Exhibit 10.2
EXHIBIT D
FORM OF TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT,
dated as of
, 2007 (this “ Agreement ”), is made by and
between Synovus Financial Corp., a Georgia corporation (“
Synovus ”), and Total System Services, Inc., a Georgia
corporation (“ TSYS ”). Synovus and TSYS may
each be referred to herein as a “ Party ” and/or
the “ Parties ” as the case may require.
WITNESSETH:
WHEREAS, Synovus, Columbus Bank and
Trust Company and TSYS are parties to an Agreement and Plan of
Distribution, dated as of October 25, 2007 (the “
Distribution Agreement ”), pursuant to which Synovus
will, subject to the terms and conditions in the Distribution
Agreement, distribute to its shareholders all of the common stock
of TSYS held by it as of a certain date;
WHEREAS, in connection with the
transactions contemplated by the Distribution Agreement, Synovus
and TSYS wish to enter into this Agreement for purposes of
continuity and transition; and
WHEREAS, TSYS desires to cause
Synovus and its appropriate Subsidiaries (as defined below) to
provide to TSYS and its appropriate Subsidiaries the Services (as
defined below) set forth on Schedule A hereto, and
Synovus is willing to provide, or cause its appropriate
Subsidiaries to provide, such Services, and Synovus desires to
cause TSYS and its appropriate Subsidiaries to provide to Synovus
and its appropriate Subsidiaries the Services set forth on
Schedule B hereto, and TSYS is willing to provide, or
cause its appropriate Subsidiaries to provide, such Services, all
on the terms and conditions set forth below.
NOW, THEREFORE, the Parties, in
consideration of the foregoing and the mutual covenants contained
herein, agree as follows:
SECTION 1. SPECIFIC
DEFINITIONS .
In addition to the terms defined
elsewhere in this Agreement, as used in this Agreement, the
following terms have the respective meanings set forth below:
“ Acquisition
Transaction ” shall mean, with respect to any Party, a
transaction (i) in which such Party acquires (by merger, asset
purchase, stock purchase or otherwise) the business of a Third
Party that has annual revenues in the fiscal year preceding such
transaction equal to or greater than thirty percent (30%) of the
consolidated revenues of such Party in the fiscal year preceding
such transaction, (ii) in which such Party merges with or into
a Third Party that has annual revenues in the fiscal year preceding
such transaction equal to or greater than thirty percent (30%) of
the consolidated revenues of such Party in the fiscal year
preceding such transaction or (iii) that would result in a
Change in Control of such Party.
“ Applicable Rate
” shall mean the rate of interest per annum announced from
time to time by Columbus Bank and Trust Company as its prime
lending rate.
“ Ancillary Agreement
” shall have the meaning given to it in the Distribution
Agreement.
“ Bankruptcy Event
” with respect to a Party shall mean the filing of an
involuntary petition in bankruptcy or similar proceeding against
such Party seeking its reorganization, liquidation or the
appointment of a receiver, trustee or liquidator for it or for all
or substantially all of its assets, whereupon such petition shall
not be dismissed within sixty (60) days after the filing thereof,
or if such Party shall (i) apply for or consent in writing to
the appointment of a receiver, trustee or liquidator of all or
substantially all of its assets, (ii) file a voluntary bankruptcy
petition, (iii) make a general assignment for the benefit of
creditors or (iv) file a petition or an answer seeking
reorganization or an arrangement with its creditors or take
advantage of any insolvency Law with respect to itself as
debtor.
“ Change in Control
” shall mean, with respect to Synovus or TSYS, as the case
may be, the occurrence of any of the following: (a) after the
Effective Time, any Person or group of Persons acquires the
beneficial ownership of more than thirty-five percent (35%) of the
outstanding voting power of Synovus or TSYS, as applicable (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended, and the applicable rules and regulations
thereunder), or (b) during any period of 12 consecutive months
commencing after the Effective Time, individuals who on the first
day of such period were directors of Synovus or TSYS, as applicable
(together with any replacement or additional directors who were
nominated or elected by a majority of directors then in office),
cease to constitute a majority of the Board of Directors of Synovus
or TSYS, as applicable.
“ Confidential Disclosure
Agreement ” shall have the meaning given to it in the
Distribution Agreement.
“ Confidential
Information ” shall have the meaning given to it in the
Confidential Disclosure Agreement.
“ Contaminant ”
shall mean any virus, worm, trojan horse, software lock,
“drop dead” device, trap door, time bomb, or any other
contaminant or material that is designed in substantial part to
access and modify or delete in an unauthorized manner, disrupt or
damage any data files or other computer programs, software or
hardware or any material that provides access to any such
contaminants or materials.
“ Distribution Agreement
” shall have the meaning set forth in the recitals.
