Exhibit 10.5

RETAIL MONEY ORDER ISSUANCE AND MANAGEMENT AGREEMENT

By and between

INTEGRATED PAYMENT SYSTEMS INC.

and

WESTERN UNION FINANCIAL SERVICES, INC.

 

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SCHEDULES

 

Schedule 2.1(A)    WU Services Schedule 2.1(B)    Contract Schedule Schedule 2.2
   Payment for WU Services Schedule 5.5    IPS Services Schedule 7.4   
Equipment

 

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AGREEMENT

THIS RETAIL MONEY ORDER ISSUANCE AND MANAGEMENT AGREEMENT (this “Agreement”),
dated as of August 14, 2006, by and between Western Union Financial Services,
Inc., a Colorado corporation (“WU”) and Integrated Payment Systems Inc., a
Delaware corporation (“IPS”).

RECITALS

WHEREAS, IPS desires to retain WU to manage IPS’ agents that currently issue and
sell money orders at retail locations specified herein and to perform certain
data processing and other related services (collectively the “Services”); and

WHEREAS, WU desires to perform the Services for IPS, all on the terms and
conditions and for the consideration set forth herein.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, WU and IPS hereby agree as
follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. In this Agreement, the following terms have the meanings
specified or referred to in this Section 1.1:

“Account Manager” has the meaning specified in Section 2.4(a).

“Additional Term” has the meaning specified in Section 9.1(b).

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with such
Person; provided, however, IPS and WU shall not be considered Affiliates of each
other for purposes of this Agreement.

“Agreement” has the meaning specified in the Preamble.

“Business” means sale of Money Orders at locations covered by IPS Agreements.

“Business Day” means any day other than Saturday, Sunday and those legal public
holidays specified in 5 U.S.C. §6103(a), as it may be amended from time to time,
or any successor provision, on which banking institutions in the city of Denver,
Colorado are open for business. If a payment date under this Agreement is not a
Business Day, payment shall be made on the next succeeding Business Day.

 

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“Claim Notice” has the meaning specified in Section 10.4(a).

“Closing Date” has the meaning specified in Article IV.

“COBRA” means the provisions set forth in Sections 601 to 608 of ERISA or
Section 4980B of the Code.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” has the meaning specified in Section 8.2(d).

“Contract Schedule” means Schedule 2.1 (B).

“Counterfeit Item” means a paper payment instrument that is a counterfeit of an
Item and the MICR line specifications for that counterfeit item match the MICR
line specifications for a Money Order.

“Court Order” means any judgment, order, award or decree of any foreign,
federal, state, local or other court or tribunal and any award in any
arbitration proceeding.

“Distant Executive” has the meaning specified in Section 11.13(b).

“Employee” has the meaning specified in Section 8.3.

“Event of Default” has the meaning specified in Section 9.3(a).

“Expenses” means any and all expenses incurred in connection with investigating,
defending or asserting any claim, action, suit or proceeding incident to any
matter indemnified against hereunder (including, without limitation, court
filing fees, court costs, arbitration fees or costs, witness fees, and
reasonable fees and disbursements of legal counsel, investigators, expert
witnesses, consultants, accountants and other professionals).

“Force Majeure” means any cause beyond the control of a party that such party is
unable to overcome by the exercise of reasonable diligence, which may include
fire; flood; explosion; war; strike; embargo; government regulation; civil or
military authority; act of God; acts or omissions of carriers; or other similar
causes.

“Governmental Body” means any foreign, federal, state, local or other
governmental authority or regulatory body.

“Governmental Permits” has the meaning specified in Section 5.4.

“Indemnified Party” has the meaning specified in Section 10.4(a).

“Indemnifying Party” has the meaning specified in Section 10.4(a).

 

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“Initial Term” has the meaning specified in Section 9.1(a).

“IPS” has the meaning specified in the Preamble. In addition, with respect to
business conducted in Canada, the term “IPS” shall include the Integrated
Payment Systems Canada Inc., a Canadian corporation, which is a wholly-owned
subsidiary of Integrated Payment Systems Inc.

“IPS Agreements” means the contracts listed on Schedule 2.1 (B), including any
renewals thereof, and the contracts executed pursuant to Schedule 2.1 (A),
Section 1 (b) hereof.

“IPS Client” means, in the case of each IPS Agreement, the party other than IPS
and WU to such IPS Agreement.

“IPS Group Member” means IPS and its Affiliates and their respective successors
and assigns.

“Issue Statements” has the meaning specified in Section 11.13(a).

“Item” means a Money Order.

“Legal Requirements” means all federal, state and local laws, regulations and
judicial and administrative decisions and interpretations applicable to the
Business.

“Losses” means any and all losses, costs, obligations, liabilities, settlement
payments, awards, judgments, fines, penalties, damages, expenses, deficiencies
or other charges.

“Money Order” means a paper payment instrument that is named and denominated as
a money order and that is sold pursuant to an IPS Agreement to a purchaser for
the purpose of the purchaser’s effecting a payment to a third party. The term
“Money Order” also includes a paper payment instrument that is issued directly
by IPS, provided that the issuance of such instrument falls within one of the
product codes listed on Schedule 2.1 (B). The term “Money Order” also includes
refund checks issued by WU for IPS as further described on Schedule 2.1 (A).

“Notice of Default” has the meaning specified in Section 9.3(b).

“Party” means IPS or WU.

“Patent License” has the meaning specified in Section 8.6.

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization or Governmental Body.

“POS Equipment” has the meaning specified in Section 7.4.

“Service Fees” has the meaning specified in Section 2.2(a).

 

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“Senior Executives” has the meaning specified in Section 11.13(a).

“Tax” (and with correlative meaning, “Taxes”) means: (i) any federal, state,
local or foreign net income, gross income, gross receipts, windfall profit,
severance, property, production, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add-on minimum, ad valorem,
value-added, transfer, stamp or environmental (including taxes under Code
Section 59A) tax, or any other tax custom, duty or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty; and
(ii) any liability for the payment of amounts with respect to payments of a type
described in clause (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group, or as a result of any obligation under
any Tax sharing arrangement or Tax indemnity arrangement.

“Term” has the meaning specified in Section 9.1(b).

“Trade Secrets” means confidential ideas, trade secrets, know-how, concepts,
methods, processes, practices, formulae, reports, data, customer lists, mailing
lists, business plans or other proprietary information.

“Transaction Tax” has the meaning specified in Section 8.1.

“User Manual has the meaning specified in Schedule 5.5.

“WU” has the meaning specified in the Preamble. In addition, with respect to
business conducted in Canada, the term “WU” shall include the Western Union
Financial Services (Canada), Inc., an Ontario corporation, which is a
wholly-owned subsidiary of Western Union Financial Services, Inc.

“WU Agreement” has the meaning specified in Section 7.3.

“WU Group Member” means WU and its Affiliates and their respective successors
and assigns.

