Master Agreement For Operations Support Services

Certegy/IBM Confidential


Exhibit 10.42 to

Form 10-K


Certegy Inc.


CONFIDENTIAL TREATMENT REQUESTED.


CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN

REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION, AND THE SPECIFIC PORTIONS THAT THE

REGISTRANT DESIRES TO BE KEPT CONFIDENTIAL HAVE BEEN

MARKED WITH *** AT THE REDACTED PORTION AND FOOTNOTED

"CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY

WITH THE COMMISSION" THE REGISTRANT HAS ALSO MARKED

THE EXHIBIT INDEX TO THE FORM 10-K TO INDICATE

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THE EXHIBITS.

MASTER AGREEMENT

FOR

OPERATIONS SUPPORT SERVICES

This Master Agreement is entered into as of June 29, 2001 (the " Effective Date") between 1. International Business Machines Corporation, a New York corporation (" IBM").


AND

2. Certegy Inc., a Georgia corporation (" Certegy").


The Parties agree to the terms and conditions set forth in this Master Agreement (including the forms of Exhibits and Schedules referenced in this Master Agreement), and in each Transaction Document (including the Supplement and Schedules referenced in each Transaction Document) executed by the Parties referencing this Master Agreement. Each Transaction Document is incorporated into this Master Agreement, and the several Transaction Documents and this Master Agreement are herein collectively referred to as the "Agreement".


Signed for and on behalf of IBM:


INTERNATIONAL BUSINESS MACHINES CORPORATION


Signature:


Title:


Signed for and on behalf of Certegy:


CERTEGY INC.


Signature:


Title:


Certegy/IBM Confidential


TABLE OF CONTENTS

Page
1. PURPOSE/STRUCTURE/TERM OF AGREEMENT 1 1.1. Purpose of Agreement 1 1.2. Structure of Agreement 2 1.3. Term of Agreement 2 1.4. Extension of Services 2 2. DEFINITIONS 3 3. THE SERVICES 13 3.1. Obligation to Provide Services 13 3.2. Performance 13 3.3. Disaster Recovery Services 14 3.4. Audits 14 3.5. Facilities and Data Center 15 3.6. Security 15 3.7. Technology Refresh 15 3.8. Software Licenses 16 3.9. Software Currency 17 3.10. Viruses 17 3.11. Software Substitutions and Additions 18 3.12. New Services 18 3.13. Affiliates 19 4. WARRANTIES/REPRESENTATIONS/COVENANTS 19 4.1. Work Standards 19 4.2. Noninfringement 19 4.3. Disabling Code 20 4.4. Authorization and Enforceability 20 4.5. Disclaimer 20 4.6. Regulatory Proceedings and Compliance with Laws 21 4.7. Year 2000 Warranty 21 4.8. Covenant of Cooperation and Good Faith 21 5. TRANSITION 21 5.1. Transition Plan 21 5.2. Affected Employees 22 5.3. Resources and Facilities 22 6. INTEGRATED PLANNING TEAM/CHANGE CONTROL PROCESS 23 6.1. Certegy/IBM Integrated Planning Team 23 6.2. Reports/Projections/Plans 23 6.3. Change Control Process 24 7. SERVICES STAFFING/MANAGEMENT/ADMINISTRATION 25 7.1. Project Executives 25 7.2. Replacement of Personnel 25 7.3. Retention of Experienced Personnel 25 7.4. Efficient Use of Resources 26 8. RELATIONSHIP PROTOCOLS 26 8.1. Evolving Nature of Relationship 26 8.2. Required Consents 26 8.3. Appointment as Attorney In Fact 28 8.4. Conflicts of Interests 29 8.5. Alternate Providers 29 8.6. Use of Subcontractors 30 8.7. Certegy Approvals and Notification 31 9. CHARGES/NEW SERVICES/INVOICES/PAYMENTS 31 9.1. Disbursements 31


