SEPARATION AND DISTRIBUTION AGREEMENT

Exhibit 2.1

Separation and Distribution Agreement

Dated as of September 29, 2006

Between

First Data Corporation

and

The Western Union Company

TABLE OF CONTENTS

 

 

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EXHIBITS

 

SCHEDULES

 

SEPARATION AND DISTRIBUTION AGREEMENT

THIS SEPARATION AND DISTRIBUTION AGREEMENT is made as of September 29, 2006 between First Data Corporation, a Delaware corporation (“ First Data ”), and The Western Union Company, a Delaware corporation (“ Western Union ”), and, as of the date hereof, a wholly-owned subsidiary of First Data.

WHEREAS, First Data, through the Western Union Subsidiaries (as hereinafter defined), is engaged in the business of providing consumer to consumer money transfer services, consumer to business payment services, retail money order services and certain prepaid services (the “ Transferred Business ”);

WHEREAS, the Board of Directors of First Data has determined that it would be advisable and in the best interests of First Data and its stockholders for First Data to transfer to Western Union (i) the Western Union Subsidiaries and (ii) the Transferred Business Assets (as hereinafter defined);

WHEREAS, in connection with the Contribution (as defined herein), First Data has agreed to transfer, or cause to be transferred, to Western Union such Western Union Subsidiaries and the Transferred Business Assets;

WHEREAS, the Board of Directors of First Data has determined that it would be advisable and in the best interests of First Data and its stockholders for First Data to distribute on a pro rata basis to the holders of First Data’s common stock, $0.01 par value per share (“ First Data Common Stock ”), without any consideration being paid by the holders of such First Data Common Stock, all of the outstanding shares of Western Union common stock, $0.01 par value per share (“ Western Union Common Stock ”), owned by First Data as of the Distribution Date (as defined herein);

WHEREAS, for federal income tax purposes, the Contribution and Distribution (as defined herein) are intended to qualify for tax-free treatment under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “ Code ”) and this Agreement is intended to be the “plan of reorganization” with respect thereto; and

WHEREAS, it is appropriate and desirable to set forth the principal transactions required to effect the Contribution and Distribution and certain other agreements that will govern the relationship of First Data and Western Union following the Distribution.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 Definitions . As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.1 :

“ Action ” means any action, claim, demand, suit, arbitration, inquiry, subpoena, discovery request, proceeding or investigation by or before any court, grand jury or Governmental Authority.

“ 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. After the Distribution, Western Union and First Data shall not be deemed to be under common Control for purposes hereof due solely to the fact that Western Union and First Data have common stockholders.

“ Agent ” means Wells Fargo Bank, National Association, the distribution agent appointed by First Data to distribute shares of Western Union Common Stock pursuant to the Distribution.

“ Agreement ” means this Separation and Distribution Agreement, as the same may be amended from time to time.

“ Applicable Deadline ” has the meaning set forth in Section 13.3(b) .

“ Arbitration Act ” means the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.

“ Arbitration Demand Notice ” has the meaning set forth in Section 13.3(a) .

“ Asset Transfer Agreements ” means the agreements listed on Schedule 1.1 (D)  pursuant to which certain assets related to the Transferred Business will or have been transferred or licensed by the applicable First Data Party to the applicable Western Union Party, or by the applicable Western Union Party to the applicable First Data Party.

“ Assumed Actions ” has the meaning set forth in Section 8.7(a).

“ Cash Consideration ” has the meaning set forth in Section 3.3(a) .

“ CESI Holdings ” means CESI Holdings, Inc., a Delaware corporation.

“ Claims Administration ” means the processing of claims made under First Data Policies, including the reporting of claims to the insurance carrier, management and defense of claims, and providing for appropriate releases upon settlement of claims.

“ Claims Made Policies ” has the meaning set forth in Section 10.5(a) .

“ Code ” has the meaning set forth in the Recitals.

“ Commercial Agreements ” means the agreements entered into on or before the Distribution Date regarding the ongoing business and service relationships between the First Data Parties and the Western Union Parties identified on Schedule 1.1(A) .

“ Confidential Information ” means any of the following:

 

(a)

any information that is competitively sensitive material or otherwise of value to First Data, Western Union and its or their Subsidiaries and/or Affiliates and not generally known to the public, including, but not limited to, product planning

 

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information, marketing strategies, plans, finance, operations, consumer and/or customer relationships, consumer and/or customer profiles, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of First Data, Western Union and its and their Subsidiaries and/or Affiliates and the consumers, customers, clients and suppliers of any of the foregoing;

 

(b)

Confidential Personal Information;

 

(c)

any scientific or technical information, design, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords First Data, Western Union and its and their Subsidiaries and/or Affiliates a competitive advantage over its competitors; and

 

(d)

all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, information, and trade secrets, whether or not patentable or copyrightable.

Confidential Information includes without limitation, all documents, inventions, substances, engineering and laboratory notebooks, drawings, diagrams, computer programs and data, specifications, bills of material, equipment, prototypes and models, and any other tangible manifestation (including data in computer or other digital format) of the foregoing.

“ Confidential Personal Information ” shall mean any information about identifiable individuals (including, without limitation, identifiable consumers or employees or other personnel) which First Data, Western Union and its and their Subsidiaries and/or Affiliates provides access or transfers to the other hereunder or which the other otherwise collects, uses, discloses, processes or otherwise handles in connection with this Agreement or any Transaction Agreement including (without limitation) any (A) information: (i) a consumer provides to First Data, Western Union, its or their Subsidiaries and/or Affiliates and/or its or their employees, agents or contractors to obtain a financial product or service; (ii) about a consumer resulting from any transaction involving a financial product or service between First Data, Western Union, its or their Subsidiaries and/or Affiliates, its or their employees, agents or contractors and a consumer; or (iii) First Data, Western Union, its or their Subsidiaries and/or Affiliates and its or their employees, agents or contractors otherwise obtain about a consumer (directly or indirectly) in connection with providing a financial product or service to that consumer; (B) list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived using any information of the type described in subsection (A) hereof; and (C) employment and personnel records and related information of First Data, Western Union and its or their Subsidiaries and Affiliates.

“ Consideration ” has the meaning set forth in Section 3.3(a) .

“ Contract ” means any written or oral agreement, undertaking, contract, commitment, lease, license, permit, franchise, concession, deed of trust, contract, note, bond, mortgage, indenture, arrangement or other instrument or obligation.

 

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“ Contribution ” has the meaning set forth in Section 3.3(a) .

“ Control ” means the power to direct the management of an entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled by” and “under common Control” have meanings correlative to the foregoing.

“ Conveyancing Instruments ” has the meaning set forth in Section 6.1 .