“ DRP ” shall have
the meaning set forth in Section 2.9 .
“ Effective Time ”
shall have the meaning given to it in the Distribution
Agreement.
“ Governmental Authority
” shall mean any federal, state, local, foreign or
international court, government, department, commission, board,
bureau, agency, official or regulatory, administrative or
governmental authority.
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“ Law ” shall mean
all laws, statutes and ordinances and all regulations, rules and
other pronouncements of Governmental Authorities having the effect
of law of the United States, any foreign country, or any domestic
or foreign state, province, commonwealth, city, country,
municipality, territory, protectorate, possession or similar
instrumentality, or any Governmental Authority thereof.
“ Loss ” shall
mean all losses, liabilities, damages, claims, demands, judgments
or settlements of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, liquidated or unliquidated,
including all reasonable costs and expenses (including reasonable
legal fees, accounting fees or otherwise as such costs are
incurred) relating thereto.
“ Person ” shall
mean any natural person, corporation, business trust, limited
liability company, joint venture, association, company, partnership
or government, or any agency or political subdivision
thereof.
“ Restricted Assignment
Period ” shall have the meaning given to it in the
Distribution Agreement.
“ Services ” shall
mean (as the context permits) the Synovus Services and/or the TSYS
Services.
“ Subsidiary ”
shall have the meaning given to it in the Distribution
Agreement.
“ Synovus Services
” shall mean, subject to Section 2.1(c) , those
services to be provided by Synovus or its appropriate Subsidiaries
to TSYS or any of its appropriate Subsidiaries designated by TSYS,
as set forth on Schedule A hereto or as otherwise set
forth herein.
“ Systems ” shall
have the meaning set forth in Section 2.10 .
“ Third Party ”
shall mean a Person who is not a Party or a Subsidiary
thereof.
“ TSYS Services ”
shall mean, subject to Section 2.1(c) , those services
to be provided by TSYS or its appropriate Subsidiaries to Synovus
or any of its appropriate Subsidiaries designated by Synovus, as
set forth on Schedule B hereto or as otherwise set
forth herein.
SECTION 2. SERVICES .
Section 2.1 Services .
(a) Synovus shall provide, or cause its appropriate
Subsidiaries to provide, to TSYS and its appropriate Subsidiaries
each Synovus Service for the term set forth opposite the
description of such Synovus Service in Schedule A
.
(b) TSYS
shall provide, or cause its appropriate Subsidiaries to provide, to
Synovus and its appropriate Subsidiaries each TSYS Service for the
term set forth opposite the description of such TSYS Service in
Schedule B .
(c) Notwithstanding
anything to the contrary in this Agreement, the Services shall not
include, nor shall this Agreement in any way apply to, any services
or products provided pursuant to those agreements between the
Parties set forth on Schedule C hereto.
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Section 2.2 Additional
Services . (a) From time to time after the Effective Time,
the Parties may identify additional services that will be provided
in accordance with the terms of this Agreement (the “
Additional Services ”). The Parties may agree in
writing on Additional Services during the term of this Agreement by
supplementing Schedule A or Schedule B , as the
case may be.
(b) Except
as set forth in the last sentence of this
Section 2.2(b) , the Party that is to provide or cause
its Subsidiary to provide any Additional Service shall be obligated
to perform such Additional Service, so long as such Additional
Service: (1) was provided by the providing Party or its
Subsidiary immediately prior to the Effective Time and is
reasonably believed by the receiving Party to have been
inadvertently or unintentionally omitted from
Schedule A or Schedule B , as the case may
be, or (2) is necessary to effectuate an orderly transition
under this Agreement and the Distribution Agreement, unless in
either case such performance would significantly disrupt the
providing Party’s operations or cannot be performed using the
existing resources of the providing Party taking into account other
commitments and needs of the providing Party. The fee for providing
an Additional Service under this Section 2.2(b) will be
a reasonable charge as agreed to by the Parties prior to the
performance of such Additional Service. If the providing Party
reasonably believes the performance of Additional Services required
under clauses (1) or (2) above would significantly
disrupt the providing Party’s operations or cannot be
performed using the existing resources of the providing Party, the
providing Party and the receiving Party shall negotiate in good
faith to establish terms under which the providing Party can
provide such Additional Services; provided , however
, that the providing Party shall not be obligated to provide such
Additional Services if, following good faith negotiation, the
Parties are unable to reach agreement on such terms.
Section 2.3 Standard of
Service . The Services shall be provided by each Party in good
faith and, except as otherwise set forth on Schedule A
or Schedule B for a specific Service, at substantially
the same level of service that such Services have historically been
provided by the providing Party.