“WU Services” has the meaning specified in Section 2.1(a).

“WU Statement” has the meaning specified in Section 2.2 (b).

“WU Service Location” means 12500 East Belford Avenue, Englewood, Colorado
80112, or as otherwise permitted in accordance with Section 2.6.

1.2. Interpretation. (a) In this Agreement, unless the context clearly indicates
otherwise:

(i) words used in the singular include the plural and words in the plural
include the singular;

(ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement;

 

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(iii) reference to any gender includes the other gender;

(iv) the word “including” means “including but not limited to” or “including
without limitation”;

(v) reference to any Article, Section, Exhibit or Schedule means such Article or
Section of, or such Exhibit or Schedule to, this Agreement, as the case may be,
and references in any Section or definition to any clause means such clause of
such Section or definition;

(vi) the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar
import shall be deemed references to this Agreement as a whole and not to any
particular Section or other provision hereof;

(vii) reference to any agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and by this
Agreement;

(viii) reference to any statute means such statute (including all rules and
regulations promulgated thereunder) as amended from time to time and includes
any successor legislation thereto;

(ix) relative to the determination of any period of time, “from” means “from and
including,” “to” means “to but excluding” and “through” means “through and
including”;

(x) in the event of any conflict between the provisions of the body of this
Agreement and the Exhibits or Schedules hereto, the provisions of the body of
this Agreement shall control; and

(xi) the titles to Articles and headings of Sections contained in this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of or to affect the meaning or interpretation of this Agreement.

(b) This Agreement was negotiated by the Parties with the benefit of legal
representation, and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against either Party
shall not apply to any construction or interpretation hereof. Subject to
Section 11.10, this Agreement shall be interpreted and construed to the maximum
extent possible so as to uphold the enforceability of each of the terms and
provisions hereof, it being understood and acknowledged that this Agreement was
entered into by the Parties after substantial negotiations and with full
awareness by the Parties of the terms and provisions hereof and the consequences
thereof.

 

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ARTICLE II

SERVICES

2.1. WU Services. (a) Subject to the terms and conditions stated herein,
commencing on the Closing Date and continuing throughout the Term, WU shall
provide (or cause one of its Affiliates to provide) the services set forth on
Schedule 2.1(A) (collectively, the “WU Services”), in accordance with the
procedures and standards set forth on Schedule 2.1(A) and in the User Manuals,
for each Money Order issued during the Term hereof.

(b) In the event that WU wishes to designate a WU Affiliate or a third party to
perform any of the WU Services, WU shall be permitted to do so so long as the
transferred WU Services are performed in compliance with this Agreement. WU
shall remain responsible and liable for all WU Services provided hereunder,
whether performed by WU, by a WU Affiliate or by a third party.

(c) Except as expressly provided herein, no interest whatsoever in any IPS
Agreement is or will be transferred to WU under this Agreement. All payments to
be made to IPS under the IPS Agreements, whether by IPS Clients or otherwise,
shall continue to be for the account of IPS, and the only remuneration of, or
financial benefit to WU with respect to the IPS Agreements shall be the fees for
the WU Services as set forth on Schedule 2.2.

(d) In performing the WU Services, WU may make no use of the names or trademarks
of IPS or any of its Affiliates, except as is essential in order to perform the
WU Services in accordance with Schedule 2.1(A).

2.2. Payment for WU Services. In consideration for providing the WU Services to
IPS, IPS shall pay WU the fees (the “Service Fees”) set forth on Schedule 2.2.

2.3. Quality of WU Services. (a) WU shall provide the WU Services to IPS in
accordance with the User Manuals, in substantially the same manner as WU
performs such aspect for itself and in compliance with all Legal Requirements
applicable to the Business and to WU as the provider of the WU Services.

(b) The data and information submitted by WU to IPS shall be accurate and
complete, and WU shall be responsible for any errors in and with respect to the
data and information submitted to IPS; provided, however, WU shall not be
responsible for, and shall not be required to indemnify IPS with respect to,
incomplete, inaccurate or erroneous data or information to the extent such
inaccuracy, incompleteness or error results from any inaccuracy, incompleteness
or error in the data received by WU from IPS. To the extent WU is responsible
for the inaccuracy, incompleteness or error, WU shall promptly correct such
errors or inaccuracies in the data or information prepared by WU and submitted
to IPS, but such correction shall not limit WU’s indemnification obligations
under Article X.

(c) WU shall provide access to the WU Service Locations to such auditors,
internal and external, and inspectors as IPS or any regulatory authority may
designate. Audits by regulatory authorities will occur on such occasions as the
regulatory authority requires and with

 

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such notice as the regulatory authority permits. Such auditors and inspectors
will be required to sign appropriate confidentiality agreements and will be
escorted by WU personnel while performing any audits or inspections (to the
extent permitted by the regulatory authority, in the case of audits required by
regulatory authorities). All audits or inspections of the WU Service Locations
and the WU Services that are required by IPS or by a regulatory authority having
jurisdiction over IPS will be at the expense of IPS. WU shall provide such
auditors and inspectors any assistance that they may reasonably require. IPS
shall not be required to reimburse WU for the costs or time of the WU employees
providing such assistance or related overhead. If any audit by an auditor
designated by IPS or a regulatory authority having jurisdiction over IPS or WU
results in WU being notified that it is not in compliance with any relevant and
generally accepted accounting principle or other audit requirement relating to
the WU Services, then:

(i) if the non-compliance was in existence prior to the date of this Agreement,
WU will make such change at WU’s own expense; or

(ii) if the non-compliance arose after the date of this Agreement and the change
is requested by IPS in order to comply with its auditors or regulators, WU shall
make the change at IPS’ expense and any incremental recurring costs related to
such change shall be at IPS’ expense; provided, however, that if WU would
otherwise be required to make such change if it were the issuer of Money Orders
hereunder, WU shall make the change at its own expense and WU shall bear any
incremental recurring costs related to such change.

In the event of a dispute between WU and IPS relating to a notification of
non-compliance received by WU from an auditor or regulatory authority, WU and
IPS shall resolve such dispute in accordance with the procedures described in
Section 11.13.

2.4. WU Personnel. WU shall designate an individual who shall be responsible for
implementing the WU Services (“Account Manager”).

2.5. Location of WU Services. The WU Services shall be performed by WU at the WU
Service Locations. WU may change any WU Service Location to a location where WU
performs the same services for a majority of money orders processed by WU
(including, but not limited to, Items). If a location is to be changed, WU will
provide IPS thirty (30) calendar days’ prior notice. If required by law or IPS’
regulators, WU must obtain IPS’ prior written consent to change any WU Service
location, which consent will not be unreasonably withheld.

