EX-10.1 TRANSITION SERVICES AGREEMENT



 





Exhibit 10.1




TRANSITION SERVICES AGREEMENT




     THIS TRANSITION SERVICES AGREEMENT, dated as of November 30, 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, as amended (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
obligations (including with respect to Synovus, all Synovus Services and with respect to TSYS, all
TSYS Services) to be performed hereunder shall be performed in compliance in all material respects
with all applicable federal, state, provincial and local Laws, rules and regulations. Each Party
shall obtain and maintain all material permits, approvals and licenses necessary or appropriate to
perform its duties and obligations (including with respect to Synovus, the Synovus Services and
with respect to TSYS, the TSYS Services) hereunder and shall at all times comply in all material
respects with the terms and conditions of such permits, approvals and licenses.



     Section 3.3 Policies. To the extent that a Party is performing Services at the other Party’s
premises, it shall use its commercially reasonable efforts to, and shall use its commercially
reasonable efforts to cause its personnel to, comply with the other Party’s policies, guidelines
and regulations applicable to each work location that it has been informed of in



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writing (including but not limited to rules and policies relating to access, conduct, and
other rules and policies otherwise in effect at the receiving Party’s premises).




     SECTION 4. PAYMENT.



     Section 4.1 Service Fees. (a) In consideration for the provision of each of the Synovus
Services, TSYS shall pay to Synovus the fee set forth for such Synovus Service on Schedule
A.



          (b) In consideration for the provision of each of the TSYS Services, Synovus shall pay to TSYS
the fee set forth for such TSYS Service on Schedule B.




     Section 4.2 Costs and Expenses. (a) In addition to the fees payable in accordance with
Section 4.1(a), TSYS shall reimburse Synovus for any and all reasonable and necessary out-of-pocket
costs and expenses (including postage and other delivery costs, telephone, telecopy and similar
expenses) incurred by Synovus or its appropriate Subsidiaries with respect to third parties in
connection with the provision of Synovus Services to TSYS pursuant to the terms of this Agreement
or paid by Synovus or its appropriate Subsidiaries on behalf of TSYS, including any costs incurred
by Synovus related to the provision of such Synovus Services; provided, however,
any such out-of-pocket costs and expenses for any month exceeding, in aggregate, $10,000 shall
require advance written approval by the receiving Party.



          (b) In addition to the fees payable in accordance with Section 4.1(b), Synovus shall reimburse
TSYS for any and all reasonable and necessary out-of-pocket costs and expenses (including postage
and other delivery costs, telephone, telecopy and similar expenses) incurred by TSYS or its
appropriate Subsidiaries with respect to third parties in connection with the provision of TSYS
Services to Synovus pursuant to the terms of this Agreement or paid by TSYS or its appropriate
Subsidiaries on behalf of Synovus, including any costs incurred by TSYS related to the provision of
such TSYS Services; provided, however, any such out-of-pocket costs and expenses
for any month exceeding, in aggregate, $10,000 shall require advance written approval by the
receiving Party.




          (c) Without limiting the foregoing, each Party agrees to reimburse the other Party for any
costs or expenses incurred by the other Party in connection with the conversion of the reimbursing
Party to the reimbursing Party’s own systems.




     Section 4.3 Invoices; Payment. (a) Synovus will invoice TSYS in U.S. dollars: (i) as of the
last day of each calendar month for any fees payable by TSYS in accordance with Section 4.1(a) for
Synovus Services listed on Schedule A provided pursuant to the terms of this Agreement
during such month; (ii) as of the last day of each calendar month for any amounts payable by TSYS
in accordance with Section 4.2(a) for any out-of-pocket costs and expenses incurred during the
immediately preceding month to the extent Synovus has received an invoice from such third party;
and (iii) as of the last day of each calendar month for any taxes (excluding taxes determined, in
whole or in part, by net income, net receipts or net worth) payable with respect to the provision
of Synovus Services to TSYS during such month. Synovus shall deliver or cause to be delivered to
TSYS each such invoice within thirty (30) days following the last day of the calendar month to
which such invoice relates. TSYS shall pay each such invoice received



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by electronic funds transfer within thirty (30) days of the date on which such invoice was
received.




