Exhibit 10.1
CREDIT AGREEMENT
DATED AS OF MARCH 31, 2003
BY AND AMONG
ACE CASH EXPRESS, INC.,
AS BORROWER
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT, CO-LEAD ARRANGER, AND AS A LENDER,
JPMORGAN CHASE BANK,
AS AGENT, SYNDICATION AGENT, AND AS A LENDER,
X.X. XXXXXX SECURITIES, INC., AS SOLE BOOKRUNNER AND CO-LEAD ARRANGER,
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT AND AS A LENDER,
U.S. BANK NATIONAL ASSOCIATION, AS DOCUMENTATION AGENT AND AS A LENDER,
AND
THE OTHER LENDERS PARTY HERETO
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS...........................................................................................2
SECTION 1.01. Certain Defined Terms..........................................................................2
SECTION 1.02. Accounting Terms; Financial Covenants.........................................................24
SECTION 1.03. Miscellaneous.................................................................................24
ARTICLE II. THE LOANS...........................................................................................24
SECTION 2.01. The Total Commitments.........................................................................24
SECTION 2.02. Loans.........................................................................................26
SECTION 2.03. Notice of Revolving Credit Loans and Seasonal Revolving Credit Loans; Funding of Loans........27
SECTION 2.04. Notes; Repayment of Loans.....................................................................29
SECTION 2.05. Interest on Loans.............................................................................29
SECTION 2.06. Fees......................................................................................... 30
SECTION 2.07. Termination or Reduction of the Total Revolving Credit Commitment;
Termination of Seasonal Revolving Credit Commitment..........................................31
SECTION 2.08. Interest after Default; Alternate Rate of Interest............................................32
SECTION 2.09. Prepayment of Loans...........................................................................32
SECTION 2.10. Increased Costs...............................................................................33
SECTION 2.11. Break Funding Payments........................................................................34
SECTION 2.12. Taxes.........................................................................................35
SECTION 2.13. Payments Generally; Pro Rata Treatment, Sharing of Set-offs...................................36
SECTION 2.14. Letters of Credit.............................................................................38
SECTION 2.15. Incremental Facility..........................................................................43
ARTICLE III. REPRESENTATIONS AND WARRANTIES.....................................................................44
SECTION 3.01. Organization; Legal Existence.................................................................44
SECTION 3.02. Authorization.................................................................................45
SECTION 3.03. Governmental Approvals........................................................................45
SECTION 3.04. Binding Effect................................................................................45
SECTION 3.05. Material Adverse Effect; Default..............................................................45
SECTION 3.06. Litigation; Compliance With Laws; Etc.........................................................45
SECTION 3.07. Financial Statements..........................................................................46
SECTION 3.08. Federal Reserve Regulation....................................................................46
SECTION 3.09. Taxes.........................................................................................47
SECTION 3.10. Employee Benefit Plans........................................................................47
SECTION 3.11. No Material Misstatements.....................................................................49
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act....................................49
SECTION 3.13. Use of Proceeds...............................................................................49
SECTION 3.14. Subsidiaries..................................................................................49
SECTION 3.15. Title to Properties; Possession Under Leases; Trademarks......................................49
SECTION 3.16. Solvency......................................................................................50
SECTION 3.17. Permits, Etc..................................................................................51
SECTION 3.18. Compliance with Environmental Laws............................................................51
SECTION 3.19. Labor Matters.................................................................................51
SECTION 3.20. Side Agreements...............................................................................53
SECTION 3.21. General.......................................................................................53
ARTICLE IV. CONDITIONS OF CREDIT EVENTS.........................................................................53
SECTION 4.01. All Credit Events.............................................................................53
SECTION 4.02. First Credit Event............................................................................53
ARTICLE V. AFFIRMATIVE COVENANTS................................................................................57
SECTION 5.01. Legal Existence...............................................................................57
SECTION 5.02. Businesses and Properties.....................................................................57
