EXHIBIT 10.4
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HUMAN RESOURCES AGREEMENT
dated as of December 10, 1996
among
FIRST DATA CORPORATION
INTEGRATED PAYMENT SYSTEMS INC.
and
MONEYGRAM PAYMENT SYSTEMS, INC.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS 1
ARTICLE 2 ALLOCATION OF LIABILITIES 5
ARTICLE 3 SAVINGS PLAN 5
Section 3.1. Establishment of Company Savings Plan 5
Section 3.2. Transfer of Account Balances from FDC Savings
Plan to Company Savings Plan 6
ARTICLE 4 PENSION PLAN 6
ARTICLE 5 WELFARE BENEFITS 6
Section 5.1. Welfare Benefits Provided Under Company Plans 6
Section 5.2. Accounts under FDC Cafeteria Plan 7
Section 5.3. Treatment of COBRA Beneficiaries. 7
ARTICLE 6 MISCELLANEOUS PLANS AND AGREEMENTS 8
Section 6.1. Stock Option Plans 8
Section 6.2. Bonus and Incentive Plans. 8
Section 6.3. Workers' Compensation 8
Section 6.4. Vacation Pay Policy 9
Section 6.5. Tuition Reimbursement Plan. 9
Section 6.6. Severance Pay Plan. 9
ARTICLE 7 INDEMNIFICATION 9
Section 7.1. Indemnification 9
Section 7.2. Notification 10
Section 7.3. Claims Period 12
Section 7.4. Subrogation 12
Section 7.5. Exclusive Remedy 12
Section 7.6. No Special Damages 13
Section 7.7. Timely Payment 13
ARTICLE 8 MISCELLANEOUS 13
Section 8.1. No Rights 13
Section 8.2. Corporate Action; Delegation of Authority 13
Section 8.3. No Solicitation 13
Section 8.4. Termination 14
Section 8.5. Survival of Obligations 14
Section 8.6. Notices 14
Section 8.7. Successors and Assigns 15
Section 8.8. Access to Records after Closing 16
Section 8.9. Entire Agreement; Amendments 16
Section 8.10. Partial Invalidity 16
Section 8.11. Execution in Counterparts 17
Section 8.12. Further Assurances 17
Section 8.13. Governing Law 17
HUMAN RESOURCES AGREEMENT
THIS HUMAN RESOURCES AGREEMENT (this "Agreement") is dated as of
December 10, 1996, among First Data Corporation, a Delaware corporation ("FDC"),
Integrated Payment Systems Inc., a Delaware corporation and a wholly owned
subsidiary of FDC ("IPS"), and MoneyGram Payment Systems, Inc., a Delaware
corporation (the "Company").
W I T N E S S E T H :
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WHEREAS, Company, IPS and 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 in Article I of the
Contribution Agreement); and
WHEREAS, IPS intends to make a public offering of its shares of
Company common stock in a transaction that will cause Company to cease to be a
member of the FDC Group (as defined below); and
WHEREAS, following the date on which Company ceases to be a member of
the FDC Group, FDC and Company intend to cause certain of their respective plans
to transfer accrued liabilities and assets relating to such liabilities between
such plans; and
WHEREAS, the Parties (as defined below) intend that Company provide
certain benefits to certain employees after Company is no longer a member of the
FDC Group; and
WHEREAS, FDC, IPS and Company wish to enter into this Agreement in
order to effect such intentions.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the sufficiency of which is
acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
In this Agreement, unless the context otherwise requires, the
capitalized terms used herein shall have the respective meanings set forth above
in the preamble or specified or referred to in this Article 1, except that any
capitalized term used but not defined herein shall have the meaning assigned to
such term in the Contribution Agreement. 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 heading 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, references to Articles and Sections
means the Articles and Sections of this Agreement. Unless the context clearly
indicates otherwise, the word "including" means "including but not limited to".