          (b) TSYS will invoice Synovus in U.S. dollars: (i) as of the last day of each calendar month
for any fees payable by Synovus in accordance with Section 4.1(b) for TSYS Services listed on
Schedule B provided pursuant to the terms of this Agreement during such month; (ii) as of
the last day of each calendar month for any amounts payable by Synovus in accordance with Section
4.2(b) for any out-of-pocket costs and expenses incurred during the immediately preceding month to
the extent TSYS has received an invoice from such third party; and (iii) as of the last day of each
calendar month for any taxes (excluding taxes determined, in whole or in part, by net income, net
receipts or net worth) payable with respect to the provision of TSYS Services to Synovus during
such month. TSYS shall deliver or cause to be delivered to Synovus each such invoice within thirty
(30) days following the last day of the calendar month to which such invoice relates. Synovus
shall pay each such invoice received by electronic funds transfer within thirty (30) days of the
date on which such invoice was received.




          (c) Subject to the Distribution Agreement and each other Ancillary Agreement, each Party shall
provide to the other Party all information, data and exemption certificates as such other Party may
from time to time reasonably request and otherwise fully cooperate with such other Party in
connection with the reporting and payment of any taxes with respect to the Services. Each Party
shall cooperate with the other Party and take any action reasonably requested which does not cause
the Party to incur any cost or inconvenience in order to minimize any taxes payable with respect to
the Services.




          (d) A Party’s obligation to make any required payments under this Agreement shall not be
subject to any unilateral right of offset, set-off, deduction or counterclaim arising under the
Distribution Agreement or any other Ancillary Agreement.




     Section 4.4 Late Payment. (a) Any amount not paid when due shall be subject to a late
payment fee computed daily at a rate equal to the Applicable Rate. Notwithstanding the foregoing,
if a Party (the “Disputing Party”) disputes the accuracy of any invoice, that Party shall
timely pay the undisputed portion of such invoice as provided herein, and the Parties will promptly
meet and seek to resolve the disputed amount of the invoice. If, upon resolution of the dispute,
the Disputing Party is found to have underpaid the amount actually due, the Disputing Party shall,
within five (5) Business Days after the date on which the dispute is resolved, remit any amount due
plus interest at the Applicable Rate from the due date until paid. To avoid doubt, (i) a Party
shall be required to timely pay any undisputed amounts due, notwithstanding the fact that such
Party may be disputing other amounts due and (ii) failure to pay an amount the subject of a bona
fide dispute under this Section 4.4 does not constitute a breach of this Agreement by the
Disputing Party.



          (b) Each Party agrees to pay the other Party’s reasonable attorneys’ fees and other costs
incurred in collection of (i) any undisputed amounts owed to such other Party hereunder and not
paid when due, (ii) disputed amounts not paid in accordance with Section 4.4(a) upon
resolution of the dispute, and (iii) a disputed amount where a court or arbitrator determines that
the amount was not the subject of a bona fide dispute. Where a court or arbitrator determines that
the Party issuing the disputed invoice did not act in good faith by not



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resolving the dispute, that Party must pay the Disputing Party’s reasonable attorneys’ fees
and other costs incurred in resolving the dispute.




     Section 4.5 Fees, Etc. Upon Termination of Services. In the event of a termination of
Services pursuant to Section 7.1, with respect to the calendar month in which such Services cease
to be provided, the recipient of such Services shall be obligated to pay a pro rata share of the
fee for such Service set forth on Schedule A or Schedule B, as applicable, equal to
the product of (x) the fee set forth on Schedule A or Schedule B, as applicable,
multiplied by (y) a fraction, the numerator of which is the number of days in the calendar month in
which such Services cease to be provided preceding and including the last date on which such
Services are provided, and the denominator of which is 30.



     SECTION 5. INDEMNIFICATION AND LIABILITY.



