Opinion ID: 1788581
Heading Depth: 1
Heading Rank: 2

Heading: The McLaughlin Agreement

Text: In July 1986, McLaughlin contracted to sell AMS II to First Texas, which owned the MoneyMaker ATM network, for $400,000 cash. The McLaughlin Agreement consists of a letter agreement and a purchase agreement that references and incorporates the letter agreement. After First Texas acquired AMS II, it became the AMS Division of First Texas Government Services (FTGS), a division of MoneyMaker EFT Services (MoneyMaker), which was itself, a division of First Texas. Before signing the McLaughlin Agreement, First Texas appointed McLaughlin director of marketing and product development for MoneyMaker's government and health care division. In the McLaughlin Agreement, First Texas contracted to commit such levels of financial and administrative support to the EBT business as First Texas, in its sole discretion deem[ed] appropriate. Besides First Texas' $400,000 cash payment for the AMS II partnership, McLaughlin received an option to purchase 49 percent of First Texas' AMS Division for $100,000 at the end of five years. If McLaughlin exercised the purchase option, First Texas contracted to immediately buy back the 49 percent interest for the lesser of a formula price [1] based on FTGS's gross revenues, or for $3 million. The McLaughlin Agreement allowed McLaughlin to exercise the purchase option upon its maturity, but then, only between June 1, 1991 and July 31, 1991. Paragraph 5 of the McLaughlin Agreement provided First Texas two methods to buy out McLaughlin's limited purchase right early if it chose to do so. First, if First Texas took MoneyMaker or FTGS public, it could buy the unmatured purchase option for $750,000 plus a formula percentage. Second, First Texas could buy out the purchase option for $3 million. Either way, First Texas' early buy-out right ended on June 1, 1989. Additionally, if First Texas withdrew from the government services business without selling the AMS Division, or if First Texas wanted to accept an outside offer to purchase the AMS Division before May 31, 1991, Paragraph 10 of the McLaughlin Agreement required First Texas to give notice about the sale to allow McLaughlin the opportunity to make an offer to purchase the AMS Division. However, the McLaughlin Agreement did not require First Texas to accept McLaughlin's offer. [2] Finally, the parties could modify or amend the McLaughlin Agreement by written agreement.