Exhibit 10.8
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TAX SHARING AGREEMENT
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THIS TAX SHARING AGREEMENT (this "Agreement") dated effective as of July 1,
2000, by and among Xxxxxxxx & Xxxxxx Corporation ("M&I"), a Wisconsin
corporation, each M&I Affiliate (as defined below), Metavante Corporation
("Metavante"), a Wisconsin corporation and currently a direct, wholly owned
subsidiary of M&I, and each Metavante Affiliate (as defined below) is entered
into in connection with the Distribution (as defined below).
RECITALS
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WHEREAS, as of the date hereof, M&I and its direct and indirect domestic
subsidiaries are members of an Affiliated Group (as defined below), of which M&I
is the common parent corporation;
WHEREAS, as set forth in the General Assignment and Assumption Agreement
dated as of July 1, 2000 (the "Assignment and Assumption Agreement"), and
subject to the terms and conditions thereof, M&I has transferred and assigned to
Metavante substantially all of the assets and liabilities currently associated
with the Metavante Business (as defined below) and the stock or similar
interests currently held by M&I in subsidiaries and other entities that conduct
such business (the "Transfer");
WHEREAS, M&I and Metavante currently contemplate that, following the
Transfer, Metavante will make an initial public offering (the "IPO") of
Metavante common stock that will reduce M&I's ownership of Metavante on a fully
diluted basis to not less than eighty and one-tenth percent (80.1%);
WHEREAS, M&I intends, sometime after the IPO, to distribute all of its
shares of Metavante common stock to M&I shareholders on a pro rata basis (the
"Distribution");
WHEREAS, the Transfer and the Distribution are intended to qualify as a
tax-free reorganization and distribution under sections 368(a)(1)(D) and 355 of
the Code; and
WHEREAS, in contemplation of the Distribution pursuant to which Metavante
and its direct and indirect domestic subsidiaries will cease to be members of
the M&I Group (as defined below) the parties hereto have determined to enter
into this Agreement, setting forth their agreement with respect to certain tax
matters.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, M&I, for itself and on behalf of its affiliates as of the
Transfer Date and its future affiliates (other than Metavante and its
affiliates), and Metavante, for itself and on behalf of its affiliates as of the
Transfer Date and its future affiliates, hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, capitalized terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
"Affiliated Group" means an affiliated group of corporations within the
meaning of section 1504(a)(1) of the Code that files a Consolidated Return.
"After Tax Amount" means any additional amount necessary to reflect the
hypothetical Tax consequences of the receipt or accrual of any payment required
to be made under this Agreement (including the receipt or payment of an
additional amount or amounts hereunder and the effect of the deductions
available for interest paid or accrued and for Taxes such as state and local
income Taxes), determined by using the highest marginal corporate Tax rate (or
rates, in the case of an item that affects more than one Tax) for the relevant
taxable period (or portion thereof).
"Assignment and Assumption Agreement" has the meaning set forth in the
Recitals.
"Audit" includes any audit, assessment of Taxes, other examination by any
Taxing Authority, proceeding, or appeal of such a proceeding relating to Taxes,
whether administrative or judicial, including proceedings relating to competent
authority determinations.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Return" means any Tax Return, other than with respect to federal
Income 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 Metavante or one or more
Metavante Affiliates join in the filing of such Tax Return (for any taxable
period or portion thereof) with M&I or one or more M&I Affiliates.
"Consolidated Return" means any Tax Return with respect to federal Income
Taxes filed on a consolidated basis wherein Metavante or one or more Metavante
Affiliates join in the filing of such Tax Return (for any taxable period or
portion thereof) with M&I or one or more M&I Affiliates.
"Distribution" has the meaning set forth in the Recitals.
"Distribution Date" means the close of business on the date which the
Distribution is effected.
"Distribution Taxes" means any Taxes imposed on M&I or any M&I Affiliate
resulting from, or arising in connection with, the failure of the Distribution
to be tax-free to such party under the Code (including, without limitation, any
Tax resulting from the failure of the Distribution to qualify under section 355
and section 368(a)(1)(D) of the Code or the application of section 355(d) or
section 355(e) of the Code to the Distribution) or corresponding provisions of
the laws of any other jurisdictions. Each Tax referred to in the immediately
preceding
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sentence shall be determined using the highest marginal corporate Income Tax
rate for the relevant taxable period (or portion thereof).
"Estimated Tax Installment Date" means the estimated Tax installment due
dates prescribed in section 6655(c) of the Code and any other date on which an
installment of Taxes is required to be made.
"Filing Party" has the meaning set forth in Section 8.01.
"Final Determination" shall mean the final resolution of liability for any
Tax for any taxable period, by or as a result of: (i) a final and unappealable
decision, judgment, decree or other order by any court of competent
jurisdiction; (ii) a final settlement with the IRS, a closing agreement or
accepted offer in compromise under Code sections 7121 or 7122, or a comparable
agreement under the laws of other jurisdictions, which resolves the entire Tax
liability for any taxable period; (iii) any allowance of a refund or credit in
respect of an overpayment of Tax, but only after the expiration of all periods
during which such refund may be recovered by the jurisdiction imposing the Tax;
or (iv) any other final disposition, including by reason of the expiration of
the applicable statute of limitations.
"Income Tax" shall mean any federal, state, local or foreign Tax determined
by reference to income, net worth, gross receipts or capital, or any such Taxes
imposed in lieu of such Tax.
"Independent Firm" has the meaning set forth in Section 9.03.
"Initial Ruling" means any private letter ruling issued by the IRS in
connection with the Distribution in response to M&I's request for such a letter
ruling.
"Interim Period" means a taxable period beginning on or after the Transfer
Date but on or before the Distribution Date.
"IPO" has the meaning set forth in the Recitals.
"IRS" means the United States Internal Revenue Service or any successor
thereto, including, but not limited to, its agents, representatives, and
attorneys.
"Joint Responsibility Item" means any Tax Item for which the non-Filing
Party's responsibility for Taxes under this Agreement could exceed one million
dollars ($1,000,000), but not a Sole Responsibility Item as regards which the
non-Filing Party has assumed control under the first sentence of Section 8.02
hereof.
"M&I Affiliate" means any corporation or other entity directly or
indirectly controlled by M&I, but excluding Metavante or any Metavante
Affiliate.
"M&I Employee" means an employee of M&I or any M&I Affiliate immediately
after the Distribution, or a retiree or other former employee of M&I or any M&I
Affiliate who is not a Metavante Employee, provided that any Metavante Employee
who becomes an M&I Employee shall be considered an M&I Employee.
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"M&I Group" means the Affiliated Group, or similar group of entities as
defined under corresponding provisions of the laws of other jurisdictions, of
which M&I is the common parent corporation, 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 any member of the Metavante Group.
