EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT is made effective as of the 26th day of February,
1998,  by and between  ELECTRONIC  PAYMENT  SERVICES,  INC. (the  "Company"),  a
Delaware corporation, and Richard N. Garman ("Executive").
     WHEREAS the Company desires to retain Executive's  services pursuant to the
terms of a written agreement,  and Executive desires to provide such services to
the Company;
     NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
     1. Employment.  The Company hereby agrees to continue to employ  Executive,
and Executive  hereby accepts such employment and agrees to perform  Executive's
duties  and  responsibilities,  in  accordance  with the terms,  conditions  and
provisions hereinafter set forth. This Agreement shall supersede and replace the
agreement  entered into between  Employee and the Company as of August 28, 1995,
which shall be void as of the date hereof.
     1.1. Employment Term. The term of this Agreement shall commence on February
26, 1998 (the  "Effective  Date") and shall  continue for an  indefinite  period
until  terminated in accordance  with Section 5 or Section 6 hereof.  The period
commencing as of the Effective  Date and ending on the date on which the term of
Executive's  employment  under the  Agreement  shall  terminate  is  hereinafter
referred to as the "Employment Term".
     1.2.  Duties and  Responsibilities.  Executive shall serve as President and
Chief Executive  Officer of the Company and in such other senior  positions,  if
any, to which Executive may be appointed during the Employment Term.  During the
Employment   Term,   Executive   shall   perform   all  duties  and  accept  all
responsibilities  incident to such  positions as may be assigned to Executive by
the  Company's  Board of  Directors  (the  "Board").  Executive  shall  have the
authority and  responsibility  normally  associated with such positions to which
Executive may be assigned, subject to the control of the Board.
     1.3. Extent of Service. During the Employment Term, Executive agrees to use
Executive's  best efforts to carry out Executive's  duties and  responsibilities
under  Section  1.2 hereof and,  consistent  with the other  provisions  of this
Agreement,  to devote substantially all Executive's business time, attention and
energy thereto.  Except as provided in Section 3 hereof, the foregoing shall not
be construed as preventing  Executive from making minority  investments in other
businesses or  enterprises,  from serving on corporate or other business  entity
boards of directors or from serving in any charitable or civic capacity provided
that  Executive  agrees  not to become  engaged in any other  business  activity
which,  in the  reasonable  judgment of the Board,  is likely to interfere  with
Executive's ability to discharge  Executive's duties and responsibilities to the
Company.
     1.4. Base Salary. For all the services rendered by Executive hereunder, the
Company  shall pay Executive a base salary  ("Base  Salary"),  commencing on the
Effective Date, at the annual rate of $330,000,  payable in installments at such
times as the Company  customarily pays its other senior level executives (but in
any event no less often than monthly). Executive's Base Salary shall be reviewed
annually  for  appropriate  adjustment  (but shall not be reduced  below that in
effect on the Effective Date without  Executive's  written consent) by the Board
pursuant to its normal performance review policies for senior level executives.
     1.5.  Retirement  and  Benefit  Coverages.   During  the  Employment  Term,
Executive  shall be  entitled to  participate  in all (a)  employee  pension and
retirement plans and programs ("Retirement Plans") and (b) welfare benefit plans
and programs ("Benefit Coverages"), in each case made available to the Company's
senior  level  executives  as a group  or to its  employees  generally,  as such
Retirement  Plans or  Benefit  Coverages  may be in  effect  from  time to time.
Executive shall also be covered by an individual  long-term disability insurance
policy  providing at least the level of coverage in effect for  Executive on the
Effective Date.
     1.6.  Reimbursement  of Expenses  and Dues;  Vacation.  Executive  shall be
provided with reimbursement of expenses related to Executive's employment by the
Company on a basis no less favorable than that which may be authorized from time
to time for senior level  executives as a group, and shall be entitled to annual
vacation and holidays in accordance with the Company's normal personnel policies
for senior level executives.
     1.7. Short-Term and Long- Term Incentive  Compensation.  Executive shall be
entitled to participate in any  short-term or long-term  incentive  compensation
programs  established by the Company for its senior level executives  generally,
depending  upon  achievement  of  certain  individual  or  business  performance
objectives  specified and approved by the Board (or a Committee  thereof) in its
sole discretion.
     2. Confidential  Information.  All work products of Executive's  efforts on
behalf  of or in  relation  to  the  Company,  either  on or off  the  Company's
facilities,  during the Employment Term shall be disclosed to the Company, shall
be  exclusive  property  of the  Company  and  shall be used  for the  Company's
exclusive  benefit.  This shall apply to all inventions,  discoveries,  designs,
processes and improvements, and Executive shall cooperate fully with the Company
in realizing  such  benefits,  including  but not limited to obtaining  patents,
copyrights,  confidential  treatment or the means of  protecting  the  Company's
exclusive rights to such work products.
