Exhibit 10.1
MASTER AGREEMENT
BY AND BETWEEN
FIDELITY NATIONAL FINANCIAL, INC.
AND
FIDELITY NATIONAL INFORMATION SERVICES, INC.
DATED AS OF ___________________, 2004
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS................................................. 2
Section 1.1 General..................................................... 2
Section 1.2 Interpretation.............................................. 14
ARTICLE 2. CONTRIBUTION AND ASSUMPTION........................ 14
Section 2.1 Contribution of Transferred Assets.......................... 14
Section 2.2 Assumption of Transferred Liabilities....................... 14
Section 2.3 Plan and Structure.......................................... 15
Section 2.4 Effective Date; Deliveries.................................. 15
Section 2.5 No Representations or Warranties............................ 16
Section 2.6 Transfers Not Effected On the Effective Date................ 16
Section 2.7 Shared Contracts............................................ 17
Section 2.8 Inter-Group Indebtedness.................................... 18
ARTICLE 3. THE IPO..................................................... 18
Section 3.1 Transactions Prior to the IPO............................... 18
Section 3.2 Conditions Precedent to Consummation of the IPO............. 19
ARTICLE 4. THE DISTRIBUTION............................................ 19
Section 4.1 The Distribution............................................ 19
Section 4.2 Actions Prior to the Distribution........................... 20
Section 4.3 Conditions to Distribution.................................. 20
Section 4.4 Certain Stockholder Matters................................. 21
ARTICLE 5. FINANCIAL AND OTHER COVENANTS............................... 22
Section 5.1 Financial and Other Information............................. 22
Section 5.2 Other Covenants............................................. 29
ARTICLE 6. ACCESS TO INFORMATION....................................... 31
Section 6.1 Restrictions on Disclosure of Information................... 31
Section 6.2 Legally Required Disclosure of Information.................. 31
Section 6.3 Access to Information....................................... 32
Section 6.4 Record Retention............................................ 33
Section 6.5 Production of Witnesses..................................... 33
Section 6.6 Reimbursement............................................... 33
Section 6.7 Other Agreements Regarding Access to Information............ 34
Section 6.8 Acquisition by Another Person............................... 34
ARTICLE 7. ADDITIONAL COVENANTS AND OTHER MATTERS...................... 34
Section 7.1 Further Assurances.......................................... 34
Section 7.2 Performance................................................. 35
Section 7.3 Insurance Matters........................................... 35
Section 7.4 FIS Release................................................. 37
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Section 7.5 FNF Release................................................. 37
Section 7.6 Approval by Disinterested Directors......................... 38
Section 7.7 Right of First Refusal...................................... 38
ARTICLE 8. INDEMNIFICATION............................................. 40
Section 8.1 Indemnification by FIS Group................................ 40
Section 8.2 Indemnification by FNF Group................................ 41
Section 8.3 Claim Procedure............................................. 42
Section 8.4 Limitations................................................. 44
ARTICLE 9. MISCELLANEOUS............................................... 46
Section 9.1 Governing Law............................................... 46
Section 9.2 Jurisdiction................................................ 46
Section 9.3 Dispute Resolution.......................................... 46
Section 9.4 Notices..................................................... 48
Section 9.5 Binding Effect and Assignment............................... 49
Section 9.6 Severability................................................ 49
Section 9.7 Entire Agreement............................................ 49
Section 9.8 Counterparts................................................ 49
Section 9.9 Expenses.................................................... 50
Section 9.10 Amendment.................................................. 50
Section 9.11 Waiver..................................................... 50
Section 9.12 Authority.................................................. 50
Section 9.13 Construction of Agreement.................................. 51
Section 9.14 Term and Termination....................................... 52
Section 9.15 Limitation on Damages...................................... 52
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EXHIBITS
Schedule 1 LSI Business Entities
Schedule 2.3 Part I: Plan and Structure for Contribution of Transferred
Assets and Assumption of Transferred Liabilities
Part II: List of Companies to Be Contributed to the FIS Group
Exhibit A Transition Services Agreement
Exhibit B Registration Rights Agreement
Exhibit C Tax Disaffiliation Agreement
Exhibit D Form of Software License Agreement
Exhibit E Intellectual Property Cross License Agreement
Exhibit F Form of CTIC Issuing Agency Agreement
Exhibit G Form of FNTIC Issuing Agency Agreement
Exhibit H Form of Title Plant Maintenance Agreement
Exhibit I Title Plant Access Agreement
Exhibit J Employee Matters Agreement
Exhibit K Lease Agreement
Exhibit L Reverse Transition Services Agreement
Exhibit M FNF Starter Repository Access Agreement
Exhibit N Cross Conveyance and Joint Ownership Agreement
Exhibit O Joint Software Development Agreement
Exhibit P SoftPro Software License Agreement
This Master Agreement (this "Agreement") is entered into as of __________,
2004, by and between Fidelity National Financial, Inc., a Delaware corporation
("FNF"), and Fidelity National Information Services, Inc., a Delaware
corporation and a subsidiary of FNF ("FIS").
RECITALS
WHEREAS, the Board of Directors of FNF has determined that it is in the
best interests of FNF and its stockholders to separate the Transferred Business
from FNF, pursuant to the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, in connection with the separation of the Transferred Business
from FNF, FNF desires to contribute, and to cause certain of its Subsidiaries to
contribute, certain Assets and Liabilities associated with the Transferred
Business, including the stock or other equity interests of certain of FNF's
Subsidiaries, to FIS and certain of FIS' Subsidiaries (collectively, the
"Contribution");
WHEREAS, FIS intends to offer and sell for its own account a limited
number of shares of FIS Common Stock pursuant to an initial public offering of
such shares (the "IPO"), and in furtherance thereof, FIS has previously filed
the initial IPO Registration Statement with the SEC which has not yet become
effective;
WHEREAS, FNF currently intends to distribute, at some time after the IPO,
to holders of shares of FNF Common Stock all the outstanding shares of FIS
Common Stock then owned by FNF (the "Distribution");
WHEREAS, FNF and FIS intend that the contribution of Assets by FNF to FIS
pursuant to Section 2.1 of this Agreement and the Distribution, taken together,
will qualify as a reorganization for U.S. federal income tax purposes pursuant
to which no gain or loss will be recognized by FNF or its stockholders under
Section 355, 361(b)(3), 368(a)(1)(D) and related provisions of the Code, and
that this Agreement is intended to be, and is hereby adopted as, a plan of
reorganization under Section 368 of the Code; and
WHEREAS, the parties intend in this Agreement and the Ancillary Agreements
to set forth the principal arrangements between them regarding the Contribution,
the IPO and the Distribution.
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 hereby agree as follows:
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ARTICLE 1. DEFINITIONS
Section 1.1 General.
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):
"Access" has the meaning set forth in Section 6.3.
"Action" means any demand, action, lawsuit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority or
any arbitration or mediation tribunal.
"Affiliate" means, with respect to any specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person; provided,
however, that, for purposes of this Agreement, no member of either Group shall
be deemed to be an Affiliate of any member of the other Group. 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.
"Agreement" has the meaning given in the Preamble.
"Ancillary Agreements" means each of the CTIC Issuing Agency Agreements,
the FNTIC Issuing Agency Agreements, the Employee Matters Agreement, the
Software License Agreements, the Intellectual Property Cross License Agreement,
the Lease Agreement, the Registration Rights Agreement, the Tax Disaffiliation
Agreement, the Title Plant Access Agreement, the Title Plant Maintenance
Agreements, the Transition Services Agreement, the Reverse Transition Services
Agreement, the FNF Starter Repository Access Agreement, the Cross Conveyance and
Joint Ownership Agreement, the SoftPro Software License Agreement and the Joint
Software Development Agreement, including any exhibits, schedules, attachments,
tables or other appendices thereto, and each other agreement and other
instrument contemplated herein or therein, all as may be amended from time to
time.
"Annual Financial Statements" has the meaning set forth in Section
5.1(a)(v).
"Applicable Period" has the meaning set forth in Section 7.7(a).
"Assets" means any and all assets, properties and rights (including
goodwill) of every kind, nature and description, whether real, personal or
mixed, tangible or intangible, accrued, contingent or otherwise, whether now
existing or hereafter acquired, wheresoever situated, and in each case whether
or not recorded or reflected or required to be recorded or reflected on the
books and records or financial statements of any Person, including, without
limitation, the following: (1) all cash, cash equivalents, notes, accounts
receivable, notes receivable and mortgages receivable (whether current or
non-current); (2) all interests in any capital stock or
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other equity interests, all rights as a partner or joint venturer or
participant, certificates of deposit, banker's acceptances, bonds, notes,
debentures, evidences of indebtedness, certificates of interest or participation
in profit-sharing agreements, collateral-trust certificates, preorganization
certificates or subscriptions, utility deposits, transferable shares, investment
contracts, voting-trust certificates, fractional undivided interests in oil, gas
or other mineral rights, all loans, advances or other extension of credit or
capital contributions, and all puts, calls, straddles, warrants, options and
other similar rights, and other securities of any kind; (3) all Intellectual
Property Rights; (4) all rights, title and interests in, to and under leases,
subleases, contracts, licenses, permits, registrations, certifications,
distribution arrangements, open purchase orders for raw materials, supplies,
parts or services, unfilled orders for the manufacture and sale of products,
other sales and purchase agreements, confidentiality agreements, and other
agreements and business arrangements; (5) all rights, title and interests in, to
and under Real Property; (6) all leasehold improvements, fixtures, trade
fixtures, machinery, equipment (including transportation and office equipment),
tools, dies, furniture and furnishings; (7) all fixtures, machinery, equipment,
tools, other inventories of supplies and spare parts, automobiles, other
vehicles and transportation equipment, furniture and office equipment, office
supplies, production supplies, spare parts, other miscellaneous supplies,
models, prototypes, test devices and other tangible assets or properties of any
kind; (8) all apparatus, computers and other electronic data processing and
computer equipment and all computer applications, programs and other software,
including operating software, network software, firmware, middleware, design
software, design tools, systems documentation and instructions; (9) all written
technical information, data, specifications, research and development
information, engineering drawings, operating and maintenance manuals, and
materials and analyses prepared by consultants and other third parties; (10) all
raw materials, parts, work-in-process, supplies, finished goods, consigned
goods, products and other inventories; (11) all deposits, letters of credit,
performance and surety bonds, prepayments and prepaid or advanced payments and
expenses, trade accounts and other accounts and notes receivable; (12) all
rights to causes of action, lawsuits, judgments, claims, choses in action, all
rights under express or implied warranties, all claims or rights against any
Person arising from the ownership of any Asset, all rights in connection with
any bids or offers, all rights of recovery and all rights of setoff of any kind
and demands of any nature, in each case whether mature, contingent or otherwise,
whether in tort, contract or otherwise, whether arising by way of counterclaim
or otherwise; (13) all rights to receive mail, payments on accounts receivable
and other communications; (14) all rights under insurance policies and all
rights in the nature of insurance, indemnification or contribution; (15) all
accounting and other files, records and data, including schematics, books,
manuals, technical information and engineering data, programming information,
computerized data, books of account, ledgers, employment records, lists and
files relating to customers, vendors, suppliers and agents, quality records and
reports, research records, cost information, pricing data, market surveys and
marketing know-how, mailing lists, purchase and sale records and correspondence,
advertising and marketing records, of every kind, whether on paper, microfilm,
microfiche, computer tape or disc, magnetic tape or any other form; (16) all
goodwill as a going concern and other intangible properties; (17) all rights
under employee contracts, including any rights thereunder to restrict an
employee from competing in certain respects; and (18) all permits, approvals,
orders, authorizations, consents, licenses, certificates, franchises, exemptions
of, or filings or registrations with or issued by, any Governmental Authority in
any jurisdiction, and all pending applications therefor.
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"Business" means the Transferred Business or the FNF Business, as the
context requires.
"Business Day" means any day, other than a Saturday or Sunday, or a day on
which banking institutions are authorized or required by law or regulation to
close in Jacksonville, Florida or New York, New York.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq.
"Claim Notice" has the meaning set forth in Section 8.3(a).
"Claimed Amount" has the meaning set forth in Section 8.3(a).
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Contracts" means any contract, agreement, lease, license, sales order,
purchase order, instrument or other commitment that is binding on any Person or
any part of its property under applicable law.
"Contribution" has the meaning given in the Recitals.
"Controlling Party" has the meaning set forth in Section 8.3(d)(ii).
"Cross Conveyance and Joint Ownership Agreement" means that certain Cross
Conveyance and Joint Ownership Agreement entered into by and between LSI Title
Company and Rocky Mountain Support Services, substantially in the form of
EXHIBIT N, as such Cross Conveyance and Joint Ownership Agreement may be amended
from time to time.
"CTIC Issuing Agency Agreements" means each of the CTIC Issuing Agency
Agreements entered into by and between Chicago Title Insurance Company and
certain FIS Affiliates, each substantially in the form of EXHIBIT F, as such
CTIC Issuing Agency Agreements may be amended from time to time.
"Damages" means all losses, claims, demands, damages, Liabilities,
judgments, dues, penalties, assessments, fines (civil, criminal or
administrative), costs, obligations, liens, forfeitures, settlements, payments,
costs, 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), of any nature or kind, whether or
not the same would properly be reflected on a balance sheet, but excluding any
special, indirect, incidental, punitive or consequential damages whatsoever,
including, without limitation, damages for lost profits and lost business
opportunities.
"Disclosing Party" has the meaning set forth in Section 6.2.
"Dispute" has the meaning set forth in Section 9.3(a).
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"Distribution" has the meaning set forth in the Recitals.
"Distribution Agent" has the meaning set forth in Section 4.4(a).
"Distribution Date" means the date as of which the Distribution shall be
effected, to be determined by, or under the authority of, the Board of Directors
of FNF consistent with this Agreement.
"Effective Date" means _______________, 2004, except to the extent that
any particular transfer or transaction to which the Effective Date relates
requires any prior approval of, or prior notice to, any Governmental Authority,
in which event the Effective Date, solely for purposes of such transfer or
transaction, shall be the Business Day immediately following the receipt of such
approval or the expiration of the notice period applicable thereto.
"Employee Matters Agreement" means that certain Employee Matters Agreement
entered into by and between FNF and FIS, substantially in the form of EXHIBIT J,
as such Employee Matters Agreement may be amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
"Financial Statements" means the Annual Financial Statements and Quarterly
Financial Statements collectively.
"FNTIC Issuing Agency Agreements" means each of the FNTIC Issuing Agency
Agreements entered into by and between Fidelity National Title Insurance Company
and certain FIS Affiliates, each substantially in the form of EXHIBIT F, as such
FNTIC Issuing Agency Agreements may be amended from time to time.
"FIS" has the meaning given in the Preamble.
"FIS Capital Stock" means all classes or series of capital stock of FIS,
including the FIS Common Stock, and all options, warrants and other rights to
acquire such capital stock.
"FIS Common Stock" means the common stock, $0.0001 par value per share, of
FIS.
"FIS Group" means FIS, the FIS Subsidiaries and each Person that FIS
directly or indirectly controls (within the meaning of the Securities Act)
immediately after the Effective Date, and each other Person that becomes an
Affiliate of FIS after the Effective Date.
"FIS Indebtedness" means liabilities (whether long-term or short-term) for
borrowed money (including capitalized leases) of the FIS Group collectively, as
determined for purposes of its Financial Statements prepared in accordance with
GAAP.
"FIS Indemnified Parties" has the meaning set forth in Section 8.2.
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"FIS Indemnitees" means FIS, each Affiliate of FIS and each of their
respective Representatives and each of the heirs, executors, successors and
assigns of any of the foregoing.
"FIS Public Filings" has the meaning set forth in Section 5.1(a)(viii).
"FIS Released Claims" has the meaning set forth in Section 7.4.
"FIS Shared Contract" means any Contract included in the Transferred
Assets relating in part to the Transferred Business and in part to the FNF
Business.
"FIS Subsidiaries" means all direct and indirect Subsidiaries of FIS.
"FIS Third Party" means any Person other than a member of the FIS Group or
the FNF Group.
"FIS Transfer Agent" means the transfer agent and registrar for the FIS
Common Stock.
"FIS Voting Stock" has the meaning set forth in Section 5.2.
"FIS' Auditors" has the meaning set forth in Section 5.1(b)(i).
"FNF" has the meaning set forth in the preamble.
