EXHIBIT 10.1
DRAFT: NOVEMBER 25, 1996
OPERATIONS AGREEMENT
DATED AS OF ________, 1996
AMONG
MONEYGRAM PAYMENT SYSTEMS, INC.,
FIRST DATA TECHNOLOGIES, INC.
AND
INTEGRATED PAYMENT SYSTEMS INC.
TABLE OF CONTENTS
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Section Page
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ARTICLE 1
DEFINITIONS ............................................................. 1
ARTICLE 2
SERVICES ................................................................ 9
Section 2.1. Support Services ................................... 9
Section 2.2. Additional Services ................................ 9
ARTICLE 3
TRANSACTION SETTLEMENT; PORTFOLIO AND REGULATORY COMPLIANCE ............. 9
Section 3.1. Transaction Settlement ............................. 9
Section 3.2. Portfolio .......................................... 10
Section 3.3. MoneyGram Agents ................................... 11
Section 3.4. Compliance with Laws ............................... 13
Section 3.5. Transition of Business ............................. 14
ARTICLE 4
SECURITY ................................................................ 15
ARTICLE 5
GENERAL AGREEMENTS OF THE PARTIES ....................................... 15
Section 5.1. Company Obligations ................................ 15
Section 5.2. First Data Obligations ............................. 16
Section 5.3. Extension of Term; Money Order Processing .......... 16
Section 5.4. License to Certain Software ........................ 17
ARTICLE 6
PAYMENTS TO FIRST DATA .................................................. 18
Section 6.1. Fees and Charges ................................... 18
Section 6.2. IPS Reports and Payments ........................... 18
Section 6.3. Taxes .............................................. 19
Section 6.4. Certification of Charges ........................... 19
ARTICLE 7
CONFIDENTIALITY ......................................................... 19
Section 7.1. General ............................................ 19
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Section Page
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Section 7.2. Confidential Information Defined ................... 20
Section 7.3. Permitted Disclosure; Public and Generic
Information; Legally Required Disclosure ........... 21
Section 7.4. Notices ............................................ 22
Section 7.5. Company Disclosure of Confidential Information
to First Data ...................................... 22
Section 7.6. Remedy ............................................. 23
ARTICLE 8
DISCLAIMER OF REPRESENTATIONS AND WARRANTIES ............................ 23
ARTICLE 9
TERM AND TERMINATION .................................................... 23
Section 9.1. Term ............................................... 23
Section 9.2. Termination by Company ............................. 24
Section 9.3. Termination by First Data .......................... 26
Section 9.4. Orderly Transition ................................. 27
Section 9.5. Effect of Termination .............................. 27
ARTICLE 10
INDEMNITIES, LIABILITY AND LIMITS OF LIABILITY .......................... 28
Section 10.1. First Data's Indemnification ....................... 28
Section 10.2. Company's Indemnification .......................... 29
Section 10.3. Notification ....................................... 31
Section 10.4. Claims Period ...................................... 32
Section 10.5. Subrogation ........................................ 33
Section 10.6. Exclusive Remedy ................................... 33
Section 10.7. No Special Damages ................................. 33
ARTICLE 11
DISPUTE RESOLUTION ...................................................... 34
Section 11.1. Dispute Resolution ................................. 34
Section 11.2. Recourse to Courts and Other Remedies .............. 37
Section 11.3. Affiliates ......................................... 37
Section 11.4. Exception to Article 11 ............................ 37
ARTICLE 12
MISCELLANEOUS ........................................................... 37
Section 12.1. Expenses ........................................... 37
Section 12.2. Relationship of Parties ............................ 38
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Section Page
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Section 12.3. Force Majeure ...................................... 38
Section 12.4. Entire Agreement ................................... 39
Section 12.5. Assignment ......................................... 39
Section 12.6. Notices ............................................ 39
Section 12.7. Counterparts ....................................... 40
Section 12.8. Governing Law ...................................... 41
Section 12.9. Media Releases ..................................... 41
Section 12.10. Waiver ............................................. 41
Section 12.11. Severability ....................................... 41
Section 12.12. Construction Rules ................................. 42
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EXHIBITS
A. Support Services
A-1. Agent Services
A-2. Corporate Support Services
A-3. Data Center Services
A-4. Voice Center Disaster Recovery Services
A-5. Regulatory Compliance Services
B. Inspection, Review and Timing
C. Software
C-1. IPS Application Software
C-2. MoneyGram Application Software
C-3. PC MoneyGram Application Software
D. Pricing and Reimbursable Expenses
E. Terminable Groups of Data Center Services
F. Form of Agent Contract
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OPERATIONS AGREEMENT
THIS OPERATIONS AGREEMENT (this "Agreement") dated as of __________,
1996 is among MoneyGram Payment Systems, Inc., a Delaware corporation
("Company"), First Data Technologies, Inc., a Delaware corporation ("FDT"), and
Integrated Payment Systems Inc., a Delaware corporation ("IPS" and, together
with FDT, "First Data").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Company, IPS and First Data Corporation, a Delaware
corporation and the parent company of FDT and IPS ("FDC"), have entered into a
Contribution Agreement dated as of the date hereof (the "Contribution
Agreement") pursuant to which IPS and certain of its Affiliates (as defined
below) contributed to Company certain assets of the Business (as defined below);
and
WHEREAS, Company and First Data desire to enter into this Agreement to
establish, among other things, (i) the terms and conditions pursuant to which
First Data shall perform for the benefit of Company certain services relating to
the Business and (ii) the duties, rights and obligations of each of First Data
and Company to the other;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, Company and First Data agree as follows:
ARTICLE 1
DEFINITIONS
-----------
In this Agreement, unless the context shall otherwise require, the
capitalized terms used herein shall have the respective meanings specified or
referred to in this Article 1. Each agreement referred to in this Agreement
shall mean such agreement as amended, supplemented and modified from time to
time to the extent permitted by the applicable provisions thereof and hereof.
Each definition in this Agreement includes the singular and the plural, and
reference to the neuter gender includes the masculine and feminine where
appropriate. References to any statute or regulations means such statute or
regulations as amended at the time and include any successor legislation or
regulations. The headings to the Articles and Sections hereof and the table of
contents herein are for convenience of reference
and shall not affect the meaning or interpretation of this Agreement. Except as
otherwise stated, reference to Articles, Sections, Exhibits mean the Articles,
Sections and Exhibits of this Agreement. The Exhibits are hereby incorporated
by reference into and shall be deemed a part of this Agreement. Unless the
context clearly indicates otherwise, the word "including" means "including but
not limited to".
"AAA" means the American Arbitration Association.
"AAA Rules" means the AAA's Commercial Arbitration Rules.
"Additional Services" means services performed for Company by First
Data or its Affiliates pursuant to this Agreement, other than (i) the Support
Services and (ii) any service or other obligation to be performed by First Data
pursuant to Article 3.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person; provided, however, that FDC and its Affiliates shall not be deemed
Affiliates of Company and Company and its Affiliates shall not be deemed
Affiliates of FDC and its Affiliates.
"Agent Contract" means an agreement pursuant to which a MoneyGram
Agent provides Consumer Money Wire Transfer Services on behalf of the Business,
together with any license agreement with such MoneyGram Agent related to the PC
MoneyGram Application Software described in Exhibit C-3.
"Agent Services" means the services specified in Exhibit A-1.
"Amount Due" has the meaning specified in Section 6.2.
"Arbitrators" has the meaning specified in Section 11.1(b)(ii).
"Bankruptcy" means, with respect to any Party, the happening of any
one or more of the following events: (a) a Party: (i) makes an assignment for
the benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii)
is adjudged a bankrupt or insolvent, or there has been entered against such
Party an order for relief, in any bankruptcy or insolvency proceeding; (iv)
files a petition or answer seeking in respect of such Party any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under
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any statute, law or regulation; (v) files an answer or other pleading admitting
or failing to contest the material allegations of a petition filed against such
Party in any proceeding of a nature described above; (vi) seeks, consents or
acquiesces in the appointment of a trustee, receiver, conservator or liquidator
of such Party or of all or any substantial part of such Party's properties; or
(vii) in respect of clauses (i), (ii), (iv), (v) or (vi) above, such Party takes
any corporate action to authorize any action contemplated by any of such
clauses; or (b) 90 days after the commencement of any proceeding against any
Party seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
if such proceeding has not been dismissed, or within 60 days after the
appointment without such Party's consent or acquiescence of a trustee, receiver
or liquidator of the Party or of all or any substantial part of such Party's
properties, if such appointment is not vacated or stayed, or within 60 days
after the expiration of any such stay, if such appointment is not vacated.
"Basic Qualifications" has the meaning specified in Section
11.1(b)(ii).
"Business" means the Consumer Money Wire Transfer Services marketed
under the name "MoneyGram"(SM) and the sales and distribution of a "MoneyGram"
phonecard.
"Business Day" means any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in
Denver, Colorado.
"Claim Notice" has the meaning specified in Section 10.3(a).
"Company Data" means, at any time, data files, databases and related
data and information (in any form or medium) relating to the Business or
comprising the input or output of First Data's obligations specified in Article
3, the Support Services or any Additional Services.
"Company Indemnitee" has the meaning specified in Section 10.1(a).
"Confidential Information" has the meaning specified in Section 7.2.
"Consequential Damages" means any liability, Loss, Expense or damage,
whether in an action arising out of breach of warranty, breach of contract,
delay, negligence, theory of tort,
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strict liability or other legal or equitable theory, for indirect, special,
reliance, incidental, punitive or consequential damages or commercial loss,
injury or damage, including loss of revenues, profits or use of capital or
production.
"Consumer Money Wire Transfer Services" means the service of
transferring the right to money using computer or telephone lines, or any other
technology now existing or later developed, from one person to a different
person through a MoneyGram Agent and the services marketed under the phrase
"Express Payment" or "Cash Advance".
"Corporate Support Services" means the services specified in Exhibit
A-2.
