EXHIBIT 99.2
Execution Version
AMENDED AND RESTATED REVERSE CORPORATE SERVICES AGREEMENT
This Amended and Restated Corporate Services Agreement (this "Agreement")
is dated as of October 23, 2006, by and between FIDELITY NATIONAL INFORMATION
SERVICES, INC., a Georgia corporation ("FIS" or "PROVIDING PARTY"), and FIDELITY
NATIONAL TITLE GROUP, INC., a Delaware corporation that, after the consummation
of the Transactions (as hereinafter defined), will be known as "Fidelity
National Financial, Inc." ("FNF" or "RECEIVING PARTY"), and. FIS and FNF shall
be referred to together in this Agreement as the "Parties" and individually as a
"Party."
WHEREAS, the Parties have previously entered into an Amended and
Restated Reverse Corporate Services Agreement dated as of February 1, 2006 (the
"Prior Agreement"); and
WHEREAS, in connection with the consummation of the transactions (the
"Transactions") contemplated by that certain Securities Exchange and
Distribution Agreement dated as of June 25, 2006, as amended and restated as of
September 18, 2006 (as so amended and restated, the "Distribution Agreement"),
between Fidelity National Financial, Inc. ("Old FNF") and FNF, and the
consummation of the transactions contemplated by that certain Agreement and Plan
of Merger dated as of June 25, 2006 as previously amended and as amended and
restated as of September 18, 2006 (as so amended and restated, the "FIS Merger
Agreement"), between Old FNF and FIS, the Parties wish to set forth amend and
restate the Prior Agreement;
NOW THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE I
CORPORATE SERVICES
1.1 Corporate Services. This Agreement sets forth the terms and conditions
for the provision by PROVIDING PARTY to RECEIVING PARTY of various corporate
services and products, as more fully described below and in Schedule 1.1(a)
attached hereto (the Scheduled Services, the Omitted Services, the Resumed
Services and Special Projects (as defined below), collectively, the "Corporate
Services").
(a) PROVIDING PARTY, through its Subsidiaries and Affiliates (each as
defined below), and their respective employees, agents or contractors, shall
provide or cause to be provided to RECEIVING PARTY and its Subsidiaries all
services set forth on Schedule 1.1(a) (the "Scheduled Services") on and after
the Effective Date (with such services to be provided to RECEIVING PARTY's
Subsidiaries as they become Subsidiaries of RECEIVING PARTY, subject to the
exception in clause (ii) of Section 1.2(a)). RECEIVING PARTY shall pay fees to
PROVIDING PARTY for providing the Scheduled Services or causing the Scheduled
Services to be provided as set forth in Schedule 1.1(a). For purposes of this
Agreement, "Subsidiary" means, with respect to either Party, any corporation,
partnership, company or other
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entity of which such Party controls or owns, directly or indirectly, more than
fifty percent (50%) of the stock or other equity interest entitled to vote on
the election of the members to the board of directors or similar governing body,
or otherwise has the power to elect a majority of the members to the board of
directors or similar governing body; and "Affiliate" means, with respect to
either Party, any corporation, partnership, company, or other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Party. As used
herein, "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such entity,
whether through ownership of voting securities or other interests, by contract
or otherwise.
(b) PROVIDING PARTY, through its Subsidiaries and Affiliates, and
their respective employees, agents or contractors, shall provide or cause to be
provided to RECEIVING PARTY and its Subsidiaries all services that PROVIDING
PARTY was performing for RECEIVING PARTY and its Subsidiaries as of the
Effective Date that pertain to and are a part of Scheduled Services under
Section 1.1(a) (with such services to be provided to RECEIVING PARTY's
Subsidiaries as they become Subsidiaries of RECEIVING PARTY, subject to the
exception in clause (ii) of Section 1.2(a)), which are not expressly included in
the list of Scheduled Services in Schedule 1.1(a), but are required to conduct
the business of RECEIVING PARTY and its Subsidiaries (the "Omitted Services"),
unless RECEIVING PARTY consents in writing to the termination of such services.
Such Omitted Services shall be added to Schedule 1.1(a) and thereby become
Scheduled Services, as soon as reasonably practicable after the Effective Date
by the Parties. In the event that RECEIVING PARTY or its Subsidiaries had been
allocated charges or otherwise paid PROVIDING PARTY or its Subsidiaries for such
Omitted Services immediately prior to the Effective Date, RECEIVING PARTY shall
pay to PROVIDING PARTY for providing the Omitted Services or causing the Omitted
Services to be provided hereunder fees equal to the actual fees paid for such
Omitted Services immediately preceding the Effective Date; provided, that
payment of such fees by RECEIVING PARTY for the Omitted Services provided
hereunder shall be retroactive to the first day of the calendar quarter in which
either Party identifies such services as Omitted Services, but in no event shall
RECEIVING PARTY be required to pay for any Omitted Services provided hereunder
by PROVIDING PARTY or its Subsidiaries or Affiliates prior to the Effective
Date. In the event that RECEIVING PARTY or its Subsidiaries had not been
allocated charges or otherwise paid PROVIDING PARTY or its Subsidiaries or
Affiliates for such Omitted Services immediately prior to the Effective Date,
the Parties shall negotiate in good faith a fee to be based on the cost of
providing such Omitted Services, which shall in no event be less than the
Default Fee (as defined below); provided, that payment of such fees by RECEIVING
PARTY for the Omitted Services provided hereunder by PROVIDING PARTY shall be
retroactive to the first day of the calendar quarter in which either Party
identifies such services as Omitted Services, but in no event shall RECEIVING
PARTY be required to pay for any such Omitted Services provided hereunder by
PROVIDING PARTY or its Subsidiaries or Affiliates prior to the Effective Date.
The "Default Fee" means an amount equal to one hundred fifty percent (150%) of
the salary of each full-time employee, on an hourly basis, who provides the
applicable Corporate Service or Transition Assistance (as defined in Section
2.3).
(c) At RECEIVING PARTY's written request, PROVIDING PARTY, through its
Subsidiaries and Affiliates, and their respective employees, agents or
contractors, shall use commercially reasonable efforts to provide or cause to be
provided to RECEIVING
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PARTY and its Subsidiaries any Scheduled Service that has been terminated at
RECEIVING PARTY's request pursuant to Section 2.2 (the "Resumed Services");
provided, that PROVIDING PARTY shall have no obligation to provide a Resumed
Service if providing such Resumed Service will have a material adverse impact on
the other Corporate Services. Schedule 1.1(a) shall from time to time be amended
to reflect the resumption of a Resumed Service and the Resumed Service shall be
set forth thereon as a Scheduled Service.
(d) At RECEIVING PARTY's written request, PROVIDING PARTY, through its
Subsidiaries and Affiliates, and their respective employees, agents or
contractors, shall use commercially reasonable efforts to provide additional
corporate services that are not described in the Schedule 1.1(a) and that are
neither Omitted Services nor Resumed Services ("Special Projects"). RECEIVING
PARTY shall submit a written request to PROVIDING PARTY specifying the nature of
the Special Project and requesting an estimate of the costs applicable for such
Special Project and the expected time frame for completion. PROVIDING PARTY
shall respond promptly to such written request, but in no event later than
twenty (20) days, with a written estimate of the cost of providing such Special
Project and the expected time frame for completion (the "Cost Estimate"). If
RECEIVING PARTY provides written approval of the Cost Estimate within ten (10)
days after PROVIDING PARTY delivers the Cost Estimate, then within a
commercially reasonable time after receipt of RECEIVING PARTY's written request,
PROVIDING PARTY shall begin providing the Special Project; provided, that
PROVIDING PARTY shall have no obligation to provide a Special Project where, in
its reasonable discretion and prior to providing the Cost Estimate, it has
determined and notified RECEIVING PARTY in writing that (i) it would not be
feasible to provide such Special Project, given reasonable priority to other
demands on its resources and capacity both under this Agreement or otherwise or
(ii) it lacks the experience or qualifications to provide such Special Project.
1.2 Provision of Corporate Services; Excused Performance.
(a) To the extent commercially reasonable, the Parties will work
together and begin the process of migrating the Corporate Services from
PROVIDING PARTY to RECEIVING PARTY, one or more of its Subsidiaries or
Affiliates or a third party (at RECEIVING PARTY's direction) such that the
completion of the migration of the Corporate Services from PROVIDING PARTY to
RECEIVING PARTY, one or more of its Subsidiaries or Affiliates or a third party,
as the case may be, shall occur prior to the end of the Term. PROVIDING PARTY
shall provide or cause to be provided each of the Corporate Services through the
expiration of the Term, except (i) as automatically modified by earlier
termination of a Corporate Service by RECEIVING PARTY in accordance with this
Agreement, (ii) for Corporate Services to or for the benefit of any entity which
ceases to be a Subsidiary of RECEIVING PARTY prior to the end of the Term, or
(iii) as otherwise agreed to by the Parties in writing.
(b) All obligations of PROVIDING PARTY with respect to any one or more
individual Corporate Services or Transition Assistance under this Agreement
shall be excused to the extent and only for so long as a failure by PROVIDING
PARTY with respect thereto is directly attributable to and caused specifically
by a failure by RECEIVING PARTY or any of its
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Subsidiaries to meet their obligations (including any performance) under any
other Related Party Agreement (as defined in the FIS Merger Agreement).