"FNF Annual Statements" has the meaning set forth in Section 5.1(b)(ii).
"FNF Business" means the businesses or operations of the FNF Group other
than the Transferred Business.
"FNF Common Stock" means the common stock, par value $0.0001 per share, of
FNF.
"FNF Disclosure Portions" means all material set forth in, or incorporated
by reference into, the IPO Registration Statement to the extent relating
exclusively to (i) the FNF Group, (ii) the FNF Business, (iii) FNF's intentions
with respect to the Distribution, or (iv) the terms of the Distribution,
including, without limitation, the form, structure and terms of any
transaction(s) and/or offering(s) to effect the Distribution and the timing of
and conditions to the consummation of the Distribution.
"FNF Group" means FNF, the FNF Subsidiaries and each Person that is an
Affiliate of FNF (other than any member of the FIS Group) immediately after the
Effective Date, and each other Person that becomes an Affiliate of FNF after the
Effective Date.
"FNF Indemnified Parties" has the meaning set forth in Section 8.1.
"FNF Public Filings" has the meaning set forth in Section 5.1(a)(xii).
"FNF Released Claims" has the meaning set forth in Section 7.5.
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"FNF Shared Contract" means any Contract relating in part to the
Transferred Business not included in the Transferred Assets.
"FNF Starter Repository Access Agreement" means that certain FNF Starter
Repository Access Agreement to be entered into between FNF and FIS,
substantially in the form of EXHIBIT M, as such FNF Starter Repository Access
Agreement may be amended from time to time.
"FNF Subsidiaries" means all direct and indirect Subsidiaries of FNF.
"FNF's Auditors" has the meaning set forth in Section 5.1(b)(ii).
"GAAP" means U.S. generally accepted accounting principles, consistently
applied.
"Governmental Approvals" means any notices, reports or other filings to be
made, or any consents, registrations, approvals, licenses, permits or
authorizations to be obtained from, any Governmental Authority, and any
financial instruments or assurances required to be maintained in connection with
such Governmental Approvals.
"Governmental Authority" means any federal, state, local, foreign or
international court, government, department, commission, board, bureau or
agency, or any other regulatory, administrative or governmental authority,
including the NYSE.
"Group" means either the FNF Group or the FIS Group, as the context
requires.
"Indemnifiable Losses" means all Damages suffered (and not actually
reimbursed by insurance proceeds) by an Indemnitee, including any reasonable
out-of-pocket fees, costs or expenses of enforcing any indemnity hereunder;
provided that "Indemnifiable Losses" shall not include: (i) any special,
indirect, incidental, punitive or consequential damages whatsoever of any
Indemnitee, including, without limitation, damages for lost profits and lost
business opportunities, arising in connection with any Action other than any
Action by any Person (including, without limitation, any Governmental Authority)
who is not a party to this Agreement or an Affiliate or Subsidiary of such a
party; or (ii) any such Damages caused by, resulting from or arising out of the
gross negligence, willful misconduct or fraud of such Indemnitee.
"Indemnified Party" has the meaning set forth in Section 8.3(a).
"Indemnifying Party" has the meaning set forth in Section 8.3(a).
"Indemnifying Party" means a Person who or which is obligated under this
Agreement to provide indemnification.
"Indemnitee" means a Person who or which may seek indemnification under
this Agreement.
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"Indemnity Payment" means an amount that an Indemnifying Party is required
to pay to or in respect of an Indemnitee pursuant to Article IV.
"Independent Offeror" means a Person who is not directly or indirectly
controlling, controlled by, or under common control with any member of either
the FIS Group or the FNF Group, and is not an Affiliate of either the FIS Group
or the FNF Group.
"Information" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, methodologies, designs, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts, data, computer data, disks,
diskettes, tapes, computer programs or other software, marketing plans, customer
names, communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data, provided, however, that "Information"
shall not be deemed to include information in the unaided memory of any
individual.
"Intellectual Property" means patents and patent rights, trademarks and
trademark rights, trade names and trade name rights, service marks and service
xxxx rights, service names and service name rights, copyrights and copyright
rights and other proprietary intellectual property rights and all pending
applications for and registrations of any of the foregoing.
"Intellectual Property Cross License Agreement" means that certain
Intellectual Property Cross License Agreement entered into by and between FNF
and FIS, substantially in the form of EXHIBIT E, as such Intellectual Property
Cross License Agreement may be amended from time to time.
"Intellectual Property Rights" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof; (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivation, and combinations
thereof and including all goodwill associated therewith ("Marks"), including
registered and unregistered Marks and all applications, registrations, and
renewals in connection with the Marks; (c) all copyrightable works, all
copyrights, and all applications, registrations, and renewals in connection
therewith, all computer software (including data and related documentation), all
websites as well as supporting HTML coding and source code, all mask works and
all applications, registrations, and renewals in connection therewith; (d) all
trade secrets and confidential information, including ideas, research and
development, know-how, methodologies, proprietary processes and formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals; (e) any
income, royalties and payments which accrue as of the IPO Closing or thereafter
with respect to any of the foregoing items, including payments for past,
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present or future infringements or misappropriation thereof, the right to xxx
and recover for past infringements or misappropriation thereof; (f) any goodwill
associated with any of the foregoing; (g) all other proprietary rights; and (h)
all copies and tangible embodiments thereof (in whatever form or medium).
"Intended Transferee" has the meaning set forth in Section 2.6(b).
"Intended Transferor" has the meaning set forth in Section 2.6(b).
"Inter-Group Indebtedness" means indebtedness for borrowed funds between a
member of the FNF Group and a member of the FIS Group other than the $40,000,000
borrowing made in connection with the acquisition of Geotrac, Inc. on July 2,
2004.
"IPO" has the meaning given in the Recitals.
"IPO Registration Statement" means the registration statement on Form S-1
(SEC Registration Number 333-115870) as filed by FIS with the SEC in connection
with the IPO, together with all amendments and supplements thereto.
"IPO Settlement Date" means the date on which the First Time of Delivery
(as defined in the Underwriting Agreement) occurs.
"IRS" means the United States Internal Revenue Service.
"Joint Software Development Agreement" means that certain Joint Software
Development Agreement to be entered into by and between Rocky Mountain Support
Services, Inc. and Property Insight, LLC, substantially in the form of EXHIBIT
O, as such Joint Software Development Agreement may be amended from time to
time.
"Lease Agreement" means that certain Lease Agreement to be entered into by
and between Fidelity Information Services, Inc. and FNF, substantially in the
form of EXHIBIT K, as such Lease Agreement may be amended from time to time.
"Liabilities" means any and all losses, claims, charges, debts, demands,
actions, causes of action, lawsuits, damages, obligations, payments, costs, fees
and expenses, sums of money, bonds, indemnities and similar obligations,
covenants, contracts, controversies, agreements, promises, omissions,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, inchoate or otherwise, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, and
including those arising under any law, rule, regulation, Action, threatened or
contemplated Action (including the costs, fees and expenses of demands,
assessments, judgments, settlements and compromises relating thereto and
out-of-pocket attorneys' costs, fees and expenses and any and all costs and
expenses incurred in investigating, preparing or defending against any such
Actions or threatened or contemplated Actions), order or consent decree of any
Governmental Authority or any award of any arbitrator or mediator of any kind,
and those arising under any contract, commitment or undertaking, including those
arising
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under this Agreement or any Ancillary Agreement, in each case, whether or not
recorded or reflected or required to be recorded or reflected on the books and
records or financial statements of any Person.
"Losses" means losses, Liabilities, damages, claims, demands, judgments,
fines, penalties, obligations, payments, costs, fees, expenses, Actions or
settlements of any nature or kind, including all reasonable out-of-pocket costs,
fees and expenses (legal, accounting or otherwise as such costs are incurred)
relating thereto.
"LSI Business" means the business conducted by the entities identified in
SCHEDULE 1, relating primarily to the provision of providing certain appraisal,
title and closing services to residential mortgage originators, originators;
provided that as used herein such term is limited solely to the extent and scope
of such operations as in effect on the Effective Date.
"Non-controlling Party" has the meaning set forth in Section 8.3(d)(ii).
"NYSE" means the New York Stock Exchange, Inc.
"Offer" has the meaning set forth in Section 7.7(b).
"Offer Notice" has the meaning set forth in Section 7.7(b).
"Ordinary Course of Business" means the ordinary course of the Transferred
Business as conducted by FNF and its Subsidiaries prior to the Effective Date
consistent with historical custom and practice during normal day-to-day
operations and not requiring any special authorization of any nature.
"Owning Party" has the meaning set forth in Section 6.2.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
"PI Business" means the business of management of certain title plant
assets of certain members of the FNF Group pursuant to the Title Plant
Maintenance Agreements and the Title Plant Access Agreement, and the title plant
management services provided by PI, and access to the title plants sold by PI,
to other FIS Third Party customers.
"PI" means Property Insight, LLC, a subsidiary of FIS.
"Possessor" has the meaning set forth in Section 6.3.
"Prohibited Act" has the meaning set forth in Section 2.2.
"Quarterly Financial Statements" has the meaning set forth in Section
5.1(a)(iv).
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"Real Property" means real property of whatever nature, including all
easements and rights of way, servitudes, leases, subleases, permits, licenses,
options and other real property rights and interests, as an owner, mortgagee or
holder of a security interest in real property, lessor, sublessor, lessee,
sublessee or otherwise, and all rights, title and interests in and to all
buildings, fixtures and improvements thereon.
"Record Date" means the close of business on the date to be determined by
FNF's Board of Directors as the record date for determining the stockholders of
FNF entitled to receive shares of FIS Common Stock pursuant to the Distribution.
"Registration Rights Agreement" means the Registration Rights Agreement to
be entered into between FNF and FIS prior to the IPO, as attached hereto as
EXHIBIT B, as such Registration Rights Agreement may be amended from time to
time.
"Regulation S-K" means Regulation S-K of the General Rules and Regulations
promulgated by the SEC pursuant to the Securities Act.
"Regulation S-X" means Regulation S-X of the General Rules and Regulations
promulgated by the SEC pursuant to the Securities Act.
"Representatives" means, with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants or
attorneys.
"Requestor" has the meaning set forth in Section 6.3.
"Retention Period" has the meaning set forth in Section 6.4.
"Reverse Transition Services Agreement" means that certain Reverse
Transition Services Agreement to be entered into by and between FNF and FIS,
substantially in the form of EXHIBIT L, as such Reverse Transition Services
Agreement may be amended from time to time.
"SEC" means the United States Securities and Exchange Commission, or any
successor agency.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, together with the rules and regulations promulgated thereunder.
"SoftPro Software License Agreement" means that certain Software License
Agreement to be entered into between FNIS SoftPro, a division of Fidelity
National Information Solutions, Inc. and FNF, substantially in the form of
EXHIBIT P, as such SoftPro Software License Agreement many be modified from time
to time.
"Software License Agreements" means each of the Software License
Agreements to be entered into by and between certain members of the FNF Group on
the one hand and certain members of the FIS Group on the other hand, each
substantially in the form of EXHIBIT D, as such Software License Agreements may
each be amended from time to time.
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"Steering Committee" has the meaning set forth in Section 9.3(a)(i).
"Subsidiary" means with respect to any specified Person, any corporation
or other legal entity of which such Person 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; provided, however, that unless the context otherwise
requires, references to Subsidiaries of FNF will not include the entities that
will be transferred to FIS or other members of the FIS Group pursuant to this
Agreement, whether the transfer of such entities occurs prior to or after the
Effective Date.
"Tax Advisor" means a United States tax counsel or accountant of
recognized national standing.
"Tax Control" means the definition of "control" set forth in Section
368(c) of the Code.
"Tax Disaffiliation Agreement" means that certain Tax Disaffiliation
Agreement entered by and between FNF and FIS, substantially in the form of
EXHIBIT C, as such Tax Disaffiliation Agreement may be amended from time to
time.
"Tax" and "Taxes" means any income, gross income, gross receipts, profits,
capital stock, franchise, withholding, payroll, social security, workers
compensation, unemployment, disability, property, ad valorem, stamp, excise,
severance, occupation, service, sales, use, license, lease, transfer, import,
export, value added, alternative minimum, estimated or other tax (including any
fee, assessment, or other charge in the nature of or in lieu of any tax) imposed
by any governmental entity or political subdivision thereof, and any interest,
penalties, additions to tax, or additional amounts in respect of the foregoing.
"Tax-Free Status" means the qualification of the contributions set forth
herein and the Distribution, taken together, (a) as a reorganization described
in Sections 355(a) and 368(a)(1)(D) of the Code, (b) as a transaction in which
the stock distributed thereby is "qualified property" for purposes of Sections
355(d), 355(e) and 361(c) of the Code and (c) as a transaction in which FNF, FIS
and the shareholders of FNF recognize no income or gain for U.S. federal income
tax purposes pursuant to Sections 355, 361 and 1032 of the Code, other than, in
the case of FNF and FIS, intercompany items or excess loss accounts taken into
account pursuant to the Treasury Regulations promulgated pursuant to Section
1502 of the Code.
"Term" has the meaning set forth in Section 9.14.
"Third-Party Claim" has the meaning set forth in Section 8.3(d)(i).
"Title Plant Access Agreement" means that certain Title Plant Access
Agreement to be entered into by and between PI and Rocky Mountain Support
Services, Inc., a Subsidiary of FNF, substantially in the form of EXHIBIT I, as
such Title Plant Access Agreement may be amended from time to time.
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"Title Plant Maintenance Agreements" means the two Title Plant Maintenance
Agreements, to be entered into by and between PI and certain Subsidiaries of
FNF, substantially in the form of EXHIBIT H, as such Title Plant Maintenance
Agreements may be amended from time to time.
"Transfer" means (i) when used as a verb, the act of selling, giving,
transferring, assigning, conveying or otherwise disposing of and (ii) when used
as a noun, any sale, gift, transfer, assignment, conveyance or other
disposition.
"Transferred Assets" means all of the FNF Group's right, title and
interest in and to: (i) any and all Assets of FNF and its Subsidiaries that are
used or held for use in the Transferred Business; and (ii) any and all Assets
that are expressly listed, scheduled or otherwise clearly described in any
Ancillary Agreement as Assets to be transferred to FIS or any other member of
the FIS Group, except to the extent limited in any of the Ancillary Agreement.
"Transferred Business" means the financial institution processing and
outsourcing business, lender services business, default management business and
real estate related services businesses conducted in each case by the entities
to be contributed to FIS as set forth in Part II of Schedule 2.3 (including, for
purposes of this definition, any member of the FIS Group) prior to the Effective
Date.
"Transferred Liabilities" means (i) any and all Liabilities to the extent
arising out of or relating to the operation of the Transferred Business or the
Transferred Assets, in each case whether such Liabilities arise or accrue prior
to, on or after the Effective Date (other than Tax-related Liabilities which are
specifically retained by FNF under the Tax Disaffiliation Agreement and
employee-related Liabilities which are specifically retained by FNF under the
Employee Matters Agreement); (ii) any and all Liabilities that are expressly
listed, scheduled or otherwise described in any Ancillary Agreement as
Liabilities to be assumed by FIS or any member of the FIS Group; and (iii) all
obligations of the FIS Group under or pursuant to this Agreement, any Ancillary
Agreement or any other instrument entered into in connection herewith or
therewith; provided, however, that "Transferred Liabilities" shall not include
any Liabilities to the extent arising out of or relating to the operation of any
FNF Business or any Prohibited Act related to any FNF Business, in either case
whether such Liabilities arise or accrue prior to, on or after the Effective
Date.
"Transition Services Agreement" means that certain Transition Services
Agreement to be entered into by and between FNF and FIS, substantially in the
form of EXHIBIT A, as such Transition Services Agreement may be amended from
time to time.
"Underwriters" means the managing underwriters for the IPO as described in
the IPO Registration Statement.
"Underwriting Agreement" means that certain Underwriting Agreement, FIS,
FNF and the Underwriters relating to the IPO, as amended from time to time.
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Section 1.2 Interpretation.
(a) For purposes of this Agreement (including all exhibits, schedules and
amendments), unless the context otherwise requires, (i) all terms defined herein
include the plural as well as the singular, the masculine, feminine or neuter
gender shall be deemed to include the others whenever the context so requires,
(ii) all accounting terms used herein but not otherwise defined herein shall
have the meaning given to them under GAAP, and (iii) references to any Person
include successors of such Person by consolidation and merger and transferees of
all or substantially all its assets (provided that such successor has duly
assumed in writing all such Person's obligations, if any, hereunder and under
all agreements to which such predecessor is a party).