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9.2. Monthly Charge 31 9.3. Additional Charges 31 9.4. Cost of Living Adjustment 32 9.5. Taxes 32 9.6. New Services 32 9.7. Invoice Payment 33 9.8. REDACTED *** 33 9.9. Service Credits 33 9.10. Other Credits 33 9.11. REDACTED *** 34 9.12. Disputed Charges/Credits 34 9.13. Reduction of Certegy Work 34 10. INTELLECTUAL PROPERTY RIGHTS 34 10.1. Ownership of Materials 35 10.2. Obligations Regarding Materials 35 11. CONFIDENTIALITY/DATA SECURITY 36 11.1. Confidential Information 36 11.2. Obligations 36 11.3. Exclusions 37 11.4. Loss of Company Information 37 11.5. Limitation 37 11.6. Data 38 12. TERMINATION 38 12.1. Termination By Certegy 38 12.2. Termination by IBM 39 12.3. Termination Charges 39 12.4. [Reserved] 39 12.5. Services Transfer Assistance 39 12.6. Other Rights Upon Termination 40 12.7. Effect of Termination/Survival of Selected Provisions 42 13. LIABILITY 42 13.1. Liability Caps 42 13.2. Exclusions 42 13.3. Direct Damages and Cover Charges 42 13.4. Dependencies 43 13.5. Remedies 43 14. INDEMNITIES 43 14.1. Indemnity by IBM 43 14.2. Indemnity by Certegy 45 14.3. Employment Actions 46 14.4. Exclusive Remedy 46 14.5. Indemnification Procedures 46 14.6. Limitation 47 15. INSURANCE AND RISK OF LOSS 47 15.1. IBM Insurance 47 15.2. Risk of Property Loss 48 15.3. Mutual Waiver of Subrogation 48 16. DISPUTE RESOLUTION 49 . 16.1. Dispute Resolution Procedures 49 16.2. Continued Performance 50 *** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.


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17. GENERAL 50 17.1. Relationship of Parties 50 17.2. Entire Agreement, Updates, Amendments and Modifications 50 17.3. Force Majeure 50 17.4. Nonperformance 51 17.5. Waiver 51 17.6. Severability 51 17.7. Counterparts 52 17.8. Governing Law 52 17.9. Binding Nature and Assignment 52 17.10. Notices 52 17.11. No Third Party Beneficiaries 54 17.12. Other Documents 54 17.13. Consents and Approvals 54 17.14. Headings 54 17.15. Remarketing 54 17.16. Commencement of Actions 55 17.17. IBM Logo Products Warranties 55


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EXHIBITS

1 Master Agreement Structure Diagram

2. Transaction Document Structure Diagram

3. Form of Transaction Document

4. Form of Supplement

5. Form of Schedules

6. Integrated Planning Team Charter and Operating Procedures


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ATTACHMENTS


Form of Transaction Document


Form of Supplement


Schedule

Title

A (Configured for each Tower and TD)

"Applications Software"

?"Applications Software Certegy"

?"Applications Software IBM"

B (Configured for each Tower and TD)

"Systems Software"

?"Systems Software Certegy"

?"Systems Software IBM"

C (Configured for each Tower and TD) "Certegy Provided Hardware"

D (Configured for each Tower and TD) "IBM Machines"

E (Configured for each Tower and TD) The "Services, Measures of Utilization, and Operational and Financial Responsibilities"

F (Configured for each Tower and TD) Leases, Licenses and Other Contracts

G (Configured for each Tower and TD) "Disaster Recovery Services"

H (Configured for each Tower and TD) "Transition Plan"

I (Network Tower Only) "Network Locations"

J (Standard Form for All Towers) "Charging Methodologies"

K (Configured for each Tower and TD) "Applications Installation Standards" (Operating Environment IT Standards)

L (Configured for each Tower and TD) "Security Procedures and Responsibilities-Data and Physical"

M (Configured for each Tower and TD) "Help Desk Services"

N (Configured for each Tower and TD) "Projects"

O (Standard Form for All Towers) "Affected Employees"


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P (MicroLAN Tower Only) Maintenance Terms

Q (Standard Form for All Towers) Outstanding Employee Claims

R (Standard Form for All Towers) "Services Transition Assistance"

S (Configured for each Tower and TD) "Service Levels and Service Credits"

T Configured for each Tower and TD) "Certegy Provided Office Furnishings"

U (Standard for all Towers) "Bill of Sale"

V (Standard for all Towers) "Key Employees"


Certegy/IBM Confidential

1. PURPOSE/STRUCTURE/TERM OF AGREEMENT

1.1. Purpose of Agreement

a) IBM is a provider of a broad range of operations support services for on-line information services companies including, without limitation, information technology, information management, communications and related services, and is experienced and skilled in the administration, management, provision and performance of such services and the business functions, responsibilities and tasks attendant with such services. IBM desires (i) to provide certain of these operations support services to the Certegy Group for the Certegy Business, and to perform and assume the functions, responsibilities and tasks attendant with such operations support services; and (ii) to provide additional quantities and elements of these and other operations support services to the Certegy Group for the Certegy Business and to perform and assume the functions, responsibilities and tasks attendant with such operations support services as envisioned to be required for the Certegy Business and the Certegy Group, all as specifically set forth in this Agreement. Certegy desires that such operations support services for the Certegy Business and the Certegy Group and the attendant functions, responsibilities and tasks, be performed and assumed by IBM. The Agreement documents the terms and conditions under which (i) the Certegy Group will obtain such operations support services from IBM and (ii) IBM will administer, manage, support, provide and perform such services and the functions, responsibilities and tasks attendant with such services, for the Certegy Group.