     Executive  recognizes and  acknowledges  that,  during the Employment Term,
Executive will also have access to, learn,  be provided with and, in some cases,
will  prepare  and  create  certain   confidential   and  proprietary   business
information,  work products and trade  secrets of the Company,  included but not
limited to client and customer  information and lists for the Company,  internal
organization  or business  structure  of the  Company,  financial  products  and
services of the Company, and work assignments or capabilities of any employee of
the Company (herein  collectively called the "Confidential  Materials"),  all of
which are of substantial value to the Company in its business.  Executive agrees
not to use or cause to be used for Executive's own benefit or for the benefit of
any third  parties or to disclose to any third party in any manner,  directly or
indirectly,  any of the Confidential Materials without the express prior written
consent of the Board, unless such information is in the public domain through no
fault of  Executive  or except when  required to do so by a court of law, by any
governmental  agency  having  supervisory  authority  over the  business  of the
Company or by any  administrative  or  legislative  body  (including a committee
thereof) with apparent  jurisdiction to order Executive to divulge,  disclose or
make  accessible  such  information,  in which case  Executive  will  inform the
Company in writing  promptly of such  required  disclosure,  but in any event at
least  five  business  days  prior  to  disclosure.   All  written  Confidential
Information (including,  without limitation, in any computer or other electronic
format) which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company.  Executive agrees to return
to the Company either before or immediately  upon the termination of Executive's
employment  with the Company,  any and all  Confidential  Materials which are in
tangible  form  including  electronic  or  software,  and any  other  documents,
equipment  and  materials of any kind relating in any way to the business of the
Company which are or may be in the possession,  custody and control of Executive
and which are or may be the property of the  Company,  whether  Confidential  or
not,  including  any and all copies  thereof  which may have been made by or for
Executive.  Except as required in the performance of Executive's  duties for the
Company, or unless expressly authorized in writing by the Board, Executive shall
not remove any written  Confidential  Information  from the Company's  premises,
except in connection with the performance of Executive's  duties for the Company
and in a manner consistent with the Company's  policies  regarding  Confidential
Information.  For the  purposes of this Section 2, the term  "Company"  shall be
deemed to include the Company and all Affiliates,  as defined in Section 6.1(a),
of the Company.
     3. Non-Competition; Non-Solicitation.
     (a) During  Executive's  employment  by the Company and for a period of one
year after Executive's termination of employment for any reason,  Executive will
not, except with the prior written consent of the Board, directly or indirectly,
own, manage,  operate,  join, control,  finance or participate in the ownership,
management,  operation,  control or financing of, or be connected as an officer,
director,  employee, partner, principal,  agent,  representative,  consultant or
otherwise with, or use or permit Executive's name to be used in connection with,
any business or  enterprise  which is engaged in any  business  that is directly
competitive  with any business or  enterprise in which the Company is engaged at
the time of Executive's  termination of employment.  Executive acknowledges that
the Company  operates on a national  basis (in the United  States) and that this
covenant of Executive  can not be limited to a service area in which the Company
does business.
     (b) The  foregoing  restrictions  shall not be  construed  to prohibit  the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in a competitive  business having a class of
securities  registered  pursuant  to the  Securities  Exchange  Act of 1934 (the
"Exchange Act"),  provided that such ownership  represents a passive  investment
and that neither Executive nor any group of persons  including  Executive in any
way,  either  directly or indirectly,  manages or exercises  control of any such
corporation,  guarantees any of its financial  obligations,  otherwise takes any
part in its business, other than exercising Executive's rights as a shareholder,
or seeks to do any of the foregoing.
     (c)  Executive  further  covenants  and  agrees  that  during   Executive's
employment by the Company and for the period of one year  thereafter,  Executive
will not, directly or indirectly,  (i) solicit, divert, take away, or attempt to
solicit,  divert or take away, any of the Company's customers, or (ii) encourage
any customer to reduce its patronage of the Company.
     (d)  Executive  further  covenants  and  agrees  that  during   Executive's
employment by the Company and for the period of one year  thereafter,  Executive
will not,  except  with the prior  written  consent  of the Board,  directly  or
indirectly,  solicit or hire,  or encourage the  solicitation  or hiring of, any
person who was a managerial or higher level  employee of the Company at any time
during the term of  Executive's  employment by the Company by any employer other
than the  Company  for any  position  as an  employee,  independent  contractor,
consultant or otherwise.  The foregoing covenant of Executive shall not apply to
any person  after 12 months have  elapsed  subsequent  to the date on which such
person's employment by the Company has terminated.