(b) Words such as "herein," "hereinafter," "hereof," "hereto," "hereby"
and "hereunder," and words of like import refer to this Agreement, unless the
context requires otherwise.
(c) References herein to any agreement or other instrument shall, unless
the context otherwise requires (or the definition thereof otherwise specifies),
be deemed references to the same as it may from time to time be changed, amended
or extended in accordance with its terms.
(d) All references in this Agreement to times of the day shall be to the
city of Jacksonville, Florida time.
ARTICLE 2. CONTRIBUTION AND ASSUMPTION
Section 2.1 Contribution of Transferred Assets.
Unless otherwise provided in this Agreement or in any Ancillary Agreement,
on the Effective Date, FNF will (and FNF will cause its applicable Subsidiaries
to) Transfer to FIS and its applicable Subsidiaries, and FIS will (and FIS will
cause its applicable Subsidiaries to) receive and accept from FNF and its
applicable Subsidiaries, all of FNF's and its applicable Subsidiaries' right,
title and interest in and to the Transferred Assets, except to the extent that
any particular transfer of Transferred Assets requires any prior Governmental
Approval, in which event such Transferred Assets shall be Transferred by FNF (or
its applicable Subsidiaries, as the case may be) on the Business Day immediately
following the receipt of such Governmental Approval or the expiration of the
notice period applicable thereto. Such Transfers will be effective at such times
as provided in each respective Ancillary Agreement and will be subject to the
terms and conditions of this Agreement and any applicable Ancillary Agreement.
The parties agree to expeditiously pursue all applicable Governmental Approvals
required in connection with the Transfer of the Transferred Assets.
Section 2.2 Assumption of Transferred Liabilities.
Unless otherwise provided in this Agreement or in any Ancillary Agreement,
on the Effective Date, FIS will (and FIS will cause its applicable Subsidiaries
to) assume, and on a
14
timely basis pay, perform, satisfy and discharge the Transferred Liabilities in
accordance with their respective terms, except to the extent that any particular
Transferred Liabilities relate, in the mutual determination of the parties,
solely to Transferred Assets the transfer of which requires any prior approval
of, or prior notice to, any Governmental Authority, in which event such
Transferred Liabilities shall be assumed by FIS (or its applicable Subsidiaries,
as the case may be) on the date on which such Transferred Assets are transferred
to FIS (or its applicable Subsidiaries, as the case may be) pursuant to Section
2.1, provided, however, that FIS shall not be obligated to timely pay, perform,
satisfy or discharge a Transferred Liability the amount or terms of which are
the subject of a good faith dispute between FIS and the applicable payee or
other party, and FIS shall pay, perform, satisfy or discharge such Transferred
Liability in accordance with any settlement of such dispute. FIS and its
applicable Subsidiaries will be responsible for all Transferred Liabilities,
regardless of (a) when or where such Liabilities arose or arise, (b) whether the
facts on which they are based occurred on, prior to or subsequent to the
Effective Date, (c) where or against whom such Liabilities are asserted or
determined, (d) whether asserted or determined on, prior to or subsequent to the
Effective Date, or (e) whether arising from or alleged to arise from negligence,
recklessness, violation of law, fraud or misrepresentation (each, a "Prohibited
Act") by any member of the FNF Group with respect to the Transferred Business,
but not the FNF Business, the FIS Group with respect to the Transferred
Business, but not the FNF Business, or any of their respective past or present
Representatives with respect to the Transferred Business; provided, however,
that this clause 2.2(e) will not limit FIS' right to make a claim against a FNF
Group member for Damages suffered by it to the extent that such Damages are a
direct result of a Prohibited Act committed by a FNF Group member; provided,
further, that, to the extent applicable, FIS' right to make such a claim may
otherwise be limited in any Ancillary Agreement. Such assumptions of Transferred
Liabilities will be effective at such times as provided in each respective
Ancillary Agreement and will be subject to the terms and conditions of this
Agreement and any applicable Ancillary Agreement. The parties agree to
expeditiously pursue all applicable Governmental Approvals in connection with
the assumption of the Transferred Liabilities.
Section 2.3 Plan and Structure.
The contribution of the Transferred Assets pursuant to Section 2.1 and the
assumption of the Transferred Liabilities pursuant to Section 2.2 shall each
occur in accordance with the plan and structure set forth on Schedule 2.3.
Section 2.4 Effective Date; Deliveries.
In furtherance of the Transfer of the Transferred Assets and the
assumption of the Transferred Liabilities as set forth in this Agreement and the
Ancillary Agreements, unless otherwise provided in this Agreement or in any
Ancillary Agreement, on the Effective Date, the parties will execute and
deliver, and they will cause their respective Subsidiaries and Representatives,
as applicable, to execute and deliver: (a) each of the Ancillary Agreements; (b)
such bills of sale, stock powers, certificates of title, assignments of
Contracts, subleases and other instruments of transfer, conveyance and
assignment as, and to the extent, necessary or convenient to evidence the
Transfer to FIS (or,
15
as applicable, its Subsidiaries) of all of FNF's (or, as applicable, its
Subsidiaries') right, title and interest in and to the Transferred Assets; and
(c) such assumptions of Contracts and other instruments of assumption as, and to
the extent, necessary or convenient to evidence the valid and effective
assumption of the Transferred Liabilities by FIS (or, as applicable, its
Subsidiaries).
Section 2.5 No Representations or Warranties.
FIS (on behalf of itself and each member of the FIS Group) acknowledges
and agrees that, except as expressly set forth in this Agreement or any
Ancillary Agreement, (a) no member of the FNF Group is making any
representations or warranties in this Agreement or any Ancillary Agreement,
express or implied, as to the condition, quality, merchantability or fitness of
any Transferred Asset transferred pursuant to this Agreement, any Ancillary
Agreement or any other agreement contemplated hereby or thereby, (b) all such
Transferred Assets will be transferred on an "as is," "where is" basis (and in
the case of any Real Property, by means of a quitclaim or similar form deed or
conveyance), and (c) subject to its rights under Section 8.2, FIS and its
Affiliates will bear the economic and legal risks that any conveyance will prove
to be insufficient to vest in them good and marketable title, free and clear of
any security interest, pledge, lien, charge, claim or other encumbrance of any
nature whatsoever; and that any consents or approvals, and that any requirements
of laws or judgments, with respect to the transfer of the Transferred Assets,
have been received or met.
Section 2.6 Transfers Not Effected On the Effective Date.
(a) The parties acknowledge and agree that some of the transfers
contemplated by this Article 2 may not be effected on the Effective Date due to
the inability of the parties to obtain necessary consents or approvals or the
inability of the parties to take certain other actions necessary to effect such
transfers on the Effective Date. To the extent any transfers contemplated by
this Article 2 have not been fully effected on the Effective Date, FNF and FIS
will cooperate and use commercially reasonable efforts (and will cause the
applicable members of its respective Group to use such efforts) to obtain any
necessary consents or approvals or take any other actions necessary to effect
such transfers as promptly as practicable following the Effective Date. FNF and
FIS agree that all costs and expenses associated with or resulting from the
actions undertaken pursuant to this Section 2.6(a) shall be borne equally
between the FNF Group on the one hand and the FIS Group on the other.
(b) If an attempted assignment would be ineffective or would impair the
rights of FIS or one of its Subsidiaries (an "Intended Transferee") under any
such Transferred Asset so that the Intended Transferee would not receive all
such rights, then FNF will provide to, or cause to be provided to, the Intended
Transferee, the rights of any such Transferred Asset (limited, with respect to
the failure to Transfer any Transferred Assets because of the inability to
obtain a Governmental Approval, to the extent permitted by law), and take such
other actions as may reasonably be requested by the other party in order to
place the Intended Transferee, insofar as reasonably possible, in the same
position as if such Transferred Asset had been transferred as contemplated
hereby. In connection therewith, (i) FNF or one of its Subsidiaries (an
"Intended Transferor") will promptly pass along to the Intended Transferee when
received all benefits
16
derived by the Intended Transferor with respect to any such Transferred Asset,
and (ii) the Intended Transferee will assume all of the Intended Transferor's
obligations with respect to any such Transferred Asset. If and when such
consents or approvals are obtained or such other required actions have been
taken, the transfer of the applicable Transferred Asset will be effected in
accordance with the terms of this Agreement and any applicable Ancillary
Agreement. The Intended Transferee will bear all costs and expenses incurred by
the Intended Transferor associated with actions of the Intended Transferor
pursuant to this Section 2.6(b).
Section 2.7 Shared Contracts.
The parties agree as follows:
(a) At the written request of FIS, FNF will, and will cause other members
of the FNF Group to, make available to FIS or applicable members of the FIS
Group benefits and rights under the FNF Shared Contracts (except where the
benefits or rights under such FNF Shared Contracts are specifically provided
pursuant to an Ancillary Agreement) which are at least substantially equivalent
to the benefits and rights enjoyed by the FNF Group under each FNF Shared
Contract for which such request is made by FIS, to the extent such benefits
relate to the Transferred Business; provided, however, that the applicable
members of the FIS Group will assume (or promptly reimburse FNF for) the
obligations and liabilities under the relevant FNF Shared Contracts associated
with the benefits so made available to them. FNF and FIS agree that all costs
and expenses associated with or resulting from the actions undertaken pursuant
to this Section 2.7(a), including the payment of any underlying license fees and
any costs associated with any FNF Shared Contract as a result of the actions of
the FNF Group due to the operation of this Section 2.7(a), shall be borne by
FIS.
(b) At the written request of FNF, FIS will, and will cause other members
of the FIS Group to, make available to FNF or applicable members of the FNF
Group benefits and rights under the FIS Shared Contracts (except where the
benefits or rights under such FIS Shared Contracts are specifically provided
pursuant to an Ancillary Agreement) which are at least substantially equivalent
to the benefits and rights enjoyed by the FIS Group under each FIS Shared
Contract for which such request is made by FNF, to the extent such benefits
relate to the FNF Business; provided, however, that the applicable members of
the FNF Group will assume (or promptly reimburse FIS for) the obligations and
liabilities under the relevant FIS Shared Contracts associated with the benefits
so made available to them. FNF and FIS agree that all costs and expenses
associated with or resulting from the actions undertaken pursuant to this
Section 2.7(b), including the payment of any underlying license fees and any
costs associated with any FIS Shared Contracts as a result of the actions of the
FIS Group due to the operation of this Section 2.7(b), shall be borne by FNF.
(c) The parties' rights and obligations pursuant to this Section 2.7 will
terminate upon the earliest to occur of (i) the Distribution Date and (ii), with
respect to any FNF Shared Contract or FIS Shared Contract in particular, such
time that the arrangement pursuant to this Section 2.7 is no longer permitted
thereunder.
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Section 2.8 Inter-Group Indebtedness.
On or prior to the IPO Settlement Date, each party will repay, and each
party will cause each of its Subsidiaries to repay, as applicable, its
respective Inter-Group Indebtedness in accordance with the terms of such
Inter-Group Indebtedness.
ARTICLE 3. THE IPO
Section 3.1 Transactions Prior to the IPO.
Subject to the conditions hereof, FNF and FIS will use their commercially
reasonable efforts to consummate the IPO, including, without limitation, by
taking the actions specified in this Section 3.1.
(a) FIS will file such amendments or supplements to the IPO Registration
Statement as may be necessary in order to cause the IPO Registration Statement
to become and remain effective as required by applicable law or by the
Underwriters, including, without limitation, filing such amendments and
supplements thereto as may be required by the Underwriting Agreement, the SEC or
applicable securities laws, or which are required to reflect the establishment
of, or amendments to, any employee benefit and other plans necessary or
appropriate in connection with the IPO, the Distribution or the other
transactions contemplated by this Agreement and the Ancillary Agreements.
(b) FIS will enter into the Underwriting Agreement with the Underwriters,
in form and substance reasonably satisfactory to each party, and each party will
comply with its respective obligations thereunder.
(c) FIS will use its commercially reasonable efforts to take all such
action as may be necessary or appropriate under applicable state securities and
blue sky laws of the United States (and any comparable laws under any foreign
jurisdictions) in connection with the IPO.
(d) FIS will prepare, file and use commercially reasonable efforts to seek
to make effective, an application for listing of the FIS Common Stock to be
issued in the IPO on the NYSE, subject to official notice of issuance.
(e) FIS will participate in the preparation of materials and presentations
that FNF and the Underwriters will deem necessary or desirable.
(f) FIS will cooperate in all respects with FNF in connection with the
pricing and timing of the FIS Common Stock to be issued in the IPO and will, at
FNF's direction, promptly take any and all actions necessary or desirable to
consummate the IPO as contemplated by the IPO Registration Statement and the
Underwriting Agreement.
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Section 3.2 Conditions Precedent to Consummation of the IPO.
The obligations of the parties to consummate the IPO will be subject to
such conditions as FNF will determine in its sole and absolute discretion, which
conditions will be for the sole benefit of FNF, may be waived by FNF in its sole
and absolute discretion, and any determination by FNF regarding the satisfaction
or waiver of any of such conditions will be conclusive. Such conditions will
include, without limitation, the following:
(a) The IPO Registration Statement will have been declared effective by
the SEC, and there will be no stop order in effect with respect thereto and no
proceeding for that purpose will have been instituted by the SEC;
(b) The FIS Common Stock to be issued in the IPO will have been accepted
for listing on the NYSE, on official notice of issuance;
(c) FIS will have entered into the Underwriting Agreement and all
conditions to the obligations of FIS and the Underwriters thereunder will have
been satisfied or waived;
(d) FNF will be satisfied that (i) it will possess Tax Control of FIS
immediately following the consummation of the IPO, (ii) all other matters
regarding the Tax-Free Status will, to the extent applicable as of the time the
IPO is consummated, be satisfied or can reasonably be anticipated to be
satisfied, and (iii) there will be no event or condition that may cause any of
such conditions not to be satisfied as of the time of the Distribution or
thereafter;
(e) No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the IPO or any of the other transactions contemplated by this
Agreement or any Ancillary Agreement will be in effect;
(f) FNF will have determined that the terms of the IPO, including the
timing and pricing thereof, and all other material matters in connection
therewith, are acceptable to FNF; and
(g) This Agreement will not have been terminated.
ARTICLE 4. THE DISTRIBUTION
Section 4.1 The Distribution.
FNF will determine the date of the consummation of the Distribution and
all terms of the Distribution, including without limitation, the form, structure
and terms of any transaction(s) and/or offering(s) to effect the Distribution
and the timing of and conditions to the consummation of the Distribution. In
addition, FNF may, at any time and from time to time until the completion of the
Distribution, modify or change the terms of the Distribution, including, without
limitation, by accelerating or delaying the timing of the consummation of all or
part of
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the Distribution. FIS will cooperate with FNF in all respects to accomplish the
Distribution and will, at FNF's direction, promptly take any and all actions
necessary or desirable to effect the Distribution, including, without
limitation, to the extent necessary, the registration under the Securities Act
and the Exchange Act of the FIS Common Stock on an appropriate registration form
or forms to be designated by FNF. FNF will select any investment banker(s) and
manager(s) in connection with the Distribution, as well as any financial
printer, solicitation and/or exchange agent and financial, legal, accounting and
other advisors for FNF, provided, however, that nothing in this Agreement will
prohibit FIS from engaging (at its own expense) its own financial, legal,
accounting and other advisors in connection with the Distribution.
Section 4.2 Actions Prior to the Distribution.
In connection with the Distribution, the parties will take the actions set
forth in this Section 4.2.
(a) FNF and FIS will prepare and mail, prior to any Distribution Date, to
the holders of FNF Common Stock, such information concerning FIS and the
Distribution and such other matters as FNF reasonably determines and as may be
required by law. FNF and FIS will prepare, and FIS will, to the extent required
by applicable law, file with the SEC any such documentation that FNF determines
is necessary or desirable to effect the Distribution, and FNF and FIS will each
use its commercially reasonable efforts to obtain all necessary approvals from
the SEC with respect thereto as soon as practicable.
(b) FIS will use its commercially reasonable efforts to take all such
action as may be necessary or desirable under applicable state securities and
blue sky laws of the United States (and any comparable laws under any foreign
jurisdictions) in connection with the Distribution.
(c) FIS will prepare, file and use commercially reasonable efforts to seek
to make effective, an application for listing of the FIS Common Stock to be
distributed in the Distribution on the NYSE, subject to official notice of
issuance.
