EXHIBIT 10.2
EXECUTION DRAFT
AMENDED AND RESTATED CORPORATE SERVICES AGREEMENT
This Amended and Restated Corporate Services Agreement (this
"Agreement") is effective as of February 1, 2006 (the "Effective Date"), by and
between FIDELITY NATIONAL TITLE GROUP, INC., a Delaware corporation ("FNT" or
"PROVIDING PARTY"), and FIDELITY NATIONAL FINANCIAL, INC., a Delaware
corporation ("FNF" or "RECEIVING PARTY"). FNT and FNF shall be referred to
together in this Agreement as the "Parties" and individually as a "Party."
WHEREAS, the Parties previously entered into a Corporate Services
Agreement dated as of September 27, 2005 (the Prior CSA Agreement") for the
provision of certain corporate services, as more fully described herein; and
WHEREAS, the Parties wish to amend and restate the Prior CSA Agreement
in its entirety;
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
1
corporation, partnership, company or other entity of which such Party controls
or owns, directly or indirectly, more than fifty percent (50%) of the stock or
other equity interest entitled to vote on the election of the members to the
board of directors or similar governing body, provided however, that with
respect to the RECEIVING PARTY, "Subsidiary" shall not include (X) Certegy,
Inc., Fidelity National Information Services, Inc. or any of their respective
Subsidiaries (collectively, "FIS") or (Y) PROVIDING PARTY or any of its
Subsidiaries; and "Affiliate" means, with respect to either Party, any
corporation, partnership, company, or other entity that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Party, except that (i) in the case of
RECEIVING PARTY, "Affiliate" shall not include PROVIDING PARTY or any of its
Subsidiaries, or FIS or any of its Subsidiaries, and (ii) in the case of
PROVIDING PARTY, "Affiliate" shall not include FIS or any of its Subsidiaries,
or FNF or any FNF Subsidiary that is not a direct or indirect Subsidiary of
PROVIDING 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
2
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. 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.
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
3
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.
(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
4
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.
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.
5
(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 date on which the last of the
Scheduled Services under this Agreement is terminated or the date on which this
Agreement is terminated by mutual agreement of the Parties, whichever is earlier
(in either case, the "Termination Date"); provided, however, that in no event
shall the Term:
(a) expire later than the date that is six (6) months after
any event or circumstance causing FNF to own or control, directly or indirectly,
fifty percent (50%) or less 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, of FNT, or
(b) continue, with respect to any entity that ceases to be a
Subsidiary of RECEIVING PARTY prior to the end of the Term, from and after the
date that such entity ceases to be a Subsidiary of RECEIVING PARTY.
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
6
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 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
7
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 Section
3.2 below, RECEIVING PARTY agrees to timely pay PROVIDING PARTY, as compensation
for the Corporate Services provided hereunder, all fees as contemplated in
Section 1.1 (the "Corporate Service Fees") and in Section 2.3 (the "Transition
Assistance Fees").
(b) Without limiting the foregoing, the Parties acknowledge
that RECEIVING PARTY is also obligated to pay, or reimburse PROVIDING PARTY for
its payment of, all Out of Pocket Costs (as defined below); provided, however,
that the incurrence of any liability by RECEIVING PARTY or any of its
Subsidiaries for any New Out of Pocket Cost (as defined below) that requires the
payment by RECEIVING PARTY or one of its Subsidiaries of more than $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 Recap Report (as defined in
Section 3.3) 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
Recap Report, 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
8
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 FNF or one of its
Subsidiaries in the ordinary course of business consistent with past practices
and for which FNF had paid or reimbursed a portion thereof prior to the
Effective Date.