Section 2.4 Service
Boundaries . (a) Except as otherwise provided in
Section 2.4(b) or Section 2.4(c) below,
(i) each of Synovus and TSYS shall be required to provide, or
cause its appropriate Subsidiaries to provide, the Services to the
other Party and its appropriate Subsidiaries only to the extent and
only at the locations such Services are being provided immediately
prior to the Effective Time, (ii) the Services will be
available only for purposes of conducting the business of the Party
receiving the Services and (iii) each Party acknowledges and
agrees that the providing Party shall have no obligation to provide
Services to segments of the receiving Party’s business that
have been added or acquired subsequent to the Effective Time, in
connection with a Change in Control of the receiving Party or
otherwise.
(b) At
any time prior to May 31, 2008, (i) a Party receiving any
Service may provide written notice to the providing Party of any
location that is additional to those locations at which such
Service is being provided immediately prior to the Effective Time
and, within a reasonable period of time as mutually agreed by the
Parties, which period of time shall in no event be later than
ninety (90) days following receipt of such notice, the
providing Party shall be required, for a reasonable charge, to
provide, or cause its appropriate Subsidiaries to provide, such
Service to the receiving Party or any of its appropriate
Subsidiaries at such additional
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location
for the then-remaining duration of the term of the applicable
Service or for such other duration as may be agreed in writing by
the Parties, and (ii) a Party receiving any Service may
provide written notice to the providing Party requesting that such
Service be made available to the receiving Party for purposes of
conducting its business in a manner substantially different from
the manner its business was conducted prior to the Effective Time
and, within a reasonable period of time as mutually agreed by the
Parties, which period of time shall in no event be later than
ninety (90) days following receipt of such notice (which
notice shall include a reasonably detailed description of the
manner in which the conduct of business has or is to be changed and
the resulting increase in the scope of the applicable Service), the
providing Party shall be required, for a reasonable charge as
agreed to by the Parties prior to the performance of such Service,
to provide, or cause its appropriate Subsidiaries to provide, such
Service to the receiving Party or any of its appropriate
Subsidiaries for purposes of conducting the business of the
receiving Party in such substantially different manner for the
then-remaining duration of the term of the applicable Service or
for such other duration as may be agreed in writing by the Parties,
unless, in case of either Section 2.4 (b)(i) or
Section 2.4(b)(ii) , such performance would
significantly disrupt the providing Party’s operations or
increase in an unduly burdensome manner the scope of its
responsibility under this Agreement.
(c) If
at any time prior to May 31, 2008 a Party receiving Services
under this Agreement enters into a definitive agreement with
respect to, or consummates, an Acquisition Transaction, such
receiving Party may (but is not required to) notify the providing
Party in writing on or prior to May 31, 2008 of such receiving
Party’s election to convert its systems directly to the
systems of the Third Party to such Acquisition Transaction. Upon
timely receipt of such a notice of election, the providing Party
shall provide reasonable cooperation and assistance to the
receiving Party in effecting such conversion; provided ,
however , the receiving Party shall reimburse the providing
Party for all reasonable expenses incurred by the providing Party
in connection with such conversion efforts.
Section 2.5 Representations
and Warranties . Each Party represents and warrants to the
other that it has the right to enter into and perform this
Agreement, this Agreement has been validly executed by a duly
authorized representative, and once executed, will impose valid and
binding legal obligations upon it; and, except as set forth on
Schedule D , its entry into and performance of this
Agreement will not conflict with any of its existing obligations or
undertakings, or any other agreement to which it is a party or
bound by.
Section 2.6 DISCLAIMER OF
OTHER WARRANTIES . EXCEPT AS EXPRESSLY SET FORTH HEREIN,
NEITHER SYNOVUS NOR TSYS MAKES ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE SERVICES OR OTHER DELIVERABLES
PROVIDED BY IT OR ITS APPROPRIATE SUBSIDIARIES HEREUNDER.
Section 2.7 Systems .
TSYS is contracting for use of Synovus’s systems, and Synovus
is contracting for use of TSYS’s systems, on an
“as-is” basis. Subject to the following sentence, it
will be at Synovus’s discretion as to whether enhancements or
modifications to its systems will be made available to TSYS and it
will be at TSYS’s discretion as to whether enhancements
or
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modifications to its systems will be made available to Synovus.
After the Effective Time, there will be no enhancements or
modifications to the systems of Synovus or TSYS at the other
Party’s request, unless the providing Party consents in
writing to such enhancement or modification; provided ,
however , if the requesting Party agrees in writing to pay,
or reimburse the providing Party for, any and all of the reasonable
costs associated with such enhancement or modification, including,
without limitation, any reasonable costs associated with
“winding down” such enhancement or modification
following the termination of the applicable Service, and
such enhancement or modification is reasonably necessary in order
for the requesting Party to comply with then applicable Law, then
such consent shall not be required and the providing Party shall
make such enhancement or modification.