2.6. Safety and Security Standards. As part of the WU Services, WU shall
maintain and enforce at the WU Service Locations such safety and security
procedures as are required to meet the applicable regulatory standards. The
safety and security procedures shall protect the data and information of IPS and
its customers from unauthorized access. In the event WU suffers a data security
breach with respect to any of IPS’ data, WU shall promptly notify IPS of such
event.

 

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2.7. Effect of Non-Performance of Either Party. In the event that either Party
fails to timely perform any task assigned to it pursuant to this Agreement, the
other Party shall be excused from performing any subsequent task therein that is
dependent upon, and cannot be performed in the ordinary course of the provision
of the WU Services without, the performance of the non-performed task, until the
non-performed task is performed, and the time period for performing such
subsequent task shall commence only when the non-performed task is completed in
accordance therewith. The excuse from performance provided in this Section 2.7
does not limit any remedy otherwise available to the Party so excused, including
the right of the Party so excused to perform the non-performed task if
practicable.

ARTICLE III

MANAGEMENT OF THE IPS CLIENTS

3.1 IPS Agreements. Certain provisions relating to IPS Agreements are set forth
in Schedule 2.1 (A).

3.2 Limitations on WU’s Obligations. Certain limitations on WU’s obligations as
manager of the Business are set forth in Schedule 2.1 (A).

ARTICLE IV

CLOSING

The closing shall occur by mutual agreement of the Parties as evidenced by the
execution of a certificate specifying the date of the closing (sometimes
referred to herein as the “Closing Date”) by each of the Parties.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF IPS

As an inducement to WU to enter into this Agreement and to consummate the
transactions contemplated hereby, IPS represents and warrants to WU and agrees
as follows:

5.1. Organization of IPS. IPS is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. IPS has full
corporate power and authority to own, operate and use the assets used in
connection with the Business and to carry on the Business as now conducted.

5.2. Authority of IPS. IPS has full corporate power and authority to execute,
deliver and perform this Agreement. The execution, delivery and performance of
this Agreement by IPS have been duly authorized and approved by IPS and do not
require any further authorization or consent of IPS or its stockholder. This
Agreement has been duly executed and delivered by IPS and is the legal, valid
and binding obligation of IPS enforceable in accordance with its terms.

 

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5.3. Contract Schedule. The IPS Agreements referenced on the Contract Schedule
are all of the agreements, contracts or understandings that have been entered
into by IPS and are currently in force with sellers of Money Orders or pursuant
to which Money Orders are sold.

5.4 Governmental Permits. IPS owns, holds or possesses all licenses, franchises,
permits, privileges, immunities, approvals and other authorizations from a
Governmental Body that are necessary to entitle it to own or lease, operate and
use the assets used in connection with the Business and to carry on and conduct
the Business substantially as currently conducted (collectively, the
“Governmental Permits”), except for such Governmental Permits as to which the
failure to so own, hold or possess would not have a material adverse effect on
the Business.

5.5 Capacity. IPS has, and will maintain throughout the Term, the operational
capacity and resources necessary to perform the services as set forth on
Schedule 5.5.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF WU

As an inducement to IPS to enter into this Agreement and to consummate the
transactions contemplated hereby, WU hereby represents and warrants to IPS and
agrees as follows:

6.1. Organization of WU. WU is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado. WU has full
corporate power and authority to provide the WU Services and to own, operate and
use its properties and assets and to carry on its business as now conducted.

6.2. Authority of WU. WU has full corporate power and authority to execute,
deliver and perform this Agreement. The execution, delivery and performance of
this Agreement by WU have been duly authorized and approved by WU and do not
require any further authorization or consent of WU or its stockholder. This
Agreement has been duly executed and delivered by WU and is the legal, valid and
binding agreement of WU enforceable in accordance with its terms.

6.3. Capacity and Governmental Permits. WU has, and will maintain throughout the
Term, the operational capacity and resources necessary to perform the WU
Services in accordance with this Agreement. WU owns, holds or possesses all
licenses, franchises, permits, privileges, immunities, approvals and other
authorizations from Governmental Bodies that are necessary for it to perform the
WU Services in accordance with this Agreement.

 

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ARTICLE VII

CERTAIN CONTRACT AND TRANSITION RELATED PROVISIONS

7.1 Contract Provisions. Certain provisions relating to agreements with selling
agents are set forth in Schedule 2.1 (A).

7.2 Termination of Certain IPS Contractual Provisions. Certain provisions
relating to agreements with IPS Clients are set forth in Schedule 2.1 (A).

7.3 Transition Efforts. (a) If WU decides to issue WU branded money orders under
its own licenses or to issue money orders under another third party’s licenses,
IPS agrees that it will, in good faith, negotiate with WU a transition services
agreement to provide WU with the types of services that IPS is providing under
this Agreement as listed in Schedule 5.5 for a reasonable period of time in
order to allow WU to make a smooth transition to the sale of such other money
order service.

(b) After the third anniversary of the Closing Date, IPS shall have the right to
require WU to agree to either (i) issue Money Orders under its own licenses (or
make arrangements with another third party to issue Money Orders) and perform
the obligations of the issuer of Money Orders under any IPS Agreements after the
last day of the Initial Term; or (ii) cease entering into IPS Agreements that
extend beyond the last day of the Initial Term.

7.4 Equipment. Point of Sale equipment, software and other equipment used in
connection with the Business (collectively, all such items are referred to
herein as “POS Equipment”) shall be maintained by WU. POS Equipment shall be
provided to WU and the IPS Client in accordance with Schedule 7.4.

7.5 Abandoned Property Software, Documentation and System. The abandoned
property software, documentation and system utilized in the Business shall be
provided to WU in accordance with Schedule 5.5.

ARTICLE VIII

ADDITIONAL AGREEMENTS

8.1. Taxes. For purposes of this Section 8.1, “Transaction Tax” shall mean any
federal, state or local gross receipts, sales or use tax or other like
assessment or charge. The recipient of any services rendered pursuant to this
Agreement shall be responsible for any Transaction Taxes levied or imposed on
the provision of such services.

8.2. Proprietary and Confidential Information. (a) Except as specifically
provided in this Agreement, neither Party shall use or disclose to any third
party any Confidential Information of the other Party; provided, however, that
information shall not be regarded as

 

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Confidential Information if it (i) is or becomes generally available to the
public other than as a result of a disclosure by one of the Parties or any of
its Affiliates, as the case may be; (ii) is or becomes known or available to one
of the Parties or its respective Affiliates, as the case may be, on a
non-confidential basis from a source who, insofar as is known to such Party, is
not prohibited from transmitting the information to such Party or its Affiliates
by a contractual, legal or fiduciary obligation; or (iii) is or was developed by
a Party or any of its Affiliates without the use of any Confidential Information
from the other Party or any of its Affiliates. All Confidential Information
shall be held in confidence by the Parties to the same extent and in at least
the same manner as the Parties protect their own confidential or proprietary
information.