"Costs" means all direct costs, expenses and charges plus all indirect
costs, expenses and charges, including reasonable allocations of overhead,
incurred by a Party in performing its obligations under this Agreement.
"Data Center Services" means the services specified in Exhibit A-3.
"days" means calendar days.
"Designated Representative" means the employee of First Data
designated in writing from time to time by First Data who shall be the only
individual to whom Company shall provide certain specified information under
this Agreement, including Confidential Information of Company. The Designated
Representative on the date hereof is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
"Dispute" has the meaning specified in Section 11.1(a).
"Expenses" means any and all reasonable expenses incurred in
connection with investigating, defending or asserting any claim, action, suit or
proceeding incident to any matter indemnified against hereunder (including court
filing fees, court costs, witness fees and reasonable fees and disbursements of
legal counsel, investigators, expert witnesses, accountants and other
professionals).
"Fees" means, with respect to each of the Support Services and the
services provided by IPS under Article 3, the fees and charges set forth or
referenced in Exhibit D and, with respect to any Additional Service, the fees
and charges agreed to in writing by First Data and Company, in each case as the
same may be modified from time to time during the Term.
4
"Fiduciary Funds" means, (i) in respect of any IPS Funds Transfer
Service transaction that will be paid to the recipient thereof in U.S. dollars,
the amount of money being transmitted to the recipient thereof and (ii) in
respect of any IPS Funds Transfer Service transaction that will be paid to the
recipient thereof in a currency other than U.S. dollars, the amount of U.S.
dollars necessary to purchase the amount of such other currency being
transmitted to the recipient thereof.
"First Data" has the meaning specified in the first paragraph of this
Agreement.
"First Data Equipment" means the equipment owned by or leased to First
Data or its Affiliates required to perform First Data's obligations hereunder.
"First Data Indemnitee" has the meaning specified in Section 10.2(a).
"Force Majeure Event" has the meaning specified in Section 12.3.
"Governmental Body" means any foreign, federal, state, local or other
governmental authority or regulatory body.
"Indemnified Party" has the meaning specified in Section 10.3(a).
"Indemnifying Party" has the meaning specified in Section 10.3(a).
"IPS Application Software" means the application Software owned by IPS
or its Affiliates that is used to provide the Data Center Services until such
time as the Utility Software is available to perform such services in accordance
with Exhibit A-3, together with the documentation (if any) relating thereto, as
described on Exhibit C-1, and any modifications thereto.
"IPS Funds Transfer Service" means the Consumer Money Wire Transfer
Services offered by and in the name of IPS or Travel Related Services.
"IPS Report" has the meaning set forth in Section 6.2.
"Losses" means any and all losses, Costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, deficiencies
or other charges.
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"modification" means any modification, enhancement, translation,
conversion, compilation, upgrade or other derivative version of, or change or
addition to, any item, and "modify" and "modified" shall have corollary
meanings.
"MoneyGram Agent" means a Person that has contracted with Travel
Related Services, IPS or the Company, as the case may be, to provide the
Consumer Money Wire Transfer Services provided by the Business.
"MoneyGram Application Software" means the application Software owned
by Company that is used in the Business, together with the documentation (if
any) relating thereto, as described on Exhibit C-2.
"New MoneyGram Application Software" means all developments,
improvements, modifications, additions, expansions, new versions, new releases,
rewrites or enhancements to the MoneyGram Application Software that are
developed by or on behalf of Company after the Closing Date.
"New Utility Software" means all developments, improvements,
modifications, additions, expansions, new versions, new releases, rewrites or
enhancements to the Utility Software that are developed by or on behalf of
Company after the 45-day period provided in Exhibit A-3.
"Panel" has the meaning specified in Section 11.1(b)(ii).
"Party" means First Data or Company as the context requires.
"PC MoneyGram Application Software" means the application Software
owned by Company that is used in the Business, together with the documentation
(if any) relating thereto, as described on Exhibit C-3.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or Governmental Body.
"Portfolio" has the meaning specified in Section 3.2(a).
"Proprietary Rights" means all trade secret, copyright, patent,
trademark, service ▇▇▇▇, trade name, certification ▇▇▇▇, trade dress or other
proprietary rights in all countries related
6
to such item or any part thereof, any extensions or renewals of the foregoing,
and any registrations, patents or applications with respect to the foregoing.
"Regulatory Compliance Services" means the services specified in
Exhibit A-5.
"Reimbursable Expenses" means, in respect of the Support Services and
the services provided by IPS under Article 3, the items of expense so designated
or described in Exhibit D and, with respect to any Additional Service, the items
of expense so designated or described by written agreement of the Parties, in
each case subject to such additions and deletions as may be made by written
agreement of the Parties from time to time during the Term.
"Requirements of Law" means any foreign, federal, state and local
laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued
or promulgated by any Governmental Body.
"Service ▇▇▇▇ Letter Agreement" means the Service ▇▇▇▇ Letter
Agreement dated as of the date hereof among Company, FDC and Western Union
Financial Services, Inc. ("Western Union"), which includes as an exhibit thereto
the Service ▇▇▇▇ License Agreement among IPS, Western Union and Company.
"Software" means computer software programs and software systems,
including, without limitation, all databases, compilations, tool sets,
compilers, higher level "proprietary" languages, related documentation and
materials, whether in source code, object code or human readable form; provided,
however, that Software shall not include computer software that is available in
consumer retail stores and subject to "shrink-wrap" license agreements.
"Software License Agreement" means the Software License Agreement
dated as of the date hereof between IPS and Company.
"Solvent", when used with respect to any Person, means that at the
time of determination: (i) the fair market value of its assets is in excess of
the total amount of its liabilities (including contingent liabilities determined
in accordance with generally accepted accounting principles); (ii) the present
fair saleable value of its assets is greater than its probable liability on its
existing debts (including contingent liabilities) as such debts become absolute
and matured; (iii) it is then able, and is reasonably expected to be able, to
pay its debts (including contingent debts and other commitments) as they
7
mature; and (iv) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
"State Licenses" means the licenses or permits issued by Governmental
Bodies in respect of State Licensing Requirements.
"State Licensing Requirements" means Requirements of Law related to
the licensing of a Person offering money transfer services.
"Support Services" means the services as described in Exhibits A-1
through A-5.
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means any
federal, state, local or foreign income, gross receipts, windfall profits,
severance, property, production, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add-on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any Governmental Body.
"Term" means, subject to the provisions of Section 5.3, the period
commencing on the date hereof and ending on the earlier of: (i) the second
anniversary of the date hereof and (ii) the end of any transition period in
accordance with Section 9.4, except that the obligations of the Parties under
Article 3 (including the Regulatory Compliance Services) shall terminate in
accordance with the provisions of Section 9.1(b).
"Third Party Software" means any Software that is proprietary to a
Person other than any Party or its Affiliates and that is to be obtained and
used by First Data or its Affiliates to perform their obligations hereunder, and
any modifications thereto.
"Third Party Vendor" means, with respect to any item of First Data
Equipment or Third Party Software, the owner, licensor, manufacturer,
distributor or other supplier of such item.
"Travel Related Services" means American Express Travel Related
Services Company, Inc., a New York corporation.
"Utility Software" means the application Software owned by IPS or its
Affiliates that will be licensed to Company under the Software License
Agreement, delivered pursuant to Exhibit A-3
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and used by First Data to provide the Data Center Services, together with the
documentation (if any) relating thereto.
"Voice Center Disaster Recovery Services" means the services specified
in Exhibit A-4.
"Voice Center Services" means the services specified in Exhibit A-2.
ARTICLE 2
SERVICES
--------
SECTION 2.1. SUPPORT SERVICES. During the Term, First Data shall
perform for Company, either directly, through its Affiliates or through
agreements with Third Party Vendors, each of the Support Services described in
Exhibit A.
SECTION 2.2. ADDITIONAL SERVICES. During the Term, First Data shall
perform for Company, either directly, through its Affiliates or through
agreements with Third Party Vendors, such Additional Services agreed to by the
Parties. Such Additional Services and the Fees, Reimbursable Expenses and other
terms with respect thereto shall be set forth in an additional Exhibit to this
Agreement or otherwise evidenced by a written amendment hereto.
ARTICLE 3
TRANSACTION SETTLEMENT; PORTFOLIO AND REGULATORY COMPLIANCE
-----------------------------------------------------------
SECTION 3.1. TRANSACTION SETTLEMENT. (a) During the period commencing
on the date hereof and until the earlier of (i) the termination of the
obligations of IPS and Company in respect of any IPS Funds Transfer Service
transaction as specified in Section 9.1(b) and (ii) the date 30 days after the
date Company has obtained all State Licenses necessary to offer the Consumer
Money Wire Transfer Services and conduct the Business in its own name, IPS
shall, subject to Section 3.1(g), be responsible for the administrative function
of collecting all sums due from MoneyGram Agents under Agent Contracts and the
payment of all Fiduciary Funds in respect of completed IPS Funds Transfer
Service transactions in accordance with the terms of the Agent Contracts.
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(b) Each Business Day, IPS shall notify Company of the following
items related to IPS Funds Transfer Service transactions effected during the
immediately preceding Business Day (and, if applicable, any intervening non-
Business Day or Days): (i) the aggregate amount received by MoneyGram Agents
from customers in respect of all IPS Funds Transfer Service transactions, (ii)
the aggregate amount of all Fiduciary Funds related to such transactions and
(iii) the aggregate amount of fees paid by customers related to such
transactions.
(c) Each Business Day, IPS shall deliver to Company, in U.S. dollars
by automated clearing house or wire transfer to an account specified by Company,
an amount equal to the amount set forth in respect of clause (iii) of Section
3.1(b).
(d) Company shall pay all fees and any foreign exchange revenues due
to MoneyGram Agents under the Agent Contracts on a timely basis in accordance
with the terms of such Agent Contracts.
(e) The Parties shall agree from time to time on operational
procedures to implement the payment obligations under Section 3.1(c) in a
timely, efficient and prudent manner.