Section 2.8 Contaminants
. Both Parties agree to implement and maintain reasonable
anti-Contaminant software programs and firewalls and to take
reasonable measures to prevent the introduction of Contaminants
into Systems used in connection with the Services. If a Contaminant
is found to have been introduced into the Systems used in
connection with the Services, the Parties shall reasonably
cooperate to eradicate and reduce the effects of such Contaminant
and, if the Contaminant causes a loss of operational efficiency or
loss of data, reasonably cooperate to mitigate any losses of
operational efficiency or data caused by it.
Section 2.9 Disaster
Recovery . During the term of this Agreement the providing
Party shall maintain business continuation and disaster recovery
plans that it maintained for the Services during the twelve
(12) months immediately preceding the Effective Time (the
“ DRP ”). The providing Party shall update and
test the operability of the DRP with the same frequency and testing
mechanisms that it used during the twelve (12) months
immediately preceding the Effective Time, and shall make available
to the receiving Party the results of such tests.
Section 2.10 Systems
Security. If a Party (or any of its Subsidiaries) is given
access to the other’s computer system(s) or software (“
Systems ”) in connection with performance of the
Services, such Party that is given access shall comply (and shall
cause its Subsidiaries to comply) with the other Party’s
system security policies, procedures, and requirements, will not
tamper with, compromise or circumvent any security or audit
measures employed by the other Party, and shall ensure that it
accesses the other Party’s Systems solely as reasonably
necessary to perform the Services in accordance with the provisions
of this Agreement. Each Party shall take reasonable steps to ensure
that only those users who are specifically authorized to gain
access to the other Party’s Systems do gain such access and
to prevent unauthorized destruction, alteration or loss of
information contained therein. Each Party undertakes to inform
promptly the other Party when it becomes aware of any unauthorized
access to the other Party’s Systems. If at any time an
employee of a Party or a Subsidiary thereof or any other individual
(i) has sought to circumvent or has circumvented the security
regulations or mechanisms of the other Party, (ii) has
accessed or has attempted to access the other Party’s Systems
without authorization or (iii) has engaged in activities that
are reasonably likely to lead to the unauthorized access,
destruction or alteration of the Systems or loss of data or
information thereon, the Party whose Systems have been so
circumvented, accessed, destroyed or altered may suspend or limit
the access of any such employee or individual to the Systems or
Services as necessary to address such unauthorized circumvention,
access, destruction or alteration and shall promptly notify the
other Party. Upon such suspension or limitation, the Parties shall
cooperate with each other and act reasonably to determine the
appropriate steps to take in response thereto, in order to minimize
the effects of
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such
unauthorized circumvention, access, destruction or alteration and
to restore the suspended or limited access as soon as
practicable.
Section 2.11 Cooperation to
Effect Separation of Parties . Each Party will use its
commercially reasonable efforts to implement its own independent
systems and services and to completely separate from the other
Party’s systems and services on or before the date on which
this Agreement terminates. The Parties shall cooperate with one
another to maintain an orderly transfer of Services provided
hereunder and shall provide necessary assistance for an orderly
transfer thereof. Each receiving Party agrees to bear its own costs
in connection with the implementation of its own systems for the
purpose of conducting its business after the termination or expiry
of the Services provided to it or any of its Subsidiaries by the
other Party or any of its Subsidiaries.
SECTION 3. COOPERATION; LICENSES
AND PERMITS .
Section 3.1 Cooperation;
Consents . The Parties will use good faith efforts to cooperate
with each other in matters relating to the provision and receipt of
Services. Such cooperation shall include exchanging information,
providing electronic access to technology systems used in
connection with the Services and obtaining all third party
consents, licenses, sublicenses or approvals necessary to permit
each Party to perform its obligations hereunder (including by way
of example, not by way of limitation, rights to use third party
software needed for the performance of Services), including those
set forth in Schedule D . The costs of obtaining the
third party consents, licenses, sublicenses or approvals listed in
Schedule D shall be borne by the Party specified in the
Schedule as responsible to pay such costs or proportion of such
costs; provided , however , where the necessary third
party consent, license, sublicense or approval is not listed in
Schedule D , the costs of obtaining such consent,
license or approval shall be borne by the providing Party, unless
the third party consent, license, sublicense or approval is
obtained for the primary purpose of providing the Services to the
receiving Party, in which case the receiving Party will pay such
costs. In the event that a consent required to perform a Service in
accordance with this Agreement is not obtained, the Parties shall
cooperate with each other and act in good faith to ascertain and
obtain reasonable alternative arrangements to allow the Service(s)
in question to be provided.
Section 3.2 Licenses and
Permits . Each Party warrants and covenants that all duties and
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