(d) FIS will take all reasonable steps necessary or desirable to cause the
conditions set forth in Section 4.3 to be satisfied and to effect the
Distribution.
Section 4.3 Conditions to Distribution.
The consummation of the Distribution will be subject to the satisfaction,
or waiver by FNF in its sole and absolute discretion, of the conditions set
forth in this Section 4.3. Any determination by FNF regarding the satisfaction
or waiver of any of such conditions will be conclusive. For the avoidance of
doubt, FNF shall not be obligated to consummate the Distribution in the event
that conditions set forth in this Section 4.3 are satisfied and, in the event
that FNF determines not to consummate the Distribution because one or more of
such conditions is not satisfied or for any other reason, such determination by
FNF will not impact the effectiveness of the Contribution or the IPO.
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(a) The receipt by FNF of a ruling by the IRS and an opinion from its Tax
Advisor collectively to the effect that the distribution will qualify for
Tax-Free Status.
(b) The receipt of any Governmental Approvals and material consents
necessary to consummate the Distribution, which approvals and consents will be
in full force and effect.
(c) No order, injunction, decree or regulation issued by any court or
agency of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Distribution will be in effect and no other
event outside the control of FNF will have occurred or failed to occur that
prevents the consummation of the Distribution.
(d) The actions and filings necessary or appropriate under applicable
securities laws in connection with the Distribution will have been taken or
made, and, where applicable, have become effective or been accepted.
(e) The FIS Common Stock to be distributed in the Distribution will have
been accepted for listing on the NYSE, subject to official notice of issuance.
(f) FNF will have determined that the terms of the Distribution, including
the timing, and all other material matters in connection therewith, are
acceptable to FNF.
Section 4.4 Certain Stockholder Matters.
(a) Subject to Section 4.3 hereof, on or prior to the Distribution Date,
FNF will deliver to a distribution agent to be appointed by FNF (the
"Distribution Agent") for the benefit of holders of record of FNF Common Stock
on the Record Date, a single stock certificate, endorsed by FNF in blank,
representing all of the outstanding shares of FIS Common Stock then owned by
FNF, and FNF will instruct the Distribution Agent to deliver to the FIS Transfer
Agent true, correct and complete copies of the stock and transfer records
reflecting the holders of FNF Common Stock entitled to receive shares of FIS
Common Stock in connection with the Distribution. FNF will cause its transfer
agent to instruct the Distribution Agent to distribute on the Distribution Date
or as soon as reasonably practicable thereafter the appropriate number of shares
of FIS Common Stock to each such holder or designated transferee(s) of such
holder. FNF will cooperate, and will instruct the Distribution Agent to
cooperate, with FIS and the FIS Transfer Agent, and FIS will cooperate, and will
instruct the FIS Transfer Agent to cooperate, with FNF and the Distribution
Agent, in connection with all aspects of the Distribution and all other matters
relating to the issuance and delivery of certificates representing, or other
evidence of ownership of, the shares of FIS Common Stock to be distributed to
the holders of FNF Common Stock in connection with the Distribution.
(b) Subject to Section 4.4(d), each holder of FNF Common Stock on the
Record Date (or such holder's designated transferee(s)) will be entitled to
receive in the Distribution a number of shares of FIS Common Stock equal to the
number of shares of FNF Common Stock held by such holder on the Record Date,
multiplied by a fraction, (i) the numerator of which is the number of shares of
FIS Common Stock beneficially owned by FNF or any other member of the FNF Group
on the Record Date, and (ii) the denominator of which is the number of Shares of
21
FNF Common Stock outstanding on the Record Date. In the event that the
Distribution consists of more than one class of FIS Common Stock, each holder of
FNF Common Stock will receive shares of FIS Common Stock, calculated as provided
above, except that the calculation will be performed separately for each such
class of stock.
(c) Until such FIS Common Stock is duly transferred in accordance with
applicable law, FIS will regard the Persons entitled to receive such FIS Common
Stock as record holders of FIS Common Stock in accordance with the terms of the
Distribution without requiring any action on the part of such Persons. FIS
agrees that, subject to any transfers of such stock, (i) each such holder will
be entitled to receive all dividends payable on, and exercise voting rights and
all other rights and privileges with respect to, the shares of FIS Common Stock
then held by such holder, and (ii) each such holder will be entitled, without
any action on the part of such holder, to receive one or more certificates
representing, or other evidence of ownership of, the shares of FIS Common Stock
then held by such holder.
(d) Notwithstanding anything to the contrary in this Section 4.4, in the
event that the Distribution is not made in the form of a pro rata distribution
of FIS Common Stock to holders of FNF Common Stock, the above provisions of this
Section 4.4 will not apply to the Distribution.
ARTICLE 5. FINANCIAL AND OTHER COVENANTS
Section 5.1 Financial and Other Information.
(a) Financial Information. FIS agrees that, until the Distribution, for so
long as FNF is required to consolidate the results of operations and financial
position of FIS and any other members of the FIS Group or to account for its
investment in FIS under the equity method of accounting (determined in
accordance with GAAP and consistent with SEC reporting requirements):
(i) Disclosure of Financial Controls. FIS will, and will cause each
other member of the FIS Group to, maintain, as of and after the Effective
Date, disclosure controls and procedures and internal control over
financial reporting as defined in Exchange Act Rule 13a-15 promulgated
under the Exchange Act; FIS will cause each of its principal executive and
principal financial officers to sign and deliver certifications to FIS'
periodic reports and will include the certifications in FIS' periodic
reports, as and when required pursuant to Exchange Act Rule 13a-14 and
Item 601 of Regulation S-K; FIS will cause its management to evaluate FIS'
disclosure controls and procedures and internal control over financial
reporting (including any change in internal control over financial
reporting) as and when required pursuant to Exchange Act Rule 13a-15; FIS
will disclose in its periodic reports filed with the SEC information
concerning FIS management's responsibilities for and evaluation of FIS'
disclosure controls and procedures and internal control over financial
reporting (including, without limitation, the annual management report and
attestation report of FIS' independent auditors relating to internal
control over financial reporting) as and when required under Items 307 and
308
22
of Regulation S-K and other applicable SEC rules; and, without limiting
the general application of the foregoing, FIS will, and will cause each
other member of the FIS Group to, maintain as of and after the Effective
Date internal systems and procedures that will provide reasonable
assurance that (A) the Financial Statements are reliable and timely
prepared in accordance with GAAP and applicable law, (B) all transactions
of members of the FIS Group are recorded as necessary to permit the
preparation of the Financial Statements, (C) the receipts and expenditures
of members of the FIS Group are authorized at the appropriate level within
FIS, and (D) unauthorized use or disposition of the assets of any member
of the FIS Group that could have a material effect on the Financial
Statements is prevented or detected in a timely manner.
(ii) Fiscal Year. FIS will, and will cause each member of the FIS
Group organized in the U.S. to, maintain a fiscal year that commences and
ends on the same calendar days as FNF's fiscal year commences and ends,
and to maintain monthly accounting periods that commence and end on the
same calendar days as FNF's monthly accounting periods commence and end.
(iii) Monthly Financial Reports. No later than ten (10) Business
Days after the end of the first three (3) monthly accounting periods of
FIS following the Effective Date FIS will deliver to FNF a consolidated
income statement and balance sheet for FIS for such period and an income
statement and balance sheet for each FIS Affiliate which is consolidated
with FIS, as the case may be, in such format and detail as FNF may
request, and no later than twelve (12) Business Days after the end of the
first three (3) monthly accounting periods of FIS following the Effective
Date FIS will deliver to FNF a consolidated statement of cash flow for FIS
for such period and statement of cash flow for each FIS Affiliate which is
consolidated with FIS, as the case may be, in such format and detail as
FNF may request. No later than five (5) Business Days after the end of
each monthly accounting period of FIS thereafter (including the last
monthly accounting period of FIS of each fiscal year), FIS will deliver to
FNF a consolidated income statement, balance sheet and statement of cash
flow for FIS for such period and an income statement, balance sheet and
statement of cash flow for each FIS Affiliate which is consolidated with
FIS, as the case may be, in such format and detail as FNF may request.
(iv) Quarterly Financial Statements. As soon as practicable, and in
any event no later than ten business (10) days prior to the date on which
FIS is required to file a Form 10-Q containing Quarterly Financial
Statements (as defined below) with the SEC for each of the first three (3)
fiscal quarters in each fiscal year of FIS, FIS will deliver to FNF drafts
of (A) the consolidated financial statements of the FIS Group (and notes
thereto) for such periods and for the period from the beginning of the
current fiscal year to the end of such quarter, setting forth in each case
in comparative form for each such fiscal quarter of FIS the consolidated
figures (and notes thereto) for the corresponding quarter and periods of
the previous fiscal year and all in reasonable detail and prepared in
accordance with Article 10 of Regulation S-X and GAAP, and (B) a
discussion and analysis by management of the FIS Group's financial
condition and results of operations
23
for such fiscal period, including, without limitation, an explanation of
any material period-to-period change and any off-balance sheet
transactions, all in reasonable detail and prepared in accordance with
Item 303(b) of Regulation S-K. The information set forth in (A) and (B)
above is referred to in this Agreement as the "Quarterly Financial
Statements." No later than three (3) Business Days prior to the date FIS
publicly files the Quarterly Financial Statements with the SEC, FIS will
deliver to FNF the final form of the FIS Quarterly Financial Statements
and certifications thereof by the principal executive and financial
officers of FIS in substantially the forms required under SEC rules for
periodic reports and in form and substance satisfactory to FNF; provided,
however, that FIS may continue to revise such Quarterly Financial
Statements prior to the filing thereof in order to make corrections and
non-substantive changes which corrections and changes will be delivered by
FIS to FNF as soon as practicable, and in any event within eight (8) hours
thereafter; provided, further, that FNF's and FIS' financial
Representatives will actively consult with each other regarding any
changes (whether or not substantive) which FIS may consider making to its
Quarterly Financial Statements and related disclosures during the two (2)
Business Days immediately prior to any anticipated filing with the SEC,
with particular focus on any changes which would have an effect upon FNF's
financial statements or related disclosures. In addition to the foregoing,
no Quarterly Financial Statement or any other document which refers, or
contains information not previously publicly disclosed with respect to the
ownership of FIS by FNF, the separation of FIS from FNF or the
Distribution will be filed with the SEC or otherwise made public by any
FIS Group member without the prior written consent of FNF unless required
under applicable law, rule or regulation.
(v) Annual Financial Statements. As soon as practicable, and in any
event no later than ten business (10) days prior to the date on which FNF
is required to file a Form 10-K or other document containing its Annual
Financial Statements (as defined below) with the SEC, FIS will deliver to
FNF (A) drafts of the consolidated financial statements of the FIS Group
(and notes thereto) for such year, setting forth in each case in
comparative form the consolidated figures (and notes thereto) for the
previous fiscal year and all in reasonable detail and prepared in
accordance with Regulation S-X and GAAP and (B) a discussion and analysis
by management of the FIS Group's financial condition and results of
operations for such year, including, without limitation, an explanation of
any material period-to-period change and any off-balance sheet
transactions, all in reasonable detail and prepared in accordance with
Item 303(a) of Regulation S-K. The information set forth in (A) and (B)
above is referred to in this Agreement as the "Annual Financial
Statements." FIS will deliver to FNF all revisions to such drafts as soon
as any such revisions are prepared or made. No later than five (5)
Business Days prior to the date FIS publicly files the Annual Financial
Statements with the SEC or otherwise makes such Annual Financial
Statements publicly available, FIS will deliver to FNF the final form of
the FIS Annual Financial Statements and certifications thereof by the
principal executive and financial officers of FIS in substantially the
forms required under SEC rules for periodic reports and in form and
substance satisfactory to FNF; provided, however, that FIS may continue to
revise such Annual Financial Statements prior to the filing thereof in
order to make corrections and non-substantive changes which corrections
24
and changes will be delivered by FIS to FNF as soon as practicable, and in
any event within eight (8) hours thereafter; provided, further, that FNF
and FIS financial Representatives will actively consult with each other
regarding any changes (whether or not substantive) which FIS may consider
making to its Annual Financial Statements and related disclosures during
the three (3) Business Days immediately prior to any anticipated filing
with the SEC, with particular focus on any changes which would have an
effect upon FNF's financial statements or related disclosures. In addition
to the foregoing, no Annual Financial Statement or any other document
which contains information not previously publicly disclosed with respect
to the ownership of FIS by FNF, the separation of FIS from FNF or the
Distribution will be filed with the SEC or otherwise made public by any
FIS Group member without the prior written consent of FNF unless required
by applicable law, rule or regulation. In any event, FIS will deliver to
FNF, no later than three (3) days prior to the date that on which FIS
files annual financial statements with the SEC, the final form of the
Annual Financial Statements accompanied by an opinion thereon by FIS'
independent certified public accountants.
(vi) Affiliate Financial Statements. FIS will deliver to FNF all
Quarterly and Annual Financial Statements of each FIS Affiliate which is
itself required to file financial statements with the SEC or otherwise
make such financial statements publicly available, with such financial
statements to be provided in the same manner and detail and on the same
time schedule as those financial statements of FIS required to be
delivered to FNF pursuant to this Section 5.1.
(vii) FIS Reports Generally. Each FIS Group member that files
information with the SEC will deliver to FNF: (A) substantially final
drafts, as soon as the same are prepared, of (x) all reports, notices and
proxy and information statements to be sent or made available by such FIS
Group member to its respective security holders, (y) all regular, periodic
and other reports to be filed or furnished under Sections 13, 14 and 15 of
the Exchange Act (including Reports on Forms 10-K, 10-Q and 8-K and Annual
Reports to Shareholders), and (z) all registration statements and
prospectuses to be filed by such FIS Group member with the SEC or any
securities exchange pursuant to the listed company manual (or similar
requirements) of such exchange (collectively, the documents identified in
clauses (x), (y) and (z) are referred to in this Agreement as "FIS Public
Filings"), and (B) as soon as practicable, but in no event later than four
(4) Business Days (other than with respect to 8-Ks) prior to the earliest
of the dates the same are printed, sent or filed, current drafts of all
such FIS Public Filings and, with respect to 8-Ks, as soon as practicable,
but in no event later than two (2) Business Days prior to the earliest of
the dates the same are printed, sent or filed in the case of planned 8-Ks
and as soon as practicable, but in no event less than 2 hours in the case
of unplanned 8-Ks; provided, however, that FIS may continue to revise such
FIS Public Filings prior to the filing thereof in order to make
corrections and non-substantive changes which corrections and changes will
be delivered by FIS to FNF as soon as practicable, and in any event within
eight (8) hours thereafter; provided, further, that FNF and FIS financial
Representatives will actively consult with each other regarding any
changes (whether or not substantive) which FIS may consider making to any
of its FIS Public Filings and related disclosures
25
prior to any anticipated filing with the SEC, with particular focus on any
changes which would have an effect upon FNF's financial statements or
related disclosures.
(viii) Budgets and Financial Projections. FIS will, as promptly as
practicable, deliver to FNF copies of all annual and other budgets and
financial projections (consistent in terms of format and detail and
otherwise required by FNF) relating to FIS on a consolidated basis and
will provide FNF an opportunity to meet with management of FIS to discuss
such budgets and projections.
(ix) Other Information. With reasonable promptness, FIS will deliver
to FNF such additional financial and other information and data with
respect to the FIS Group and their business, properties, financial
positions, results of operations and prospects as from time to time may be
reasonably requested by FNF.
(x) Press Releases and Similar Information. FIS and FNF will consult
with each other as to the timing of their annual and quarterly earnings
releases and any interim financial guidance for a current or future period
and will give each other the opportunity to review the information therein
relating to the FIS Group and to comment thereon. FNF and FIS will make
reasonable efforts to issue their respective annual and quarterly earnings
releases at approximately the same time on the same date. No later than
eight (8) hours prior to the time and date that a party intends to publish
its regular annual or quarterly earnings release or any financial guidance
for a current or future period, such party will deliver to the other party
copies of substantially final drafts of all press releases and other
statements to be made available by any member of that party's Group to
employees of any member of that party's Group or to the public concerning
any matters that could be reasonably likely to have a material financial
impact on the earnings, results of operations, financial condition or
prospects of any FIS Group member. In addition, prior to the issuance of
any such press release or public statement that meets the criteria set
forth in the preceding two sentences, the issuing party will consult with
the other party regarding any changes (other than typographical or other
similar minor changes) to such substantially final drafts. Immediately
following the issuance thereof, the issuing party will deliver to the
other party copies of final drafts of all press releases and other public
statements.