SECTION 5.03. Insurance.....................................................................................57
SECTION 5.04. Taxes.........................................................................................58
SECTION 5.05. Financial Statements, Reports, Etc............................................................58
SECTION 5.06. Litigation and Other Notices..................................................................60
SECTION 5.07. ERISA.........................................................................................61
SECTION 5.08. Maintaining Records; Access to Properties and Collateral; Inspections.........................62
SECTION 5.09. Use of Proceeds...............................................................................62
SECTION 5.10. [RESERVED]....................................................................................62
SECTION 5.11. Additional Guarantors and Pledge of Assets....................................................62
SECTION 5.12. Environmental Legislation.....................................................................63
SECTION 5.13. Pay Obligations to Lenders and Perform Other Covenants........................................64
SECTION 5.14. Assurances....................................................................................64
SECTION 5.15. Certain Changes...............................................................................64
SECTION 5.16. Assignment of Leases..........................................................................64
SECTION 5.17. Third-Party Payables..........................................................................64
SECTION 5.18. Interest Rate Hedging.........................................................................64
SECTION 5.19. Compliance with Agreements....................................................................65
ARTICLE VI. NEGATIVE COVENANTS..................................................................................65
SECTION 6.01. Liens.........................................................................................65
SECTION 6.02. Sale and Lease-Back Transactions..............................................................67
SECTION 6.03. Indebtedness for Borrowed Money and Guarantees................................................67
SECTION 6.04. Equity Interest in Subsidiaries Equity Interests in Borrower..................................68
SECTION 6.05. Consolidations, Mergers and Sales of Assets...................................................68
SECTION 6.06. Loans and Advances............................................................................69
SECTION 6.07. Net Worth.....................................................................................69
SECTION 6.08. EBITDA........................................................................................70
SECTION 6.09. Debt to EBITDA Ratio..........................................................................70
SECTION 6.10. Cash Flow Coverage Ratio......................................................................70
SECTION 6.11. Use of Proceeds...............................................................................70
SECTION 6.12. ERISA.........................................................................................70
SECTION 6.13. Modifications of Certain Indebtedness; Other Agreements.......................................71
SECTION 6.14. Transactions with Affiliates..................................................................71
SECTION 6.15. Other Agreements..............................................................................71
SECTION 6.16. Restricted Payments...........................................................................71
SECTION 6.17. Limitation on Investments.....................................................................72
SECTION 6.18. Change in Business............................................................................73
SECTION 6.19. Capital Expenditures..........................................................................73
SECTION 6.20. Deposit Accounts and Armored Couriers.........................................................73
SECTION 6.21. ACE Funding...................................................................................73
SECTION 6.22. Restrictive Agreements........................................................................74
ARTICLE VII. EVENTS OF DEFAULT..................................................................................75
ARTICLE VIII. AGENT.............................................................................................79
ARTICLE VIIIA. ADMINISTRATIVE AGENT.............................................................................82
ARTICLE IX. MISCELLANEOUS.......................................................................................85
SECTION 9.01. Notices.......................................................................................85
SECTION 9.02. Waivers; Amendments...........................................................................86
SECTION 9.03. Expenses; Indemnity, Damage Waiver............................................................87
SECTION 9.04. Successors and Assigns........................................................................88
SECTION 9.05. Survival......................................................................................91
SECTION 9.06. Counterparts; Integration; Effectiveness......................................................92
SECTION 9.07. Severability..................................................................................92
SECTION 9.08. Right of Set-off..............................................................................92
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process....................................92
SECTION 9.10. WAIVER OF JURY TRIAL..........................................................................93