“ Debt Exchange ” has the meaning set forth in Section 3.1(a) .

“ Distributed Companies ” means FDCS Holdings, CESI Holdings, TeleCheck, EBP Re, Ltd., IPS Holdings, Inc., Virtual Financial Services, LLC, First Data Canada Limited and their respective Subsidiaries (including those formed or acquired after the date hereof).

“ Distribution ” has the meaning set forth in Section 4.5(a) .

“ Distribution Date ” means September 29, 2006.

“ Distribution Ratio ” has the meaning set forth in Section 4.5(a) .

“ ECG ” means E Commerce Group, Inc., a New York corporation.

“ Effective Time ” means the time at which the Distribution occurs on the Distribution Date.

“ Eligible First Data Debt ” means principal and interest on (a) all or a portion of the outstanding Historic First Data Long-Term Debt (as reduced by the amount of Refinancing Commercial Paper) and/or (b) First Data Commercial Paper outstanding on the Distribution Date up to an amount equal to the sum of (i) $700 million plus (ii) the amount of Refinancing Commercial Paper.

“ Employee Contract ” means any written agreement or contract between a Party and a current or former employee of any Party.

“ Employee Matters Agreement ” means the Employee Matters Agreement, dated the date hereof, between First Data and Western Union, the form of which is attached hereto as Exhibit A .

“ Escalation Notice ” has the meaning set forth in Section 13.2(a) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Exchange Agreement ” has the meaning set forth in Section 3.1(a) .

“ Exchange Banks ” has the meaning set forth in Section 3.1(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 court filing fees, court costs, arbitration fees or costs, witness fees,

 

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and reasonable fees and disbursements of legal counsel, investigators, expert witnesses, consultants, accountants and other professionals).

“ FDCS Holdings ” means First Data Commercial Services Holdings, Inc., a Delaware corporation.

“ FDR ” means First Data Resources Inc., a Delaware corporation.

“ FFMC ” means First Financial Management Corporation, a Georgia corporation.

“ FFMC Note ” has the meaning set forth in Section 3.1(c) .

“ FIFO Basis ” means, with respect to the payment of Unrelated Claims pursuant to the same Shared Policy, the payment in full of each successful claim (regardless of whether a First Data Insured Party or a Western Union Insured Party is the claimant) in the order in which such successful claim is approved by the insurance carrier, until the limit of the applicable Shared Policy is met.

“ First Data ” has the meaning set forth in the first paragraph of this Agreement.

“ First Data Balance Sheet ” means the unaudited consolidated balance sheet of First Data as of June 30, 2006 attached hereto as Exhibit B.

“ First Data Business ” means (a) all businesses and operations of the First Data Parties, other than the Western Union Business, and (b) the First Data Former Businesses.

“ First Data Commercial Paper ” means First Data commercial paper and First Data Extendible Commercial Notes.

“ First Data Common Stock ” has the meaning set forth in the Recitals.

“ First Data Extendible Commercial Notes ” means unsecured notes of First Data issued at a discount having an initial redemption date not more than 90 days from the date of issue and a final maturity date of up to 390 days from the date of issue.

“ First Data Financial Instruments ” means all credit facilities, guaranties, foreign currency forward exchange contracts, letters of credit and similar instruments primarily related to the First Data Business under which any Western Union Party has any primary, secondary, contingent, joint, several or other Liability, including those set forth on Schedule 1.1(B) .

“ First Data Former Business ” means the Former Businesses set forth on Schedule 1.1(C) and any Former Business (other than the Western Union Parties, the Transferred Business and the Former Businesses identified on Schedule 1.1(I) ) owned by, in whole or in part, and/or operated by, in whole or in part, any of the First Data Parties.

“ First Data Indemnified Parties ” has the meaning set forth in Section 12.2 .

 

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“ First Data Insured Party ” means any First Data Party that is a named insured, additional named insured or insured under any Shared Policy.

“ First Data Intercompany Notes Payable ” means the payables of the type reflected on the historical portion of the Western Union Balance Sheet as “Notes receivable from affiliated companies” (which, as of June 30, 2006, was in the amount of approximately $778.8 million) owed by one or more First Data Parties to one or more Western Union Subsidiaries incurred at any time prior to the Effective Time; it being understood that to the extent the amount of any balance included on the Western Union Balance Sheet was an estimate thereof, or is estimated as of a particular date or time, the actual amount of such balance (rather than the estimated amount) shall be deemed to be the balance used in determination of the First Data Intercompany Notes Payable.

“ First Data Liabilities ” means, without duplication, (a) all Liabilities of the First Data Parties to the extent based upon or arising out of the First Data Business and the Transferred First Data Business Assets, (b) all Liabilities of the Western Union Parties to the extent based upon or arising out of the First Data Business the Transferred First Data Business Assets, (c) all Liabilities based upon or arising out of the First Data Financial Instruments, (d) all outstanding Liabilities (other than the Western Union Liabilities) included on the First Data Balance Sheet and the notes thereto and all other Liabilities (other than the Western Union Liabilities) that are of a nature or type that would have resulted in such Liabilities being included as Liabilities on a consolidated balance sheet of First Data, and the notes thereto, as of the Effective Time (were such balance sheet and notes to be prepared) on a basis consistent with the determination of the nature and type of Liabilities included on the First Data Balance Sheet; it being understood that to the extent the amount of any Liability included on the First Data Balance Sheet or the notes thereto was an estimate thereof, the actual amount of such Liability (rather than the estimated amount) shall be deemed to be a First Data Liability for purposes of clause (d).

“ First Data Net Intercompany Payable ” means the payables of the type reflected on the historical portion of the Western Union Balance Sheet as “Receivables from affiliated companies, net” (which, as of June 30, 2006, was in the amount of approximately $167.2 million) owed by one or more First Data Parties to one or more Western Union Parties incurred at any time prior to the Effective Time; it being understood that to the extent the amount of any balance included on the Western Union Balance Sheet was an estimate thereof, or is estimated as of a particular date or time, the actual amount of such balance (rather than the estimated amount) shall be deemed to be the balance used in determination of the First Data Net Intercompany Payable.

“ First Data Parties ” means First Data and its Subsidiaries (including those formed or acquired after the date hereof), other than the Western Union Parties.

“ First Data Policies ” has the meaning set forth in Section 10.2(a) .

“ Foreign Exchange Rate ” means, with respect to any currency other than United States dollars, as of any date of determination, the rate set forth in the exchange rate section of The Wall Street Journal or, if not published in The Wall Street Journal , then the average of the opening bid and asked rates on such date at which such currency may be exchanged for United States

 

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dollars as quoted by JPMorgan Chase Bank (or any successor thereto or other major money center commercial bank agreed to by the Parties hereto).