     (e) For the purposes of this Section 3, the term "Company"  shall be deemed
to include the Company and the Affiliates,  as defined in Section 6.1(a), of the
Company.
     4. Equitable Relief.
     (a) Executive  acknowledges and agrees that the  restrictions  contained in
Sections 2 and 3 are  reasonable  and  necessary  to protect  and  preserve  the
legitimate interests, properties, goodwill and business of the Company, that the
Company  would not have  entered  into this  Agreement  in the  absence  of such
restrictions and that irreparable  injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive  represents
and  acknowledges  that (i) Executive has been advised by the Company to consult
Executive's  own legal  counsel  in  respect  of this  Agreement,  and (ii) that
Executive has had full  opportunity,  prior to execution of this  Agreement,  to
review thoroughly this Agreement with Executive's counsel.
     (b) Executive  further  acknowledges and agrees that a breach of any of the
restrictions  in Sections 2 and 3 cannot be adequately  compensated  by monetary
damages.  Executive agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages, as
well as an equitable  accounting  of all  earnings,  profits and other  benefits
arising  from any  violation  of Sections 2 or 3 hereof,  which  rights shall be
cumulative  and in addition to any other rights or remedies to which the Company
may be  entitled.  In the event that any of the  provisions  of  Sections 2 or 3
hereof should ever be adjudicated to exceed the time,  geographic,  service,  or
other  limitations  permitted by applicable law in any  jurisdiction,  it is the
intention  of the parties that the  provision  shall be amended to the extent of
the  maximum  time,  geographic,  service,  or other  limitations  permitted  by
applicable law, that such amendment shall apply only within the  jurisdiction of
the court  that made  such  adjudication  and that the  provision  otherwise  be
enforced to the maximum extent permitted by law.
     (c) If Executive  breaches any of Executive's  obligations under Sections 2
or 3 hereof,  and such  breach  constitutes  "cause,"  as defined in Section 5.3
hereof, or would constitute cause if it had occurred during the Employment Term,
the Company  shall  thereafter  remain  obligated  only for any  benefits due in
accordance with the terms of any applicable plans and programs of the Company.
     (d) Executive  irrevocably  and  unconditionally  (i) agrees that any suit,
action  or  other  legal  proceeding  arising  out of  Sections  2 or 3  hereof,
including  without   limitation,   any  action  commenced  by  the  Company  for
preliminary and permanent  injunctive relief and other equitable relief,  may be
brought in the United States District Court for the District of Delaware,  or if
such court does not have  jurisdiction or will not accept  jurisdiction,  in any
court of general  jurisdiction  in  Wilmington,  Delaware,  (ii) consents to the
non-exclusive  jurisdiction  of any  such  court  in any such  suit,  action  or
proceeding,  and (iii)  waives any  objection  which  Executive  may have to the
laying  of venue of any such  suit,  action  or  proceeding  in any such  court.
Executive also  irrevocably and  unconditionally  consents to the service of any
process, pleadings,  notices or other papers in a manner permitted by the notice
provisions of Section 10 hereof.
     (e) For the purposes of this Section 4, the term "Company"  shall be deemed
to include the Company and the Affiliates,  as defined in Section 6.1(a), of the
Company.
     5. Termination.  The Employment Term shall terminate upon the occurrence of
any one of the following events:
     5.1. Disability. The Company may terminate the Employment Term if Executive
is unable  substantially  to perform  Executive's  duties  and  responsibilities
hereunder to the full extent required by the Board by reason of illness,  injury
or incapacity  for six  consecutive  months,  or for more than six months in the
aggregate during any period of twelve calendar months;  provided,  however, that
the Company shall continue to pay Executive's Base Salary until the Company acts
to terminate the Employment Term. If the Company terminates the Employment Term,
Executive shall be entitled to receive (i) any amounts earned,  accrued or owing
but  not  yet  paid  under  Section 1  above,  (ii) a pro  rata  portion  of any
Short-Term  or  Long-Term  Incentive   Compensation  provided  under  a  program
described  in Section 1.7 for the portion of the  performance  period  under any
such program that Executive participated prior to the end of the Employment Term
and (iii) any other  benefits  in  accordance  with the terms of any  applicable
plans and programs of the Company.  Otherwise, the Company shall have no further
liability or  obligation  to Executive for  compensation  under this  Agreement.
Executive agrees, in the event of a dispute under this Section 5.1, to submit to
a physical examination by a licensed physician selected by the Board.
