EXHIBIT 10.3
December 10, 1996
MoneyGram Payment Systems, Inc.
7401 West Mansfield Ave.
Lakewood, Colorado 80235
The undersigned, First Data Corporation, a Delaware corporation
("First Data"), and Western Union Financial Services, Inc., a Delaware
corporation ("Western Union"), hereby refer to the transactions contemplated by
the Registration Statement of MoneyGram Payment Systems, Inc., a Delaware
corporation ("MoneyGram"), on Form S-1 (Registration No. 333-228), as amended
(the "Registration Statement"), filed under the Securities Act of 1933, as
amended, in respect of the initial public offering of shares of common stock,
par value $.01 per share (the "Common Stock"), of MoneyGram. Such initial public
offering is intended by First Data to satisfy its obligations under the Consent
Decree dated January 19, 1996 (Docket No. C-3635) between First Data and the
Federal Trade Commission and will be effected through the sale by First Data of
its shares of Common Stock. In connection with such initial public offering,
MoneyGram, First Data and certain subsidiaries of First Data will enter into
agreements that are described in the Registration Statement as the "Transition
Agreements."
In consideration of the foregoing, and of the promises and covenants
hereinafter set forth, the parties to this letter agreement agree as follows:
During the two years following the date of the closing of the initial
sale of Common Stock by First Data pursuant to the Registration Statement
(the "Period"), MoneyGram, on the one hand, and First Data and Western
Union, on the other hand, each agrees not to sue the other party or any of
such other party's Affiliates (as defined below), officers, directors or
employees in respect of any of the service marks set forth in Exhibit A to
this letter agreement (the "Disputed Marks") in any jurisdiction, and,
after the Period, MoneyGram, on the one hand, and First Data and Western
Union, on the other hand, each agrees not to sue the other party or any of
such other party's Affiliates, officers, directors or employees in respect
of the use of any Disputed Mark during the Period. Nothing in the preceding
sentence shall preclude First Data or MoneyGram from prosecuting or
challenging applications in respect of
MoneyGram Payment Systems, Inc.
December 10, 1996
Page 2
any of the Disputed Marks at the United States Patent and Trademark Office
or any governmental authority in any state or other jurisdiction of the
United States or country other than the United States that performs
functions similar to those performed by the United States Patent and
Trademark Office.
The parties hereto agree that each statute of limitations that may be
applicable to a claim in respect of any Disputed Mark shall be deemed to
have been tolled during the Period.
MoneyGram, First Data and Western Union agree that, upon written
notice from MoneyGram to First Data and Western Union at any time during
the Period, First Data shall cause Integrated Payment Systems Inc. to, and
Western Union shall, enter into the Service Mark License Agreement attached
hereto as Exhibit B. Upon execution and delivery of the Service Mark
License Agreement, the parties hereto agree that their agreements set forth
in the two immediately preceding paragraphs shall terminate.
MoneyGram, First Data and Western Union each agrees to be responsible
for ensuring that each of their respective Affiliates complies with this
letter agreement and does not take any action which, if done by MoneyGram,
First Data or Western Union, as the case may be, would constitute a breach
of this letter agreement. "Affiliate" of any person means any other person
which, directly or indirectly, controls, is controlled by or is under
common control with such person.
This letter agreement may be executed in one or more counterparts,
each of which shall be considered an original instrument, but all of which shall
be considered one and the same agreement, and shall become binding when one or
more counterparts have been signed by each of the parties hereto and delivered
to each of MoneyGram, First Data and Western Union.
This letter agreement shall not be amended, modified or supplemented,
except by a written instrument signed by an authorized representative of each of
the parties hereto.
This letter agreement shall be governed by and construed in accordance
with the internal laws (as opposed to the conflict of laws provisions) of the
State of New York.
MoneyGram Payment Systems, Inc.
December 10, 1996
Page 3
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
letter and your acceptance shall represent a binding agreement among MoneyGram,
First Data and Western Union.
Very truly yours,
FIRST DATA CORPORATION
By /s/ Charles T. Fote
-------------------------------
Name: Charles T. Fote
Title: Executive Vice President
WESTERN UNION FINANCIAL
SERVICES, INC.
By /s/ George D. McNary
-------------------------------
Name: George D. McNary
Title: President
The foregoing agreement is hereby confirmed and accepted as of the date of this
letter.
MONEYGRAM PAYMENT SYSTEMS, INC.
By /s/ James F. Calvano
-------------------------------
Name: James F. Calvano
Title: Chairman and Chief
Executive Officer