(xi) Cooperation on FNF Filings. FIS will cooperate fully, and cause
FIS' Auditors to cooperate fully, with FNF to the extent requested by FNF
in the preparation of FNF's public earnings or other press releases,
Quarterly Reports on Form 10-Q, Annual Reports to Shareholders, Annual
Reports on Form 10-K, any Current Reports on Form 8-K and any other proxy,
information and registration statements, reports, notices, prospectuses
and any other filings made by FNF with the SEC, any national securities
exchange or otherwise made publicly available (collectively, the "FNF
Public Filings"). FIS agrees to provide to FNF all information that FNF
reasonably requests in connection with any FNF Public Filings or that, in
the judgment of FNF's legal department, is required to be disclosed or
incorporated by reference therein under any law, rule or regulation. FIS
will provide such information in a timely manner on the dates requested
26
by FNF (which may be earlier than the dates on which FIS otherwise would
be required hereunder to have such information available) to enable FNF to
prepare, print and release all FNF Public Filings on such dates as FNF
will determine but in no event later than as required by applicable law.
FIS will use its commercially reasonable efforts to cause FIS' Auditors to
consent to any reference to them as experts in any FNF Public Filings
required under any law, rule or regulation. If and to the extent requested
by FNF, FIS will diligently and promptly review all drafts of such FNF
Public Filings and prepare in a diligent and timely fashion any portion of
such FNF Public Filing pertaining to FIS. Prior to any printing or public
release of any FNF Public Filing, an appropriate executive officer of FIS
will, if requested by FNF, certify that the information relating to any
FIS Group member or the Transferred Business in such FNF Public Filing is
accurate, true, complete and correct in all material respects. Unless
required by law, rule or regulation, FIS will not publicly release any
financial or other information which conflicts with the information with
respect to any FIS Group member or the Transferred Business that is
included in any FNF Public Filing without FNF's prior written consent.
Prior to the release or filing thereof, FNF will provide FIS with a draft
of any portion of a FNF Public Filing containing information relating to
the FIS Group and will give FIS an opportunity to review such information
and comment thereon; provided that FNF will determine in its sole and
absolute discretion the final form and content of all FNF Public Filings.
(xii) Confidentiality. FNF agrees to keep confidential all
information provided to FNF by FIS or any of FIS' affiliates pursuant to
this Section 5.1(a), until the point in time that such information is
filed with the SEC.
(b) Auditors and Audits; Annual Statements and Accounting. FIS agrees
that, until the Distribution:
(i) Audit Timing. FIS will use its best efforts to enable their
independent certified public accountants ("FIS' Auditors") to complete
their audit such that they will date their opinion on the Annual Financial
Statements on the same date that FNF's independent certified public
accountants ("FNF's Auditors") date their opinion on FNF's audited annual
financial statements (the "FNF Annual Statements"), and to enable FNF to
meet its timetable for the printing, filing and public dissemination of
the FNF Annual Statements, all in accordance with Section 5.1(a) hereof
and as required by applicable law.
(ii) Information Needed by FNF. FIS will provide to FNF on a timely
basis all information that FNF reasonably requires to meet its schedule
for the preparation, printing, filing, and public dissemination of the FNF
Annual Statements in accordance with Section 5.1(a) hereof and as required
by applicable law. Without limiting the generality of the foregoing, FIS
will provide all required financial information with respect to the FIS
Group to FIS' Auditors in a sufficient and reasonable time and in
sufficient detail to permit FIS' Auditors to take all steps and perform
all reviews necessary to provide sufficient assistance to FNF's Auditors
with respect to information to be included or contained in the FNF Annual
Statements, and will provide access to the
27
responsible personnel of FIS as required for FNF and FNF's Auditors to
conduct their audits relating to FIS' Financial Statements.
(iii) Access to FIS Auditors. FIS will authorize FIS' Auditors to
make available to FNF's Auditors both the personnel who performed, or are
performing, the annual audit of FIS and work papers related to the annual
audit of FIS, in all cases within a reasonable time prior to FIS'
Auditors' opinion date, so that FNF's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of
FIS' Auditors as it relates to FNF's Auditors' report on FNF's statements,
all within sufficient time to enable FNF to meet its timetable for the
printing, filing and public dissemination of the FNF Annual Statements.
(iv) Access to Records. If FNF determines in good faith that there
may be some inaccuracy in a FIS Group member's financial statements or
deficiency in a FIS Group member's internal accounting controls or
operations that could materially impact FNF's financial statements, at
FNF's request, FIS will provide FNF's internal auditors with access to the
FIS Group's books and records so that FNF may conduct reasonable audits
relating to the financial statements provided by FIS under this Agreement
as well as to the internal accounting controls and operations of the FIS
Group.
(v) Notice of Changes. Subject to Section 5.1(a)(vii), FIS will give
FNF as much prior notice as reasonably practicable of any proposed
determination of, or any significant changes in, FIS' accounting estimates
or accounting principles from those in effect on the Effective Date. FIS
will consult with FNF and, if requested by FNF, FIS will consult with
FNF's Auditors with respect thereto. FIS will not make any such
determination or changes without FNF's prior written consent if such a
determination or a change would be sufficiently material to be required to
be disclosed in FIS' or FNF's financial statements as filed with the SEC
or otherwise publicly disclosed therein.
(vi) Accounting Changes Requested by FNF. Notwithstanding clause (v)
above, FIS will make any changes in its accounting estimates or accounting
principles that are reasonably requested by FNF in order for FIS'
accounting practices and principles to be consistent with those of FNF.
(vii) Special Reports of Deficiencies or Violations. FIS will report
in reasonable detail to FNF the following events or circumstances promptly
after any executive officer of FIS or any member of the FIS Board of
Directors becomes aware of such matter: (A) all significant deficiencies
and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect
FIS' ability to record, process, summarize and report financial
information; (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in FIS' internal
control over financial reporting; (C) any illegal act within the meaning
of Section 10A(b) and (f) of the Exchange Act; and (D) any report of a
material violation of law that an attorney representing any FIS Group
28
member has formally made to any officers or directors of FIS pursuant to
the SEC's attorney conduct rules (17 C.F.R. Part 205).
Section 5.2 Other Covenants.
In addition to the other covenants contained in this Agreement and the
Ancillary Agreements, FIS hereby covenants and agrees that, for so long as FNF
beneficially owns at least fifty percent (50%) of the total voting power of all
classes of then outstanding capital stock of FIS entitled to vote generally in
the election of directors ("FIS Voting Stock"):
(a) Neither FIS nor FNF will, without the prior written consent of the
other, take, or cause to be taken, directly or indirectly, any action, or enter
into any agreement that would cause the other party to violate any law,
agreement or judgment, or enter into any agreement that binds or purports to
bind the other party;
(b) FIS will not, without the prior written consent of FNF, take, or cause
to be taken, directly or indirectly, any action, including making or failing to
make any election under the law of any state, which has the effect, directly or
indirectly, of restricting or limiting the ability of FNF to freely sell,
transfer, assign, pledge or otherwise dispose of shares of FIS Common Stock or
would restrict or limit the rights of any transferee of FNF as a holder of FIS
Common Stock. Without limiting the generality of the foregoing, FIS will not,
without the prior written consent of FNF, take any action, or take any action to
recommend to its stockholders any action, which would among other things, limit
the legal rights of, or deny any benefit to, FNF as a FIS stockholder either (i)
solely as a result of the amount of Common Stock owned by FNF or (ii) in a
manner not applicable to FIS stockholders generally.
(c) FIS will not, without the prior written consent of FNF, issue any
shares of FIS Capital Stock or any rights, warrants or options to acquire FIS
Capital Stock (including, without limitation, securities convertible into or
exchangeable for FIS Capital Stock), if after giving effect to such issuances
and considering all of the shares of FIS Capital Stock acquirable pursuant to
such rights, warrants and options to be outstanding on the date of such issuance
(whether or not then exercisable), FNF would own less than fifty percent (50%)
of the FIS Voting Stock.
(d) To the extent that FNF is a party to any Contracts that provide that
certain actions or inactions of the FNF Group (which for purposes of such
Contract includes any member of the FIS Group) may result in FNF being in breach
of or in default under such Contracts and FNF has advised FIS of the existence,
and has furnished FIS with copies, of such Contracts (or the relevant portions
thereof), FIS will not take or fail to take, as applicable, and FIS will cause
the other members of the FIS Group not to take or fail to take, as applicable,
any actions that reasonably could result in FNF being in breach of or in default
under any such Contract. The parties acknowledge and agree that from time to
time FNF may in good faith (and not solely with the intention of imposing
restrictions on FIS pursuant to this covenant) enter into additional Contracts
or amendments to existing Contracts that provide that certain actions or
inactions of the FNF Group (including, for purposes of this Section 5.2(d),
members of the FIS Group) may
29
result in FNF being in breach of or in default under such Contracts. In such
event, provided FNF has notified FIS of such additional Contracts or amendments
to existing Contracts, FIS will not thereafter take or fail to take, as
applicable, and FIS will cause the other members of the FIS Group not to take or
fail to take, as applicable, any actions that reasonably could result in FNF
being in breach of or in default under any such additional Contracts or
amendments to existing Contracts. FNF acknowledges and agrees that FIS will not
be deemed in breach of this Section 5.2(d) to the extent that, prior to being
notified by FNF of an additional Contract or an amendment to an existing
Contract pursuant to this Section 5.2(d), a FIS Group member already has taken
or failed to take one or more actions that would otherwise constitute a breach
of this Section 5.2(d) had such action(s) or inaction(s) occurred after such
notification, provided that FIS does not, after notification by FNF, take any
further action or fail to take any action that contributes further to such
breach or default. FIS agrees that any Information provided to it pursuant to
this Section 5.2(d) will constitute Information that is subject to FIS'
obligations under Article 6. The provisions of this Section 5.2(d) shall not
limit nor supercede the rights and liabilities of the parties under Sections 2.6
and 2.7.
(e) To the extent that FIS is a party to any Contracts that provide that
certain actions or inactions of the FIS Group (which for purposes of such
Contract includes any member of the FNF Group) may result in FIS being in breach
of or in default under such Contracts and FIS has advised FNF of the existence,
and has furnished FNF with copies, of such Contracts (or the relevant portions
thereof), FNF will not take or fail to take, as applicable, and FNF will cause
the other members of the FNF Group not to take or fail to take, as applicable,
any actions that reasonably could result in FIS being in breach of or in default
under any such Contract. The parties acknowledge and agree that from time to
time FIS may in good faith (and not solely with the intention of imposing
restrictions on FNF pursuant to this covenant) enter into additional Contracts
or amendments to existing Contracts that provide that certain actions or
inactions of the FIS Group (including, for purposes of this Section 5.2(e),
members of the FNF Group) may result in FIS being in breach of or in default
under such Contracts. In such event, provided FIS has notified FNF of such
additional Contracts or amendments to existing Contracts, FNF will not
thereafter take or fail to take, as applicable, and FNF will cause the other
members of the FNF Group not to take or fail to take, as applicable, any actions
that reasonably could result in FIS being in breach of or in default under any
such additional Contracts or amendments to existing Contracts. FIS acknowledges
and agrees that FNF will not be deemed in breach of this Section 5.2(e) to the
extent that, prior to being notified by FIS of an additional Contract or an
amendment to an existing Contract pursuant to this Section 5.2(e), a FNF Group
member already has taken or failed to take one or more actions that would
otherwise constitute a breach of this Section 5.2(e) had such action(s) or
inaction(s) occurred after such notification, provided that FNF does not, after
notification by FIS, take any further action or fail to take any action that
contributes further to such breach or default. FNF agrees that any Information
provided to it pursuant to this Section 5.2(e) will constitute Information that
is subject to FNF's obligations under Article 6. The provisions of this Section
5.2(e) shall not limit nor supercede the rights and liabilities of the parties
under Sections 2.6 and 2.7.
30
ARTICLE 6. ACCESS TO INFORMATION
Section 6.1 Restrictions on Disclosure of Information.
(a) Generally. Without limiting any rights or obligations under any other
existing or future agreement between the parties and/or any other members of
their respective Group relating to confidentiality, for five (5) years after the
Effective Date each party will, and each party will cause its respective Group
members and its Representatives to, hold in confidence, with at least the same
degree of care that applies to FNF's confidential and proprietary Information
pursuant to confidentiality policies in effect as of the Effective Date, all
confidential and proprietary Information concerning the other Group that is
either in its possession as of the Effective Date or furnished by the other
Group or its respective Representatives at any time pursuant to this Agreement,
any Ancillary Agreement or the transactions contemplated hereby or thereby.
Notwithstanding the foregoing, each party, its respective Group members and its
Representatives, may disclose such Information to the extent that such party can
demonstrate that such Information is or was (i) in the public domain other than
by the breach of this Agreement or by breach of any other agreement between or
among the parties and/or any of their respective Group members relating to
confidentiality, or (ii) lawfully acquired from a third Person on a
non-confidential basis or independently developed by, or on behalf of, such
party by Persons who do not have access to, or descriptions of, any such
Information. Each party will maintain, and will cause its respective Group
members and Representatives to maintain, policies and procedures, and develop
such further policies and procedures as will from time to time become necessary
or appropriate, to ensure compliance with this Section 6.1.
(b) Disclosure of Third Person Information. Each party acknowledges that
it and other members of its Group may have in its or their possession
confidential or proprietary Information of third Persons that was received under
a confidentiality or non-disclosure agreement between such third Person and the
other party. Each party will, and will cause its respective Group members and
its Representatives to, hold in strict confidence the confidential and
proprietary Information of third Persons to which any member of such party's
Group has access, in accordance with the terms of any agreements entered into
between such third Person and the other party or a member of the other party's
Group.
Section 6.2 Legally Required Disclosure of Information.
If either party or any of its respective Group members or Representatives
becomes legally required to disclose any Information (the "Disclosing Party")
that it is otherwise obligated to hold in strict confidence pursuant to Section
6.1, such party will promptly notify the Person that owns the Information (the
"Owning Party") and will use all commercially reasonable efforts to cooperate
with the Owning Party so that the Owning Party may seek a protective order or
other appropriate remedy and/or waive compliance with this Section 6.2. All
expenses reasonably incurred by the Disclosing Party in seeking a protective
order or other remedy will be borne by the Owning Party. If such protective
order or other remedy is not obtained, or if the Owning Party waives compliance
with this Section 6.2, the Disclosing Party will (a) disclose only that portion
of the Information which its legal counsel advises it is compelled to disclose
or otherwise
31
stand liable for contempt or suffer other similar significant corporate censure
or penalty, (b) use all commercially reasonable efforts to obtain reliable
assurance requested by the Owning Party that confidential treatment will be
accorded such Information, and (c) promptly provide the Owning Party with a copy
of the Information so disclosed, in the same form and format so disclosed,
together with a list of all Persons to whom such Information was disclosed.
Section 6.3 Access to Information.
During the Retention Period (as defined in Section 6.4 below), each party
will provide to the other party, and will cause its respective Group members and
Representatives to provide to the other party, in accordance with the
requirements of this Section 6.3, reasonable Access upon reasonable advance
written request to all Information (other than Information which is (a)
protected from disclosure by the attorney-client privilege or work product
doctrine, (b) proprietary in nature, (c) the subject of a confidentiality
agreement between such party and a third Person which prohibits disclosure to
the other party, or (d) prohibited from disclosure under applicable law) owned
by such party or one of its Group members or within such party's or any of its
respective Group member's or Representative's possession which is created prior
to the Distribution Date and which relates to the requesting party's (the
"Requestor") business, assets or liabilities, and such access is reasonably
required by the Requestor (i) to comply with requirements imposed on the
Requestor by any governmental authority, (ii) for use in any proceeding (except
for a litigation matter between the parties or any of their respective Group
members), (iii) to satisfy audit, accounting, Tax or similar requirements, (iv)
to obtain insurance, or (v) to comply with the Requestor's obligations under
this Agreement or any Ancillary Agreement. "Access" means the obligation of a
party in possession of Information (the "Possessor") requested by the Requestor
to locate all requested Information that is owned and/or possessed by Possessor
or any respective Group members or Representatives and to provide such
Information to the Requestor and the obligation of the Possessor to, at its own
expense, conduct a diligent search designed to identify all requested
Information and to collect all such Information for inspection by the Requestor
during normal business hours at the Possessor's place of business. Subject to
such confidentiality and/or security obligations as the Possessor may reasonably
deem necessary, the Requestor may have all requested Information duplicated at
Requestor's expense. Alternatively, the Possessor may choose to deliver, at the
Requestor's expense, all requested Information to the Requestor in the form
requested by the Requestor. The Possessor will notify the Requestor in writing
at the time of delivery if such Information is to be returned to the Possessor.