"Affected Business Employee" means any (i) any "MoneyGram Business
Employee" as defined in Section 5.7 of the Contribution Agreement, and (ii) any
individual whose relationship with Company or any Affiliate of Company is, as of
the Effective Date, under common law that of an employee, including any such
individual who on the Effective Date is not actively at work on account of
short-term disability or approved leave of absence, other than a nonresident
alien who receives no earned income from Company, or an Affiliate thereof,
constituting income from sources within the United States.
"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.
"Agreement" means this Agreement.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and any applicable state law requiring continuation coverage
under a medical plan.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Company" means MoneyGram Payment Systems, Inc., a Delaware
corporation, and any corporation which shall succeed to the business of such
corporation.
"Company Cafeteria Plan" means the MoneyGram Payment System, Inc.
Employee Welfare Benefit Plan.
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"Company Group" means Company and (a) any corporation which is a
member of the same controlled group of corporations (within the meaning of
section 414(b) of the Code) as Company, (b) a trade or business (whether or not
incorporated) under common control (within the meaning of section 414(c) of the
Code) with Company, (c) any organization (whether or not incorporated) which is
a member of an affiliated service group (within the meaning of section 414(m) of
the Code) which includes Company, a corporation described in clause (a) of this
definition or a trade or business described in clause (b) of this definition, or
(d) any other entity which is required to be aggregated with Company pursuant to
regulations promulgated under section 414(o) of the Code.
"Company Indemnified Parties" shall mean any Company Group member, its
officers, directors and employees, each of Company's Employee Benefit Plans and
any contract administrator or service provider for any such plan (and the agents
and employees of such administrators and providers).
"Company Plan" means the Company Cafeteria Plan, the Company Savings
Plan and the Company Welfare Plans, and any other Employee Benefit Plan
contributed to or maintained at any time by Company or its Affiliates.
"Company Savings Plan" means the defined contribution plan which shall
be established by Company after the Effective Date for the benefit of certain
eligible employees.
"Company Welfare Plans" means the welfare benefit plans established by
Company following the Effective Date which provide benefits which correspond to
benefits provided under the FDC Welfare Plans.
"Effective Date" means the date on which Company ceases to be a member
of the FDC Group.
"Employee Benefit Plan" means any plan, program, agreement or
arrangement providing compensation or benefits to employees or their
beneficiaries or dependents, including but not limited to any "employee benefit
plan" within the meaning of section 3(3) of ERISA, and any cash or stock bonus,
deferred compensation, stock option, stock purchase disability, tuition
reimbursement, vacation, cafeteria or severance plan, arrangement or program.
"ERISA" means the Employee Retirement Income Security Act of 1974 as
amended.
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"FDC Cafeteria Plans" means the First Data Corporation Health Care
Reimbursement Account Plan, the First Data Corporation Dependent Care Account
Plan and the First Data Corporation Flexible Benefit Plan.
"FDC Group" means FDC and (a) any corporation which is a member of the
same controlled group of corporations (within the meaning of section 414(b) of
the Code) as FDC, (b) a trade or business (whether or not incorporated) under
common control (within the meaning of section 414(c) of the Code) with FDC, (c)
any organization (whether or not incorporated) which is a member of an
affiliated service group (within the meaning of section 414(m) of the Code)
which includes FDC, a corporation described in clause (a) of this definition or
a trade or business described in clause (b) of this definition, or (d) any other
entity which is required to be aggregated with FDC pursuant to regulations
promulgated under section 414(o) of the Code.
"FDC Indemnified Parties" shall mean any FDC Group member, its
officers, directors and employees, each of FDC's Employee Benefit Plans and any
contract administrator or service provider for any such plan (and the agents and
employees of such administrators and providers).
"FDC Pension Plan" means the First Data Corporation Retirement Plan.