     Section 5.1 Indemnification by Principal. (a) TSYS agrees to indemnify, defend and hold
Synovus and its appropriate Subsidiaries harmless from and against any Loss to which Synovus or its
appropriate Subsidiaries may become subject arising out of, by reason of or otherwise in connection
with the provision hereunder by Synovus or its appropriate Subsidiaries of Synovus Services, other
than Losses resulting from Synovus’s or its appropriate Subsidiaries’ gross negligence, willful
misconduct or material breach of its obligations pursuant to this Agreement. Notwithstanding any
provision in this Agreement to the contrary, TSYS shall not be liable under this Section 5.1 for
any consequential, special or punitive damages (including lost profits).



          (b) Synovus agrees to indemnify, defend and hold TSYS and its appropriate Subsidiaries
harmless from and against any Loss to which TSYS or its appropriate Subsidiaries may become subject
arising out of, by reason of or otherwise in connection with the provision hereunder by TSYS or its
appropriate Subsidiaries of TSYS Services, other than Losses resulting from TSYS’s or its
appropriate Subsidiaries’ gross negligence, willful misconduct or material breach of its
obligations pursuant to this Agreement. Notwithstanding any provision in this Agreement to the
contrary, Synovus shall not be liable under this Section 5.1 for any consequential, special or
punitive damages (including lost profits).




     Section 5.2 Indemnification by Provider. (a) Synovus agrees to indemnify, defend and hold
TSYS and its appropriate Subsidiaries harmless from and against any Loss to which TSYS or its
appropriate Subsidiaries may become subject arising out of, by reason of or otherwise in connection
with the provision hereunder by Synovus or its appropriate Subsidiaries of Synovus Services to TSYS
or its appropriate Subsidiaries where such Losses resulted from Synovus’s or its appropriate
Subsidiaries’ gross negligence, willful misconduct or material breach of its obligations pursuant
to this Agreement.



          (b) TSYS agrees to indemnify, defend and hold Synovus and its appropriate Subsidiaries
harmless from and against any Loss to which Synovus or its appropriate Subsidiaries may become
subject arising out of, by reason of or otherwise in connection with the provision hereunder by
TSYS or its appropriate Subsidiaries of TSYS Services to Synovus or its appropriate Subsidiaries
where such Losses resulted from TSYS’s or its appropriate Subsidiaries’



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gross negligence, willful misconduct or material breach of its obligations pursuant to this
Agreement.




     Section 5.3 Control of Indemnification Claims. Indemnification claims hereunder shall be
subject to the procedure set forth in the Indemnification and Insurance Matters Agreement of even
date between the Parties.



     Section 5.4 DISCLAIMER OF LIABILITY. NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE
CONTRARY, NO PARTY SHALL BE LIABLE HEREUNDER FOR ANY CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES
(INCLUDING LOST PROFITS), EXCEPT TO THE EXTENT THAT SUCH CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES
RELATE TO A LOSS RESULTING FROM A CLAIM AGAINST THE INDEMNIFIED PARTY BY AN UNAFFILIATED THIRD
PARTY.



     SECTION 6. CONFIDENTIALITY.



     Each Party shall keep, and shall cause its appropriate Subsidiaries to keep, confidential the
Schedules to this Agreement and all information received from the other Party regarding the
Services, including any information received with respect to Synovus and its Subsidiaries or TSYS
and its Subsidiaries, in accordance with the Confidential Disclosure Agreement, and shall use such
information only for the purpose set forth in this Agreement unless otherwise agreed to in writing
by the Party from which such information was received.



     SECTION 7. TERM.



     Section 7.1 Duration. (a) Subject to Sections 7.1(a), 7.2,
7.3, 7.4, 7.6 and 7.9, this Agreement will continue in full force
and effect with respect to each Service until the earlier of (i) the last expiration date with
respect to such Service set forth on Schedule A or Schedule B, as applicable and
(ii) the termination of such Service in accordance with Section 7.1(b) or 7.4.