3.2 Payment Terms. PROVIDING PARTY shall invoice RECEIVING PARTY on a
monthly basis in arrears for Corporate Service Fees, Transition Assistance Fees,
and Total Allocated FAS 123 Charges, as calculated in accordance with Section
3.1 and Schedule 1.1(a) (it being understood that the Total Allocated FAS 123
Charges are non-cash items treated by RECEIVING PARTY as a contribution to
capital by PROVIDING PARTY with no commensurate issuance of any equity in
connection therewith). Each monthly invoice shall list all Corporate Services
and FNF Costs in the format of Schedule 3.1(e). In addition, PROVIDING PARTY
shall promptly notify RECEIVING PARTY, no more frequently than monthly, of the
aggregate amount of Out of Pocket Costs to be reimbursed or paid. RECEIVING
PARTY shall pay by electronic funds transfer or other method satisfactory to
PROVIDING PARTY and RECEIVING PARTY, in full, the monthly amount so invoiced and
the Out of Pocket Costs incurred, within thirty (30) days after the date on
which PROVIDING PARTY's monthly invoice or notification of Out of Pocket Costs,
as the case may be, was received. All invoices shall include, without
limitation, the category of applicable Corporate Service or Transition
Assistance Service (as the case may be), a brief description of the Out of
Pocket Costs (if applicable), the billing period, and such other information as
RECEIVING PARTY may reasonably request. Should RECEIVING PARTY dispute any
portion of the amount due on any invoice or require any adjustment to an
invoiced amount, or dispute any Out of Pocket Costs for which it received
notification, then RECEIVING PARTY shall notify PROVIDING PARTY in writing of
the nature and basis of the dispute and/or adjustment as soon as reasonably
possible using, if necessary, the dispute resolution procedures set forth in
Section 1.4. The Parties shall use their reasonable best efforts to resolve the
dispute prior to the payment due date.
3.3 Fee Reports. On or before the twentieth (20th) calendar day
following the last day of each calendar month, PROVIDING PARTY will provide to
the chief accounting officer of RECEIVING PARTY (or his/her designee) a summary
recap report (the "Monthly Recap Report") showing for the calendar month then
ended all Corporate Service Fees, Transition Assistance Fees, Out of Pocket
Costs, Total Allocated FAS 123 Charges (if applicable) 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. The Monthly
Recap Report will list each PROVIDING PARTY accounting cost center that provided
Corporate Services hereunder during the month and the amount of the costs
allocated or incurred by each such cost center to RECEIVING PARTY for such
calendar month. In addition, the Monthly Recap Report will also show the monthly
aggregate cost trend for the trailing 12-month period.
9
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.
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.
10
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 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.
601 Riverside Avenue
Jacksonville, Florida 32204
Attention: General Counsel
If to PROVIDING PARTY, to:
Fidelity National Title Group, 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 and this Section
6.2.
ARTICLE VII
REMEDIES
7.1 Remedies Upon Material Breach. In the event of material breach of
any provision of this Agreement by a Party, the non-defaulting Party shall give
the defaulting Party written notice, and:
(a) If such breach is for RECEIVING PARTY's non-payment of an
amount that is not in dispute, the defaulting Party shall cure the breach within
thirty (30) calendar days of such notice. If the defaulting Party does not cure
such breach by such date, then the defaulting Party shall pay the non-defaulting
Party the undisputed amount, any interest that has accrued hereunder through the
expiration of the cure period plus an additional amount of interest equal to
four percent (4%) per annum above the "prime rate" as announced in the most
recent edition of the Wall Street Journal. The Parties agree that this rate of
interest constitutes reasonable liquidated damages and not an unenforceable
penalty.
(b) If such breach is for any other material failure to
perform in accordance with this Agreement, the defaulting Party shall cure such
breach within thirty (30) calendar days of the date of such notice. If the
defaulting Party does not cure such breach within such period,
11
then the defaulting Party shall pay the non-defaulting Party all of the
non-defaulting Party's actual damages, subject to Article IV above.
7.2 Survival Upon Expiration or Termination. The provisions of Section
1.4 (Dispute Resolution), Section 2.4 (Return of Materials), Article IV
(Limitation of Liability), Article VI (Notices and Demands), this Section 7.2,
Article VIII (Confidentiality), Article X (Indemnification) and Article XI
(Miscellaneous) shall survive the termination or expiration of this Agreement
unless otherwise agreed to in writing by both Parties.
