Document:

exv4w1

 

EXHIBIT 4.1

(CERTIFICATE)

INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE

	 	 	 	 	 
		 	

	 	

	 	 	 	 	 
	COMMON
STOCK

	 	CAVCO INDUSTRIES, INC.
	 	CUSIP 149568 10 7
	THIS CERTIFICATE IS TRANSFERABLE IN	 	 	 	SEE REVERSE
FOR CERTAIN
	NEW YORK, NY AND RIDGEFIELD PARK, NJ	 	 	 	DEFINITIONS

	 
	THIS CERTIFIES that
	 
	 
	 
	 
	is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF

CAVCO INDUSTRIES, INC.

	
	transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this certificate
properly
endorsed. This certificate is not valid unless countersigned by the Transfer
Agent and registered by the Registrar.
	 
	     WITNESS the seal of the Corporation and the signature of its duly
authorized officers.

	 	 	 	 	 
		 	 	 	 
	 
	CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER	 	 	 	Dated:

		 	
(CAVCO INDUSTRIES, INC. SEAL)
	 	COUNTERSIGNED AND
REGISTERED:
	CORPORATE SECRETARY	 	 	 	     MELLON INVESTOR SERVICES L.L.C.
	 	 	 	 	          TRANSFER AGENT AND REGISTRAR
	 	 	 	 	BY
	 	 	 	 	               AUTHORIZED SIGNATUREexv10w3

 

EXHIBIT 10.3

TAX SHARING AGREEMENT

BY AND AMONG

CENTEX CORPORATION

AND ITS AFFILIATES

AND

CAVCO INDUSTRIES, INC.

Dated                     

     This TAX SHARING AGREEMENT (the “Agreement”) dated as of
                     , 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

     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.

     “Consolidated Group” means an affiliated group of corporations within the
meaning of Section 1504 (a) of the Code that files a Consolidated Return.

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     “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.

     “Interest Accrual Period” has the meaning set forth in Section 6.4 of this
Agreement.

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     “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.

     “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,

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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.

	 	(a)	 	All Tax Returns filed after the date of this Agreement by
Centex, any Centex Affiliate, or Cavco shall be

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	 	(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.
	 
	 	(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

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	 	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 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.
	 
	 	(d)	 	Notwithstanding any other provision of this Agreement, no
member of the Centex Group shall be required to provide Cavco access
to or copies of:

	 	(1)	 	any information that relates to any member of the Centex Group,
	 
	 	(2)	 	any information as to which any member of the Centex Group is
entitled to assert the protection of any Privilege, or
	 
	 	(3)	 	any information as to which any member of the Centex Group is
subject to an obligation to maintain the confidentiality of such
information.

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	 	Centex shall use reasonable efforts to separate any such
information from any other information to which Cavco is entitled
to access or to which Cavco is entitled to copy under this
Agreement, to the extent consistent with preserving its rights
under this Section 2.4(d).

ARTICLE 3

TAX SHARING AND PAYMENT OF TAXES

	3.1	 	Cavco Liability for Payment of Taxes. Cavco shall pay to the appropriate
Tax Authorities all Taxes due and payable for all Pre-Distribution Periods
and all Post-Distribution Periods for which it is responsible for filing
any Tax Return pursuant to Section 2.1(b). Cavco shall also provide
Centex a check made payable to the appropriate Tax Authority for all Taxes
due and payable for any Pre-Distribution Period for which Centex is
responsible for filing any Separate Return pursuant to Section 2.1(a)(3).
Cavco shall deliver such check to Centex within 5 days of Centex’s request
for such payment.
	 
	3.2	 	Centex Liability for Payment of Taxes. Except as provided in Section 3.1
(with respect to Cavco’s payment of any Tax that may be due of a Separate
Return filed by Centex pursuant to Section 2.1(a)(3)), Centex shall pay to
the appropriate Tax Authorities all Taxes due and payable for all
Pre-Distribution Periods for which it is responsible for filing any Tax
Return pursuant to Section 2.1.
	 
	3.3	 	Additional Liability Allocation. Except with respect to any
Restructuring Tax, Cavco shall have no further liability to Centex for any
Taxes for any Pre-Distribution Period for which Centex is responsible for
filing any Tax Return pursuant to Section 2.1(a)(1) and 2.1(a)(2).