          (b) Each Party acknowledges that the purpose of this Agreement is for Synovus to provide the
Synovus Services to TSYS on an interim basis until TSYS can perform the Synovus Services for
itself, and for TSYS to provide the TSYS Services to Synovus on an interim basis until Synovus can
perform the TSYS Services for itself. Accordingly, each of Synovus and TSYS shall use its
commercially reasonable efforts to make or obtain such approvals, permits and licenses and
implement such systems, as shall be necessary for it to provide the appropriate Services for itself
as promptly as practicable. As TSYS becomes self-sufficient with respect to, or engages other
sources to provide, any Synovus Service, TSYS shall be entitled to release Synovus from providing
any or all of the Synovus Services hereunder by delivering a written notice thereof to Synovus at
least thirty (30) days prior to the effective date of release (such notice to expire on the last
day of a calendar month) of such Synovus Service(s). At the end of such thirty (30) day period (or
such shorter period as may be agreed by the Parties), Synovus shall discontinue the provision of
the Synovus Services specified in such notice and any such Synovus Services shall be excluded from
this Agreement, and Schedule A shall be deemed to be amended accordingly. As Synovus
becomes self-sufficient with respect to, or engages other sources to provide, any TSYS Service,
Synovus shall be entitled to release TSYS from



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providing any or all of the TSYS Services hereunder by delivering a written notice thereof to
TSYS at least thirty (30) days prior to the effective date of release (such notice to expire on the
last day of a calendar month) of such TSYS Service(s). At the end of such thirty (30) day period
(or such shorter period as may be agreed by the Parties), TSYS shall discontinue the provision of
the TSYS Services specified in such notice and any such TSYS Services shall be excluded from this
Agreement, and Schedule B shall be deemed to be amended accordingly.




          (c) Provided that the receiving Party has used commercially reasonable efforts to transition
off the Services by the applicable Termination Date, if it has nevertheless not been possible for
the receiving Party to transition off a particular Service prior to its applicable Termination Date
(other than as a result of the receiving Party (i) requesting a modification of the form, scope or
nature of the particular Service or (ii) electing any conversion of its systems or plans to systems
or plans that materially differ from the systems and plans in effect on the date hereof, provided
that the limitations in clauses (i) and (ii) shall not apply to any of the Services set forth in
Section 01 of Schedule A (Human Resources (HR), Compensation, Recruiting and Compliance)), then
upon the receiving Party’s request the Parties shall negotiate in good faith commercially
reasonable terms for an extension (in any event not to exceed three months from the initial
Termination Date for such Service) of the Termination Date for such existing Service to be provided
in the same form, scope and nature that such Service is being provided as of the Termination Date.




     Section 7.2 Early Termination by Synovus. Synovus may terminate this Agreement by giving
written notice to TSYS under the following circumstances:



          (a) if TSYS shall default in the performance of any of its material obligations under, or
breach any of its covenants set forth in, this Agreement, and such default or breach shall continue
and not be remedied for a period of thirty (30) days after Synovus has given written notice to TSYS
specifying such default or breach and requiring it to be remedied; or




          (b) if a Bankruptcy Event has occurred with respect to TSYS and TSYS has ceased to make
payments due under this Agreement in accordance with its terms.




     Section 7.3 Early Termination by TSYS. TSYS may terminate this Agreement by giving written
notice to Synovus under the following circumstances:



          (a) if Synovus shall default in the performance of any of its material obligations under, or
breach any of its warranties set forth in, this Agreement and such default or breach shall continue
and not be remedied for a period of thirty (30) days after TSYS has given written notice to Synovus
specifying such default or breach and requiring it to be remedied; or




          (b) if a Bankruptcy Event has occurred with respect to Synovus and Synovus has ceased to make
payments due under this Agreement in accordance with its terms.