"FDC Plan" means the FDC Cafeteria Plan, the FDC Pension Plan, the FDC
Savings Plan, the FDC Welfare Plans and any other Employee Benefit Plan
maintained or contributed to by FDC and any other employee benefit plan or
program maintained by FDC that immediately before the Effective Date covered or
provided benefits to any Affected Business Employee or any dependent or
beneficiary thereof.
"FDC Savings Plan" means First Data Corporation Incentive Savings
Plan.
"FDC Welfare Plans" means an "employee welfare plan" as defined in
section 3(1) of ERISA maintained or contributed to by FDC and which covers or
otherwise provides benefits to any Affected Business Employee or the dependents
or beneficiaries thereof. For purposes of this Agreement, any plan, program or
policy providing for severance pay or benefits shall be treated as an "employee
welfare plan" without regard to whether such plan, program or policy is in fact
subject to ERISA.
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"Losses" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges.
"Other Agreements" shall mean the Contribution Agreement among the
Parties and the Operations Agreement among Company, IPS and First Data
Technologies, Inc.
"Party" means FDC, IPS or Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or Governmental Body.
"Transfer Date" means December 21, 1996.
ARTICLE 2
ALLOCATION OF LIABILITIES
Except as otherwise provided in this Agreement or the Other
Agreements, the obligations and liabilities of FDC, Company and their respective
Affiliates under the applicable FDC Plans and Company Plans shall be determined
pursuant to the terms of such plans as in effect on the Effective Date.
ARTICLE 3
SAVINGS PLAN
SECTION 3.1. ESTABLISHMENT OF COMPANY SAVINGS PLAN. On the Transfer
Date, each Affected Business Employee shall cease to accrue any additional
benefit under the FDC Savings Plan. Company shall take any and all action
necessary to establish the Company Savings Plan effective on the Transfer Date
(including, but not limited to, any and all action necessary to enable Company
to administer such plan on the Transfer Date) and to obtain as soon thereafter
as is administratively practicable a determination letter from the Internal
Revenue Service stating that such plan is, as of the Transfer Date, qualified
under section 401(a) of the Code. The Company Savings Plan shall contain such
terms and conditions as Company shall determine, provided that the Company
Savings Plan shall provide that (i) any Affected Business Employee who
immediately before the Transfer Date is a participant in the FDC Savings Plan
shall be on the Transfer Date a participant in the Company Savings Plan, (ii)
periods of employment with the FDC Group prior to the Transfer Date shall be
taken into account under the Company Savings Plan as if it were employment by
the Company Group for purposes of determining an individual's eligibility to
participate and such individual's
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vested interest in his or her accounts under such plan, (iii) the Company
Savings Plan shall contain such provisions, including optional forms of benefit,
as are reasonably necessary or appropriate in the opinion of FDC and Company, to
allow the transfer of accounts described in Section 3.2, (iv) the interest of
each Affected Business Employee (or the beneficiaries thereof) under the Company
Savings Plan in any amount transferred thereto from the FDC Savings Plan
(including any future earnings thereon) shall be fully vested and nonforfeitable
and (v) subject to applicable law and the provisions of the FDC Savings Plan,
the account balances (including outstanding loans) of each Affected Business
Employee shall be spun off from the FDC Savings Plan and merged into the Company
Savings Plan within three months of the Transfer Date.
SECTION 3.2. TRANSFER OF ACCOUNT BALANCES FROM FDC SAVINGS PLAN TO
COMPANY SAVINGS PLAN. Subject to applicable law and the provisions of the FDC
Savings Plan, not later than the first day of the second calendar month
beginning after the Transfer Date, or effective as of any other date as agreed
to in writing by the plan administrator for the FDC Savings Plan and the plan
administrator for the Company Savings Plan, the account balances (including
outstanding loans) of all Affected Business Employees and any beneficiaries
thereof shall be transferred from the FDC Savings Plan to the Company Savings
Plan in the manner prescribed by section 414(l) of the Code. As of the effective
date of such transfer, the Company Savings Plan shall assume all obligations and
liabilities of the FDC Savings Plan to the Affected Employees and their
beneficiaries, and the FDC Plan shall have no further obligations or liabilities
with respect thereto.