1.3 Third Party Vendors; Consents.
(a) PROVIDING PARTY shall use its commercially reasonable efforts to
keep and maintain in effect its relationships with its vendors that are integral
to the provision of the Corporate Services. PROVIDING PARTY shall use
commercially reasonable efforts to procure any waivers, permits, consents or
sublicenses required by third party licensors, vendors or service providers
under existing agreements with such third parties in order to provide any
Corporate Services hereunder ("Third Party Consents"). In the event that
PROVIDING PARTY is unable to procure such Third Party Consents on commercially
reasonable terms, PROVIDING PARTY agrees to so notify RECEIVING PARTY, and to
assist RECEIVING PARTY with the transition to another vendor. If, after the
Effective Date, any one or more vendors (i) terminates its contractual
relationship with PROVIDING PARTY or ceases to provide the products or services
associated with the Corporate Services or (ii) notifies PROVIDING PARTY of its
desire or plan to terminate its contractual relationship with PROVIDING PARTY or
(iii) ceases providing the products or services associated with the Corporate
Services, then, in either case, PROVIDING PARTY agrees to so notify RECEIVING
PARTY, and to assist RECEIVING PARTY with the transition to another vendor so
that RECEIVING PARTY may continue to receive similar products and services.
(b) PROVIDING PARTY shall not be required to transfer or assign to
RECEIVING PARTY any third party software licenses or any hardware owned by
PROVIDING PARTY or its Subsidiaries or Affiliates in connection with the
provision of the Corporate Services or at the conclusion of the Term.
1.4 Dispute Resolution.
(a) Amicable Resolution. PROVIDING PARTY and RECEIVING PARTY mutually
desire that friendly collaboration will continue between them. Accordingly, they
will try to resolve in an amicable manner all disagreements and
misunderstandings connected with their respective rights and obligations under
this Agreement, including any amendments hereto. In furtherance thereof, in the
event of any dispute or disagreement (a "Dispute") between PROVIDING PARTY and
RECEIVING PARTY in connection with this Agreement (including, without
limitation, the standards of performance, delay of performance or
non-performance of obligations, or payment or non-payment of fees hereunder),
then the Dispute, upon written request of either Party, will be referred for
resolution to the president (or similar position) of the division implicated by
the matter for each of PROVIDING PARTY and RECEIVING PARTY, which presidents
will have fifteen (15) days to resolve such Dispute. If the presidents of the
relevant divisions for each of PROVIDING PARTY and RECEIVING PARTY do not agree
to a resolution of such Dispute within fifteen (15) days after the reference of
the matter to them, such presidents of the relevant divisions will refer such
matter to the president of each of PROVIDING PARTY and RECEIVING PARTY for final
resolution. Notwithstanding anything to the contrary in this Section 1.4, any
amendment to the terms of this Agreement may only be effected in accordance with
Section 11.10.
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(b) Arbitration. In the event that the Dispute is not resolved in a
friendly manner as set forth in Section 1.4(a), either Party involved in the
Dispute may submit the dispute to binding arbitration pursuant to this Section
1.4(b). All Disputes submitted to arbitration pursuant to this Section 1.4(b)
shall be resolved in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, unless the Parties involved mutually agree to
utilize an alternate set of rules, in which event all references herein to the
American Arbitration Association shall be deemed modified accordingly. Expedited
rules shall apply regardless of the amount at issue. Arbitration proceedings
hereunder may be initiated by either Party making a written request to the
American Arbitration Association, together with any appropriate filing fee, at
the office of the American Arbitration Association in Orlando, Florida. All
arbitration proceedings shall be held in the city of Jacksonville, Florida in a
location to be specified by the arbitrators (or any place agreed to by the
Parties and the arbitrators). The arbitration shall be by a single qualified
arbitrator experienced in the matters at issue, such arbitrator to be mutually
agreed upon by PROVIDING PARTY and RECEIVING PARTY. If PROVIDING PARTY and
RECEIVING PARTY fail to agree on an arbitrator within thirty (30) days after
notice of commencement of arbitration, the American Arbitration Association
shall, upon the request of either Party to the Dispute, appoint the arbitrator.
Any order or determination of the arbitral tribunal shall be final and binding
upon the Parties to the arbitration as to matters submitted and may be enforced
by either Party to the Dispute in any court having jurisdiction over the subject
matter or over either Party. All costs and expenses incurred in connection with
any such arbitration proceeding (including reasonable attorneys' fees) shall be
borne by the Party incurring such costs. The use of any alternative dispute
resolution procedures hereunder will not be construed under the doctrines of
laches, waiver or estoppel to affect adversely the rights of either Party.
(c) Non-Exclusive Remedy. Nothing in this Section 1.4 will prevent
either PROVIDING PARTY or RECEIVING PARTY from immediately seeking injunctive or
interim relief in the event (i) of any actual or threatened breach of any of the
provisions of Article VIII or (ii) that the Dispute relates to, or involves a
claim of, actual or threatened infringement of intellectual property. All such
actions for injunctive or interim relief shall be brought in a court of
competent jurisdiction in accordance with Section 11.6. Such remedy shall not be
deemed to be the exclusive remedy for breach of this Agreement, and further
remedies may be pursued in accordance with Section 1.4(a) and Section 1.4(b)
above.
(d) Commencement of Dispute Resolution Procedure. Notwithstanding
anything to the contrary in this Agreement, PROVIDING PARTY and RECEIVING PARTY,
but none of their respective Subsidiaries or Affiliates, are entitled to
commence a dispute resolution procedure under this Agreement, whether pursuant
to Article XI, this Section 1.4 or otherwise, and each Party will cause its
respective Affiliates not to commence any dispute resolution procedure other
than through such Party as provided in this Section 1.4(d).
(e) Compensation. RECEIVING PARTY shall continue to make all payments
due and owing under Article III for Corporate Services not the subject of a
Dispute and shall not off-set such fees by the amount of fees for Corporate
Services that are the subject of the Dispute.
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1.5 Standard of Services.
(a) PROVIDING PARTY shall perform the Corporate Services for RECEIVING
PARTY in a professional and competent manner, using standards of performance
consistent with its performance of such services for itself.
(b) During the Term, PROVIDING PARTY shall maintain a disaster
recovery program for the Corporate Services substantially consistent with the
disaster recovery program in place for such Corporate Services as of the
Effective Date. For the avoidance of doubt, the disaster recovery program
maintained by PROVIDING PARTY will not include a business continuity program.
(c) If RECEIVING PARTY provides PROVIDING PARTY with written notice
("Shortfall Notice") of the occurrence of any Significant Service Shortfall (as
defined below), as determined by RECEIVING PARTY in good faith, PROVIDING PARTY
shall rectify such Significant Service Shortfall as soon as reasonably possible.
For purposes of this Section 1.5(c), a "Significant Service Shortfall" shall be
deemed to have occurred if the timing or quality of performance of Corporate
Services provided by PROVIDING PARTY hereunder falls below the standard required
by Section 1.5(a) hereof; provided that PROVIDING PARTY's obligations under this
Agreement shall be relieved to the extent, and for the duration of, any force
majeure event as set forth in Article V.
1.6 Response Time. PROVIDING PARTY shall respond to and resolve any
problems in connection with the Corporate Services for RECEIVING PARTY within a
commercially reasonable period of time, using response and proposed resolution
times consistent with its response and resolution of such problems for itself.
1.7 Ownership of Materials; Results and Proceeds. All data and information
submitted to PROVIDING PARTY by RECEIVING PARTY, in connection with the
Corporate Services or the Transition Assistance (as defined in Section 2.3) (the
"RECEIVING PARTY Data"), and all results and proceeds of the Corporate Services
and the Transition Assistance with regard to the RECEIVING PARTY Data, is and
will remain, as between the Parties, the property of RECEIVING PARTY. PROVIDING
PARTY shall not and shall not permit its Subsidiaries or Affiliates to use
RECEIVING PARTY Data for any purpose other than to provide the Corporate
Services or Transition Assistance.
ARTICLE II
TERM AND TRANSITION ASSISTANCE
2.1 Term. The term (the "Term") of this Agreement shall commence as of the
date hereof and shall continue until the earliest of:
(i) the date on which the last of the Scheduled Services under
this Agreement is terminated,
(ii) the date on which this Agreement is terminated by mutual
agreement of the Parties, or
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(iii) the second anniversary of the date of this Agreement,
whichever is earlier (in any case, the "Termination Date"); provided, however,
that, with respect to any entity that ceases to be a Subsidiary of RECEIVING
PARTY prior to the Termination Date, the Term with respect to such entity shall
terminate effective as of the date that such entity ceases to be a Subsidiary of
RECEIVING PARTY.
2.2 Termination.
(a) If RECEIVING PARTY is not able to complete its transition of the
Corporate Services by the Termination Date, then upon written notice provided to
PROVIDING PARTY at least thirty (30) days prior to the Termination Date,
RECEIVING PARTY shall have the right to request and cause PROVIDING PARTY to
provide up to thirty (30) days of additional Corporate Services to RECEIVING
PARTY; provided, that RECEIVING PARTY shall pay for all such additional
Corporate Services.
