Exhibit 10.3
TRANSITION SERVICES
AGREEMENT
THIS TRANSITION SERVICES AGREEMENT
is made as of September 29, 2006 by and between First Data
Corporation, a Delaware corporation ( “ First Data
” ), and The Western Union Company, a Delaware
corporation ( “ Western Union ”
).
WHEREAS, First Data, through certain
of its Subsidiaries, is, among other things, engaged in the
business of providing money transfer, consumer to biller payment
services, retail money orders and certain prepaid services (the
“ Western Union 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 those Subsidiaries of First Data that are
engaged in the Western Union Business and certain other assets
related thereto;
WHEREAS, First Data has agreed to
transfer, or cause to be transferred, to Western Union such
Subsidiaries;
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, without any consideration being paid
by the holders of such common stock, all of the outstanding shares
of Western Union common stock, $0.01 par value, then owned by First
Data;
WHEREAS, First Data and Western
Union have entered into a Separation and Distribution dated as of
the date hereof (the “ Distribution Agreement
” ) in order to carry out, effect and consummate the
foregoing transactions; and
WHEREAS, to facilitate the
transactions described above, First Data and Western Union deem it
to be appropriate and in the best interests of First Data and
Western Union that First Data provide certain Services to Western
Union and Western Union provide certain Services to First Data, on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of
the mutual promises contained herein, the Parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1
Definitions . Unless
otherwise defined herein, each capitalized term shall have the
meaning specified for such term in the Distribution Agreement. As
used in this Agreement:
(a) “ Action
” means any action, claim, demand, suit, arbitration,
inquiry, subpoena, discovery request, proceeding or investigation
by or before any court or grand jury, any Governmental
Authority.
(b) “ Additional
Services ” means the Additional First Data Services
or the Additional Western Union Services, individually, or the
Additional First Data Services and the Additional Western Union
Services, collectively, as the context may indicate. Any Additional
Services provided pursuant to this Agreement shall be deemed to be
“ Services ” under this Agreement.
(c) “ 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.
(d) “ Agreement
” means this Transition Services Agreement together with
those portions of the Distribution Agreement referenced herein and
all Annexes attached hereto and incorporated herein by this
reference and all amendments, modifications and changes hereto and
thereto.
(e) “ Authorized
Representative ” means any of the individuals listed
on Annex A .
(f) “ Consent
” means a Governmental Consent or a Third Party
Consent.
(g) “ 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.
(h) “ 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).
(i) “ 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, and reasonable fees and disbursements of legal
counsel, investigators, expert witnesses, consultants, accountants
and other professionals).
(j) “ Fees
” for a particular Service shall be as set forth on
Annex B or Annex C , as the case may be.
(k) “ First Data
Indemnified Parties ” means the First Data Parties
(for so long as such Person is a First Data Party) and each of
their Affiliates, directors, officers, employees and agents, and
each of the heirs, executors, successors and assigns of any of the
foregoing.
(l) “ First Data
Parties ” means First Data and its Subsidiaries
(including those formed or acquired after the date hereof), other
than the Western Union Parties.
(m) “ First Data
Services ” means the Services generally described on
Annex B and any other Service provided by First Data or its
Affiliates pursuant to this Agreement.
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(n) “ First Data
Systems ” means any computer software program or
routine or part thereof owned, licensed or provided by or for any
First Data Party which is used by any Western Union Party or its
suppliers on any First Data Party’s behalf pursuant to this
Agreement, and any other computer software program or routine so
designated in Annex B or Annex C, each as modified, maintained or
enhanced from time to time by any First Data Party, any Western
Union Party or any Third Party.
(o) “ 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.
(p) “ Governmental
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.
(q) “ Losses
” means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines,
penalties, damages, fees, expenses, deficiencies, claims or other
charges.
(r) “ Party
” means a First Data Party or a Western Union Party, as
applicable.
(s) “ Person
” means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock
company, trust, unincorporated organization or Governmental
Authority.
(t) “ Services
” means the First Data Services or the Western Union
Services, individually, or the First Data Services and the Western
Union Services, collectively, as the context may indicate. “
Services ” shall also include those First Data and
Western Union functions described in Sections 7.2(a) through
7.2(f) .
(u) “ 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
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.
(v) Systems ”
means the First Data Systems or the Western Union Systems,
individually, or the First Data Systems and the Western Union
Systems, collectively, as the context may indicate.
(w) “ Third Party
” means a Person that is not an Affiliate of any Party
hereto.
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(x) “ Third Party
Consents ” means any material consent, approval or
authorization to be obtained from any Third Party that is not a
Governmental Authority.
(y) “ Western Union
Indemnified Parties ” means the Western Union Parties
(for so long as such Person is a Western Union Party) and each of
their Affiliates, directors, officers, employees and agents, and
each of the heirs, executors, successors and assigns of any of the
foregoing.