ARTICLE 4
PENSION PLAN
Each Affected Business Employee shall be treated as having terminated
employment with an "Employer" as defined in the FDC Pension Plan as of the
Transfer Date, and thereafter, such employees shall be entitled to distributions
thereunder as provided pursuant to the terms thereof.
ARTICLE 5
WELFARE BENEFITS
SECTION 5.1. WELFARE BENEFITS PROVIDED UNDER COMPANY PLANS. On the
Effective Date, each Affected Business Employee shall cease to accrue any
additional benefit under the FDC Welfare Plans. On the Effective Date, Company
shall establish the Company Welfare Plans to the extent such plans are not
already in existence prior to the Effective Date. The Company
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Welfare Plans shall duplicate the types of benefits (but shall not be required
by this Agreement to duplicate the amount or level of benefits) provided by the
FDC Welfare Plans pursuant to such terms and conditions as the Company shall
determine, provided that (i) each Affected Business Employee who immediately
before the Effective Date is covered by a FDC Welfare Plan shall on the
Effective Date be eligible for coverage under the comparable Company Welfare
Plan, (ii) periods of employment with the FDC Group prior to the Effective Date
shall be taken into account for all purposes under the Company Welfare Plans as
if it were employment by the Company Group, (iii) any amounts paid or incurred
by Affected Employees during 1996 under the FDC Welfare Plans shall be taken
into account under the Company Welfare Plans for purposes of satisfying
deductibles and determining whether maximum out-of-pocket or similar
requirements have been satisfied and (iv) no condition of an Affected Business
Employee covered by the applicable FDC Welfare Plan shall be excluded from
coverage under the applicable Company Welfare Plans as a pre-existing condition.
On the Effective Date, Company shall assume and be responsible for all
liabilities and obligations to Affected Business Employees in respect of claims
made under the applicable Company Welfare Plan by or on behalf of Affected
Business Employees on and after the Effective Date. FDC shall, pursuant to the
terms of the applicable FDC Welfare Plan, retain responsibility for all claims
relating to Affected Business Employees made up to, but not including, the
Effective Date.
SECTION 5.2. ACCOUNTS UNDER FDC CAFETERIA PLAN. On the Effective
Date, Company shall establish the Company Cafeteria Plan. On the Effective Date,
each Affected Business Employee shall cease to accrue any additional benefit
under the FDC Cafeteria Plans. The Company Cafeteria Plan shall contain such
terms and conditions as Company shall determine, provided that any Affected
Business Employee who was immediately before the Effective Date a participant in
any FDC Cafeteria Plan shall be eligible to be a participant in the
corresponding portion of the Company Cafeteria Plan on the Effective Date. On
and after the Effective Date, the Company Cafeteria Plan shall assume and be
responsible for any claims under, and no Affected Business Employee shall be
entitled to submit any further claims under, any FDC Cafeteria Plan to the
extent of any balance to the credit of such employee under any FDC Cafeteria
Plan as of the Effective Date, and each Affected Business Employee shall be
credited with an opening balance under the corresponding portion of the Company
Cafeteria Plan as of the Effective Date equal to the balance, if any, to the
benefit of such employee under such FDC Cafeteria Plan as of the Effective Date.
SECTION 5.3. TREATMENT OF COBRA BENEFICIARIES. The appropriate
Company Welfare Plans shall retain or assume, as the
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case may be, any and all obligations for and liabilities to any individual
claiming coverage or benefits with respect to welfare benefits on account of a
relationship or former relationship with an Affected Business Employee pursuant
to COBRA or any similar provision of federal or state law requiring continued
coverage of such individuals. Any provisions of this Agreement applicable to
Affected Business Employees also shall be applicable in determining the rights
of or benefits provided to any persons claiming coverage or benefits with
respect to the coverage provided to such Affected Business Employees pursuant to
COBRA or any similar provision of federal or state law requiring continued
coverage of such persons.