(b) If RECEIVING PARTY wishes to terminate a Corporate Service (or a
portion thereof) on a date that is earlier than the Termination Date, RECEIVING
PARTY shall provide written notice (the "Termination Notice") to PROVIDING PARTY
of a proposed termination date for such Corporate Service (or portion thereof),
at least ninety (90) days prior to such proposed termination date. Upon receipt
of such notice, PROVIDING PARTY shall promptly provide notice to RECEIVING PARTY
(the "Termination Dispute Notice") in the event that PROVIDING PARTY believes in
good faith that, notwithstanding PROVIDING PARTY using its commercially
reasonable efforts, the requested termination will have a material adverse
impact on other Corporate Services and the scope of such adverse impact. In such
event, the Parties will resolve the dispute in accordance with Section 1.4. If
PROVIDING PARTY does not provide the Termination Dispute Notice, based on the
standards set forth above, within ten (10) days of the date on which the
Termination Notice was received, then, effective on the termination date
proposed by RECEIVING PARTY in its Termination Notice, such Corporate Service
(or portion thereof) shall be discontinued (thereafter, a "Discontinued
Corporate Service") and deemed deleted from the Scheduled Services to be
provided hereunder and thereafter, this Agreement shall be of no further force
and effect with respect to the Discontinued Corporate Service (or portion
thereof), except as to obligations accrued prior to the date of discontinuation
of such Corporate Service (or portion thereof). Upon the occurrence of any
Discontinued Corporate Service, the Parties shall promptly update Schedule
1.1(a) to reflect the discontinuation, and the Corporate Service Fees shall be
adjusted in accordance therewith and the provisions of Article III.
Notwithstanding anything to the contrary contained herein, at any time that
employees of PROVIDING PARTY or its Subsidiaries or Affiliates move to a
department within RECEIVING PARTY or its Subsidiaries or Affiliates (an
"Employee Shift"), a proportional portion of the relevant Corporate Service
shall be deemed automatically terminated. If a Corporate Service, or portion
thereof, is terminated as a result of an Employee Shift, then such termination
shall take effect as of the date of the Employee Shift, and the adjustment in
Corporate Service Fees shall also take effect as of the date of the Employee
Shift.
(c) If all Corporate Services shall have been terminated under this
Section 2.2 prior to the expiration of the Term, then either Party shall have
the right to terminate this
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Agreement by giving written notice to the other Party, which termination shall
be effective upon delivery as provided in Section 6.1.
2.3 Transition Assistance. In preparation for the discontinuation of any
Corporate Service provided under this Agreement, PROVIDING PARTY shall,
consistent with its obligations to provide Corporate Services hereunder and with
the cooperation and assistance of RECEIVING PARTY, use commercially reasonable
efforts to provide such knowledge transfer services and to take such steps as
are reasonably required in order to facilitate a smooth and efficient transition
and/or migration of records to RECEIVING PARTY or its Subsidiaries or Affiliates
(or at RECEIVING PARTY's direction, to a third party) and responsibilities so as
to minimize any disruption of services ("Transition Assistance"). RECEIVING
PARTY shall cooperate with PROVIDING PARTY to allow PROVIDING PARTY to complete
the Transition Assistance as early as is commercially reasonable to do so. Fees
for any Transition Assistance shall be determined in accordance with the
calculation formula and methods applicable to the Scheduled Services that are
most similar in nature to the Transition Assistance being so provided, as set
forth on the applicable Section of Schedule 1.1(a).
2.4 Return of Materials. As a Corporate Service or Transition Assistance is
terminated, each Party will return all materials and property owned by the other
Party, including, without limitation, all RECEIVING PARTY Data, if any, and
materials and property of a proprietary nature involving a Party or its
Subsidiaries or Affiliates relevant to the provision or receipt of that
Corporate Service or Transition Assistance and no longer needed regarding the
performance of other Corporate Services or other Transition Assistance under
this Agreement, and will do so (and will cause its Subsidiaries and Affiliates
to do so) within thirty (30) days after the applicable termination. Upon the end
of the Term, each Party will return all material and property of a proprietary
nature involving the other Party or its Subsidiaries, in its possession or
control (or the possession or control of an Affiliate as a result of the
Services provided hereunder) within thirty (30) days after the end of the Term.
In addition, upon RECEIVING PARTY's request, PROVIDING PARTY agrees to provide
to RECEIVING PARTY copies of RECEIVING PARTY's Data, files and records on
magnetic media, or such other media as the Parties shall agree upon, to the
extent practicable. PROVIDING PARTY may retain archival copies of RECEIVING
PARTY's Data, files and records.
ARTICLE III
COMPENSATION AND PAYMENTS FOR CORPORATE SERVICES
3.1 Compensation for Corporate Services.
(a) In accordance with the payment terms described in Sections 3.2 and
3.3 below, RECEIVING PARTY agrees to timely pay PROVIDING PARTY, as compensation
for the Corporate Services provided hereunder, all fees as contemplated in
Section 1.1 (the "Corporate Service Fees") and in Section 2.3 (the "Transition
Assistance Fees").
(b) Without limiting the foregoing, the Parties acknowledge that
RECEIVING PARTY is also obligated to pay, or reimburse PROVIDING PARTY for its
payment of, all Out of Pocket Costs (as defined below); provided, however, that
the incurrence of any liability by RECEIVING PARTY or any of its Subsidiaries
for any New Out of Pocket Cost (as defined
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below) that requires the payment by RECEIVING PARTY or one of its Subsidiaries
of more than $200,000, on an annualized basis, shall require either (i) the
prior approval of a full-time employee of RECEIVING PARTY or one of its
Subsidiaries, or (ii) the subsequent approval of the chief accounting officer of
RECEIVING PARTY (or his/her designee) after his/her receipt of the Monthly
Summary Statement (as defined in Section 3.2) provided to RECEIVING PARTY for
the calendar month in which the New Out of Pocket Cost was incurred or paid by
PROVIDING PARTY on behalf of RECEIVING PARTY. If (x) PROVIDING PARTY has not
obtained the prior approval of a full-time employee of RECEIVING PARTY or one of
its Subsidiaries before incurring or paying any New Out of Pocket Cost that
exceeds $200,000 on an annualized basis, and (y) after receiving and reviewing
the applicable Monthly Summary Statement, the chief accounting officer of
RECEIVING PARTY (or his/her designee) has not expressly approved the New Out of
Pocket Cost in question, then RECEIVING PARTY shall be entitled to dispute the
New Out of Pocket Cost until the close of the next audit cycle, provided that if
PROVIDING PARTY disagrees with RECEIVING PARTY's dispute of the New Out of
Pocket Cost, then PROVDING PARTY shall be entitled to exercise its rights under
the dispute resolution provisions set forth in Section 1.4. For purposes hereof,
the term "Out of Pocket Costs" means all fees, costs or other expenses payable
by RECEIVING PARTY or its Subsidiaries to third parties that are not Affiliates
of PROVIDING PARTY in connection with the Corporate Services provided hereunder;
and the term "New Out of Pocket Cost" means any Out of Pocket Cost incurred
after the Effective Date that is not a continuation of services provided to
RECEIVING PARTY or one of its Subsidiaries in the ordinary course of business
consistent with past practices and for which RECEIVING PARTY had paid or
reimbursed a portion thereof prior to the Effective Date.
3.2 Monthly Summary Statements. Within 30 days after the end of each
calendar month, PROVIDING PARTY shall prepare and deliver to the chief
accounting officer (or his/her designee) of RECEIVING PARTY a monthly summary
statement (each a "Monthly Summary Statement") setting forth all of the costs
owing by the RECEIVING PARTY to the PROVIDING PARTY, including all Corporate
Service Fees, Transition Assistance Fees, Out of Pocket Costs, as calculated in
accordance with Section 3.1 and Schedule 1.1(a), and any other charges incurred
by, and cost allocations made by, PROVIDING PARTY for or on behalf of RECEIVING
PARTY for Corporate Services pursuant to this Agreement. For sake of
clarification, the Parties acknowledge that unless and until the Parties agree
otherwise, the Monthly Summary Statements required hereunder shall including the
applicable monthly costs, fees and expenses owing by RECEIVING PARTY to
PROVIDING PARTY for all Related Party Agreements, as well as all other
agreements between RECEIVING PARTY and PROVIDING PARTY designated to be included
by each of RECEIVING PARTY and PROVIDING PARTY, including without limitation the
Amended and Restated Corporate Services Agreement of even date herewith (the
"CSA") between FNF, as providing party, and FIS, as receiving party, and the
provisions of this Article III should be read and interpreted in conjunction
with Article III of the CSA. The specific form of the Monthly Summary Statement
shall be as agreed to between the parties from time to time, acting with
commercial reasonableness.