"Metavante Affiliate" means any corporation or other entity directly or
indirectly controlled by Metavante.
"Metavante Business" means (a) the business and operations of the business
of Metavante as described in the registration statement on Form S-1 pursuant to
the Securities Act of 1933, as amended, to be filed with the Securities and
Exchange Commission registering the shares of common stock of Metavante to be
issued in the IPO, together with all amendments thereto and (b) except as
otherwise expressly provided herein, any terminated, divested or discontinued
businesses or operations that at the time of termination, divestiture or
discontinuation primarily related to the Metavante business as then conducted.
"Metavante Employee" means an employee of Metavante or any Metavante
Affiliate immediately after the Distribution, or a retiree or other former
employee of Metavante, any Metavante Affiliate or any predecessor thereto
including the Data Services division of M&I and M&I Data Services, Inc. (but not
an employee of the item processing department of Data Services) who is not an
M&I Employee, provided that any M&I Employee who becomes a Metavante Employee
shall be considered a Metavante Employee.
"Metavante Group" means the Affiliated Group, or similar group of entities
as defined under corresponding provisions of the laws of other jurisdictions, of
which Metavante will be the common parent corporation immediately after the
Distribution, and any corporation or other entity which may become a member of
such group from time to time.
"Option" means an option to acquire common stock, or other equity-based
incentives the economic value of which is designed to mirror that of an option.
"Owed Party" has the meaning set forth in Section 7.04.
"Owing Party" has the meaning set forth in Section 7.04.
"Payment Period" has the meaning set forth in Section 7.04(e).
"Post-Distribution Period" means a taxable period beginning after the
Distribution Date.
"Pre-Distribution Period" means any Pre-Transfer Period and/or Interim
Period.
"Pre-Transfer Period" means a taxable period beginning before the Transfer
Date.
"Ruling Documents" means (1) the request for a private letter ruling under
section 355 and various other sections of the Code, together with any
supplemental filings or ruling requests or other materials subsequently
submitted on behalf of M&I, its subsidiaries and shareholders to the IRS, the
appendices and exhibits thereto, and any rulings issued by the IRS to M&I (or
any
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M&I Affiliate) in connection with the Distribution or (2) any similar filings
submitted to, or rulings issued by, any other Taxing Authority in connection
with the Distribution.
"Separate Tax Liability" means an amount equal to the Tax liability that
Metavante and each Metavante Affiliate would have incurred if they had filed a
consolidated return, combined return or a separate return, as the case may be,
separate from the M&I Group, for the Metavante Business for all Pre-Distribution
Periods, and such amount shall be computed by M&I using the highest marginal
corporate Tax rate (or rates, in the case of an item that affects more than one
Tax) for the relevant taxable period (or portion thereof), giving effect to any
carryforward or carryover of any Tax Asset associated with the Metavante
Business, and in a manner consistent with (i) general Tax accounting principles,
(ii) the Code and the Treasury regulations promulgated thereunder, (iii) any
similar provisions of the laws of other jurisdictions, if applicable, and (iv)
past practice, if any.
"Sole Responsibility Item" means any Tax Item for which the non-Filing
Party has the entire economic liability under this Agreement.
"Supplemental Ruling" means (1) any ruling issued by the IRS in connection
with the IPO or Distribution other than the Initial Ruling and (2) any similar
ruling issued by any other Taxing Authority in connection with the IPO or
Distribution addressing the application of a provision of the laws of another
jurisdiction.
"Supplemental Ruling Documents" means (1) the request for a Supplemental
Ruling and any materials, appendices and exhibits submitted or filed therewith
and any Supplemental Rulings issued by the IRS to M&I and (2) any similar
filings submitted to, or rulings issued by, any other Taxing Authority in
connection with the Distribution.
"Tax Asset" means any Tax Item that has accrued for Tax purposes, but has
not been used during a taxable period, and that could reduce a Tax in another
taxable period, including a net operating loss, net capital loss, investment tax
credit, foreign tax credit, research and experimentation credit, charitable
deduction or credit related to alternative minimum tax or any other Tax credit.
"Tax Benefit" means a reduction in the Tax liability of a taxpayer (or of
the Affiliated Group of which it is a member) for any taxable period. Except as
otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been
realized or received from a Tax Item in a taxable period only if and to the
extent that the Tax liability of the taxpayer (or of the Affiliated Group of
which it is a member) for such period, after taking into account the effect of
the Tax Item on the Tax liability of such taxpayer in the current period and all
prior periods, is less than it would have been if such Tax liability were
determined without regard to such Tax Item.
"Tax Detriment" means an increase in the Tax liability of a taxpayer (or of
the Affiliated Group of which it is a member) for any taxable period. Except as
otherwise provided in this Agreement, a Tax Detriment shall be deemed to have
been realized or received from a Tax Item in a taxable period only if and to the
extent that the Tax liability of the taxpayer (or of the Affiliated Group of
which it is a member) for such period, after taking into account the effect of
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the Tax Item on the Tax liability of such taxpayer in the current period and all
prior periods, is more than it would have been if such Tax liability were
determined without regard to such Tax Item.
"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 Taxing 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.
"Taxes" includes all taxes, charges, fees, duties, levies, imposts, rates
or other assessments imposed by any federal, state, local or foreign Taxing
Authority, including, but not limited to, income, gross receipts, excise,
property, sales, use, license, capital stock, transfer, franchise, payroll,
withholding, social security, value added or other taxes, and any interest,
penalties or additions attributable thereto.
"Taxing 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 IRS).
"Transfer" has the meaning set forth in the Recitals.
"Transfer Date" means July 1, 2000.
Section 2. Preparation and Filing of Tax Returns.
2.01. M&I's Responsibility. M&I shall have sole and exclusive
responsibility for the preparation and filing of:
(a) all Tax Returns with respect to M&I, any M&I Affiliate, Metavante,
and/or any Metavante Affiliate for Pre-Transfer Periods (except for the Tax
Returns for M&I Financial Corp. (n/k/a Metavante), M&I EastPoint
Technology, Inc. and M&I Asia Pacific, SDN.BTD for the period beginning
January 1, 2000), and all Consolidated Returns and all Combined Returns for
any Interim Periods; and
(b) all Tax Returns with respect to M&I and any M&I Affiliate for
Post-Distribution Periods.
2.02. Metavante's Responsibility. Except as otherwise provided in Section
2.01 of this Agreement, Metavante shall have sole and exclusive responsibility
for the preparation and filing of (1) all Tax Returns for M&I Financial Corp.
(n/k/a Metavante), M&I EastPoint Technology, Inc. and M&I Asia Pacific, SDN.BTD
for the period beginning January 1, 2000, (2) all Tax Returns (other than
Consolidated Returns and Combined Returns) for Metavante and any
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Metavante Affiliate for any Interim Periods and (3) all Tax Returns with respect
to Metavante and any Metavante Affiliate for Post Distribution Periods.