ARTICLE 6
MISCELLANEOUS PLANS AND AGREEMENTS
SECTION 6.1. STOCK OPTION PLANS. On the Transfer Date, Company's and
its Affiliates' employees shall no longer be eligible to receive options under
the terms of the First Data Corporation 1992 Long-Term Incentive Plan. Affected
Business Employees who hold options under such plans shall be treated as having
terminated their employment with the FDC Group on the Transfer Date, and any
stock options remaining outstanding thereunder that are not fully exercisable
pursuant to their terms shall become fully exercisable on the Transfer Date for
the remainder of the post-termination of employment period specified therein.
SECTION 6.2. BONUS AND INCENTIVE PLANS. (a) Company and its
Affiliates shall retain or assume, as the case may be, all obligations to pay
bonuses or incentive compensation to or on behalf of Affected Business Employees
that are accrued or accruable under generally accepted accounting principles
consistently applied on the books of FDC, Company or their Affiliates as of the
Effective Date. Except as set forth in paragraph (b) below, after the Effective
Date, FDC shall have no further obligation for the payment of any such bonuses
or incentive compensation.
(b) IPS agrees to pay to Company, on or before thirty (30) days after
the Effective Date, an amount equal to the product of (i) the number of days
from January 1, 1996 to the Effective Date (inclusive) and (ii) $2,085.
SECTION 6.3. WORKERS' COMPENSATION. (a) FDC shall retain the
responsibility for all claims relating to Company employees and former Company
employees relating to incidents occurring up to but not including the Effective
Date (including, but not limited to, claims which are filed after the Effective
Date but which relate to incidents occurring prior to the
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Effective Date). Any amount by which actual claims expenses vary from the
reserve established by FDC for such expenses for periods prior to the Effective
Date shall be retained by FDC.
(b) Company shall assume responsibility for all claims relating to
Company employees and former employees under applicable workers' compensation
laws relating to periods beginning on the Effective Date. Company shall take any
and all action necessary to effect timely return to work for all Company
employees and former Company employees who are on a leave of absence from
employment during which they were entitled to receive workers' compensation
(including, but not limited to, persons with respect to whom FDC has the
liability to pay workers' compensation claims).
SECTION 6.4. VACATION PAY POLICY. Company shall assume liability for
accrued but unpaid vacation of Affected Business Employees, determined under
generally accepted accounting principles consistently applied, as of the
Effective Date. After the Effective Date, it is expected that Company shall
maintain for its employees a vacation pay policy, and Company shall be
responsible for costs incurred to provide vacation pay to Company employees
following such date. Periods of employment by Affected Business Employees with
the FDC Group prior to the Effective Date shall be taken into account under
Company's vacation pay policy for purposes of determining the amount of vacation
to which such employees are entitled.
SECTION 6.5. TUITION REIMBURSEMENT PLAN. On the Effective Date,
Company shall assume any obligation of FDC or its affiliates to or on behalf of
Affected Business Employees under the IPS tuition reimbursement plan, including
(without limitation) the obligation to pay or make reimbursements for expenses
incurred during 1996 with respect to any course of study commenced prior to the
Effective Date. In assuming such liabilities and making such payments and
reimbursements, Company shall apply terms and conditions set forth in the IPS
tuition reimbursement plan and applicable law.
SECTION 6.6. SEVERANCE PAY PLAN. Until the first anniversary of the
Effective Date, Company shall provide Affected Business Employees severance
benefits pursuant to a severance plan, program or policy not less favorable to
such employees than that maintained by FDC immediately before the Effective
Date.