3.3 Net Amounts Payable.
(a) Subject to the provisions of Section 3.3(b), the Parties
contemplate that (i) one Monthly Summary Statement will be prepared by FIS with
respect to all expenses, costs and
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fees attributable or allocable to FNF and its subsidiaries under all agreements
between FIS and/or its subsidiaries, on the one hand, and FNF and/or its
subsidiaries, on the other, incurred during the preceding calendar month, (ii)
one Monthly Summary Statement will be prepared by FNF with respect to all
expenses, costs and fees attributable or allocable to FIS and its subsidiaries
under all agreements between FNF and/or its subsidiaries, on the one hand, and
FIS and/or its subsidiaries, on the other, incurred during the preceding
calendar month, whereupon FIS (on behalf of itself and its subsidiaries) and FNF
(on behalf of itself and its subsidiaries) will offset the amounts owing, as
shown on their respective Monthly Summary Statements for the same month, so that
the net amount owing from the applicable Party can be determined (in any case,
the "Monthly Net Amount"). The determination of the Monthly Net Amount owing
each month shall be made by RECEIVING PARTY within two (2) Business Days of
delivery of the Monthly Summary Statements from each of FIS and FNF, and the
PROVIDING PARTY shall provide RECEIVING PARTY with a written statement of the
Monthly Net Amount (the "Monthly Net Amount Statement"). Within ten (10)
Business Days of the determination of the Monthly Net Amount, the chief
accounting officers (or their designees) from each of PROVIDING PARTY and
RECEIVING PARTY shall confer together regarding the Monthly Summary Statements
and the Monthly Net Amount then owing. If the chief accounting officers (or
their designees) agree that the Monthly Net Amount is correct, then within ten
(10) Business Days after such conference and agreement, the Party owing the
Monthly Net Amount shall cause immediately available funds to be transferred to
or to the order of the other Party, in an amount equal to the Monthly Net
Amount. If the chief accounting officers (or their designees) do not agree that
the Monthly Net Amount is correct, or if either Party shall otherwise dispute
any amounts shown on the applicable Monthly Summary Statement, including without
limitation any Out of Pocket Costs, then as soon as reasonably possible after
the determination of the Monthly Net Amount but not later than the tenth (10)
Business Day thereafter, the disputing Party shall notify the other Party in
writing of the nature and basis of the dispute and/or the amount of the
adjustment requested. The Parties shall use their reasonable best efforts to
resolve the dispute but if the Parties are unable to resolve the dispute within
twenty (20) Business Days after the determination date of the Net Amount, the
dispute resolution procedures set forth in Section 1.4 shall apply, provided
that, in the event of any dispute regarding the amounts owing (and the use of
the dispute resolution process with respect thereto), the Party owing the
Monthly Net Amount shall nevertheless timely pay that portion of the Monthly Net
Amount, as shown on the Monthly Net Amount Statement, that is not in dispute, it
being understood that if the amount owing is later revised, then the excess
amount so paid shall be either (i) promptly returned to the Party making the
payment, in immediately available funds or (ii) applied to credit the revised
Monthly Net Amount, as appropriate, and provided, further, that to the extent
that any amount in dispute is not paid within sixty (60) days after the date on
which the non-disputing Party is notified in writing of the dispute, then in
addition to its liability for the disputed amounts, the Party that is ultimately
determined to have been incorrect as to the amount so in dispute shall be liable
to the other Party for interest, calculated on the amount in dispute ultimately
determined to be incorrect, at a rate amount equal to one percent (1%) per annum
above the "prime rate" as announced in the "Money Rates" section of the most
recent edition of The Wall Street Journal, which interest rate shall change as
and when the "prime rate" changes.
(b) At any time during the Term of this Agreement, if the Parties
mutually agree, the Parties may utilize the following procedures, which will be
an alternative to the procedures set forth in Section 3.3(a) above: Only one
Monthly Summary Statement (the
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"Combined Monthly Summary Statement") will be prepared by FNF with respect to
all expenses, costs and fees attributable or allocable to each of FNF (and its
subsidiaries) and FIS (and its subsidiaries) under all agreements between FNF
(and/or any of its subsidiaries), on the one hand, and FIS (and/or any of its
subsidiaries), on the other, incurred during the preceding calendar month. A
copy of the Combined Monthly Summary Statement will be provided to FIS within 30
calendar days after the end of each calendar month. In addition to setting forth
in detail the monthly amounts owing under each such agreement, the Combined
Monthly Summary Statement will also set forth the calculation of the offsetting
amounts owing, so that the net amount owing from the applicable Party can be
determined (the Monthly Net Amount). Within ten (10) Business Days after
receiving the Combined Monthly Summary Statement, the FIS chief accounting
officer (or his/her designee) shall review the Combined Monthly Summary
Statement and the Monthly Net Amount then owing. If the FIS chief accounting
officer agrees that the Combined Monthly Summary Statement and the resulting
Monthly Net Amount is correct, then within ten (10) Business Days after FIS'
receipt of the Combined Monthly Summary Statement, FIS shall notify FNF of its
agreement to the Monthly Net Amount and the Party owing the Monthly Net Amount
shall cause immediately available funds to be transferred to (or to the order
of) the other Party, in an amount equal to the Monthly Net Amount. If the FIS
chief accounting officers (or his/her designee) does not agree that the Combined
Monthly Summary Statement and the resulting Monthly Net Amount is correct, then
before the tenth (10) Business Day after receiving the Combined Monthly Summary
Statement, he/she shall notify FNF in writing of the nature and basis of his/her
objections and, if known at the time, the amount of the adjustment(s) requested.
The Parties shall use their reasonable best efforts to resolve FIS' objections,
but if the Parties are unable to resolve their differences within twenty (20)
Business Days after FIS's receipt of the Combined Monthly Summary Statement, the
dispute resolution procedures set forth in Section 1.4 shall apply, provided
that, in the event of any dispute regarding the amounts owing (and the use of
the dispute resolution process with respect thereto), the Party owing the
Monthly Net Amount shall nevertheless timely pay that portion of the Monthly Net
Amount, as shown on the Monthly Net Amount Statement, that is not in dispute, it
being understood that if the amount owing is later revised, then the excess
amount so paid shall be either (i) promptly returned to the Party making the
payment, in immediately available funds or (ii) applied to credit the revised
Monthly Net Amount, as appropriate, and provided, further, that to the extent
that any amount in dispute is not paid within sixty (60) days after the date on
which the non-disputing Party is notified in writing of the dispute, then in
addition to its liability for the disputed amounts, the Party that is ultimately
determined to have been incorrect as to the amount so in dispute shall be liable
to the other Party for interest, calculated on the amount in dispute ultimately
determined to be incorrect, at a rate amount equal to one percent (1%) per annum
above the "prime rate" as announced in the "Money Rates" section of the most
recent edition of The Wall Street Journal, which interest rate shall change as
and when the "prime rate" changes.
3.4 Audit Rights. Upon reasonable advance notice from RECEIVING PARTY,
PROVIDING PARTY shall permit RECEIVING PARTY to perform annual audits of
PROVIDING PARTY's records only with respect to amounts invoiced and Out of
Pocket Costs invoiced pursuant to this Article III. Such audits shall be
conducted during PROVIDING PARTY's regular office hours and without disruption
to PROVIDING PARTY's business operations and shall be performed at RECEIVING
PARTY's sole expense.
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ARTICLE IV
LIMITATION OF LIABILITY
4.1 LIMITATION OF LIABILITY. THE LIABILITY OF EITHER PARTY FOR A CLAIM
ASSERTED BY THE OTHER PARTY BASED ON BREACH OF ANY COVENANT, AGREEMENT OR
UNDERTAKING REQUIRED BY THIS AGREEMENT SHALL NOT EXCEED, IN THE AGGREGATE, THE
FEES PAYABLE BY RECEIVING PARTY TO PROVIDING PARTY DURING THE ONE (1) YEAR
PERIOD PRECEDING THE BREACH FOR THE PARTICULAR CORPORATE SERVICE AFFECTED BY
SUCH BREACH UNDER THIS AGREEMENT; PROVIDED THAT SUCH LIMITATION SHALL NOT APPLY
IN RESPECT OF ANY CLAIMS BASED ON A PARTY'S (i) GROSS NEGLIGENCE, (ii) WILLFUL
MISCONDUCT, (iii) IMPROPER USE OR DISCLOSURE OF CUSTOMER INFORMATION, (iv)
VIOLATIONS OF LAW, OR (v) INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF A
PERSON OR ENTITY WHO IS NOT A PARTY HERETO OR THE SUBSIDIARY OR AFFILIATE OF A
PARTY HERETO.
4.2 DAMAGES. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGE OF ANY KIND WHATSOEVER; PROVIDED,
HOWEVER, THAT TO THE EXTENT AN INDEMNIFIED PARTY UNDER ARTICLE X IS REQUIRED TO
PAY ANY SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS TO A PERSON OR ENTITY WHO IS NOT A PARTY OR A SUBSIDIARY
OR AFFILIATE OF THE INDEMNIFIED PARTY IN CONNECTION WITH A THIRD PARTY CLAIM,
SUCH DAMAGES WILL CONSTITUTE DIRECT DAMAGES AND WILL NOT BE SUBJECT TO THE
LIMITATION SET FORTH IN THIS ARTICLE IV.
