or

870AD, or by a comparable form under the laws of other jurisdictions (excluding,

however, with respect to a particular Tax Item for a particular taxable period

any such form that reserves (whether by its terms or by operation of law) the

right of the taxpayer to file a claim for refund and/or the right of the Tax

Authority to assert a further deficiency with respect to such Tax Item for such

period), or (5) by any allowance of a refund or credit, but only after the

expiration of all periods during which such refund or credit may be recovered

(including by way of offset), or (b) the payment of Tax by any member of the

Consolidated Group or Combined Group with respect to any Tax Item disallowed or

adjusted by a Tax Authority provided that Centex determines that no action

should be taken to recoup such payment.

 

      "Income Taxes" means (a) any Tax based upon, measured by, or calculated

with respect to (1) net income or profits (including any capital gains Tax,

minimum Tax and any Tax on items of Tax preference, but not including sales,

use, real or personal property, gross or net receipts, transfer or similar

Taxes) or (2) multiple bases if one or more of the bases upon which such Tax may

be based, measured by, or calculated with respect to, is described in clause (1)

above, or (b) any U.S. state or local franchise Tax.

 

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      "Interest Accrual Period" has the meaning set forth in Section 6.4 of this

Agreement.

 

      "Non-Federal Combined Tax" means any Non-Federal Tax with respect to which

a Combined Return is filed.

 

      "Non-Federal Separate Tax" means any Non-Federal Tax other than a

Non-Federal Combined Tax.

 

      "Non-Federal Tax" means any Tax other than a Federal Tax.

 

      "Payment Period" has the meaning set forth in Section 5.3 of this

Agreement.

 

      "Post-Distribution Period" means a taxable period beginning after the

Distribution Date.

 

      "Pre-Distribution Period" means a taxable period beginning on or before

the Distribution Date.

 

      "Privilege" means any privilege that may be asserted under applicable law

including, any privilege arising under or relating to the attorney-client

relationship (including the attorney-client and work product privileges), the

accountant-client privilege, and any privilege relating to internal evaluation

processes.

 

      "Restructuring Tax" means any Tax imposed upon Centex or a Centex

Affiliate and reasonable professional fees that are attributable to, or result

from, the failure of the Distribution to qualify under Section 355 of the Code

(including any Tax attributable to the application of Section 355(e) or Section

355(f) of the Code to the Distribution) or corresponding provisions of the laws

of other jurisdictions. Each Tax referred to in the preceding sentence shall be

determined using the highest marginal corporate Tax rate for the relevant

taxable period (or any portion thereof). For the avoidance of doubt,

Restructuring Tax does not include an amount described in this paragraph that is

imposed upon a shareholder of Centex in its capacity as a shareholder of Centex.

 

      "Ruling Documents" means (a) the request for a ruling under Section 355

and various other sections of the Code, filed with the Service on November 5,

2002, together with any supplemental filings or ruling requests or other

materials subsequently submitted on behalf of Centex, its subsidiaries and

shareholders to the Service, the appendices and exhibits thereto, and any

rulings issued by the Service to Centex (or any Centex Affiliate) in connection

with the Distribution or (b) any similar filings submitted to, or rulings issued

by, any other Tax Authority in connection with the Distribution.

 

      "Separate Return" means any Tax Return with respect to Non-Federal

Separate Taxes filed by Centex, Cavco, or any of their respective affiliates.

 

      "Service" means the Internal Revenue Service.

 

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      "Tax" means any charges, fees, levies, imposts, duties, or other

assessments of a similar nature, including income, alternative or add-on

minimum, gross receipts, profits, lease, service, service use, wage, wage

withholding, employment, workers compensation, business occupation, occupation,

premiums, environmental, estimated, excise, employment, sales, use, transfer,

license, payroll, franchise, severance, stamp, occupation, windfall profits,

withholding, social security, unemployment, disability, ad valorem, estimated,

highway use, commercial rent, capital stock, paid up capital, recording,

registration, property, real property gains, value added, business license,

custom duties, or other tax or governmental fee of any kind whatsoever, imposed

or required to be withheld by any Tax Authority including any interest,

additions to tax, or penalties applicable or related thereto.

 

      "Tax Authority" means governmental authority or any subdivision, agency,

commission or authority thereof or any quasi-governmental or private body having

jurisdiction over the assessment, determination, collection or imposition of any

Tax (including the Service).

 

      "Tax Item" means any item of income, gain, loss, deduction or credit, or

other attribute that may have the effect of increasing or decreasing any Tax.

 

      "Tax Return" means any return, report, certificate, form or similar

statement or document (including, any related or supporting information or

schedule attached thereto and any information return, amended tax return, claim

for refund or declaration of estimated tax) required to be supplied to, or filed

with, a Tax Authority in connection with the determination, assessment or

collection of any Tax or the administration of any laws, regulations or

administrative requirements relating to any Tax.

