EXHIBIT 10.10
NOVATION
CORPORATE SERVICES AGREEMENT
This Corporate Services Agreement (this "Agreement") is effective as of
___________________, 2005 (the "Effective Date"), by and between FIDELITY
NATIONAL TITLE GROUP, INC., a Delaware corporation ("FNT" or "PROVIDING PARTY"),
and FIDELITY NATIONAL INFORMATION SERVICES, INC., a Delaware corporation ("FIS"
or "RECEIVING PARTY"). FNT and FIS shall be referred to together in this
Agreement as the "Parties" and individually as a "Party."
WHEREAS, FIS previously entered into a certain Stock Purchase Agreement,
dated as of December 23, 2004 (the "Stock Purchase Agreement"), with Fidelity
National Financial, Inc., a Delaware corporation ("FNF"), pursuant to which
certain purchasers (the "Purchasers") purchased from FIS 50,000,000 shares of
FIS' common stock, subject to the terms and conditions of the Stock Purchase
Agreement; and
WHEREAS, a condition to the closing of the transactions contemplated by
the Stock Purchase Agreement required that FIS and FNF enter into certain
Intercompany Agreements (as defined in the Stock Purchase Agreement), and that
the form and substance of such Intercompany Agreements be satisfactory to the
Parties and the representatives of the Purchasers; and
WHEREAS, pursuant to the requirements in the Stock Purchase Agreement, FIS
previously entered into a Corporate Services Agreement dated as of March 4, 2005
(the "FNF Agreement") with FNF, as the parent company of FNT and its
subsidiaries, for the provision of certain corporate services, as more fully
described herein; and
WHEREAS, pursuant to an Assignment and Assumption Agreement of even date
herewith between FNF and FNT, FNT has assumed, with the consent of FIS, all of
FNF's rights and obligations under the FNF Agreement; and
WHEREAS, FIS and FNT wish to enter into a novation of the rights and
obligations under the FNF Agreement, as assumed by and assigned to FNT, so that
FNT is the clear party in interest with respect to the corporate services to be
provided to FIS, as more particularly described herein;
NOW THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE I
CORPORATE SERVICES
1.1 Corporate Services. This Agreement sets forth the terms and conditions
for the provision by PROVIDING PARTY to RECEIVING PARTY of various corporate
services and products, as more fully described below and in Schedule 1.1(a)
attached hereto (the Scheduled
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Services, the Omitted Services, the Resumed Services and Special Projects (as
defined below), collectively, the "Corporate Services").
(a) PROVIDING PARTY, through its Subsidiaries and Affiliates (each
as defined below), and their respective employees, agents or contractors, shall
provide or cause to be provided to RECEIVING PARTY and its Subsidiaries all
services set forth on Schedule 1.1(a) (the "Scheduled Services") on and after
the Effective Date (with such services to be provided to the RECEIVING PARTY's
Subsidiaries as they become Subsidiaries of RECEIVING PARTY, subject to the
exception in clause (ii) of Section 1.2(a)). RECEIVING PARTY shall pay fees to
PROVIDING PARTY for providing the Scheduled Services or causing the Scheduled
Services to be provided as set forth in Schedule 1.1(a). For purposes of this
Agreement, "Subsidiary" means, with respect to either Party, any corporation,
partnership, company or other entity of which such Party controls or owns,
directly or indirectly, more than fifty percent (50%) of the stock or other
equity interest entitled to vote on the election of the members to the board of
directors or similar governing body; and "Affiliate" means, with respect to
either Party, any corporation, partnership, company, or other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Party, except
that (i) in the case of RECEIVING PARTY, "Affiliate" shall not include FNF and
any Subsidiary of FNF that is not a Subsidiary (directly or indirectly) of FIS,
and (ii) in the case of PROVIDING PARTY, "Affiliate" shall include FNF and its
Subsidiaries, excluding FIS and its Subsidiaries. As used herein, "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract or otherwise.
(b) PROVIDING PARTY, through its Subsidiaries and Affiliates, and
their respective employees, agents or contractors, shall provide or cause to be
provided to RECEIVING PARTY and its Subsidiaries all services that PROVIDING
PARTY was performing for RECEIVING PARTY and its Subsidiaries as of the
Effective Date that pertain to and are a part of Scheduled Services under
Section 1.1(a) (with such services to be provided to the RECEIVING PARTY's
Subsidiaries as they become Subsidiaries of RECEIVING PARTY, subject to the
exception in clause (ii) of Section 1.2(a)), which are not expressly included in
the list of Scheduled Services in Schedule 1.1(a), but are required to conduct
the business of RECEIVING PARTY and its Subsidiaries (the "Omitted Services"),
unless RECEIVING PARTY consents in writing to the termination of such services.
Such Omitted Services shall be added to Schedule 1.1(a) and thereby become
Scheduled Services, as soon as reasonably practicable after the Effective Date
by the Parties. In the event that RECEIVING PARTY or its Subsidiaries had been
allocated
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charges or otherwise paid PROVIDING PARTY or its Subsidiaries for such Omitted
Services immediately prior to the Effective Date, RECEIVING PARTY shall pay to
PROVIDING PARTY for providing the Omitted Services or causing the Omitted
Services to be provided hereunder fees equal to the actual fees paid for such
Omitted Services immediately preceding the Effective Date; provided, that
payment of such fees by the RECEIVING PARTY for the Omitted Services provided
hereunder shall be retroactive to the first day of the calendar quarter in which
either Party identifies such services as Omitted Services, but in no event shall
RECEIVING PARTY be required to pay for any Omitted Services provided hereunder
by the PROVIDING PARTY or its Subsidiaries or Affiliates prior to the Effective
Date. In the event that RECEIVING PARTY or its Subsidiaries had not been
allocated charges or otherwise paid PROVIDING PARTY or its Subsidiaries or
Affiliates for such Omitted Services immediately prior to the Effective Date,
the Parties shall negotiate in good faith a fee to be based on the cost of
providing such Omitted Services, which shall in no event be less than the
Default Fee (as defined below); provided, that payment of such fees by the
RECEIVING PARTY for the Omitted Services provided hereunder by the RECEIVING
PARTY shall be retroactive to the first day of the calendar quarter in which
either the Party identifies such services as Omitted Services, but in no event
shall RECEIVING PARTY be required to pay for any such Omitted Services provided
hereunder by the PROVIDING PARTY or its Subsidiaries or Affiliates prior to the
Effective Date. The "Default Fee" means an amount equal to one hundred fifty
percent (150%) of the salary of each full-time employee, on an hourly basis, who
provides the applicable Corporate Service or Transition Assistance (as defined
in Section 2.3).
(c) At RECEIVING PARTY's written request, PROVIDING PARTY, through
its Subsidiaries and Affiliates, and their respective employees, agents or
contractors, shall use commercially reasonable efforts to provide or cause to be
provided to RECEIVING PARTY and its Subsidiaries any Scheduled Service that has
been terminated at RECEIVING PARTY's request pursuant to Section 2.2 (the
"Resumed Services"); provided, that PROVIDING PARTY shall have no obligation to
provide a Resumed Service if providing such Resumed Service will have a material
adverse impact on the other Corporate Services. Schedule 1.1(a) shall from time
to time be amended to reflect the resumption of a Resumed Service and the
Resumed Service shall be set forth thereon as a Scheduled Service.
(d) At RECEIVING PARTY's written request, PROVIDING PARTY, through
its Subsidiaries and Affiliates, and their respective employees, agents or
contractors, shall use commercially reasonable efforts to provide additional
corporate services that are not described in the Schedule 1.1(a) and that are
neither Omitted Services nor Resumed Services ("Special Projects"). RECEIVING
PARTY shall submit a written request to PROVIDING PARTY specifying the nature of
the Special Project and requesting an estimate of the costs applicable for such
Special Project and the expected time frame for completion. PROVIDING PARTY
shall respond promptly to such written request, but in no event later than
twenty (20) days, with a written estimate of the cost of providing such Special
Project and the expected time frame for completion (the "Cost Estimate"). If
RECEIVING PARTY provides written approval of the Cost Estimate within ten (10)
days after PROVIDING PARTY delivers the Cost Estimate, then within a
commercially reasonable time after receipt of RECEIVING PARTY's written request,
PROVIDING PARTY shall begin providing the Special Project; provided, that
PROVIDING PARTY shall have no obligation to provide a Special Project where, in
its reasonable discretion and prior to providing the Cost Estimate, it has
determined and notified RECEIVING PARTY in writing that (i) it would not be
feasible to provide such Special Project, given reasonable priority to other
demands on its resources and capacity both under this Agreement or otherwise or
(ii) it lacks the experience or qualifications to provide such Special Project.