ARTICLE V
FORCE MAJEURE
Neither Party shall be held liable for any delay or failure in performance
of any part of this Agreement from any cause beyond its reasonable control and
without its fault or negligence, including, but not limited to, acts of God,
acts of civil or military authority, embargoes, epidemics, war, terrorist acts,
riots, insurrections, fires, explosions, earthquakes, hurricanes, tornadoes,
nuclear accidents, floods, strikes, terrorism and power blackouts. Upon the
occurrence of a condition described in this Article, the Party whose performance
is prevented shall give written notice to the other Party, and the Parties shall
promptly confer, in good faith, to agree upon equitable, reasonable action to
minimize the impact, on both Parties, of such conditions.
ARTICLE VI
NOTICES AND DEMANDS
6.1 Notices. Except as otherwise provided under this Agreement (including
Schedule 1.1(a)), all notices, demands or requests which may be given by a Party
to the other Party shall be in writing and shall be deemed to have been duly
given on the date delivered in person, or sent via telefax, or on the next
business day if sent by overnight courier, or on the date
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of the third business day after deposit, postage prepaid, in the United States
Mail via Certified Mail return receipt requested, and addressed as set forth
below:
If to RECEIVING PARTY, to:
Fidelity National Financial, Inc./Fidelity National Title Group, Inc.
601 Riverside Avenue
Jacksonville, Florida 32204
Attention: General Counsel
If to PROVIDING PARTY, to:
Fidelity National Information Services, Inc.
601 Riverside Avenue
Jacksonville, Florida 32204
Attention: General Counsel
The address to which such notices, demands, requests, elections or other
communications are to be given by either Party may be changed by written notice
given by such Party to the other Party pursuant to Section 6.1.
ARTICLE VII
REMEDIES
7.1 Remedies Upon Material Breach. In the event of material breach of any
provision of this Agreement by a Party, the non-defaulting Party shall give the
defaulting Party written notice, and:
(a) If such breach is for RECEIVING PARTY's non-payment of an amount
that is not in dispute, the defaulting Party shall cure the breach within thirty
(30) calendar days of such notice. If the defaulting Party does not cure such
breach by such date, then the defaulting Party shall pay the non-defaulting
Party the undisputed amount, any interest that has accrued hereunder through the
expiration of the cure period plus an additional amount of interest equal to
four percent (4%) per annum above the "prime rate" as announced in the "Money
Rates" section of the most recent edition of The Wall Street Journal, which
interest rate shall change as and when the "prime rate" changes. The Parties
agree that this rate of interest constitutes reasonable liquidated damages and
not an unenforceable penalty.
(b) If such breach is for any other material failure to perform in
accordance with this Agreement, the defaulting Party shall cure such breach
within thirty (30) calendar days of the date of such notice. If the defaulting
Party does not cure such breach within such period, then the defaulting Party
shall pay the non-defaulting Party all of the non-defaulting Party's actual
damages, subject to Article IV above.
7.2 Survival Upon Expiration or Termination. The provisions of Section 1.4
(Dispute Resolution), Section 2.4 (Return of Materials), Article IV (Limitation
of Liability), Article VI (Notices and Demands), this Section 7.2, Article VIII
(Confidentiality), Article X
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(Indemnification) and Article XI (Miscellaneous) shall survive the termination
or expiration of this Agreement unless otherwise agreed to in writing by both
Parties.
ARTICLE VIII
CONFIDENTIALITY
8.1 Confidential Information. Each Party shall use at least the same
standard of care in the protection of Confidential Information of the other
Party as it uses to protect its own confidential or proprietary information;
provided that such Confidential Information shall be protected in at least a
reasonable manner. For purposes of this Agreement, "Confidential Information"
includes all confidential or proprietary information and documentation of either
Party, including the terms of this Agreement, including with respect to each
Party, all of its software, data, financial information all reports, exhibits
and other documentation prepared by any of its Subsidiaries or Affiliates. Each
Party shall use the Confidential Information of the other Party only in
connection with the purposes of this Agreement and shall make such Confidential
Information available only to its employees, subcontractors, or agents having a
"need to know" with respect to such purpose. Each Party shall advise its
respective employees, subcontractors, and agents of such Party's obligations
under this Agreement. The obligations in this Section 8.1 will not restrict
disclosure by a Party pursuant to applicable law, or by order or request of any
court or government agency; provided that prior to such disclosure the Party
making such disclosure shall (a) immediately give notice to the other Party, (b)
cooperate with the other Party in challenging the right to such access and (c)
only provide such information as is required by law, court order or a final,
non-appealable ruling of a court of proper jurisdiction. Confidential
Information of a Party will not be afforded the protection of this Article VIII
if such Confidential Information was (A) developed by the other Party
independently as shown by its written business records regularly kept, (B)
rightfully obtained by the other Party without restriction from a third party,
(C) publicly available other than through the fault or negligence of the other
Party or (D) released by the Party that owns or has the rights to the
Confidential Information without restriction to anyone.
8.2 Work Product Privilege. RECEIVING PARTY represents and PROVIDING PARTY
acknowledges that, in the course of providing Corporate Services pursuant to
this Agreement, PROVIDING PARTY may have access to (a) documents, data,
databases or communications that are subject to attorney client privilege and/or
(b) privileged work product prepared by or on behalf of the Affiliates of
RECEIVING PARTY in anticipation of litigation with third parties (collectively,
the "Privileged Work Product") and RECEIVING PARTY represents and PROVIDING
PARTY understands that all Privileged Work Product is protected from disclosure
by Rule 26 of the Federal Rules of Civil Procedure and the equivalent rules and
regulations under the law chosen to govern the construction of this Agreement.
RECEIVING PARTY represents and PROVIDING PARTY understands the importance of
maintaining the strict confidentiality of the Privileged Work Product to protect
the attorney client privilege, work product doctrine and other privileges and
rights associated with such Privileged Work Product pursuant to such Rule 26 and
the equivalent rules and regulations under the law chosen to govern the
construction of this Agreement. After PROVIDING PARTY is notified or otherwise
becomes aware that documents, data, database, or communications are Privileged
Work Product, only PROVIDING PARTY personnel for whom such access is necessary
for the purposes of providing Services to RECEIVING PARTY as provided in this
Agreement shall have access to
14
such Privileged Work Product. Should PROVIDING PARTY ever be notified of any
judicial or other proceeding seeking to obtain access to Privileged Work
Product, PROVIDING PARTY shall (A) immediately give notice to RECEIVING PARTY,
(B) cooperate with RECEIVING PARTY in challenging the right to such access and
(C) only provide such information as is required by a final, non-appealable
ruling of a court of proper jurisdiction. RECEIVING PARTY shall pay all of the
cost incurred by PROVIDING PARTY in complying with the immediately preceding
sentence. RECEIVING PARTY has the right and duty to represent PROVIDING PARTY in
such resistance or to select and compensate counsel to so represent PROVIDING
PARTY or to reimburse PROVIDING PARTY for reasonable attorneys' fees and
expenses as such fees and expenses are incurred in resisting such access. If
PROVIDING PARTY is ultimately required, pursuant to an order of a court of
competent jurisdiction, to produce documents, disclose data, or otherwise act in
contravention of the confidentiality obligations imposed in this Article VIII,
or otherwise with respect to maintaining the confidentiality, proprietary
nature, and secrecy of Privileged Work Product, PROVIDING PARTY is not liable
for breach of such obligation to the extent such liability does not result from
failure of PROVIDING PARTY to abide by the terms of this Article VIII. All
Privileged Work Product is the property of RECEIVING PARTY and will be deemed
Confidential Information, except as specifically authorized in this Agreement or
as shall be required by law.
8.3 Unauthorized Acts. Each Party shall (a) notify the other Party promptly
of any unauthorized possession, use, or knowledge of any Confidential
Information by any person which shall become known to it, any attempt by any
person to gain possession of Confidential Information without authorization or
any attempt to use or acquire knowledge of any Confidential Information without
authorization (collectively, "Unauthorized Access"), (b) promptly furnish to the
other Party full details of the Unauthorized Access and use reasonable efforts
to assist the other Party in investigating or preventing the reoccurrence of any
Unauthorized Access, (c) cooperate with the other Party in any litigation and
investigation against third parties deemed necessary by such Party to protect
its proprietary rights, and (d) use commercially reasonable efforts to prevent a
reoccurrence of any such Unauthorized Access.
8.4 Publicity. Except as required by law or national stock exchange rule or
as allowed by any Ancillary Agreement, neither Party shall issue any press
release, distribute any advertising, or make any public announcement or
disclosure (a) identifying the other Party by name, trademark or otherwise or
(b) concerning this Agreement without the other Party's prior written consent.
Notwithstanding the foregoing sentence, in the event either Party is required to
issue a press release relating to this Agreement or any of the transactions
contemplated by this Agreement, or by the laws or regulations of any
governmental authority, agency or self-regulatory agency, such Party shall (A)
give notice and a copy of the proposed press release to the other Party as far
in advance as reasonably possible, but in any event not less than five (5) days
prior to publication of such press release and (B) make any changes to such
press release reasonably requested by the other Party. In addition, RECEIVING
PARTY may communicate the existence of the business relationship contemplated by
the terms of this Agreement internally within PROVIDING PARTY's organization and
orally and in writing communicate PROVIDING PARTY's identity as a reference with
potential and existing customers.
