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Exhibit 10.01

 

 

 

 

 

 

EXECUTION

 

 

VERSION

TAX ALLOCATION AGREEMENT

among

METAVANTE HOLDING COMPANY,

METAVANTE CORPORATION,

NEW M&I CORPORATION

and

MARSHALL & ILSLEY CORPORATION

Dated as of April 3, 2007


TAX ALLOCATION AGREEMENT

TAX ALLOCATION AGREEMENT (this “ Agreement ”), dated as of April 3, 2007, among Metavante Holding Company, a Wisconsin corporation and, as of the date hereof, a wholly-owned subsidiary of MI Corp. (“ MVT Holding ”), Metavante Corporation, a Wisconsin corporation and, as of the date hereof, a wholly-owned subsidiary of MI Corp. (“ MVT Corp. ”) (MVT Holding and MVT Corp., collectively, the “ MVT Parties ”), Marshall & Ilsley Corporation, a Wisconsin corporation (“ MI Corp. ”), and New M&I Corporation, a Wisconsin corporation (“ New MI Corp. ”) (MI Corp. and New MI Corp., collectively, the “ MI Parties ”).

RECITALS

WHEREAS, MI Corp. is the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”), which currently files consolidated federal Income Tax Returns (the “ Affiliated Group ”);

WHEREAS, pursuant to the Separation Agreement dated as of the date hereof between the MVT Parties and the MI Parties (as may be amended from time to time in accordance with its terms, the “ Separation Agreement ”) and the Investment Agreement (as defined below), MVT Holding will distribute all of the issued and outstanding shares of New MI Corp. common stock (“ New MI Corp. Common Stock ”) on a pro rata basis to holders of record of MVT Holding Common Stock (as defined in the Investment Agreement) (as described more fully in the Separation Agreement, the “ Distribution ”);

WHEREAS, the MVT Parties, Montana Merger Sub Inc., a Wisconsin corporation and, as of the date hereof, a wholly-owned subsidiary of MVT Holding (“ Merger Sub ”), and the MI Parties have entered into an Investment Agreement, dated as the date hereof (the “ Investment Agreement ”) with WPM, L.P., a Delaware limited partnership (“ Investor ”) pursuant to which, prior to the Distribution, MI Corp. will undertake the MI Merger, the MI Conversion, the MVT Distribution, the MI LLC Contribution and the MI Cash Contribution, and Investor will make the Equity Investment (as defined in the Separation Agreement);

WHEREAS, in connection with the transactions contemplated by the Investment Agreement, one or more of the members of the MVT Group (as defined below) will incur approximately $1.75 billion of indebtedness (the “ Debt Financing ”);

WHEREAS, the parties to this Agreement intend that (i) the MI Merger and the MI Conversion will qualify as a reorganization under Section 368(a)(1)(F) of the Code, (ii) following the MI Merger and the MI Conversion, MVT Holding will become the common parent of the Affiliated Group; (iii) the MI Contribution (as defined in the Investment Agreement) followed by the Distribution will qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code; and (iv) the Distribution will qualify as a distribution eligible for nonrecognition under Sections 355(a) and 361(c) of the Code;

WHEREAS, after the Distribution, no member of the MI Group (as defined below) will be a member of the Affiliated Group for federal income tax purposes and MI Corp. will be disregarded as an entity separate from New MI Corp. for U.S. federal income tax purposes;


WHEREAS, after the Distribution the Affiliated Group will continue and MVT Holding will be treated as the common parent of the Affiliated Group for federal income tax purposes; and

WHEREAS, the MVT Group and the MI Group desire on behalf of themselves and their successors to set forth their rights and obligations with respect to Taxes due for periods before, on and after the Distribution Date.

NOW, THEREFORE, in consideration of the premises and of the respective agreements and covenants contained in this Agreement, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. General . Capitalized terms used in this Agreement have the meanings set forth in this Agreement, or, when not so defined, in the Separation Agreement or the Investment Agreement. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

Affiliate ” has the meaning set forth in the Separation Agreement.

Affiliated Group ” has the meaning set forth in the first recital.

Agreement ” means this Tax Allocation Agreement as the same may be amended from time to time.

Applicable Federal Rate ” means the federal short-term rate under Section 1274(d) of the Code, compounded quarterly.

Audit ” means any audit, assessment of Taxes, other examination by any Governmental Entity (as defined in the Investment Agreement), proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.