1.2 Provision of Corporate Services; Excused Performance.
(a) To the extent commercially reasonable, the Parties will work
together and begin the process of migrating the Corporate Services from
PROVIDING PARTY to
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RECEIVING PARTY, one or more of its Subsidiaries or Affiliates or a third party
(at RECEIVING PARTY's direction) such that the completion of the migration of
the Corporate Services from PROVIDING PARTY to RECEIVING PARTY, one or more of
its Subsidiaries or Affiliates or a third party, as the case may be, shall occur
prior to the end of the Term. PROVIDING PARTY shall provide or cause to be
provided each of the Corporate Services through the expiration of the Term,
except (i) as automatically modified by earlier termination of a Corporate
Service by RECEIVING PARTY in accordance with this Agreement, (ii) for Corporate
Services to or for the benefit of any entity which ceases to be a Subsidiary of
RECEIVING PARTY prior to the end of the Term, or (iii) as otherwise agreed to by
the Parties in writing.
(b) All obligations of PROVIDING PARTY with respect to any one or
more individual Corporate Services or Transition Assistance under this Agreement
shall be excused to the extent and only for so long as a failure by PROVIDING
PARTY with respect thereto is directly attributable to and caused specifically
by a failure by RECEIVING PARTY or any of its Subsidiaries to meet their
obligations (including any performance) under any other Intercompany Agreement
(as defined in the Stock Purchase Agreement) or under the Master Information
Technology Services Agreement dated as of _____________, 2005 by and between
Fidelity Information Services, Inc. and FNT (as novated pursuant to the
Assignment and Assumption Agreement dated as of __________, 2005 between FNT and
FNF).
1.3 Third Party Vendors; Consents.
(a) PROVIDING PARTY shall use its commercially reasonable efforts to
keep and maintain in effect its relationships with its vendors that are integral
to the provision of the Corporate Services. PROVIDING PARTY shall use
commercially reasonable efforts to procure any waivers, permits, consents or
sublicenses required by third party licensors, vendors or service providers
under existing agreements with such third parties in order to provide any
Corporate Services hereunder ("Third Party Consents"). In the event that
PROVIDING PARTY is unable to procure such Third Party Consents on commercially
reasonable terms, PROVIDING PARTY agrees to so notify RECEIVING PARTY, and to
assist RECEIVING PARTY with the transition to another vendor. If, after the
Effective Date, any one or more vendors (i) terminates its contractual
relationship with PROVIDING PARTY or ceases to provide the products or services
associated with the Corporate Services or (ii) notifies PROVIDING PARTY of its
desire or plan to terminate its contractual relationship with PROVIDING PARTY or
(iii) ceases providing the products or services associated with the Corporate
Services, then, in either case, PROVIDING PARTY agrees to so notify RECEIVING
PARTY, and to assist RECEIVING PARTY with the transition to another vendor so
that RECEIVING PARTY may continue to receive similar products and services.
(b) PROVIDING PARTY shall not be required to transfer or assign to
RECEIVING PARTY any third party software licenses or any hardware owned by
PROVIDING PARTY or its Subsidiaries or Affiliates in connection with the
provision of the Corporate Services or at the conclusion of the Term.
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1.4 Dispute Resolution.
(a) Amicable Resolution. PROVIDING PARTY and RECEIVING PARTY
mutually desire that friendly collaboration will continue between them.
Accordingly, they will try to resolve in an amicable manner all disagreements
and misunderstandings connected with their respective rights and obligations
under this Agreement, including any amendments hereto. In furtherance thereof,
in the event of any dispute or disagreement (a "Dispute") between PROVIDING
PARTY and RECEIVING PARTY in connection with this Agreement (including, without
limitation, the standards of performance, delay of performance or
non-performance of obligations, or payment or non-payment of fees hereunder),
then the Dispute, upon written request of either Party, will be referred for
resolution to the president (or similar position) of the division implicated by
the matter for each of PROVIDING PARTY and RECEIVING PARTY, which presidents
will have fifteen (15) days to resolve such Dispute. If the presidents of the
relevant divisions for each of PROVIDING PARTY and RECEIVING PARTY do not agree
to a resolution of such Dispute within fifteen (15) days after the reference of
the matter to them, such presidents of the relevant divisions will refer such
matter to the president of each of PROVIDING PARTY and RECEIVING PARTY for final
resolution. Notwithstanding anything to the contrary in this Section 1.4, any
amendment to the terms of this Agreement may only be effected in accordance with
Section 11.10.
(b) Arbitration. In the event that the Dispute is not resolved in a
friendly manner as set forth in Section 1.4(a), either Party involved in the
Dispute may submit the dispute to binding arbitration pursuant to this Section
1.4(b). All Disputes submitted to arbitration pursuant to this Section 1.4(b)
shall be resolved in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, unless the Parties involved mutually agree to
utilize an alternate set of rules, in which event all references herein to the
American Arbitration Association shall be deemed modified accordingly. Expedited
rules shall apply regardless of the amount at issue. Arbitration proceedings
hereunder may be initiated by either Party making a written request to the
American Arbitration Association, together with any appropriate filing fee, at
the office of the American Arbitration Association in Orlando, Florida. All
arbitration proceedings shall be held in the city of Jacksonville, Florida in a
location to be specified by the arbitrators (or any place agreed to by the
Parties and the arbitrators). The arbitration shall be by a single qualified
arbitrator experienced in the matters at issue, such arbitrator to be mutually
agreed upon by PROVIDING PARTY and RECEIVING PARTY. If PROVIDING PARTY and
RECEIVING PARTY fail to agree on an arbitrator within thirty (30) days after
notice of commencement of arbitration, the American Arbitration Association
shall, upon the request of any Party to the Dispute, appoint the arbitrator. Any
order or determination of the arbitral tribunal shall be final and binding upon
the Parties to the arbitration as to matters submitted and may be enforced by
any Party to the Dispute in any court having jurisdiction over the subject
matter or over any of the Parties. All costs and expenses incurred in connection
with any such arbitration proceeding (including reasonable attorneys' fees)
shall be borne by the Party incurring such costs. The use of any alternative
dispute resolution procedures hereunder will not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the rights of either
Party.
(c) Non-Exclusive Remedy. Nothing in this Section 1.4 will prevent
either PROVIDING PARTY or RECEIVING PARTY from immediately seeking injunctive or
interim relief in the event (i) of any actual or threatened breach of any of the
provisions of Article VIII or (ii) that the Dispute relates to, or involves a
claim of, actual or threatened infringement of
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intellectual property. All such actions for injunctive or interim relief shall
be brought in a court of competent jurisdiction in accordance with Section 11.6.
Such remedy shall not be deemed to be the exclusive remedy for breach of this
Agreement, and further remedies may be pursued in accordance with Section 1.4(a)
and Section 1.4(b) above.
(d) Commencement of Dispute Resolution Procedure. Notwithstanding
anything to the contrary in this Agreement, PROVIDING PARTY and RECEIVING PARTY,
but none of their respective Subsidiaries or Affiliates, are entitled to
commence a dispute resolution procedure under this Agreement, whether pursuant
to Article XI, this Section 1.4 or otherwise, and each Party will cause its
respective Affiliates not to commence any dispute resolution procedure other
than through such Party as provided in this Section 1.4(d).
(e) Compensation. RECEIVING PARTY shall continue to make all
payments due and owing under Article III for Corporate Services not the subject
of a Dispute and shall not off-set such fees by the amount of fees for Corporate
Services that are the subject of the Dispute.
1.5 Standard of Services.
(a) PROVIDING PARTY shall perform the Corporate Services for
RECEIVING PARTY in a professional and competent manner, using standards of
performance consistent with its performance of such services for itself.
(b) During the Term, PROVIDING PARTY shall maintain a disaster
recovery program for the Corporate Services substantially consistent with the
disaster recovery program in place for such Corporate Services as of the
Effective Date. For the avoidance of doubt, the disaster recovery program
maintained by PROVIDING PARTY will not include a business continuity program.
(c) If RECEIVING PARTY provides PROVIDING PARTY with written notice
("Shortfall Notice") of the occurrence of any Significant Service Shortfall (as
defined below), as determined by RECEIVING PARTY in good faith, PROVIDING PARTY
shall rectify such Significant Service Shortfall as soon as reasonably possible.
For purposes of this Section 1.5(c), a "Significant Service Shortfall" shall be
deemed to have occurred if the timing or quality of performance of Corporate
Services provided by PROVIDING PARTY hereunder falls below the standard required
by Section 1.5(a) hereof; provided that PROVIDING PARTY's obligations under this
Agreement shall be relieved to the extent, and for the duration of, any force
majeure event as set forth in Article V.
1.6 Response Time. PROVIDING PARTY shall respond to and resolve any
problems in connection with the Corporate Services for RECEIVING PARTY within a
commercially reasonable period of time, using response and proposed resolution
times consistent with its response and resolution of such problems for itself.
1.7 Ownership of Materials; Results and Proceeds. All data and information
submitted to PROVIDING PARTY by RECEIVING PARTY, in connection with the
Corporate Services or the Transition Assistance (as defined in Section 2.3) (the
"RECEIVING PARTY Data"), and all results and proceeds of the Corporate Services
and the Transition Assistance with
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regard to the RECEIVING PARTY Data, is and will remain, as between the Parties,
the property of the RECEIVING PARTY. The PROVIDING PARTY shall not and shall not
permit its Subsidiaries or Affiliates to use the RECEIVING PARTY Data for any
purpose other than to provide the Corporate Services or Transition Assistance.