(z) “ 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.
(aa) “ Western Union
Services ” means the Services generally described on
Annex C and any other Service provided by Western Union or
its Affiliates pursuant to this Agreement.
(bb) “ Western Union
Subsidiaries ” means, collectively, ECG, FFMC, GMT,
Paymap, WUSI and each Subsidiary of any of the foregoing other than
the Distributed Companies.
(cc) “ Western Union
Systems ” means any computer software program or
routine or part thereof owned, licensed or provided by or for any
Western Union Party which is used by any First Data Party or its
suppliers on any Western Union Party’s behalf pursuant to
this Agreement, and any other computer software program or routine
so designated on Annex B or Annex C, each as modified, maintained
or enhanced from time to time by any Western Union Party, any First
Data Party or any Third Party.
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) references 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) references to any Article,
Section or Annex means such Article or Section of, or such Annex
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) references 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) references 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 Distribution Agreement and this
Agreement, the provisions of this Agreement shall control with
respect to the subject matter hereof; if there is any conflict
between the provisions of the body of this Agreement and the
Annexes hereto, the provisions of the body of this Agreement shall
control unless explicitly stated otherwise in such
Annex;
(xii) 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;
(xiii) 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 Affiliates to take such action
or refrain from taking such action, as the case may be (and,
accordingly, if Services are provided by Affiliates of First Data,
references to “First Data” shall be deemed to be
references to such Affiliate which shall provide the Services under
this Agreement; if Services are provided by Affiliates of Western
Union, references to “Western Union” shall be deemed to
be references to such Affiliate which shall provide the Services
under this Agreement); and
(xiv) unless otherwise specified in
this Agreement, all references to dollar amounts herein shall be in
respect of lawful currency of the United States.
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ARTICLE II
TERM
Section 2.1
Term . The term of
this Agreement shall commence on the Distribution Date and end on
the first anniversary of the Distribution Date (the “
Term ” ).
ARTICLE III
PERFORMANCE OF
SERVICES
Section 3.1
General .
(a) During the Term, and subject to the terms and conditions
of this Agreement, First Data will provide, or will cause to be
provided, the First Data Services to Western Union and its
Affiliates. Unless specifically provided to the contrary on
Annex B (including any performance standards set forth
therein) or Annex D , all First Data Services provided
pursuant to this Agreement shall be performed or provided, as
applicable: (i) with the use of reasonable care;
(ii) consistent with this Agreement and in substantially the
same manner (including as to level, quality and timeliness) as such
Services have been provided to the Western Union Business by the
First Data Parties on or prior to the Distribution Date;
(iii) in material compliance with applicable laws, rules and
regulations; (iv) in a manner substantially consistent with
the First Data Parties’ usual and customary practices with
respect to the Western Union Business on or prior to the
Distribution Date; and (v) with substantially the same
priority under comparable circumstances as it provides such
services to itself and its Subsidiaries.
(b) During the Term, and subject to
the terms and conditions of this Agreement, Western Union will
provide, or will cause to be provided, the Western Union Services
to First Data and its Affiliates. Unless specifically provided to
the contrary on Annex C (including any performance standards
set forth therein) or Annex D , all Western Union Services
provided pursuant to this Agreement shall be performed or provided,
as applicable: (i) with the use of reasonable care;
(ii) consistent with this Agreement and in substantially the
same manner (including as to level, quality and timeliness) as such
Services have been provided to the First Data Business by the
Western Union Parties on or prior to the Distribution Date;
(iii) in material compliance with applicable laws, rules and
regulations; (iv) in a manner substantially consistent with
the Western Union Parties’ usual and customary practices with
respect to the First Data Business on or prior to the Distribution
Date; and (v) with substantially the same priority under
comparable circumstances as it provides such services to itself and
its Subsidiaries.
Section 3.2
Additional Services .
(a) If Western Union reasonably determines that additional
transition services of the type previously provided by the First
Data Parties to the Western Union Business are necessary to conduct
the Western Union Business and Western Union or its Affiliates are
not able to provide such services to the Western Union Business
(each such service an “ Additional First Data
Service ” ), then Western Union may provide written
notice thereof to First Data. Upon receipt of such notice by First
Data, if First Data is willing, in its sole discretion, to provide
such Additional First Data Service during the Term, the Parties
will negotiate in good faith an amendment to Annex B setting
forth the Additional First Data Service, the terms and conditions
for the provision of such Additional First Data Service and the
Fees payable by Western Union for such Additional First Data
Service, such Fees to be determined on an arm’s-length
basis.