In such case, the Requestor will return such Information when no longer needed
to the Possessor at the Possessor's expense. In connection with providing
Information pursuant to this Section 6.3, each party hereto will, upon the
request of the other party and upon reasonable advance notice, make available
during normal business hours its respective employees (and those employees of
its respective Group members and Representatives, as applicable) to the extent
that they are reasonably necessary to discuss and explain all requested
Information with and to the Requestor.
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Section 6.4 Record Retention.
FIS will, and FIS will cause each of the other FIS Group members to, adopt
and comply with a record retention policy with respect to Information owned by
or in the possession of the FIS Group and which is created prior to the
Distribution Date that is no less stringent than FNF's record retention policy
in effect as of the Effective Date or as FNF may modify such policy during the
three (3) year period subsequent to the Distribution Date, provided that FNF
notifies FIS of any such modifications, provided, however, that FNF agrees not
to modify such policy if such modification would have a proportionately greater
negative effect on the FIS Group than it would have on the FNF Group. FNF will,
and FNF will cause each of the other FNF Group members to, adopt (to the extent
that they have not previously adopted) and comply with a record retention policy
with respect to Information owned by or in the possession of the FNF Group and
which is created prior to the Distribution Date. Each party will, at its sole
cost and expense, preserve and retain all Information in its respective
possession or control that the other party has the right to access pursuant to
Section 6.3 or that it is required to preserve and retain in accordance with
such record retention policy or for any longer period as may be required by (a)
any government agency, (b) any litigation matter, (c) applicable law, or (d) any
Ancillary Agreement (as applicable, the "Retention Period"). If either party
wishes to dispose of any Information which it is obligated to retain under this
Section 6.4 prior to the expiration of the Retention Period, then that party
will first provide forty-five (45) days' written notice to the other party, and
the other party will have the right, at its option but at the expense of the
party that desires to dispose of such Information, upon prior written notice
within such 45-day period, to take possession of such Information within ninety
(90) days after the date of the notice provided pursuant to this Section 6.4.
Written notice of intent to dispose of such Information will include a
description of the Information in detail sufficient to allow the other party to
reasonably assess its potential need to retain such materials.
Section 6.5 Production of Witnesses.
For five (5) years after the Effective Date, each party will use
commercially reasonable efforts, and will cause each of its respective Group
members to use commercially reasonable efforts, to make available to each other,
upon written request, its past and present Representatives as witnesses to the
extent that any such Representatives may reasonably be required (giving
consideration to the business demands upon such Representatives) in connection
with any legal, administrative or other proceedings in which the requesting
party may from time to time be involved.
Section 6.6 Reimbursement.
Unless otherwise provided in this Article 6, each party providing access
to Information or witnesses to the other party pursuant to Sections 6.3, 6.4 or
6.5 will be entitled to receive from the receiving party, upon the presentation
of invoices therefor, payment for all reasonable, out-of-pocket costs and
expenses (excluding allocated compensation, salary and overhead expenses) as may
be reasonably incurred in providing such Information or witnesses.
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Section 6.7 Other Agreements Regarding Access to Information.
The rights and obligations of the parties under this Article 6 are subject
to any specific limitations, qualifications or additional provisions on the
sharing, exchange or confidential treatment of Information set forth in this
Agreement or any Ancillary Agreement.
Section 6.8 Acquisition by Another Person.
(a) Prior to the Distribution Date, in the event FIS enters into an
agreement with a third Person to sell all or any portion of the Transferred
Business, whether pursuant to a stock or asset sale, merger or otherwise, FNF
will have the right to duplicate prior to any such disposition any Information
of FNF or a member of the FNF Group relating to the FNF Business held by FIS
that relates to the transactions contemplated by this Agreement. In addition,
prior to the Distribution Date, FNF will have the right, in its sole discretion,
to require FIS to destroy or return to FNF all or any portion of such
Information prior to such disposition. FIS covenants and agrees that it will not
sell all or any portion of the Transferred Business to any third Person unless
such third Person expressly agrees in writing to be bound by all of FIS'
obligations under this Section 6.8.
(b) Prior to the Distribution Date, in the event FNF enters into an
agreement with a third Person to sell all or any portion of the FNF Business,
whether pursuant to a stock or asset sale, merger or otherwise, FIS will have
the right to duplicate prior to any such disposition any Information of FIS or a
member of the FIS Group relating to the Transferred Business held by FNF that
relates to the transactions contemplated by this Agreement. In addition, prior
to the Distribution Date, FIS will have the right, in its sole discretion, to
require FNF to destroy or return to FIS all or any portion of such Information
prior to such disposition. FNF covenants and agrees that it will not sell all or
any portion of the FNF Business to any third Person unless such third Person
expressly agrees in writing to be bound by all of FNF's obligations under this
Section 6.8.
ARTICLE 7. ADDITIONAL COVENANTS AND OTHER MATTERS
Section 7.1 Further Assurances.
(a) In addition to the Ancillary Agreements, the parties agree (i) to
execute, or cause to be executed by their appropriate Group members or
Representatives, and deliver, as appropriate, such other agreements, instruments
and documents as may be necessary or desirable in order to effect the
transactions contemplated by this Agreement and the Ancillary Agreements, (ii)
to cause the assignment, transfer and conveyance to FIS and its applicable
Subsidiaries of any Transferred Assets that for any reason were not assigned,
transferred or
34
conveyed by the Effective Date and (iii) to cause the assumption of any
Transferred Liabilities that for any reason were not assumed on the Effective
Date. FNF shall undertake such actions, and shall cause applicable members of
the FNF Group to take such actions, as required to pass on to FIS or the
applicable member(s) of the FIS Group the benefits derived and the expenses
incurred by FNF or any members of the FNF Group with respect to any Transferred
Assets assigned, transferred or conveyed, and any Transferred Liabilities
assumed, pursuant to clauses (ii) and (iii) of the first sentence of this
Section 7.1(a).
(b) At the request of FIS, FNF will execute and deliver, and will cause
applicable members of the FNF Group to execute and deliver, to FIS and/or
applicable members of the FIS Group such other instruments of transfer,
conveyance, assignment, substitution and confirmation and take such other
actions as FIS may reasonably deem necessary or desirable in order (a) to
transfer, convey and assign to FIS and the other members of the FIS Group, as
applicable, the Transferred Assets, (b) to put FIS and the other members of the
FIS Group, as applicable, in actual possession and operating control thereof,
and (c) to permit FIS and the other members of the FIS Group, as applicable, to
exercise all rights with respect thereto. At the request of FNF, FIS will
execute and deliver, and will cause applicable members of the FIS Group to
execute and deliver, to FNF and/or applicable members of the FNF Group all
instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as FNF may reasonably deem necessary or
desirable in order to ensure that FIS and the other members of the FIS Group
fully and unconditionally assume and discharge the Transferred Liabilities as
contemplated under this Agreement, the Ancillary Agreements or any document in
connection herewith or therewith, and relieve the FNF Group of any Liability
with respect thereto and evidence the same to third Persons.
Section 7.2 Performance.
FNF will cause to be performed, and hereby guarantees the performance of,
all actions, agreements and obligations set forth in this Agreement or in any
Ancillary Agreement to be performed by any member of the FNF Group. FIS will
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth in this Agreement or in any Ancillary
Agreement to be performed by any member of the FIS Group. Each party further
agrees that it will cause its other Group members not to take any action or fail
to take any action inconsistent with such party's obligations under this
Agreement, any Ancillary Agreement or the transactions contemplated hereby or
thereby.
Section 7.3 Insurance Matters.
(a) Directors' and Officers' Insurance. FIS and its Covered Subsidiaries,
and each of their directors and officers, will be covered and insured under
FNF's current directors' and officers' insurance program in the same manner and
coverages as FNF's then current directors and officers are insured under the
same policies until the earlier to occur of (i) the date that FIS and its
Covered Subsidiaries have directors' and officers' insurance in place and (ii)
the Distribution Date. FIS will promptly pay or reimburse FNF, as the case may
be, for all costs and expenses associated with this coverage that are allocated
by FNF to FIS and its Covered Subsidiaries in accordance with FNF's practice
with respect to the Transferred Business as of the Effective Date. FIS, its
Covered Subsidiaries and each of their directors and officers may review said
policies upon request. In addition, FNF will continue to provide such coverage
and insurance to FIS and its Covered Subsidiaries, and each of their directors
and officers in connection with any extension of FNF's current directors' and
officers' insurance program or
35
under any new director's and officers' insurance program when FNF's current
program expires. FIS will reimburse FNF for any incremental costs or expenses
incurred by FNF in connection with covering FIS and its Covered Subsidiaries,
and each of their directors and officers under any new insurance program or
extension of the current insurance program that FNF determines to be
attributable to the coverage for FIS, its Covered Subsidiaries or any of their
directors or officers. FIS acknowledges that such directors' and officers'
insurance coverage will terminate as of the Distribution Date, and FIS covenants
and agrees that it will take appropriate steps to secure directors' and
officers' insurance coverage for itself, its Subsidiaries and each of their
directors and officers as of the Distribution Date. FNF agrees to cooperate with
and assist FIS in FIS obtaining directors', officers' and other insurance. In
addition, FNF shall purchase, and FIS shall reimburse FNF for the costs of, tail
coverage on terms and provisions reasonably acceptable to FIS, until the third
(3rd) anniversary of the date on which FIS and its Covered Subsidiaries, and
each of their directors and officers cease to be covered under FNF's current
directors' and officers' insurance program, including any extensions thereof,
with respect to matters occurring prior to the termination of the FNF current
programs and any extensions thereof.
(b) Other Insurance. Except as set forth in Section 7.3(a) with respect to
directors' and officers' insurance, during the period from the Effective Date
through the Distribution Date, FNF will, subject to insurance market conditions
and other factors beyond FNF's reasonable control, maintain, for the protection
of FIS and its Covered Subsidiaries, policies of insurance that are comparable
to those maintained generally for FNF and its Covered Subsidiaries during the
same period, but not less than the scope and amount of insurance that FNF
maintains for itself and that is sufficient to allow FIS to meet its customer
contractual obligations relating to insurance coverage. FIS will promptly pay or
reimburse FNF, as the case may be, for all costs and expenses associated
therewith that are allocated by FNF to FIS and its Covered Subsidiaries in
accordance with (i) FNF's practice with respect to the Transferred Business as
of the Effective Date, or (ii) the terms of the Transition Services Agreement,
as applicable. To the extent FNF purchases a new type of insurance, or an amount
or level of insurance not previously purchased by FNF in order to protect, at
least in part, FIS or any of its Covered Subsidiaries, the terms of that portion
of the insurance must be approved by FIS and the associated costs and expenses
of such insurance attributable to FIS or any of its Covered Subsidiaries shall
be reimbursed by FIS.
(c) Payments and Reimbursements. All payments and reimbursements by FIS
pursuant to this Section 7.3 will be made within thirty (30) days after FIS'
receipt of an invoice therefor from FNF.
(d) Changes in Costs or Expenses. The costs and expenses for which FIS is
obligated to pay or reimburse FNF pursuant to this Section 7.3 will be based on
FNF's current insurance costs and expenses as of the Effective Date and will be
appropriately adjusted as a result of any changes in those costs and expenses
after the Effective Date, although the methodology upon which such costs and
expenses is based will remain the same.
(e) Notification of Changes. FNF agrees to provide FIS not less than sixty
(60) days advance written notice in the event it elects (or any of its insurers
notifies FNF in writing of such insurer's election) to cancel or effect any
non-administrative modification of the terms and
36
conditions of any FNF insurance policy that provides coverage to FIS or any of
its Covered Subsidiaries, which notice will include the anticipated date of
cancellation or a description of such modification, as applicable, provided,
that FNF may not cancel or effect any non-administrative modification to such
policies that would result in the provision of less coverage to the FIS Group
relative to the FNF Group and that causes FIS to breach any of its customer
contractual obligations relating to insurance coverage.
(f) Historical Loss Data. For no less than four (4) years after the
Effective Date, FNF will provide FIS with Access, upon written request, to
historical insurance loss Information relating to the Transferred Business and
any other Information relating to FNF's historic insurance program with respect
to the Transferred Business. Any such Information provided to FIS pursuant to
this provision will also be subject to the provisions of Section 6.3.
(g) Post Distribution Date. FIS acknowledges and agrees that from and
after the Distribution Date (i) no member of the FNF Group will purchase or
maintain, or cause to be purchased or maintained, any insurance policy for the
protection of FIS, its Covered Subsidiaries, any member of the FIS Group or any
of their respective directors and officers, and (ii) the FIS Group (including
FIS and its Covered Subsidiaries) will purchase insurance coverage sufficient to
protect its interests.
Section 7.4 FIS Release.
Effective as of the Effective Date, except for the rights, obligations or
provisions under this Agreement, the Ancillary Agreements or any agreement
between any member of the FIS Group on the one hand and any member of the FNF
Group on the other hand which remains in effect after the Effective Date, FIS,
for itself and each member of the FIS Group, releases, remises, and forever
discharges FNF and each member of the FNF Group and their Affiliates,
Representatives and insurers, and their respective successors and assigns, and
each of them of and from any and all claims, demands, debts, accounts,
covenants, agreements, obligations, costs, expenses, actions or causes of action
of every nature, character or description, without limitation of law, equity or
otherwise, based in whole or in part on any facts, conduct, activities,
transactions, events or occurrences known or unknown, which have or allegedly
have existed, occurred, happened, arisen or transpired from the beginning of
time to the Effective Date (the "FIS Released Claims"). FIS represents and
warrants that no FIS Released Claim released herein has been assigned,
expressly, impliedly, or by operation of law, and that all FIS Released Claims
released herein are owned by FIS or a member of the FIS Group, who has the sole
authority to release them. FIS agrees that such holder shall forever refrain and
forebear from commencing, instituting or prosecuting any lawsuit, action or
proceeding, judicial, administrative, or otherwise, or otherwise attempting to
collect or enforce any FIS Released Claims which are released and discharged
herein.
Section 7.5 FNF Release.
Effective as of the Effective Date, except for the rights, obligations or
provisions under this Agreement, the Ancillary Agreements or any agreement
between any member of the FIS
37
Group on the one hand and any member of the FNF Group on the other hand which
remains in effect after the Effective Date, FNF, for itself and each member of
the FNF Group, releases, remises, and forever discharges FIS and each member of
the FIS Group and their Affiliates, Representatives and insurers, and their
respective successors and assigns, and each of them of and from any and all
claims, demands, debts, accounts, covenants, agreements, obligations, costs,
expenses, actions or causes of action of every nature, character or description,
without limitation of law, equity or otherwise, based in whole or in part on any
facts, conduct, activities, transactions, events or occurrences known or
unknown, which have or allegedly have existed, occurred, happened, arisen or
transpired from the beginning of time to the Effective Date (the "FNF Released
Claims"). FNF represents and warrants that no FNF Released Claim released herein
has been assigned, expressly, impliedly, or by operation of law, and that all
FNF Released Claims released herein are owned by FNF or a member of the FNF
Group, who has the sole authority to release them. FNF agrees that such holder
shall forever refrain and forebear from commencing, instituting or prosecuting
any lawsuit, action or proceeding, judicial, administrative, or otherwise, or
otherwise attempting to collect or enforce any FNF Released Claims which are
released and discharged herein.
Section 7.6 Approval by Disinterested Directors.
FIS and FNF agree that, from the Effective Date until the Distribution
Date, any Contract to be entered into between any member of the FNF Group, on
the one hand, and any member of the FIS Group, on the other hand, shall, as a
condition precedent to its effectiveness, be approved by a majority of the
disinterested directors of each of FNF and FIS.
Section 7.7 Right of First Refusal.