 

                                    ARTICLE 2

                      PREPARATION AND FILING OF TAX RETURNS

 

2.1    In General.

 

      (a)    Centex shall have the sole and exclusive responsibility for the

            preparation and filing of the following Tax Returns: (1) all

            Consolidated Returns for any Pre-Distribution Period, (2) all

            Combined Returns for any Pre-Distribution Period, and (3) any

            Separate Return for any Pre-Distribution Period beginning before and

            ending on or before the Distribution Date (specifically including,

            but not limited to, any Texas franchise tax returns for the fiscal

            year ending March 31, 2003).

 

      (b)    Except as provided in Section 2.1(a) of this Agreement, Cavco shall

            have the sole and exclusive responsibility for the preparation and

            filing of all other Tax Returns for Cavco (or which relate to its

            businesses, assets or activities) which are required to be filed for

            any Pre-Distribution Period (including (i) any Pre-Distribution

            Period beginning before and ending on or before the Distribution

            Date and (ii) any Pre-Distribution Period beginning before and

            ending after the Distribution Date) and any Post-Distribution

            Period.

 

2.2    Manner of Filing Tax Returns.

 

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      (a)    All Tax Returns filed after the date of this Agreement by Centex,

            any Centex Affiliate, or Cavco shall be

 

            (1)    prepared in a manner that is consistent with the Ruling

                  Documents, and

 

            (2)    filed on a timely basis (including extensions) by the party

                  responsible for such filing under Section 2.1 of this

                  Agreement.

 

      (b)    Centex and Cavco agree to file all Tax Returns for any

            Pre-Distribution Period, as provided for in Section 2.1, and to take

            all other actions in a manner consistent with the position that

            Cavco is part of any Consolidated Group and any Combined Group for

            all days through and including the Distribution Date.

 

      (c)    Except as otherwise provided in this Section 2.2, Centex shall have

            the exclusive right, in its sole discretion, with respect to any Tax

            Return described in Section 2.1(a) of this Agreement to determine:

 

            (1)    the manner in which such Tax Return shall be prepared and

                   filed, including the elections, methods of accounting,

                  positions, conventions and principles of taxation to be used

                  and the manner in which any Tax Item shall be reported;

 

            (2)    whether any extensions may be requested;

 

            (3)    the elections that will be made by Centex, any Centex

                  Affiliate, and Cavco in such Tax Return;

 

            (4)    whether any amended Tax Returns shall be filed;

 

            (5)    whether any claims for refund shall be made;

 

            (6)    whether any refunds shall be paid by way of refund or credited

                  against any liability for the related Tax; and

 

            (7)    whether to retain outside specialists to prepare such Tax

                   Return, whom to retain for such purpose and the scope of any

                  such retainer.

 

      (d)    In the event that a Tax Item is includable in a Tax Return described

            in Section 2.1(a) of this Agreement and also in a Tax Return

            described in Section 2.1(b) of this Agreement that is filed after

            the date of this Agreement, Cavco preparing, or causing the

            preparation of, such Tax Return under Section 2.1(b) of this

            Agreement shall conform the treatment of such Tax Item in such Tax

            Return described in Section 2.1(b) of this Agreement to the

            treatment of such Tax Item in the applicable Tax Return described in

            Section 2.1(a) of this Agreement.

 

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      (e)    Any Tax Return described in (1) Section 2.1(a) of this Agreement

            (but only with respect to Tax Items of Cavco) or (2) Section 2.1(b)

            of this Agreement, in either case which Tax Return is filed after

            the date of this Agreement, shall be prepared on a basis consistent

            with the elections, methods of accounting, positions, conventions

            and principles of taxation and the manner in which any Tax Item or

            other information is reported as reflected on the most recently

            filed Tax Returns involving similar matters. The preceding sentence

            shall not apply (1) to the extent otherwise required by Section

            2.2(a)(1) of this Agreement or (2) if (i) Cavco obtains Centex's

            prior written consent (which consent shall not be unreasonably

            withheld), (ii) there has been a controlling change in law or

            circumstances, or (iii) the failure to be consistent will not result

            in an increased Tax liability to, or reduction in a Tax Asset of,

            Centex or any Centex Affiliate with respect to a Pre-Distribution

            Period, not fully compensated by Cavco. For purposes of this Section

            2.2(e), a controlling change in law or circumstances includes, with

            respect to Post-Distribution Periods (but not Pre-Distribution

            Periods), permission to change a method of accounting granted by the

             relevant Tax Authority.

 

2.3    Agent. Cavco hereby irrevocably designates Centex as its sole and

      exclusive agent and attorney-in-fact to take such action (including

      execution of documents) as Centex, in its sole discretion, may deem

      appropriate in any and all matters (including Audits) relating to any Tax

      Return described in Section 2.1(a) of this Agreement.

 

2.4    Provision of Tax Return Information.

 

      (a)    Both Cavco and Centex agree to provide all documents and

            information, and to make available their employees and officers, as

            may be reasonably requested by either party to prepare any Tax

            Return described in Section 2.1 of this Agreement.

 

      (b)    In the case of any Tax Return described in Section 2.1(a) that is

            filed after the date of this Agreement, Centex shall, upon request

            of Cavco, provide Cavco a copy of each such Tax Return and all

            related Tax accounting work papers to the extent that they relate to

            Cavco.

 

      (c)    In the case of any Tax Return in Centex's possession that was filed

            before the date of this Agreement, Centex sha