2.03. Agent. Subject to the other applicable provisions of this Agreement,
Metavante hereby irrevocably designates, and agrees to cause each Metavante
Affiliate to so designate, M&I as its sole and exclusive agent and attorney-in-
fact to take such action (including execution of documents) as M&I, in its sole
discretion, may deem appropriate in any and all matters (including Audits)
relating to any Tax Return described in Section 2.01 of this Agreement.
2.04. Manner of Tax Return Preparation.
(a) Unless otherwise required by a Taxing Authority, the parties
hereby agree to prepare and file all Tax Returns, and to take all other
actions, in a manner consistent with (1) this Agreement, (2) any Ruling
Documents, and (3) any Supplemental Ruling Documents. All Tax Returns shall
be filed on a timely basis (taking into account applicable extensions) by
the party responsible for filing such returns under this Agreement.
(b) M&I shall have the exclusive right, in its sole discretion, with
respect to any Tax Return described in Section 2.01(a) of this Agreement to
determine (1) the manner in which such Tax Return shall be prepared and
filed, including the elections, method 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 M&I, any M&I Affiliate,
Metavante, or any Metavante Affiliate on 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 firms to prepare or review such Tax Returns. M&I shall provide
Metavante with copies of information reported on Tax Returns which is
applicable to Metavante and/or any Metavante Affiliate upon reasonable
request and so long as any confidential information regarding M&I and/or
any M&I Affiliate is deleted.
(c) Within one hundred twenty (120) days after filing the 2000
Consolidated Return, M&I shall notify Metavante of the Tax attributes
associated with Metavante and each Metavante Affiliate, and the Tax bases
of the assets and liabilities, transferred to Metavante in connection with
the Transfer. At Metavante's request, M&I will use its best efforts to
provide Metavante with preliminary estimates of such information as soon as
is practicable.
Section 3. Liability for Taxes.
3.01. Metavante's Liability for Section 2.01(a) Taxes. With respect to all
Tax Returns described in Section 2.01(a) of this Agreement, Metavante shall be
liable for the Separate Tax Liability of Metavante and all Metavante Affiliates,
and shall be entitled to receive and retain all refunds or credits of Taxes
previously paid by Metavante with respect to any such Separate Tax Liability.
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3.02. M&I's Liability for Section 2.01 Taxes. With respect to all Tax
Returns described in Section 2.01(a) of this Agreement, M&I shall be liable for
the difference between the Separate Tax Liability of Metavante and all Metavante
Affiliates and all Taxes shown as due on such Tax Returns, and shall be entitled
to receive and retain all refunds or credits of Taxes attributable to such
difference. With respect to all Tax Returns described in Section 2.01(b) of this
Agreement, M&I shall be liable for all Taxes due with respect thereto, and shall
be entitled to receive and retain all refunds or credits of Taxes previously
paid by M&I with respect to such Taxes.
3.03. Metavante's Liability for Section 2.02 Taxes. With respect to all Tax
Returns described in Section 2.02 of this Agreement, Metavante shall be liable
for all Taxes due with respect thereto, and shall be entitled to receive and
retain all refunds or credits of Taxes previously paid by Metavante with respect
to such Taxes
3.04. Payment of Tax Liability. If one party is liable for Taxes, under
Sections 3.01 through 3.03 of this Agreement, with respect to Tax Returns for
which another party is responsible for preparing and filing, then the liable
party shall pay the Taxes to the other party or the appropriate Taxing Authority
pursuant to Section 7.04 of this Agreement.
3.05. Computation. M&I shall provide to Metavante, within twenty (20) days
prior to the filing of any applicable Tax Return, a written calculation in
reasonable detail setting forth the amount of any Separate Tax Liability or
estimated Separate Tax Liability (for purposes of Section 7.01 of this
Agreement). Metavante shall have the right to review and comment on such
calculation, but no later than ten (10) days prior to the due date, as extended,
of any such Tax Return. Any dispute with respect to such calculation shall be
resolved pursuant to Section 9.03 of this Agreement, provided, however, that,
notwithstanding any dispute with respect to any such calculation, in no event
shall any payment attributable to the amount of any Separate Tax Liability or
estimated Separate Tax Liability be paid later than the date provided in Section
7 of this Agreement, subject to subsequent resolution of such dispute pursuant
to Section 9.03 of this Agreement.
Section 4. Distribution Taxes and Deconsolidation.
4.01. Distribution Taxes.
(a) M&I's Liability for Distribution Taxes. Notwithstanding Sections
3.01 through 3.03 of this Agreement, M&I (and each M&I Affiliate, but only
for the percentage attributable to such M&I Affiliate's actions hereunder),
shall be liable for one hundred percent (100%) of any Distribution Taxes
that result from one or more of the following:
(i) any act, failure to act or omission of or by M&I (or any M&I
Affiliate) inconsistent with any material, information, covenant or
representation in the Ruling Documents, Supplemental Ruling Document,
Initial Ruling, or Supplemental Ruling;
(ii) any act, failure to act or omission of or by M&I (or any
M&I Affiliate) after the date of the Distribution, including, without
limitation, any
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cessation, transfer to affiliates, or disposition of its active trades
or businesses, or certain issuances of stock, stock buybacks or
payments of an extraordinary dividend by M&I (or any M&I Affiliate)
following the Distribution;
(iii) any acquisition of any stock or assets of M&I (or any M&I
Affiliate) by one or more other persons prior to or following the
Distribution; or
(iv) any issuance of stock by M&I (or any M&I Affiliate), or
change in ownership of stock in M&I (or any M&I Affiliate), that
causes section 355(d) or section 355(e) of the Code to apply to the
Distribution.
(b) Metavante's Liability for Distribution Taxes. Notwithstanding
Sections 3.01 through 3.03 of this Agreement, Metavante and each Metavante
Affiliate shall be liable for one hundred percent (100%) of any
Distribution Taxes that result from one or more of the following:
(i) any act, failure to act or omission of or by Metavante (or
any Metavante Affiliate) inconsistent with any material, information,
covenant or representation in the Ruling Documents, Supplemental
Ruling Document, Initial Ruling, or Supplemental Ruling;
(ii) any act, failure to act or omission of or by Metavante (or
any Metavante Affiliate) after the date of the Distribution, including
without limitation, any cessation, transfer to affiliates or
disposition of its active trades or businesses, or certain issuances
of stock, stock buybacks or payments of an extraordinary dividend by
Metavante (or any Metavante Affiliate) following the Distribution;
(iii) any acquisition of any stock or assets of Metavante (or
any Metavante Affiliate) by one or more other persons prior to or
following the Distribution (unless such acquisition occurs prior to
the Distribution and M&I specifically consents to such acquisition);
or
(iv) any issuance of stock by Metavante (or any Metavante
Affiliate), or change in ownership of stock in Metavante (or any
Metavante Affiliate), that causes section 355(d) or section 355(e) of
the Code to apply to the Distribution.