“ Form 10 Registration Statement ” has the meaning set forth in Section 2.1(a).

“ Former Business ” means any corporation, partnership, entity, division, business unit or business within the definition of Rule 11-01(d) of Regulation S-X (in each case, including any assets and liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (in whole or in part) or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part).

“ GMT ” means GMT Group, Inc., a Delaware corporation.

“ Governmental Approvals and Consents ” means any material notices, reports or other filings to be made with or to, or any material consents, registrations, approvals, permits, clearances or authorizations to be obtained from, any Governmental Authority.

“ Governmental Authority ” means any foreign, federal, state, local or other government, governmental, statutory or administrative authority, regulatory body or commission or any court, tribunal or judicial or arbitral body.

“ Historic First Data Long-Term Debt ” means those certain First Data long-term notes issued prior to January 1, 2006 and set forth on Schedule 1.1(E) .

“ Indemnified Party ” has the meaning set forth in Section 12.5(a) .

“ Indemnifying Party ” has the meaning set forth in Section 12.5(a) .

“ Indemnity Payment ” has the meaning set forth in Section 12.5(a) .

“ Information ” has the meaning set forth in Section 14.1(a) .

“ Information Statement ” has the meaning set forth in Section 2.1(a) .

“ Insured Party ” means a First Data Insured Party or a Western Union Insured Party.

“ Intercompany Agreements ” means any Contract, other than this Agreement and the Operating Agreements, between one or more of the First Data Parties, on the one hand, and one or more of the Western Union Parties, on the other hand, entered into prior to the Distribution.

“ Internal Distribution ” has the meaning set forth in Section 3.1(e) .

“ IPS ” means Integrated Payment Systems Inc., a Delaware corporation.

“ IRS ” means the Internal Revenue Service.

“ Liabilities ” means any and all debts, liabilities and obligations, absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown,

 

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whenever arising, including all costs and expenses relating thereto, and including, without limitation, those debts, liabilities and obligations arising under any law, rule, regulation, Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking.

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

“ Management Agreement ” means the Retail Money Order Issuance and Management Services Agreement, dated August 14, 2006, between IPS and WUFSI, the form of which is attached hereto as Exhibit C .

“ Merchant Alliance ” means any joint venture (in any form, including in corporate, partnership or limited liability company form) or contractual alliance now or hereafter entered into between a First Data Party and one or more financial institutions or other Persons for the provision of merchant processing services.

“ Merchant Alliance Agreement ” means any contract or agreement between a Western Union Party and a Merchant Alliance.

“ Note Offering ” means the offering under the Note Offering Memorandum of the Western Union Notes.

“ Note Offering Memorandum ” means the Preliminary Offering Memorandum and the Final Offering Memorandum with respect to the offering and sale of the Western Union Notes.

“ NYSE ” means the New York Stock Exchange, Inc.

“ Occurrence Based Policies ” has the meaning set forth in Section 10.5(a) .

“ Operating Agreements ” means the Transaction Agreements and the Commercial Agreements.

“ Out-of-Pocket Expenses ” means expenses involving a payment to a Third Party (other than an employee of the party making the payment).

“ Party ” means a First Data Party or a Western Union Party, as applicable.

“ Patent Ownership Agreement ” means the Patent Ownership Agreement, dated the date hereof, between First Data and Western Union, the form of which is attached hereto as Exhibit D .

“ Paymap ” means Paymap Inc., a Delaware corporation.

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

 

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“ Personal Information Incident ” shall mean any actual or threatened unauthorized access, acquisition, use, alteration, creation, destruction, loss, theft, copying or disclosure of Confidential Personal Information, including but not limited to user IDs or passwords, regardless of whether such has been encrypted. Personal Information Incidents shall exclude the following to the extent occurring in the normal course of business and not reasonably likely to result in harm to a consumer or customer or misuse of Confidential Personal Information: (a) data input errors that are immediately rectified; and (b) any authorized access, acquisition, use, alteration, creation, destruction, copying or disclosure of Confidential Personal Information.

“ Prime Rate ” means the rate that JPMorgan Chase Bank (or any successor thereto or other major money center commercial bank agreed to by the Parties hereto) announces from time to time as its prime lending rate, as in effect from time to time.

“ Privilege ” has the meaning set forth in Section 14.9(a) .

“ Privileged Information ” has the meaning set forth in Section 14.9(a) .

“ Record Date ” means September 22, 2006.

“ Refinancing Commercial Paper ” means First Data Commercial Paper outstanding on the Distribution Date having a stated principal amount equal to the amount of First Data Commercial Paper proceeds used to pay principal and/or interest on Historic First Data Long-Term Debt.

“ Related Claims ” means a claim or claims against a Shared Policy made by one or more Western Union Insured Parties, on the one hand, and one or more First Data Insured Parties, on the other hand, filed in connection with Losses suffered by either a Western Union Insured Party or a First Data Insured Party, as the case may be, arising out of the same underlying transaction or series of transactions or event or series of events that have also given rise to Losses suffered by a First Data Insured Party or a Western Union Insured Party, as the case may be, which Losses are the subject of a claim or claims by such Person against a Shared Policy.

“ SEC ” means the United States Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Shared Policies ” has the meaning set forth in Section 10.5(a) .

“ Stock Options Registration Statement ” means the Registration Statement on Form S-1, as amended and supplemented, including all documents incorporated by reference, to effect the registration under the Securities Act of shares of Western Union Common Stock subject to certain stock options granted to current and former officers, employees, directors and consultants of the First Data Parties pursuant to the Employee Matters Agreement.

“ Subsidiary ” means, when used with reference to any Person, any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or

 

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other organization is directly or indirectly owned or Controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided, however, that no Person that is not directly or indirectly wholly-owned by any other Person shall be a Subsidiary of such other Person unless such other Person Controls, or has the right, power or ability to Control, that Person. After the Distribution, First Data and Western Union shall not be deemed to be under common Control for purposes hereof due solely to the fact that First Data and Western Union have common stockholders.

“ Tax Allocation Agreement ” means the Tax Allocation Agreement, dated the date hereof, between First Data and Western Union, the form of which is attached hereto as Exhibit E .

“ TeleCheck ” means TeleCheck International, Inc., a Georgia corporation.

“ Third Party ” means a Person that is not an Affiliate of any Party hereto.

“ Third Party Claim ” has the meaning set forth in Section 12.6(a).

“ Third Party Consents ” means any material consent, approval or authorization to be obtained from any Person that is not a Governmental Authority.

“ Transaction Agreements ” means the Employee Matters Agreement, the Management Agreement, the Patent Ownership Agreement, the Tax Allocation Agreement, the Transition Services Agreement, the Transferred Action Assignment and Assumption Agreement, the Asset Transfer Agreements and the Conveyancing Instruments.