(f) Company acknowledges that all amounts representing Fiduciary
Funds are funds of IPS to be held on behalf of IPS until such time as they are
disbursed by a MoneyGram Agent to the recipient thereof. Company and MoneyGram
Agents shall have a fiduciary duty to IPS with respect to such Fiduciary Funds.
Company shall take appropriate steps on its own initiative and as reasonably
requested by IPS to ensure that MoneyGram Agents are clearly aware of their
responsibilities with respect to such Fiduciary Funds and properly handle such
Fiduciary Funds.
(g) Any amounts paid by IPS to MoneyGram Agents or customers with
respect to any IPS Funds Transfer Service transaction for which a corresponding
settlement of sales proceeds is not received by IPS shall be the sole
responsibility of Company. If IPS makes any payment with respect to any such
transaction, IPS shall be entitled to full reimbursement therefor from Company.
SECTION 3.2. PORTFOLIO. (a) The Parties agree that IPS shall maintain
in accordance with Requirements of Law a portfolio or portfolios of investments
(the "Portfolio") at least equal to the amount of Fiduciary Funds associated
with IPS Funds Transfer Service transactions conducted in the name of IPS that,
10
from time to time, have been initiated but not yet paid to the recipient.
(b) The Parties agree to transfer the Portfolio to Company for
management by Company in accordance with the transition contemplated by Section
3.5.
SECTION 3.3. MONEYGRAM AGENTS. (a) Company shall be responsible for
negotiating and enforcing the terms of all Agent Contracts, including in respect
of the sums to be paid to IPS, the timing of remittance fees and consumer funds
to be transferred (subject to compliance with applicable Requirements of Law)
and the payment of any incentive fees to MoneyGram Agents.
(b) The Parties agree that contracts entered into after the date
hereof with respect to the IPS Funds Transfer Service shall be executed (i) in
the name of IPS by Company as IPS's authorized agent for such purpose, (ii)
assignable to Company and (iii) shall be binding upon IPS, it being agreed by
the Parties that no such contract shall, without the prior written consent of
IPS, which consent shall not be unreasonably withheld, contain terms relating to
the liabilities and obligations of IPS that are materially more onerous to IPS
than those set forth in the form or forms of contract set forth in Exhibit F.
Promptly after entering into any Agent Contract or amending or modifying any
Agent Contract, Company shall inform the Designated Representative, in writing,
of the material terms thereof, including the timing of payment of Fiduciary
Funds. If required in order to comply with Requirements of Law or State
Licensing Requirements, the Company shall deliver to the Designated
Representative a copy of any Agent Contract requested by IPS to be used solely
for such purposes.
(c) Company shall have sole discretion in selecting the entities that
shall serve as MoneyGram Agents; provided, however, that, if First Data
reasonably determines that providing the IPS Funds Transfer Service through a
MoneyGram Agent could reasonably be expected to subject First Data to potential
liability under, or cause First Data to violate or not be in full compliance
with, applicable Requirements of Law, including State Licensing Requirements,
federal and state currency reporting and anti-money laundering statutes or
similar laws, then First Data may give Company written notice of its desire not
to provide the services contemplated by this Article 3 in respect of such
MoneyGram Agent. If Company does not object to such written notice within five
Business Days of receipt thereof, First Data shall be excused from its
obligations to perform under this
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Article 3 in respect of such MoneyGram Agent. If Company does so object by
written notice to First Data within such five Business Day period, then First
Data shall continue to perform its obligations under this Article 3 in respect
of such MoneyGram Agent, and First Data and Company shall resolve their dispute
in accordance with the following procedures:
(i) Any disputes or controversies under this Section 3.3(c) shall be
settled by arbitration before a single arbitrator in Denver, Colorado under
the Expedited Procedures of the AAA Rules. The AAA shall provide the
Parties with a list of proposed arbitrators within five Business Days of
the filing of a demand for arbitration. Each Party shall have three
Business Days to return the list containing its peremptory strikes of
arbitrators. The AAA shall then appoint a single arbitrator within five
Business Days of receiving the return of the Parties' lists, and any
objections by the Parties to the qualifications of the arbitrator shall be
made within two Business Days thereafter. Within five Business Days of the
date for Parties' objections to the qualifications of the arbitrator, the
arbitration hearing shall begin and it shall be continued from day to day
until completed. The arbitrator's award shall be rendered within five
Business Days of the completion of the hearing;
(ii) To the extent that the award rendered by the arbitrator is
relief or a remedy on which a court could enter judgment, a judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction. Otherwise the award shall be binding on the Parties in
connection with their continuing performance of this Agreement and in any
subsequent arbitral or judicial proceeding between the Parties; and
(iii) To the extent that there is a dispute or controversy as to
whether providing the IPS Funds Transfer Service through a MoneyGram Agent
could reasonably be expected to cause First Data to violate or not be in
full compliance with applicable Requirements of Law under this Section
3.3(c), either Party may, but is not required to, obtain an opinion or
ruling from the applicable Governmental Body regarding such issue. Any such
opinion or ruling shall be conclusive between the Parties. If such opinion
or ruling is obtained prior to or during an arbitration proceeding, it
shall be conclusively binding upon the arbitrator in rendering the award,
and the arbitrator's authority shall be limited to rendering an award that
is consistent with the opinion or ruling. If such opinion or
12
ruling is obtained after an award has been rendered, the Parties agree to
vacate any award inconsistent with the opinion or ruling, and any judgment
rendered on such an award. Vacating of such an award and/or judgment,
however, shall not affect the Parties' rights to have relied upon the award
and/or judgment while it was in effect.
(d) Company shall have the authority, in its sole discretion, to
terminate any MoneyGram Agent in accordance with the terms of the applicable
Agent Contract. Company shall have the authority to determine where the
Business is conducted, subject to compliance with applicable Requirements of
Law.
SECTION 3.4. COMPLIANCE WITH LAWS. (a) Company and IPS each agrees
that it will perform its obligations under this Article 3 and, in the case of
IPS, the Regulatory Compliance Services so as not to cause the other Party or
the Business to be in violation of any applicable Requirements of Law, including
State Licensing Requirements, permissible investment rules, prompt remittance
rules and federal and state currency reporting and anti-money laundering
requirements.
(b) IPS shall, with the cooperation and assistance of Company and at
Company's expense, provide Regulatory Compliance Services, including making all
required filings with any Governmental Body, that are required in connection
with the Business solely as it relates to the sale of the IPS Funds Transfer
Service and shall comply with State Licensing Requirements and licensing,
escheat and sales Tax laws with respect to the Business. The Parties
acknowledge that IPS shall have no obligation under this Section 3.4(b) with
respect to any Consumer Money Wire Transfer Services conducted by Company in its
own name, including in connection with the transition contemplated by Section
3.5.
(c) IPS shall prepare and provide Company (i) the operating,
financial, investments, sales and outstanding, and abandoned property reports
that IPS generated in respect of the Business prior to the date hereof in the
ordinary course of its business and (ii) such other reports and information (in
such form and frequency as Company may reasonably request) sufficient to enable
Company to monitor the Business.
(d) Company may (with prior written approval of IPS, which shall not
be unreasonably withheld) initiate, prosecute and resolve collection actions
against MoneyGram Agents or other actions in the name of IPS to enforce and
defend IPS's rights under the Agent Contracts. Company shall keep the
Designated
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Representative informed on a timely and regular basis of any material
developments in any such action.
SECTION 3.5. TRANSITION OF BUSINESS. (a) As soon as practicable
after the execution of this Agreement, Company shall apply for and use its best
efforts to obtain State Licenses to offer Consumer Money Wire Transfer Services
and conduct the Business in its own name. No later than three months after the
date hereof, Company shall inform the Designated Representative, in writing, of
the material terms of Company's strategy and anticipated schedule for obtaining
such licenses and shall keep IPS informed, in writing, on a timely and regular
basis of any changes to such strategy and schedule.
(b) Company shall notify the Designated Representative in writing
before filing any license application contemplated by Section 3.5(a). IPS may
elect to participate in any such application process if it deems such
participation appropriate to protect licenses IPS will continue to maintain in
connection with its businesses.
(c) Company shall begin converting MoneyGram Agents from sellers of
the IPS Funds Transfer Services to become sellers of Consumer Money Wire
Transfer Services offered in Company's name as soon as possible after obtaining
the appropriate State Licenses to allow for such conversion.
(d) Company shall keep the Designated Representative informed on a
regular and timely basis (with such frequency and in such format as IPS
reasonably requests) of all of its plans and activities relating to the
transition process contemplated hereunder, including as to the schedule and
status of State License applications and the conversion of MoneyGram Agents and
the Portfolio.
(e) Subject to its other rights under this Agreement, IPS shall
cooperate in good faith with Company in support of Company's transition plan and
take such actions as are reasonable and necessary to support such transition,
including assignment of Agent Contracts.
14
ARTICLE 4
SECURITY
--------
The IPS Application Software and the Utility Software are and shall
remain First Data's property, and Company shall have no rights to, or interest
in, the IPS Application Software or the Utility Software, except as provided in
the Software License Agreement. As between First Data and Company, First Data
shall exercise exclusive control over the First Data Equipment, IPS Application
Software, First Data personnel and physical premises and facilities used by
First Data and its Affiliates to perform its obligations hereunder. Any use of
or access to such First Data Equipment, IPS Application Software, First Data
personnel, physical premises or facilities by Company personnel shall be subject
to First Data's express prior consent in each specific instance. The personnel
of each Party shall comply with the security and other rules, policies and
procedures applicable to the other Party's employees and invitees for access to
such other Party's premises or facilities.
ARTICLE 5
GENERAL AGREEMENTS OF THE PARTIES
---------------------------------
SECTION 5.1. COMPANY OBLIGATIONS. (a) Except as set forth in this
Agreement, Company hereby agrees to perform and be responsible for all aspects
of the Business, including all sales and marketing activities and credit review
and analysis related to selecting and maintaining MoneyGram Agents.