(c) Joint Liability for Remaining Distribution Taxes. The liability
for any Distribution Taxes not allocated by Sections 4.01(a) or (b) of this
Agreement shall be borne by M&I and by Metavante in proportion to the
market values of M&I and Metavante, respectively, as of the Distribution
Date, determined by multiplying the closing price of M&I and Metavante
stock on the Distribution Date by the respective number of common shares
outstanding in each company.
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4.02. Private Letter Rulings.
(a) Information. M&I has provided Metavante with copies of the
Ruling Documents submitted on or prior to the date hereof and shall provide
Metavante with copies of any additional Ruling Documents prepared after the
date hereof prior to the submission of such Ruling Documents to a Taxing
Authority.
(b) Supplemental Rulings.
(i) In General. M&I agrees that at the reasonable request of
Metavante, M&I shall cooperate with Metavante and use its reasonable
best efforts to seek to obtain, as expeditiously as possible, a
Supplemental Ruling or other guidance from the IRS or any other Taxing
Authority for the purpose of confirming (1) the continuing validity of
any ruling issued by any Taxing Authority addressing the application
of the law to the Distribution or (2) compliance on the part of
Metavante (or any Metavante Affiliate) with its obligations under
Section 4.01(b) of this Agreement. However, M&I shall not be
obligated to seek a Supplemental Ruling if it reasonably believes that
seeking such Supplemental Ruling would adversely affect M&I (or any
M&I Affiliate) or if Metavante does not agree in advance to pay all
Costs (as defined in Section 8.01 hereof) incurred in filing and
obtaining such Supplemental Ruling. Further, in no event shall M&I be
required to file any Supplemental Ruling Documents unless Metavante
represents that (1) it has read the Supplemental Ruling Documents and
(2) all information and representations, if any, relating to Metavante
(or any Metavante Affiliate) contained in the Supplemental Ruling
Documents are true, correct and complete in all material respects.
Metavante shall reimburse M&I for all costs and expenses incurred by
M&I in obtaining a Supplemental Ruling requested by Metavante.
Neither Metavante nor any Metavante Affiliate shall seek any guidance
(whether written or oral) from the IRS or any other Taxing Authority
concerning the Distribution except as set forth in this Section
4.02(b). The preceding sentence shall not in any way limit the
ability of any outside counsel to Metavante to request informal
guidance from the IRS regarding such issues on an anonymous basis.
(ii) Participation Rights. If M&I requests a Supplemental
Ruling or other guidance after the date of this Agreement: (1) M&I
shall keep Metavante informed in a timely manner of all material
actions taken or proposed to be taken by M&I in connection therewith;
(2) M&I shall (A) reasonably in advance of the submission of any such
Supplemental Ruling Documents provide Metavante with a draft copy
thereof, (B) reasonably consider Metavante's comments on such draft
copy, and (C) provide Metavante with a final copy and, (D) provide
Metavante with notice reasonably in advance of, and Metavante shall
have the right to attend, any meetings with the Taxing Authority
(subject to the approval of the Taxing Authority) that relate to such
Supplemental Ruling. Metavante agrees that Metavante shall cooperate
fully with M&I with respect to any request by M&I for a Supplemental
Ruling.
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4.03. Carrybacks.
(a) In General. M&I agrees to pay to Metavante the federal income
Tax Benefit from the use in any Pre-Distribution Period (the "Carryback
Period") of a carryback of any Tax Asset of the Metavante Group from a
Post-Distribution Period (other than a carryback of any Tax Asset
attributable to Distribution Taxes). If subsequent to the payment by M&I to
Metavante of the federal income Tax Benefit of a carryback of a Tax Asset
of the Metavante Group, there shall be a Final Determination which results
in a (1) change to the amount of the Tax Asset so carried back or (2)
change to the amount of such federal income Tax Benefit, Metavante shall
repay to M&I, or M&I shall repay to Metavante, as the case may be, any
amount which would not have been payable to such other party pursuant to
this Section 4.03(a) had the amount of the benefit been determined in light
of these events, but only if the parties first agree as to the allocation
of any Costs (as defined in Section 8.01 hereof) which will be incurred in
implementing the Final Determination (including amended Tax Return
preparation, if any).
(b) Net Operating Losses. Notwithstanding any other provision of
this Agreement, Metavante hereby expressly agrees to elect (under section
172(b)(3) of the Code and, to the extent feasible, any similar provision of
any state, local or foreign Tax law) to relinquish any right to carryback
net operating losses for any tax year with respect to which such net
operating loss could otherwise be carried back into a Consolidated Return
or a Combined Return (in which event no payment shall be due from M&I to
Metavante in respect of such net operating losses).
4.04. Allocation of Tax Items. All Tax computations for (1) any Pre-
Distribution Periods ending on the Distribution Date and (2) the immediately
following taxable period of Metavante or any Metavante Affiliate, shall be made
pursuant to the principles of section 1.1502-76(b) of the Treasury Regulations
or of a corresponding provision under the laws of other jurisdictions, as
determined by M&I, taking into account all reasonable suggestions made by
Metavante with respect thereto.
4.05. Continuing Covenants. M&I (for itself and each M&I Affiliate) and
Metavante (for itself and each Metavante Affiliate) agree (1) not to take any
action reasonably expected to result in an increased Tax liability to the other,
a reduction in a Tax Asset of the other or an increased liability to the other
under this Agreement and (2) to take any action reasonably requested by the
other that would reasonably be expected to result in a Tax Benefit or avoid a
Tax Detriment to the other, provided that such action does not result in any
additional direct or indirect cost not fully compensated for by the requesting
party. The parties hereby acknowledge that the preceding sentence is a statement
of general principle and is not intended to limit, and therefore shall not apply
to, the rights of the parties with respect to matters otherwise covered by this
Agreement.
4.06. Allocation of Tax Assets.
(a) In General. In connection with the Distribution, M&I and
Metavante shall cooperate in determining the allocation of any Tax Assets
among M&I, each M&I
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Affiliate, Metavante, and each Metavante Affiliate. The parties hereby
agree that in the absence of controlling legal authority or unless
otherwise provided under this Agreement, Tax Assets shall be allocated to
the legal entity that incurred the cost or burden associated with the
creation of such Tax Asset (other than with respect to any Tax Asset
created by reason of a contribution to the capital of Metavante by M&I on
or before the Distribution Date, in which case Metavante shall be permitted
to retain such Tax Asset).