     Section 7.4 Force Majeure. If the performance by TSYS or Synovus of their respective duties
or obligations hereunder (other than payment obligations under Section 4 hereof) is interrupted or
interfered with by an event beyond the reasonable control of the performing Party which by its
nature could not have been foreseen by that Party, or if it could have been foreseen, was
unavoidable, and includes fire, storm, flood, earthquake or other natural



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disaster, explosion, war or terrorism, strike or labor disruption, rebellion, insurrection,
quarantine, act of God, boycott, embargo, unavailability of raw materials, riot or any governmental
Law, regulation or edict (collectively, the “Force Majeure Events”), the Party affected by
such Force Majeure Event shall not be deemed to be in default of this Agreement by reason of its
nonperformance due to such Force Majeure Event, but shall give prompt written notice to the other
Party of the Force Majeure Event and the extent and anticipated duration of its inability to
perform its obligations. The Party affected by the Force Majeure Event shall use its commercially
reasonable efforts to mitigate the effect of the Force Majeure Event, and shall cooperate with the
other Party in obtaining, at the other Party’s sole expense, an alternative source for the affected
Services, and the other Party shall be released from any payment obligation to the Party affected
by the Force Majeure Event with respect to such Services during the period of such Force Majeure
Event. Additionally, upon and during the occurrence of a Force Majeure Event, at the sole option
of the Party receiving the Services affected by the Force Majeure Event, the term of this Agreement
shall be tolled with respect to such Services. If the Force Majeure Event still persists following
thirty (30) consecutive days, the unaffected Party may terminate this Agreement with respect to the
affected Services and any Services associated therewith by service of written notice in writing to
the Party unable to perform due to the Force Majeure Event. Upon the cessation of the event of
Force Majeure, the affected Party shall promptly notify the other Party in writing of such
cessation.




     Section 7.5 Consequences on Termination. If this Agreement expires or is terminated in
accordance with this Section 7, then (a) all Services to be provided will promptly cease, (b) each
of Synovus and TSYS shall promptly return all Confidential Information received from the other
Party in connection with this Agreement (including the return of all information received with
respect to the Services of Synovus or TSYS, as the case may be), without retaining a copy thereof,
and (c) each of Synovus and TSYS shall honor all credits and make any accrued and unpaid payment to
the other Party as required pursuant to the terms of this Agreement, and no rights already accrued
hereunder shall be affected.



     Section 7.6 Survival. Notwithstanding anything to the contrary in this Section 7,
Sections 5, 6, 7, 8, 9, 10, 11 and
12 of this Agreement shall survive the termination hereof in accordance with their
respective terms.



     Section 7.7 Accrued Rights. Any termination or expiration of this Agreement (howsoever
caused) shall not affect any accrued rights or liabilities of either Party nor shall it affect the
coming into force or the continuance in force of any provision hereof which is expressly or by
implication intended to come into or continue in force on or after such termination or expiration.



     Section 7.8 Termination Assistance. On the expiration or termination of a Service the Parties
shall act reasonably and cooperate with each other to (if requested by the Party receiving the
Service), at the sole cost and expense of the receiving Party, migrate such Service to the
replacement service provider, as designated by the receiving Party. Each Party shall in such
co-operation take into account the need to minimize both the cost of such migration and the
disruption to the ongoing business activities of the Parties, and shall provide reasonable access
to information and data regarding the relevant Service(s) to enable an orderly assumption of the
Service(s) by the receiving Party’s replacement service provider.



13









 





     Section 7.9 Effectiveness. This Agreement shall become effective upon the Effective Time and
prior thereto shall be of no force or effect. If the Distribution Agreement shall be terminated in
accordance with its terms prior to the occurrence of the Effective Time, this Agreement and any
actions or agreements contemplated hereby shall automatically be terminated and of no force or
effect.



     SECTION 8. RECORDS.



     Each of the Parties shall create and, for a period of six (6) years after the termination or
expiration of this Agreement, maintain full and accurate books in connection with the provision of
the Services, and all other records relevant to this Agreement, and upon reasonable notice from the
other Party shall make available for inspection and copy by such other Party’s agents such records
during reasonable business hours.



     SECTION 9. INTELLECTUAL PROPERTY, DATA.