(b) Company agrees to perform on a timely basis its obligations set
forth in this Agreement. Without limiting the generality of the foregoing,
Company agrees to:
(i) inspect and review all reports, displays and other output prepared
by First Data in connection with performing its obligations hereunder and
reject all such incorrect reports, displays or output within the period
necessary to permit timely correction of such report, display or output, as
specified in Exhibit B;
(ii) comply with the operating procedures established from time to
time by First Data in connection with the provision of its Data Center
Services hereunder, it being understood that First Data has provided to
Company a copy of such procedures as in effect on the date hereof; and
15
(iii) provide to the Designated Representative such timely management
decisions, access to personnel, information (including financial statements
necessary for IPS to perform its obligations under Article 3 (including
Regulatory Compliance Services) in respect of, or to comply with, State
Licensing Requirements), approvals and acceptances as First Data or its
Affiliates may reasonably request in order to perform their obligations
hereunder, including (A) furnishing to the Designated Representative on a
monthly basis by the first of each month, for First Data's planning
purposes, reports of Company's anticipated need for Support Services (and
Additional Services, if any) during the next six-month period (but not
beyond the later of (i) the end of the Term and (ii) the expiration of
First Data's obligations under Section 9.4), and (B) promptly informing the
Designated Representative of any proposed business changes that would
require First Data to alter its performance of its obligations hereunder.
(c) The failure of Company to reject any report, display or output
within the applicable time period as contemplated by Section 5.1(b)(i) shall
constitute acceptance thereof. If Company rejects any such report, display or
output within the applicable time period, then upon request of Company, First
Data shall use reasonable efforts to correct the report, display or output. The
correction of any such incorrect report, display or output, at First Data's
expense (to the extent that First Data is responsible primarily therefor and has
received timely notice thereof), shall be Company's sole and exclusive remedy
for any such incorrect report, display or output.
SECTION 5.2. FIRST DATA OBLIGATIONS. Except as may otherwise be
agreed during the Term, First Data shall perform the Support Services, any
Additional Services and the services under Article 3 in all material respects in
a professional and workmanlike manner.
SECTION 5.3. EXTENSION OF TERM; MONEY ORDER PROCESSING. (a) Upon
the written request of Company, in its sole discretion, at any time during the
Term, First Data will negotiate in good faith (i) an extension of the Term or
(ii) the terms of a new agreement covering the provision by First Data to
Company of any or all of the Support Services, any Additional Services or the
services contemplated by Article 3, in each case upon such terms and conditions,
including prices, to be agreed upon by First Data and Company.
16
(b) Upon the written request of Company, in its sole discretion at any
time during the Term, First Data will negotiate in good faith the terms of
Additional Services to be provided to Company in respect of (i) a money order
product offered by Company in the names of IPS, as the entity licensed to offer
such a product under State Licensing Requirements, and Company and (ii) at such
time as Company has obtained State Licenses necessary under State Licensing
Requirements to offer such product in its own name, a money order product
offered by Company in the name of Company. Any agreement among the Parties in
respect of such Additional Services shall be entered into in accordance with
Section 2.2; provided, however, that the Fees and Reimbursable Expenses in
respect of such Additional Services shall not be greater than then-current
market rates.
SECTION 5.4. LICENSE TO CERTAIN SOFTWARE. (a) Company hereby grants
First Data a non-exclusive, royalty-free license for the Term to execute the
MoneyGram Application Software and any New MoneyGram Application Software or New
Utility Software in connection with First Data's performance of the Data Center
Services. As between First Data and Company, the MoneyGram Application Software
and any New MoneyGram Application Software or New Utility Software will remain
Company's property. First Data will have no ownership interest or other right
in the MoneyGram Application Software or any New MoneyGram Application Software
or New Utility Software. Company represents and warrants to First Data that any
New MoneyGram Application Software and New Utility Software will not violate or
infringe, directly or indirectly, any Proprietary Rights of any other Person or
contribute to any such violation or infringement.
(b) If any injunction is issued as to the MoneyGram Application
Software or any New MoneyGram Application Software or New Utility Software
because of the violation or infringement, or alleged violation or infringement,
of a third Person's Proprietary Rights, Company shall use reasonable efforts to
modify or replace such Software in order to avoid such violation or
infringement. If Company is unable to so modify or replace such Software with
reasonable efforts, at reasonable prices or within a reasonable period of time,
then First Data shall not be responsible for providing to Company the affected
portion of the Data Center Services.
17
ARTICLE 6
PAYMENTS TO FIRST DATA
----------------------
SECTION 6.1. FEES AND CHARGES. The initial Fees for the Support
Services and the services performed by First Data under Article 3 are set forth
in Exhibit D. Exhibit D also sets forth or describes the applicable
Reimbursable Expenses, including reimbursements, assessments and pass through
fees of Third Party Vendors. If First Data commences to perform any Additional
Services for Company after the execution of this Agreement, then Company shall
pay Fees and Reimbursable Expenses for any such Additional Services as agreed
upon by the Parties and set forth in writing.
SECTION 6.2. IPS REPORTS AND PAYMENTS. In respect of each calender
month, First Data shall deliver to Company a report (the "IPS Report") setting
forth in reasonable detail the following information in respect of such month,
such IPS Report to be delivered to Company as soon as reasonably practicable
after the information needed to compile the report is available to First Data
and in no event later than the 15th day after the end of such month: (i) the
aggregate amount of foreign exchange revenues realized in respect of all IPS
Funds Transfer Service transactions effected and (ii) the aggregate amount of
all Fees, Costs, charges, Reimbursable Expenses, Taxes, interest payments and
other amounts due or payable to First Data under this Agreement. The difference
between the amounts set forth in response to items (i) and (ii) above in the IPS
Report is defined herein as the "Amount Due".
If the Amount Due is a positive number, then IPS shall pay to Company
the absolute value of the Amount Due and, if the Amount Due is a negative
number, then Company shall pay to IPS the absolute value of the Amount Due.
Payments of the Amount Due with respect to any IPS Report shall be made no later
than five Business Days following the delivery of such IPS Report. Such payment
shall be made by wire transfer to the account identified in writing from time to
time by the Party receiving an Amount Due.
To the extent Company disputes in good faith any portion of the IPS
Report or the calculation of the Amount Due, then Company shall so notify First
Data and such dispute shall be resolved pursuant to the procedures set forth in
Article 11. Notwithstanding the existence of any such dispute, each Party agrees
to pay, and continue to pay, any Amount Due on a timely basis in accordance with
the terms hereof, without set-off or
18
taking other action other than pursuant to the procedures set forth in Article
11.
SECTION 6.3. TAXES. (a) In addition to any and all other payments
to First Data to be made hereunder, Company shall pay, or shall reimburse First
Data for payments made in respect of, all Taxes which are levied or imposed by
any Governmental Body by reason of the performance, sale, license or use of any
services, equipment, software or other goods or products covered by this
Agreement, excluding any income Taxes payable by First Data on amounts earned by
First Data hereunder. Without limitation on the foregoing, Company shall
promptly pay to First Data an amount equal to any such Taxes actually paid or
required to be collected or paid by First Data.
(b) Company hereby authorizes First Data to calculate the total
amount of escheat and sales Taxes due from Company from the monies due First
Data and remit the amount of escheat and sales Taxes to the appropriate taxing
authority on behalf of Company. First Data's remittance of the escheat and
sales Taxes on behalf of Company shall be computed by First Data based on the
information available to First Data. In the event of under or over calculation,
Company shall be responsible for any additional monies due including any
penalties or interest and for collecting any refunds due to Company from the
appropriate taxing authority, unless such calculation resulted from First Data's
negligence or willful misconduct.
(c) Prior to First Data making the escheat and sales Tax remittance
on behalf of Company provided in paragraph (b) above, Company agrees to supply
First Data with any and all current information necessary for First Data to
compute and remit the escheat and sales Taxes.
SECTION 6.4. CERTIFICATION OF CHARGES. First Data shall provide,
upon reasonable request, the written certificate of First Data's authorized
officer, certifying that any amount calculated by First Data hereunder has been
accurately calculated in accordance with the terms of this Agreement.
ARTICLE 7
CONFIDENTIALITY
---------------
SECTION 7.1. GENERAL. (a) Except as otherwise provided in this
Article 7, each Party shall keep confidential and not disclose Confidential
Information of the other Party.
19
The Parties shall take reasonable steps, no less rigorous than those taken to
protect their own comparable confidential and proprietary information, to
prevent any unauthorized or inadvertent disclosure of Confidential Information
of the other Party or the loss of Confidential Information. Each Party agrees
that for purposes of this Article 7, the terms First Data and Company shall also
include their respective Affiliates, who shall be subject to the provisions of
this Article 7.
(b) Each Party shall create and maintain safeguards to limit
disclosure of Confidential Information of the other Party to its Affiliates, and
its or its Affiliate's employees, third party service providers, consultants,
subcontractors and contractors who have a need to know such information solely
in connection with such Party's obligations under this Agreement or rights under
the Software License Agreement or, if applicable, the Service ▇▇▇▇ License
Agreement, and provided that any such Person who is not an employee of the Party
or an Affiliate of such Party making such disclosure shall have first executed a
confidentiality agreement containing terms consistent with the obligations of
this Article 7. First Data acknowledges and agrees to use best efforts to
establish and maintain safeguards so that Confidential Information of Company
shall not be used in competition with, or otherwise to the detriment of,
Company.
(c) Subject to Company's rights under the Software License Agreement
and, if applicable, the Service ▇▇▇▇ License Agreement, each Party agrees that,
upon request by the other Party, such Party shall return to the other Party any
Confidential Information of the other Party which such Party does not then
require to perform its obligations hereunder. No Party shall obtain any
Proprietary Rights under this Agreement in any of the other Party's Confidential
Information that has been or at any time after the date of this Agreement is
disclosed, directly or indirectly, to such Party exclusively pursuant to this
Agreement.