(b) Earnings and Profits. M&I will advise Metavante in writing of
the decrease in M&I earnings and profits attributable to the Distribution
under section 312(h) of the Code (i) not later than December 15, 2001, with
respect to transactions completed on or before December 31, 2000 and (ii)
not later than December 15, 2002 with respect to transactions completed on
or before December 31, 2001; provided, however, that M&I shall provide
Metavante with estimates of such amounts (determined in accordance with
past practice) prior to such date as reasonably requested by Metavante. M&I
and Metavante agree that they will each pay one-half of the Costs (as
defined in Section 8.01 hereof) of determining the earnings and profits
amounts.
Section 5. Stock Options.
5.01. Deductions. To the extent permitted by law, M&I (or the appropriate
member of the M&I Group) shall claim all Tax deductions arising by reason of
exercises of Options to acquire Metavante stock held by M&I Employees. To the
extent permitted by law, Metavante (or the appropriate member of the Metavante
Group) shall claim all Tax deductions arising by reason of exercises of Options
to acquire M&I stock held by Metavante Employees.
5.02. Withholding and Notice.
(a) Withholding. M&I shall, to the extent required by law, withhold
applicable Taxes and satisfy applicable Tax reporting obligations with
respect to exercises of Options to acquire Metavante stock held by M&I
Employees. Metavante shall, to the extent required by law, withhold
applicable Taxes and satisfy applicable Tax reporting obligations with
respect to exercises of Options to acquire M&I stock held by Metavante
Employees. M&I and Metavante hereby each request of the other party that
the party paying the compensation or issuing the stock withhold the
applicable Taxes and remit them to the other party or to the appropriate
Taxing Authority as subsequently directed by the legally obligated party.
(b) Notice. M&I shall timely notify Metavante of any income
recognized by any Metavante Employee as a result of exercising Options to
acquire M&I stock. Metavante shall timely notify M&I of any income
recognized by any M&I Employee as a result of exercising Options to acquire
Metavante stock.
5.03. Tax Benefit Reimbursement. With respect to Options to acquire M&I
stock, Metavante agrees to pay M&I an amount equal to the Tax Benefit obtained
by Metavante as a result of its claiming compensation deductions with respect to
such items less the after-tax cost of the employer's share of any employment
taxes paid by Metavante arising from the exercise of
12
the Options to acquire M&I stock. With respect to Options to acquire Metavante
stock, M&I agrees to pay Metavante an amount equal to the Tax Benefit obtained
by M&I as a result of its claiming compensation deductions with respect to the
exercise of Options to acquire Metavante stock, less the after-tax cost of the
employer's share of any employment taxes paid by M&I arising of exercise of the
Options to acquire Metavante stock. The time for payment shall be promptly after
the Tax Returns for the year to which the compensation deductions relate are
filed.
5.04. Notice. M&I and Metavante shall timely provide to the other party
all information necessary for such party to satisfy its obligations described in
Sections 5.01, 5.02 and 5.03 of this Agreement.
Section 6. Indemnification
6.01. Generally. The M&I Group shall jointly and severally indemnify
Metavante, each Metavante Affiliate, and their respective directors, officers
and employees, and hold them harmless from and against any and all Taxes for
which M&I or any M&I Affiliate is liable under this Agreement and any loss,
cost, damage or expense, including reasonable attorneys' fees and costs, but
excluding any consequential, special, punitive or exemplary damages, that is
attributable to, or results from the failure of M&I, any M&I Affiliate or any of
their respective directors, officers or employees to make any payment required
to be made under this Agreement. The Metavante Group shall jointly and severally
indemnify M&I, each M&I Affiliate, and their respective directors, officers and
employees, and hold them harmless from and against any and all Taxes for which
Metavante or any Metavante Affiliate is liable under this Agreement and any
loss, cost, damage or expense, including reasonable attorneys' fees and costs,
but excluding any consequential, special, punitive or exemplary damages, that is
attributable to, or results from, the failure of Metavante, any Metavante
Affiliate or any of their respective directors, officers or employees to make
any payment required to be made under this Agreement.
6.02. Inaccurate or Incomplete Information. The M&I Group shall jointly
and severally indemnify Metavante, each Metavante Affiliate, and their
respective directors, officers and employees, and hold them harmless from and
against any cost, fine, penalty, or other expense of any kind, excluding any
consequential, special, punitive or exemplary damages, that is attributable to
the negligence of M&I or any M&I Affiliate in supplying Metavante or any
Metavante Affiliate with inaccurate or incomplete information, in connection
with the preparation of any Tax Return. The Metavante Group shall jointly and
severally indemnify M&I, each M&I 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, excluding any consequential, special,
punitive or exemplary damages, that is attributable to the negligence of
Metavante or any Metavante Affiliate in supplying M&I or any M&I Affiliate with
inaccurate or incomplete information, in connection with the preparation of any
Tax Return.
6.03. No Guarantee for Tax Items. Nothing in this Agreement shall be
construed as a guarantee of the existence or amount of any loss, credit,
carryforward, basis or other Tax Item, whether past, present or future, of M&I,
any M&I Affiliate, Metavante or any Metavante Affiliate.
13
6.04. Indemnification Procedure. The indemnification procedure set forth
in Section 3.3(f) of the Assignment and Assumption Agreement of even date
herewith between the parties hereto shall be applicable to any indemnity granted
herein.
Section 7. Payments.
7.01. Estimated Tax and Extension Payments. As requested by M&I,
Metavante shall promptly, but not later than the date immediately preceding each
Estimated Tax Installment Date with respect to a taxable period for which a
Consolidated Return or a Combined Return will be filed, pay to M&I on behalf of
the Metavante Group an amount equal to the amount of any estimated Separate Tax
Liability that Metavante would have otherwise been required to pay to a Taxing
Authority on such Estimated Tax Installment Date. As requested by M&I, Metavante
shall promptly, but not later than the day immediately preceding the date of the
filing of any request for extension to file a Consolidated Return or Combined
Return, pay to M&I on behalf of the Metavante Group an amount equal to the
difference, if any, between the estimated Metavante Separate Tax Liability
included in the extension request and the aggregate amount paid by Metavante
with respect to such taxable period as its share of any estimated tax payments.
7.02. True-Up Payments. Upon the date of filing of a Tax Return or such
later date as the information is available, Metavante shall pay to M&I, or M&I
shall pay to Metavante or apply as a credit against future Tax liability, as
appropriate, an amount equal to the difference, if any, between the Metavante
Separate Tax Liability and the aggregate amount paid by Metavante with respect
to such period under Section 7.01 of this Agreement.