SECTION 9.11. Headings......................................................................................93
SECTION 9.12. Confidentiality...............................................................................94
SECTION 9.13. Interest......................................................................................94
SECTION 9.14. [RESERVED].....................................................................................95
SECTION 9.15. Nonapplicability of Chapter 346 et seq........................................................96
SECTION 9.16. Waiver of Consumer Rights.....................................................................96
SECTION 9.17. Entire Agreement..............................................................................96
SECTION 9.18. Amendment and Restatement of Existing Credit Agreement.........................................96
EXHIBITS:
EXHIBIT A.........Form of Revolving Credit Notes
EXHIBIT B.........Form of Seasonal Revolving Credit Notes
EXHIBIT C.........Form of Borrowing Base Report
EXHIBIT D.........Form of Borrowing Notice
EXHIBIT E ........Form of Global Assignment and Acceptance
EXHIBIT F-1.......Form of Perfection Letter - Bank (Long Form)
EXHIBIT F-2.......Form of Perfection Letter - Bank (Short Form)
EXHIBIT G.........Form of Perfection Letter - Courier
EXHIBIT H.........Form of Cash Holdings Report
EXHIBIT I.........Form of Compliance Certificate
EXHIBIT J.........Form of Assignment and Assumption
SCHEDULES:
SCHEDULE 1..........Pricing Grid
SCHEDULE 2.01(a)....Revolving Credit Commitments
SCHEDULE 2.01(b)....Seasonal Revolving Credit Commitments
SCHEDULE 2.02(a)....Domestic Lending Offices
SCHEDULE 2.02(b)....Eurodollar Loan Lending Offices
SCHEDULE 3.06.......Litigation
SCHEDULE 3.14.......Subsidiaries
SCHEDULE 3.15(c)....Intellectual Property
SCHEDULE 3.15(d)....Deposit Accounts and Armored Couriers
SCHEDULE 3.18.......Environmental
SCHEDULE 6.01.......Existing Liens
SCHEDULE 6.02.......Sale Leaseback Transactions
SCHEDULE 6.03.......Existing Indebtedness
SCHEDULE 6.06.......Existing Loans and Advances
SCHEDULE 6.17.......Permitted Investments
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement"), dated as of March 31, 2003 is
by and among ACE CASH EXPRESS, INC., a Texas corporation (the "Borrower"), XXXXX
FARGO BANK TEXAS, NATIONAL ASSOCIATION ("WFB"), as administrative agent for the
Lenders (WFB, in such capacity, is herein referred to as the "Administrative
Agent") and Co-Lead Arranger, JPMORGAN CHASE BANK ("JPMCB"), as agent for the
Lenders (JPMCB, in such capacity, is herein referred to as the "Agent") and
Syndication Agent, X.X. XXXXXX SECURITIES, INC., as Sole Bookrunner and Co-Lead
Arranger, BANK OF AMERICA, N.A., as Syndication Agent, U.S. BANK NATIONAL
ASSOCIATION, as Documentation Agent, and the lenders named in Schedule 2.01
hereto (collectively, together with all successors and assigns, the "Lenders").
PRELIMINARY STATEMENTS
A. Pursuant to that certain Amended and Restated Credit Agreement, dated
as of November 9, 2000 (as amended, supplemented, restated, or otherwise
modified, the "Existing Credit Agreement"), by and among Borrower, Xxxxx Fargo
Bank Texas, National Association, as Administrative Agent, and certain other
financial institutions, as lenders (the "Existing Lenders"), Existing Lenders
provided Borrower with a revolving credit, seasonal revolving credit, and term
loan facility;
B. Pursuant to a Global Assignment and Acceptance of even date herewith,
the Existing Lenders have assigned certain of their rights and obligations under
the Existing Credit Agreement to the several Lenders parties to such Global
Assignment and Acceptance;
C. The parties hereto wish to amend and restate the Existing Credit
Agreement, which amendment and restatement is in extension and renewal, and not
in extinguishment or novation, of certain of the indebtedness outstanding under
the Existing Credit Agreement, as herein provided, it being acknowledged and
agreed by the Borrower, on behalf of itself and its Subsidiaries (other than ACE
Funding), that the Indebtedness under this Agreement constitutes an extension
and renewal of certain of the outstanding indebtedness under the Existing Credit
Agreement, and that all Liens and Guaranty Agreements that secure the repayment
of such outstanding indebtedness under the Existing Credit Agreement shall
continue to secure Indebtedness under this Agreement;
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
AGREEMENT
ARTICLE I. DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below (such meanings to be
equally applicable to both the singular and plural of the terms defined):
"AAA" shall have the meaning set forth in Section 9.14(b) hereof.
"ABR Loans" shall mean any Loan bearing interest at an interest rate based
upon the Alternate Base Rate.
"Acceptable Acquisition" shall mean (i) any acquisition by the Borrower of
all or substantially all of the business of, any business entity (whatever
corporate form and whether accomplished as an asset acquisition or a stock
purchase or acquisition of other forms of ownership interests) engaged in the
same business or a substantially similar line of business, but only if (a) the
purchase price of such acquisition (including the amount of Indebtedness of the
business entity or of the seller or sellers assumed in connection therewith) is
no more than $7,000,000 and (b) such business entity has either (I) positive
EBITDA for the twelve (12) month period immediately preceding the proposed date
of such acquisition or (II) positive Restated EBITDA for the twelve (12) month
period immediately preceding the proposed date of such acquisition (as
determined by Agent and Borrower), or (ii) any other acquisition approved by
Required Lenders in their sole discretion.
"Acceptable Hedging Contract" shall have the meaning given to such term in
Section 5.18.