“ Transferred Action Assignment and Assumption Agreement ” means the Transferred Action Assignment and Assumption Agreement, dated the date hereof, between First Data and Western Union, the form of which is attached hereto as Exhibit F .

“ Transferred Actions ” has the meaning set forth in Section 8.7(b) .

“ Transferred Business Assets ” means, collectively, the assets set forth on Schedule 1.1(F) .

“ Transferred Business ” has the meaning set forth in the Recitals.

“ Transferred First Data Business Assets ” means, collectively, the assets set forth on Schedule 1.1(G) .

“ Transition Services Agreement ” means the Transition Services Agreement, dated the date hereof, between First Data and Western Union, the form of which is attached hereto as Exhibit G .

“ Unrelated Claims ” means a claim or claims against a Shared Policy that is not a Related Claim.

“ Western Union ” has the meaning set forth in the first paragraph of this Agreement.

 

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“ Western Union Amended and Restated Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of Western Union, the form of which is attached hereto as Exhibit H .

“ Western Union Balance Sheet ” means the unaudited pro forma combined balance sheet of Western Union as of June 30, 2006 and attached hereto as Exhibit I.

“ Western Union Business ” means (a) all businesses and operations of the Western Union Parties and (b) the Western Union Former Businesses.

“ Western Union Common Stock ” has the meaning set forth in the Recitals.

“ Western Union Credit Facility ” means a $1.5 billion credit facility to be entered into by Western Union.

“ Western Union Financial Instruments ” means all credit facilities, guaranties, foreign currency forward exchange contracts, letters of credit and similar instruments primarily related to the Western Union Business under which any First Data Party has any primary, secondary, contingent, joint, several or other Liability, including those set forth on Schedule 1.1(H) .

“ Western Union Former Business ” means the Former Businesses set forth on Schedule 1.1(I) and any Former Business (other than the Former Businesses identified on Schedule 1.1(C) ) owned by, in whole or in part, and/or operated by, in whole or in part, any of the Western Union Parties.

“ Western Union Indemnified Parties ” has the meaning set forth in Section 12.3.

“ Western Union Insured Party ” means any Western Union Party that is a named insured, additional named insured or insured under any Shared Policy.

“ Western Union Intercompany Notes Payable ” means the payables of the type reflected on the historical portion of the Western Union Balance Sheet as “Notes payable to affiliated companies” (excluding an $11.3 million note payable cancelled by a First Data Party on September 26, 2006) (which, as of June 30, 2006, was in the amount of approximately $52.2 million) owed by one or more Western Union Parties to one or more First Data Parties incurred at any time prior to the Effective Time; it being understood that to the extent the amount of any balance included on the Western Union Balance Sheet was an estimate thereof, or is estimated as of a particular date or time, the actual amount of such balance (rather than the estimated amount) shall be deemed to be the balance used in determination of the Western Union Intercompany Notes Payable.

“ Western Union Liabilities ” means (a) all Liabilities of the Western Union Parties to the extent based upon or arising out of the Western Union Business and the Transferred Business Assets, (b) all Liabilities of the First Data Parties to the extent based upon or arising out of the Western Union Business and the Transferred Business Assets, (c) all Liabilities based upon or arising out of the Western Union Financial Instruments, (d) all outstanding Liabilities included on the Western Union Balance Sheet and the notes thereto and all other Liabilities that are of a nature or type that would have resulted in such Liabilities being included as Liabilities on a

 

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consolidated balance sheet of Western Union, and the notes thereto, as of the Effective Time (were such balance sheet and notes to be prepared) on a basis consistent with the determination of the nature and type of Liabilities included on the Western Union Balance Sheet; it being understood that to the extent the amount of any Liability included on the Western Union Balance Sheet or the notes thereto was an estimate thereof, the actual amount of such Liability (rather than the estimated amount) shall be deemed to be a Western Union Liability for purposes of clause (d).

“ Western Union Notes ” means the 5.930% Notes due 2016 of Western Union in the aggregate principal amount of $1,000,000,000, as more fully described in the Note Offering Memorandum.

“ Western Union Parties ” means Western Union, the Western Union Subsidiaries and any other Subsidiary of Western Union (including those formed or acquired after the date hereof), in each case, other than the Distributed Companies.

“ Western Union Subsidiaries ” means, collectively, ECG, FFMC, GMT, Paymap, WUSI and each Subsidiary of any of the foregoing other than the Distributed Companies.

“ Western Union Share ” means a share of Western Union Common Stock.

“ WUFSI ” means Western Union Financial Services, Inc., a Colorado corporation.

“ WUSI ” means Western Union Services Inc., a Maryland corporation.

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

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

(ii) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and a reference to such Person’s “Affiliates” shall be deemed to mean such Person’s Affiliates following the Distribution;

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

(iv) the words “include,” “includes” and “including” shall be deemed to be followed by the words “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;

 

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(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 law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

(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) accounting terms used herein shall have the meanings historically ascribed to them by First Data and its Subsidiaries, including Western Union, in its and their internal accounting and financial policies and procedures in effect prior to the date of this Agreement;

(xi) if there is any conflict between the provisions of the body of this Agreement and the Schedules hereto, the provisions of the body of this Agreement shall control unless explicitly stated otherwise in such Schedule;

(xii) if there is any conflict between the provisions of this Agreement and a Transaction Agreement, the provisions of such Transaction Agreement shall control unless explicitly stated otherwise therein;

(xiii) 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;

(xiv) any portion of this Agreement obligating a Party to take any action or refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Subsidiaries to take such action or refrain from taking such action, as the case may be; and

(xv) unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the United States.

ARTICLE II

ACTIONS PRIOR TO THE DISTRIBUTION DATE

SECTION 2.1 SEC and Other Securities Filings; Western Union Note Offering . In order to effect the transactions contemplated by Articles III and IV , the First Data Parties and the Western Union Parties shall take the following actions prior to the Distribution Date:

(a) Western Union shall file with the SEC (i) a registration statement under the Exchange Act on Form 10 (including all amendments or supplements thereto, in each case prior to the Distribution Date, the “ Form 10 Registration Statement ”) to effect the registration of the Western Union Common Stock under the Exchange Act and (ii) the Stock Options Registration Statement. The Form 10 Registration Statement will include an information statement to be sent

 

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by First Data to its stockholders in connection with the Distribution (as may be amended or supplemented, the “ Information Statement ”). Western Union and First Data shall use their respective commercially reasonable efforts to cause the Form 10 Registration Statement and the Stock Options Registration Statement to become effective as soon as reasonably practicable. As soon as practicable after the Form 10 Registration Statement becomes effective, First Data shall mail the Information Statement to the holders of record of First Data Common Stock.