7.03. Redetermination Amounts. In the event of a redetermination of any
Tax Item reflected on any Tax Return described in Section 2.01(a) of this
Agreement (other than Tax Items relating to Distribution Taxes), as a result of
a refund of Taxes paid, a Final Determination or any settlement or compromise
with any Taxing Authority which may affect Metavante's Separate Tax Liability,
M&I shall prepare a revised schedule for the relevant taxable period reflecting
the redetermination of such Tax Item as a result of such refund, Final
Determination, settlement or compromise. Metavante shall pay to M&I, or M&I
shall pay to Metavante, as appropriate, an amount equal to the difference, if
any, between the Separate Tax Liability computed in accordance with past
practice taking into account the redetermination of such Tax Items and the
Separate Tax Liability for such period as originally computed pursuant to this
Agreement within five business days of the delivery of such schedule to
Metavante.
7.04. Payments Under This Agreement. In the event that one party (the
"Owing Party") is required to make a payment to another party (the "Owed Party")
pursuant to this Agreement, then such payments shall be made according to this
Section 7.04.
(a) In General. All payments shall be made to the Owed Party or to
the appropriate Taxing Authority as specified by the Owed Party within the
time prescribed for payment in this Agreement, or if no period is
prescribed, within twenty (20) days after delivery of written notice of
payment owing together with a computation of the amounts due.
14
(b) Treatment of Payments. Unless otherwise required by any Final
Determination, the parties agree that any payments made by one party to
another party (other than payments of interest pursuant to Section 7.04(e)
of this Agreement and payments of After Tax Amounts pursuant to Section
7.04(d) of this Agreement) pursuant to this Agreement shall be treated for
all Tax and financial accounting purposes as nontaxable payments (dividend
distributions or capital contributions, as the case may be) made
immediately prior to the Distribution and, accordingly, as not includible
in the taxable income of the recipient or as deductible by the payor;
provided, however, nothing in this section shall eliminate the right of
Metavante and the Metavante Affiliates to claim an Income Tax deduction for
Taxes paid to the extent otherwise allowable by law.
(c) Prompt Performance. All actions required to be taken by any
party under this Agreement shall be performed within the time prescribed
for performance in this Agreement, or if no period is prescribed, such
actions shall be performed promptly.
(d) After Tax Amounts. If pursuant to a Final Determination it is
determined that the receipt or accrual of any payment made under this
Agreement (other than payments of interest pursuant to Section 7.04(e) of
this Agreement) is subject to any Tax, the party making such payment shall
be liable for (a) the After Tax Amount with respect to such payment and (b)
interest at the rate described in Section 7.04(e) of this Agreement on the
amount of such After Tax Amount from the date such After Tax Amount is due
under this Agreement through the date of payment of such After Tax Amount.
A party making a demand for a payment pursuant to this Agreement and for a
payment of an After Tax Amount with respect to such payment shall
separately specify and compute such After Tax Amount. However, a party may
choose not to specify an After Tax Amount in a demand for payment pursuant
to this Agreement without thereby being deemed to have waived its right
subsequently to demand an After Tax Amount with respect to such payment.
(e) Interest. Payments pursuant to this Agreement that are not made
within the period prescribed in this Agreement (the "Payment Period") and
were not otherwise setoff against amounts owed by one party to the other
party as provided in Section 9.16 of this Agreement 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 at a per
annum rate equal to the prime rate as published in The Wall Street Journal
on the last day of such Payment Period, plus one percent (1%). 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.
7.05. Other Adjustments. Except as otherwise provided under this
Agreement, if, pursuant to a Final Determination, a party to this Agreement
suffers an unanticipated Tax Detriment and, as a result, the other party to this
Agreement obtains a corresponding unanticipated Tax Benefit, and such Tax
Detriment is not otherwise compensated under this Agreement, then the party
obtaining such Tax Benefit shall make a payment to the other party in an amount
equal to such Tax Benefit.
15
Section 8. Tax Proceedings.
8.01. In General. Except as otherwise provided in this Agreement, the
party responsible for preparing and filing a Tax Return pursuant to Section 2 of
this Agreement (the "Filing Party") shall have the exclusive right, in its sole
discretion, to control, contest, and represent the interests of M&I, any M&I
Affiliate, Metavante, and any Metavante Affiliate in any Audit relating to such
Tax Return 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. The Filing Party's rights shall extend to any matter pertaining
to the management and control of an Audit, including execution of waivers,
choice of forum, scheduling of conferences and the resolution of any Tax Item.
Any costs incurred in handling, settling, or contesting an Audit shall be borne
by the Filing Party except that Metavante shall reimburse M&I within thirty days
of receiving an invoice for Costs (as defined in this Section 8.01) incurred by
M&I related to Audits by any Taxing Authority as follows: (i) as regards any
Combined Return which includes Metavante, any Metavante Affiliate, the Data
Services division of M&I or M&I Data Services, Inc., Metavante shall reimburse
M&I for that portion of the Costs which is proportional with the Separate Tax
Liability as determined in connection with the Combined Return after any Final
Determination has occurred when compared with the total Taxes reflected on such
Combined Return after such Final Determination, (ii) as regards any Consolidated
Return or Wisconsin separate Tax Return, Metavante shall reimburse M&I for that
portion of the Costs which were expended in connection with issues which arise
in connection with Tax Items of Metavante, any Metavante Affiliate, or its
predecessors including the Data Services division of M&I and M&I Data Services,
Inc. (but not the item processing department of Data Services), (iii) as regards
any separate Tax Return which M & I files which includes Tax Items from its Data
Services division (other than any Wisconsin Tax Return), all of the Costs, and
(iv) as regards any separate Tax Returns of Metavante, any Metavante Affiliate
or M&I Data Services, Inc. for any Pre-Distribution Period or Post-Distribution
Period, all of the Costs. "Costs" means (i) an hourly charge for time expended
by M&I personnel (such hourly charge not to include a profit component), (ii) a
pass through of all xxxxxxxx of any third parties such as lawyers and
accountants, and (iii) out-of-pocket costs incurred by M&I, including, for
example, photocopying (even if performed on M&I equipment, but with no profit
component).
8.02. Participation of non-Filing Party. Except as otherwise provided in
this Agreement, the non-Filing Party shall have the right to assume control over
decisions to resolve, settle or otherwise agree to any deficiency, claim or
adjustment: (i) with respect to any Sole Responsibility Item for which the non-
Filing Party's responsibility under this Agreement could exceed one hundred
thousand dollars ($100,000), upon delivery to the Filing Party of a written
opinion of a nationally recognized law or accounting firm chosen by the parties
substantially to the effect that the non-Filing Party's position with respect to
such deficiency, claim, or adjustment should be upheld on appeal; and (ii) with
respect to any Sole Responsibility Item for which the non-Filing Party's
responsibility under this Agreement could exceed two hundred and fifty thousand
dollars ($250,000), upon delivery to the Filing Party of a written opinion of a
nationally recognized law or accounting firm chosen by the parties substantially
to the effect that the non-Filing Party's position with respect to such
deficiency, claim, or adjustment is more likely than not to be upheld on appeal.