Code ” has the meaning set forth in the first recital.

Controlling Party ” means the party described as the Controlling Party in accordance with Section 3.01 .

Covered Group ” means, in the case of any Covered Group Taxes, the group of Persons that join in the filing of the consolidated, combined or unitary Tax Return upon which such Covered Group Taxes are reported.

 

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Covered Group Taxes ” means any federal, state, local or foreign Taxes reportable on a consolidated, combined or unitary Tax Return for a group that includes any member of the MI Group, on the one hand, and any member of the MVT Group, on the other hand.

Covered Group Year ” means, in the case of any Covered Group, any Taxable year of such Covered Group that ends prior to or includes the Distribution Date.

Debt Financing ” has the meaning set forth in the fourth recital.

Distribution ” has the meaning set forth in the second recital.

Distribution Date ” has the meaning set forth in the Separation Agreement.

Filing Party ” has the meaning set forth in Section 2.08 .

Final Determination ” means with respect to any issue (a) a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal, (b) a closing agreement (whether or not entered into under Section 7121 of the Code) or any other binding settlement agreement (whether or not with the IRS) entered into in connection with or in contemplation of an administrative or judicial proceeding, or (c) the completion of the highest level of administrative proceedings if a judicial contest is not or is no longer available.

GAAP ” has the meaning set forth in the Investment Agreement.

Income Tax ” means any franchise Tax and any federal, state, local or foreign Tax measured by or imposed on gross receipts or net income or profits. For the avoidance of doubt, the term “Income Tax” shall not include any sales or use Tax.

Income Tax Return ” means any Tax Return with respect to Income Taxes.

Indemnifiable Losses ” has the meaning set forth in the Separation Agreement.

Independent Firm ” has the meaning set forth in Article VI .

Information ” has the meaning set forth in the Separation Agreement.

Investment Agreement ” has the meaning set forth in the third recital.

Investor ” has the meaning set forth in the third recital.

Investor Factual Representation ” means the representations of Investor set forth in Section 4.1 of the Investment Agreement and any factual representation provided by Investor in writing in connection with the Tax Opinion described in Section 7.1(f)(ii) of the Investment Agreement.

IRS ” means the United States Internal Revenue Service.

 

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Liable Party ” has the meaning set forth in Section 2.08 .

MI Corp. ” has the meaning set forth in the preamble.

MI Compensation Payments ” has the meaning set forth in Section 2.06(a) .

MI Group ” has the meaning set forth in the Separation Agreement.

MI Parties ” has the meaning set forth in the preamble.

MI Specified Refunds ” means any refunds or credits relating to (i) the transactions described in the complaint filed on March 2, 2007, in the United States District Court for the Eastern District of Wisconsin, (ii) the “Tempest” transactions currently in appeals, and (iii) the amended tax returns filed in connection with securitizations involving auto loans.

MI Subsidiary ” has the meaning set forth in the Separation Agreement.

MI Taxes ” means any Taxes (excluding Restructuring Taxes) that are treated as MI Taxes under Section 2.05 of this Agreement.

New MI Corp. ” has the meaning set forth in the preamble.

New MI Corp. Common Stock ” has the meaning set forth in the second recital.

MVT Corp. ” has the meaning set forth in the preamble.

MVT Compensation Payments ” has the meaning set forth in Section 2.06(a) .

MVT Group ” has the meaning set forth in the Separation Agreement.

MVT Holding ” has the meaning set forth in the preamble.

MVT Parties ” has the meaning set forth in the preamble.

MVT Restructuring Tax Audit ” has the meaning set forth in Section 3.02(a) .

“MVT Separate Group Basis ” means, in the case of any Covered Group Taxes for a Covered Group Year, the amount of such Covered Group Taxes for such Covered Group Year that would have been due if the underlying Covered Group consisted solely of members of the MVT Group and did not include any members of the MI Group and computed (i) by taking into account elections and accounting methods actually used in computing such Covered Group Taxes for such Covered Group Year, (ii) with appropriate adjustments to take into account the application of Treasury Regulations Section 1.1502-13 or similar provisions of state and local Tax law to any intercompany transactions between members of the MVT Group (on one hand) and members of the MI Group (on the other hand), (iii) consistent with past practice (including past practice of allocating state and local unitary Taxes and expenses to an entity if that entity caused the filing of a combined, consolidated or unitary Tax Return) and (iv) with such other adjustments as are contemplated by this Agreement; provided , however , that Tax liability for an entity with nexus in a combined return state shall be based on that entity’s relative apportionment percentage of the total apportionment percentage of the actual combined group.