ARTICLE VIII
CONFIDENTIALITY
8.1 Confidential Information. Each Party shall use at least the same
standard of care in the protection of Confidential Information of the other
Party as it uses to protect its own confidential or proprietary information;
provided that such Confidential Information shall be protected in at least a
reasonable manner. For purposes of this Agreement, "Confidential Information"
includes all confidential or proprietary information and documentation of either
Party, including the terms of this Agreement, including with respect to each
Party, all of its software, data, financial information all reports, exhibits
and other documentation prepared by any of its Subsidiaries or Affiliates. Each
Party shall use the Confidential Information of the other Party only in
connection with the purposes of this Agreement and shall make such Confidential
Information available only to its employees, subcontractors, or agents having a
"need to know" with respect to such purpose. Each Party shall advise its
respective employees, subcontractors, and agents of such Party's obligations
under this Agreement. The obligations in this Section 8.1 will not restrict
disclosure by a Party pursuant to applicable law, or by order or request of any
court or government agency; provided that prior to such disclosure the 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
12
product doctrine and other privileges and rights associated with such Privileged
Work Product pursuant to such Rule 26 and the equivalent rules and regulations
under the law chosen to govern the construction of this Agreement. After
PROVIDING PARTY is notified or otherwise becomes aware that documents, data,
database, or communications are Privileged Work Product, only PROVIDING PARTY
personnel for whom such access is necessary for the purposes of providing
Services to RECEIVING PARTY as provided in this Agreement shall have access to
such Privileged Work Product. Should PROVIDING PARTY ever be notified of any
judicial or other proceeding seeking to obtain access to Privileged Work
Product, PROVIDING PARTY shall (A) immediately give notice to RECEIVING PARTY,
(B) cooperate with RECEIVING PARTY in challenging the right to such access and
(C) only provide such information as is required by a final, non-appealable
ruling of a court of proper jurisdiction. RECEIVING PARTY shall pay all of the
cost incurred by PROVIDING PARTY in complying with the immediately preceding
sentence. RECEIVING PARTY has the right and duty to represent PROVIDING PARTY in
such resistance or to select and compensate counsel to so represent PROVIDING
PARTY or to reimburse PROVIDING PARTY for reasonable attorneys' fees and
expenses as such fees and expenses are incurred in resisting such access. If
PROVIDING PARTY is ultimately required, pursuant to an order of a court of
competent jurisdiction, to produce documents, disclose data, or otherwise act in
contravention of the confidentiality obligations imposed in this Article VIII,
or otherwise with respect to maintaining the confidentiality, proprietary
nature, and secrecy of Privileged Work Product, PROVIDING PARTY is not liable
for breach of such obligation to the extent such liability does not result from
failure of PROVIDING PARTY to abide by the terms of this Article VIII. All
Privileged Work Product is the property of RECEIVING PARTY and will be deemed
Confidential Information, except as specifically authorized in this Agreement or
as shall be required by law.
8.3 Unauthorized Acts. Each Party shall (a) notify the other Party
promptly of any unauthorized possession, use, or knowledge of any Confidential
Information by any person which shall become known to it, any attempt by any
person to gain possession of Confidential Information without authorization or
any attempt to use or acquire knowledge of any 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
13
the existence of the business relationship contemplated by the terms of this
Agreement internally within PROVIDING PARTY's organization and orally and in
writing communicate PROVIDING PARTY's identity as a reference with potential and
existing customers.
8.5 Data Privacy. (a) Where, in connection with this Agreement,
PROVIDING PARTY processes or stores information about a living individual that
is held in automatically processable form (for example in a computerized
database) or in a structured manual filing system ("Personal Data"), on behalf
of any Subsidiaries of RECEIVING PARTY or their clients, then PROVIDING PARTY
shall implement appropriate measures to protect those personal data against
accidental or unlawful destruction or accidental loss, alteration, unauthorized
disclosure or access and shall use such data solely for purposes of carrying out
its obligations under this Agreement.
(b) RECEIVING PARTY may instruct PROVIDING PARTY, where
PROVIDING PARTY processes Personal Data on behalf of Subsidiaries of RECEIVING
PARTY, to take such steps to preserve data privacy in the processing of those
Personal Data as are reasonably necessary for the performance of this Agreement.
(c) Subsidiaries of RECEIVING PARTY may, in connection with
this Agreement, collect Personal Data in relation to PROVIDING PARTY and
PROVIDING PARTY's employees, directors and other officers involved in providing
Corporate Services hereunder. Such Personal Data may be collected from PROVIDING
PARTY, its employees, its directors, its officers, or from other (for example,
published) sources; and some limited personal data may be collected indirectly
at RECEIVING PARTY's (or Subsidiaries of RECEIVING PARTY's) locations from
monitoring devices or by other means (e.g., telephone logs, closed circuit TV
and door entry systems). Nothing in this Section 8.5(c) obligates PROVIDING
PARTY or PROVIDING PARTY's employees, directors or other officers to provide
Personal Data requested by RECEIVING PARTY. The Subsidiaries of RECEIVING PARTY
may use and disclose any such data disclosed by PROVIDING PARTY solely for
purposes connected 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,
14
QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR THE
RESULTS OBTAINED OF THE CONTINUING BUSINESS. ALL OTHER REPRESENTATIONS,
WARRANTIES, AND COVENANTS, EXPRESS OR IMPLIED, STATUTORY, COMMON LAW OR
OTHERWISE, OF ANY NATURE, INCLUDING WITH RESPECT TO THE WARRANTIES OF
MERCHANTABILITY, QUALITY, QUANTITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR THE RESULTS OBTAINED OF THE CONTINUING BUSINESS ARE HEREBY DISCLAIMED
BY PROVIDING PARTY.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification.