8.5 Data Privacy. (a) Where, in connection with this Agreement, PROVIDING
PARTY processes or stores information about a living individual that is held in
automatically
15
processable form (for example in a computerized database) or in a structured
manual filing system ("Personal Data"), on behalf of any Subsidiaries of
RECEIVING PARTY or their clients, then PROVIDING PARTY shall implement
appropriate measures to protect those personal data against accidental or
unlawful destruction or accidental loss, alteration, unauthorized disclosure or
access and shall use such data solely for purposes of carrying out its
obligations under this Agreement.
(b) RECEIVING PARTY may instruct PROVIDING PARTY, where PROVIDING
PARTY processes Personal Data on behalf of Subsidiaries of RECEIVING PARTY, to
take such steps to preserve data privacy in the processing of those Personal
Data as are reasonably necessary for the performance of this Agreement.
(c) Subsidiaries of RECEIVING PARTY may, in connection with this
Agreement, collect Personal Data in relation to PROVIDING PARTY and PROVIDING
PARTY's employees, directors and other officers involved in providing Corporate
Services hereunder. Such Personal Data may be collected from PROVIDING PARTY,
its employees, its directors, its officers, or from other (for example,
published) sources; and some limited personal data may be collected indirectly
at RECEIVING PARTY's (or Subsidiaries of RECEIVING PARTY's) locations from
monitoring devices or by other means (e.g., telephone logs, closed circuit TV
and door entry systems). Nothing in this Section 8.5(c) obligates PROVIDING
PARTY or PROVIDING PARTY's employees, directors or other officers to provide
Personal Data requested by RECEIVING PARTY. The Subsidiaries of RECEIVING PARTY
may use and disclose any such data disclosed by PROVIDING PARTY solely for
purposes connected with this Agreement and for the relevant purposes specified
in the data privacy policy of the Subsidiary of RECEIVING PARTY (a copy of which
is available on request.) RECEIVING PARTY will maintain the same level of
protection for Personal Data collected from PROVIDING PARTY (and PROVIDING
PARTY's employees, directors and officers, as appropriate) as RECEIVING PARTY
maintains with its own Personal Data, and will implement appropriate
administrative, physical and technical measures to protect the personal data
collected from PROVIDING PARTY and PROVIDING PARTY's employees, directors and
other officers against accidental or unlawful destruction or accidental loss,
alternation, unauthorized disclosure or access.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS
EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY MADE IN
THIS AGREEMENT, PROVIDING PARTY HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES OR COVENANTS, STATUTORY OR
OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES OF
MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR THE RESULTS OBTAINED OF THE CONTINUING BUSINESS. ALL OTHER
REPRESENTATIONS, WARRANTIES, AND COVENANTS, EXPRESS OR IMPLIED, STATUTORY,
COMMON LAW OR OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES
OF MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR THE RESULTS
16
OBTAINED OF THE CONTINUING BUSINESS ARE HEREBY DISCLAIMED BY PROVIDING PARTY.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification.
(a) Subject to Article IV, RECEIVING PARTY will indemnify, defend and
hold harmless PROVIDING PARTY, each Subsidiary and Affiliate of PROVIDING PARTY,
each of their respective past and present directors, officers, employees,
agents, consultants, advisors, accountants and attorneys ("Representatives"),
and each of their respective successors and assigns (collectively, the
"PROVIDING PARTY Indemnified Parties") from and against any and all Damages (as
defined below) incurred or suffered by the PROVIDING PARTY Indemnified Parties
arising or resulting from the provision of Corporate Services hereunder, which
Damages shall be reduced to the extent of:
(i) Damages caused or contributed to by PROVIDING PARTY's
negligence, willful misconduct or violation or law; or
(ii) Damages caused or contributed to by a breach of this
Agreement by PROVIDING PARTY.
"Damages" means, subject to Article IV hereof, all losses, claims, demands,
damages, liabilities, judgments, dues, penalties, assessments, fines (civil,
criminal or administrative), costs, liens, forfeitures, settlements, fees or
expenses (including reasonable attorneys' fees and expenses and any other
expenses reasonably incurred in connection with investigating, prosecuting or
defending a claim or Action).
(b) Except as set forth in this Section 10.1(b), PROVIDING PARTY will
have no liability to RECEIVING PARTY for or in connection with any of the
Corporate Services rendered hereunder or for any actions or omissions of
PROVIDING PARTY in connection with the provision of any Corporate Services
hereunder. Subject to the provisions hereof and subject to Article IV, PROVIDING
PARTY will indemnify, defend and hold harmless RECEIVING PARTY, each Subsidiary
and Affiliate of RECEIVING PARTY, each of their respective past and present
Representatives, and each of their respective successors and assigns
(collectively, the "RECEIVING PARTY Indemnified Parties") from and against any
and all Damages incurred or suffered by the RECEIVING PARTY Indemnified Parties
arising or resulting from either of the following:
(i) any claim that PROVIDING PARTY's use of the software or other
intellectual property used to provide the Corporate Services or
Transition Assistance, or any results and proceeds of such Corporate
Services or Transition Assistance, infringes, misappropriates or
otherwise violates any United States patent, copyright, trademark,
trade secret or other intellectual property rights; provided, that
such intellectual property indemnity shall not apply to the extent
that any such claim arises out of any modification to such software or
other
17
intellectual property made by RECEIVING PARTY without PROVIDING
PARTY's authorization or participation, or
(ii) PROVIDING PARTY's gross negligence, willful misconduct,
improper use or disclosure of customer information or violations of
law;
provided, that in each of the cases described in subclauses (i) through (ii)
above, the amount of Damages incurred or sustained by RECEIVING PARTY shall be
reduced to the extent such Damages shall have been caused or contributed to by
any action or omission of RECEIVING PARTY in amounts equal to RECEIVING PARTY's
equitable share of such Damages determined in accordance with its relative
culpability for such Damages or the relative fault of RECEIVING PARTY or its
Subsidiaries.
10.2 Indemnification Procedures.
(a) Claim Notice. A Party that seeks indemnity under this Article X
(an "Indemnified Party") will give written notice (a "Claim Notice") to the
Party from whom indemnification is sought (an "Indemnifying Party"), whether the
Damages sought arise from matters solely between the Parties or from Third Party
Claims. The Claim Notice must contain (i) a description and, if known, estimated
amount (the "Claimed Amount") of any Damages incurred or reasonably expected to
be incurred by the Indemnified Party, (ii) a reasonable explanation of the basis
for the Claim Notice to the extent of facts then known by the Indemnified Party,
and (iii) a demand for payment of those Damages. No delay or deficiency on the
part of the Indemnified Party in so notifying the Indemnifying Party will
relieve the Indemnifying Party of any liability for Damages or obligation
hereunder except to the extent of any Damages caused by or arising out of such
failure.
(b) Response to Notice of Claim. Within thirty (30) days after
delivery of a Claim Notice, the Indemnifying Party will deliver to the
Indemnified Party a written response in which the Indemnifying Party will
either: (i) agree that the Indemnified Party is entitled to receive all of the
Claimed Amount and, in which case, the Indemnifying Party will pay the Claimed
Amount in accordance with a payment and distribution method reasonably
acceptable to the Indemnified Party; or (ii) dispute that the Indemnified Party
is entitled to receive all or any portion of the Claimed Amount, in which case,
the Parties will resort to the dispute resolution procedures set forth in
Section 1.4.
(c) Contested Claims. In the event that the Indemnifying Party
disputes the Claimed Amount, as soon as practicable but in no event later than
ten (10) days after the receipt of the notice referenced in Section 10.2(b)(ii)
hereof, the Parties will begin the process to resolve the matter in accordance
with the dispute resolution provisions of Section 1.4 hereof. Upon ultimate
resolution thereof, the Parties will take such actions as are reasonably
necessary to comply with such agreement or instructions.
(d) Third Party Claims.
(i) In the event that the Indemnified Party receives notice or
otherwise learns of the assertion by a person or entity who is not a
Party hereto or a
18
Subsidiary or Affiliate of a Party hereto of any claim or the
commencement of any action (a "Third-Party Claim") with respect to
which the Indemnifying Party may be obligated to provide
indemnification under this Article X, the Indemnified Party will give
written notification to the Indemnifying Party of the Third-Party
Claim. Such notification will be given within fifteen (15) days after
receipt by the Indemnified Party of notice of such Third-Party Claim,
will be accompanied by reasonable supporting documentation submitted
by such third party (to the extent then in the possession of the
Indemnified Party) and will describe in reasonable detail (to the
extent known by the Indemnified Party) the facts constituting the
basis for such Third-Party Claim and the amount of the claimed
Damages; provided, however, that no delay or deficiency on the part of
the Indemnified Party in so notifying the Indemnifying Party will
relieve the Indemnifying Party of any liability for Damages or
obligation hereunder except to the extent of any Damages caused by or
arising out of such failure. Within twenty (20) days after delivery of
such notification, the Indemnifying Party may, upon written notice
thereof to the Indemnified Party, assume control of the defense of
such Third-Party Claim with counsel reasonably satisfactory to the
Indemnified Party. During any period in which the Indemnifying Party
has not so assumed control of such defense, the Indemnified Party will
control such defense.