(b) Each Party shall be permitted to disclose relevant aspects of the other
Party’s Confidential Information to its officers, agents and employees and to
the officers, agents and employees of its Affiliates to the extent that such
disclosure is reasonably necessary for the performance of its duties and
obligations under this Agreement; provided, that such Party shall take all
reasonable measures to ensure that Confidential Information of the other Party
is not disclosed or duplicated in contravention of this Agreement by such
officers, agents and employees. In addition, WU may use IPS’ Confidential
Information regarding IPS Clients for the purposes contemplated by Schedule 2.1
(A), Section 1 (b); provided, that such use is not in contravention of any
agreement between IPS and the applicable IPS Client or such use is not
prohibited by law.

(c) The obligations in this Section 8.2 shall not restrict any disclosure by
either Party pursuant to any applicable law or by order of any court or
government agency (provided that the disclosing Party shall give prompt notice
to the non-disclosing Party of such order).

(d) As used in this Agreement, the term “Confidential Information” shall mean
(i) with respect to IPS, all information, data and materials relating to the
customers, business and affairs of IPS provided to, disclosed or received by WU
from any source in connection with this Agreement or WU’s performance of the WU
Services, including any Trade Secrets and the terms of any IPS Agreement,
(ii) with respect to WU, all information, data and materials relating to the
customers, business and affairs of WU provided to, disclosed or received by IPS
from any source in connection with this Agreement, including any Trade Secrets
and the terms of any WU Agreement and (iii) the terms of this Agreement.

(e) Notwithstanding the foregoing, WU shall be entitled to use Confidential
Information of IPS after the termination of this Agreement to the extent use of
such information is necessary in connection with its continuation of the
Business after the termination of this Agreement.

8.3. Employees and Employee Benefit Plans. (a) Other than as WU may otherwise
agree in its discretion by separate agreement in connection with its spin off
from First Data Corp., no person who is or who has been an employee of IPS (an
“Employee”) shall transfer employment to WU or any of its Affiliates in
connection with WU’s provision of WU Services pursuant to this Agreement.
Nothing contained in this Agreement shall obligate WU to employ any persons who
are or who have been Employees. IPS shall retain the sole

 

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responsibility, in connection with the Employees’ employment by IPS and its
Affiliates, for all matters relating to the maintenance of personnel and payroll
records, the withholding and payment of federal, state and local income and
payroll Taxes, the payment of workers’ compensation and unemployment
compensation insurance, salaries, wages and pension, welfare and other fringe
benefits, including any severance and/or pay-out of accrued vacation pay which
may be triggered as a result of any termination of employment (including all
severance and vacation pay liabilities incurred on or prior to the Closing Date)
and the conduct of all other matters relating to labor relations, including
compliance with IPS’ obligations under any applicable collective bargaining
agreements and all negotiations and communications with any union. IPS shall
retain liability for compliance with all applicable labor and employment laws
relating to the Employees in connection with their employment by IPS or any of
its Affiliates. IPS shall retain the obligation and liability for any workers’
compensation or similar workers’ protection claims with respect to any Employee
in connection with the Employee’s employment by IPS or its Affiliates.

(b) IPS shall retain all liabilities under its employee benefits plans,
programs, agreements and arrangements, in connection with each Employee’s
employment by IPS and its Affiliates, including (a) any liabilities relating to
any noncompliance with applicable laws, including COBRA, and (b) any liabilities
which arise as a result of IPS’ joint and several liability through its
relationship with an Affiliate. IPS shall be solely responsible to provide
continuation coverage under COBRA and other any applicable law to any Employee
or beneficiary of any Employee who is entitled to such continuation coverage in
connection with the Employee’s employment by IPS and its Affiliates.

8.4. Insurance. During the Term, WU shall maintain the adequate and customary
insurance coverages for the conduct of the Business. WU shall add IPS to the
Commercial General Liability policy as an additional insured. WU shall provide
IPS with a certificate of such coverage prior to the date of this Agreement. WU
shall provide to IPS at least thirty (30) days prior written notice of any
cancellation, modification or alteration affecting the coverage.

8.5. Independent Contractor Status. Nothing in this Agreement shall be deemed to
create a partnership, joint venture or agency relationship between the Parties.
WU shall render and perform the WU Services as an independent contractor in
accordance with its own standards, subject to its compliance with the provisions
of this Agreement and with all applicable laws, ordinances and regulations.

8.6. License to Use IPS Patent License. As further described in Schedule 2.1
(A), IPS has granted WU a license to use an IPS patent license.

8.7. Legal Requirements. During the Term, (i) IPS agrees to conduct the Business
in compliance with the Legal Requirements (but such agreement shall not limit
WU’s obligation to perform the WU Services in accordance herewith), and (ii) WU
agrees to perform the WU Services in compliance with all Legal Requirements
applicable to the Business and to WU as the provider of the WU Services.

 

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ARTICLE IX

TERM AND TERMINATION

9.1. Term. (a) Subject to any early termination provided for in this Agreement,
the term of the provision of WU Services under this Agreement begin on the
effective date hereof and shall continue for a period of 5 years (the “Initial
Term”).

(b) At any time after the first anniversary of the Closing Date, WU may request
any extension of this Agreement for an additional term. If the parties are able
to mutually agree to the terms of such extension (including without limitation,
the length of the extension and pricing), the provision of WU Services under
this Agreement may be extended for an additional term (the “Additional Term”
and, together with the Initial Term, the “Term”).

(c) The provisions related to IPS’ payment for WU Services shall survive the
termination of this Agreement and IPS shall continue to pay WU for the WU
Services until all Money Orders have either been paid or escheated. In the event
a Money Order is not subject to escheatment, the provisions related to IPS’
payment for WU Services with respect to such Money Order shall survive the
termination of this Agreement and IPS shall continue to pay WU for the WU
Services until such Money Order is either paid or, if not paid, until seven
years after the date of issuance of such Money Order.

(d) If on the last day of the Initial Term, IPS continues to have obligations
under the IPS Agreements that have not been assumed by WU, then IPS and WU agree
to extend the term of this Agreement until all such obligations have been
satisfied; provided, however, that during such extended Term, WU shall not be
authorized to further extend the term of any IPS Agreement without the written
consent of IPS.

9.2. Termination. The provision of WU Services under this Agreement may be
terminated pursuant to Section 9.3 or at any time by the mutual written consent
of WU and IPS.

9.3. Events of Default. (a) The occurrence of any of the following events (each,
an “Event of Default”) shall constitute an Event of Default under this
Agreement:

(i) Payment of Obligations under this Agreement. The failure by either Party to
make any payment to the other when such payment is due and owing pursuant to the
terms and conditions of this Agreement.

(ii) Failure to Perform. The failure of either Party to perform any material
term, covenant, or agreement contained in this Agreement.

(iii) Breach of Representation or Warranty. Any representation or warranty of
either Party made in this Agreement or in any document or instrument delivered
pursuant to or in connection with this Agreement shall prove to have been false
in any material respect upon the date when made.