     Section 9.1 Ownership. This Agreement and the performance of this Agreement will not affect
the ownership of any copyrights or other intellectual property rights allocated in the Distribution
Agreement or the other Ancillary Agreements. Neither Party will gain, by virtue of this Agreement,
any rights of ownership of copyrights, patents, trade secrets, trademarks or any other intellectual
property rights owned by the other Party. Except as otherwise set forth in any of the Ancillary
Agreements, the Party providing the applicable Service will own all copyrights, patents, trade
secrets or other intellectual property rights subsisting in any deliverable that subsists in whole
or in part of software, firmware or other computer code and any other works developed by such Party
for purposes of this Agreement. Each Party acknowledges and agrees that each shall retain
exclusive ownership of its own respective data and other intellectual property provided to the
other pursuant to this Agreement. Neither Party shall use the other Party’s data for any purpose
other than the performance of this Agreement in accordance with its provisions. The receiving
Party will own all data generated by or for it in the course of performing the applicable Services,
and shall at all times have a right to access and be provided with copies of that data.



     SECTION 10. DISPUTE RESOLUTION.



     Section 10.1 Dispute Resolution under Distribution Agreement. Any dispute arising out of or
relating to the performance, breach or interpretation of this Agreement shall be handled in
accordance with Section 5.5 of the Distribution Agreement.



     Section 10.2 Continuity of Service and Performance. Unless otherwise agreed herein or in
writing, the Parties will continue to provide Services and honor all other commitments under this
Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the
provisions of this Section 10 with respect to all matters not subject to such dispute, controversy
or claim.



     SECTION 11. NOTICES.



     All notices and other communications hereunder shall be in writing and shall be deemed
effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one (1)



14









 




Business Day after being delivered by facsimile (with receipt of appropriate confirmation), or
(iv) one (1) Business Day after being deposited with an overnight courier service and addressed to
the respective parties as follows:



To Synovus:



Synovus Financial Corp.

1111 Bay Avenue

Suite 500

Columbus, GA 31901

Attention: Thomas J. Prescott

                 Chief Financial Officer

Telephone: 706-649-2401

Facsimile: 706-649-4819



With a copy to:



Synovus Financial Corp.

1111 Bay Avenue

Suite 500

Columbus, GA 31901

Attention: B. Scott McGlaun

                 Chief Information Officer

Telephone: 706-649-4916

Facsimile: 706-464-4730



To TSYS:



Total System Services, Inc.

1600 First Avenue

Columbus, GA 31901

Attention: James B. Lipham

                 Chief Financial Officer

Telephone: 706-649-2262

Facsimile: 706-644-1725



With a copy to:



Total System Services, Inc.

1600 First Avenue

Columbus, GA 31901

Attention: Ryland L. Harrelson

                 Executive Vice President of Administrative Services

Telephone: 706-649-4840

Facsimile: 706-615-2716




15









 







; or to such other address as the Party to whom notice is given may request by notifying the other
in writing in the manner set forth above. As used in this Section 11, “Business
Day” means any day other than a Saturday, a Sunday or a day on which banking institutions
located in the city of Columbus, Georgia are authorized or obligated by law or executive order to
close.




     SECTION 12. MISCELLANEOUS.



     Section 12.1 Termination of Management Agreements. On and from the Effective Time, the
Parties agree that each of the agreements set forth on Schedule E shall be terminated with
immediate effect and without the need for any Party to take any further action.



     Section 12.2 Waivers, Modifications, Amendments. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by TSYS, on the one hand, and Synovus, on the other hand, or in the case of a
waiver, by the Party against whom the waiver is to be effective. No failure or delay by any Party
in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein provided shall be
cumulative and in addition to other or further remedies provided by law or equity.



     Section 12.3 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE
OF GEORGIA.



     Section 12.4 Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof. If any provision of this Agreement, or the application thereof to any
person, corporation, partnership or other entity or any circumstance, is invalid and unenforceable,
(a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to other persons,
corporations, partnerships or other entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity
or enforceability of such provision, or the application thereof, in any jurisdiction.



     Section 12.5 Reference; Interpretation. References in this Agreement to any gender include
references to all genders, and references to the singular include references to the plural and vice
versa. The words “include”, “includes” and “including” when used in this Agreement shall be deemed
to be followed by the phrase “without limitation.” Unless the context otherwise requires,
references in this Agreement to Sections and Schedules shall be deemed references to Sections of,
and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”,
“hereby” and “herein” and words of similar meaning when used in this Agreement refer to this
Agreement in its entirety and not to any particular Section or provision of this Agreement. This
Agreement shall not be construed against either Party as the principal drafter hereof.