     5.2. Death. The Employment Term shall terminate in the event of Executive's
death.  In such event,  the Company shall pay to  Executive's  executors,  legal
representatives  or  administrators,  as  applicable,  an  amount  equal  to the
installment of  Executive's  Base Salary set forth in Section 1.4 hereof for the
month in which Executive dies. In addition, Executive's estate shall be entitled
to receive (i) any other amounts earned, accrued or owing but not yet paid under
Section  1  above,  (ii) a pro  rata  portion  of any  Short-Term  or  Long-Term
Incentive Compensation provided under a program described in Section 1.7 for the
portion  of the  performance  period  under  any  such  program  that  Executive
participated  prior  to the end of the  Employment  Term  and  (iii)  any  other
benefits in accordance  with the terms of any  applicable  plans and programs of
the  Company.  Otherwise,  the  Company  shall  have  no  further  liability  or
obligation under this Agreement to Executive's executors, legal representatives,
administrators,  heirs or assigns or any other person  claiming under or through
Executive.
     5.3. Cause. The Company may terminate the Employment Term, at any time, for
"cause" upon written  notice,  in which event all payments  under this Agreement
shall cease, except for Base Salary to the extent already accrued, but Executive
shall remain  entitled to any other benefits in accordance with the terms of any
applicable  plans and programs of the Company.  For purposes of this  Agreement,
Executive's employment may be terminated for "cause" if the Board determines, in
the exercise of good faith and  reasonable  judgment,  that any of the following
has occurred:
     (a) Gross negligence or willful  misconduct by Executive in the performance
of Executive's duties for the Company; or
     (b) Executive  intentionally and materially breached this Agreement,  which
breach has not been cured within 30 days after written  notice of the breach was
given by the Board to Executive.
     For purposes of this Agreement, an act or omission on the part of Executive
shall be deemed  "intentional"  only if it was not due  primarily to an error in
judgment or  negligence  and was done by Executive not in good faith and without
reasonable  belief  that the act or  omission  was in the best  interest  of the
Company.
     5.4. Termination Without Cause and Non-Renewal.
     (a) The Company may remove Executive,  at any time,  without cause from the
position in which  Executive is employed  hereunder  and Executive may terminate
employment if Executive has "Good  Reason," as defined in Section 6.1 below,  to
terminate the Agreement (in either such case the Employment Term shall be deemed
to have ended) upon not less than 60 days' prior written  notice to Executive or
to the Company, as applicable;  provided,  however, that, in the event that such
notice is given, Executive shall be under no obligation to render any additional
services  to the Company  and,  subject to the  provisions  of Section 3 hereof,
shall be allowed to seek other employment. Upon any such removal or if Executive
has Good  Reason to  terminate  the  Agreement,  Executive  shall be entitled to
receive,  as  liquidated  damages  for the failure of the Company to continue to
employ  Executive,  only the amount due to Executive  under the  Company's  then
current severance pay plan for employees. No other payments or benefits shall be
due under this  Agreement to Executive,  but Executive  shall be entitled to any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.
     (b)  Notwithstanding  the provisions of Section  5.4(a),  in the event that
Executive  offers to execute,  and  executes  and does not revoke if offered,  a
written release upon such removal, termination or non-renewal,  substantially in
the form  attached  hereto as Annex 1, (the  "Release"),  of any and all  claims
against the Company and all related  parties with respect to all matters arising
out of Executive's  employment by the Company (other than any entitlements under
the terms of this  Agreement or under any other plans or programs of the Company
in which  Executive  participated  and  under  which  Executive  has  accrued  a
benefit), or the termination thereof, Executive shall be entitled to receive, in
lieu of the payment  described  in Section  5.4(a),  which  Executive  agrees to
waive,
     (i) as  liquidated  damages  for the  failure of the Company to continue to
employ Executive, 12 monthly cash payments,  commencing within 30 days after the
effective  date  of  the  removal  or  non-renewal,   equal  to  one-twelfth  of
Executive's Base Compensation, as defined in Section 6.1 below;
     (ii) for a period equal to two years  following  the end of the  Employment
Term,  Executive and Executive's  spouse and dependents  shall be eligible for a
continuation  of  those  Benefit  Coverages,  as in  effect  at the time of such
termination or removal,  and as the same may be changed from time to time, as if
Executive had been continued in employment during said period or to receive cash
in lieu of  such  benefits  or  premiums,  as  applicable,  where  such  Benefit
Coverages  may not be  continued  (or where such  continuation  would  adversely
affect the tax status of the plan  pursuant  to which the  Benefit  Coverage  is
provided) under applicable law or regulations;
     (iii) any other  amounts  earned,  accrued  or owing but not yet paid under
Section 1 above;
     (iv) any other  benefits  in  accordance  with the terms of any  applicable
plans and programs of the Company; and
     (v)  all  options  to  purchase  shares  of  common  stock  of the  Company
previously  granted to  Executive  shall be 100% vested and  nonforfeitable  and
shall be  exercisable  until the  earlier  of (a) the last day of the 36th month
following the removal,  termination  or non-renewal or (b) the expiration of the
original term of the option.