(b) In connection with the Distribution:

(i) the Parties shall use their respective commercially reasonable efforts to take all such action as may be necessary or appropriate under state and foreign securities and “blue sky” laws in connection with the transactions contemplated by this Agreement;

(ii) the Parties shall prepare, and Western Union shall file and seek to have approved, an application for the listing of the Western Union Common Stock on the NYSE, subject to official notice of issuance;

(iii) First Data shall give the NYSE notice of the Record Date in compliance with Rule 10b-17 under the Exchange Act; and

(iv) the Parties shall cooperate in preparing, filing with the SEC and causing to become effective any other registration statements or amendments or supplements thereto that are necessary or appropriate in order to effect the transactions contemplated hereby, or to reflect the establishment of, or amendments to, any employee benefit plans contemplated hereby.

SECTION 2.2 Financial Instruments.

(a) Western Union will use its commercially reasonable efforts to take or cause to be taken all actions, and enter into (or cause the other Western Union Parties to enter into) such agreements and arrangements, as shall be necessary to cause, as of the Effective Time, (i) the removal of the First Data Parties from all Western Union Financial Instruments and (ii) the First Data Parties to be fully and unconditionally released from all Liabilities in respect of the Western Union Financial Instruments. It is understood and agreed that all Liabilities in respect of the Western Union Financial Instruments are Western Union Liabilities and Western Union shall indemnify the First Data Parties from any Liabilities suffered thereby arising out of, resulting from or relating to the Western Union Financial Instruments. Without limiting the foregoing, after the Effective Time, (A) Western Union will not, and will not permit any Western Union Party to, renew, extend, modify, amend or supplement any Western Union Financial Instrument in any manner that would increase, extend or give rise to any Liability of a First Data Party under such Western Union Financial Instrument and (B) with respect to any Western Union Financial Instrument for which any First Data Party was not removed and fully and unconditionally released from all Liabilities in respect of such Western Union Financial Instrument prior to the Effective Time, Western Union shall continue to use its reasonable best efforts to cause such removal and release.

(b) First Data will use its commercially reasonable efforts to take or cause to be taken all actions, and enter into (or cause the other First Data Parties to enter into) such agreements and arrangements, as shall be necessary to cause, as of the Effective Time, (i) the removal of the

 

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Western Union Parties from all First Data Financial Instruments and (ii) the Western Union Parties to be fully and unconditionally released from all Liabilities in respect of the First Data Financial Instruments. It is understood and agreed that all Liabilities in respect of the First Data Financial Instruments are First Data Liabilities and First Data shall indemnify the Western Union Parties from any Liabilities suffered thereby arising out of, resulting from or relating to the First Data Financial Instruments. Without limiting the foregoing, after the Effective Time, (A) First Data will not, and will not permit any First Data Party to, renew, extend, modify, amend or supplement any First Data Financial Instrument in any manner that would increase, extend or give rise to any Liability of a Western Union Party under such First Data Financial Instrument and (B) with respect to any First Data Financial Instrument for which any Western Union Party was not removed and fully and unconditionally released from all Liabilities in respect of such First Data Financial Instrument prior to the Effective Time, First Data shall continue to use its reasonable best efforts to cause such removal and release.

ARTICLE III

BUSINESS SEPARATION

SECTION 3.1 Actions Taken Prior to the Distribution Date . Prior to the Distribution Date, First Data and Western Union took or caused to be taken the following actions in the following order:

(a) Purchase and Exchange Arrangements . On September 26, 2006, Western Union, Barclays Capital Inc. and J.P. Morgan Securities Inc. (Barclays Capital Inc. and J.P. Morgan Securities Inc., collectively, the “ Exchange Banks ”) entered into a purchase agreement, dated as of September 20, 2006, which established the terms upon which the Western Union Notes will be sold to the purchasers thereof and which provides for a closing date that is the same day as the Distribution Date and at a time following the Effective Time. On September 26, 2006, First Data, Western Union and the Exchange Banks entered into an exchange agreement (“ Exchange Agreement ”) regarding the exchange of Eligible First Data Debt having an aggregate fair market value equal to the amount set forth in the Exchange Agreement (the “ Debt Exchange ”).

(b) FDR Conversion . First Data, on September 25, 2006, caused FDR to file a certificate of conversion with the Secretary of State of the State of Delaware converting FDR from a corporation to a limited liability company, which certificate provided that it is effective at the time of the filing thereof.

(c) Repayment of Western Union Intercompany Notes . On September 26, 2006, one or more Western Union Parties paid to one or more First Data Parties by wire transfer of immediately available funds to an account specified in writing by a First Data Party an amount equal to the Western Union Intercompany Notes Payable in full satisfaction thereof.

(d) Repayment of First Data Intercompany Notes . On September 26, 2006, one or more First Data Parties paid to one or more Western Union Parties by wire transfer of immediately available funds to an account specified in writing by a Western Union Party an amount equal to the First Data Intercompany Notes Payable in full satisfaction thereof.

 

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(e) Asset Transfers . Prior to the close of business on September 27, 2006, the applicable First Data Parties and the applicable Western Union Parties entered into the Asset Transfer Agreements and consummated the transactions contemplated thereby in accordance with their terms.

(f) FFMC Dividend; GMT Contribution . The board of directors of FFMC, on September 27, 2006, in accordance with the articles of incorporation and bylaws of FFMC and the Georgia Business Corporation Code, declared a dividend to First Data, as the sole stockholder of FFMC as of the September 27, 2006 record date of the dividend, in the amount of $2,399,291,710, and caused the dividend amount to be paid to First Data on such record date by execution and delivery of a promissory note (the “ FFMC Note ”). Concurrently with the distribution of the FFMC Note described in this Section 3.1(c) , First Data contributed all of its right, title and interest in and to the issued and outstanding shares of capital stock of GMT to FFMC.

(g) Dividends and Distributions Related to First Data Net Intercompany Payable . The board of directors or other governing body or equity owner of each of substantially all of the Western Union Subsidiaries and the Distributed Companies formed under the laws of the United States, on September 27, 2006, in accordance with the organizational documents of such Persons and the laws of their respective jurisdictions, declared a dividend or distribution to their respective parent companies as of the September 27, 2006 record date of the dividend or distribution, to effectuate, as of the close of business on September 27, 2006, the distribution in cancellation of the First Data Net Intercompany Payable. Immediately following declaration of such dividends and distributions, First Data and each of the applicable Western Union Subsidiaries and Distributed Companies entered into instruments of assignment, contribution and assumption in furtherance of the actions contemplated by the distribution in cancellation of the First Data Net Intercompany Payable as of the close of business on September 27, 2006.