"ACE Funding" shall mean ACE Funding, LLC, a Delaware limited liability
company.
"ACE Funding Lender" shall have the meaning assigned to such term in
Section 6.21 hereof.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Loan or
Reference Rate Loan for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Adjustment Date" shall mean with respect to any calculation of the
Applicable Margin following each fiscal quarter, (i) with respect to the final
fiscal quarter in each fiscal year of the Borrower, the earlier of (a) the date
on which Borrower's audited financial statements for the applicable fiscal year
are required to be filed with the Securities Exchange Commission under
applicable law after the end of such fiscal year and (b) two (2) Business Days
after the Borrower has delivered such audited financial statements to Agent with
respect to such fiscal year as required under Section 5.05(a) and
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(ii) with respect to any other fiscal quarter, the earlier of (a) the date which
is forty five (45) days after the end of such fiscal quarter and (ii) the date
which is two (2) Business Days after the Borrower has delivered the financial
statements to Agent with respect to such fiscal quarter as required under
Section 5.05(b).
"Administrative Agent" shall have the meaning assigned to such term in the
preamble to this Agreement, and any successor Administrative Agent appointed
pursuant to the terms of this Agreement.
"Affiliate" of any Person shall mean any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and, without limiting the generality of the foregoing, includes (a) any
Person which beneficially owns or holds ten percent (10%) or more of any class
of voting securities of such Person or ten percent (10%) or more of the equity
interest in such Person, (b) any Person of which such Person beneficially owns
or holds ten percent (10%) or more of any class of voting securities or in which
such Person beneficially owns or holds ten percent (10%) or more of the equity
interest in such Person and (c) any director, officer or employee of such
Person. For the purposes of this definition, the term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" shall have the meaning assigned to such term in the preamble to
this Agreement, and any successor Agent appointed pursuant to the terms of this
Agreement.
"Agreement" shall mean this Credit Agreement, as amended, modified,
renewed or supplemented from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"American Capital Agent" shall mean American Capital Financial Services,
Inc., and any successor agent appointed pursuant to the terms of the American
Capital Agreement.
"American Capital Agreement" shall mean that certain Note Purchase
Agreement of even date herewith by and among the Borrower, American Capital
Agent, and the purchasers of the American Capital Notes named therein, as the
same may be from time to time amended, supplemented, restated, or otherwise
modified with the prior written consent of Required Lenders as set forth in
Section 6.13.
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"American Capital Notes" shall mean the promissory notes of the Borrower
of even date herewith in the aggregate principal amount of $40,000,000 issued
under the American Capital Agreement, as the same may be from time to time
renewed, extended, or otherwise modified with the prior written consent of
Required Lenders as set forth in Section 6.13.
"American Capital Obligations" shall mean the "ACFS Obligations", as such
term is defined in the Intercreditor Agreement.
"American Capital Transactions" shall mean the execution, delivery and
performance by the Borrower and its Subsidiaries (other than ACE Funding) of the
American Capital Agreement, the American Capital Notes, and the other
transaction documents relating thereto to which the Borrower or any of its
Subsidiaries is a party, and the funding of the borrowings by the Borrower
thereunder.
"Applicable Commitment Fee Rate" shall mean the rate of 0.50% per annum.
"Applicable Lending Office" shall mean, with respect to each Lender, such
Lender's Domestic Lending Office in the case of an ABR Loan and such Lender's
Eurodollar Lending Office in the case of a Eurodollar Loan or a Reference Rate
Loan.
"Applicable Margin" shall mean the margin to be added to the Alternate
Base Rate and Adjusted LIBO Rate which is equal to the applicable percentage
rate per annum set forth in the Pricing Grid for the applicable type of Loan
(i.e., ABR Loan, Reference Rate Loan, or Eurodollar Loan). On the Closing Date
and continuing through and including the day immediately preceding the first
Adjustment Date occurring after the Closing Date, the Applicable Margin shall be
the Applicable Margin for the applicable Type of Loan when the Debt to EBITDA
Ratio is greater than or equal to 2.75 to 1.00 but less than 3.00 to 1.00 and
for each period thereafter beginning on an Adjustment Date and ending on the day
immediately preceding the next succeeding Adjustment Date, the Applicable Margin
for the applicable Type of Loan set forth opposite the Debt to EBITDA Ratio as
determined at the end of the most recently ended fiscal quarter prior to the
applicable Adjustment Date.