(a) FNF and FIS agree that, in the event that FIS desires to Transfer the
PI Business and/or the LSI Business, whether through a Transfer of more than
fifty percent (50%) of the stock or interest in, or a Transfer of all or
substantially all of the assets of, any Person conducting such business(es), to
any Independent Offeror during the Applicable Period (as defined below), such
that a majority of the PI Business and/or a majority of the LSI Business, as the
case may be, will, after such Transfer, no longer be a conducted within, or the
assets thereof owned as a part of, the FIS Group (a "Qualifying Transfer"), FIS
shall, and shall cause the applicable members of the FIS Group to, follow the
procedures set forth in this Section 7.7, it being understood that none of (x) a
sale of one hundred percent (100%) of the stock of FIS, in one transaction or a
series of related transactions, nor (y) a sale of one hundred percent (100%) of
the assets of the FIS, in one transaction or a series of related transactions,
nor (z) the merger of FIS with or into any other Person, regardless of whether
FIS or such other person is the surviving entity in such merger, shall be deemed
a "Qualifying Transfer." "Applicable Period" means the period beginning on the
Effective Date and ending on the earlier to occur of (i) June 30, 2008, (ii)
with respect to the PI Business, the date that PI ceases to (A) manage certain
title plant assets of any members of the FNF Group and (B) provide access to any
FNF Group-title plant assets to any members of the FNF Group, and (iii) with
respect to the LSI Business, the date that no member of the FNF Group is
providing services in connection with the LSI Business.
38
(b) FIS shall not, and shall not permit any member of the FIS Group to,
undertake a Qualifying Transfer without first offering to FNF the right to
purchase the stock, interests, assets, or business involved in such Qualifying
Transfer, such offering to be made by written notice (the "Offer Notice"). If
FIS or any member of the FIS Group shall receive a bona fide written offer from
any Independent Offeror to undertake a Qualifying Transfer, and if FIS or the
member of the FIS Group, as applicable, desires to accept that offer (any such
offer being an "Offer"), FIS shall deliver or cause to be delivered to FNF the
Offer Notice, including with that notice a copy of any contract or other
writing(s) evidencing the Offer. The Offer Notice shall specify (A) the price at
which the stock, interests, assets, or business involved in such Qualifying
Transfer are offered and (B) any other material terms of the proposed Offer.
(c) FNF may exercise its right of first refusal by giving written notice
to FIS within thirty (30) Business Days following the delivery of the Offer
Notice (the "Offer Period"). Upon delivery of such written notice to FIS, FNF
and the FIS shall negotiate exclusively with each other in good faith respect to
such Qualifying Transfer and shall endeavor to reach agreement on any additional
terms of any exercise by FNF of its right to purchase the stock, interests,
assets, or business involved in such Qualifying Transfer, provided, however,
that if FNF and FIS cannot reach agreement on such additional terms of such
purchase within thirty (30) days of the delivery of such notice by FNF, FIS
shall be free to proceed and consummate the Qualifying Transfer to the Intended
Offeror. FNF may, or may cause one of its Affiliates, pursuant to this Section
7.7 to purchase all, but not less than all, of the stock, interests, assets, or
business involved in such Qualifying Transfer.
(d) If FNF elects to purchase the stock, interests, assets, or business
involved in such Qualifying Transfer, such election shall constitute the
agreement by FIS or the applicable member of the FIS Group to sell, and FNF or
the applicable FNF Affiliate to purchase, the stock, interests, assets, or
business involved in such Qualifying Transfers at the price and in accordance
with the terms and conditions contained in the relevant Offer Notice as they may
be added to pursuant to the parties' negotiations pursuant to Section 7.7(c),
with the closing of such sale to occur on a date agreed to by FNF and FIS;
provided, that such date shall not be more than sixty (60) days after delivery
of the Offer Notice, subject to any extension needed to obtain regulatory
approvals required for closing the transaction. The closing of such sale shall
take place at a location agreed to by FNF and FIS, and the tender of payment for
the stock, interests, assets, or business involved in such Qualifying Transfer
shall be made in immediately available funds against delivery of evidence of
ownership of such stock, interests, assets, or business involved in such
Qualifying Transfer as applicable, duly endorsed for transfer and recording,
together with such other documents as FNF may reasonably request.
(e) If FNF elects not to purchase the stock, interests, assets, or
business involved in the Qualifying Transfer, then FIS may sell, or cause the
sale of, the stock, interests, assets, or business involved in the Qualifying
Transfer to an FIS Third Party, on terms providing for a price equal to or
higher than the amount set forth in the Offer Notice and on other terms at least
as favorable to the FIS Third Party as set forth in the Offer Notice. If FIS
fails to complete any such sale within one hundred and eighty (180) days
following the expiration of the time provided for FNF to elect to purchase the
stock, interests, assets, or business involved in the Qualifying
39
Transfer as set forth in the Offer Notice, FIS shall be required to submit
another Offer Notice and comply with the procedures set forth in this Section
7.7 in order to dispose of such stock, interests, assets, or business involved
in the Qualifying Transfer.
ARTICLE 8. INDEMNIFICATION
Section 8.1 Indemnification by FIS Group.
Subject to the provisions hereof and during the term of this Agreement as
specified in Section 9.14, FIS will, and FIS will cause any member of the FIS
Group that receives any Transferred Asset or assumes any Transferred Liability
pursuant to the terms of this Agreement or any Ancillary Agreement (and each of
their respective successors and assigns) to, jointly and severally indemnify,
defend and hold harmless FNF, each member of the FNF Group, each of their
respective past and present Representatives, and each of their respective
successors and assigns (collectively, the "FNF Indemnified Parties") from and
against any and all Indemnifiable Losses incurred or suffered by the FNF
Indemnified Parties arising or resulting from the following, whether, except as
set forth below, such Indemnifiable Losses arise or accrue prior to, on or
following the Effective Date:
(a) the failure by FIS or any of FIS' Affiliates or any other Person to
pay, perform or otherwise promptly discharge any Liabilities or contractual
obligations associated with the Transferred Liabilities or the operation of the
Transferred Business, whether arising before or after the Distribution Date;
(b) the operations, liabilities and obligations of the Transferred
Business or the operation, liabilities and obligations of other businesses
operated by the FIS Group commencing after the Effective Date;
(c) any guarantee, indemnification obligation, surety bond or other credit
support arrangement by FNF or any of its Affiliates for the benefit of FIS,
subject to any limitations on liability in such agreement;
(d) any breach by FIS or any of FIS' Affiliates of this Agreement, the
Ancillary Agreements, any other agreement to which any of them is a party, FIS'
certificate of incorporation, FIS' by-laws or any law of regulation, subject to
any limitations on such liability in such Ancillary Agreements;
(e) any untrue statement of, or omission to state, a material fact in the
FIS Public Filings or the FNF Public Filings to the extent it was required to be
included therein and to the extent it was as a result of information that FIS
furnished to FNF or which FNF incorporated by reference from the FIS Public
Filings, if such statement or omission was made or occurred before the
Distribution Date;
(f) any untrue statement of, or omission to state, a material fact in the
IPO Registration Statement or any prospectus related to the IPO, except to the
extent the statement
40
was made or omitted in reliance upon information provided to FIS by FNF
expressly for use in any registration statement or prospectus or information
relating to and provided by any underwriter expressly for use in any
registration statement or prospectus; and
(g) any actions or liability imposed by any Governmental Authorities on
the Transferred Business.
Section 8.2 Indemnification by FNF Group.
Subject to the provisions hereof and during the term of this Agreement as
specified in Section 9.14, FNF will, and FNF will cause any member of the FNF
Group that transfers any Transferred Asset pursuant to the terms of this
Agreement or any Ancillary Agreement (and each of their respective successors
and assigns) to, jointly and severally indemnify, defend and hold harmless each
member of the FIS Group, each of their respective past and present
Representatives, and each of their respective successors and assigns
(collectively, the "FIS Indemnified Parties") from and against any and all
Indemnifiable Losses incurred or suffered by the FIS Indemnified Parties arising
as a result of the Distribution or arising or resulting from the following,
whether, except as set forth below, such Indemnifiable Losses arise or accrue
prior to, on or following the Effective Date:
(a) the failure of FNF or any Affiliate of FNF or any other Person or
entity to pay, perform or otherwise promptly discharge any liabilities of FNF or
its Affiliates other than liabilities associated with the Transferred
Liabilities or the operation of the Transferred Business, whether arising before
or after the Distribution Date;
(b) the operations, liabilities, and obligations of FNF and its Affiliates
and their respective businesses other than liabilities associated with
Transferred Business or the operation, liabilities and obligations of other
businesses operated by the FIS Group commencing after the Effective Date;
(c) any guarantee, indemnification obligation, surety bond or other credit
support arrangement by FIS or any of its Affiliates for the benefit of FNF,
subject to any limitations on liability in such agreement;
(d) any breach by FNF or any of its Affiliates of this Agreement, any of
the Ancillary Agreements, any other agreement to which any of them is a party,
FNF' certificate of incorporation, FNF's by-laws, or any law or regulation,
subject to any limitations on such liability in such Ancillary Agreements, FNF'
certificate of incorporation or FNF's by-laws;
(e) any untrue statement of, or omission to state, a material fact in the
FIS Public Filings or the FNF Public Filings to the extent it was required to be
included therein and to the extent it was as a result of information that FNF
furnished to FIS or which FIS incorporated by reference from FNF's Public
Filings (other than the IPO Registration Statement or any prospectus related to
the IPO);
41
(f) any untrue statement of, or omission to state, a material fact
contained in the IPO Registration Statement or any prospectus related to the
IPO, but only to the extent the untrue statement or omission was made or omitted
in reliance upon information provided by FNF expressly for use in any
registration statement or prospectus;
(g) any actions or liability imposed by any Governmental Authorities on
the FNF Business; and
(h) any action or liability arising as a result of the Distribution.
Section 8.3 Claim Procedure.
(a) Claim Notice. A party that seeks indemnity under this Article 8 (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 the
part of the Indemnified Party in so notifying the Indemnifying Party will
relieve the Indemnifying Party of any Liability 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 9.3.
(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)
Business Days after the receipt of the notice referenced in Section 8.3(b)(ii)
hereof, the parties will begin the process to resolve the matter in accordance
with the dispute resolution provisions of Section 9.3 hereof. Upon ultimate
resolution thereof, the parties will take such actions as are reasonably
necessary to comply with such resolution.
(d) Third Party Claims.
(i) In the event that the Indemnified Party receives notice or
otherwise learns of the assertion by a Person who is not a member of
either Group of any claim or the commencement of any Action (collectively,
a "Third-Party Claim") with respect to which the Indemnifying Party may be
obligated to provide indemnification under this Article 8,
42
the Indemnified Party will give written notification to the Indemnifying
Party of the Third-Party Claim. Such notification will be given within
five (5) Business 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 or obligation hereunder
except to the extent of any Damages caused by or arising out of such
failure. Within twenty (20) Business 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; provided, however,
that if the Indemnifying Party assumes control of such defense and the
Indemnified Party concludes that the Indemnifying Party and the
Indemnified Party have conflicting interests or different defenses
available with respect to such Third-Party Claim, the reasonable fees and
expenses of counsel to the Indemnified Party will be considered "Damages"
for purposes of this Agreement. 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.
(iii) 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.
43
Section 8.4 Limitations.
(a) Insurance Proceeds; Third Party Coverage. The amount of any Damages
for which indemnification is provided under this Agreement will be net of any
amounts actually recovered by the Indemnified Party from any third Person
(including, without limitation, amounts actually recovered under insurance
policies) with respect to such Damages. Any Indemnifying Party hereunder will be
subrogated to the rights of the Indemnified Party upon payment in full of the
amount of the relevant indemnifiable Damages. An insurer who would otherwise be
obligated to pay any claim will not be relieved of the responsibility with
respect thereto or, solely by virtue of the indemnification provision hereof,
have any subrogation rights with respect thereto. If any Indemnified Party
recovers an amount from a third Person in respect of Damages for which
indemnification is provided in this Agreement after the full amount of such
indemnifiable Damages has been paid by an Indemnifying Party or after an
Indemnifying Party has made a partial payment of such indemnifiable Damages and
the amount received from the third Person exceeds the remaining unpaid balance
of such indemnifiable Damages, then the Indemnified Party will promptly remit to
the Indemnifying Party the excess (if any) of (X) the sum of the amount
theretofore paid by such Indemnifying Party in respect of such indemnifiable
Damages plus the amount received from the third Person in respect thereof, less
(Y) the full amount of such indemnifiable Damages.
(b) Insurance Coverage Procedures. Notwithstanding anything to the
contrary in this Article 8, in the event that a FIS Group member is an
Indemnifying Party, the initial presumption will be that there is no insurance
coverage for any such Damages, and the Indemnifying Party will, upon request by
FNF, fully indemnify, defend and hold harmless the Indemnified Party from and
against any and all such Damages. Once the Indemnifying Party has discharged
this obligation to the Indemnified Party, the Indemnifying Party may request
that the Indemnified Party pursue insurance coverage from one or more insurers
in connection with such Damages. If requested, the Indemnified Party will pursue
insurance coverage, including, if necessary, the filing of coverage litigation,
all of which will be at the Indemnifying Party's sole cost and expense. The
Indemnifying Party will pay directly or promptly reimburse the Indemnified Party
for all such costs and expenses, as directed by the Indemnified Party. The
Indemnified Party will retain full and exclusive control of all such matters
(including, without limitation, the settlement of underlying covered claims
and/or coverage claims against insurers), and the Indemnified Party will have
the right to select counsel with the concurrence of Indemnifying Party, which
concurrence will not be withheld unreasonably. The net proceeds of any insurance
recovery (after deducting any costs and expenses that have not yet been paid or
reimbursed by the Indemnifying Party) will be paid to the Indemnifying Party. At
all times, the Indemnifying Party will cooperate with the Indemnified Party's
insurers and/or with the Indemnified Party in the pursuit of insurance coverage,
as and when reasonably requested to do so by the Indemnified Party. It is not
the intent of this Section 8.4(b) to absolve the Indemnifying Party of any
responsibility to the Indemnified Party for those Damages in connection with
which the Indemnified Party actually secures insurance coverage, but to allocate
the costs of pursuing such coverage to the Indemnifying Party and to provide the
Indemnified Party with a full, interim indemnity from the Indemnifying Party
until such time as the extent of insurance coverage is determined and is
obtained. Notwithstanding anything to the contrary in this Section 8.4(b), if
44
the Indemnified Party in its sole discretion determines that it is necessary to
do so, the Indemnified Party may pursue insurance coverage for the benefit of
Indemnifying Party before the Indemnifying Party has fully discharged its
obligations to the Indemnified Party under this Agreement. In such event, the
Indemnified Party may unilaterally take any steps it determines are necessary to
preserve such insurance coverage, including, by way of example and not by way of
limitation, tendering the defense of any claim or suit to an insurer or insurers
of the Indemnified Party if the Indemnified Party concludes that such action may
be required by the relevant insurance policy or policies. Any such actions by
the Indemnified Party will not relieve Indemnifying Party of any of its
obligations to the Indemnified Party under this Agreement, including the
Indemnifying Party's obligation to pay directly or reimburse the Indemnified
Party for costs and expenses.
(c) Tax Characterization. Any indemnification payment made under this
Agreement will be characterized for Tax purposes as a contribution or
distribution or payment of an assumed or retained liability, as applicable.
(d) Parent Payments. Notwithstanding the joint and several indemnification
obligations of each Group as set forth in Sections 8.1 and 8.2, the parties
agree that the indemnification obligation of any FNF Group member or FIS Group
member, as applicable, for Damages will be satisfied by a direct payment from
FNF or FIS, as applicable, to the other party irrespective of which Group member
is found liable for Damages.
(e) Other Agreements. Notwithstanding anything to the contrary in Section
8.1 or Section 8.2, (i) indemnification with respect to Taxes shall be governed
exclusively by the Tax Disaffiliation Agreement, (ii) to the extent the
Intellectual Property Cross License Agreement specifically provides
indemnification with respect to Third-Party Claims for infringement of
Intellectual Property rights, the Intellectual Property Cross License Agreement
shall govern with respect to that indemnification, and (iii) to the extent the
Employee Matters Agreement specifically provides indemnification with respect to
certain employee-related Transferred Liabilities, the Employee Matters Agreement
shall govern with respect to that indemnification. To the extent indemnification
is not provided in such Ancillary Agreements, the terms of this Agreement shall
govern.