(ii) The Party not controlling such defense (the "Non-controlling
Party") may participate therein at its own expense.
(iii) The Party controlling such defense (the "Controlling
Party") will keep the Non-controlling Party reasonably advised of the
status of such Third-Party Claim and the defense thereof and will
consider in good faith recommendations made by the Non-controlling
Party with respect thereto. The Non-controlling Party will furnish the
Controlling Party with such Information as it may have with respect to
such Third-Party Claim (including copies of any summons, complaint or
other pleading which may have been served on such Party and any
written claim, demand, invoice, billing or other document evidencing
or asserting the same) and will otherwise cooperate with and assist
the Controlling Party in the defense of such Third-Party Claim.
(iv) The Indemnifying Party will not agree to any settlement of,
or the entry of any judgment arising from, any such Third-Party Claim
without the prior written consent of the Indemnified Party, which
consent will not be unreasonably withheld or delayed; provided,
however, that the consent of the Indemnified Party will not be
required if (A) the Indemnifying Party agrees in writing to pay any
amounts payable pursuant to such settlement or judgment, and (B) such
settlement or judgment includes a full, complete and unconditional
release of the Indemnified Party from further Liability. The
Indemnified Party will not agree to any settlement of, or the entry of
any judgment arising from, any such Third-Party Claim without the
prior written consent of the Indemnifying Party, which consent will
not be unreasonably withheld or delayed.
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ARTICLE XI
MISCELLANEOUS
11.1 Relationship of the Parties. The Parties declare and agree that each
Party is engaged in a business that is independent from that of the other Party
and each Party shall perform its obligations as an independent contractor. It is
expressly understood and agreed that RECEIVING PARTY and PROVIDING PARTY are not
partners, and nothing contained herein is intended to create an agency
relationship or a partnership or joint venture with respect to the Corporate
Services. Neither Party is an agent of the other and neither Party has any
authority to represent or bind the other Party as to any matters, except as
authorized herein or in writing by such other Party from time to time.
11.2 Employees. (a) PROVIDING PARTY shall be solely responsible for payment
of compensation to its employees and, as between the Parties, for its
Subsidiaries' employees and for any injury to them in the course of their
employment. PROVIDING PARTY shall assume full responsibility for payment of all
federal, state and local taxes or contributions imposed or required under
unemployment insurance, social security and income tax laws with respect to such
persons.
(b) RECEIVING PARTY shall be solely responsible for payment of
compensation to its employees and, as between the Parties, for its Subsidiaries'
employees and for any injury to them in the course of their employment.
RECEIVING PARTY shall assume full responsibility for payment of all federal,
state and local taxes or contributions imposed or required under unemployment
insurance, social security and income tax laws with respect to such persons.
11.3 Assignment. Neither Party may assign, transfer or convey any right,
obligation or duty, in whole or in part, or of any other interest under this
Agreement relating to such Corporate Services without the prior written consent
of the other Party, including any assignment, transfer or conveyance in
connection with a sale of an asset to which one or more of the Corporate
Services relate. All obligations and duties of a Party under this Agreement
shall be binding on all successors in interest and permitted assigns of such
Party. Each Party may use its Subsidiaries or Affiliates or subcontractors to
perform the Corporate Services; provided that such use shall not relieve such
assigning Party of liability for its responsibilities and obligations.
11.4 Severability. In the event that any one or more of the provisions
contained herein shall for any reason be held to be unenforceable in any respect
under law, such unenforceability shall not affect any other provision of this
Agreement, and this Agreement shall be construed as if such unenforceable
provision or provisions had never been contained herein.
11.5 Third Party Beneficiaries. The provisions of this Agreement are for
the benefit of the Parties and their Affiliates and not for any other person.
However, should any third party institute proceedings, this Agreement shall not
provide any such person with any remedy, claim, liability, reimbursement, cause
of action, or other right.
11.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to such
State's laws and
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principles regarding the conflict of laws. Subject to Section 1.4, if any
Dispute arises out of or in connection with this Agreement, except as expressly
contemplated by another provision of this Agreement, the Parties irrevocably (a)
consent and submit to the exclusive jurisdiction of federal and state courts
located in Jacksonville, Florida, (b) waive any objection to that choice of
forum based on venue or to the effect that the forum is not convenient and (c)
WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION
BY JURY.
11.7 Executed in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same document.
11.8 Construction. The headings and numbering of articles, Sections and
paragraphs in this Agreement are for convenience only and shall not be construed
to define or limit any of the terms or affect the scope, meaning, or
interpretation of this Agreement or the particular Article or Section to which
they relate. This Agreement and the provisions contained herein shall not be
construed or interpreted for or against any Party because that Party drafted or
caused its legal representative to draft any of its provisions.
11.9 Entire Agreement. This Agreement, including all attachments,
constitutes the entire Agreement between the Parties with respect to the subject
matter hereof, and supersedes all prior oral or written agreements,
representations, statements, negotiations, understandings, proposals and
undertakings, with respect to the subject matter hereof. Without limiting the
foregoing, the Parties expressly acknowledge that this Agreement, together with
the Exhibits and Schedules hereto, is intended to amend and restate the Prior
Agreement in its entirety, and upon the effectiveness of this Agreement, the
Prior Agreement shall be deemed to have been superseded and replaced in its
entirety by this Agreement.
11.10 Amendments and Waivers. The Parties may amend this Agreement only by
a written agreement signed by each Party and that identifies itself as an
amendment to this Agreement. No waiver of any provisions of this Agreement and
no consent to any default under this Agreement shall be effective unless the
same shall be in writing and signed by or on behalf of the Party against whom
such waiver or consent is claimed. No course of dealing or failure of any Party
to strictly enforce any term, right or condition of this Agreement shall be
construed as a waiver of such term, right or condition. Waiver by either Party
of any default by the other Party shall not be deemed a waiver of any other
default.
11.11 Remedies Cumulative. Unless otherwise provided for under this
Agreement, all rights of termination or cancellation, or other remedies set
forth in this Agreement, are cumulative and are not intended to be exclusive of
other remedies to which the injured Party may be entitled by law or equity in
case of any breach or threatened breach by the other Party of any provision in
this Agreement. Unless otherwise provided for under this Agreement, use of one
or more remedies shall not bar use of any other remedy for the purpose of
enforcing any provision of this Agreement.
11.12 Taxes. All charges and fees to be paid to PROVIDING PARTY under this
Agreement are exclusive of any applicable taxes required by law to be collected
from
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RECEIVING PARTY (including, without limitation, withholding, sales, use, excise,
or services tax, which may be assessed on the provision of Corporate Services).
In the event that a withholding, sales, use, excise, or services tax is assessed
on the provision of any of the Corporate Services under this Agreement,
RECEIVING PARTY will pay directly, reimburse or indemnify PROVIDING PARTY for
such tax, plus any applicable interest and penalties. The Parties will cooperate
with each other in determining the extent to which any tax is due and owing
under the circumstances, and shall provide and make available to each other any
resale certificate, information regarding out-of-state use of materials,
services or sale, and other exemption certificates or information reasonably
requested by either Party.
11.13 Changes in Law. PROVIDING PARTY's obligations to provide Corporate
Services hereunder are to provide such Corporate Services in accordance with
applicable laws as in effect on the date of this Agreement. Each Party reserves
the right to take all actions in order to ensure that the Corporate Services and
Transition Assistance are provided in accordance with any applicable laws.
11.14 Effectiveness. Notwithstanding the date hereof, this Agreement shall
become effective as of the date and time that the Merger becomes effective
pursuant to the terms of the FIS Merger Agreement.
[signature page to follow]
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IN WITNESS WHEREOF, the Parties, acting through their authorized officers,
have caused this Agreement to be duly executed and delivered as of the date
first above written.
PROVIDING PARTY:
FIDELITY NATIONAL INFORMATION SERVICES,
INC.
By /s/ Michael L. Gravelle
-------------------------------------
Michael L. Gravelle
Executive Vice President - Legal
RECEIVING PARTY:
FIDELITY NATIONAL TITLE GROUP, INC.
By /s/ Anthony J. Park
-------------------------------------
Anthony J. Park
Executive Vice President and Chief
Financial Officer
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DEFINITIONS AND FORMULAS
FOR PURPOSES OF CALCULATING COST ALLOCATION
For purposes of this Agreement and the Reverse Corporate Service Schedules:
"Direct Employee Compensation" of an employee means the aggregate of such
employee's salary, overtime, cash bonus and commission compensation, payroll
taxes attributable thereto, group insurance charges and benefits paid by the
employer on behalf of or for the benefit of the employee, contributions to any
401k programs or accounts on behalf of or for the benefit of the employee,
together with the employee's pro rata portion of the benefits administration
expenses (including expenses for prizes or awards allocable to the employee)
incurred by the employer.