SECTION 7.2. CONFIDENTIAL INFORMATION DEFINED. As used herein the
term "Confidential Information" means (i) with respect to Company, the Company
Data, the MoneyGram Application Software, any New MoneyGram Application
Software, the PC MoneyGram Application Software, any New Utility Software and
any Third Party Software that is licensed to or used by Company, (ii) with
respect to First Data, the IPS Application Software, the Utility Software and
any Third Party Software that is licensed to or used by First Data and (iii)
with respect to each Party, the terms of this Agreement and all information and
materials (in any medium), whether communicated to a Party before or after the
date
20
hereof, respecting, comprising, describing, embodying or incorporating:
(i) information about such Party's business, customers, employees,
finances, operations, products or services,
(ii) other technical data, research, products, business or financial
information, plans or strategies, forecasts or forecast assumptions,
business practices, operations or procedures, services, marketing or
merchandising information respecting such Party or its customers, or
(iii) computer software and documentation, databases, data processing
or communications systems, practices or procedures or other internal
systems or controls (planned or in any stage of development) used, owned or
developed (or in development) by or at the request of such Party (including
(1) object code, source code, source listings, programming techniques or
systems, programming or systems documentation or specifications, or user,
operations or systems manuals, (2) hardware, firmware or other equipment or
appliances, engineering drawings, schematics or related documentation,
specifications or manuals or (3) other charts, diagrams, graphs, models,
sketches, writings or data related thereto),
including, in each case, any trade secrets and other proprietary ideas,
concepts, know-how, methodologies and information incorporated therein, whether
incorporated in materials produced by a Party pursuant to or in connection with
this Agreement or any other agreement between the Parties; provided, however,
that the Party disclosing such information in tangible form shall ▇▇▇▇ any
tangible material containing Confidential Information of such Party with an
appropriate legend indicating the confidential nature of such material prior to
providing such material to the other Party; and provided, further, that the
failure of either Party to so legend any material shall not relieve the other
Party of the obligation to maintain the confidentiality of any unlegended
material which such Party knows or should reasonably know contains Confidential
Information of the other Party.
SECTION 7.3. PERMITTED DISCLOSURE; PUBLIC AND GENERIC INFORMATION;
LEGALLY REQUIRED DISCLOSURE. (a) The provisions of this Article 7 shall not
apply to any Confidential Information to the extent included in any assignment
of any of Company's rights under the Software License Agreement or, if
applicable, the Service ▇▇▇▇ License Agreement if effected in accordance with
the
21
terms of such agreements; provided, however, that such assignee executes and
delivers to IPS an agreement to be bound by the terms of this Article 7 in
respect of such Confidential Information, in form and substance reasonably
satisfactory to IPS.
(b) The provisions of this Article 7 shall not prohibit disclosure by
a Party of any information or materials identical or similar to that contained
in another Party's Confidential Information, but which (i) are or become
generally available to the public other than as a result of any breach of the
provisions of this Agreement or any other applicable agreement between the
Parties; (ii) are in the possession of such Party or any of its Affiliates prior
to receipt thereof (other than through any improper means) and are not subject
to a confidentiality obligation; (iii) are commonly known to Persons engaged in
the funds transfer, payment instrument, message or document delivery,
telecommunications or data processing industries or by individuals employed by
Persons engaged in such industries other than as a result of any breach of the
provisions of this Agreement or any other applicable agreement between the
Parties; or (iv) are independently developed by such Party without reference to
the Confidential Information of the other Party.
(c) A Party may disclose Confidential Information to the extent
required to be disclosed by such Party under any Requirements of Law applicable
to such Party or the conduct of such Party's business or otherwise (provided
that upon receipt of demand for any such required disclosure such Party shall
provide the disclosing Party prompt notice thereof).
SECTION 7.4. NOTICES. Each Party agrees that it will not remove any
statutory copyright notice or other identification or evidence of Confidential
Information contained on or included in any item of Confidential Information of
the other Party. The Parties shall each reproduce any such notice or
identification on any reproduction, modification or translation of such
Confidential Information and shall add any statutory copyright notice or other
evidence of confidential information to the other Party's Confidential
Information in its possession upon reasonable request by the other Party.
SECTION 7.5. COMPANY DISCLOSURE OF CONFIDENTIAL INFORMATION TO FIRST
DATA. Company hereby agrees that it shall, and shall cause its Affiliates and
its or its Affiliates officers, employees, representatives, agents and advisors
to, disclose only to the Designated Representative any and all
22
Confidential Information of Company that Company desires or intends to, or is
required by the terms of this Agreement to, disclose to First Data or its
Affiliates.
SECTION 7.6. REMEDY. In the event of any breach of this Article 7,
the Parties agree that the non-breaching Party will suffer irreparable harm and
the total amount of monetary damages for any injury to the non-breaching Party
from any violation of this Article 7 will be impossible to calculate and will
therefore be an inadequate remedy. Accordingly, the Parties agree that the non-
breaching Party shall be entitled to temporary and permanent injunctive relief
against the breaching Party, its Affiliates, employees, officers, directors,
agents or representatives, and the other rights and remedies to which the non-
breaching Party may be entitled to at law, in equity and under this Agreement
for any violation of this Article 7. The provisions of this Article 7 shall
survive the expiration or termination of this Agreement.
ARTICLE 8
DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
--------------------------------------------
IT IS UNDERSTOOD AND AGREED THAT FIRST DATA DOES NOT REPRESENT,
WARRANT OR GUARANTEE IN ANY WAY THAT THE PERFORMANCE OF THE SUPPORT SERVICES,
ANY ADDITIONAL SERVICES OR THE SERVICES CONTEMPLATED BY ARTICLE 3 WILL BE
UNINTERRUPTED OR ERROR FREE. EXCEPT AS PROVIDED HEREIN, NO PARTY HERETO MAKES
ANY, AND EACH PARTY HERETO HEREBY EXPRESSLY DISCLAIMS ANY, REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING OUT OF OR RELATED TO THIS
AGREEMENT, INCLUDING AS TO ANY SERVICES, HARDWARE, SOFTWARE, EQUIPMENT OR
MATERIALS PROVIDED OR USED BY OR ON BEHALF OF ANY PARTY UNDER THIS AGREEMENT.
EACH PARTY HERETO EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. FIRST DATA AND COMPANY HEREBY AGREE THAT
THIS AGREEMENT INVOLVES THE PROVISIONS OF SERVICES, AND THAT THIS AGREEMENT IS A
SERVICE AGREEMENT FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE AND THEREFORE THAT
THE PROVISIONS OF THE UNIFORM COMMERCIAL CODE SHALL NOT APPLY TO THIS AGREEMENT.
ARTICLE 9
TERM AND TERMINATION
--------------------
SECTION 9.1. TERM. (a) This Agreement shall commence on the date
hereof and, subject to the earlier termination of (i) the services contemplated
in Article 3 pursuant to Section 3.1(a)
23
(including the Regulatory Compliance Services) or (ii) the Data Center Services,
the Agent Services, the Corporate Support Services, the Voice Center Disaster
Recovery Services or any Additional Services pursuant to Section 9.2(b), shall
continue for the Term, unless earlier terminated as provided in Section 9.2 or
Section 9.3.
(b) Upon the earlier of (i) the expiration of the Term or (ii) the
conditions specified in clause (ii) of Section 3.1(a) have been fulfilled, IPS
shall have no further obligation to allow Company or any MoneyGram Agent to
continue to sell the IPS Funds Transfer Service. On or before the expiration of
the earlier of the Term or the transition period contemplated by Section 9.4,
Company shall terminate on behalf of IPS all Agent Contracts between IPS and
MoneyGram Agents in respect of the IPS Funds Transfer Service or convert such
Agent Contracts into contracts between Company and MoneyGram Agents, destroy at
its expense all IPS blank financial paper (money transfer checks) not shipped to
MoneyGram Agents and perform such other tasks as are reasonably requested by
First Data for the prompt, orderly and proper wind-down of the IPS Funds
Transfer Service relationship with such MoneyGram Agents. After the expiration
of the earlier of the Term or the transition period contemplated by Section 9.4,
IPS and Company shall continue to fulfill their respective obligations under
Article 3 (including, in the case of IPS, Regulatory Compliance Services) so
long as any IPS Funds Transfer Service transactions remain uncompleted, and,
once all IPS Funds Transfer Service transactions are completed, then Article 3
shall be null and void and of no further force or effect.
SECTION 9.2. TERMINATION BY COMPANY. (a) This Agreement shall
terminate upon the occurrence of any of the following events and (i) in the case
of clause (A), (C) or (D) below, at the option of Company by written notice to
First Data and (ii) in the case of clause (B) below, immediately and without
prior written notice or any other action by Company:
(A) If First Data or any Affiliate of First Data shall fail to
perform, or repudiates or seeks to avoid or invalidate, any material
obligation to be performed by it under this Agreement, provided that (i) in
the case of any breach which is capable of being cured, or otherwise
discontinued, First Data has received notice of such breach from Company
demanding such breach be cured and First Data has not cured or discontinued
such breach within 30 days of receipt of such notice; and (ii) the Parties
have exhausted the dispute resolution proceedings described in Article 11;
24
(B) In the event of Bankruptcy of IPS;
(C) If a Governmental Body enjoins the performance by a Party of any
material obligations under this Agreement; or
(D) If Company reasonably determines that First Data is not Solvent.
(b) Notwithstanding anything to the contrary in this Agreement,
(i) if the conditions specified in clause (ii) of Section 3.1(a) have
been fulfilled, Company may terminate this Agreement in its entirety by
giving First Data 90 days' notice thereof; and
(ii) if Company shall determine that it no longer requires (1) the
Data Center Services, (2) the Agent Services, (3) the Corporate Support
Services, (4) the Voice Center Disaster Recovery Services, (5) the Voice
Center Services or (6) any Additional Services, in the case of clause (1),
(2) or (3), as a whole or any portion thereof (provided that Company may
only terminate groups of Data Center Services as described in Exhibit E),
and, in the case of clause (4) or (5), as a whole, then Company shall give
First Data prior written notice of such determination as follows:
(A) in the case of all or any portion of the Data Center
Services, 90 days' notice;
(B) in the case of all or any portion of the Agent Services, 30
days' notice;
(C) in the case of all or any portion of the Corporate Support
Services, 30 days' notice;
(D) in the case of the Voice Center Disaster Recovery Services,
30 days' notice;
(E) in the case of the Voice Center Services, 30 days' notice;
and
(F) in the case of any Additional Services, as agreed to by the
Parties.