ARTICLE 7
INDEMNIFICATION
SECTION 7.1. INDEMNIFICATION. (a) Company shall indemnify and hold
harmless the FDC Indemnified Parties for all
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Losses and Expenses sustained in connection with the benefits provided or the
actions taken or omitted to be taken in connection with this Agreement, or
otherwise relating to the provision of employee benefits to employees or former
employees of Company, their beneficiaries, alternate payees or any other person
claiming benefits through them (except to the extent such Losses or Expenses are
specifically allocated to FDC pursuant to this Agreement, including without
limitation Losses and Expenses arising in connection with (1) Company's
reduction, elimination or failure to provide any benefit previously provided to
its employees or employees of any of its subsidiaries, (2) the provision of
benefits to Affected Business Employees under the FDC Welfare Plans where such
Losses or Expenses arise after the Effective Date, (3) the transfer of account
balances from the FDC Savings Plan to the Company Savings Plan where such Losses
or Expenses are incurred as a result of (A) any act or omission by Company (or
Company's representative) or (B) a determination by the Internal Revenue Service
that the Company Savings Plan is not a tax-qualified plan and (4) any failure of
Company or its Affiliates to fulfill any of its obligations under this Agreement
or any Employee Benefit Plan of the Company Group.
(b) FDC shall indemnify and hold harmless the Company Indemnified
Parties for all Losses and Expenses sustained in connection with (1) the
provision of benefits to Affected Business Employees under FDC Employee Benefit
Plans where such Losses or Expenses arise prior to the Effective Date, (2) the
transfer of account balances from the FDC Savings Plan to the Company Savings
Plan where such Losses or Expenses are incurred as a result of (A) any act or
omission by FDC (or FDC's representative) or (B) determination by the Internal
Revenue Service that the FDC Savings Plan is not a tax-qualified plan and (3)
any failure of FDC or its Affiliates to fulfill any of its obligations under
this Agreement or any Employee Benefit Plan of the FDC Group not assumed by
Company and its Affiliates under this Agreement.
(c) In the event that any Party retains the services of an attorney
to enforce any term of this Agreement, or to obtain a remedy for a breach of
this Agreement, the prevailing Party shall be entitled to recover its reasonable
costs and attorney fees, including the costs and attorney fees on appeal, if
any.
SECTION 7.2. 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
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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 party 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 7 shall be determined: (i) by the written agreement between the
Indemnified Party and the Indemnifying Party; (ii) by a final judgment, decree
or decision 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) In the event a claim, suit or proceeding by a third party 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 such claim, suit or proceeding. The
Indemnifying Party, within thirty (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 party claim, suit or
proceeding at its expense. There after, the Indemnified Party shall deliver to
the Indemnifying Party, within ten (10) 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 party claim. In
any third party 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 party 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
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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 party 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
thirty (30) days after the date of such notice.
SECTION 7.3. CLAIMS PERIOD. No cause of action, dispute or claim for
indemnification under this Agreement may be asserted or made against any Party
or submitted to arbitration on a date later than the earlier of: (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 7.2; or (b) the second
anniversary of the Effective Date.
SECTION 7.4. SUBROGATION. In the event that an Indemnifying Party
shall be obligated to indemnify an Indemnified Party pursuant to Section 7.1,
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 7.5. EXCLUSIVE REMEDY. Except for (i) remedies that cannot
be waived as a matter of law and injunctive and provisional relief, and (ii) any
Party's obligation to make any payments or reimbursements hereunder, this
Article 7 shall be the sole and exclusive remedy for breach of this Agreement,
including with respect to any claim, demand, cause of action, debt, Loss,
Expense or liability subject thereto.
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SECTION 7.6. NO SPECIAL DAMAGES. IN NO EVENT SHALL FIRST DATA, IPS,
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. THE FOREGOING REPRESENTS AN EXPRESS ALLOCATION OF RISK BETWEEN THE
PARTIES.