ARTICLE 4

DECONSOLIDATION

4.1 Distribution Related Items.

	 	(a)	 	Restrictions on Certain Post-Distribution Actions.

	 	(1)	 	Cavco Restrictions. Cavco covenants to Centex that it will not
take or fail to take any action where such action or failure
to act would cause the Merger and Distribution to fail to
qualify under Sections 355(a) and 368(a)(1)(D) of the Code or
any corresponding provisions of state or local law. Without
limiting the foregoing, Cavco covenants to Centex that: (i)
during the two-year period following the Distribution Date,
Cavco will not liquidate, merge or consolidate with any other
person; (ii) during the two-year period following the
Distribution Date, Cavco will not sell, exchange, or
distribute or otherwise dispose of all or a substantial
portion of its assets except in the ordinary course of
business; (iii) during the two-year period following the
Distribution Date, Cavco will continue the active conduct of
the historic business as transferred to it in the Merger; (iv)
Cavco will not take any action inconsistent with the
information and representations in the Ruling

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	 	Documents; (v) Cavco will not repurchase stock of Cavco in a
manner contrary to the requirements of Section 4.05(1)(b) of
Revenue Procedure 96-30 or in a manner contrary to the
representations made in the Ruling Documents; and (vi) Cavco
will not enter into any negotiations, agreements or
arrangements with respect to any of the foregoing.

	 	(2)	Centex Restrictions. Centex covenants to Cavco that it will
not take or fail to take any action where such action or
failure to act would cause the Merger and Distribution to fail
to qualify under Sections 355(a) and 368(a)(1)(D) of the Code
or any corresponding provisions of state or local law.

	 	(b)	 	Liability for Undertaking Certain Actions.

	 	(1)	 	Cavco Liability. Cavco shall be responsible for one hundred
percent (100%) of any Restructuring Taxes that are
attributable to, or result from, any act or failure to act
described in Section 4.1(a)(1) of this Agreement by Cavco.
Cavco shall indemnify Centex, each Centex Affiliate and their
directors, officers and employees and hold them harmless from
and against any such Restructuring Taxes.
	 
	 	(2)	 	Centex Liability. Centex and each Centex Affiliate shall be
responsible for one hundred percent (100%) of any
Restructuring Taxes that are attributable to, or result from,
any act or failure to act described in Section 4.1(a)(2) of
this Agreement by Centex or any Centex Affiliate. Centex and
each Centex Affiliate shall jointly and severally indemnify
Cavco and their directors, officers and employees and hold
them harmless from and against any such Restructuring Tax.

	 	(c)	 	Information. Centex has provided Cavco with copies of the
Ruling Documents submitted on or prior to the date hereof, and shall
provide Cavco with copies of any additional Ruling Documents
prepared after the date hereof prior to the submission of such
Ruling Documents to a Tax Authority.
	 
	 	(d)	 	Liability for Breach of Representation. Each of Centex and
Cavco hereby represents that (1) it has read the Ruling Documents
submitted on or prior to the date hereof, (2) all information
contained in such Ruling Documents that concerns or relates to such
party or any affiliate of such party, other than information which
is provided by an external expert, is true, correct and complete in
all material respects, and (3) except to the extent that such party
shall have notified the other party in writing to the contrary and
with reasonable specificity prior to the Distribution Date, all such
information that concerns or relates to such party or any affiliate
of such party, other than information which is provided by an
external expert, is and will be true, correct and complete in all
material respects as of the Distribution Date.

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	 	Cavco acknowledges and agrees that the term “Ruling Documents,”
whenever used in this Agreement, includes all filings or ruling
requests or other materials, appendices and exhibits submitted after
the date hereof to the Service or any Tax Authority in connection
with the Distribution and provided by Centex to Cavco under Section
4.1 of this Agreement.