(h) Internal Distribution Declaration . The board of directors of FFMC, on September 28, 2006, in accordance with the articles of incorporation and bylaws of FFMC and the Georgia Business Corporation Code, declared a dividend to First Data, as the sole stockholder of FFMC as of the September 28, 2006 record date of the dividend, of all of FFMC’s right, title and interest in and to the issued and outstanding shares of capital stock of FDCS Holdings (the “ Internal Distribution ”), such dividend being payable on September 29, 2006.

SECTION 3.2 Actions Prior to the Separation . Subject to the terms and conditions of this Agreement, on the Distribution Date but prior to the Contribution and Distribution, First Data and Western Union shall take or cause to be taken the following actions in the following order:

(a) Dividends and Distributions Related to First Data Net Intercompany Payable . The board of directors or other governing body or equity owner of each of substantially all of the Western Union Subsidiaries and the Distributed Companies formed under the laws of the United States shall, effective as of 5:00 AM (Eastern Time) on the Distribution Date (the “ Intercompany Distribution Time ”), in accordance with the organizational documents of such Persons and the laws of their respective jurisdictions, declared a dividend or distribution to their respective parent companies as of the Intercompany Distribution Time, to effectuate, as of the

 

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Intercompany Distribution Time, the distribution in cancellation of the First Data Net Intercompany Payable as of the close of business on the Distribution Date (after giving effect to the transactions contemplated by Section 5.1(d) ). Immediately following declaration of such dividends and distributions, First Data and each of the applicable Western Union Subsidiaries and Distributed Companies shall enter into instruments of assignment, contribution and assumption in furtherance of the actions contemplated by the distribution in cancellation, as of the Intercompany Distribution Time, of the First Data Net Intercompany Payable as of the close of business on the Distribution Date.

(b) Internal Contribution . First Data shall cause FFMC to contribute all of its right, title and interest in and to the issued and outstanding shares of capital stock and other equity interests of each of CESI, TeleCheck, EBP Re, Ltd., IPS Holdings, Inc., Virtual Financial Services, LLC, and First Data Canada Limited to FDCS Holdings, and in consideration therefor and simultaneously therewith FDCS Holdings shall issue to FFMC 100 fully paid, nonassessable shares of common stock of FDCS Holdings, which shares shall be free of preemptive rights (the “ Internal Contribution ”).

(c) Internal Distribution . FFMC shall effect the Internal Distribution by distributing to First Data all of FFMC’s right, title and interest in and to the outstanding shares of common stock of FDCS Holdings. For federal income tax purposes, the Internal Contribution and the Internal Distribution are intended to qualify for tax-free treatment under Sections 355 and 368(a)(1)(D) of the Code.

(d) Western Union Borrowings . Western Union shall borrow $100 million in principal amount under the Western Union Credit Facility.

SECTION 3.3 The Separation . Subject to the terms and conditions of this Agreement, on the Distribution Date and following the consummation of the transactions to be taken pursuant to Section 3.2 , First Data and Western Union shall take the following actions in the following order:

(a) Western Union Board . The Board of Directors of Western Union shall be reconstituted so that it consists of the persons set forth on Schedule 3.3 .

(b) Western Union Contribution . First Data shall (i) contribute to Western Union all of First Data’s right, title and interest in and to the issued and outstanding shares of capital stock of each of FFMC, ECG, Paymap and WUSI and (ii) contribute to Western Union all of First Data’s right, title and interest in and to the Transferred Business Assets set forth on Schedule 3.3(A) and simultaneously therewith and in consideration therefor Western Union shall (A) pay to First Data by wire transfer of immediately available funds to an account described in Section 5.1(d) and specified in writing by First Data an amount equal to $100 million (the “ Cash Consideration ”), (B) deliver to First Data the Western Union Notes, and (C) deliver to First Data a number of uncertificated Western Union Shares which, together with the Western Union Shares held by First Data, shall equal the number of Western Union Shares to be distributed by First Data in the Distribution, which shares shall be fully paid, nonassessable and free of preemptive rights (the consideration described in clauses (A) , (B)  and (C) , the “ Consideration ”, and the transfers in clauses (i)  and (ii)  and delivery of the Consideration, the “ Contribution ”).

 

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(c) Transaction Agreements . The applicable First Data Parties and the applicable Western Union Parties shall execute and deliver to the other the Transaction Agreements to which they are intended to be a Party.

(d) Commercial Agreements . To the extent not already executed, the applicable First Data Parties and the applicable Western Union Parties shall execute and deliver to the other the Commercial Agreements to which they are intended to be a Party.

Notwithstanding the foregoing, First Data may elect in its sole and absolute discretion at any time prior to the Distribution to omit or modify any of the transactions set forth in Sections 3.2 through 3.3 or to include additional transactions.

SECTION 3.4 Termination of Existing Intercompany Agreements . Except as otherwise provided or contemplated by this Agreement, the Operating Agreements, Merchant Alliance Agreements or as set forth on Schedule 3.4, all Intercompany Agreements and all other intercompany arrangements and course of dealings, whether or not in writing and whether or not binding, in effect immediately prior to the Distribution, shall be terminated and be of no further force and effect from and after the Distribution; provided that, for the avoidance of doubt, this Section 3.4 shall not terminate or affect this Agreement, any Operating Agreement or any Merchant Alliance Agreement. If, as a result of mistake or oversight, any Intercompany Agreement, intercompany arrangement and/or course of dealings is terminated pursuant to this Section 3.4 , then, at the request of First Data or Western Union, the Parties shall negotiate in good faith after the Distribution to determine whether, notwithstanding such termination, such Intercompany Agreement, intercompany arrangement and/or course of dealings should continue following the Effective Time and the terms and conditions upon which the Parties may continue with respect thereto.

ARTICLE IV

THE DISTRIBUTION

SECTION 4.1 Record Date and Distribution Date . Subject to the terms and conditions of this Agreement, the Board of Directors of First Data shall, in its sole and absolute discretion, establish the Record Date and the Distribution Date and any necessary or appropriate procedures in connection with the Distribution. The Board of Directors of First Data shall have the right to adjust the Distribution Ratio at any time prior to the Distribution.

SECTION 4.2 Increase In Western Union Authorized Shares . Prior to the Contribution, the Western Union Board of Directors and First Data, as sole stockholder of Western Union, shall have adopted the Western Union Amended and Restated Certificate of Incorporation and Western Union shall have filed the Western Union Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware.

SECTION 4.3 The Agent . Prior to the Distribution Date, First Data will enter into a distribution agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution.

SECTION 4.4 Delivery of Western Union Shares . First Data shall take such steps as are necessary or appropriate to permit the Western Union Shares to be distributed in the manner

 

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described in this Article IV. In its capacity as First Data’s distribution agent and Western Union’s transfer agent, the Agent will distribute the Western Union Shares in the manner described in this Article IV.