 

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(iv) Insolvency, Bankruptcy, Etc.

(A) If either Party shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay or shall generally fail to pay its
debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of such
Party or of any substantial part of the assets of such Party or shall commence
any case or other proceeding relating to such Party under any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against such Party and such Party shall indicate its approval
thereof, consent thereto, or acquiescence therein.

(B) If a decree or order shall be entered appointing any such trustee,
custodian, liquidator or receiver, or adjudicating either Party bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief shall be entered in respect of such Party in an
involuntary case under Federal bankruptcy laws as now or hereafter in effect.

(b) If any Event of Default shall have occurred, the non-defaulting Party shall
notify the defaulting Party in writing (the “Notice of Default”) of such Event
of Default. If such Event of Default has not been cured or waived in writing
within thirty (30) calendar days of the date of the Notice of Default, the
non-defaulting Party may, in its discretion, immediately terminate the provision
of WU Services under this Agreement; provided, however, that if the Event of
Default is a payment default pursuant to Section 9.3(a)(i), the period for
curing such default shall be reduced to ten (10) calendar days. The foregoing
right to terminate is not intended to be exclusive of any other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.

9.4. Effect of Termination. Except as expressly provided herein, the termination
of the provision of WU Services under this Agreement shall not affect any other
provisions of this Agreement. Termination of the provision of WU Services under
this Agreement shall not limit either Party’s obligations for breach of this
Agreement prior to termination or for the payment of amounts due that were
incurred prior to such termination.

ARTICLE X

INDEMNIFICATION AND LIMITATION ON LIABILITY

10.1. Indemnification by IPS. (a) IPS agrees to indemnify and hold harmless each
WU Group Member from and against any and all Losses and Expenses incurred by
such WU Group Member in connection with or arising from:

(i) any breach by IPS of any of its covenants in this Agreement;

 

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(ii) any failure of IPS to perform any of its obligations in this Agreement;

(iii) any breach of any warranty or the inaccuracy of any representation of IPS
contained or referred to in this Agreement; or

(iv) the grossly negligent, intentionally wrongful or fraudulent acts of IPS or
its employees, agents or representatives.

(b) Limitation on Indemnification by IPS. Subject to Section 10.4(b), the
indemnification by IPS provided for in Section 10.1(a) shall terminate one
(1) year after the expiration of the Initial Term (and no claims shall be made
by a WU Group Member thereafter); provided, however, indemnification by IPS
shall continue as to:

(i) the covenants of IPS set forth in Sections 8.1, 8.2 and 8.3, as to all of
which no time limitation shall apply;

(ii) any Losses or Expenses of which any WU Group Member has notified IPS in
accordance with the requirements of Section 10.4 on or prior to the date such
indemnification would otherwise terminate in accordance with this
Section 10.1(b), as to which the obligation of IPS shall continue until the
liability of IPS shall have been determined pursuant to this Article X, and IPS
shall have reimbursed all WU Group Members for the full amount of such Losses
and Expenses for which IPS is liable in accordance with this Article X;

(iii) claims relating to or arising out of the WU Services provided in the
Additional Term or during the term of any extension of the term of this
Agreement pursuant to Section 9.1 (d); provided, however, that the
indemnification provided for in this subsection (iii) shall terminate one
(1) year after the expiration of the Additional Term or the expiration of the
term of any extension of the term of this Agreement pursuant to Section 9.1 (d),
as the case may be;

(iv) claims relating to or arising out of the failure of IPS to pay WU for the
WU Services; and

(v) claims related to payment for WU Services as set forth in Section 9.1.

IPS’ indemnification obligations provided for in this Agreement shall be further
limited as follows:

(A) No Consequential Damages. In no event shall IPS or any of its Affiliates be
liable for any consequential damages under or in connection with this Agreement,
which are hereby excluded by agreement of the Parties regardless of whether IPS
or any of its Affiliates has been advised, or could have foreseen, of the
possibility of such damages; provided, however, that the foregoing exclusion
shall not apply to (1) consequential damages incurred by any WU Group Member as
a result of the violation by IPS of the covenants in Section 8.2, or (2) in the
case of consequential damages recovered from a WU Group Member by a third party.
The foregoing represents an express allocation of risk between the Parties.

 

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(B) Notwithstanding anything in this Agreement to the contrary, IPS shall in no
event be liable or responsible for its failure to carry out any of its
obligations under this Agreement, if and to the extent such failure is caused by
Force Majeure. If performance by IPS is delayed by more than thirty (30) days by
Force Majeure, WU may terminate this Agreement by notice to IPS which
termination right, if exercised by WU, shall be WU’s sole remedy for IPS’
failure to provide IPS Services by reason of any Force Majeure. Notwithstanding
anything in this paragraph, nothing shall limit any claims by WU unrelated to
the Force Majeure event.

(C) Disclaimer of Warranties. Except as expressly set forth in this Agreement,
IPS does not make any representation or warranty whatsoever, express or implied,
including, but not limited to, any representation or warranty as to IPS Services
(including with respect to the nature, quantity or quality thereof) to be
provided hereunder.

(D) Notwithstanding anything contained in this Agreement to the contrary, IPS’
aggregate liability for indemnification pursuant to this Section 10.1 shall in
no event exceed $5 million.

10.2. Indemnification by WU. (a) WU agrees to indemnify and hold harmless each
IPS Group Member from and against any and all Losses and Expenses incurred by
such IPS Group Member in connection with or arising from:

(i) any breach by WU of any of its covenants or agreements in this Agreement;

(ii) any failure by WU to perform any of its obligations in this Agreement
including its obligations to perform the WU Services in accordance with
Schedule 2.1(A);

(iii) any breach of any warranty or the inaccuracy of any representation of WU
contained or referred to in this Agreement;

(iv) the grossly negligent, intentionally wrongful or fraudulent acts of WU or
its employees, agents or representatives;

(v) any Counterfeit Item that is presented to IPS for payment during the Term
with respect to which action was required to be taken by WU pursuant to Schedule
2.1(A) and WU failed to take such action; or

(vi) any acts of IPS Clients.

 

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(b) Limitation on Indemnification by WU. Subject to Section 10.4(b), the
indemnification by WU provided for in Section 10.2(a) shall terminate one
(1) year after the expiration of the Initial Term (and no claims shall be made
by an IPS Group Member thereafter), provided, however, indemnification by WU
shall continue as to:

(i) the covenants of WU set forth in Sections 8.1, 8.2, and 8.3, as to all of
which no time limitation shall apply;

(ii) any Losses or Expenses of which IPS has notified WU in accordance with the
requirements of Section 10.4 on or prior to the date such indemnification would
otherwise terminate in accordance with this Section 10.2(b), as to which the
obligation of WU shall continue until the liability of WU shall have been
determined pursuant to this Article X, and WU shall have reimbursed all IPS
Group Members for the full amount of such Losses and Expenses for which WU is
liable in accordance with this Article X; and

(iii) claims relating to or arising out of the WU Services provided in the
Additional Term or during the term of any extension of the term of this
Agreement pursuant to Section 9.1 (d); provided, however, that the
indemnification provided for in this subsection (iii) shall terminate one
(1) year after the expiration of the Additional Term or the expiration of the
term of any extension of the term of this Agreement pursuant to Section 9.1 (d),
as the case may be.