"Applicable Percentage" shall mean, with respect to any Lender, the
percentage of the Total Commitments represented by such Lender's Total
Commitment. If the Total Commitments or any part thereof have terminated or
expired, the Applicable Percentages shall be determined based upon the Total
Commitments most recently in effect, giving effect to any assignments.
"Assessment Rate" shall mean, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that
4
if, as a result of any change in any law, rule or regulation, it is no longer
possible to determine the Assessment Rate as aforesaid, then the Assessment Rate
shall be such annual rate as shall be determined by the Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Assumption" shall mean an assignment and assumption
entered into by a Lender and an assignee and accepted by the Agent and the
Borrower, in substantially the form of Exhibit J annexed hereto.
"Base CD Rate" shall mean the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Borrowing Base" shall mean the "Net Amount Available for Borrowing" on
each Borrowing Base Report, subject to verification by the Agent. The
calculation of the Borrowing Base shall utilize the eligibility criteria, rates
of advance, borrowing base factors and dollar ceilings for various components as
are specified on Exhibit C hereto and incorporated herein by reference.
"Borrowing Base Report" shall mean the Borrowing Base Report with respect
to Cash Holdings provided as Collateral to the Lenders by the Borrower and its
Subsidiaries (other than ACE Funding) in the form of Exhibit C hereto.
"Borrowing Notice" shall have the meaning assigned to such term in Section
2.03 hereof.
"Business Day" shall mean any day, other than a Saturday, Sunday or legal
holiday in the States of Texas and California on which banks are open for
substantially all their banking business in Dallas and San Francisco,
respectively; provided, however, if any determination of a "Business Day" shall
relate to a Eurodollar Loan or a Reference Rate Loan, the term "Business Day"
shall in addition exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"Capital Expenditures" shall mean capital expenditures of the Borrower and
its Subsidiaries on a Consolidated basis, as computed and calculated in
accordance with GAAP, including, without limitation, all principal payments made
during the applicable period on Capitalized Lease Obligations.
"Capitalized Lease" shall mean, with respect to any Person, any lease or
any other agreement for the use of real and/or personal property which in
accordance with GAAP should be capitalized on the lessee's or user's balance
sheet.
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"Capitalized Lease Obligation" shall mean an obligation to pay rent or
other amounts under any Capitalized Lease, and for purposes hereof the amount of
such obligation shall be the capitalized amount thereof determined in accordance
with GAAP.
"Cash Flow Coverage Ratio" shall mean, in each case, with respect to the
Borrower and its Consolidated Subsidiaries: (a) the total without duplication,
during the twelve-month period preceding the applicable date of determination,
of (i) EBITDA, minus (ii) Federal, state and local income taxes actually paid,
minus (iii) total capital expenditures paid in cash, minus (iv) cash dividends
paid, minus (v) treasury stock purchased, plus (v) rent expense, divided by (b)
the total without duplication during the same specified twelve month period of
(i) cash Interest Expense paid, plus (ii) the current portion of all Capitalized
Lease Obligations, plus (iii) the current portion of all long-term debt, plus
(iv) rent expense.
"Cash Holdings" shall mean Borrower's cash in the Borrower's stores, plus
Borrower's cash in the Borrower's depository accounts with WFB, plus Borrower's
cash in the Borrower's depository accounts with Other Financial Institutions,
plus the amount of items of the Borrower in clearing at WFB and at Other
Financial Institutions, plus cash of the Borrower in transit with armored
couriers.
"Cash Holdings Report" shall mean the Cash Holdings Report in the form of
Exhibit H hereto.
"Certificate of Update" shall mean a Certificate signed by a Responsible
Officer of the Borrower which sets forth any changes during the prior month to
Schedule 3.15(d) hereto, any of the Schedules attached to the Intercreditor
Agreement, or any of the Schedules attached to the Security Agreement.
"Change in Control" shall mean (i) any transaction or series of related
transactions as a result of which any Person or Persons, including but not
limited to any "person" or "group" (as such terms are used in sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than the Permitted Investors, acquires beneficial ownership (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act) on a fully-diluted basis of
30% or more of (a) the then outstanding shares of common stock of the Borrower
or (b) the combined voting power of the then outstanding voting securities of
the Borrower entitled to vote generally in the election of directors (provided,
however, that an underwritten public offering of the Borrower's common stock
registered under the Securities Act of 1933, as amended, that has been approved
by a majority of the Continuing Directors shall not be deemed to be a Change of
Control); (ii) any merger, consolidation, share exchange, sale of assets or
other reorganization to which the Borrower is a party and as a result of which
members of the Board of Directors in office immediately prior to such
transaction or event thereafter constitute less than a majority of the whole
Board of Directors; (iii) the first day on which a majority of the members of
the Board of Directors of the Borrower is not constituted by Continuing
Directors; or (iv) a "Change of Control" under the American Capital Agreement.