(f) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY ANCILLARY
AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY OR ANY OF ITS GROUP
MEMBERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS SUFFERED BY AN INDEMNIFIED
PARTY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, IN CONNECTION WITH ANY
DAMAGES ARISING HEREUNDER OR THEREUNDER; PROVIDED, HOWEVER, THAT TO THE EXTENT
AN INDEMNIFIED PARTY IS REQUIRED TO PAY ANY SPECIAL, INCIDENTAL, INDIRECT,
COLLATERAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS TO A PERSON WHO IS
NOT A MEMBER OF EITHER GROUP IN CONNECTION WITH A THIRD PARTY CLAIM, SUCH
DAMAGES WILL CONSTITUTE
45
DIRECT DAMAGES AND NOT BE SUBJECT TO THE LIMITATION SET FORTH IN THIS SECTION
8.4(f).
ARTICLE 9. MISCELLANEOUS
Section 9.1 Governing Law.
The internal laws of the State of Florida (without reference to its
principles of conflicts of law) govern the construction, interpretation and
other matters arising out of or in connection with this Agreement (including,
for the avoidance of doubt, those claims or disputes referenced in Section
9.3(f)) and, unless expressly provided therein, each Ancillary Agreement, and
each of the exhibits and schedules hereto and thereto (whether arising in
contract, tort, equity or otherwise).
Section 9.2 Jurisdiction.
Subject to Section 9.3, if any Dispute arises out of or in connection with
this Agreement or any Ancillary Agreement, except as expressly contemplated by
another provision of this Agreement or any Ancillary Agreement, the parties
irrevocably (and the parties will cause each other member of their respective
Group to irrevocably) (a) consent and submit to the exclusive jurisdiction of
federal and state courts located in Xxxxx County, 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.
Section 9.3 Dispute Resolution.
(a) Amicable Resolution. FNF and FIS mutually desire that friendly
collaboration will continue between them. Accordingly, they will try, and they
will cause their respective Group members to try, to resolve in an amicable
manner all disagreements and misunderstandings connected with their respective
rights and obligations under this Agreement or any Ancillary Agreement,
including any amendments hereto or thereto. In furtherance thereof, in the event
of any dispute or disagreement (a "Dispute") between any FNF Group member and
any FIS Group member as to the interpretation of any provision of this Agreement
or any Ancillary Agreement executed in connection herewith or therewith (or the
performance of obligations hereunder or thereunder), then unless otherwise
provided in any Ancillary Agreement, the matter, upon written request of either
party, will be referred for resolution to a steering committee established
pursuant to this Section 9.3(a) (the "Steering Committee"). The Steering
Committee will have two members, one of whom will be appointed by FNF and the
other of whom will be appointed by FIS, and each of whom shall be a senior
executive of the party appointing them. Each of FNF and FIS will use its good
faith efforts to avoid replacing the initial members of the Steering Committee
for the first year after the Effective Date. Thereafter, FNF and FIS will, to
the extent practicable, honor the other party's reasonable objections to any
replacements of Steering Committee members. The Steering Committee will make a
good faith effort to promptly resolve all Disputes referred to it. Steering
Committee decisions will be
46
unanimous and will be binding on FNF and FIS. If the Steering Committee does not
agree to a resolution of a Dispute within fifteen (15) days after the reference
of the matter to it, the Dispute will be referred to the Presidents of FNF and
of FIS. If the Presidents do not agree to a resolution of the Dispute within
fifteen (15) days after the reference of the matter to them, then the parties
will be free to exercise the remedies available to it under applicable law,
subject to Sections 9.3(b) and 9.3(c). Notwithstanding anything to the contrary
in this Article 9, any amendment to the terms of this Agreement or any Ancillary
Agreement may only be effected in accordance with Section 9.10.
(b) Mediation. In the event any Dispute cannot be resolved in a friendly
manner as set forth in Section 9.3(a), the parties intend that such Dispute be
resolved by mediation. If the Steering Committee is unable to resolve the
Dispute as contemplated by Section 9.3(a), either FNF or FIS may demand
mediation of the Dispute by written notice to the other in which case the two
parties will select a mediator within ten (10) days after the demand. Neither
party may unreasonably withhold consent to the selection of the mediator. Each
of FNF and FIS will bear its own costs of mediation but both parties will share
the costs of the mediator equally.
(c) Arbitration. In the event that the Dispute is not resolved in a
friendly manner as set forth in Section 9.3(a) or through mediation pursuant to
Section 9.3(b), the latter within thirty (30) days of the submission of the
Dispute to mediation, either party involved in the Dispute may submit the
dispute to binding arbitration pursuant to this Section 9.3(c). All Disputes
submitted to arbitration pursuant to this Section 9.3(c) 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 Arbitrator (or any place agreed to by the parties and the
Arbitrator). The arbitration shall be by a single qualified Arbitrators
experienced in the matters at issue, such Arbitrator to be mutually agreed upon
by FNF and FIS. If the parties 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 or difference,
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. The parties
agree that the length of time to be provided in any arbitration action to
conduct discovery shall be limited to ninety (90) days, the length of time to
conduct the arbitration hearing shall be limited to ten (10) days (with each
party having equal time) and that the Arbitrator shall be required to render his
or her decision within thirty (30) days of the completion of the arbitration
hearing. All costs and expenses incurred by the Arbitrator shall be shared
equally by the parties. Each party shall bear its own costs and expenses in
connection with any such arbitration proceeding. The use of any alternative
dispute resolution procedures hereunder will not be
47
construed under the doctrines of laches, waiver or estoppel to affect adversely
the rights of either party.
(d) Non-Exclusive Remedy.
(i) Nothing in this Section 9.3 will prevent either FNF or FIS from
commencing formal litigation proceedings or seeking injunctive or similar
relief if any delay resulting from efforts to mediate such Dispute could
result in serious and irreparable injury to either FNF, FIS or any member
of either party's Group.
(ii) Nothing in this Section 9.3 will prevent either FNF or FIS from
immediately seeking injunctive or interim relief in the event of any
actual or threatened breach of any confidentiality provisions of this
Agreement. If an arbitral tribunal has not been appointed with respect to
any Dispute at the time of such actual or threatened breach, then either
party may seek such injunctive or interim relief from any court with
jurisdiction over the matter. If an arbitral tribunal has been appointed
with respect to any Dispute at the time of such actual or threatened
breach, then the parties agree to submit to the jurisdiction of the state
and federal courts of Delaware, pursuant to Section 9.2, with respect to
such matter.
(e) Commencement of Dispute Resolution Procedure. Notwithstanding anything
to the contrary in this Agreement or any Ancillary Agreement, FNF and FIS are
the only members of their respective Group entitled to commence a dispute
resolution procedure under this Agreement, whether pursuant to Section 8.3, this
Section 9.3 or otherwise, and each party will cause its respective Group members
not to commence any dispute resolution procedure other than through such party
as provided in this Section 9.3(d).
Section 9.4 Notices.
Each party giving any notice required or permitted under this Agreement or
any Ancillary Agreement will give the notice in writing and use one of the
following methods of delivery to the party to be notified, at the address set
forth below or another address of which the sending party has been notified in
accordance with this Section 9.4: (a) personal delivery; (b) facsimile or
telecopy transmission with a reasonable method of confirming transmission; (c)
commercial overnight courier with a reasonable method of confirming delivery; or
(d) pre-paid, United States of America certified or registered mail, return
receipt requested. Notice to a party is effective for purposes of this Agreement
or any Ancillary Agreement only if given as provided in this Section 9.4 and
will be deemed given on the date that the intended addressee actually receives
the notice.
If to FNF, to
Fidelity National Financial, Inc.
Attention: General Counsel
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX, 00000
Telephone: 000.000.0000
48
If to FIS, to:
Fidelity National Information Services, Inc.
Attention: General Counsel
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX, 00000
Telephone: 000.000.0000
Section 9.5 Binding Effect and Assignment.
This Agreement and each Ancillary Agreement binds and benefits the parties
and their respective successors and assigns. Notwithstanding anything in Section
6.8 to the contrary, neither party may assign any of its rights or delegate any
of its obligations under this Agreement or any Ancillary Agreement without the
written consent of the other party which consent may be withheld in such party's
sole and absolute discretion and any assignment or attempted assignment in
violation of the foregoing will be null and void. Notwithstanding the preceding
sentence, either party may assign this Agreement and any Ancillary Agreement in
connection with a merger transaction in which such party is not the surviving
entity or the sale of all or substantially all of its assets.
Section 9.6 Severability.
If any provision of this Agreement or any Ancillary Agreement is
determined to be invalid, illegal or unenforceable, the remaining provisions of
this Agreement or such Ancillary Agreement, as the case may be, shall remain in
full force, if the essential terms and conditions of this Agreement or such
Ancillary Agreement, as the case may be, for each party remain valid, binding
and enforceable.
Section 9.7 Entire Agreement.
This Agreement, together with the Ancillary Agreements and each of the
exhibits and schedules appended hereto and thereto, constitutes the final
agreement between the parties, and is the complete and exclusive statement of
the parties' agreement on the matters contained herein and therein. All prior
and contemporaneous negotiations and agreements between the parties with respect
to the matters contained herein and therein are superseded by this Agreement and
the Ancillary Agreements, as applicable. In the event of any conflict between
any provision in this Agreement and any provision in any Ancillary Agreement, on
the other hand, pertaining to the subject matter of such Ancillary Agreement,
the specific provisions in such Ancillary Agreement will control over the
provisions in this Agreement.
Section 9.8 Counterparts.
The parties may execute this Agreement and any Ancillary Agreement in
multiple counterparts, each of which constitutes an original as against the
party that signed it, and all of which together constitute one agreement. The
signatures of both parties need not appear on the same counterpart. The delivery
of signed counterparts by facsimile or email transmission that
49
includes a copy of the sending party's signature is as effective as signing and
delivering the counterpart in person.
Section 9.9 Expenses.
Except as otherwise set forth herein or in any Ancillary Agreement, each
of FIS and FNF shall be responsible for its own costs (including third party
costs) incurred in connection with this Agreement, provided, however, that (i)
FIS shall be responsible for, and shall pay as incurred or due, all costs, fees
and expenses relating to the IPO, including any underwriting discounts and
commissions, and any printing and accounting out-of-pocket costs, and all
out-of-pocket costs and expenses for any financial or legal advisors, whether
retained by FIS or FNF and (ii) FNF will be responsible for, and shall pay as
incurred or due, all out-of-pocket costs, fees and expenses relating to the
Distribution. Responsibility for payment of costs, fees and expenses relating to
the Contribution will be agreed to by the parties, including as set forth in any
Ancillary Agreement.
Section 9.10 Amendment.
(a) The parties may amend this Agreement or any Ancillary Agreement only
by a written agreement signed by each party to be bound by the amendment and
that identifies itself as an amendment to this Agreement or such Ancillary
Agreement, as applicable.
(b) Any such amendment of this Agreement or any Ancillary Agreement shall,
before effectiveness, be first approved by a majority of the disinterested
directors of each of FNF and FIS.
Section 9.11 Waiver.
The parties may waive a provision of this Agreement or an Ancillary
Agreement only by a writing signed by the party intended to be bound by the
waiver. A party is not prevented from enforcing any right, remedy or condition
in the party's favor because of any failure or delay in exercising any right or
remedy or in requiring satisfaction of any condition, except to the extent that
the party specifically waives the same in writing. A written waiver given for
one matter or occasion is effective only in that instance and only for the
purpose stated. A waiver once given is not to be construed as a waiver for any
other matter or occasion. Any enumeration of a party's rights and remedies in
this Agreement or any Ancillary Agreement is not intended to be exclusive, and a
party's rights and remedies are intended to be cumulative to the extent
permitted by law and include any rights and remedies authorized in law or in
equity.
Section 9.12 Authority.
Each of the parties represents to the other that (a) it has the corporate
or other requisite power and authority to execute, deliver and perform this
Agreement and each of the Ancillary Agreements to which it is a party, (b) the
execution, delivery and performance of this Agreement and each of the Ancillary
Agreements to which it is a party have been duly authorized by all necessary
corporate or other action, (c) it has duly and validly executed and delivered
this
50
Agreement and each of the Ancillary Agreements to which it is a party, and (d)
this Agreement and each of the Ancillary Agreements to which it is a party is a
legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equity principles.
Section 9.13 Construction of Agreement.
(a) Where this Agreement or any Ancillary Agreement states that a party
"will" or "shall" perform in some manner or otherwise act or omit to act, it
means that the party is legally obligated to do so in accordance with this
Agreement or such Ancillary Agreement, as applicable.
(b) Wherever any provision of the Agreement is in direct conflict with any
provision of an Ancillary Agreement, the parties agree that the provisions of
the Ancillary Agreement shall be binding on the parties; provided, however, that
Section 7.7 hereof shall take precedence over any section in any Ancillary
Agreement that purports to contravene, prohibit or limit such section or the
operation thereof.
(c) The captions, titles and headings, and table of contents, included in
this Agreement and the Ancillary Agreements are for convenience only, and do not
affect this Agreement's or such Ancillary Agreements' construction or
interpretation. When a reference is made in this Agreement or any Ancillary
Agreement to an Article or a Section, exhibit or schedule, such reference will
be to an Article or Section of, or an exhibit or schedule to, this Agreement
unless otherwise indicated.
(d) Neither this Agreement nor any uncertainty or ambiguity herein shall
be construed against any party under any rule of construction, and no party
shall be considered the draftsman. The parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and intentions
of all parties hereto.
(e) This Agreement and the Ancillary Agreements are for the sole benefit
of the parties hereto and their respective Group members and, except for the
indemnification rights of the FNF Indemnified Parties and the FIS Indemnified
Parties under this Agreement or as expressly provided in any Ancillary
Agreement, do not, and are not intended to, confer any rights or remedies in
favor of any Person (including any employee or stockholder of FNF or FIS) other
than the parties signing this Agreement and their respective Group members.
(f) The words "including," "includes," or "include" are to be read as
listing non-exclusive examples of the matters referred to, whether or not words
such as "without limitation" or "but not limited to" are used in each instance.
(g) For purposes of this Agreement, after the Effective Date the
Transferred Business will be deemed to be the business of FIS and the FIS Group,
and all references made in this
51
Agreement to FIS as a party which operates as of a time following the Effective
Date, will be deemed to refer to all members of the FIS Group as a single party
where appropriate.
(h) Unless otherwise expressly specified in an Ancillary Agreement, all
references in this Agreement or any Ancillary Agreement to "dollars" or "$"
means United States Dollars. If any payment required to be made hereunder is
denominated in a currency other than United States Dollars, such payment will be
made in United States Dollars and the amount thereof will be computed using
FNF's P&L rate for the current month.
(i) Any reference in this Agreement or any Ancillary Agreement to a
"member" of a Group means a party to this Agreement or another Person referred
to in the definition of FIS Group or FNF Group, as applicable.
Section 9.14 Term and Termination.
(a) This Agreement shall terminate at the Distribution Date, provided,
however, that (A) the provisions of Article 6 shall survive any termination of
this Agreement for a period of seven (7) years; (B) the provisions of Sections
7.1 and 7.3(f) shall survive any termination of this Agreement for a period of
four (4) years; (C) the provisions of Section 7.7 shall survive any termination
of this Agreement for the period of the applicability of such Section 7.7 as set
forth therein; (D) the provisions of Article 8 shall survive any termination of
this Agreement for a period of eighteen (18) months; and (E) Article 9 shall
survive any termination of this Agreement for the period of survival of any
other Section or Article of this Agreement.
(b) This Agreement may be terminated by either FNF or FIS at any time
prior to the effectiveness of the IPO Registration Statement. After the date of
the effectiveness of the IPO Registration Statement, this Agreement may only be
terminated with the mutual consent of both FNF and FIS.
Section 9.15 Limitation on Damages.
EXCEPT TO THE EXTENT OF ANY INDEMNIFICATION OBLIGATIONS HEREUNDER, BUT NOT
WITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT TO
THE CONTRARY, IN NO EVENT WILL EITHER PARTY OR ANY OF ITS GROUP MEMBERS BE
LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES OR LOST PROFITS IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES,
OR INJURIES ARISING OUT OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS AGREEMENT.
52
In witness whereof, each of the parties has caused this Agreement to be
executed on its behalf by a duly authorized officer on the date first set forth
above.
Fidelity National Financial, Inc.
---------------------------------
By:
-----------------------------
Title:
--------------------------
Fidelity National Information
Services, Inc.
---------------------------------
By:
-----------------------------
Title:
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53
