Exhibit 10.15
TAX SHARING
AGREEMENT
TAX SHARING AGREEMENT (the
“Agreement”), dated as of December 22, 2000,
between Atlantic Express Transportation Group Inc., a New York
Corporation (“AETG”) and Atlantic Express
Transportation Corp., a New York Corporation
(“AETC”).
W I T N E S S E T H
:
WHEREAS, AETG is the common parent
of an affiliated group of corporations filing a consolidated
federal income tax return which affiliated group includes AETC and
AETC’s subsidiaries.
WHEREAS, the parties hereto desire,
to allocate liability for taxes AETG Group (as defined below) on
the one hand and AETC Group (as defined below) on the other hand,
and to agree as to certain other tax matters.
NOW, THEREFORE, in consideration of
the mutual promises and covenants set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1.
DEFINITIONS
For purposes of this Agreement, the
following words and phrases have the following meanings:
“AETC Group” means AETC
and the AETC Subsidiaries.
“AETC Subsidiaries”
means the Subsidiaries of AETC and any additional Subsidiaries
which are acquired by AETC during the term of this
Agreement.
“AETG Group” means AETG
and the AETG Subsidiaries.
“AETG Subsidiaries”
means the Subsidiaries of AETG and any additional Subsidiaries
which are acquired by AETC during the term of this Agreement, other
than AETC and each of the AETC Subsidiaries..
“Code” means the
Internal Revenue Code of 1986, as amended.
“Consolidated Federal Income
Tax” means the regular federal income tax shown on the
consolidated federal income tax return of the Consolidated Group,
including interest and penalties, if any, as last determined
reflecting any adjustment made by an amended return, claim for
refund, carryback claim, or examination by the Internal Revenue
Service.
“Consolidated Group”
means the group of affiliated companies of which AETG is the common
parent.
“Consolidated Return”
means the consolidated U.S. federal income Tax or any combined
state and/or local tax return of AETG for the taxable period
commencing on
and each consolidated U.S. Federal Income Tax Return of AETG for
each subsequent taxable period until the termination of this
Agreement.
“Effective Date” means
the date set forth herein above.
“Final Determination”
means the final resolution of liability for tax for any tax period
or for any tax issue as a result of (i) a final and unappealable
judgment or other order of a court of competent jurisdiction, (ii)
a closing agreement or accepted offer in compromise under sections
7121 or 7122 of the Code, or a comparable agreement under the laws
of other jurisdictions, which resolves the entire liability for
such tax or such issue for such tax period, or (iii) any other
final deposition, including by reason of the expiration of the
applicable statute of limitations.
“Group” means in the
context used herein either the AETG Group or the AETC
Group.
“IRS” means the Internal
Revenue Service.
“Member” means AETG.
AETC or any of their Subsidiaries.
“Non-Consolidated Taxes”
means all Taxes other than Consolidated Taxes.
“Subsidiary” means with
respect to any Person, (i) any corporation, association or other
business entity of which more than 80% of the total voting power of
shares of voting stock thereof is at the time owned or controlled,
directly or indirectly, by such person or one or more of the other
subsidiaries of that person or a combination thereof and (ii) any
partnership in which such person or any of its subsidiaries is a
general partner.
“Substantial Authority”
has the meaning provided in the Treasury Regulations under
section 6662 of the Code.
“Tax Dispute Accountant”
means the national office of an independent accounting firm of
national reputation selected by AETG and reasonably acceptable to
AETC.
“Tax” means any federal,
state or local, income tax, franchise tax or tax on
capital.
2
2.
[INTENTIONALLY OMITTED]
3.
FILING RESPONSIBILITY
3.1
Consolidated Returns
. (a) AETG and AETC shall and
shall cause the AETC Subsidiaries and AETG Subsidiaries,
respectively, to join, in the Consolidated Returns to the extent
each is eligible to join in such return under the Code and the
Treasury Regulations. AETG shall cause the Consolidated
Returns to be timely prepared and filed, and shall timely prepare
any consents and requests for extension of time within which to
file the Consolidated Returns or any related information or similar
returns. AETG shall make the Consolidated Returns available
to AETC for review prior to filing and shall furnish AETC with a
copy of each such return promptly after it is filed.
(b)
AETC and the AETC Subsidiaries shall
each furnish to AETG, on a timely basis, such information,
schedules, analysis and other items as may be reasonably requested
by AETG to prepare the Consolidated Returns.
(c)
AETC and the AETC Subsidiaries shall
execute and deliver all documentation reasonably required
(including powers of attorney) to enable AETG to timely file, and
take all actions necessary or incidental to the filing of, the
Consolidated Returns or any amendment of the Consolidated
Returns. AETG shall determine in its sole discretion whether
to file an amended return, and no consent of AETC or an AETC
Subsidiary shall be required for the filing of any such amended
return.
(d)
AETG shall pay or cause to be paid
all Taxes with respect to the Consolidated Returns, and shall act
as the agent of AETC, the AETC Subsidiaries and the AETG
Subsidiaries in all Tax matters having to do with the Consolidated
Returns.
4.
SHARING OF CONSOLIDATED FEDERAL
INCOME TAX
(A)
Taxable Income
. The AETC Group and AETG
Group shall pay to AETG for each taxable year during the term of
this Agreement, an amount equal to the result of the following
equation:
(i)
the separate taxable income of each
Group (but not less than zero) divided by
(ii)
the sum of the Separate Taxable
Incomes of each Member of the Consolidated Group that has
positive Separate Taxable Income for the year, the resulting
quotient multiplied by
(iii)
the federal income tax liability of
the Consolidated Group, prior to the application of foreign tax
credits, if any, for the year.
3
(B)
Separate Taxable
Income . For
purposes of this Agreement, the Separate Taxable Income of each
Member of the Consolidated Group shall be determined under Treas.
Reg. Section 1.1502-12 with the adjustments provided in Treas.
Reg. Section 1.1552-1(a)(1)(ii).
(C)
Subsequent Adjustments
. In the event that the
separate income of any Member of the AETG Group or AETC Group is
adjusted by reason of an amended return, claim for refund, or
examination by the Internal Revenue Service, the amount due from
such Group under paragraph 4.A shall be recomputed using the
adjusted Separate Taxable Income and such Group shall pay to AETG
any additional amount owed with applicable interest (with full
credit given for any prior payments for the year), and AETG agrees
to pay to AETC Group or any AETG Subsidiary any overpayment made by
AETC Group or such AETG Subsidiary.
(D)
Refunds . In the event that the separate taxable
income of any Member of the Consolidated Group is negative
(determined without reference to the adjustments provided in Treas.
Reg. Section 1.1552-1(a)(1)(ii) and such Member would
be entitled to receive a refund for the year if the Member were not
a