ARTICLE II
TERM AND TRANSITION ASSISTANCE
2.1 Term. The term (the "Term") of this Agreement shall commence as of the
date hereof and shall continue until the date on which the last of the Scheduled
Services under this Agreement is terminated or the date on which this Agreement
is terminated by mutual agreement of the Parties, whichever is earlier (in
either case, the "Termination Date"); provided, however, that in no event shall
the Term:
(a) expire later than the date that is six (6) months after (i) any
Sale of FIS (as defined below) or any IPO (as defined below) or (ii) the
exercise by the Sponsor Group (as defined in the Stockholders Agreement
hereinafter defined) of exchange rights under Section 4.2 of the Stockholders
Agreement, or
(b) continue, with respect to any entity that ceases to be a
Subsidiary of RECEIVING PARTY prior to the end of the Term, from and after the
date that such entity ceases to be a Subsidiary of RECEIVING PARTY.
For purposes of this Agreement, (i) the term "Sale of FIS" means an acquisition
by any Person (within the meaning of Section 3(a)(9) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") and used in Sections 13(d)
and 14(d) thereof ("Person")) of Beneficial Ownership (within the meaning of
Rule 13d-3 under the Exchange Act ("Beneficial Ownership")) of 50% or more of
either the then outstanding shares of FIS common stock (the "Outstanding FIS
Common Stock") or the combined voting power of the then outstanding voting
securities of FIS entitled to vote generally in the election of directors (the
"Outstanding FIS Voting Securities"); excluding, however, the following: (A) any
acquisition directly from FIS, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted was
itself acquired directly from FIS, (B) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by FIS or a member of the FIS
Group, or (C) any acquisition of Outstanding FIS Common Stock by one or more
Subsidiaries or Affiliates of PROVIDING PARTY; (ii) the term "IPO" means an
offering and sale to the public of any shares or equity securities of FIS or any
of its Subsidiaries pursuant to a registration statement in the United States;
and (iii) the term "Stockholders Agreement" means that certain Stockholders
Agreement to be dated on or about March 9, 2005 by and among RECEIVING PARTY and
the holders of its common stock.
2.2 Termination.
(a) If RECEIVING PARTY is not able to complete its transition of the
Corporate Services by the Termination Date, then upon written notice provided to
PROVIDING PARTY at least thirty (30) days prior to the Termination Date,
RECEIVING PARTY shall have the right to request and cause PROVIDING PARTY to
provide up to thirty (30) days of
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additional Corporate Services to RECEIVING PARTY; provided, that RECEIVING PARTY
shall pay for all such additional Corporate Services.
(b) If RECEIVING PARTY wishes to terminate a Corporate Service (or a
portion thereof) on a date that is earlier than the Termination Date, RECEIVING
PARTY shall provide written notice (the "Termination Notice") to PROVIDING PARTY
of a proposed termination date for such Corporate Service (or portion thereof),
at least ninety (90) days prior to such proposed termination date. Upon receipt
of such notice, PROVIDING PARTY shall promptly provide notice to RECEIVING PARTY
(the "Termination Dispute Notice") in the event that the PROVIDING PARTY
believes in good faith that, notwithstanding the PROVIDING PARTY using its
commercially reasonable efforts, the requested termination will have a material
adverse impact on other Corporate Services and the scope of such adverse impact.
In such event, the Parties will resolve the dispute in accordance with Section
1.4. If PROVIDING PARTY does not provide the Termination Dispute Notice, based
on the standards set forth above, within ten (10) days of the date on which the
Termination Notice was received, then, effective on the termination date
proposed by RECEIVING PARTY in its Termination Notice, such Corporate Service
(or portion thereof) shall be discontinued (thereafter, a "Discontinued
Corporate Service") and deemed deleted from the Scheduled Services to be
provided hereunder and thereafter, this Agreement shall be of no further force
and effect with respect to the Discontinued Corporate Service (or portion
thereof), except as to obligations accrued prior to the date of discontinuation
of such Corporate Service (or portion thereof). Upon the occurrence of any
Discontinued Corporate Service, the Parties shall promptly update Schedule
1.1(a) to reflect the discontinuation, and the Corporate Service Fees and FIS
Costs Cap shall be adjusted in accordance therewith and the provisions of
Article III. Notwithstanding anything to the contrary contained herein, at any
time that employees of PROVIDING PARTY or its Subsidiaries or Affiliates move to
a department within RECEIVING PARTY or its Subsidiaries or Affiliates (an
"Employee Shift"), a proportional portion of the relevant Corporate Service
shall be deemed automatically terminated. If a Corporate Service, or portion
thereof, is terminated as a result of an Employee Shift, then such termination
shall take effect as of the date of the Employee Shift, and the adjustment in
Corporate Service Fees and FIS Costs Cap shall also take effect as of the date
of the Employee Shift.
(c) If all Corporate Services shall have been terminated under this
Section 2.2 prior to the expiration of the Term, then either Party shall have
the right to terminate this Agreement by giving written notice to the other
Party, which termination shall be effective upon delivery as provided in Section
6.1.
2.3 Transition Assistance. In preparation for the discontinuation of any
Corporate Service provided under this Agreement, PROVIDING PARTY shall,
consistent with its obligations to provide Corporate Services hereunder and with
the cooperation and assistance of RECEIVING PARTY, use commercially reasonable
efforts to provide such knowledge transfer services and to take such steps as
are reasonably required in order to facilitate a smooth and efficient transition
and/or migration of records to the RECEIVING PARTY or its Subsidiaries or
Affiliates (or at RECEIVING PARTY's direction, to a third party) and
responsibilities so as to minimize any disruption of services ("Transition
Assistance"). RECEIVING PARTY shall cooperate with PROVIDING PARTY to allow
PROVIDING PARTY to complete the Transition Assistance as early as is
commercially reasonable to do so. Fees for any Transition Assistance
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shall be determined in accordance with the calculation formula and methods
applicable to the Scheduled Services that are most similar in nature to the
Transition Assistance being so provided, as set forth on the applicable section
of Schedule 1.1(a).
2.4 Return of Materials. As a Corporate Service or Transition Assistance
is terminated, each Party will return all materials and property owned by the
other Party, including, without limitation, all RECEIVING PARTY Data, if any,
and materials and property of a proprietary nature involving a Party or its
Subsidiaries or Affiliates relevant to the provision or receipt of that
Corporate Service or Transition Assistance and no longer needed regarding the
performance of other Corporate Services or other Transition Assistance under
this Agreement, and will do so (and will cause its Subsidiaries and Affiliates
to do so) within thirty (30) days after the applicable termination. Upon the end
of the Term, each Party will return all material and property of a proprietary
nature involving the other Party or its Subsidiaries, in its possession or
control (or the possession or control of an Affiliate as a result of the
Services provided hereunder) within thirty (30) days after the end of the Term.
In addition, upon RECEIVING PARTY's request, PROVIDING PARTY agrees to provide
to RECEIVING PARTY copies of RECEIVING PARTY's Data, files and records on
magnetic media, or such other media as the Parties shall agree upon, to the
extent practicable. PROVIDING PARTY may retain archival copies of RECEIVING
PARTY's Data, files and records.
ARTICLE III
COMPENSATION AND PAYMENT ARRANGEMENTS FOR CORPORATE
SERVICES AND CORPORATE MARKS
3.1 Compensation for Corporate Services.
(a) In accordance with the payment terms described in Section 3.2
below, RECEIVING PARTY agrees to timely pay PROVIDING PARTY, as compensation for
the Corporate Services provided hereunder, all fees as contemplated in Section
1.1 (the "Corporate Service Fees") and in Section 2.3 (the "Transition
Assistance Fees").
(b) Without limiting the foregoing, the parties acknowledge that
RECEIVING PARTY is also obligated to pay, or reimburse PROVIDING PARTY for its
payment of, all Out of Pocket Costs (as defined below); provided, however, that
the incurrence of any liability by RECEIVING PARTY or any of its Subsidiaries
for any New Out of Pocket Cost (as defined below) that requires the payment by
RECEIVING PARTY or one of its Subsidiaries of more than $50,000, on an
annualized basis, shall require the prior written approval of a full-time
employee of RECEIVING PARTY or one of its Subsidiaries. For purposes hereof, the
term "Out of Pocket Costs" means all fees, costs or other expenses payable by
RECEIVING PARTY or its Subsidiaries to third parties that are not Affiliates of
PROVIDING PARTY in connection with Services provided hereunder, solely to the
extent that such fees, costs and other expenses have not historically been
included in FNF Administrative Overhead (as defined below) because such fees,
costs or other expenses have historically been billed directly to a
department/cost center or division of FIS or one of its Subsidiaries. For
purposes hereof, the term "New Out of Pocket Cost" means any Out of Pocket Cost
incurred after the Effective Date that is not a continuation of services
provided to FIS or one of its Subsidiaries in the ordinary course of
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business consistent with past practices and for which FIS had paid or reimbursed
a portion thereof prior to the Effective Date.