     (vi)   as   additional    consideration   for   the   non-competition   and
non-solicitation  covenant contained in Section 3, a single cash payment, within
30 days  after  the  effective  date of the  removal  or  non-renewal,  equal to
Executive's Base Compensation, as defined in Section 6.1 below.
     5.5.  Voluntary  Termination.   Executive  may  voluntarily  terminate  the
Employment  Term upon 30 days'  prior  written  notice for any  reason.  In such
event,  after the effective date of such termination,  no further payments shall
be due under this  Agreement  except  that  Executive  shall be  entitled to any
benefits due in accordance with the terms of any applicable plan and programs of
the Company.
     6. Other Payments and Definitions.
     6.1.  Definitions.  For all purposes of this Section 6, the following terms
shall have the  meanings  specified  in this  Section  6.1  unless  the  context
otherwise clearly requires:
     (a)  "Affiliate"  shall mean an "affiliate" as defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
     (b) "Base  Compensation"  shall mean,  for the  calendar  year  immediately
preceding  Executive's  Termination of Employment,  Executive's  Base Salary and
Short-Term Incentive  Compensation,  as reported for federal income tax purposes
on Form W-2 for such calendar year,  together with any and all salary  reduction
authorized amounts under any of the Company's benefit plans or programs for such
calendar year. "Base  Compensation" shall not include the value of any Long-Term
Incentive Compensation, any stock options or any exercise thereunder.
     (c) "Change of Control" shall mean the happening of any of the following:
     1. Prior to any  registration of the Company's shares of common stock under
Section 12 of the Securities Act of 1933:
     (i) When any "person," as such term is used in Sections  13(d) and 14(d) of
the  Exchange  Act,  other than the  Company,  its  Affiliates,  or any  Company
employee benefit plan (including any trustee of such plan acting as trustee), is
or becomes the  "beneficial  owner" (as defined in Rule 13d-3 under the Exchange
Act),  directly or indirectly,  of securities of the Company  representing  more
than 50% of the combined voting power of either (i) the then outstanding  shares
of common stock of the Company (the "Outstanding Common Stock") or (ii) the then
outstanding  voting  securities of the Company entitled to vote generally in the
election of directors (the "Voting Securities"); or
     (ii)   Consummation  by  the  Company  of  a   reorganization,   merger  or
consolidation  (a "Business  Combination"),  in each case, with respect to which
all or substantially all of the individuals and entities who were the respective
beneficial  owners  of  the  Outstanding  Common  Stock  and  Voting  Securities
immediately prior to such Business  Combination do not,  following such Business
Combination,  beneficially  own,  directly  or  indirectly,  more  than  50% of,
respectively,  the then  outstanding  shares  of common  stock and the  combined
voting  power  of the  then  outstanding  voting  securities  entitled  to  vote
generally in the election of directors,  as the case may be, of the corporation,
business trust or other entity  resulting from or being the surviving  entity in
such  Business  Combination  in  substantially  the  same  proportion  as  their
ownership  immediately  prior to such Business  Combination  of the  Outstanding
Common Stock and Voting Securities, as the case may be; or
     (iii) Consummation of a complete  liquidation or dissolution of the Company
or sale or other  disposition of all or  substantially  all of the assets of the
Company other than to a corporation, business trust or other entity with respect
to which,  following such sale or disposition,  more than 50% of,  respectively,
the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors,  as the  case  may  be,  is  then  owned  beneficially,  directly  or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively,  of the Outstanding Common Stock and Voting
Securities  immediately  prior to such sale or disposition in substantially  the
same proportion as their  ownership of the  Outstanding  Common Stock and Voting
Securities, as the case may be, immediately prior to such sale or disposition.
     2. After  any  registration of the  Company's shares  of common stock under
Section 12 of the Securities Act of 1933:
     (i) An event described in 1(i) above but substituting 20% for 50%;
     (ii) An event described in 1(ii) or (iii) above; or
     (iii) Individuals who, as of the beginning of any twenty-four month period,
constitute  the  Board  (the  "Incumbent  Directors")  cease  for any  reason to
constitute  at least a majority of the Board or cease to be able to exercise the
powers of the majority of the Board,  provided  that any  individual  becoming a
director subsequent to the beginning of such period whose election or nomination
for election by the Company's  stockholders was approved by a vote of at least a
majority of the  directors  then  comprising  the Incumbent  Directors  shall be
considered as though such individual  were a member of the Incumbent  Directors,
but excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened  election  contest relating
to the  election  of the  Board  (as  such  terms  are  used in Rule  14a-11  of
Regulation 14A promulgated under the Exchange Act).