16









 





     Section 12.6 Entire Agreement. This Agreement, the Distribution Agreement and the
Confidential Disclosure Agreement (including all Schedules to such agreements) contains the entire
agreement between the Parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.



     Section 12.7 Assignment. (a) This Agreement shall inure to the benefit of and be binding
upon the Parties and their respective legal representatives and successors, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any rights or remedies
of any nature whatsoever under or by reason of this Agreement; provided, however,
except as otherwise expressly provided for in this Agreement, this Agreement shall not be
assignable, in whole or in part, by any Party without the prior written consent of the other Party,
and any attempt to assign any rights or obligations arising under this Agreement without such
consent shall be null and void; and provided further, that a Party may assign this
Agreement without such prior written consent in connection with: (i) a merger transaction in which
such Party is not the surviving entity or (ii) the sale, transfer, exchange or other disposition by
such Party of all or substantially all of its assets, so long as, in either case, if such merger or
asset sale transaction occurs during the Restricted Assignment Period, the rating of the assignee,
following the consummation of such merger or asset sale transaction, shall be BBB- or better from
Standard & Poor’s and Baa3 or better from Moody’s Investor Services, Inc. (or if Standard & Poor’s
or Moody’s Investor Services, Inc. shall change their rating designations after the date of this
Agreement, a comparable rating or better under such new designations), and upon the effectiveness
of any such valid assignment the assigning Party shall be released from all of its obligations
under this Agreement if the surviving entity of such merger or the transferee of such assets shall
agree in writing, in form and substance reasonably satisfactory to the other Party, to be bound by
the terms of this Agreement as if named as a “Party” hereto.



          (b) Nothing contained herein shall prevent a Party from providing Services through or with the
assistance of third parties or subcontractors whom such Party regularly used to provide such
Services prior to the date hereof or will regularly use to provide similar services to its own
organization thereafter; provided, however, a providing Party will at all times
remain responsible for the fulfillment of its obligations under this Agreement, notwithstanding the
performance of the obligations by another person.




          (c) For the avoidance of doubt, the providing Party shall not be relieved of its obligation to
provide Services by reason of (i) any event referred to in this Section 12.7, or (ii) a
Change of Control of the receiving Party, provided in either case that such event or Change of
Control does not materially alter the scope or volume of Services being provided to the receiving
Party by the providing Party.




     Section 12.8 Binding Effect. This Agreement shall be binding upon each Party and its
Subsidiaries who receive or provide Services under this Agreement, and their respective successors
and permitted assigns, if any, and except as provided herein, shall inure to the benefit of the
Parties and their respective successors and permitted assigns, if any. Nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or remedies of any
nature whatsoever under or by reason of this Agreement.



17









 





     Section 12.9 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and the same Agreement.



     Section 12.10 No Agency or Partnership. Nothing in this Agreement will create, or will be
deemed to create, a partnership or the relationship of principal and agent or of employer and
employee between the Parties.



     Section 12.11 Provisions Unaffected. Nothing contained in this Agreement shall affect the
rights and obligations of Synovus and TSYS pursuant to the Distribution Agreement.



     Section 12.12 Conflict. Notwithstanding any other provision in this Agreement to the
contrary, in the event and to the extent of conflict between this Agreement and any Schedule, the
Schedule shall prevail.



[Signature page follows]




18









 








     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on behalf of the
Parties as of the date first herein above written.



	 	 	 	 	 	 	 	 	 
	 	 	SYNOVUS FINANCIAL CORP.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas J. Prescott 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	Thomas J. Prescott 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	Executive
Vice President and Chief Financial Officer 	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	TOTAL SYSTEM SERVICES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ James B. Lipham 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	James B. Lipham 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	Senior Executive Vice
President and Chief Financial Officer 	 	 
	 	 	 	 	 	 	 






[Signature page to Transition Services Agreement]