b) The Parties have identified goals and objectives that they intend that IBM's performance pursuant to the Agreement will assist the Parties to achieve. These goals and objectives include the following: (i) engaging IBM (A) under a master agreement to provide, and/or cause to be provided through its Affiliates and/or other subcontractors, certain operations support services to Certegy and certain of its Affiliates on a worldwide basis as the Certegy Business evolves over the Term, (B) to efficiently and timely provide such operations support services to, and perform and assume the functions, responsibilities and tasks attendant with such support services for, the Certegy Business and the Certegy Group at levels appropriate to fulfill the requirements of the Certegy Business and the Certegy Group; and (C) to proactively define and propose cost effective solutions to improve the efficiency and functionality of the information management systems operations of the Certegy Group in support of the Certegy Business; (ii) securing favorable rates for current and additional resource consumption and for reductions in resource consumption and increasing flexibility regarding resources chargeable and available to the Certegy Group and committed by IBM to the Certegy Group; (iii) taking advantage of new and/or proven business processes and technologies to improve performance, efficiency and cost to performance ratios experienced by the Certegy Group and to enable the Certegy Group to respond to market requirements for the Certegy Business; (iv) enhancing the current functionality of the Certegy Group's processes, systems and service levels covered under this Agreement; (v) minimizing any potential operating and financial risks to the Certegy Group, (vi) ensuring the efficiency, stability and security of existing and future processes, systems and service levels, (vii) evolving the support services, processes, systems and service levels to meet the dynamic requirements of the Certegy Group and the Certegy Business; and (viii) providing an opportunity to transition the Services back to the Certegy Group or to another service provider from IBM with minimal disruption.

c) IBM recognizes that the Certegy Group expects to be treated as a valued and commercially favored customer and agrees that the definition of customer satisfaction goes beyond IBM's performance against established service levels and requires that IBM exhibit a customer service attitude focused on assisting Certegy where commercially reasonable to attain the goals and objectives described in Section 1.1(b) , including, without limitation, reducing the operations support costs of and improving service levels to the Certegy Group and the customers of the Certegy Group.

d) The provisions of this Section 1.1 are intended to be a statement of the purpose of the Agreement and are not intended to alter the plain meaning of the terms and conditions of the Agreement or to require either Party to undertake performance obligations beyond those set forth in the Agreement. To the extent that the terms and conditions of the Agreement are unclear or ambiguous, such terms and conditions are to be interpreted and construed consistent with the purposes set forth in this Section 1.1 .


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1.2. Structure of Agreement

a) The Services will be grouped around the following technology platforms and clusters of services: Mainframe, Midrange, MicroLAN and Network. Each such technology platform/cluster of services is herein referred to generically as a "Tower".

b) The Agreement is comprised of (i) the provisions set forth in this Master Agreement and the forms of the Exhibits and Schedules referenced herein as illustrated in Exhibit 1 ; and (ii) each Transaction Document including the Supplement and Schedules referenced in each Transaction Document and as illustrated in Exhibit 2 .

c) The Services under each Transaction Document may be defined on a Tower basis across sites and/or on a Tower basis and all Towers located at one (1) site, and/or on a Tower basis migrated to multiple sites or to one (1) site, will be the subject of a single Transaction Document. Each Transaction Document will be in the form of Exhibit 3 adjusted to comport with the applicable Services arrangement. Each Transaction Document will be comprised of a Supplement in the form of Exhibit 4 and Schedules in the form of Exhibit 5 , all configured as described in Exhibit 2 and adjusted to comport with the applicable Services arrangement.

d) Transaction Documents will be executed by the Parties. The terms of Transaction Documents will be governed by the terms of the Master Agreement unless the Parties specifically note the deviations from the terms of the Master Agreement for the purposes of such Transaction Document in the Section of the Transaction Document entitled "Deviations From Terms of Master Agreement". e) Each Transaction Document will be submitted to and approved by the Integrated Planning Team prior to execution by the Parties. The approval will be evidenced by a representative of each of the Parties who is also a member of the Integrated Planning Team, noting and attesting to the approval of the Integrated Planning Team on a cover sheet to such Transaction Document. f) IBM and Certegy will be the primary contracting parties under the Agreement and under each Transaction Document. Each of the Parties may assign a Transaction Document to one of its Affiliates for performance, but such assignment shall not relieve or release such Party from the full, timely and proper performance of its duties and obligations under such Transaction Document. Moreover, as a condition precedent to such assignment, the Affiliate shall accept such assignment and agree to assume the full, timely and proper performance of the duties and obligations of the Party assigning such Transaction Document to such Affiliate in a written document in form and content reasonably satisfactory to the other Party.