		
	 	If any Tax Authority withdraws any portion of a ruling issued to
Centex in connection with the Distribution because of a breach by
Cavco of a representation made in this Section 4.1, Cavco shall be
responsible for one hundred percent (100%) of any Restructuring
Taxes. In such event, Cavco shall indemnify Centex, each Centex
Affiliate and their directors, officers and employees and hold them
harmless from and against any Restructuring Taxes. If any Tax
Authority withdraws any portion of a ruling issued to Centex in
connection with the Distribution because of a breach by Centex or any
Centex Affiliate of a representation made in this Section 4.1, Centex
and each Centex Affiliate shall be responsible for one hundred
percent (100%) of any Restructuring Taxes. In such event, Centex and
each Centex Affiliate shall jointly and severally indemnify Cavco and
its directors, officers and employees and hold them harmless from and
against any Restructuring Taxes.

	 	(e)	 	Payment. Cavco shall make or cause to be made all payments
for which it may be liable under this Section 4.1. Such payments
shall be made to Centex or to the appropriate Tax Authority as
specified by Centex no later than five (5) days after delivery by
Centex to Cavco of written notice of a payment by or liability of
Centex (or a Centex Affiliate or a director, officer or employee)
based on a Final Determination, together with a computation of the
amounts due.

	4.2	 	Information for Shareholders. Centex shall provide each shareholder that
receives stock of Cavco pursuant to the Public Distribution with the
information necessary for such shareholder to comply with the requirements
of Section 355 of the Code and the Treasury regulations thereunder with
respect to statements that such shareholders must file with their Federal
Income Tax Returns demonstrating the applicability of Section 355 of the
Code to the Public Distribution.
	 
	4.3	 	Special Indemnification. Centex expressly agrees to indemnify Cavco for
any Federal Income Tax with respect to any Consolidated Return for which
Centex is responsible for filing pursuant to Section 2.1(a)(1) in the
event that Cavco is liable to the Service for any such Federal Income Tax
pursuant to Treasury Regulation section 1.1502-6.

ARTICLE 5

ADDITIONAL OBLIGATIONS

5.1 Provision of Information.

	 	(a)	 	Cavco shall furnish to Centex in a timely manner such
information and documents as Centex may reasonably request for
purposes of (1) preparing any Tax Return for

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	 	which Centex has filing responsibility under this Agreement, (2)
contesting or defending any Audit, and (3) making any determination
or computation necessary or appropriate under this Agreement.

	 	(b)	 	Cavco shall make its employees available to provide
explanations of documents and other materials and such other
information as Centex may reasonably request in connection with any
of the foregoing.
	 
	 	(c)	 	Cavco shall cooperate in any Audit of any Consolidated Return
or Combined Return.
	 
	 	(d)	 	Cavco shall retain and provide on demand books, records,
documentation or other information relating to any Tax Return until
the later of (1) the expiration of the applicable statute of
limitations (giving effect to any extension, waiver, or mitigation
thereof) and (2) in the event any claim is made under this Agreement
for which such information is relevant, until a Final Determination
with respect to such claim.
	 
	 	(e)	 	Cavco shall take such action as Centex may reasonably deem
appropriate in connection with the provision of information under
this Section 5.1.

5.2 Indemnification.

	 	(a)	 	Failure to Pay. Centex and each Centex Affiliate shall
jointly and severally indemnify Cavco and its respective directors,
officers and employees, and hold them harmless from and against any
loss, cost, damage or expense, including reasonable attorneys’ fees
and costs, that is attributable to, or results from the failure of
Centex, any Centex Affiliate or any director, officer or employee to
make any payment required to be made under this Agreement. Cavco
shall indemnify Centex, each Centex Affiliate and their respective
directors, officers and employees, and hold them harmless from and
against any loss, cost, damage or expense, including reasonable
attorneys’ fees and costs, that is attributable to, or results from,
the failure of Cavco or any director, officer or employee to make
any payment required to be made under this Agreement.
	 
	 	(b)	 	Inaccurate or Incomplete Information. Centex and each Centex
Affiliate shall jointly and severally indemnify Cavco and their
respective directors, officers and employees, and hold them harmless
from and against any cost, fine, penalty, or other expense of any
kind attributable to the negligence of Centex or any Centex
Affiliate in supplying Cavco with inaccurate or incomplete
information, in connection with the preparation of any Tax Return.
Cavco shall indemnify Centex, each Centex Affiliate and their
respective directors, officers and employees, and hold them harmless
from and against any cost, fine, penalty, or other expenses of any
kind attributable to the negligence of Cavco in supplying Centex or
any Centex Affiliate with inaccurate or incomplete information, in
connection with the preparation of any Tax Return.