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(b) If First Data reasonably
determines that additional transition Services of the type
previously provided by the Western Union Parties to the First Data
Business are necessary to conduct the First Data Business and First
Data or its Affiliates are not able to provide such services to the
First Data Business (each such service an “ Additional
Western Union Service ” ), then First Data may
provide written notice thereof to Western Union. Upon receipt of
such notice by Western Union, if Western Union is willing, in its
sole discretion, to provide such Additional Western Union Service
during the Term, the Parties will negotiate in good faith an
amendment to Annex C setting forth the Additional Western
Union Service, the terms and conditions for the provision of such
Additional Western Union Service and the Fees payable by First Data
for such Additional Western Union Service, such Fees to be
determined on an arm’s-length basis.
Section 3.3
Procedure .
(a) Any requests by a Party to the other Party regarding
(i) the Services or (ii) any modification or alteration
to the provision of the Services must be made by an Authorized
Representative (it being understood that the receiving Party shall
not be obligated to agree to any modification or alteration
requested thereby). A Party receiving Services shall provide no
less than 30 days written notice (unless a shorter time is mutually
agreed upon by the Parties) to the other Party of any Services
that, prior to the expiration of the Term, are no longer needed
from the other Party, in which case this Agreement shall terminate
as to such Services, provided that the Party providing such
Services must consent to such early termination, such consent not
to be unreasonably withheld, conditioned or delayed (a “
Partial Termination ” ). The parties shall
mutually agree as to the effective date of any Partial Termination.
In the event of any termination prior to the expiration of the Term
or of any Partial Termination hereunder, (x) with respect to
any terminated Services in which the Fee for such terminated
Services is charged as a flat monthly rate, the Fee for the month
in which the termination occurs shall be 0% of the monthly rate for
such terminated Service, in the event that the effective date of
termination occurs on or prior to the 10 th calendar day of such month, or 100%
of the monthly rate for such Service, in the event that the
effective date of termination occurs on or after the 11
th
calendar day of such
month, and (y) with respect to any other terminated Services,
all amounts due pursuant to the terms hereof with respect to the
terminated Services shall be appropriately pro rated and reduced to
reflect such shortened period during which such Services are
actually provided hereunder, and each Party shall refund to the
other Party an appropriate pro rated amount for any such Services
that have been paid for in advance. Notwithstanding the preceding
sentence, to the extent any amounts due or advances made hereunder
related to costs or expenses that have been or will be incurred and
that cannot be recovered by a Party providing Services, such
amounts due or advances made shall not be pro rated or reduced and
such Party shall not be required to refund to the other Party any
pro rated amount for such costs or expenses; and the terminating
Party shall reimburse the Party providing such Service for any
Third Party cancellation or similar charges incurred as a result of
such early termination. Notwithstanding anything to the contrary
hereunder, each Party may avail itself of the remedies set forth in
Sections 3.4(b) and 10.2 without fulfilling the
notice requirements of this Section 3.3(a) .
(b) In the event of a Partial
Termination, this Agreement shall remain in full force and effect
with respect to the Services which have not been terminated by the
Parties as provided herein.
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(c) Each Party acknowledges and
agrees that certain of the Services to be provided under this
Agreement have been, and will continue to be provided (in
accordance with this Agreement) to the First Data Business or the
Western Union Business, as applicable, by Third Parties designated
by the Party responsible for providing such Services. To the extent
so provided, the Party responsible for providing such Services
shall use commercially reasonable efforts to (a) cause such
Third Parties to provide such Services under this Agreement and/or
(b) enable the Party seeking the benefit of such Services and
its Affiliates to avail itself of such Services; provided ,
however , that if any such Third Party is unable or
unwilling to provide any such Services, the Parties agree to use
their commercially reasonable efforts to determine the manner in
which such Services can best be provided (it being acknowledged and
agreed that any costs or expenses to be incurred in connection with
obtaining a Third Party to provide any such Services shall be paid
by the Party to which such Services are provided; provided
that the Party responsible for providing such Services shall use
commercially reasonable efforts to communicate the costs or
expenses expected to be incurred in advance of incurring such costs
or expenses).
Section 3.4 Disclaimer of
Warranties; Force Majure .
(a) Except as expressly set forth in
this Agreement: (i) each Party acknowledges and agrees that
the other Party makes no warranties with respect to the Services to
be provided hereunder; and (ii) each Party hereby expressly
disclaims all warranties, expressed or implied, of any kind with
respect to the Services to be provided hereunder, including,
without limitation, any warranty of merchantability or fitness for
a particular purpose as to the Services provided hereunder. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES TO BE
PURCHASED UNDER THIS AGREEMENT ARE PROVIDED AS IS, WHERE IS, WITH
ALL FAULTS, AND WITHOUT WARRANTY OR CONDITION OF ANY KIND, EXPRESS
OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR
ANY PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OR ANY OTHER
WARRANTY WHATSOEVER.
(b) If either Party, any of its
Affiliates or any Third Party service provider is prevented from or
delayed in complying, either to