(c) Test Period FIS Costs.
(i) Attached hereto as Schedule 3.1(e) is a statement (the
"January Statement"), prepared by PROVIDING PARTY, of RECEIVING
PARTY's allocated and direct costs (collectively, the "FIS Costs")
that are part of PROVIDING PARTY's administrative corporate overhead
("FNF Administrative Overhead") (as opposed to being billed directly
to a department/cost center or division of RECEIVING PARTY) for the
one-month period ended January 31, 2005. All Corporate Service Fees
and Total Allocated FAS 123 Charges for the month of January 31,
2005 are listed under "Allocated" on Schedule 3.1(e) and total
$3,073,805 (equivalent on an annualized basis to $36,885,660). All
direct costs of FIS within FNF Administrative Overhead (referred to
herein as "Direct Costs"), including direct FAS 123 Charges, for the
month of January 31, 2005 are listed under "Direct" on Schedule
3.1(e) and total $1,164,187 (equivalent on an annualized basis to
$13,970,244). All Allocated FAS 123 Charges and Direct FAS 123
Charges are referred to herein as "Total FAS 123 Charges."
(ii) After delivery of Q2 2005 financials, both parties will
review the FNF Administrative Overhead charges to RECEIVING PARTY
over the six-month period ending June 30, 2005 (the "Test Period").
For purposes hereof, during the Test Period, all FIS Costs charges
related to RECEIVING PARTY shall be classified in a manner
consistent with the methodology of the January Statement; provided,
however, that if the January Statement failed to reflect charges of
a category that have historically been billed through FNF
Administrative Overhead, then such charges shall be reflected in all
statements of FNF Administrative Overhead going forward to the
extent that such charges continue to be billed through FNF
Administrative Overhead, including, but not limited to, any FAS 123
charges related to grants of options or restricted stock by Fidelity
National Financial, Inc. prior to 2005 (such as those charges
related to the Fidelity National Information Solutions and Xxxxxxx
acquisitions). For purposes of this Agreement, the FIS Costs
incurred during the Test Period shall be referred to as the "Test
Period FIS Costs".
(iii) If the annualized Test Period FIS Costs are greater than
$50,000,000, then the parties will use their reasonable best efforts
to promptly agree on a reduction in administrative and overhead
costs that would result in all FIS Costs being equal to or less than
$50,000,000 on an annualized basis going forward. In addition,
notwithstanding the foregoing or any other provision contained
herein, in no event shall RECEIVING PARTY be responsible for any FIS
Costs that, for any given fiscal year, exceed (A) in fiscal year
2005, $50,000,000 and (B) in any fiscal year subsequent to 2005, the
sum of (I) $50,000,000, plus (II) the product of (x) $50,000,000
multiplied by (y) a percentage equal to one-half of the percentage
by which RECEIVING PARTY's consolidated annual revenues (determined
in accordance with GAAP consistently
10
applied), increased over the prior fiscal year, minus (III) the
Adjustment Amount (as defined in Schedule 1.1(a)) for any
Discontinued Corporate Services (such sum or amount as so calculated
being, the "FIS Costs Cap"). Without limiting the foregoing, the
Parties agree that in calculating the Test Period FIS Costs as well
as the annual FIS Costs described in the preceding sentence, all
SFAS 123 and SFAS 123(R) charges related to (1) options to purchase
common stock of RECEIVING PARTY or (2) restricted common stock of
RECEIVING PARTY (which are excluded from the Total FAS 123 Charges)
shall be excluded from the calculation. The Parties agree to
consider any extraordinary direct corporate litigation charges in
analyzing the FIS Costs during the Test Period.
(d) The parties acknowledge that in calculating the FIS Costs Cap,
(i) Out of Pocket Costs are not considered Corporate Service Fees and are
excluded from the calculation, and (ii) Transition Assistance Fees are excluded
from the calculation of the FIS Costs Cap. The Parties further acknowledge and
agree that the Total FAS 123 Charges are included in the calculation of the FIS
Costs Cap but are non-cash items that shall be treated by the Parties as a
contribution to capital by PROVIDING PARTY, but with no commensurate issuance of
additional equity in connection with such contribution to capital.
(e) After the Test Period, the Parties agree to consider charging
all FIS Direct Costs directly to a department/cost center or division of FIS or
one of its Subsidiaries, and reduce the FIS Costs Cap accordingly.
3.2 Payment Terms. The PROVIDING PARTY shall invoice the RECEIVING PARTY
on a monthly basis in arrears for Corporate Service Fees, Transition Assistance
Fees, and Total Allocated FAS 123 Charges, as calculated in accordance with
Section 3.1 and Schedule 1.1(a) (it being understood that the Total Allocated
FAS 123 Charges are non-cash items treated by RECEIVING PARTY as a contribution
to capital by PROVIDING PARTY with no commensurate issuance of any equity in
connection therewith). Each monthly invoice shall list all Corporate Services
and FIS Costs in the format of Schedule 3.1(e) and shall state the then current
FIS Costs Cap, any changes made thereto and brief explanation thereof. In
addition, the PROVIDING PARTY shall promptly notify the RECEIVING PARTY, no more
frequently than monthly, of the aggregate amount of Out of Pocket Costs to be
reimbursed or paid. The RECEIVING PARTY shall pay by electronic funds transfer
or other method satisfactory to PROVIDING PARTY and RECEIVING PARTY, in full,
the monthly amount so invoiced and the Out of Pocket Costs incurred, within
thirty (30) days after the date on which the PROVIDING PARTY's monthly invoice
or notification of Out of Pocket Costs, as the case may be, was received. All
invoices shall include, without limitation, the category of applicable Corporate
Service or Transition Assistance Service (as the case may be), a brief
description of the Out of Pocket Costs (if applicable), the billing period, and
such other information as RECEIVING PARTY may reasonably request. Should
RECEIVING PARTY dispute any portion of the amount due on any invoice or require
any adjustment to an invoiced amount, or dispute any Out of Pocket Costs for
which it received notification, then RECEIVING PARTY shall notify PROVIDING
PARTY in writing of the nature and basis of the dispute and/or adjustment as
soon as reasonably possible using, if necessary, the dispute resolution
procedures set forth in Section 1.4. The Parties shall use their reasonable best
efforts to resolve the dispute prior to the payment due date.
11
3.3 Audit Rights. Upon reasonable advance notice from RECEIVING PARTY,
PROVIDING PARTY shall permit RECEIVING PARTY to perform annual audits of
PROVIDING PARTY's records only with respect to amounts invoiced and Out of
Pocket Costs invoiced pursuant to this Article III. Such audits shall be
conducted during PROVIDING PARTY's regular office hours and without disruption
to PROVIDING PARTY's business operations and shall be performed at RECEIVING
PARTY's sole expense.
ARTICLE IV
LIMITATION OF LIABILITY
4.1 LIMITATION OF LIABILITY. THE LIABILITY OF EITHER PARTY FOR A CLAIM
ASSERTED BY THE OTHER PARTY BASED ON BREACH OF ANY COVENANT, AGREEMENT OR
UNDERTAKING REQUIRED BY THIS AGREEMENT SHALL NOT EXCEED, IN THE AGGREGATE, THE
FEES PAYABLE BY RECEIVING PARTY TO PROVIDING PARTY DURING THE ONE (1) YEAR
PERIOD PRECEDING THE BREACH FOR THE PARTICULAR CORPORATE SERVICE AFFECTED BY
SUCH BREACH UNDER THIS AGREEMENT; PROVIDED THAT SUCH LIMITATION SHALL NOT APPLY
IN RESPECT OF ANY CLAIMS BASED ON A PARTY'S (i) GROSS NEGLIGENCE, (ii) WILLFUL
MISCONDUCT, (iii) IMPROPER USE OR DISCLOSURE OF CUSTOMER INFORMATION, (iv)
VIOLATIONS OF LAW, OR (v) INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF A
PERSON OR ENTITY WHO IS NOT A PARTY HERETO OR THE SUBSIDIARY OR AFFILIATE OF A
PARTY HERETO.
4.2 DAMAGES. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGE OF ANY KIND WHATSOEVER; PROVIDED,
HOWEVER, THAT TO THE EXTENT AN INDEMNIFIED PARTY UNDER ARTICLE X IS REQUIRED TO
PAY ANY SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS TO A PERSON OR ENTITY WHO IS NOT A PARTY OR A SUBSIDIARY
OR AFFILIATE OF THE INDEMNIFIED PARTY IN CONNECTION WITH A THIRD PARTY CLAIM,
SUCH DAMAGES WILL CONSTITUTE DIRECT DAMAGES AND WILL NOT BE SUBJECT TO THE
LIMITATION SET FORTH IN THIS ARTICLE IV.