The Filing Party and the non-Filing Party shall have joint control over
decisions to resolve, settle or otherwise agree to any deficiency, claim or
adjustment
16
with respect to any Joint Responsibility Item. The Filing Party shall not settle
any Audit it controls concerning a Tax Item of an Interim Period on a basis that
would materially adversely affect the non-Filing Party without obtaining such
non-Filing Party's consent, which consent shall not be unreasonably withheld if
failure to consent would adversely affect the Filing Party. For purposes of this
Agreement, a settlement will not be deemed to have a material adverse effect if
the effect on the party's publicly-reported financial statements would not be
material.
8.03. Notice. Within ten (10) days after a party receives a written
notice from a Taxing Authority of a proposed adjustment to a Tax Item that would
reasonably be expected to give rise to an indemnification obligation or other
liability (including a liability for Tax) under this Agreement, such party shall
notify the other party of such proposed adjustment, and thereafter shall
promptly forward to the other party copies of notices and material
communications with any Taxing Authority relating to such proposed adjustment;
provided, however, that the failure to provide such notice shall not release the
indemnifying party from any of its obligations under this Agreement except to
the extent that such indemnifying party is materially prejudiced by such
failure.
8.04. Control of Distribution Tax Proceedings.
(a) Subject to the provisions of Section 8.04(b) of this Agreement,
M&I shall have the exclusive right, in its sole discretion, to control,
contest, and represent the interests of M&I, any M&I Affiliate, Metavante,
and any Metavante Affiliate in any Audits relating to Distribution Taxes
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. M&I's rights shall extend to any matter pertaining to the
management and control of such Audit, including execution of waivers,
choice of forum, scheduling of conferences and the resolution of any Tax
Item. The notice provisions contained in Section 8.03 shall apply to any
Audits relating to Distribution Taxes, and M&I agrees to consult with
Metavante regarding material decisions in the Audits or any settlement
regarding Distribution Taxes, but M&I has the ultimate authority to make
all decisions and settlements as regards any such Audit.
(b) Notwithstanding the provisions of Section 8.04(a) of this
Agreement, Metavante shall have the exclusive right, in its sole
discretion, to control, contest, and represent the interests of M&I, any
M&I Affiliate, Metavante, and any Metavante Affiliate in any Audits
relating to Distribution Taxes 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, if it (i) acknowledges in
writing that it has sole liability for any Distribution Taxes that might
arise in such Audit, (ii) demonstrates to the satisfaction of M&I by clear
and convincing evidence that it has the financial ability to discharge all
liabilities arising from or related to any Distribution Taxes that may
arise in such Audit, and (iii) acknowledges in writing that it will forego
any right to challenge its liability under this Agreement for such
Distribution Taxes.
17
Section 9. Miscellaneous Provisions.
9.01. Effectiveness. This Agreement shall be effective as of July 1,
2000.
9.02. Cooperation and Exchange of Information.
(a) Cooperation. Metavante and M&I shall each cooperate fully (and
each shall cause its respective affiliates to cooperate fully) with all
reasonable requests from another party in connection with the preparation
and filing of Tax Returns, claims for refund, and Audits concerning issues
or other matters covered by this Agreement. Such cooperation shall
include, without limitation:
(i) the retention until the expiration of the applicable statute
of limitations, and the provision upon request, of Tax Returns, books,
records (including information regarding ownership and Tax basis of
property), documentation and other information relating to the Tax
Returns, including accompanying schedules, related work papers, and
documents relating to rulings or other determinations by Taxing
Authorities;
(ii) the execution of any document that may be necessary or
reasonably helpful in connection with any Audit, or the filing of a
Tax Return or refund claim by a member of the M&I Group or the
Metavante Group, including certification, to the best of a party's
knowledge, of the accuracy and completeness of the information it has
supplied; and
(iii) the use of the party's best efforts to obtain any
documentation that may be necessary or reasonably helpful in
connection with any of the foregoing. Each party shall make its
employees and facilities available on a reasonable and mutually
convenient basis in connection with the foregoing matters.
(b) Failure to Perform. If a party fails to comply with any of its
obligations set forth in Section 9.02(a) of this Agreement upon reasonable
request and notice by the other party, and such failure results in the
imposition of additional Taxes, the nonperforming party shall be liable in
full for such additional Taxes.
(c) Retention of Records. A party intending to dispose of
documentation of M&I (or any M&I Affiliate) or Metavante (or any Metavante
Affiliate), including without limitation, books, records, Tax Returns and
all supporting schedules and information relating thereto (after the
expiration of the applicable statute of limitations), which relates to Tax
Returns described in Sections 2.01(a) (to the extent it affects the
Separate Tax Liability of Metavante or a Metavante Affiliate) and 2.02
(other than returns for Post-Distribution Periods) shall provide written
notice to the other party describing the documentation to be destroyed or
disposed of sixty (60) business days prior to taking such action. The
other party may arrange to take delivery of the documentation described in
the notice at its expense during the succeeding sixty (60) day period. The
documentation described in the notice will not be disposed of without the
affirmative written consent of an officer of the notified party.
18
9.03. Dispute Resolution. In the event that M&I and Metavante disagree as
to the amount or calculation of any payment to be made under this Agreement, or
the interpretation or application of any provision under this Agreement, the
parties shall attempt in good faith to resolve such dispute. If such dispute is
not resolved within sixty (60) business days following the commencement of the
dispute, M&I and Metavante shall jointly retain a nationally recognized law or
accounting firm, which firm is independent of both parties (the "Independent
Firm"), to resolve the dispute; provided, however, that in order to pursue any
such dispute resolution under this Section 9.03, the Owing Party must either (i)
first pay to the Owed Party, or place in an escrow reasonably satisfactory to
the Owed Party pending resolution of such dispute, an amount equal to the
payment which is the subject of such dispute, or (ii) deliver to the Owed Party
a written opinion of a nationally recognized law or accounting firm chosen by
the parties substantially to the effect that with respect to such dispute the
Owing Party is more likely than not to prevail in its entirety in the dispute
resolution proceeding. The Independent Firm shall act as an arbitrator to
resolve all points of disagreement and its decision shall be final and binding
upon all parties involved. Following the decision of the Independent Firm, M&I
and Metavante shall each take or cause to be taken any action necessary to
implement the decision of the Independent Firm. The fees and expenses relating
to the Independent Firm shall be borne equally by M&I and Metavante; provided,
however, that the Independent Firm shall be entitled, in its sole discretion, to
allocate such fees and expenses otherwise between the parties. Notwithstanding
anything in this Agreement to the contrary, the dispute resolution provisions
set forth in this Section 9.03 shall not be applicable to any disagreement
between M&I and Metavante relating to Distribution Taxes.