SECTION 7.7. TIMELY PAYMENT. Each Party shall be required to pay any
amount due to the other Party pursuant to this Agreement in a timely manner on
the date on which such payment is due, and if no due date is specified, within
30 days after the date on which the Party to whom payment is owed makes written
demand for such payment from the other Party.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. NO RIGHTS. This Agreement shall not give any employee
(including any Affected Business Employee) or any Person any right to continued
employment or to any employee benefits. Except for rights of any Indemnified
Party under Article 7 or any FDC Group member or Company Group member under
Section 8.3, this Agreement shall not give any Person other than a Party any
rights, including in particular any third-party beneficiary or other right to
enforce any provision of this Agreement or to receive damages for a breach of
any such provision. Nothing in this Agreement shall obligate FDC, IPS, Company
or any of their Affiliates to assist any Company employee to enforce any rights
such employee may have with respect to any of the employee benefits described in
this Agreement.
SECTION 8.2. CORPORATE ACTION; DELEGATION OF AUTHORITY. Any action
taken by an officer at the level of Vice-President or above shall be considered
to be action taken by either FDC or Company for purposes of this Agreement.
Without limiting the foregoing, the Chief Executive Officer of FDC or Company
may delegate in writing to any other person the authority to act on behalf of
FDC or Company, respectively, with respect to actions required under the terms
of this Agreement.
SECTION 8.3. NO SOLICITATION. For a period of one year after the
Effective Date, neither Company nor any of its Affiliates shall (i) induce or
attempt to persuade any current or future employee of IPS or Western Union
Financial Services, Inc. ("WU"), as the case may be, to terminate his or her
employment relationship with IPS or WU, as the case may be, in order to
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enter into employment with Company or any of its Affiliates, or (ii) hire or
retain, as an employee, independent contractor or otherwise, any current or
future employee of IPS or WU, as the case may be, unless, in each case, waived
in writing by IPS or WU, as the case may be. For a period of one year after the
Effective Date, neither FDC nor any of its Affiliates shall (i) induce or
attempt to persuade any current or future employee of any member of the Company
Group to terminate his or her employment relationship with such member in order
to enter into employment with IPS or WU or (ii) hire or retain for or on behalf
of IPS or WU as an employee, independent contractor or otherwise, any current or
future employee of any member of the Company Group unless, in each case, waived
in writing by Company. The Parties acknowledge that a violation of this Section
8.3 may cause IPS, WU, Company or their respective Affiliates, as the case may
be, irreparable harm which may not be adequately compensated for by money
damages. The Parties therefore agree that in the event of any actual or
threatened violation of this Section 8.3, any affected FDC Group member or
Company Group member, as the case may be, shall be entitled, in addition to
other remedies it may have, to a temporary restraining order and to preliminary
and final injunctive relief against Company, FDC or their respective Affiliates,
as the case may be, to prevent any violation of this Section 8.3, without the
necessity of posting a bond. The prevailing party in any action commenced under
this Section 8.3 shall also be entitled to receive reasonable attorney's fees
and court costs. It is the intent and the understanding of each Party if, in any
action before any court, agency or arbitration panel legally empowered to
enforce this Section 8.3, any term, restriction, covenant or promise in this
Section 8.3 is found to be unreasonable and for that reason unenforceable, then
such term, restriction, covenant or promise shall be deemed modified to the
extent necessary to make it enforceable by such court, agency or arbitration
panel.
SECTION 8.4. TERMINATION. Anything contained in this Agreement to
the contrary notwithstanding, this Agreement may be terminated at any time prior
to the Effective Date by the mutual consent of Company, FDC and IPS. In the
event this Agreement shall be terminated, no Party shall have any liability to
any other Party hereunder.
SECTION 8.5. SURVIVAL OF OBLIGATIONS. All covenants and obligations
contained in this Agreement shall survive the consummation of the transactions
contemplated by this Agreement.
SECTION 8.6. NOTICES. All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given or
delivered when delivered
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personally or when sent by registered or certified mail or by private courier
addressed as follows:
If to Company, to:
MoneyGram Payment Systems, Inc.
7401 West Mansfield Avenue
Lakewood, Colorado 80235
Attention: Chief Executive Officer
with a copy to:
MoneyGram Payment Systems, Inc.