ARTICLE V
FORCE MAJEURE
Neither Party shall be held liable for any delay or failure in performance
of any part of this Agreement from any cause beyond its reasonable control and
without its fault or negligence, including, but not limited to, acts of God,
acts of civil or military authority, embargoes, epidemics, war, terrorist acts,
riots, insurrections, fires, explosions, earthquakes, hurricanes, tornadoes,
nuclear accidents, floods, strikes, terrorism and power blackouts. Upon the
occurrence of a condition described in this Article, the Party whose performance
is prevented shall give written notice to the other Party, and the Parties shall
promptly confer, in good faith, to agree upon equitable, reasonable action to
minimize the impact, on both Parties, of such conditions.
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ARTICLE VI
NOTICES AND DEMANDS
6.1 Notices. Except as otherwise provided under this Agreement (including
Schedule 1.1(a)), all notices, demands or requests which may be given by any
Party to the other Party shall be in writing and shall be deemed to have been
duly given on the date delivered in person, or sent via telefax, or on the next
business day if sent by overnight courier, or on the date of the third business
day after deposit, postage prepaid, in the United States Mail via Certified Mail
return receipt requested, and addressed as set forth below:
If to RECEIVING PARTY, to:
Fidelity National Information Services, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
prior to the Sale of FIS (unless such sale is to THL, TPG or their
affiliates) or any IPO, with copies to:
Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx and Xxxx Xxxxx
Facsimile: (000) 000-0000
and
Texas Pacific Group
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx and Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
If to PROVIDING PARTY, to:
Fidelity National Title Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
The address to which such notices, demands, requests, elections or other
communications are to be given by either Party may be changed by written notice
given by such Party to the other Party pursuant to Section 6.1 and this Section
6.2.
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ARTICLE VII
REMEDIES
7.1 Remedies Upon Material Breach. In the event of material breach of any
provision of this Agreement by a Party, the non-defaulting Party shall give the
defaulting Party written notice, and:
(a) If such breach is for RECEIVING PARTY's non-payment of an amount
that is not in dispute, the defaulting Party shall cure the breach within thirty
(30) calendar days of such notice. If the defaulting Party does not cure such
breach by such date, then the defaulting Party shall pay the non-defaulting
Party the undisputed amount, any interest that has accrued hereunder through the
expiration of the cure period plus an additional amount of interest equal to
four percent (4%) per annum above the "prime rate" as announced in the most
recent edition of the Wall Street Journal. The Parties agree that this rate of
interest constitutes reasonable liquidated damages and not an unenforceable
penalty.
(b) If such breach is for any other material failure to perform in
accordance with this Agreement, the defaulting Party shall cure such breach
within thirty (30) calendar days of the date of such notice. If the defaulting
Party does not cure such breach within such period, then the defaulting Party
shall pay the non-defaulting Party all of the non-defaulting Party's actual
damages, subject to Article IV above.
7.2 Survival Upon Expiration or Termination. The provisions of Section 1.4
(Dispute Resolution), Section 2.4 (Return of Materials), Article IV (Limitation
of Liability), Article VI (Notices and Demands), this Section 7.2, Article VIII
(Confidentiality), Article X (Indemnification) and Article XI (Miscellaneous)
shall survive the termination or expiration of this Agreement unless otherwise
agreed to in writing by both Parties.
ARTICLE VIII
CONFIDENTIALITY
8.1 Confidential Information. Each Party shall use at least the same
standard of care in the protection of Confidential Information of the other
Party as it uses to protect its own confidential or proprietary information;
provided that such Confidential Information shall be protected in at least a
reasonable manner. For purposes of this Agreement, "Confidential Information"
includes all confidential or proprietary information and documentation of either
Party, including the terms of this Agreement, including with respect to each
Party, all of its software, data, financial information all reports, exhibits
and other documentation prepared by any of its Subsidiaries or Affiliates. Each
Party shall use the Confidential Information of the other Party only in
connection with the purposes of this Agreement and shall make such Confidential
Information available only to its employees, subcontractors, or agents having a
"need to know" with respect to such purpose. Each Party shall advise its
respective employees, subcontractors, and agents of such Party's obligations
under this Agreement. The obligations in this Section 8.1 will not restrict
disclosure by a Party pursuant to applicable law, or by order or request of any
court or government agency; provided, that prior to such disclosure the
receiving Party shall (a) immediately give notice to the disclosing Party, (b)
cooperate with the disclosing Party in challenging the right to such access and
(c) only provide such information as is required
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by law, such order or a final, non-appealable ruling of a court of proper
jurisdiction Confidential Information of a Party will not be afforded the
protection of this Article VIII if such Confidential Information was (A)
developed by the other Party independently as shown by its written business
records regularly kept, (B) rightfully obtained by the other Party without
restriction from a third party, (C) publicly available other than through the
fault or negligence of the other Party or (D) released by the disclosing Party
without restriction to anyone.
8.2 Work Product Privilege. RECEIVING PARTY represents and PROVIDING PARTY
acknowledges that, in the course of providing Corporate Services pursuant to
this Agreement, PROVIDING PARTY may have access to (a) documents, data,
databases or communications that are subject to attorney client privilege and/or
(b) privileged work product prepared by or on behalf of the Affiliates of
RECEIVING PARTY in anticipation of litigation with third parties (collectively,
the "Privileged Work Product") and RECEIVING PARTY represents and PROVIDING
PARTY understands that all Privileged Work Product is protected from disclosure
by Rule 26 of the Federal Rules of Civil Procedure and the equivalent rules and
regulations under the law chosen to govern the construction of this Agreement.
RECEIVING PARTY represents and PROVIDING PARTY understands the importance of
maintaining the strict confidentiality of the Privileged Work Product to protect
the attorney client privilege, work product doctrine and other privileges and
rights associated with such Privileged Work Product pursuant to such Rule 26 and
the equivalent rules and regulations under the law chosen to govern the
construction of this Agreement. After PROVIDING PARTY is notified or otherwise
becomes aware that documents, data, database, or communications are Privileged
Work Product, only PROVIDING PARTY personnel for whom such access is necessary
for the purposes of providing Services to RECEIVING PARTY as provided in this
Agreement shall have access to such Privileged Work Product. Should PROVIDING
PARTY ever be notified of any judicial or other proceeding seeking to obtain
access to Privileged Work Product, PROVIDING PARTY shall (A) immediately give
notice to RECEIVING PARTY, (B) cooperate with RECEIVING PARTY in challenging the
right to such access and (C) only provide such information as is required by a
final, non-appealable ruling of a court of proper jurisdiction. RECEIVING PARTY
shall pay all of the cost incurred by PROVIDING PARTY in complying with the
immediately preceding sentence. RECEIVING PARTY has the right and duty to
represent PROVIDING PARTY in such resistance or to select and compensate counsel
to so represent PROVIDING PARTY or to reimburse PROVIDING PARTY for reasonable
attorneys' fees and expenses as such fees and expenses are incurred in resisting
such access. If PROVIDING PARTY is ultimately required, pursuant to an order of
a court of competent jurisdiction, to produce documents, disclose data, or
otherwise act in contravention of the confidentiality obligations imposed in
this Article VIII, or otherwise with respect to maintaining the confidentiality,
proprietary nature, and secrecy of Privileged Work Product, PROVIDING PARTY is
not liable for breach of such obligation to the extent such liability does not
result from failure of PROVIDING PARTY to abide by the terms of this Article
VIII. All Privileged Work Product is the property of RECEIVING PARTY and will be
deemed Confidential Information, except as specifically authorized in this
Agreement or as shall be required by law.
8.3 Unauthorized Acts. Each Party shall (a) notify the other Party
promptly of any unauthorized possession, use, or knowledge of any Confidential
Information by any person which shall become known to it, any attempt by any
person to gain possession of Confidential Information without authorization or
any attempt to use or acquire knowledge of any
15
Confidential Information without authorization (collectively, "Unauthorized
Access"), (b) promptly furnish to the other Party full details of the
Unauthorized Access and use reasonable efforts to assist the other Party in
investigating or preventing the reoccurrence of any Unauthorized Access, (c)
cooperate with the other Party in any litigation and investigation against third
parties deemed necessary by such Party to protect its proprietary rights, and
(d) use commercially reasonable efforts to prevent a reoccurrence of any such
Unauthorized Access.
8.4 Publicity. Except as required by law or national stock exchange rule
or as allowed by any Ancillary Agreement, neither Party shall issue any press
release, distribute any advertising, or make any public announcement or
disclosure (a) identifying the other Party by name, trademark or otherwise or
(b) concerning this Agreement without the other Party's prior written consent.
Notwithstanding the foregoing sentence, in the event either Party is required to
issue a press release relating to this Agreement or any of the transactions
contemplated by this Agreement, or by the laws or regulations of any
governmental authority, agency or self-regulatory agency, such Party shall (A)
give notice and a copy of the proposed press release to the other Party as far
in advance as reasonably possible, but in any event not less than five (5) days
prior to publication of such press release and (B) make any changes to such
press release reasonably requested by the other Party. In addition, RECEIVING
PARTY may communicate the existence of the business relationship contemplated by
the terms of this Agreement internally within PROVIDING PARTY's organization and
orally and in writing communicate PROVIDING PARTY's identity as a reference with
potential and existing customers.