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	5.3	 	Interest. Payments pursuant to this Agreement that are not made within
the period prescribed in this Agreement or, if no period is prescribed,
within thirty (30) days after demand for payment is made (the “Payment
Period”) shall bear interest for the period from and including the date
immediately following the last date of the Payment Period through and
including the date of payment (the “Interest Accrual Period”) at a per
annum rate equal to Cavco’s weighted average interest rate for debt
capital for each year, or part thereof, included in the Interest Accrual
Period plus 50 basis points. Such interest will be payable at the same
time as the payment to which it relates and shall be calculated on the
basis of a year of 365 days and the actual number of days for which due.

ARTICLE 6

AUDITS

6.1 In General.

	 	(a)	 	Centex shall have the exclusive right, in its sole
discretion, to control, contest, and represent the interests of
Centex, any Centex Affiliate, or Cavco in any Audit relating to any
Tax Return described in Section 2.1(a)(1) or 2.1(a)(2) of this
Agreement and to resolve, settle or agree to any deficiency, claim
or adjustment proposed, asserted or assessed in connection with or
as a result of any such Audit.
	 
	 	(b)	 	Cavco shall have the exclusive right, in its sole discretion,
to control, contest, and represent the interests of Cavco in any
Audit relating to any Tax Return described in Section 2.1(b) or
Section 2.1(a)(3) of this Agreement and to resolve, settle, or agree
to any deficiency, claim or adjustment proposed, asserted or
assessed in connection with or as a result of any such Audit.
	 
	 	(c)	 	After the Distribution Date, Centex and Cavco shall cooperate
in order to transfer to Cavco the exclusive right to control,
contest and represent the interests of Cavco in any Audit and to
resolve, settle, or agree to any deficiency, claim or adjustment
proposed, asserted or assessed in connection with or as a result of
any such Audit in each case relating to all Separate Returns of
Cavco relating to Non-Federal Separate Taxes.

	6.2	 	Notice. If, after the Distribution Date, Centex or any member of the
Centex Group receives written notice of, or relating to, an Audit from a
Tax Authority that asserts, proposes or recommends a deficiency, claim or
adjustment that, if sustained, would result in any Restructuring Taxes for
which Cavco could be responsible under this Agreement, Centex shall notify
Cavco in writing of such deficiency, claim or adjustment within ten (10)
days of its receipt. If Cavco receives written notice of or relating to
an audit from a Tax Authority with respect to a Tax Return described in
Section 2.1(a)(1) or 2.1(a)(2) of this Agreement, Cavco shall provide a
copy of such notice to Centex within ten (10) days of receiving such
notice of such Audit, but in no case later than thirty (30) days before a
response is required to be provided to the relevant Tax Authority.

12

 

6.3 Participation Rights.

	 	(a)	 	If a Tax Authority asserts, proposes or recommends a
deficiency, claim or adjustment that, if sustained, would result in
Restructuring Taxes for which Cavco could be responsible under this
Agreement, and Cavco acknowledges in writing to Centex that, as
between Cavco and Centex, Cavco shall be responsible for one hundred
percent (100%) of any such Restructuring Taxes that are determined
pursuant to a Final Determination, then (1) Centex shall take all
actions requested by Cavco to contest such deficiency, claim or
adjustment, including administrative and judicial proceedings; (2)
Cavco shall have the right to fully participate with respect to such
deficiency, claim or adjustment and related proceedings and Centex
shall accept all reasonable suggestions by Cavco in connection with
the management and substance of such proceedings, and (3) in no
event shall Centex settle or compromise any such deficiency, claim
or adjustment without the written consent of Cavco.
	 