25
Upon any such termination, the provisions of this Agreement that
relate to such Support Services or any Additional Services so terminated
shall be void and of no further force and effect and the Parties shall
effect the provisions of the last paragraph of Section 9.5. If Company
terminates all or any portion of the Data Center Services prior to the time
that First Data's obligations under Article 3 have terminated, then Company
shall provide to First Data such information at such times as First Data
reasonably requests as necessary or desirable to perform its obligations
under Article 3 (including Regulatory Compliance Services). The failure of
Company to so provide such information at the times required shall excuse
First Data from its obligations to perform under Article 3 for any period
affected by, and to the extent of, such failure by Company, and First Data
shall not be liable to Company under this Agreement in connection with
First Data's duties or obligations under Article 3.
SECTION 9.3. TERMINATION BY FIRST DATA. (a) This Agreement shall
terminate upon the occurrence of any of the following events and (i) in the case
of clause (A), (C) or (D) below, at the option of First Data by written notice
to Company and (ii) in the case of clause (B) below, immediately and without
prior written notice or any other action by First Data:
(A) If Company or any Affiliate of Company shall fail to perform, or
repudiates or seeks to avoid or invalidate, any material obligation to be
performed by it under this Agreement, provided that (i) in the case of any
breach which is capable of being cured, or otherwise discontinued, Company has
received notice of such breach from First Data demanding such breach be cured
and Company has not cured or discontinued such breach within 30 days of receipt
of such notice; and (ii) the Parties have exhausted the dispute resolution
proceedings described in Article 11;
(B) In the event of Bankruptcy of Company;
(C) If a Governmental Body enjoins the performance by a Party of any
material obligations under this Agreement; or
(D) If First Data reasonably determines that Company is not Solvent.
(b) Notwithstanding anything to the contrary in this Agreement,
First Data shall have the right to terminate the
26
Corporate Support Services described in Exhibit A-2.1 upon 60 days' prior
written notice to Company.
SECTION 9.4. ORDERLY TRANSITION. Upon termination of this Agreement
pursuant to Section 9.2(a) or 9.3(a), First Data and Company shall expeditiously
and in good faith, agree upon and document a plan providing for an orderly
transition of any or all of the obligations of First Data hereunder, as the case
may be, to a successor over a period of not less than 180 days from the date of
such termination. Such transition period shall be deemed to be part of the Term,
unless otherwise agreed to by the Parties. During such transition period, First
Data shall provide reasonable transition assistance to Company. Company shall
compensate First Data, on a time and materials basis, for such assistance, at
First Data's then prevailing rates (plus reimbursement of out-of-pocket
expenses) in addition to all other payment obligations of Company pursuant to
and in accordance with this Agreement.
SECTION 9.5. EFFECT OF TERMINATION. Upon the termination of this
Agreement, each Party shall have no further obligation to perform any obligation
hereunder to the other Party and all outstanding unpaid amounts due and owing to
First Data or Company under the terms of this Agreement shall become immediately
due and payable, provided, however, that the termination of this Agreement shall
not affect the following:
(a) The obligation of Company to pay for any services rendered or any
other obligation or liability owing or which becomes owing under this Agreement
whether the obligations arise prior to or after the date of termination,
including pursuant to Section 9.4;
(b) The provisions of Article 10 or any other indemnification
obligations of any Party;
(c) The provisions of Section 3.5, Section 5.3 and Section 9.4;
(d) The provisions of Article 7 or any other confidentiality
obligations of any Party; and
(e) The provisions of Article 11.
In addition, upon the termination of this Agreement, each Party shall
return to the other Party all copies of such Party's Confidential Information,
and shall erase all versions of the other Party's Confidential Information from
its data files,
27
in each case, other than any Confidential Information licensed to Company under
the Software License Agreement or, if applicable, the Service ▇▇▇▇ License
Agreement.
ARTICLE 10
INDEMNITIES, LIABILITY AND
LIMITS OF LIABILITY
--------------------------
SECTION 10.1. FIRST DATA'S INDEMNIFICATION. (a) Subject to the
provisions of this Article 10, First Data shall indemnify and hold harmless
Company, its Affiliates and their respective directors, officers, employees,
shareholders and permitted assigns (each, a "Company Indemnitee") from and
against any and all Loss and Expense imposed in any manner upon or asserted
against any Company Indemnitee in connection with or arising from this Agreement
to the extent that such Loss or Expense relates to or arises out of:
(i) the breach by First Data or any Affiliate of First Data of any
material covenant or agreement of First Data or any Affiliate of First Data
contained in this Agreement; or
(ii) any claim, demand or action alleging that the First Data
Equipment infringes any third Person's Proprietary Rights.
(b) Notwithstanding subsection (a) of this Section 10.1, First Data
shall not be required to indemnify, protect or hold harmless any Company
Indemnitee from and against any Loss or Expense to the extent that such Loss or
Expense arises as a result of (i) any Company Indemnitee's gross negligence or
willful misconduct, (ii) the breach by Company or any Affiliate of Company any
of its covenants or agreements contained in this Agreement or (iii) any
modification contained in the New MoneyGram Application Software or the New
Utility Software or the incapability of any such Software with the First Data
Equipment.
(c) Except as provided in Section 10.1(d), notwithstanding anything
to the contrary in this Agreement, the cumulative liability of First Data under
Section 10.1(a) relating to any and all events occurring in any one calendar
year shall not under any circumstances exceed the aggregate amount of fees paid
to First Data for its services provided hereunder performed during the
immediately preceding calendar year; and in the case of events occurring in the
remainder of the calendar year in
28
which this Agreement is executed, such liability shall not under any
circumstances exceed $2 million.
(d) Notwithstanding the limitation of liability provided in Section
10.1(c), if the liability of First Data under Section 10.1(a) arises as a result
of its gross negligence or willful misconduct in the performance of its
obligations hereunder, then the cumulative liability of First Data under Section
10.1(a) relating to any and all events occurring in any one calendar year shall
not under any circumstances exceed an amount equal to two times the aggregate
amount of fees paid to First Data for its services provided hereunder performed
during the immediately preceding calendar year; and in the case of events
occurring in the remainder of the calendar year in which this Agreement is
executed, such liability shall not under any circumstances exceed $4 million.
SECTION 10.2. COMPANY'S INDEMNIFICATION. (a) Subject to the
provisions of this Article 10, Company shall indemnify and hold harmless First
Data and its Affiliates and their respective directors, officers, employees,
shareholders and permitted assigns (each, a "First Data Indemnitee") from and
against any and all Loss and Expense imposed in any manner upon or asserted
against any First Data Indemnitee in connection with or arising from this
Agreement to the extent that such Loss or Expense relates to or arises out of:
(i) the breach by Company or any Affiliate of Company of any material
covenant or agreement of Company or any Affiliate of Company contained in
this Agreement;
(ii) any claim, demand or action alleging that any New MoneyGram
Application Software or New Utility Software, any modification to the PC
MoneyGram Application Software or any Software (other than the MoneyGram
Application Software), Company Data or Third Party Software provided by
Company or any Affiliate of Company or any portion thereof as furnished to
or used by First Data or its Affiliates under this Agreement infringes any
third Person's Proprietary Rights; provided that Company shall not be
required to indemnify and hold harmless any First Data Indemnitee to the
extent an actual or alleged infringement is caused by any First Data
Indemnitee combining any New MoneyGram Application Software or New Utility
Software or any Software (other than the MoneyGram Application Software),
Company Data or Third Party Software with any other Software without the
express consent of Company; and provided, further, that Company's
obligations hereunder shall also not apply to the extent
29
that an infringement claim is made with respect to Software (other than the
MoneyGram Application Software, the PC MoneyGram Application Software, the
IPS Application Software or the Utility Software) provided by First Data to
Company or enhancements to Software, Company Data or Third Party Software
that are requested by First Data or any Affiliate of First Data and which
are implemented using designs or specifications created by First Data or
any Affiliate of First Data;
(iii) any claim that the Business, Company or any Affiliate of Company
has violated or does not comply with any Requirements of Law, except to the
extent such violation or lack of compliance directly relates to the
services provided by First Data under this Agreement;
(iv) any claim by any third Person (including any MoneyGram Agent)
that Company breached any contractual or other legal obligation (including
any Agent Contract) owed or alleged to be owed to such third Person;
(v) the performance on and after the date hereof of all aspects of the
Business not delegated to First Data under this Agreement, including all
activities contemplated by Section 5.1; or
(vi) any application for any license as contemplated by Section
3.4(b).
(b) Notwithstanding subsection (a) of this Section 10.2, Company
shall not be required to indemnify or hold harmless any First Data Indemnitee
from and against any Loss or Expense to the extent that such Loss or Expense
arises as a result of any First Data Indemnitee's gross negligence or willful
misconduct or the breach by First Data or any Affiliate of First Data of any of
its covenants or agreements contained in this Agreement.
(c) Except as provided in Section 10.2(d), notwithstanding anything
to the contrary in this Agreement, the cumulative liability of Company under
Sections 10.2(a)(i) and (ii) relating to events occurring in any one calendar
year shall not under any circumstances exceed the aggregate amount of fees paid
to First Data for its services provided hereunder performed during the
immediately preceding calendar year; and in the case of events occurring in the
remainder of the calendar year in which this Agreement is executed, such
liability shall not under any circumstances exceed $2 million.