8.5 Data Privacy. (a) Where, in connection with this Agreement, PROVIDING
PARTY processes or stores information about a living individual that is held in
automatically processable form (for example in a computerized database) or in a
structured manual filing system ("Personal Data"), on behalf of any Subsidiaries
of RECEIVING PARTY or their clients, then PROVIDING PARTY shall implement
appropriate measures to protect those personal data against accidental or
unlawful destruction or accidental loss, alteration, unauthorized disclosure or
access and shall use such data solely for purposes of carrying out its
obligations under this Agreement.
(b) RECEIVING PARTY may instruct PROVIDING PARTY, where PROVIDING
PARTY processes Personal Data on behalf of Subsidiaries of RECEIVING PARTY, to
take such steps to preserve data privacy in the processing of those Personal
Data as are reasonably necessary for the performance of this Agreement.
(c) Subsidiaries of RECEIVING PARTY may, in connection with this
Agreement, collect Personal Data in relation to PROVIDING PARTY and PROVIDING
PARTY's employees, directors and other officers involved in providing Corporate
Services hereunder. Such Personal Data may be collected from PROVIDING PARTY,
its employees, its directors, its officers, or from other (for example,
published) sources; and some limited personal data may be collected indirectly
at RECEIVING PARTY's (or Subsidiaries of RECEIVING PARTY's) locations from
monitoring devices or by other means (e.g., telephone logs, closed circuit TV
and door entry systems). Nothing in this Section 8.5(c) obligates PROVIDING
PARTY or PROVIDING PARTY's employees, directors or other officers to provide
Personal Data requested by RECEIVING PARTY. The Subsidiaries of RECEIVING PARTY
may use and disclose any such data disclosed by PROVIDING PARTY solely for
purposes connected
16
with this Agreement and for the relevant purposes specified in the data privacy
policy of the Subsidiary of RECEIVING PARTY (a copy of which is available on
request.) RECEIVING PARTY will maintain the same level of protection for
Personal Data collected from PROVIDING PARTY (and PROVIDING PARTY's employees,
directors and officers, as appropriate) as RECEIVING PARTY maintains with its
own Personal Data, and will implement appropriate administrative, physical and
technical measures to protect the personal data collected from PROVIDING PARTY
and PROVIDING PARTY's employees, directors and other officers against accidental
or unlawful destruction or accidental loss, alternation, unauthorized disclosure
or access.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS
EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY MADE IN
THIS AGREEMENT, PROVIDING PARTY HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES OR COVENANTS, STATUTORY OR
OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES OF
MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR THE RESULTS OBTAINED OF THE CONTINUING BUSINESS. ALL OTHER
REPRESENTATIONS, WARRANTIES, AND COVENANTS, EXPRESS OR IMPLIED, STATUTORY,
COMMON LAW OR OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES
OF MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR THE RESULTS OBTAINED OF THE CONTINUING BUSINESS ARE HEREBY DISCLAIMED
BY PROVIDING PARTY.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification.
(a) Subject to Article IV, RECEIVING PARTY will indemnify, defend
and hold harmless PROVIDING PARTY, each Subsidiary and Affiliate of PROVIDING
PARTY, each of their respective past and present directors, officers, employees,
agents, consultants, advisors, accountants and attorneys ("Representatives"),
and each of their respective successors and assigns (collectively, the
"PROVIDING PARTY Indemnified Parties") from and against any and all Damages (as
defined below) incurred or suffered by the PROVIDING PARTY Indemnified Parties
arising or resulting from the provision of Corporate Services hereunder, which
Damages shall be reduced to the extent of:
(i) Damages caused or contributed to by PROVIDING PARTY's
negligence, willful misconduct or violation or law; or
(ii) Damages caused or contributed to by a breach of this
Agreement by PROVIDING PARTY.
17
"Damages" means, subject to Article IV hereof, all losses, claims, demands,
damages, liabilities, judgments, dues, penalties, assessments, fines (civil,
criminal or administrative), costs, liens, forfeitures, settlements, fees or
expenses (including reasonable attorneys' fees and expenses and any other
expenses reasonably incurred in connection with investigating, prosecuting or
defending a claim or Action).
(b) Except as set forth in this Section 10.1(b), PROVIDING PARTY
will have no liability to RECEIVING PARTY for or in connection with any of the
Corporate Services rendered hereunder or for any actions or omissions of
PROVIDING PARTY in connection with the provision of any Corporate Services
hereunder. Subject to the provisions hereof and subject to Article IV, PROVIDING
PARTY will indemnify, defend and hold harmless RECEIVING PARTY, each Subsidiary
and Affiliate of RECEIVING PARTY, each of their respective past and present
Representatives, and each of their respective successors and assigns
(collectively, the "RECEIVING PARTY Indemnified Parties") from and against any
and all Damages incurred or suffered by the RECEIVING PARTY Indemnified Parties
arising or resulting from either of the following:
(i) any claim that PROVIDING PARTY's use of the software or
other intellectual property used to provide the Corporate Services
or Transition Assistance, or any results and proceeds of such
Corporate Services or Transition Assistance, infringes,
misappropriates or otherwise violates any United States patent,
copyright, trademark, trade secret or other intellectual property
rights; provided, that such intellectual property indemnity shall
not apply to the extent that any such claim arises out of any
modification to such software or other intellectual property made by
RECEIVING PARTY without PROVIDING PARTY's authorization or
participation, or
(ii) PROVIDING PARTY's gross negligence, willful misconduct,
improper use or disclosure of customer information or violations of
law;
provided, that in each of the cases described in subclauses (i) through (ii)
above, the amount of Damages incurred or sustained by RECEIVING PARTY shall be
reduced to the extent such Damages shall have been caused or contributed to by
any action or omission of RECEIVING PARTY in amounts equal to RECEIVING PARTY's
equitable share of such Damages determined in accordance with its relative
culpability for such Damages or the relative fault of RECEIVING PARTY or its
Subsidiaries.
10.2 Indemnification Procedures.
(a) Claim Notice. A Party that seeks indemnity under this Article X
(an "Indemnified Party") will give written notice (a "Claim Notice") to the
Party from whom indemnification is sought (an "Indemnifying Party"), whether the
Damages sought arise from matters solely between the Parties or from Third Party
Claims. The Claim Notice must contain (i) a description and, if known, estimated
amount (the "Claimed Amount") of any Damages incurred or reasonably expected to
be incurred by the Indemnified Party, (ii) a reasonable explanation of the basis
for the Claim Notice to the extent of facts then known by the Indemnified Party,
and (iii) a demand for payment of those Damages. No delay or deficiency on
18
the part of the Indemnified Party in so notifying the Indemnifying Party will
relieve the Indemnifying Party of any liability for Damages or obligation
hereunder except to the extent of any Damages caused by or arising out of such
failure.
(b) Response to Notice of Claim. Within thirty (30) days after
delivery of a Claim Notice, the Indemnifying Party will deliver to the
Indemnified Party a written response in which the Indemnifying Party will
either: (i) agree that the Indemnified Party is entitled to receive all of the
Claimed Amount and, in which case, the Indemnifying Party will pay the Claimed
Amount in accordance with a payment and distribution method reasonably
acceptable to the Indemnified Party; or (ii) dispute that the Indemnified Party
is entitled to receive all or any portion of the Claimed Amount, in which case,
the Parties will resort to the dispute resolution procedures set forth in
Section 1.4.
(c) Contested Claims. In the event that the Indemnifying Party
disputes the Claimed Amount, as soon as practicable but in no event later than
ten (10) days after the receipt of the notice referenced in Section 10.2(b)(ii)
hereof, the Parties will begin the process to resolve the matter in accordance
with the dispute resolution provisions of Section 1.4 hereof. Upon ultimate
resolution thereof, the Parties will take such actions as are reasonably
necessary to comply with such agreement or instructions.
(d) Third Party Claims.
(i) In the event that the Indemnified Party receives notice or
otherwise learns of the assertion by a person or entity who is not a
Party hereto or a Subsidiary or Affiliate of a Party hereto of any
claim or the commencement of any action (a "Third-Party Claim") with
respect to which the Indemnifying Party may be obligated to provide
indemnification under this Article X, the Indemnified Party will
give written notification to the Indemnifying Party of the
Third-Party Claim. Such notification will be given within fifteen
(15) days after receipt by the Indemnified Party of notice of such
Third-Party Claim, will be accompanied by reasonable supporting
documentation submitted by such third party (to the extent then in
the possession of the Indemnified Party) and will describe in
reasonable detail (to the extent known by the Indemnified Party) the
facts constituting the basis for such Third-Party Claim and the
amount of the claimed Damages; provided, however, that no delay or
deficiency on the part of the Indemnified Party in so notifying the
Indemnifying Party will relieve the Indemnifying Party of any
liability for Damages or obligation hereunder except to the extent
of any Damages caused by or arising out of such failure. Within
twenty (20) days after delivery of such notification, the
Indemnifying Party may, upon written notice thereof to the
Indemnified Party, assume control of the defense of such Third-Party
Claim with counsel reasonably satisfactory to the Indemnified Party.