     (d) "Exchange Act" shall mean the Securities Exchange Act of 1934.
     (e)  "Good  Reason"  shall  mean  grounds  for  Executive  to  institute  a
Termination  of Employment  with the Company (1) upon any failure of the Company
materially  to  comply  with and  satisfy  any of the  terms of this  Agreement,
including   any   reduction  by  the  Company  of  the   authority,   duties  or
responsibilities  or reporting lines of Executive,  any reduction of Executive's
compensation or benefits due hereunder, or the assignment to Executive of duties
which are materially  inconsistent  with the duties of  Executive's  position as
defined  in  Section  1.2  above or (2) if  Executive  is  transferred,  without
Executive's  written  consent,  to a  location  that is more than 50 miles  from
Executive's  principal  place of business  immediately  preceding  the Change of
Control.
     (f)  "Termination  Date"  shall  mean the date of  receipt  of a Notice  of
Termination of this Agreement or any later date specified therein.
     (g)  "Termination of Employment"  shall mean the termination of Executive's
actual  employment  relationship  with the Company  occasioned  by the Company's
action.
     (h)  "Termination  upon a Change of Control"  shall mean a  Termination  of
Employment  upon or  within  two  years  after a Change of  Control  either  (i)
initiated by the Company for any reason other than  Executive's  (w) disability,
as  defined  in  Section  5.1  hereof,  (x)  death,  (y) retirement  on or after
attaining  age 65,  or (z)  "cause,"  as  defined  in  Section  5.3  hereof,  or
(ii) initiated by Executive for Good Reason.
     6.2. Notice of Termination.  Any Termination upon a Change of Control shall
be  communicated  by a Notice of  Termination to the other party hereto given in
accordance with Section 10 hereof. For purposes of this Agreement,  a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement  relied upon, (ii) briefly  summarizes the facts and
circumstances  deemed to provide a basis for a Termination of Employment and the
applicable provision hereof, and (iii) if the Termination Date is other than the
date of receipt of such notice, specifies the Termination Date (which date shall
not be more than 15 days after the giving of such notice).
     6.3.  Payments upon  Termination.  Subject to the provisions of Section 6.6
hereof,  in the event of Executive's  Termination upon a Change of Control,  the
Company  agrees (a) in the event  Executive  executes  the  Release  required by
Section  5.4(b),  to pay to Executive,  in a single cash payment,  within thirty
days after the Termination Date, (i) Executive's Base  Compensation,  as defined
in Section 6.1(b), and, in addition, all amounts, benefits and Benefit Coverages
described in Section  5.4(b)(ii),  (iii), (iv), (v) and (vi) or (b) in the event
Executive fails or refuses to execute the Release required by Section 5.4(b), to
pay to  Executive,  in a single  cash  payment,  within  thirty  days  after the
Termination  Date,  the amount due under Section  5.4(a) above and, in addition,
all other amounts and benefits described in Section 5.4(a).
     6.4.  Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit  Executive's  continuing  or future  participation  in or rights under any
benefit,  bonus,  incentive or other plan or program provided by the Company and
for which Executive may qualify;  provided,  however,  that if Executive becomes
entitled to and  receives all of the  payments  provided for in this  Agreement,
Executive  hereby  waives  Executive's  right  to  receive  payments  under  any
severance plan or similar program applicable to all employees of the Company.
     6.5  Shareholder  Approval.  In the event that a Change of  Control  occurs
prior to any  registration of the Company's shares of common stock under Section
12 of the Securities Act of 1933, the Company covenants and agrees that it shall
obtain a favorable vote of more than 75% of its stockholders in order to satisfy
the requirements of Section  280G(b)(5)(B) of the Internal Revenue Code of 1986,
as amended (the "Code"),  in order to preclude the  limitations  of Section 280G
and the excise tax of Section 4999 from applying.