9.04. 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 or sent by telecopy to the facsimile number indicated below
with a required confirmation copy sent in accordance with clause (2) below, (2)
deposited in the United States mail, postage prepaid and sent certified mail,
return receipt requested or (3) delivered to Federal Express or similar service
for overnight delivery to the address of the party set forth below:
If to M&I or any M&I Affiliate to:
Xxxxxxxx & Ilsley Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: M.A. Xxxxxxxx
Facsimile: (000)000-0000
If to Metavante or any Metavante Affiliate to:
Metavante Corporation
0000 Xxxx Xxxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: N. "Norrie" X. Xxxxxx
Facsimile: (000)000-0000
19
Either party may, by written notice to the other parties, change the address or
the party to which any notice, request, instruction or other document is to be
delivered.
9.05. Changes in Law.
(a) 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.
(b) 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.
9.06. 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) in the public domain through no fault
of such party, (2) later lawfully acquired from other sources not known to be
under a duty of confidentiality by the party to which it was furnished, or (3)
independently developed), 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 9.06. 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.
9.07. Successors. This Agreement shall be binding on and inure to the
benefit and detriment 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.
9.08. Affiliates. M&I shall cause to be performed, and hereby guarantees
the performance of, all actions, agreements and obligations set forth herein to
be performed by any M&I Affiliate, and Metavante shall cause to be performed,
and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Metavante Affiliate;
provided, however, that (1) if it is contemplated that a Metavante Affiliate may
cease to be a Metavante 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 Metavante Group to the shareholders of Metavante then Metavante
may request in writing no later than thirty (30) days prior to such cessation
that M&I execute a release of such Metavante Affiliate from its obligations
under this Agreement effective as of such transfer and M&I shall promptly
execute and deliver such release to Metavante provided
20
that Metavante shall have confirmed in writing its obligations and the
obligations of its remaining Metavante Affiliates with respect to their own
obligations and those of the departing Metavante Affiliate and that such
departing Metavante Affiliate shall have executed a release of any rights it may
have against M&I or any M&I Affiliate by reason of this Agreement, and (2) if it
is contemplated that an M&I Affiliate may cease to be an M&I 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 M&I Group to the shareholders of
M&I then M&I may request in writing no later than thirty (30) days prior to such
cessation that Metavante execute a release of such M&I Affiliate from its
obligations under this Agreement effective as of such transfer and Metavante
shall promptly execute and deliver such release to M&I provided that M&I shall
have confirmed in writing its obligations and the obligations of its remaining
M&I Affiliates with respect to their own obligations and the obligations of the
departing M&I Affiliate and that such departing M&I Affiliate shall have
executed a release of any rights it may have against Metavante or any Metavante
Affiliate by reason of this Agreement. The requested party hereunder shall not
unreasonably withhold the provision of any such release.
9.09. 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.
9.10. Entire Agreement. This Agreement contains the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes any
prior tax sharing agreements between M&I (or any M&I Affiliate) and Metavante
(or any Metavante Affiliate) and such prior tax sharing agreements shall have no
further force and effect.
9.11. Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Wisconsin without giving
effect to laws and principles relating to conflicts of law.
9.12. 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.
9.13. 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. 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
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alternate means to achieve the same or substantially the same result as that
contemplated by such terms, provisions, covenant, or restriction.
9.14. No Third Party Beneficiaries. This Agreement is solely for the
benefit of M&I, the M&I Affiliates, Metavante and the Metavante Affiliates. 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.
9.15. 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.
9.16. Setoff. All payments to be made by any party under this Agreement may
be netted against payments due to such party under this Agreement, but otherwise
shall be made without setoff, counterclaim or withholding, all of which are
hereby expressly waived.
9.17. Other Remedies. Metavante recognizes that (1) any act, failure to
act, or omission specified in Section 4.01(b)(i)-(ii) of this Agreement of or by
Metavante or any Metavante Affiliate or (2) the occurrence of any event
specified in Section 4.01(b)(iii)-(iv) of this Agreement, may result in
Distribution Taxes which could cause irreparable harm to M&I, M&I Affiliates and
their stockholders, and that such persons may be inadequately compensated by
monetary damages for such act, failure to act, omission, or event. Accordingly,
neither Metavante nor any Metavante Affiliate shall permit (1) any act, failure
to act, or omission specified in Section 4.01(b)(i)-(ii) of this Agreement or
(2) the occurrence of any event specified in Section 4.01(b)(iii)-(iv) of this
Agreement, that could be reasonably foreseeable to result in any Distribution
Taxes, and M&I and each M&I Affiliate shall be entitled to injunctive relief, in
addition to all other remedies, in order to prevent any such act, failure to
act, omission, or occurrence. M&I recognizes that (1) any act, failure to act,
or omission specified in Section 4.01(a)(i)-(ii) of this Agreement of or by M&I
or any M&I Affiliate or (2) the occurrence of any event specified in Section
4.01(a)(iii)-(iv) of this Agreement, may result in Distribution Taxes which
could cause irreparable harm to Metavante, Metavante Affiliates and their
stockholders, and that such persons may be inadequately compensated by monetary
damages for such act, failure to act, omission, or event. Accordingly, neither
M&I nor any M&I Affiliate shall permit (1) any act, failure to act, or omission
specified in Section 4.01(a)(i)-(ii) of this Agreement or (2) the occurrence of
any event specified in Section 4.01(a)(iii)-(iv) of this Agreement, that could
be reasonably foreseeable to result in any Distribution Taxes, and Metavante and
each Metavante Affiliate shall be entitled to injunctive relief, in addition to
all other remedies, in order to prevent any such act, failure to act, omission,
or occurrence.
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9.18. Conflicting Agreements. In the event of conflict between this
Agreement and any other express agreement of the parties, the provisions of this
Agreement shall prevail unless otherwise provided herein.
9.19. Expiration of Administrative Services Agreement. If the
Administrative Services Agreement between the parties hereto (the "ASA") has
expired at such time as M&I incurs any Costs (as defined in Section 8.01 hereof)
in connection with any services that M&I is to perform under this Agreement for
which it would otherwise be compensated by Metavante under the ASA absent its
expiration, this Agreement shall be deemed to include such portions of said ASA
so that M&I is not incurring Costs on Metavante's behalf for which it is not
compensated.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by a duly authorized officer effective as of the date first above
written.
XXXXXXXX & XXXXXX CORPORATION
on behalf of itself and the M&I Affiliates
By:
---------------------------------------
Name:
Title:
METAVANTE CORPORATION
on behalf of itself and the Metavante Affiliates
By:
---------------------------------------
Name:
Title:
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