During any period in which the Indemnifying Party has not so assumed
control of such defense, the Indemnified Party will control such
defense.
(ii) The Party not controlling such defense (the
"Non-controlling Party") may participate therein at its own expense.
19
(iii) The Party controlling such defense (the "Controlling
Party") will keep the Non-controlling Party reasonably advised of
the status of such Third-Party Claim and the defense thereof and
will consider in good faith recommendations made by the
Non-controlling Party with respect thereto. The Non-controlling
Party will furnish the Controlling Party with such Information as it
may have with respect to such Third-Party Claim (including copies of
any summons, complaint or other pleading which may have been served
on such Party and any written claim, demand, invoice, billing or
other document evidencing or asserting the same) and will otherwise
cooperate with and assist the Controlling Party in the defense of
such Third-Party Claim.
(iv) The Indemnifying Party will not agree to any settlement
of, or the entry of any judgment arising from, any such Third-Party
Claim without the prior written consent of the Indemnified Party,
which consent will not be unreasonably withheld or delayed;
provided, however, that the consent of the Indemnified Party will
not be required if (A) the Indemnifying Party agrees in writing to
pay any amounts payable pursuant to such settlement or judgment, and
(B) such settlement or judgment includes a full, complete and
unconditional release of the Indemnified Party from further
Liability. The Indemnified Party will not agree to any settlement
of, or the entry of any judgment arising from, any such Third-Party
Claim without the prior written consent of the Indemnifying Party,
which consent will not be unreasonably withheld or delayed.
ARTICLE XI
MISCELLANEOUS
11.1 Relationship of the Parties. The Parties declare and agree that each
Party is engaged in a business that is independent from that of the other Party
and each Party shall perform its obligations as an independent contractor. It is
expressly understood and agreed that RECEIVING PARTY and PROVIDING PARTY are not
partners, and nothing contained herein is intended to create an agency
relationship or a partnership or joint venture with respect to the Corporate
Services. Neither Party is an agent of the other and neither Party has any
authority to represent or bind the other Party as to any matters, except as
authorized herein or in writing by such other Party from time to time.
11.2 Employees. (a) PROVIDING PARTY shall be solely responsible for
payment of compensation to its employees and, as between the Parties, for its
Subsidiaries' employees and its Affiliates' employees, and for any injury to
them in the course of their employment. PROVIDING PARTY shall assume full
responsibility for payment of all federal, state and local taxes or
contributions imposed or required under unemployment insurance, social security
and income tax laws with respect to such persons.
(b) RECEIVING PARTY shall be solely responsible for payment of
compensation to its employees and, as between the Parties, for its Subsidiaries'
employees and for any injury to them in the course of their employment.
RECEIVING PARTY shall assume full responsibility for payment of all federal,
state and local taxes or contributions imposed or
20
required under unemployment insurance, social security and income tax laws with
respect to such persons.
11.3 Assignment. Neither Party may, in connection with a sale of an asset
to which one or more of the Corporate Services relate, assign, transfer or
convey any right, obligation or duty, in whole or in part, or of any other
interest under this Agreement relating to such Corporate Services without the
prior written consent of the other Party, provided, however, that in the event
of a Sale of FIS (as defined in Section 2.1), FIS may assign its interest in
this Agreement without the prior written consent of FNT. All obligations and
duties of a Party under this Agreement shall be binding on all successors in
interest and permitted assigns of such Party. Each Party may use its
Subsidiaries or Affiliates or subcontractors to perform the Corporate Services;
provided that such use shall not relieve such assigning Party of liability for
its responsibilities and obligations.
11.4 Severability. In the event that any one or more of the provisions
contained herein shall for any reason be held to be unenforceable in any respect
under law, such unenforceability shall not affect any other provision of this
Agreement, and this Agreement shall be construed as if such unenforceable
provision or provisions had never been contained herein.
11.5 Third Party Beneficiaries. The provisions of this Agreement are for
the benefit of the Parties and their Affiliates and not for any other person.
However, should any third party institute proceedings, this Agreement shall not
provide any such person with any remedy, claim, liability, reimbursement, cause
of action, or other right.
11.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to such
State's laws and principles regarding the conflict of laws. Subject to Section
1.4, if any Dispute arises out of or in connection with this Agreement, except
as expressly contemplated by another provision of this Agreement, the Parties
irrevocably (a) consent and submit to the exclusive jurisdiction of federal and
state courts located in Jacksonville, Florida, (b) waive any objection to that
choice of forum based on venue or to the effect that the forum is not convenient
and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR
ADJUDICATION BY JURY.
11.7 Executed in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same document.
11.8 Construction. The headings and numbering of articles, sections and
paragraphs in this Agreement are for convenience only and shall not be construed
to define or limit any of the terms or affect the scope, meaning, or
interpretation of this Agreement or the particular Article or Section to which
they relate. This Agreement and the provisions contained herein shall not be
construed or interpreted for or against any Party because that Party drafted or
caused its legal representative to draft any of its provisions.
11.9 Entire Agreement. This Agreement, including all attachments,
constitutes the entire Agreement between the Parties with respect to the subject
matter hereof, and supersedes
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all prior oral or written agreements, representations, statements, negotiations,
understandings, proposals and undertakings, with respect to the subject matter
hereof.
11.10 Amendments and Waivers. (a) The Parties may amend this Agreement
only by a written agreement signed by each Party and that identifies itself as
an amendment to this Agreement. No waiver of any provisions of this Agreement
and no consent to any default under this Agreement shall be effective unless the
same shall be in writing and signed by or on behalf of the Party against whom
such waiver or consent is claimed. No course of dealing or failure of any Party
to strictly enforce any term, right or condition of this Agreement shall be
construed as a waiver of such term, right or condition. Waiver by either Party
of any default by the other Party shall not be deemed a waiver of any other
default.
(b) Notwithstanding the foregoing, at any time prior to the Sale of
FIS or any IPO, this Agreement may not be amended without the prior written
consent of THL and TPG if such amendment would: (i) change the methodology of
calculating the cost of any services provided hereunder (e.g., change from a
"cost" method to a "cost plus X" method), (ii) add any service that is not
contemplated as of the date hereof, if the cost of such additional service is
expected to be more than five hundred thousand dollars ($500,000) annually,
(iii) affect the Term of the Agreement, (iv) affect RECEIVING PARTY's ability to
terminate any Corporate Services pursuant to Section 2.2, (v) affect Sections
1.5 (Standard of Services), 1.6 (Response Time), or 1.7 (Ownership of Materials)
in any manner adverse to RECEIVING PARTY, (vi) affect Section 3.1 (Compensation
for Corporate Services) in any manner, (vii) affect PROVIDING PARTY's limitation
of liability under Article IV (Limitation of Liability) in any manner adverse to
RECEIVING PARTY, (viii) affect PROVIDING PARTY's rights under Article VII
(Remedies) upon default by RECEIVING PARTY in any manner adverse to RECEIVING
PARTY, (ix) affect Article X (Indemnification) in any manner adverse to
RECEIVING PARTY, or (x) affect this Section 11.10 (Amendment). For purposes
hereof, the term "THL" means Xxxxxx X. Xxx Equity Fund V, L.P. and the term
"TPG" means TPG Partners III, L.P. THL and TPG are intended third party
beneficiaries of this Agreement solely with respect to this Section 11.10(b).
11.11 Remedies Cumulative. Unless otherwise provided for under this
Agreement, all rights of termination or cancellation, or other remedies set
forth in this Agreement, are cumulative and are not intended to be exclusive of
other remedies to which the injured Party may be entitled by law or equity in
case of any breach or threatened breach by the other Party of any provision in
this Agreement. Unless otherwise provided for under this Agreement, use of one
or more remedies shall not bar use of any other remedy for the purpose of
enforcing any provision of this Agreement.
11.12 Taxes. All charges and fees to be paid to PROVIDING PARTY under this
Agreement are exclusive of any applicable taxes required by law to be collected
from the RECEIVING PARTY (including, without limitation, withholding, sales,
use, excise, or services tax, which may be assessed on the provision of
Corporate Services). In the event that a withholding, sales, use, excise, or
services tax is assessed on the provision of any of the Corporate Services under
this Agreement, RECEIVING PARTY will pay directly, reimburse or indemnify
PROVIDING PARTY for such tax, plus any applicable interest and penalties. The
Parties will cooperate with each other in determining the extent to which any
tax is due and owing under the circumstances, and shall provide and make
available to each other any resale
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certificate, information regarding out-of-state use of materials, services or
sale, and other exemption certificates or information reasonably requested by
either Party.