         6.6.     Certain Increase in Payments.
     After any  registration  of the  Company's  shares of  common  stock  under
Section 12 of the Securities Act of 1933 or in the event the Company is breaches
its obligation under Section 6.5:
     (a)  Anything in this  Agreement to the  contrary  notwithstanding,  in the
event  that it shall be  determined  that any  payment  or  distribution  by the
Company  to or for  the  benefit  of  Executive,  whether  paid  or  payable  or
distributed  or  distributable  pursuant  to the  terms  of  this  Agreement  or
otherwise (the "Payment"), would constitute an "excess parachute payment" within
the meaning of Section  280G of the Internal  Revenue  Code of 1986,  as amended
(the  "Code"),  Executive  shall be paid an  additional  amount  (the  "Gross-Up
Payment") such that the net amount  retained by Executive after deduction of any
excise tax imposed  under Section 4999 of the Code,  and any federal,  state and
local income and employment tax and excise tax imposed upon the Gross-Up Payment
shall be equal to the  Payment.  For purposes of  determining  the amount of the
Gross-Up  Payment,  Executive  shall be deemed  to pay  federal  income  tax and
employment  taxes at the highest  marginal rate of federal income and employment
taxation in the calendar  year in which the  Gross-Up  Payment is to be made and
state and local  income  taxes at the highest  marginal  rate of taxation in the
state and locality of Executive's  residence on the Termination Date, net of the
maximum  reduction  in  federal  income  taxes  that  may be  obtained  from the
deduction of such state and local taxes.
     (b) All determinations to be made under this Section 6 shall be made by the
Company's  independent  public  accountant  immediately  prior to the  Change of
Control (the "Accounting Firm"), which firm shall provide its determinations and
any supporting  calculations both to the Company and Executive within 10 days of
the  Termination  Date. Any such  determination  by the Accounting Firm shall be
binding upon the Company and  Executive.  Within five days after the  Accounting
Firm's determination,  the Company shall pay (or cause to be paid) or distribute
(or cause to be  distributed) to or for the benefit of Executive such amounts as
are then due to Executive under this Agreement.
     (c) In the event that upon any audit by the Internal Revenue Service, or by
a state or local taxing authority,  of the Payment or Gross-Up Payment, a change
is finally  determined  to be required in the amount of taxes paid by Executive,
appropriate  adjustments  shall be made under this  Agreement  such that the net
amount which is payable to Executive after taking into account the provisions of
Section 4999 of the Code shall reflect the intent of the parties as expressed in
subsection (a) above, in the manner determined by the Accounting Firm.
     (d) All of the fees and expenses of the  Accounting  Firm in performing the
determinations  referred  to in  subsections  (b) and (c)  above  shall be borne
solely by the Company.  The Company  agrees to indemnify  and hold  harmless the
Accounting Firm of and from any and all claims,  damages and expenses  resulting
from or  relating to its  determinations  pursuant  to  subsections  (b) and (c)
above,  except  for  claims,  damages  or  expenses  resulting  from  the  gross
negligence or wilful misconduct of the Accounting Firm.
     7. Survivorship. The respective rights and obligations of the parties under
this Agreement  shall survive any  termination of Executive's  employment to the
extent necessary to the intended preservation of such rights and obligations.
     8.  Mitigation.  Executive  shall not be required to mitigate the amount of
any  payment  or  benefit  provided  for in  this  Agreement  by  seeking  other
employment  or  otherwise  and there  shall be no  offset  against  amounts  due
Executive  under this Agreement on account of any  remuneration  attributable to
any subsequent employment that Executive may obtain.
     9. Arbitration;  Expenses. In the event of any dispute under the provisions
of this Agreement  other than a dispute in which the primary relief sought is an
equitable  remedy such as an  injunction,  the parties shall be required to have
the  dispute,  controversy  or  claim  settled  by  arbitration  in the  City of
Wilmington,  Delaware  accordance  with  National  Rules for the  Resolution  of
Employment  Disputes  then in effect of the  American  Arbitration  Association,
before a panel of  three  arbitrators,  two of whom  shall  be  selected  by the
Company and Executive,  respectively, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance  with  applicable  law in any court of competent  jurisdiction.  This
arbitration provision shall be specifically  enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a  dispute  involving  this  Agreement  other  than a  benefit  specifically
provided  under or by virtue of the  Agreement.  If  Executive  prevails  on any
material issue which is the subject of such arbitration or lawsuit,  the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses  relating to the conduct of the arbitration
(including  the  Company's  and  Executive's   reasonable  attorneys'  fees  and
expenses).  Otherwise,  each party  shall be  responsible  for its own  expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.
     10.  Notices.  All notices and other  communications  required or permitted
under this Agreement or necessary or convenient in connection  herewith shall be
in writing and shall be deemed to have been given when hand  delivered or mailed
by registered or certified  mail, as follows  (provided that notice of change of
address shall be deemed given only when received):

         If to the Company, to:
                  Marcia E. Heister, General Counsel
                  Electronic Payment Services, Inc.