SECTION 4.5 The Distribution . (a) Subject to the satisfaction or waiver of the conditions set forth in Section 9.1 and at the sole and absolute discretion of First Data, on the Distribution Date First Data shall cause the Agent to distribute to each holder of record of shares of First Data Common Stock as of the Record Date (or, if such holder has sold its shares of First Data Common Stock in the regular way market on or prior to the Distribution Date, to the transferee of such shares) by means of a pro rata dividend of one Western Union Share for each share of First Data Common Stock (the “ Distribution Ratio ”) held of record by such holder (or such transferee) as of the Record Date (the “ Distribution ”).

(b) Subject to the terms and conditions of this Agreement, each holder of record of First Data Common Stock as of the Record Date (or such holder’s designated transferee) will be entitled to receive in the Distribution one share of Western Union Common Stock for each share of First Data Common Stock held of record by such record holder (or such transferee) as of the Record Date.

SECTION 4.6 Delivery of Western Union Shares . Each distributed Western Union Share shall be validly issued, fully paid and nonassessable and free of preemptive rights. The shares of Western Union Common Stock distributed shall be distributed as uncertificated shares registered in book-entry form through the direct registration system. No certificates therefor shall be distributed. First Data shall cause the Agent to deliver an account statement to each holder of record of Western Union Common Stock reflecting such holder’s ownership interest in shares of Western Union Common Stock.

SECTION 4.7 Distribution is at First Data’s Discretion . The consummation of the transactions provided for in this Article IV shall only be effected after the Distribution has been declared by the Board of Directors of First Data and after all of the conditions set forth in Section 9.1 shall have been satisfied or waived by First Data. Notwithstanding the foregoing, at any time prior to the Distribution, First Data, in its sole and absolute discretion, may determine not to consummate the Distribution.

SECTION 4.8 Additional Approvals . First Data shall cooperate with Western Union in effecting, and if so requested by Western Union, First Data shall, as the sole stockholder of Western Union prior to the Distribution, ratify any actions which are reasonably necessary or desirable to be taken by Western Union to effectuate the transactions referenced in or contemplated by this Agreement in a manner consistent with the terms hereof, including the preparation and implementation of appropriate plans, agreements and arrangements for employees of the Western Union Business and non-employee members of Western Union’s Board of Directors.

 

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ARTICLE V

ACTIONS SUBSEQUENT TO THE DISTRIBUTION

SECTION 5.1 Actions Following the Distribution . On the Distribution Date and promptly following the consummation of the Distribution, the following transactions shall be undertaken:

(a) FFMC Debt Financing. FFMC shall, pursuant to one or more financing agreements previously entered into, borrow a sufficient amount of cash to comply with its obligations pursuant to Section 5.1(b) .

(b) Satisfaction of FFMC Note . FFMC shall pay to First Data by wire transfer of immediately available funds to an account specified in writing by First Data an amount equal to the outstanding principal amount of, and accrued interest on, the FFMC Note in full satisfaction thereof.

(c) Debt Exchange and Note Offering . Pursuant to the Exchange Agreement and subject to the terms thereof, First Data will transfer the Western Union Notes to the Exchange Banks in exchange for all or a portion of the Eligible First Data Debt. First Data and Western Union shall use their respective reasonable best efforts to cause the Debt Exchange and the Note Offering to be consummated on the Distribution Date. Without limiting the generality of the foregoing, each of First Data and Western Union shall use its reasonable best efforts to cause their respective employees, accountants, counsel and other representatives to reasonably cooperate with each other in carrying out the transactions contemplated by the Debt Exchange and the Note Offering and in delivering all documents and instruments deemed reasonably necessary by First Data and Western Union and otherwise cooperating and assisting in satisfying the conditions of the Debt Exchange and the Note Offering.

(d) Intercompany Arrangements on the Distribution Date . During the period beginning at the Effective Time and concluding immediately following the close of business on the Distribution Date, with respect to intercompany arrangements which historically have resulted in the creation of a First Data Net Intercompany Payable, the First Data Parties and the Western Union Parties shall continue such intercompany arrangements in the ordinary course of business consistent with past practice, including the transfer to First Data at the close of business on the Distribution Date of operating cash received by the Western Union Parties on the Distribution Date in excess of amounts, consistent with past practice, which have historically been retained by the applicable Western Union Parties at the close of business. For the purpose of this Agreement and the transactions contemplated by Section 3.2(a) , the intercompany arrangements and resulting accounts arising from this Section 5.2(d) shall be deemed to have taken effect prior to the Contribution and the Intercompany Distribution Time, and the rights of the Parties with respect therein shall be effective and enforceable as of the Intercompany Distribution Time.

SECTION 5.2 Paydown of First Data Debt . First Data agrees (i) subject to the payment of indebtedness of the First Data Parties in accordance with this Section 5.2 , to maintain the Cash Consideration in a separate, interest-bearing account from all other cash and cash equivalents of the First Data Parties, (ii) not to commingle the Cash Consideration with any other

 

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assets owned or held by First Data and (iii) to, not later than one year following the Distribution Date, use all of the Cash Consideration plus all earnings on any amounts held in such account solely to repay Eligible First Data Debt.

ARTICLE VI

BUSINESS SEPARATION CLOSING MATTERS

SECTION 6.1 Delivery of Instruments of Conveyance . In order to effectuate the transactions contemplated by Articles II through IV, the Parties shall execute and deliver, or cause to be executed and delivered, prior to or as of the Distribution Date, such deeds, bills of sale, instruments of assumption, instruments of assignment, stock powers, certificates of title and other instruments of assignment, transfer, assumption, license and conveyance (collectively, the “ Conveyancing Instruments ”) as First Data and Western Union shall reasonably deem necessary or appropriate to effect such transactions, including the Asset Transfer Agreements.

SECTION 6.2 Provision of Corporate Records . (a) Without limitation of the Parties rights and obligations pursuant to Article XIV , prior to or as promptly as reasonably practicable after the Distribution, First Data shall deliver to Western Union all corporate books and records of the Western Union Parties and, upon request, copies of all corporate books and records of the First Data Parties relating to the Western Union Business in its possession or control, including in each case all active agreements, litigation files and government filings.

(b) Without limitation of the Parties rights and obligations pursuant to Article XIV , prior to or as promptly as reasonably practicable after the Distribution, Western Union shall deliver to First Data all corporate books and records of the First Data Parties and, upon request, copies of all corporate books and records of the Western Union Parties relating to the First Data Business in its possession or control, including in each case all active agreements, litigation files and government filings.