[signature page to follow]
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11.13 Changes in Law. PROVIDING PARTY's obligations to provide Corporate
Services hereunder are to provide such Corporate Services in accordance with
applicable laws as in effect on the date of this Agreement. Each Party reserves
the right to take all actions in order to ensure that the Corporate Services and
Transition Assistance are provided in accordance with any applicable laws.
IN WITNESS WHEREOF, the Parties, acting through their authorized officers,
have caused this Agreement to be duly executed and delivered as of the date
first above written.
PROVIDING PARTY:
FIDELITY NATIONAL TITLE GROUP, INC.
By ____________________________
Xxxxxxx X. Xxxxx
Chief Executive Officer
RECEIVING PARTY:
FIDELITY NATIONAL INFORMATION SERVICES, INC.
By ____________________________
Xxxxxxx X. Xxxxxxxx
Senior Vice President
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DEFINITIONS AND FORMULAS
FOR PURPOSES OF CALCULATING COST ALLOCATION
For purposes of this Agreement and the Corporate Service Schedules:
"Direct Employee Compensation" of an employee means the aggregate of such
employee's salary, overtime, cash bonus and commission compensation and payroll
taxes attributable thereto.
"Departmental Costs" of a department/cost center means any and all costs
incurred by or allocated to that department/cost center other than Direct
Employee Compensation of the employees in the department/cost center, such as
office furniture and equipment, office space and facilities expenses, repairs &
maintenance expenses, rent and leasehold improvements, utilities,
telecommunications and IT equipment, insurance costs, employee benefits costs,
depreciation, amortization, real property and personal property taxes,
advertising and promotional expenses (if any), postage, courier and shipping
expenses, printing, reproduction, stationary, and office supplies, travel and
entertainment expenses, educational, training and recruiting expenses,
professional dues and subscriptions, fees, costs and expenses incurred in
connection with the Services that are included in FNF Administrative Overhead,
and the other similar costs that are generally characterized as "overhead"', in
each case as allocated to the department/cost center in accordance with
PROVIDING PARTY's current overhead cost allocation policy.
"Servicing Employee" means an employee of PROVIDING PARTY or its Subsidiaries or
its Affiliates who provides services to RECEIVING PARTY and its Subsidiaries
under this Agreement.
"Standard Allocation", for purposes of the Services provided under this
Agreement and the Schedules hereto, including the Cost Allocation section of the
Schedules, shall be calculated as follows:
1. Out of Pocket Costs incurred by or on behalf of RECEIVING PARTY or
its Subsidiary(s) are charged directly to it and are not part of the
Services under this Agreement or the payments to be made therefor,
and are not included in the FIS Costs Cap described in Section 3.1.
2. The Direct Employee Compensation of the PROVIDING PARTY Servicing
Employees shall be allocated to RECEIVING PARTY based on the
percentage of work time that each such Servicing Employee spends in
providing the applicable Services to RECEIVING PARTY and its
Subsidiaries. Allocations as of the Closing Date will be those
reflected in the data and results of January 2005, and shall be
applied to determine the allocations hereunder on a monthly basis,
with each work time percentage and corresponding Departmental Cost
percentage to be re-examined and updated (if appropriate) at the end
of each 6-month period following the Closing Date, it being
understood that any changes in the
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allocations (a) must be pre-approved by a full-time FIS employee and
(b) shall not affect the FIS Costs Cap.
By way of example, for a Servicing Employee of PROVIDING PARTY who
has an annual salary of $50,000, a cash bonus of $20,000, and
payroll taxes of $10,000 and who spends 40% of his work time on
providing Services under this Agreement, RECEIVING PARTY would be
allocated a Direct Employee Compensation cost of $32,000 calculated
as follows:
($50,000 + $20,000 + $10,000) x 40% = $32,000.
3. In addition to the Direct Employee Compensation, Departmental Costs
of each department/cost center of PROVIDING PARTY that has Servicing
Employees shall be allocated to RECEIVING PARTY based on a
percentage reflecting the aggregate regular salaries of all of the
Servicing Employees in that department/cost center, in relation to
the aggregate regular salaries of all employees in the
department/cost center, taking into account the percentage of work
time that each Servicing Employee in the department/cost center
spends in providing services to RECEIVING PARTY and its Subsidiaries
hereunder.
By way of example, assume that in a PROVIDING PARTY department/cost
center, there are 20 employees, 5 of whom are Servicing Employees
who each spend 40% of the work time providing services to RECEIVING
PARTY and its Subsidiaries. If the aggregate regular salaries of the
20 employees is $500,000, and the aggregate regular salaries of the
5 Servicing Employees is $300,000, then we determine the portion of
the Departmental Costs that will be allocated to RECEIVING PARTY as
follows:
First, determine the aggregate regular salaries allocable to
RECEIVING PARTY:
$300,000 x 40% = $120,000.
Then, determine the portion of the Departmental Costs to be
allocated to RECEIVING PARTY based on the aggregate regular salaries
percentage:
$120,000 / $500,000 = 24%.
In this example, 24% of the Departmental Costs of this
department/cost center will be allocated to RECEIVING PARTY.
4. Except to the extent otherwise expressly provided herein, for any
given 6-month period, all Direct Employee Compensation to be
allocated shall be determined on the basis of the applicable work
time percentages for the immediately preceding 6-month period,
except that the Direct Employee Compensation allocations applicable
on the Closing Date shall be based on the work time percentages
applicable for the calendar month June 2005. At the end of each
6-month period,
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the work time percentages shall be re-examined and the Direct
Employee Compensation will be re-allocated based on the revised work
time percentages, if any. For any given 6-month, all Departmental
Costs to be allocated shall be determined on the basis of the
applicable aggregate salaries and related percentages for the
immediately preceding 6-month period, except that the aggregate
salaries and related percentages applicable on the Closing Date
shall be based on the work time percentages and aggregate salaries
applicable for the calendar month January 2005. Without limiting the
foregoing, the parties acknowledge that although the work time
percentages and Departmental Cost percentages will be re-examined
every 6 months, no such re-examination shall increase or decrease
the FIS Costs Cap, as defined in Section 3.1(c).
5. If at any time during the Term of this Agreement RECEIVING PARTY
terminates or discontinues all or any portion of a Corporate Service
prior to the end of the Term or if any Corporate Service (or portion
thereof) automatically terminates, pursuant to Section 2.2(b)
(hereinafter referred to as a "Discontinued Service"), then
effective as of the last day of the calendar month in which such
termination or discontinuation is effective, an amount equal to the
Adjustment Amount (as herein defined) for the Discontinued Service
shall be deducted from the FIS Costs Cap and such amount shall no
longer be owing under this Agreement. For purposes of this
Agreement, the "Adjustment Amount" for a Discontinued Service shall
be calculated as follows:
(i) if the Discontinued Service is terminated or discontinued
during fiscal 2005, then the Adjustment Amount for 2005 shall equal
the annualized actual Allocated Costs and actual Direct Costs
(determined on the basis of the average monthly costs) attributable
to such Discontinued Service from January through the calendar month
immediately preceding the date of such termination or
discontinuation (hereinafter referred to as the "Annualized 2005
Cost") less the aggregate amount of actual Allocated Costs and
actual Direct Costs attributable to such Discontinued Service that
have been allocated or billed to RECEIVING PARTY through the
calendar month immediately preceding the date of such termination or
discontinuation; and, for all subsequent years, shall equal the
Annualized 2005 Cost; and
(ii) if the Discontinued Service is terminated or discontinued
after fiscal year 2005, then the Adjustment Amount for the fiscal
year in which the service is terminated or discontinued shall equal
the aggregate actual Allocated Costs and actual Direct Costs
attributable to such Discontinued Service for the 12-month period
(determined on a rolling basis) immediately preceding the date of
such termination or discontinuation (hereinafter referred to as the
"Annualized Cost") less (I) the aggregate amount of actual Allocated
Costs and actual Direct Costs attributable to such Discontinued
Service that have been allocated or billed to RECEIVING PARTY from
January of the fiscal year in which the service is terminated or
discontinued through the calendar month immediately preceding the
date of such termination or discontinuation, plus (II) the pro rata
portion of any
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increase that would be attributable to the Discontinued Service and
related Adjustment Amount from any increase in FIS' consolidated
annual revenues pursuant to Section 3.1(c)(iii)(B)(II) of this
Agreement; and, for all subsequent years, shall equal the Annualized
Cost plus the pro rata portion of any increase that would be
attributable to the Discontinued Service and related Adjustment
Amount from any increase in FIS' consolidated annual revenues
pursuant to Section 3.1(c)(iii)(B)(II) of this Agreement;
it being understood that the parties will jointly review the proposed
Adjustment Amount so calculated and, in the event that either party
believes such Adjustment Amount is not appropriate, make reasonable best
efforts to agree upon an appropriate Adjustment Amount. In the event that
no agreement can be reached, the Adjustment Amount calculated pursuant to
subparagraphs (i) or (ii) above will stand.
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