	 	(b)	 	If a Tax Authority asserts, proposes or recommends a
deficiency, claim or adjustment that, if sustained, would result in
Restructuring Taxes for which Cavco could be responsible under this
Agreement and has not admitted liability for such Restructuring
Taxes pursuant to Section 6.3(a):

	 	(1)	 	Centex shall keep Cavco informed in a timely manner of all
material actions taken or proposed to be taken by Centex in
connection with such deficiency, claim or adjustment;
	 
	 	(2)	 	Centex shall reasonably consider any comments that Cavco makes
with respect to the handling of the case and provide Cavco an
opportunity to attend any meetings with the Tax Authority; and
	 
	 	(3)	 	Centex shall have no obligation to appeal a determination of
any Tax Authority in any judicial forum.

	6.4	 	Failure to Notify, Etc. The failure of Centex promptly to notify Cavco
of any matter relating to a particular Tax for a taxable period or to take
any action specified in Section 6.3 of this Agreement shall not relieve
Cavco of any liability and/or obligation which it may have to Centex or
any Centex Affiliate under this Agreement with respect to such
Restructuring Taxes except to the extent that Cavco’s rights hereunder are
materially prejudiced by such failure and in no event shall such failure
relieve Cavco of any other liability and/or obligation which it may have
to Centex or any Centex Affiliate.

13

 

ARTICLE 7

DISPUTE RESOLUTION

	7.1	 	Governed by Distribution Agreement. Any dispute arising out of or relating
to this Agreement, including the breach or termination hereof, shall be
resolved in accordance with the procedures specified in Article 8 of that
certain Distribution Agreement between Centex and Cavco dated as of
                  
                  
                  
to which this Agreement is attached as an exhibit.

ARTICLE 8

MISCELLANEOUS

	8.1	 	Effectiveness. This Agreement shall become effective upon execution by
both parties hereto.
	 
	8.2	 	Notices. Any notice, request, instruction or other document to be given
or delivered under this Agreement by any party to another party shall be
in writing and shall be deemed to have been duly given or delivered when
(1) delivered in person, (2) sent by facsimile, (3) deposited in the
United States mail, postage prepaid and sent certified mail, return
receipt requested, or (4) delivered to Federal Express or similar service
for overnight delivery to the address of the party set forth below.

	 	 	 
	 	 	
If to Centex or any Centex Affiliate, to:
	 	 	 
	 	 	
Centex Corporation

2728 North Harwood

Dallas, Texas 75201

Fax No.: (214) 981-6859

Attention: Chief Executive Officer

	 	 	 
	 	 	
With copy to:
	 	 	 
	 	 	
Centex Corporation

2728 North Harwood

Dallas, TX 75201

Fax. No.: (214) 981-6855

Attention: General Counsel
	 	 	 
	 	 	
If to Cavco:
	 	 	
Cavco Industries, Inc.

1001 North Central Avenue

Suite 800

Phoenix, Arizona 85004

Fax No.: (602) 256-6189

Attention: Chief Executive Officer

14

 

		
	 	Any party may, by written notice to the other parties, change the address
or the party to which any notice, request, instruction or other document
(or any copy thereof) is to be delivered.

	8.3	 	Changes in Law. Any reference to a provision of the Code or a law of
another jurisdiction shall include a reference to any applicable successor
provision or law.
	 
	8.4	 	Confidentiality. Each party shall hold and cause its directors,
officers, employees, advisors and consultants to hold in strict
confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law,
all information (other than any such information relating solely to the
business or affairs of such party) concerning the other parties hereto
furnished it by such other party or its representatives pursuant to this
Agreement (except to the extent that such information can be shown to have
been (1) previously known by the party to which it was furnished, (2) in
the public domain through no fault of such party, or (3) later lawfully
acquired from other sources not under a duty of confidentiality by the
party to which it was furnished), and each party shall not release or
disclose such information to any other person, except its directors,
officers, employees, auditors, attorneys, financial advisors, bankers and
other consultants who shall be advised of and agree to be bound by the
provisions of this Section 9.4. Each party shall be deemed to have
satisfied its obligation to hold confidential information concerning or
supplied by the other party if it exercises the same care as it takes to
preserve confidentiality for its own similar information.
	 
	8.5	 	Successors. This Agreement shall be binding on and inure to the benefit
of any successor, by merger, acquisition of assets or otherwise, to any of
the parties hereto, to the same extent as if such successor had been an
original party.
	 