30
(d) Notwithstanding the limitation of liability provided in Section
10.2(c), if the liability of Company under Section 10.2(a)(i) or (ii) arises as
a result of its gross negligence or willful misconduct in the performance of its
obligations hereunder, then the cumulative liability of Company under Sections
10.2(a)(i) and (ii) relating to events occurring in any one calendar year shall
not under any circumstances exceed an amount equal to two times the aggregate
amount of fees paid to First Data for its services provided hereunder performed
during the immediately preceding calendar year; and in the case of events
occurring in the remainder of the calendar year in which this Agreement is
executed, such liability shall not under any circumstances exceed $4 million.
SECTION 10.3. NOTIFICATION. (a) Any Person (the "Indemnified
Party") seeking indemnification hereunder shall give promptly to the Party
obligated to provide indemnification to such Indemnified Party (the
"Indemnifying Party") a notice (a "Claim Notice") describing in reasonable
detail the facts giving rise to any claim for indemnification hereunder and
shall include in such Claim Notice (if then known) the amount or the method of
computation of the amount of such claim, and a reference to the provision of
this Agreement or any other agreement, document or instrument executed hereunder
or in connection herewith upon which such claim is based; provided, however,
that a Claim Notice in respect of any action at law or suit in equity by or
against a third Person as to which indemnification will be sought shall be given
promptly after the action or suit is commenced.
(b) After the giving of any Claim Notice pursuant hereto, the amount
of indemnification to which an Indemnified Party shall be entitled under this
Article 10 shall be determined: (i) by the written agreement between the
Indemnified Party and the Indemnifying Party; (ii) by a final judgment, decree
or decision pursuant to the dispute resolution procedures referred to in Article
11 and/or of any court of competent jurisdiction; or (iii) by any other means to
which the Indemnified Party and the Indemnifying Party shall agree. The
judgment or decree of a court shall be deemed final when the time for appeal, if
any, shall have expired and no appeal shall have been taken or when all appeals
taken shall have been finally determined. The Indemnified Party shall have the
burden of proof in establishing the amount of Loss and Expense suffered by it.
(c) If a claim, suit or proceeding by a third Person for which
indemnification may be available under this Agreement is made or filed against
an Indemnified Party, the Indemnified Party shall promptly notify the
Indemnifying Party in writing of
31
such claim, suit or proceeding. The Indemnifying Party, within 30 days, or such
shorter period as is required to avoid any prejudice in the claim, suit or
proceeding, after the notice, may elect to defend, compromise or settle the
third Person claim, suit or proceeding at its expense. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, within ten Business
Days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the third Person claim. In any third Person claim, suit or proceeding which the
Indemnifying Party has elected to defend, compromise or settle, the Indemnifying
Party shall not after such election be responsible for the expenses of legal
counsel for the Indemnified Party, but the Indemnified Party may participate
therein and retain counsel at its own expense. In any third Person claim, suit
or proceeding the defense of which the Indemnifying Party shall have assumed,
the Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the matter without the consent of the
Indemnifying Party and the Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement affecting the Indemnified Party
without the written consent of the Indemnified Party to the extent that the
judgment or settlement involves more than the payment of money. The Indemnified
Party shall provide to the Indemnifying Party all information, assistance and
authority reasonably requested in order to evaluate any third Person claim, suit
or proceeding and effect any defense, compromise or settlement. To the extent
the Indemnifying Party elects not to defend such proceeding, claim or demand,
and the Indemnified Party defends against or otherwise deals with any such
proceeding, claim or demand, the Indemnified Party may retain counsel, at the
expense of the Indemnifying Party, and control the defense of such proceeding.
After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
time in which to appeal therefrom has expired, or a settlement shall have been
consummated, or the Indemnified Party and the Indemnifying Party shall arrive at
a binding agreement with respect to each separate matter alleged to be
indemnified by the Indemnifying Party hereunder, the Indemnified Party shall
forward to the Indemnifying Party notice of any sums due and owing by it with
respect to such matter and the Indemnifying Party shall pay all of the sums owed
to the Indemnified Party by wire transfer, certified or bank cashier's check
within 30 days after the date of such notice.
SECTION 10.4. CLAIMS PERIOD. No cause of action, dispute or claim
for indemnification under this Agreement may be
32
asserted or made against any Party or submitted to arbitration on a date later
than: (a) one year after the date in which facts giving rise to such cause of
action, dispute or claim are discovered or, with the exercise of due diligence,
should reasonably have been discovered, or if such event for which
indemnification is claimed is an action or proceeding brought against the
Indemnified Party, the end of the related notification period provided in
Section 10.3; or (b) one year after the earlier of the termination of this
Agreement or the expiration of the Term.
SECTION 10.5. SUBROGATION. If an Indemnifying Party shall be
obligated to indemnify an Indemnified Party pursuant to Sections 10.1 or 10.2,
the Indemnifying Party shall, upon payment of such indemnity in full, be
subrogated to all rights of the Indemnified Party with respect to the claims and
defenses to which such indemnification relates.
SECTION 10.6. EXCLUSIVE REMEDY. Except for (i) remedies that cannot
be waived as a matter of law and injunctive and provisional relief, (ii) the
provisions of Sections 5.1(c), 7.6, 9.2 and 9.3 and (iii) any Party's obligation
to make any payments or reimbursements hereunder (including the payment of Fees,
Reimbursable Expenses and Taxes and reimbursements pursuant to Article 3), this
Article 10 shall be the sole and exclusive remedy for breach of this Agreement,
including with respect to any claim, demand, cause of action, debt, Cost, Loss,
Expense or liability subject thereto.
SECTION 10.7. NO SPECIAL DAMAGES. IN NO EVENT SHALL FIRST DATA,
COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES BE LIABLE FOR ANY CONSEQUENTIAL
DAMAGES UNDER THIS AGREEMENT, WHICH ARE HEREBY EXCLUDED BY AGREEMENT OF THE
PARTIES REGARDLESS OF WHETHER FIRST DATA, COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES HAS BEEN ADVISED, OR COULD HAVE FORESEEN, OF THE POSSIBILITY SUCH
DAMAGES; PROVIDED THE FOREGOING EXCLUSION SHALL NOT APPLY TO CONSEQUENTIAL
DAMAGES INCURRED BY ANY PARTY AS A RESULT OF THE MISAPPROPRIATION OR MISUSE OF
SUCH PARTY'S CONFIDENTIAL INFORMATION. THE FOREGOING REPRESENTS AN EXPRESS
ALLOCATION OF RISK BETWEEN THE PARTIES.
33
ARTICLE 11
DISPUTE RESOLUTION
------------------
SECTION 11.1. DISPUTE RESOLUTION.
(a) Informal Dispute Resolution. Subject to Section 11.2, any
dispute, controversy or claim between Company and First Data arising from or in
connection with this Agreement, the Software License Agreement or, if
applicable, the Service ▇▇▇▇ License Agreement whether based on contract, tort,
common law, equity, statute, regulation, order or otherwise ("Dispute") shall be
resolved in accordance with this Section 11.1:
(i) Upon written request of Company or First Data, each Party will
appoint a designated representative whose task it will be to meet for the
purpose of endeavoring to resolve such Dispute ("Level 1 Review"). The
designated representatives shall meet as often as the Parties reasonably
deem necessary to discuss the Dispute and negotiate in good faith in an
effort to resolve the Dispute without the necessity of any formal
proceeding;
(ii) If resolution of the Dispute cannot be resolved within 15 days
of the first Level 1 Review meeting, then the issue shall be brought before
a committee (the "Senior Level Policy Team") comprised of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, representing First Data, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇, representing Company (or comparable level successors to
these individuals, as appropriate) ("Level 2 Review"). The Senior Level
Policy Team shall meet as often as necessary to discuss the Dispute and
negotiate in good faith to resolve the Dispute. The members of the Senior
Level Policy Team may be substituted at the discretion of First Data or
Company, as the case may be, upon ten days' written notice.
(iii) Arbitration for the resolution of a Dispute may not be commenced
until the earlier of:
(A) the date on which the Senior Level Policy Team concludes in
good faith that amicable resolution through continued negotiation of
the matter does not appear likely; or
(B) 30 days after the date the Dispute became subject to the
review of the Senior Level Policy Team.
34
(b) Arbitration. Any Dispute that remains unresolved after compliance
with the provisions of Section 11.1(a), regardless of the magnitude thereof or
the amount in controversy or whether such Dispute would otherwise be considered
justiciable or ripe for resolution by a court or arbitral tribunal, shall be
submitted to, and finally determined by, arbitration in accordance with the
following provisions of this Section 11.1(b):
(i) Any such arbitration shall be conducted by the AAA in
accordance with the AAA Rules, except as the AAA Rules conflict with
the provisions of this Article 11, in which event the provisions of
this Article 11 shall control.
(ii) The arbitral panel (the "Panel") shall consist of three
arbitrators independent of the Parties (the "Arbitrators"). The
Arbitrators shall be appointed pursuant to AAA's procedure for
selecting arbitrators as described in its pamphlet entitled Resolving
Computer Disputes: A Guide to Arbitration or any other publication of
the AAA relevant to the nature of the Dispute. Each Arbitrator shall
have at least ten years' experience as a senior manager in a data
processing company or a consumer payment services company (the "Basic
Qualifications").
(iii) Should an Arbitrator refuse or be unable to proceed with
arbitration proceedings as called for by this Section 11.1(b), the
Arbitrator shall be replaced by the AAA. Each such replacement
Arbitrator shall satisfy the Basic Qualifications. If an Arbitrator is
replaced after the arbitration hearing has commenced, then a rehearing
shall take place in accordance with the provisions of this Section
11.1(b) and the AAA Rules.
(iv) The arbitration shall be conducted in Denver, Colorado or
in such other location as the Parties may designate by mutual written
consent; provided, however, that the Panel may from time to time
convene, carry on hearings, inspect property or documents, and take
evidence at any location which the Panel deems appropriate.
(v) The Panel may in its discretion order a pre-hearing exchange
of information including production of documents, exchange of
summaries of testimony or exchange of statements of position, and
shall schedule promptly all discovery and other procedural steps and
otherwise assume case management initiative and control to effect an
efficient and expeditious resolution of the Dispute.