7401 West Mansfield Avenue
Lakewood, Colorado 80235
Attention: General Counsel
If to FDC or to IPS to:
First Data Corporation
2121 North 117th Avenue
Omaha, Nebraska 68164
Attention: General Counsel
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
SECTION 8.7. SUCCESSORS AND ASSIGNS. (a) The rights of any Party
shall not be assignable by such Party without the written consent of the other
Parties, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, (i) FDC and IPS may assign all their respective rights and delegate
their respective duties and obligations hereunder to any of their Affiliates,
provided such Affiliate remains an Affiliate of FDC and IPS after such an
assignment and that notwithstanding such assignment FDC and IPS, respectively,
shall remain primarily liable for all of their respective obligations hereunder;
and (ii) subsequent to the consummation of the initial public offering of the
common stock of Company, 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.
(b) This Agreement shall be binding upon and inure to the benefit of
the Parties and their successors and permitted assigns.
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SECTION 8.8. ACCESS TO RECORDS AFTER CLOSING. (a) Subject to
applicable laws and regulations relating to confidentiality and privacy of
employee information and records, for a period of six years after the Effective
Date, IPS, FDC and their Affiliates and their respective representatives shall
have reasonable access to all of the books and records of the Business to the
extent that such access may reasonably be required by IPS, FDC or their
Affiliates in connection with matters which are the subject matter of this
Agreement. Such access shall be afforded by Company upon receipt of reasonable
advance written notice and during normal business hours. IPS shall be solely
responsible for any costs or expenses incurred by it pursuant to this Section
8.8(a). If Company shall desire to dispose of any of such books and records
prior to the expiration of such six-year period, Company shall, prior to such
disposition, give IPS a reasonable opportunity, at IPS' expense, to segregate
and remove such books and records as IPS may select.
(b) Subject to applicable laws and regulations relating to
confidentiality and privacy of employee information and records, for a period of
six years after the Effective Date, Company and its representatives shall have
reasonable access to all of the books and records relating to the Business which
IPS or any of its Affiliates may retain after the Effective Date. Such access
shall be afforded by IPS and its Affiliates upon receipt of reasonable advance
written notice and during normal business hours. Company shall be solely
responsible for any costs and expenses incurred by it pursuant to this Section
8.8(b). If IPS or any of its Affiliates shall desire to dispose of any of such
books and records prior to the expiration of such six-year period, IPS shall,
prior to such disposition, give Company a reasonable opportunity, at Company's
expense, to segregate and remove such books and records as Company may select.
SECTION 8.9. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, and any
agreements and documents delivered pursuant hereto, contain the entire
understanding of the Parties with regard to the subject matter contained herein
or therein, and supersede all other prior agreements, understandings or letters
of intent between or among any of the Parties. This Agreement shall not be
amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of the Parties.
SECTION 8.10. PARTIAL INVALIDITY. 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,
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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.
SECTION 8.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when one or more counterparts have been
signed by each of the Parties and delivered to each of FDC, IPS and Company.
SECTION 8.12. FURTHER ASSURANCES. On and after the Effective Date,
each Party shall take such other actions and execute such other documents and
instruments as may be reasonably requested by the other Parties from time to
time to effectuate or confirm the consummation of the transaction contemplated
by this Agreement in accordance with the terms of this Agreement.
SECTION 8.13. GOVERNING LAW. 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.
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IN WITNESS WHEREOF, each Party 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: /s/ Charles T. Fote
----------------------------------
Name: Charles T. Fote
Title: Executive Vice President
INTEGTRATED PAYMENT SYSTEMS INC.
By: /s/ Charles W. Brooks
----------------------------------
Name: Charles W. Brooks
Title: President
MONEYGRAM PAYMENT SYSTEMS, INC.
By: /s/ James F. Calvano
----------------------------------
Name: James F. Calvano
Title: Chairman & CEO