(a) Subject to Article IV, RECEIVING PARTY will indemnify,
defend and hold harmless PROVIDING PARTY, each Subsidiary and Affiliate of
PROVIDING PARTY, each of their respective past and present directors, officers,
employees, agents, consultants, advisors, accountants and attorneys
("Representatives"), and each of their respective successors and assigns
(collectively, the "PROVIDING PARTY Indemnified Parties") from and against any
and all Damages (as defined below) incurred or suffered by the PROVIDING PARTY
Indemnified Parties arising or resulting from the provision of Corporate
Services hereunder, which Damages shall be reduced to the extent of:
(i) Damages caused or contributed to by PROVIDING
PARTY's negligence, willful misconduct or violation or law; or
(ii) Damages caused or contributed to by a breach of
this Agreement by PROVIDING PARTY.
"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:
15
(i) any claim that PROVIDING PARTY's use of the
software or other intellectual property used to provide the
Corporate Services or Transition Assistance, or any results
and proceeds of such Corporate Services or Transition
Assistance, infringes, misappropriates or otherwise violates
any United States patent, copyright, trademark, trade secret
or other intellectual property rights; provided, that such
intellectual property indemnity shall not apply to the extent
that any such claim arises out of any modification to such
software or other intellectual property made by RECEIVING
PARTY without PROVIDING PARTY's authorization or
participation, or
(ii) PROVIDING PARTY's gross negligence, willful
misconduct, improper use or disclosure of customer information
or violations of law;
provided, that in each of the cases described in subclauses (i) through (ii)
above, the amount of Damages incurred or sustained by RECEIVING PARTY shall be
reduced to the extent such Damages shall have been caused or contributed to by
any action or omission of RECEIVING PARTY in amounts equal to RECEIVING PARTY's
equitable share of such Damages determined in accordance with its relative
culpability for such Damages or the relative fault of RECEIVING PARTY or its
Subsidiaries.
10.2 Indemnification Procedures.
(a) Claim Notice. A Party that seeks indemnity under this
Article X (an "Indemnified Party") will give written notice (a "Claim Notice")
to the Party from whom indemnification is sought (an "Indemnifying Party"),
whether the Damages sought arise from matters solely between the Parties or from
Third Party Claims. The Claim Notice must contain (i) a description and, if
known, estimated amount (the "Claimed Amount") of any Damages incurred or
reasonably expected to be incurred by the Indemnified Party, (ii) a reasonable
explanation of the basis for the Claim Notice to the extent of facts then known
by the Indemnified Party, and (iii) a demand for payment of those Damages. No
delay or deficiency on 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
16
ultimate resolution thereof, the Parties will take such actions as are
reasonably necessary to comply with such agreement or instructions.
(d) Third Party Claims.
(i) In the event that the Indemnified Party receives
notice or otherwise learns of the assertion by a person or
entity who is not a Party hereto or a Subsidiary or Affiliate
of a Party hereto of any claim or the commencement of any
action (a "Third-Party Claim") with respect to which the
Indemnifying Party may be obligated to provide indemnification
under this Article X, the Indemnified Party will give written
notification to the Indemnifying Party of the Third-Party
Claim. Such notification will be given within fifteen (15)
days after receipt by the Indemnified Party of notice of such
Third-Party Claim, will be accompanied by reasonable
supporting documentation submitted by such third party (to the
extent then in the possession of the Indemnified Party) and
will describe in reasonable detail (to the extent known by the
Indemnified Party) the facts constituting the basis for such
Third-Party Claim and the amount of the claimed Damages;
provided, however, that no delay or deficiency on the part of
the Indemnified Party in so notifying the Indemnifying Party
will relieve the Indemnifying Party of any liability for
Damages or obligation hereunder except to the extent of any
Damages caused by or arising out of such failure. Within
twenty (20) days after delivery of such notification, the
Indemnifying Party may, upon written notice thereof to the
Indemnified Party, assume control of the defense of such
Third-Party Claim with counsel reasonably satisfactory to the
Indemnified Party. During any period in which the Indemnifying
Party has not so assumed control of such defense, the
Indemnified Party will control such defense.