                  1100 Carr Road
                  Wilmington, DE 19808

         With a required copy to:
                  Morgan, Lewis & Bockius
                  2000 One Logan Square
                  Philadelphia, PA  19103-6993
                  Attention:  Robert J. Lichtenstein, Esquire

         If to Executive, to:
                  Richard N. Garman
                  4208 Kennett Pike
                  Greenville, DE 19807

     or to such other names or  addresses  as the Company or  Executive,  as the
case may be, shall  designate by notice to each other person entitled to receive
notices in the manner specified in this Section.
     11. Contents of Agreement; Amendment and Assignment.
     (a) This Agreement sets forth the entire understanding  between the parties
hereto  with  respect  to the  subject  matter  hereof  and  cannot be  changed,
modified,  extended or terminated except upon written amendment  approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
     (b) All of the terms and provisions of this Agreement shall be binding upon
and  inure  to the  benefit  of  and be  enforceable  by the  respective  heirs,
executors, administrators, legal representatives,  successors and assigns of the
parties hereto,  except that the duties and  responsibilities of Executive under
this  Agreement  are  of a  personal  nature  and  shall  not be  assignable  or
delegatable  in whole or in part by  Executive.  The Company  shall  require any
successor  (whether  direct or  indirect,  by purchase,  merger,  consolidation,
reorganization  or  otherwise)  to all or  substantially  all of the business or
assets of the  Company,  by  agreement  in form and  substance  satisfactory  to
Executive,  expressly to assume and agree to perform this  Agreement in the same
manner and to the extent the  Company  would be  required  to perform if no such
succession had taken place.
     12. Severability. If any provision of this Agreement or application thereof
to  anyone  or  under  any   circumstances  is  adjudicated  to  be  invalid  or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other  provision or application of this Agreement  which can be given
effect without the invalid or  unenforceable  provision or application and shall
not  invalidate or render  unenforceable  such  provision or  application in any
other jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances,  it shall nevertheless remain in full force
and effect in all other circumstances.
     13. Remedies  Cumulative;  No Waiver.  No remedy  conferred upon a party by
this  Agreement is intended to be exclusive  of any other  remedy,  and each and
every such  remedy  shall be  cumulative  and shall be in  addition to any other
remedy  given under this  Agreement  or now or  hereafter  existing at law or in
equity. No delay or omission by a party in exercising any right, remedy or power
under this  Agreement  or existing at law or in equity  shall be  construed as a
waiver  thereof,  and any such right,  remedy or power may be  exercised by such
party from time to time and as often as may be deemed  expedient or necessary by
such party in its sole discretion.
     14.  Beneficiaries/References.  Executive shall be entitled,  to the extent
permitted  under any  applicable  law,  to select  and change a  beneficiary  or
beneficiaries  to  receive  any  compensation  or  benefit  payable  under  this
Agreement  following  Executive's  death by giving the  Company  written  notice
thereof.  In the  event of  Executive's  death or a  judicial  determination  of
Executive's  incompetence,  reference in this  Agreement  to Executive  shall be
deemed, where appropriate, to refer to Executive's beneficiary,  estate or other
legal representative.
     15.  Miscellaneous.  All section  headings  used in this  Agreement are for
convenience only. This Agreement may be executed in counterparts,  each of which
is an original.  It shall not be necessary in making proof of this  Agreement or
any counterpart hereof to produce or account for any of the other counterparts.
     16.  Withholding.  The Company may withhold  from any  payments  under this
Agreement  all  federal,  state and local  taxes as the  Company is  required to
withhold pursuant to any law or governmental rule or regulation. Executive shall
bear all expense of, and be solely responsible for, all federal, state and local
taxes due with respect to any payment received under this Agreement.
     17.  Governing  Law. This  Agreement  shall be governed by and  interpreted
under the laws of the state of Delaware without giving effect to any conflict of
laws provisions.
     18.  Establishment  of Trust.  The Company has  established  an irrevocable
trust fund  pursuant to a trust  agreement  to hold assets to satisfy any of its
obligations  under certain  employee  benefit plans and shall use such trust, in
the event of a Change of  Control  or in the event  that a Change of  Control is
imminent,  as  defined in that  trust,  to satisfy  its  obligations  under this
Agreement.  Funding  of such  trust  fund  shall be  subject to the terms of the
agreement pursuant to which the trust was established.
     IN WITNESS WHEREOF,  the undersigned,  intending to be legally bound,  have
executed this Agreement as of the date first above written.

Attest:                                     ELECTRONIC PAYMENT SERVICES, INC.

By:/s/Mary Beth Lis                         By:/s/Marcia E. Heister
   -------------------------------             ---------------------------------
   Asst. Secretary                             Marcia E. Heister
                                               General Counsel

                                            Accepted:/s/Richard N. Garman 
                                                     ---------------------------