"Full Departmental Costs", allocated with respect to any department/cost center
of PROVIDING PARTY with FIS Servicing Employees, means any and all costs
incurred by or allocated to that department/cost center other than Direct
Employee Compensation of the employees in the department/cost center. Full
Departmental Costs include office furniture and equipment, office space and
facilities expenses, repairs & maintenance expenses, rent and leasehold
improvements, utilities, telecommunications and IT equipment, insurance costs,
depreciation, amortization, real property and personal property taxes,
advertising and promotional expenses (if any), postage, courier and shipping
expenses, printing, reproduction, stationary, and office supplies, travel and
entertainment expenses, educational, training and recruiting expenses,
professional dues and subscriptions, fees, general costs and expenses incurred
in connection with the Services that are included in administrative overhead,
and the other similar costs that are generally characterized as "overhead"', in
each case as allocated to the department/cost center in accordance with
PROVIDING PARTY's current overhead cost allocation policy.
"Limited Departmental Costs", allocated with respect to any department/cost
center of PROVIDING PARTY with FNF Transferred Employees, means any and all
costs incurred by or allocated to that department/cost center that are directly
related to the physical location of the FNF Transferred Employee within an FIS
department/cost center. Limited Departmental Costs include telecommunications
and IT equipment, office furniture and equipment, office space and facilities
expenses, repairs & maintenance expenses, rent and leasehold improvements,
utilities, data processing charges and expenses, rental expenses and charges
paid to Fidelity Asset Management, Inc. for use of certain office assets and
equipment, all as shown on the accounting cost center reports, it being
understood that in no event shall any costs be allocated to, or paid by,
RECEIVING PARTY hereunder with respect any Transferred Employee to the extent
that an equivalent amount of the same cost item is otherwise being allocated to
and paid by RECEIVING PARTY with respect to such Transferred Employee.
"Servicing Employee" means an employee of PROVIDING PARTY or its Subsidiaries or
its Affiliates who provides services to RECEIVING PARTY and its Subsidiaries
under this Agreement.
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"Transferred Employee" means an employee of RECEIVING PARTY or its Subsidiaries
who is not a Servicing Employee of PROVIDING PARTY, but who is physically
located within a PROVIDING PARTY department/cost center, such as persons who are
former PROVIDING PARTY employees who have been transferred or migrated to
RECEIVING PARTY but whose office is still housed with their former
department/cost center.
"Standard Allocation", for purposes of the Services provided under this
Agreement and the Schedules hereto, including the Cost Allocation Section of the
Schedules, shall be calculated as follows:
1. Out of Pocket Costs: Direct Charges. Out of Pocket Costs incurred by
or on behalf of RECEIVING PARTY or its Subsidiary(s) are charged
directly to it and are not part of the Services under this Agreement
or the payments to be made for Services hereunder.
2. Direct Employee Compensation: Allocation Based on Work Time
Percentage. The Direct Employee Compensation of each PROVIDING PARTY
Servicing Employee shall be allocated to RECEIVING PARTY based on the
percentage of work time that such Servicing Employee spends in
providing the applicable Services to RECEIVING PARTY and its
Subsidiaries. Allocations as of the Effective Date will be those
reflected in the data and results of October 1, 2006.
By way of example, for a Servicing Employee of PROVIDING PARTY who has
an annual salary of $50,000, a cash bonus of $20,000, and benefits of
$10,000, and who spends 40% of his work time on providing Services
under this Agreement, the Direct Employee Compensation allocation
would be calculated as follows:
($50,000 + $20,000 + $10,000) x 40% = $32,000
In this example, RECEIVING PARTY would be allocated $32,000 of Direct
Employee Compensation for this Servicing Employee.
3. Full Departmental (Overhead) Costs for FIS Servicing Employees:
Allocation based on Employee Head Count and Percentage of Work Time.
In addition to the Direct Employee Compensation, Full Departmental
Costs of each department/cost center of PROVIDING PARTY that has
Servicing Employees shall be allocated to RECEIVING PARTY based on the
employee head count of the Servicing Employees and the average
percentage of work time that the Servicing Employees in that
department/cost center spend on providing services to RECEIVING PARTY.
Under this methodology, RECEIVING PARTY is charged for a percentage of
the total Full Departmental Costs that reflects the headcount number
of Servicing Employees in that department/cost center, in relation to
the aggregate headcount of all employees in the department/cost
center, taking into account the average percentage of work time that
each Servicing
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Employee in the department/cost center spends in providing services to
RECEIVING PARTY and its Subsidiaries.
By way of example, assume that in a PROVIDING PARTY department/cost
center, there are 20 employees, 4 of whom are Servicing Employees,
with 2 of those 4 Servicing Employees spending 50% of their work time
providing Services to RECEIVING PARTY and its Subsidiaries, and the
other 2 of those 4 Servicing Employees spending 10% of their work time
providing Services to RECEIVING PARTY and its Subsidiaries. Let's also
assume that we need to allocate $100 of office supplies. The portion
of the Full Departmental Costs that will be allocated to RECEIVING
PARTY is determined as follows:
First, determine the department/cost center's Servicing Employee
headcount allocable to RECEIVING PARTY:
4 Servicing Employees / 20 department/cost center employees = 20%.
Second, use this percentage to determine the amount of the total Full
Departmental Costs will be allocated to the Servicing Employees:
20% of the $100 office supplies = $20 allocable to the Servicing
Employees
So, based solely on employee headcount, $20 of the total $100 of
office supplies are allocable to the Servicing Employees, but a
portion of that should be allocable to RECEIVING PARTY.
Third, to determine that portion of the Full Departmental Costs
allocable to the Servicing Employees that is allocable to providing
services to RECEIVING PARTY and its Subsidiaries, we determine the
average work time percentage of the Servicing Employees:
So, if:
2 employee spend 50% of their time on services for RECEIVING PARTY,
and 2 employees spend 10% of their time on services for RECEIVING
PARTY,
then the average work time percentage for these 4 Servicing Employees
is:
(50 + 50 + 10 + 10) = 120 / 4 = 30% average work time percentage
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Fourth, apply the average work time percentage of the Servicing
Employees in this department/cost center to their share of the total
Full Departmental Costs:
30% (average work time percentage) of the $20 of office supplies
allocable to these Servicing Employees:
30% x $20 = $6.00 allocable to providing services to RECEIVING PARTY
In this example, $6.00 of the Full Departmental Costs for the $100 of
office supplies for this department/cost center will be allocated to
RECEIVING PARTY.
4. Limited Departmental (Overhead) Costs for FNF Transferred Employees:
Allocation Based on Employee Head Count. Limited Departmental Costs of
each department/cost center of PROVIDING PARTY that has Transferred
Employees (i.e., RECEIVING PARTY employees who are not Servicing
Employees of PROVIDING PARTY, but who are physically located within
such department/cost center, such as persons who are former PROVIDING
PARTY employees who have been transferred to RECEIVING PARTY but whose
office is still housed with their former department/cost center) shall
be allocated to RECEIVING PARTY based on employee head count,
determined by applying a percentage reflecting the number of
Transferred Employees in that department/cost center, in relation to
the number of all employees in the department/cost center.
By way of example, assume that in a PROVIDING PARTY department/cost
center, there are 10 employees, 2 of whom are Transferred Employees
now employed by RECEIVING PARTY. The portion of the Limited
Departmental Costs that will be allocated to RECEIVING PARTY as
follows:
2 Transferred Employees / 10 Total Department Employees = 20%.
In this example, 20% of the Limited Departmental Costs of this
department/cost center will be allocated to RECEIVING PARTY.
5. Update of Servicing Employee Work Percentages and Transferred Employee
Head Count: At Least Every 6 Months. Except to the extent otherwise
expressly provided herein, for any given 6-month period, all Direct
Employee Compensation to be allocated shall be so allocated on the
basis of the applicable work time percentage determined as of the most
recent work time percentage review undertaken by PROVIDING PARTY (each
a "Work Time Percentage Review"). Work Time Percentage Reviews for all
Servicing Employees shall be re-examined and updated by PROVIDING
PARTY no less frequently than every 6 months, with the first update
after the Effective Date to occur in March 2007. Direct Employee
Compensation allocations applicable on the Effective Date and
continuing until the completion of the April 2007 Work Time Percentage
Review
xxvii
shall be based on the Work Time Percentage Review undertaken for the
calendar month October 2006. Full Departmental Costs and Limited
Departmental Costs will be allocated based on the head count (and, if
applicable, the work time percentage) determined as of the most recent
Work Time Percentage Review. Without limiting the foregoing, changes
in work time percentages based on an updated Work Time Percentage
Review shall be reviewed and approved by a full-time FIS employee.
6. Terminated or Discontinued Services. If at any time during the Term of
this Agreement RECEIVING PARTY terminates or discontinues all or any
portion of a Corporate Service prior to the end of the Term or if any
Corporate Service (or portion thereof) automatically terminates,
pursuant to Section 2.2(b) (hereinafter referred to as a "Discontinued
Service"), then effective as of the last day of the calendar month in
which such termination or discontinuation is effective, Corporate
Service Fees related to the Discontinued Service shall no longer be
owing under this Agreement.
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