1.3. Term of Agreement


The term of the Agreement will begin as of the Effective Date and will terminate upon the later to occur of (a) the expiration of the Transaction Document with the longest term extending past December 31, 2007, or (b) upon a termination date that is effective not sooner than six (6) months after December 31, 2007 set forth in a notice by either Party to the other Party (the "Term") unless earlier terminated in accordance with the provisions of the Agreement.

1.4. Extension of Services

Certegy may request and IBM will once extend the provision of the Services pursuant to any Transaction Document or the Services Transfer Assistance pursuant to any Transaction Document for up to one (1) year ("Extension Period") upon not less than sixty (60) days prior written notice before the scheduled termination or expiration of the provision of such Services or Services Transfer Assistance, or if applicable, notice given within thirty (30) days after the effective date of a notice of termination for any reason by either Party, other than Termination for Convenience. However, in the event Certegy is in default with respect to the payment of any amounts under a Transaction Document at the start of the Extension Period, IBM will extend the provision of such Services or Services Transfer Assistance as described in this Section 1.4 , only if Certegy cures such default and prepays three (3) months of the


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Monthly Charges allocable to such Transaction Document during such Extension Period and a reasonable projection of other charges due under such Transaction Document for such three (3) calendar months period. Certegy will be credited any unused portions of such prepayment for the remaining part of such Extension Period covered by such unused portion of such prepayment. 2. DEFINITIONS


In the Agreement (including each Transaction Document and the Supplement and Schedules thereto), the following terms will have the following meanings:


Action

has the meaning given in Section 17.8 .


AD/M

means both Applications Development and Applications Maintenance.


AD/M Projects

means the Applications Development and Applications Maintenance performed during the Term and the production cutover date for the corresponding scheduled Projects and/or each New Service added during the Term requiring the performance of Applications Development and Applications Maintenance by IBM.


Affected Employees

has the meaning given in Section 5.2 .


Affiliates

means, with respect to a Party, any entity at any time Controlling, Controlled by or under common Control with such Party.


Agreement

means this Master Agreement for Operations Support Services Agreement and the forms of Exhibits and Schedules referenced herein and each Transaction Document referencing the Master Agreement for Operations Support Services and the Supplement and Schedules referenced therein.


Annual Service Charge or ASC

has the meaning given in the Supplement and Schedules to each Transaction Document for such Transaction Document.

Applications Development

means the programming of any new applications software, and changes or enhancements to existing Applications Software. Programming effort shall include the pre and post development analysis, planning, design, coding, testing, installation, provision of a single set of program and training documentation per Applications Software program and training necessary to complete the task.


Applications Development

Methodology

means the pre and post development analysis, planning, design, coding, testing, installation, provision of a single set of program and training documentation per Applications Software program and training necessary to complete the task.


Applications Maintenance

means defect identification and provision of fixes, and installation of those fixes and updates for the Applications Software provided by the Applications Software vendors as part of normal maintenance service for the Applications Software for which there is no charge by such vendors in addition to periodic maintenance charges, if any, and defect identification, provision of fixes and installation of those fixes and updates for Applications Software for which there is no generally commercially available maintenance support.


Applications Software

means those programs and programming, including all supporting documentation and media, that perform specific user related data processing, data management and telecommunications tasks, including updates, enhancements, modifications, releases and Derivative Works thereof. Applications Software as of the


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Commencement Date is listed in Schedule A to each Transaction Document for such Transaction Document, which Schedule shall be updated pursuant to Section 8.1 during the Term to reflect the then-current Applications Software.


Applications Software Certegy

means the Applications Software listed on Schedule A to each Transaction Document for such Transaction Document under such heading, provided or to be provided by Certegy.


Applications Software IBM

means the Applications Software listed on Schedule A to each Transaction Document for such Transaction Document under such heading, provided or to be provided by IBM.


Authorized User

means a person or entity authorized to use the Services, including without limitation the System, by Certegy.

Baseline(s)

has the meaning given in Schedule J to each Transaction Document for such Transaction Document.