35
(vi) At any oral hearing of evidence in connection with an
arbitration pursuant to this Section 11.1(b), each Party and its legal
counsel shall have the right to examine its witnesses and to cross-examine
the witnesses of the other Party. No testimony of any witness shall be
presented in written form unless the opposing Party or Parties shall have
the opportunity to cross-examine such witness, except as the Parties
otherwise agree in writing or except under extraordinary circumstances
where, in the opinion of the Panel, the interests of justice require a
different procedure.
(vii) Within 15 days after the closing of the arbitration hearing,
the Panel shall prepare and distribute to the Parties a writing setting
forth the Panel's findings of facts and conclusions of law relating to the
Dispute, including the reasons for the giving or denial of any award.
(viii) Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a Party nor an arbitrator may disclose the existence,
content or results of any arbitration hereunder without the prior written
consent of both Parties.
(ix) A judgment upon the award rendered by the Panel may be entered
in any court having jurisdiction thereof.
(x) First Data and Company agree to share equally the cost of any
administrative fee, any compensation of the Arbitrators and any expenses of
any witnesses or proof produced at the direct request of the Panel.
(xi) The Parties shall each bear all their own Costs of arbitration,
including legal fees.
(xii) The Panel shall not have the power to award Consequential
Damages.
(xiii) The Federal Arbitration Act, 9 U.S.C. Sections 1 through 14,
except as modified hereby, shall govern the interpretation and enforcement
of this Section 11.1(b).
Notwithstanding the foregoing, the Parties agree to continue
performing their respective obligations under this Agreement, the Software
License Agreement and the Service ▇▇▇▇ License Agreement while the Dispute is
being resolved unless and until such obligations are terminated or expire in
accordance with the provisions hereof.
36
SECTION 11.2. RECOURSE TO COURTS AND OTHER REMEDIES. Notwithstanding
the Dispute resolution procedures contained in Section 11.1, either Party may
apply to any court having jurisdiction (i) to enforce this agreement to
arbitrate, (ii) to seek provisional injunctive relief so as to enforce any
agreements in this Agreement, the Software License Agreement or the Service ▇▇▇▇
License Agreement until the arbitration award is rendered or the Dispute is
otherwise resolved, (iii) to avoid the expiration of any applicable limitation
period, (iv) to preserve a superior position with respect to other creditors or
(v) to challenge or vacate any final judgment, award or decision of the Panel
that does not comport with the express provisions of Section 11.1.
SECTION 11.3. AFFILIATES. Each Party agrees that for purposes of
this Article 11, the terms First Data and Company shall also include their
respective Affiliates, who shall be subject to the Dispute resolution procedures
of this Article 11.
SECTION 11.4. EXCEPTION TO ARTICLE 11. This Article 11 shall not
apply to any dispute or controversy arising out of Section 3.3(c). Such
disputes and controversies shall be settled in accordance with the dispute
resolution procedures of Section 3.3(c).
ARTICLE 12
MISCELLANEOUS
-------------
SECTION 12.1. EXPENSES. First Data shall bear all costs incurred by
or on behalf of each Party for services rendered on or prior to the date hereof
in connection with the negotiation and preparation of this Agreement, including
fees and expenses of financial consultants, accountants and counsel. Except as
otherwise provided herein, each of the Parties shall pay all Costs incurred by
it or on its behalf in connection with its performance and compliance with all
its obligations hereunder, including fees and expenses of its own financial
consultants, accountants and counsel.
37
SECTION 12.2. RELATIONSHIP OF PARTIES. (a) First Data, in
furnishing services to Company under this Agreement, is acting only as an
independent contractor. Except as set forth in this Agreement, First Data does
not and shall not undertake by this Agreement or otherwise to perform any
obligation of Company, whether regulatory or contractual, or assume any
responsibility for Company's business or operations. First Data has the sole
and exclusive right and obligation to supervise, manage, contract, direct,
procure, perform or cause to be performed, all work to be performed by First
Data under this Agreement, unless otherwise provided herein.
(b) Nothing in this Agreement shall be deemed by the Parties, or by
any third Person, to create a partnership, joint venture or similar relationship
between or among any of the Parties and, except as otherwise expressly provided
herein, no Party shall be deemed to be the agent of any other Party, it being
understood and agreed that neither the method of computing compensation nor any
other provision contained herein shall be deemed to create any relationship
between the Parties hereto other than the relationship of independent parties
contracting for services. No Party has, and shall not hold itself out as
having, any authority to enter into any contract or create any obligation or
liability on behalf of, in the name of, or binding upon any other Party except
as specifically provided herein.
SECTION 12.3. FORCE MAJEURE. Each Party shall be excused from the
performance of obligations (other than payment obligations) under this
Agreement, for any period and to the extent that it is prevented, restricted or
delayed from or interfered with in performing any of its obligations under this
Agreement, in whole or in part, as a result of labor disputes, strikes, work
stoppages or delays, acts of God, severe weather, failures or fluctuations in
utilities or telecommunications equipment or service, shortages of materials or
rationing, civil disturbance, acts of public enemies, blockade, embargo or any
law, order, proclamation, regulation, ordinance or court order or requirement
having legal effect of any judicial authority or Governmental Body, or any other
act or omission whatsoever, whether similar or dissimilar to the foregoing,
which are beyond the reasonable control of such Party (each, a "Force Majeure
Event"), and such nonperformance shall not be a breach or default under this
Agreement, or a ground for termination of this Agreement. Each Party shall give
the other Party immediate notice of any Force Majeure Event affecting the
notifying Party's ability to perform under this Agreement and shall promptly
update
38
the other Party regarding the notifying Party's efforts to mitigate and resolve
such Force Majeure Event.
SECTION 12.4. ENTIRE AGREEMENT. This Agreement, the Software License
Agreement and the Service ▇▇▇▇ License Agreement, including the Exhibits hereto
and thereto, constitute the entire agreement among the Parties with regard to
the subject matter hereof and thereof, and supersede all other prior agreements,
understandings or discussions among the Parties concerning such subject matter.
This Agreement may not be amended or modified except in writing signed by an
authorized representative of each Party to this Agreement.
SECTION 12.5. ASSIGNMENT. Except as otherwise provided herein, the
rights and obligations of both First Data and Company under this Agreement are
personal and not assignable, either voluntarily or by operation of law, without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, (i) First Data may assign
its rights and delegate its duties and obligations hereunder to any of its
Affiliates, provided such Affiliate remains an Affiliate of First Data after
such an assignment and that notwithstanding such assignment IPS and FDC shall
remain primarily liable for all of their respective obligations hereunder; and
(ii) if the conditions specified in clause (ii) of Section 3.1(a) have been
fulfilled, the Company may assign all its rights and delegate its duties and
obligations hereunder to any of its Affiliates or to any Person who purchases
substantially all of the Business, provided the assignee agrees to be bound in
writing to the terms and conditions set forth in this Agreement, and,
notwithstanding such assignment, the Company shall remain primarily liable for
all of its obligations hereunder. Except in respect of a Company Indemnitee or
a First Data Indemnitee entitled to indemnification under Article 10, nothing in
this Agreement is intended to or shall be construed to confer upon any Person
other than the Parties and their respective successors and permitted assigns,
any right, remedy or claim under or by reason of this Agreement.
SECTION 12.6. NOTICES. All notices which any Party may be required
or desire to give to any other Party shall be in writing and shall be given by
personal service, telecopy, registered mail or certified mail (or its
equivalent) or overnight courier to the other Party at its respective address or
telecopy telephone number set forth below. Mailed notices and notices by
overnight courier shall be deemed to be given upon actual receipt by the Party
to be notified. Notice delivered by telecopy shall be confirmed in writing by
overnight courier and
39
shall be deemed to be given upon actual receipt by the Party to be notified.
In the case of First Data:
First Data Technologies, Inc.
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Willing
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
First Data Corporation
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇. NP 30
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
In the case of Company:
MoneyGram Payment Systems, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
MoneyGram Payment Systems, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
A Party may from time to time change its address for notification purposes by
giving the other Party prior written notice of the new address and the date upon
which it shall become effective.
SECTION 12.7. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed
40
an original but all of which together shall constitute one and the same
instrument.
SECTION 12.8. GOVERNING LAW. Except as otherwise specified in
Article 11, this Agreement shall be governed by and construed in accordance with
the internal laws (as opposed to the conflict of laws provisions) of the State
of New York.
SECTION 12.9. MEDIA RELEASES. All media releases, public
announcements and public disclosures by the Parties or their respective
employees, representatives or agents relating to this Agreement or its subject
matter, including promotional or marketing material and annual account reports,
but not including any announcement intended solely for internal distribution by
any of the Parties, or any disclosure required by Requirements of Law or
accounting or regulatory requirements beyond the reasonable control of any of
the Parties, shall be coordinated with and approved in writing by the other
Parties prior to the release thereof.
SECTION 12.10. WAIVER. Any term or provision of this Agreement may
be waived, or the time for its performance may be extended, by the Party
entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any Party,
it is authorized in writing by an authorized representative of such Party. The
failure of any Party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the
right of any Party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach. Except as specifically provided otherwise, all
remedies provided for in this Agreement shall be cumulative and in addition to
and not in lieu of any other remedies available to any Party at law, in equity
or otherwise.
SECTION 12.11. SEVERABILITY. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.
41
SECTION 12.12. CONSTRUCTION RULES. The Parties hereto represent that
in the negotiation and drafting of this Agreement they have been represented by
and relied upon the advice of counsel of their choice. The Parties affirm that
their counsel have had a substantial role in the drafting and negotiation of
this Agreement and, therefore, the rule of construction to the effect that any
ambiguities are to be resolved against the drafting Person shall not be employed
in the interpretation of this Agreement, including any Exhibit.
42
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
signed and delivered by its duly authorized officer as of the date first written
above.
MONEYGRAM PAYMENT SYSTEMS, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
FIRST DATA TECHNOLOGIES, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
INTEGRATED PAYMENT SYSTEMS INC.
By: _____________________________
Name: ___________________________
Title: __________________________
43