WU’s indemnification obligations provided for in this Agreement shall be further
limited as follows:

(A) Notwithstanding anything in this Agreement to the contrary, WU shall in no
event be liable or responsible for its failure to carry out any of its
obligations under this Agreement, if and to the extent such failure is caused by
Force Majeure. If performance by WU is delayed by more than thirty (30) days by
Force Majeure, IPS may terminate this Agreement by notice to WU, which
termination right, if exercised by IPS, shall be IPS’ sole remedy for WU’s
failure to provide WU Services by reason of any Force Majeure. Notwithstanding
anything in this paragraph, nothing shall limit any claims by IPS unrelated to
the Force Majeure event.

(B) Disclaimer of Warranties. Except as expressly set forth in this Agreement,
WU does not make any representation or warranty whatsoever, express or implied,
including, but not limited to, any representation or warranty as to WU Services
(including with respect to the nature, quantity or quality thereof) to be
provided hereunder.

(C) No Consequential Damages. In no event shall WU or any of its Affiliates be
liable for any consequential damages under or in connection with this Agreement,
which are hereby excluded by agreement of the Parties regardless of whether WU
or any of its Affiliates has been advised, or could have foreseen, of the
possibility of such damages; provided, however, that the foregoing

 

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exclusion shall not apply (1) to consequential damages incurred by any IPS Group
Member as a result of violations by WU of the covenants in Section 8.2, or
(2) in the case of consequential damages recovered from an IPS Group Member by a
third party. The foregoing represents an express allocation of risk between the
Parties.

(D) Counterfeit Items. In the case of any Counterfeit Item which is presented to
IPS for payment during the Term with respect to which either no action was
required to be taken by WU pursuant to Schedule 2.1(A) or all action that was
required to be taken by WU pursuant to Schedule 2.1(A) was taken, WU will have
no obligation to indemnify and hold harmless each IPS Group Member and any and
all Losses and Expenses incurred in connection with or arising from such
Counterfeit Item shall be the sole responsibility of IPS.

(E) Notwithstanding anything contained in this Agreement to the contrary and
except for the indemnification obligations of WU set forth in
Section 10.2(a)(v), WU’s annual aggregate liability for indemnification pursuant
to this Section 10.2 shall in no event exceed $5 million, provided, however,
that such limit shall not apply to:

(i) Losses and Expenses related to a failure of either WU or an IPS Client to
remit proceeds from the sale of Money Orders to IPS.

(ii) Losses and Expenses caused by WU’s failure to instruct IPS to return, by
the applicable deadline specified in the User Manuals, a Counterfeit Item when
such failure to make a timely return was not caused by IPS’s failure to follow
the procedure set in the User Manuals;

(iii) Losses and Expenses caused by WU’s failure to instruct IPS to return
(including all such failures caused by IPS’s failure to enter stop payment
orders in accordance with User Manuals), by the applicable deadline specified in
the User Manuals, an Item on which a stop payment has been requested in
accordance the procedure set forth in the User Manuals, when such failure to
make a timely return was not caused by IPS’s failure to follow the procedure set
forth in the User Manuals;

(iv) Losses and Expenses caused by WU’s failure to instruct IPS to return, by
the applicable deadline specified in the User Manuals, a payment instrument that
does not bear a serial number assigned to an IPS Client or does bear a serial
number assigned to an IPS Client but its face amount does not correspond to the
issue amount reported by the IPS Client when such failure to make a timely
return was not caused by IPS’s failure to follow the procedure set forth on in
the User Manuals; or

(v) Losses and Expenses caused by WU’s failure to instruct IPS to return, by the
applicable deadline specified in the User Manuals, a

 

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payment instrument or Item that bears the same valid serial number and face
amount as an Item (or Counterfeit Item) previously paid when such failure to
make a timely return was not caused by IPS’s failure to follow the procedure set
forth in the User Manuals.

(vi) Regulatory fines, assessment and penalties arising from WU’s non-compliance
with the terms and conditions of this Agreement.

For purposes of subparagraphs (i) through (iv) above, the terms “Losses and
Expenses” shall not include losses or expenses incurred by IPS that are related
to adjustments to the average investable balance of an IPS Client that will be
required when the items described above are properly recorded or adjusted as the
case may be.

(c) In the event that IPS makes a claim against WU for indemnification under
this Agreement, IPS shall assist and cooperate fully with WU, in all such lawful
manners as WU shall request, in asserting in the name of WU any claims or rights
against any third party or any defenses to claims asserted by third parties that
IPS may have, or have the right to assert, including, without limitation, any
rights under any agreement with IPS’ depository banks, the IPS Clients or other
third party, by law or in equity. Such assistance and cooperation shall include,
but not be limited to, the assignment of claims, rights or defenses held by IPS,
but excludes the right to assert or defend any action in the name of IPS. As
part of such assistance, IPS will make available IPS employees knowledgeable
with respect to such claim or defense. WU shall bear any material costs and
expenses incurred by IPS to third parties, such as IPS’ out-of-pocket costs and
outside attorneys’ fees, in providing such assistance and cooperation, but WU
shall not be required to reimburse IPS for the costs or time of IPS employees or
related overhead. Upon reasonable request, WU shall provide IPS with
non-confidential information regarding the status of any such actions.

(d) In the event that WU is required by law, regulation or court order to bring
a formal legal action against an IPS Client, an IPS depository bank or other
third party, under IPS’ name (whether as a claimant or co-claimant), then WU and
IPS shall utilize the following procedures:

(A) WU will notify IPS of its intent to bring a formal legal action against the
third party, and will include in such notification a copy of the law,
regulation, court order or written opinion of outside counsel on letterhead,
demonstrating that IPS is a necessary party to the legal proceedings
contemplated.

(B) IPS shall determine within ten (10) Business Days of the receipt of the
notice and documentation whether it will permit WU to proceed in IPS’ name. If
IPS will permit WU to proceed in IPS’ name, WU shall proceed with the proposed
formal legal action and/or any other action WU has the right to pursue pursuant
to Section 10.2(c). If IPS will not permit WU to proceed in IPS’ name, (1) IPS
shall promptly reimburse WU for the amount of the claim that is attributable to
the actions or failures of the third party (and that WU has previously paid to
IPS), and (2) IPS shall have no further right to seek

 

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indemnification from WU for such that portion of such claim under this
Agreement. In the event IPS and WU do not agree as to the amount of the claim
attributable to the actions or failures of the third party, such dispute will be
resolved in accordance with Section 11.13.