 

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MVT Subsidiary ” has the meaning set forth in the Separation Agreement.

MVT Tainting Act ” means:

(a) any action (or failure to take any reasonably available action) by any of the MVT Parties or any Affiliate of the MVT Parties after the Distribution Date other than an action contemplated by the Investment Agreement or any of the Transaction Agreements;

(b) any inaccuracy of any Investor Factual Representation;

(c) any acquisition or other transaction involving the equity of any of the MVT Parties or any Affiliate of the MVT Parties (other than the distribution of the New MI Corp. Common Stock in the Distribution or the Equity Investment); or

(d) any Prohibited Act performed by any of the MVT Parties or any Affiliate of the MVT Parties after the Distribution Date.

MVT Taxes ” means any Taxes (excluding Restructuring Taxes) that are treated as MVT Taxes under Section 2.05 of this Agreement.

Past Practice ” has the meaning set forth in Section 2.01(e) .

Person ” has the meaning set forth in the Investment Agreement.

Post-Distribution Period ” means any Taxable year or other Taxable period beginning after the Distribution Date and, in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distribution Date, that part of the Taxable year or other Taxable period that begins at the beginning of the day after the Distribution Date.

Pre-Distribution Period ” means any Taxable year or other Taxable period that ends on or before the close of the Distribution Date and, in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distribution Date, that part of the Taxable year or other Taxable period through the close of the Distribution Date.

Private Letter Ruling ” has the meaning set forth in the Investment Agreement.

Prohibited Acts ” has the meaning specified in Section 4.02(a) .

Restricted Period ” has the meaning specified in Section 4.02(a) .

Restructuring Taxes ” means any Taxes (and other liabilities, including liability to stockholders and the costs of defending against the imposition of such Taxes and other liabilities) of any member of the MVT Group or the MI Group arising from or attributable to one or more of the Transactions (as defined in the Investment Agreement), including but not limited to (a) any failure of the Distribution to constitute a distribution eligible for nonrecognition under

 

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Sections 355(a) and 361(c), (b) any failure of the MI Contribution (as defined in the Investment Agreement) followed by the Distribution to qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code, or (c) any failure of any stock of New MI Corp. to be treated as “qualified property” within the meaning of Section 355(c)(2) or Section 361(c)(2) of the Code because of the application of Section 355(d) or Section 355(e) of the Code to the Distribution; provided , however , that Restructuring Taxes shall not include any Taxes imposed on the MVT Dividend or any distributions of cash from Subsidiaries to fund the MVT Dividend (which Taxes are governed by Section 2.04(d) ).

Separation Agreement ” has the meaning set forth in the second recital.

Shared Return ” means a Tax Return described in clause (a) of Section 2.01 .

Subsidiary ” has the meaning set forth in the Separation Agreement.

Tax ” (and, with correlative meaning, “Taxes” and “Taxable”) has the meaning set forth in the Investment Agreement.

Tax Carryover Attribute ” has the meaning specified in Section 2.07 .

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 Opinion ” means the tax opinion described in Section 7.1(f)(ii) of the Investment Agreement.

Tax Return ” has the meaning set forth in the Investment Agreement.

Transaction Agreements ” has the meaning set forth in the Investment Agreement.

Transaction Taxes ” has the meaning set forth in Section 2.04(b) .

ARTICLE II

TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS

SECTION 2.01. Obligations to File Tax Returns .

(a) From and after the Distribution Time, New MI Corp. shall prepare and timely file or cause to be timely filed all original Income Tax Returns with respect to any member of the MVT Group for any Taxable year ending on or before December 31, 2007 (including any original Income Tax Return for any Covered Group Taxes for any Taxable year ending on or before December 31, 2007), whether or not such Income Tax Return includes any member of the MI Group. To the extent a member of the MI Group is legally unable to sign any such Income Tax Return, MVT Holding shall sign or cause to be signed such Income Tax Return. The MVT Parties shall reimburse New MI Corp. for any Costs (as defined in Section 3.01 ) incurred by MI Corp. in preparing any Income Tax Return to the extent such Cost is attributable to the portion of such Income Tax Return relating to any member of the MVT Group.

 

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