(ii) The Party not controlling such defense (the
"Non-controlling Party") may participate therein at its own
expense.
(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
17
or judgment, and (B) such settlement or judgment includes a
full, complete and unconditional release of the Indemnified
Party from further Liability. The Indemnified Party will not
agree to any settlement of, or the entry of any judgment
arising from, any such Third-Party Claim without the prior
written consent of the Indemnifying Party, which consent will
not be unreasonably withheld or delayed.
ARTICLE XI
MISCELLANEOUS
11.1 Relationship of the Parties. The Parties declare and agree that
each Party is engaged in a business that is independent from that of the other
Party and each Party shall perform its obligations as an independent contractor.
It is expressly understood and agreed that RECEIVING PARTY and PROVIDING PARTY
are not partners, and nothing contained herein is intended to create an agency
relationship or a partnership or joint venture with respect to the Corporate
Services. Neither Party is an agent of the other and neither Party has any
authority to represent or bind the other Party as to any matters, except as
authorized herein or in writing by such other Party from time to time.
11.2 Employees. (a) PROVIDING PARTY shall be solely responsible for
payment of compensation to its employees and, as between the Parties, for its
Subsidiaries' employees and 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, in connection with a sale of an
asset to which one or more of the Corporate Services relate, assign, transfer or
convey any right, obligation or duty, in whole or in part, or of any other
interest under this Agreement relating to such Corporate Services without the
prior written consent of the other Party. 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.
18
11.5 Third Party Beneficiaries. The provisions of this Agreement are
for the benefit of the Parties and their Affiliates and not for any other
person. However, should any third party institute proceedings, this Agreement
shall not provide any such person with any remedy, claim, liability,
reimbursement, cause of action, or other right.
11.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida, without giving effect to
such State's laws and principles regarding the conflict of laws. Subject to
Section 1.4, if any Dispute arises out of or in connection with this Agreement,
except as expressly contemplated by another provision of this Agreement, the
Parties irrevocably (a) consent and submit to the exclusive jurisdiction of
federal and state courts located in Jacksonville, Florida, (b) waive any
objection to that choice of forum based on venue or to the effect that the forum
is not convenient and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT
TO TRIAL OR ADJUDICATION BY JURY.
11.7 Executed in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same document.
11.8 Construction. The headings and numbering of articles, sections and
paragraphs in this Agreement are for convenience only and shall not be construed
to define or limit any of the terms or affect the scope, meaning, or
interpretation of this Agreement or the particular Article or Section to which
they relate. This Agreement and the provisions contained herein shall not be
construed or interpreted for or against any Party because that Party drafted or
caused its legal representative to draft any of its provisions.
11.9 Entire Agreement. This Agreement, including all attachments,
constitutes the entire Agreement between the Parties with respect to the subject
matter hereof, and supersedes 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
CSA Agreement in its entirety, and upon the effectiveness of this Agreement, the
Prior CSA 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
19
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 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.
[signature page to follow]
20
IN WITNESS WHEREOF, the Parties, acting through their authorized
officers, have caused this Agreement to be duly executed and delivered as of the
date first above written.
PROVIDING PARTY:
FIDELITY NATIONAL TITLE GROUP, INC.
By
-----------------------------------
Raymond R. Quirk
Chief Executive Officer
RECEIVING PARTY:
FIDELITY NATIONAL FINANCIAL INC.
By
----------------------------------
Peter A. Sadowski
Executive Vice President and General Counsel
LLGM JK232522
21
DEFINITIONS AND FORMULAS
FOR PURPOSES OF CALCULATING COST ALLOCATION
For purposes of this Agreement and the Corporate Service Schedules:
"Direct Employee Compensation" of an employee means the aggregate of such
employee's salary, overtime, cash bonus and commission compensation, 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 FNT 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 FNT
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.
22
"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, 2005.
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 FNT 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,
23
taking into account average percentage of work time that each
Servicing 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
24
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
June 2006. Direct Employee Compensation allocations applicable
on the Effective Date and continuing until the completion of
the June 2006 Work Time Percentage Review
25
shall be based on the Work Time Percentage Review undertaken
for the calendar month October 2005. 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 FNF 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.
LLGM JK232522
26