Business and Operations Support

Plan

has the meaning given in Section 6.2(b) .


Cable or Cabling

means the wires or cables that interconnect Machines and/or connect a Machine to a facility connection.

Certegy Business

means the businesses engaged in by the Certegy Group.


Certegy Code

means Code Developed by IBM and/or its subcontractors independently or jointly with the Certegy Group and/or their contractors, as part of the Services. Certegy Code shall not include any IBM Derivative Code.


Certegy Direct Damages Cap

has the meaning given in Section 13.1(b) .


Certegy Derivative Code

means Developed Code, which constitutes Derivative Work of software for which the copyright is owned by the Certegy Group and/or their contractors.


Certegy Group

means individually and collectively Certegy and its existing and future Affiliates that are using and/or receiving any portion of the Services.


Certegy, IBM Integrated

Planning Team

has the meaning given in Section 6.1 .


Certegy In-Scope Operations

means all functions, responsibilities, tasks and activities that are described in the Agreement and each Transaction Document (including the Supplement and Schedules thereto) that are to be performed by IBM under the Agreement, including, without limitation, those performed for the Certegy Group by the Affected Employees that are directly related to information technology services under each Transaction Document before they entered the employ of IBM and/or its Affiliates and subcontractors and those performed by IBM and/or its Affiliates for Certegy and/or its Affiliates immediately prior to the Commencement Date under any Transaction Document or agreement with IBM comprised of or directly related to the information technology services under such Transaction Document and otherwise within the scope of the prior Transaction Document or agreement between Certegy and IBM pursuant to which such services were performed unless specifically deleted or otherwise described (versus not described) in the new


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Transaction Document.


Certegy LAN Software

has the meaning given in Schedule A to each Transaction Document for such Transaction Document.

Certegy Provided Hardware

means the computer equipment peripheral devices, storage media, Cabling, connectors, the Data Network, the LAN, telephone equipment and other equipment (however described) provided from time to time by the Certegy Group for use by IBM to perform and deliver the Services and fulfill its obligations under the Agreement. The Certegy Provided Hardware as of the Commencement Date is listed on and/or referred to in Schedule C to each Transaction Document for such Transaction Document, which schedule shall be updated pursuant to Section 8.1 during the Term to reflect the then-current Certegy Provided Hardware.


Certegy Provided Office

Furnishings

means the desks, chairs, filing cabinets, office cube partitions and other office furniture (however described) provided from time to time by the Certegy Group for use by IBM to perform and deliver the Services and fulfill its obligations under the Agreement. The Certegy Provided Office Furnishings as of the Commencement Date are listed on and/or referred to in Schedule T to each Transaction Document for such Transaction Document, which schedule shall be updated pursuant to Section 8.1 during the Term to reflect the then-current Certegy Provided Office Furnishings.

Certegy Server Configurations

shall have the meaning given in a Schedule to each Transaction Document for such Transaction Document.

Certegy Software

means Applications Software-Certegy, Systems Software-Certegy and Certegy LAN Software.

Certegy Works

means literary works of authorship (other than Code) Developed by IBM and/or its subcontractors independently or jointly with the Certegy Group and/or its contractors under the Agreement, specifically for the Certegy Group or the Certegy Business or specifically for the purpose of providing the Services, including without limitation user manuals, charts, graphs and other written documentation, and machine-readable text and files, but shall not include any Derivative Works of any works in which the copyright is owned by IBM, its Affiliates or subcontractors.

Change Control Process

has the meaning given in Section 6.3 of the Agreement.


Change of Control

means the transfer of the Control of a Party, or a sale of substantially all of the assets of a Party, from the persons or persons who hold such Control on the Effective Date to another person or persons, but shall not include a transfer of the Control of a Party to an Affiliate of such Party.


Change Request

has the meaning given in Section 6.3 .


Claim

has the meaning given in Section 14.5(a) .


Code

has the meaning given in Section 10 .


Commencement Date

means the date set forth in each Transaction Document for the start of the Services covered by such Transaction Document.


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Company Information

has the meaning given in Section 11.1 .


Confidential Information

has the meaning given in Section 11.1 .


Contract Year

means each twelve (12) calendar month period, or portion thereof, beginning January 1 of each calendar year during the Term.


Control, Controlling, or

Controlled

means possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of an entity through ownership of greater than fifty (50%) percent of the voting securities of such entity.

Cost of Living Adjustment

("COLA")

has the meaning given in Schedule J to each Transaction Document for such Transaction Document.

CRF or Chang ...