(C) In the event any formal proceedings are commenced hereunder under IPS’ name,
WU will update IPS regularly on the status of such proceedings and provide
information as reasonably requested by IPS regarding such proceedings.

10.3. Specific Performance. (a) In the event IPS or any of its Affiliates
violates any of its obligations under Section 8.2, WU may proceed against it in
law or in equity for such damages or other relief as a court may deem
appropriate. IPS acknowledges that a violation of Section 8.2 may cause WU
irreparable harm which may not be adequately compensated for by money damages.
IPS therefore agrees that in the event of any actual or threatened violation of
Section 8.2, WU shall be entitled, in addition to other remedies that it may
have, to a temporary restraining order and to preliminary and final injunctive
relief against IPS or such Affiliate of IPS to prevent any violations of
Section 8.2, without the necessity of posting a bond.

(b) In the event WU or any of its Affiliates violates any of its obligations
under Section 8.2, IPS may proceed against it in law or in equity for such
damages or other relief as a court may deem appropriate. WU acknowledges that a
violation of Section 8.2 may cause IPS irreparable harm which may not be
adequately compensated for by money damages. WU therefore agrees that in the
event of any actual or threatened violation of Section 8.2, IPS shall be
entitled, in addition to other remedies that it may have, to a temporary
restraining order and to preliminary and final injunctive relief against WU or
such Affiliate of WU to prevent any violations of Section 8.2, without the
necessity of posting a bond.

(c) The prevailing Party in any action commenced under this Section 10.3 shall
also be entitled to receive reasonable attorneys’ fees and court costs.

10.4. Notice of Claims.

(a) General Procedures. The following procedures shall apply to any claim for
indemnification under this Agreement:

(i) Any Person (the “Indemnified Party”) seeking indemnification hereunder shall
give 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, 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

 

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given promptly after the action or suit is commenced; provided further that
failure to give such notice shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent it shall have been prejudiced by such
failure.

(ii) In calculating any Losses or Expenses (i) there shall be deducted (x) any
insurance recovery in respect thereof (and no right of subrogation shall accrue
hereunder to any insurer) and (y) the amount of any Tax benefit to the
Indemnified Party (or any of its Affiliates) with respect to such Losses or
Expenses (after giving effect to the tax effect of receipt of the
indemnification payments), and (ii) there shall be added the amount of any Tax
detriment to the Indemnified Party (or any of its Affiliates) with respect to
such Losses or Expenses (after giving effect to the tax effect of receipt of the
indemnification payments).

(iii) After the giving of any Claim Notice pursuant hereto, the amount of
indemnification to which an Indemnified Party shall be entitled under this
Article X shall be determined (i) by the written agreement between the
Indemnified Party and the Indemnifying Party; (ii) pursuant to Section 11.13; 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
Losses and Expenses suffered by it.

(b) Limitation on Notice Period Relating to WU Services. No cause of action,
dispute or claim for indemnification relating to the WU Services may be asserted
or made against any Party on a date later than: (i) two (2) years 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 10.4(a) or (ii) one year after the
earlier of the termination of the provision of WU Services under this Agreement
or the expiration of the Additional Term.

10.5. Third Person Claims. The following procedures shall apply to any claim for
indemnification under this Agreement:

(a) Subject to Section 10.5(b), the Indemnified Party shall have the right to
conduct and control, through counsel of its choosing, the defense, compromise or
settlement of any third Person claim, action or suit against such Indemnified
Party as to which indemnification will be sought by any Indemnified Party from
any Indemnifying Party hereunder, and in any such case the Indemnifying Party
shall cooperate in connection therewith and shall furnish such records,
information and testimony and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested by the Indemnified
Party in connection therewith; provided, that the Indemnifying Party may
participate, through counsel chosen by it and at its own expense, in the defense
of any such claim, action or suit as to which the Indemnified Party has so
elected to conduct and control the defense thereof; and provided, further, that
the Indemnified Party shall not, without the written consent of the Indemnifying

 

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Party (which written consent shall not be unreasonably withheld), pay,
compromise or settle any such claim, action or suit, except that no such consent
shall be required if, following a written request from the Indemnified Party,
the Indemnifying Party shall fail, within fourteen (14) days after the making of
such request, to acknowledge and agree in writing that, if such claim, action or
suit shall be adversely determined, such Indemnifying Party has an obligation to
provide indemnification hereunder to such Indemnified Party. Notwithstanding the
foregoing, the Indemnified Party shall have the right to pay, settle or
compromise any such claim, action or suit without such consent, provided that in
such event the Indemnified Party shall waive any right to indemnity therefor
hereunder unless such consent is unreasonably withheld.

(b) If any third Person claim, action or suit against any Indemnified Party is
solely for money damages, then the Indemnifying Party shall have the right to
conduct and control, through counsel of its choosing, the defense, compromise or
settlement of any such third Person claim, action or suit against such
Indemnified Party as to which indemnification will be sought by any Indemnified
Party from any Indemnifying Party hereunder if the Indemnifying Party has
acknowledged and agreed in writing that, if the same is adversely determined,
the Indemnifying Party has an obligation to provide indemnification to the
Indemnified Party in respect thereof, and in any such case the Indemnified Party
shall cooperate in connection therewith and shall furnish such records,
information and testimony and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested by the Indemnifying
Party in connection therewith; provided, that the Indemnified Party may
participate, through counsel chosen by it and at its own expense, in the defense
of any such claim, action or suit as to which the Indemnifying Party has so
elected to conduct and control the defense thereof. Notwithstanding the
foregoing, the Indemnified Party shall have the right to pay, settle or
compromise any such claim, action or suit, provided that in such event the
Indemnified Party shall waive any right to indemnity therefor hereunder unless
the Indemnified Party shall have sought the consent of the Indemnifying Party to
such payment, settlement or compromise and such consent was unreasonably
withheld, in which event no claim for indemnity therefor hereunder shall be
waived.

ARTICLE XI

GENERAL PROVISIONS

11.1. Survival of Obligations. All representations, warranties, covenants and
obligations contained in this Agreement shall survive the consummation of the
transactions contemplated by this Agreement.

11.2. No Public Announcement. Neither WU nor IPS shall, without the approval of
the other, make any press release or other public announcement concerning the
transactions contemplated by this Agreement, except as and to the extent that
any such Party shall be so obligated by law or the rules of any stock exchange,
in which case the other Party shall be advised and the Parties shall use their
best efforts to cause a mutually agreeable release or announcement to be issued;
provided, however, that the foregoing shall not preclude communications or
disclosures necessary to implement the provisions of this Agreement or to comply
with the accounting and Securities and Exchange Commission disclosure
obligations.

