TAX MATTERS AGREEMENT

 

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                                                                    Exhibit 10.4

 

 

                              TAX MATTERS AGREEMENT

 

 

 

 

                                     between

 

 

 

                        FIDELITY NATIONAL FINANCIAL, INC.

 

 

 

 

                                       and

 

 

 

 

                       FIDELITY NATIONAL TITLE GROUP, INC.

 

 

 

 

                         dated as of September 27, 2005

 

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                              TAX MATTERS AGREEMENT

 

      THIS TAX MATTERS AGREEMENT (this "Agreement"), dated as of September 27,

2005, by and among FIDELITY NATIONAL FINANCIAL, INC. ("FNF"), a Delaware

corporation, and FIDELITY NATIONAL TITLE GROUP, INC. ("FNT"), a Delaware

corporation and currently a subsidiary of FNF, is entered into as of the date

last executed by the undersigned parties.

 

                                    RECITALS

 

      WHEREAS, as set forth in the resolutions of the Board of Directors of FNF

dated May 16, 2005, FNF intends to distribute to its shareholders, on a pro rata

basis, Class A Common Stock of FNT representing 17.5% of its outstanding common

stock, on a date to be determined ("Distribution Date");

 

      WHEREAS, FNF is the common parent of the affiliated group of corporations

(the "Affiliated Group") within the meaning of Section 1504(a) of the Internal

Revenue Code of 1986, as amended (the "Code"), which includes FNT and the FNT

Subsidiaries; and

 

      WHEREAS, FNF is party to a Tax Sharing Agreement which includes FNT and

the FNT Subsidiaries;

 

       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.

 

1.1    In General.   As used in this Agreement, the following capitalized terms

shall have the following meanings:

 

      "Affiliated Group" has the meaning set forth in the Recitals.

 

      "Agreement" has the meaning set forth in the Preamble hereto.

 

      "Code" has the meaning set forth in the Recitals to this Agreement.

 

      "Combined Return" means any state or local Tax Return filed on a

consolidated, combined, unitary or other similar basis wherein any FNT

Subsidiary joins in the filing of such Tax Return (for any Taxable Year) with a

member of the Affiliated Group that is not an FNT Subsidiary.

 

      "Combined State Tax Liability" means the 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 transaction taxes and (ii) is computed on a

consolidated, unitary, or combined basis by reference to the income and/or

activities of a

 

 

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member of the Affiliated Group other than the FNT Subsidiaries, on the one hand,

and one or more FNT Subsidiaries on the other.

 

      "Consolidated Federal Tax Liability" means the Federal Income Tax

liability of the Affiliated Group.

 

      "Consolidated Return" means any Federal Income Tax Return of the

Affiliated Group filed on a consolidated basis pursuant to Section 1501 of the

Code.

 

       "Covered Insurance Company" means any FNT Subsidiary that has separately

entered into a written Tax Sharing Agreement with FNF and filed that Tax Sharing

Agreement with a State Insurance Commissioner, for the period that Tax Sharing

Agreement remains in effect.

 

      "Distribution Date" has the meaning set forth in the Preamble to this

Agreement.

 

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

(including the Taxes imposed by Sections 11, 55, 831 and 1201(a) of the Code),

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

and any other income-based U.S. federal Tax which is hereinafter imposed upon

corporations.

 

      "Final Determination" means with respect to any issue (a) a decision,

judgment, decree, or other order by the United States Tax Court or any other

court of competent jurisdiction that has become final and unappealable, (b) a

closing agreement under Section 7121 of the Code or a comparable provision of

any state, local or foreign Tax law that is binding against the Service or any

other Tax Authority, (c) any other final settlement with the Service or other

Tax Authority, or (d) the expiration of the applicable statute of limitations.

 

      "FNT" has the meaning set forth in the Preamble to this Agreement.

 

      "FNF" has the meaning set forth in the Preamble to this Agreement.

 

      "FNT Combined State Tax Liability" means the amount that the receipts,

income, or net worth of any FNT Subsidiary other than any Covered Insurance

Subsidiary resulted in, or increased the Combined State Tax Liability, with any

remaining Tax allocated between FNF and FNT on the basis which the FNT

Subsidiary's relative attribute (positive or negative) was taken into account in

determining the Combined State Tax Liability.

 

      "FNT Subsidiary" means any member of the Affiliated Group for which FNT,

directly or indirectly, beneficially owns more than 50% of the equity interest

or the voting control.

 

      "FNT Sum of Hypothetical Tax Liabilities" means, for any Taxable Year, the

sum of the Hypothetical Tax Liability for each FNT Subsidiary, EXCEPT that any

FNT Subsidiary that is a Covered Insurance Company shall be excluded from such

calculation.

 

      "Hypothetical Tax Liability" means, for any Taxable Year, the Tax

Liability that an FNT Subsidiary would have had for such Taxable Year if it had

filed its own separate federal income tax return for such Taxable Year, taking

into account any carryovers to, or carrybacks from, other Taxable Years of the

FNT Subsidiary. In computing each FNT Subsidiary's separate Tax

 

 

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Liability, (i) 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

("Consolidated Items"), foreign tax credits, research and experimentation credit

and Section 1231 gains and losses, such Consolidated Item shall be taken into

account by the FNT Subsidiary 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 Affiliated Group; (ii) 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; (iii) all intercompany transactions (as defined in Treasury Regulation

Section 1.1502-13(b)(1)) between Subsidiaries shall be taken into account at the

time when such transactions are required to be taken into account by the FNT

Group under Treasury Regulation Section 1.1502-13; and (iv) any Consolidated

Item not initially taken into account in computing the Tax of each FNT

Subsidiary is shall be taken into account by each FNT Subsidiary in the year,

and to the extent that such Consolidated Item is taken into account by the

Affiliated Group; and (v) the FNT Subsidiary is treated as 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.

 

      "Service" means the Internal Revenue Service.

 

       "Subsidiary" means a member of the Affiliated Group other than FNF.

 

      "Tax" means any net income, gross income, gross receipts, alternative or

add-on minimum, sales, use, ad valorem, franchise, profits, license,

withholding, payroll, employment, excise, transfer, recording, severance, stamp,

occupation, premium, property, environmental, estimated, custom duty, or other

tax, governmental fee or other like assessment or charge of any kind whatsoever,

together with any interest and any penalty, addition to Tax or additional amount

imposed by a Taxing Authority.

 

      "Tax Authority" means any 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 Law" means any federal, state, local or foreign law with respect to

Taxes, including the Code and Treasury Regulations.

 

      "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 retur