ARTICLE VII

NO REPRESENTATIONS AND WARRANTIES

SECTION 7.1 No First Data Representations or Warranties . Except as expressly set forth herein or in any Operating Agreement, none of the First Data Parties represents or warrants in any way (a) as to the value, condition, prospects or freedom from encumbrance of, or any other matter concerning, any of the Western Union Subsidiaries (including their respective assets), the Transferred Business Assets or the Western Union Business, (b) as to the legal sufficiency to convey title to any of the Western Union Subsidiaries or Transferred Business Assets on the execution, delivery and filing of the Conveyancing Instruments or (c) the amount or nature of, or any other matter concerning, the Liabilities of the Western Union Parties. THE WESTERN UNION BUSINESS AND ALL SUCH WESTERN UNION SUBSIDIARIES (AND THEIR RESPECTIVE ASSETS) AND TRANSFERRED BUSINESS ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY, TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, and the Western Union Parties shall bear the economic and legal risks that any conveyances of such assets shall

 

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prove to be insufficient or that the Western Union Parties’ title to any such assets shall be other than good and marketable and free of encumbrances. Except as expressly set forth in this Agreement or in any Operating Agreement, none of the First Data Parties represents or warrants that the obtaining of the consents or approvals, the execution and delivery of any amendatory agreements and the making of the filings and applications contemplated by this Agreement shall satisfy the provisions of all applicable agreements or the requirements of all applicable laws or judgments and, subject to Section 7.2 , the Western Union Parties shall bear the economic and legal risk that any necessary consents or approvals are not obtained or that any requirements of law or judgments are not complied with with respect to the Contribution or the contribution of GMT to FFMC.

SECTION 7.2 No Western Union Representations or Warranties . Except as expressly set forth herein or in any Operating Agreement, none of the Western Union Parties represents or warrants in any way (a) as to the value or freedom from encumbrance of, or any other matter concerning, any of the Distributed Companies (including their respective assets), the Transferred First Data Business Assets or the First Data Business, (b) as to the legal sufficiency to convey title to any of the Distributed Companies or the Transferred First Data Business Assets on the execution, delivery and filing of the Conveyancing Instruments or (c) the amount or nature of, or any other matter concerning, the Liabilities of the Distributed Companies. THE DISTRIBUTED COMPANIES (AND THEIR RESPECTIVE ASSETS) AND THE TRANSFERRED FIRST DATA BUSINESS ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY, TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, and the First Data Parties shall bear the economic and legal risks that any conveyances of such assets shall prove to be insufficient or that the First Data Parties’ title to any such assets shall be other than good and marketable and free of encumbrances. Except as expressly set forth in this Agreement or in any Operating Agreement, solely with respect to the Internal Distribution, none of the Western Union Parties represents or warrants that the obtaining of the consents or approvals, the execution and delivery of any amendatory agreements and the making of the filings and applications contemplated by this Agreement shall satisfy the provisions of all applicable agreements or the requirements of all applicable laws or judgments and, subject to Section 7.1 , the First Data Parties shall bear the economic and legal risk that any necessary consents or approvals are not obtained or that any requirements of law or judgments are not complied with respect to the Internal Distribution.

ARTICLE VIII

CERTAIN COVENANTS

SECTION 8.1 Governmental Approvals and Consents; Third Party Consents . Prior to the Distribution, the Parties hereto will use their respective commercially reasonable efforts to obtain all Governmental Approvals and Consents and all Third Party Consents that are required or appropriate in connection with the transactions contemplated by this Agreement.

SECTION 8.2 Non-Assignable Contracts . (a) If and to the extent that any First Data Party is unable to obtain any consent, approval or amendment necessary for the transfer or

 

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assignment to any Western Union Party of any Contract or other rights relating to the Western Union Business that would otherwise be transferred or assigned to such Western Union Party as contemplated by this Agreement or any other agreement or document contemplated hereby, (i) such First Data Party shall continue to be bound thereby and the purported transfer or assignment to such Western Union Party shall automatically be deemed deferred until such time as all legal impediments are removed and all necessary consents have been obtained and (ii) unless not permitted by the terms thereof or by law, the Western Union Parties shall pay, perform and discharge fully all of the obligations of the First Data Parties thereunder from and after the Distribution, or such earlier time as such transfer or assignment would otherwise have taken place, and indemnify the First Data Parties for all Losses arising out of such performance by such Western Union Party. The First Data Parties shall, without further consideration therefor, pay and remit to the applicable Western Union Party promptly all monies, rights and other considerations received in respect of such performance. The First Data Parties shall exercise or exploit their rights and options under all such Contracts and other rights, agreements and documents referred to in this Section 8.2(a) only as reasonably directed by Western Union and at Western Union’s expense. If and when any such consent, approval or amendment shall be obtained or such Contract or other right or agreement shall otherwise become transferable or assignable or be able to be novated, the First Data Parties shall promptly assign or transfer and novate (to the extent permissible) all of their rights and obligations thereunder to the applicable Western Union Party without payment of further consideration, and the Western Union Party shall, without the payment of any further consideration therefor, assume such rights and obligations. To the extent that the transfer or assignment of any Contract or other right (or the proceeds thereof) pursuant to this Section 8.2(a) is prohibited by law or the terms thereof, this Section 8.2(a) shall operate to create a subcontract with the applicable Western Union Party to perform each relevant Contract or other right, agreement or document at a subcontract price equal to the monies, rights and other considerations received by the First Data Parties with respect to the performance by such Western Union Party.

(b) If and to the extent that any Western Union Party is unable to obtain any consent, approval or amendment necessary for the transfer or assignment to any First Data Party of any Contract or other rights relating to the First Data Business that would otherwise be transferred or assigned to such First Data Party as contemplated by this Agreement or any other agreement or document contemplated hereby, (i) such Western Union Party shall continue to be bound thereby and the purported transfer or assignment to such First Data Party shall automatically be deemed deferred until such time as all legal impediments are removed and all necessary consents have been obtained and (ii) unless not permitted by the terms thereof or by law, the First Data Parties shall pay, perform and discharge fully all of the obligations of the Western Union Parties thereunder from and after the Distribution, or such earlier time as such transfer or assignment would otherwise have taken place, and indemnify the Western Union Parties for all indemnifiable Losses arising out of such performance by such First Data Party. The Western Union Parties shall, without further consideration therefor, pay and remit to the applicable First Data Party promptly all monies, rights and other considerations received in respect of such performance. The Western Union Parties shall exercise or exploit their rights and options under all such Contracts and other rights, agreements and documents referred to in this Section 8.2(b) only as reasonably directed by First Data and at First Data’s expense. If and when any such consent, approval or amendment shall be obtained or such Contract or other right or agreement shall otherwise become transferable