Exhibit 10.3
TAX SHARING
AGREEMENT
THIS TAX SHARING AGREEMENT (the
“Agreement”) dated as of October 1, 2002, between
Nationwide Life Insurance Company, an Ohio insurance company
(“Nationwide Life”) and any corporation that may
hereafter be a subsidiary of Nationwide Life and become a party
hereto as contemplated by Section 8 hereof (collectively, the
“Subsidiaries”).
Nationwide Life and the Subsidiaries are members
of an affiliated group of corporations as defined in Section 1504
of the Internal Revenue Code of 1986, as amended (the
“Code”), of which Nationwide Life is the common parent.
Such affiliated group of corporations is referred to herein as the
“Group.” The Group will file consolidated federal
income tax returns pursuant to Sections 1501 et seq
of the Code. In addition, members of the Group may be eligible to
file consolidated or combined state or local income or franchise
tax returns. Nationwide Life and the Subsidiaries desire to
allocate among themselves the benefits and burdens which arise from
filing of such consolidated or combined tax returns and,
accordingly, hereby agree as follows:
Section 1. Definitions . As used herein,
the following terms shall have the following meanings (all terms
defined in this Section 1 or in other provisions of this Agreement
in the singular shall have the same meanings when used in the
plural and vice versa ):
“Includible Corporation” shall mean,
with respect to any entity, any corporation that is a subsidiary of
such entity and that now or in the future qualifies under Section
1501 et seq. of the Code as an includible corporation of an
affiliated group of corporations of which such entity is the
parent.
“Obligor” shall mean, individually,
Nationwide Life and each of the Subsidiaries that is or becomes a
party hereto.
“Tax Year” shall mean each year or
other period during which the Subsidiaries are included in a
consolidated federal income tax return with Nationwide
Life.
In addition, for purposes of this
Agreement, the “federal income tax liability” or
“federal income tax refund” for any Tax Year shall be
an amount equal to the decrease or increase, respectively, in the
earnings and profits of Nationwide Life or any Subsidiary as
calculated under Section 1552(a)(2) and Regulation 1.1502-33(d)(3)
(the Percentage Method, using 100%), but without regard to the
provisions of Section 55 of the Code.
Section 2. Representations and Warranties
. Each Obligor hereby represents and warrants to each other Obligor
that:
(a) Such Obligor is a corporation duly
incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.
(b) None of the execution and delivery of this
Agreement, the consummation of the transaction herein contemplated
or compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent under, the
Charter, Bylaws, Code of Regulations or Articles of Incorporation
of such Obligor, or, to the best knowledge of such Obligor, any
applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which such Obligor is a party or by
which such Obligor is bound or to which such Obligor is subject, or
constitute a
1
default under any such agreement or instrument,
or result in the creation or imposition of any lien on any of the
revenues or assets of such Obligor pursuant to the terms of any
such agreement or instrument.
(c) Such Obligor has all necessary corporate
power and authority to execute, deliver and perform its obligations
under this Agreement; the execution, delivery and performance by
such Obligor of this Agreement have been duly authorized by all
necessary corporate action on its part; and this Agreement has been
duly and validly executed and delivered by such Obligor and
constitutes its legal, valid and binding obligation, enforceable
against such Obligor in accordance with its terms, except as
suchenforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors’ rights and (b) the
application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(d) No authorizations, approvals or consents of
and no filing or registrations with, any governmental or regulatory
authority or agency are necessary for the execution, delivery or
performance by such Obligor of this Agreement or for the validity
or enforceability hereof or such authorizations, approvals,
consents, filings or registrations have been obtained or
made.
Section 3. Consolidated Tax Returns .
Nationwide Life will file a consolidated federal income tax return
for all taxable periods that it is eligible to do so. Nationwide
Life and the Subsidiaries agree to file such consents, elections
and other documents and to take such other action as may be
necessary or appropriate to carry out the purposes of this Section
3. Nationwide Life will timely pay the Group’s federal income
tax liability for each Tax Year.
Section 4. Payment of Tax Liability . For
each Tax Year, each Subsidiary will pay to Nationwide Life an
amount equal to the federal income tax liability attributable to
such Subsidiary for such Tax Year within sixty (60) days following
the filing of the consolidated federal income tax return of the
Group.
Section 5. Estimated Taxes . If in any
Tax Year Nationwide Life believes in good faith that any Subsidiary
will be obligated to make payment to Nationwide Life pursuant to
Section 4 hereof in respect of such Tax Year, such Subsidiary may
be required by Nationwide Life to pay such amounts as would be
necessary to make estimated payments in respect of its federal
income tax liability, if any, that the Subsidiary will be obligated
to pay under Section 4 hereof. Nationwide Life shall calculate the
amount of the payments to be made by the Subsidiary pursuant to
this Section 5 in a manner consistent with the conventions used by
Nationwide Life to compute its estimated tax, and shall provide the
Subsidiary with at least 10 days’ notice of the amount due.
Estimated payments may be required to be paid by the Subsidiary to
Nationwide Life, even if no such payment