 

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11.3. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered (i) when
delivered personally, (ii) if transmitted by facsimile, when confirmation of
transmission is received, (iii) if sent by registered or certified mail, postage
prepaid, return receipt requested, on the third Business Day after mailing, or
(iv) if sent by reputable overnight courier services, when received, and shall
be addressed as follows:

If to WU, to:

Western Union Financial Services, Inc.

12510 East Belford Avenue

Englewood, Colorado 80112

Telephone: (720) 332-3190

Facsimile: (720) 332-0501

Attention: General Manager- Retail Money Order

with a copy to:

General Counsel

If to IPS, to:

Integrated Payment Systems Inc.

12500 East Belford Avenue, Mail Stop M18U

Englewood, Colorado 80112

Telephone: (720) 332-3101

Facsimile: (720) 332-0096

Attention: President

with a copy to:

General Counsel

or to such other address as such Party may indicate by a notice delivered to the
other Party.

11.4. Successors and Assigns; Third Party Beneficiaries. (a) The rights and
obligations of either Party under this Agreement shall not be assigned by such
Party without the written consent of the other Party.

(b) This Agreement shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assigns. Except for Article X,
which is intended to benefit, and to be enforceable by, the parties specified
therein, nothing in this

 

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Agreement, expressed or implied, is intended or shall be construed to confer
upon any Person other than the Parties and their respective successors and
assigns permitted by this Section 11.4 any right, remedy or claim under or by
reason of this Agreement.

11.5. Access to Records after Closing Date. For a period of eight (8) years
after the expiration or termination of the Term or the expiration of the term of
any extension of the term of this Agreement pursuant to Section 9.1 (c) or
Section 9.1(d), as applicable, each Party and its representatives shall have
reasonable access to all of the books and records related to this Agreement to
the extent necessary for such Party to meet its regulatory and contractual
responsibilities. Such access shall be afforded to such Party and its Affiliates
upon receipt of reasonable advance notice and during normal business hours. The
requesting Party shall be solely responsible for any costs and expenses incurred
by it pursuant to this Section 11.5 in seeking access to books and records in
the control of the other Party. The non-requesting Party shall be solely
responsible for any costs and expenses incurred by it in complying with this
Section 11.5. If either Party or any of its Affiliates shall desire to dispose
of any of such books and records prior to the expiration of such eight-year
period, such Party shall, prior to such disposition, give the other Party a
reasonable opportunity, at the non-disposing Party’s expense, to segregate and
remove such books and records as the non-disposing Party may select.

11.6. Entire Agreement; Amendments. This Agreement and the Exhibits and
Schedules referred to herein and the documents delivered pursuant hereto contain
the entire understanding of the Parties with regard to the subject matter
contained herein or therein, and supersede all prior agreements, understandings
or letters of intent between 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.

11.7. Interpretation. Article titles and headings to Sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.

11.8. Waivers. Any term or provision of this Agreement may be waived, or the
time for its performance may be extended, by the Party or Parties entitled to
the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement only if, as to any Party, it is in
writing signed by an authorized representative of such Party. The failure of any
Party 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.

11.9. Expenses. Each Party will pay all costs and expenses incident to its
negotiation and preparation of this Agreement and to its performance and
compliance with all agreements and conditions contained herein on its part to be
performed or complied with, including the fees, expenses and disbursements of
its counsel and accountants.

 

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11.10. Severability. Wherever possible, each provision of this Agreement 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 provision or provisions or any other provisions hereof, unless such a
construction would be unreasonable.

11.11. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be considered an original instrument, but
all of which together shall be considered one and the same agreement, and shall
become binding when one or more counterparts have been signed and delivered to
each of the Parties.

11.12. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (without regard to the conflicts of law
provisions) of the State of New York.

11.13. Dispute Resolution. IPS and WU agree to utilize the following procedures
to resolve any disputes between them that arise under this Agreement (other than
those governed by Section 10.2(d)):

(a) Level One. If IPS identifies an issue, or issues, that requires resolution,
it will give the Account Manager written notice thereof; and if WU identifies an
issue, or issues, that require resolution, it will give IPS written notice
thereof. The Account Manager and an IPS designee will then negotiate in good
faith on a regular basis to resolve the issue(s) as expeditiously as feasible.
If they are unable to resolve the issue(s) within ten (10) Business Days of such
notice, either may state in writing to the other that they will not be able to
resolve the remaining issue(s) through continued negotiation. Promptly
thereafter, they will refer the issue(s) to the IPS executive with management
responsibility for the WU relationship and the executive of WU with management
responsibility for the IPS relationship (collectively, the “Senior Executives”)
and will each provide to the Senior Executives a written statement describing in
detail their respective positions related to the issue(s) (the “Issue
Statements”).

(b) Level Two. Promptly after receiving the Issue Statements, the Senior
Executives will negotiate in good faith on a regular basis to resolve the
issue(s) as expeditiously as feasible. If the Senior Executives are unable to
resolve the issue(s) within ten (10) Business Days of receipt of such Issue
Statements, either Senior Executive may state in writing to the other that they
will not be able to resolve the remaining issue(s) through continued
negotiation. Promptly thereafter, each Senior Executive will refer the issue(s)
to a senior level executive from a separate business unit, division, subsidiary
or Affiliate of their respective Party (the “Distant Executive”) and each
Party’s respective management team will prepare any revisions to their
respective Issue Statements. The Issue Statements, as revised, will be submitted
to the Distant Executives.

(c) Level Three. Promptly after receiving the Issue Statements, the Distant
Executives will negotiate in good faith on a regular basis to resolve the
issue(s) as expeditiously

 

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as feasible. Thereafter, the Distant Executives will submit a joint written
recommendation for any issue(s) the Distant Executives agreed upon and separate
written recommendations for any issue(s) the Distant Executives disagreed upon
or which remain unresolved. IPS and WU agree to be bound by such joint written
recommendation. In the event, the Distant Executives are unable to resolve the
dispute, then, at the request of either Party, the dispute shall be settled by
binding arbitration by a single arbitrator. Such arbitration shall occur in
Denver, Colorado, and shall be administered by the American Arbitration
Association under its Commercial Arbitration Rules. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

(d) Continuity of WU Services. WU acknowledges that the timely and complete
performance of its obligations pursuant to this Agreement is critical to the
business and operations of IPS. Accordingly, in the event of a dispute between
IPS and WU, WU shall continue to so perform its obligations under this Agreement
in good faith during the resolution of such dispute unless and until this
Agreement is terminated in accordance with the provisions hereof.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first above written.

 

INTEGRATED PAYMENT SYSTEMS INC. By:  

/s/ Rodney J. Esch

Name:   Rodney J. Esch Title:   President WESTERN UNION FINANCIAL SERVICES, INC.
By:  

/s/ Royal Cole

Name:   Royal Cole Title:   Executive Vice President - Payment Services

 

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[Schedules Intentionally Omitted]

 

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