	8.6	 	Affiliates. Centex shall cause to be performed, and hereby guarantees
the performance of, all actions, agreements and obligations set forth
herein to be performed by a Centex Affiliate; provided, however, that if
a Centex Affiliate ceases to be a Centex Affiliate as a result of a
transfer of its stock or other ownership interests to a third party in
exchange for consideration in an amount approximately equal to the fair
market value of the stock or other ownership interests transferred and
such consideration is not distributed outside of the Centex Group to the
shareholders of Centex then Cavco shall, upon request, execute a release
of such Centex Affiliate from its obligations under this Agreement upon
such transfer provided that such Centex Affiliate shall have executed a
release of any rights it may have against Cavco or any Cavco Affiliate by
reason of this Agreement.
	 
	8.7	 	Authorization, Etc. Each of the parties hereto hereby represents and
warrants that it has the power and authority to execute, deliver and
perform this Agreement, that this Agreement has been duly authorized by
all necessary corporate action on the part of such party, that this
Agreement constitutes a legal, valid and binding obligation of each such
party and that the execution, delivery and performance of this Agreement
by such party does not contravene or conflict with any provision of law or
of its charter or bylaws or any agreement, instrument or order binding on
such party.

15

 

	8.8	 	Entire Agreement. This Agreement contains the entire agreement among the
parties hereto with respect to the subject matter hereof and amends and
restates all prior Tax sharing agreements between Centex or any Centex
Affiliate and Cavco and such prior tax sharing agreements shall have no
further force and effect.
	 
	8.9	 	Section Captions. Section captions used in this Agreement are for
convenience and reference only and shall not affect the construction of
this Agreement.
	 
	8.10	 	Governing Law. This Agreement shall be governed by and construed in
accordance with laws of the State of Texas without giving effect to laws
and principles relating to conflicts of law.
	 
	8.11	 	Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
	 
	8.12	 	Severability. If any term, provision, covenant, or restriction of this
Agreement is held by a court of competent jurisdiction (or an arbitrator
or arbitration panel) to be invalid, void, or unenforceable, the remainder
of the terms, provisions, covenants, and restrictions set forth herein
shall remain in full force and effect, and shall in no way be affected,
impaired, or invalidated. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining
terms, provisions, covenants, and restrictions without including any of
such which may be hereafter declared invalid, void, or unenforceable. In
the event that any such term, provision, covenant or restriction is held
to be invalid, void or unenforceable, the parties hereto shall use their
best efforts to find and employ an alternate means to achieve the same or
substantially the same result as that contemplated by such terms,
provisions, covenant, or restriction.
	 
	8.13	 	No Third Party Beneficiaries. This Agreement is solely for the benefit of
Centex, the Centex Affiliates, and Cavco. This Agreement should not be
deemed to confer upon third parties any remedy, claim, liability,
reimbursement, cause of action or other rights in excess of those existing
without this Agreement.
	 
	8.14	 	Waivers, Etc. No failure or delay on the part of the parties in
exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any
other right or power. No modification or waiver of any provision of this
Agreement nor consent to any departure by the parties therefrom shall in
any event be effective unless the same shall be in writing, and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
	 
	8.15	 	Setoff. All payments to be made by any party under this Agreement shall
be made without setoff, counterclaim, or withholding, all of which are
expressly waived.

16

 

	8.16	 	Change of Law. If, due to any change in applicable law or regulations or
their interpretation by any court of law or other governing body having
jurisdiction subsequent to the date of this Agreement, performance of any
provision of this Agreement or any transaction contemplated thereby shall
become impracticable or impossible, the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by
such provision.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by a duly authorized officer as of the date first above written.

	 	 	 
	 	 	
CENTEX CORPORATION, on behalf of itself and its affiliates
	 	 	 
	 	 	 
	 	 	
By
	 	 	 
	 	 	
Name:
	 	 	

	 	 	
Title:
	 	 	

	 	 	 
	 	 	
CAVCO INDUSTRIES, INC.
	 	 	 
	 	 	
By
	 	 	 
	 	 	
Name:
	 	 	

	 	 	
Title:
	 	 	

17

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