As used herein, "Continuing Directors" shall mean as of any date of
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determination, the directors of the Borrower on the Closing Date and each other
individual becoming a director subsequent to the Closing Date whose election, or
nomination for election by the Borrower's stockholders, was approved by a vote
of a majority of the Continuing Directors as of such date, and "Permitted
Investors" shall mean, collectively, (i) all officers of the Borrower on the
Closing Date, (ii) all members of the Board of Directors of the Borrower on the
Closing Date, (iii) Xxxxxxx X. Xxxxxx, (iv) Xxxxxx X. Xxxxxxxx, (v) Xxxxxxxx X.
Xxxxx, (vi) Xxxxxx X. Xxxx III, (vii) Greenbriar Partners, Ltd., and (viii) FMR
Corp.
"Change in Law" shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.10(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, or any successor Federal tax code, and any reference to any statutory
provision shall be deemed to be a reference to any successor provision or
provisions.
"Collateral" shall mean all assets, tangible or intangible, real, personal
or mixed, of the Borrower and each of its Subsidiaries other than ACE Funding
including, without limitation, all Deposit Accounts in which Cash Holdings or
any Subsidiary's Cash Holdings are maintained, all Cash Holdings and each
Subsidiary's Cash Holdings, and other cash, accounts receivable, instruments,
patents, trademarks, service marks, all other intellectual property, all
software whether purchased by or developed by the Borrower or any of its
Subsidiaries other than ACE Funding, general intangibles, furniture and
equipment of the Borrower and its Subsidiaries other than ACE Funding, and all
partnership interests, capital stock or other Equity Interests of each
Subsidiary of the Borrower other than ACE Funding, but excluding any assets held
by Borrower for the benefit of non-Affiliates in which no security interest or
other Lien may be granted, the Borrower's interest in any Indebtedness of ACE
Funding owed to the Borrower, and all assets or properties of ACE Funding.
"Collateral Agency Agreement" shall mean that certain Collateral Agency
Agreement dated as of the Closing Date by and among the Borrower, the
Administrative Agent, Travelers, American Capital Agent, and Wilmington Trust
Company, as the same may be amended, restated or modified from time to time.
"Collateral Agent" shall mean the collateral agent pursuant to the
Collateral Agency Agreement.
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"Commitment Fee" shall have the meaning set forth in Section 2.06 hereof.
"Compliance Certificate" shall mean the Financial Covenant and Compliance
Certificate with respect to financial and other covenants set forth in this
Agreement provided to the Lenders by the Borrower in the form of Exhibit I
hereto.
"Consolidated" shall mean, in respect of any Person, as applied to any
financial or accounting term, such term determined on a consolidated basis in
accordance with GAAP (except as otherwise required herein) for the Person and
all consolidated Subsidiaries thereof.
"Credit Documents" shall mean collectively, this Agreement, the Notes, the
Letters of Credit, the Guaranty Agreements, the Collateral Agency Agreement, the
Intercreditor Agreement, the Security Documents, the Letter Agreements, the
Lender Control Agreements, all Hedging Contracts entered into by the Borrower or
any of its Subsidiaries (other than ACE Funding) with any Lender or any
Affiliate of any Lender, all other agreements, documents and instruments and
other writings contemplated by this Agreement, all assignments, deeds,
guaranties, pledges, instruments, certificates and agreements now or hereafter
executed or delivered to Administrative Agent, Agent, or any Lender pursuant to
any of the foregoing, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.
"Credit Event" shall mean each borrowing and each issuance of a Letter of
Credit hereunder.
"Credit Transactions" shall mean the execution, delivery and performance
by the Borrower and each Guarantor of the Credit Documents to which it is a
party, the borrowings and the issuance of Letters of Credit hereunder, and the
execution and delivery by the Borrower of the Notes (if any).
"Debt to EBITDA Ratio" shall mean, in each case with respect to the
Borrower and its Consolidated Subsidiaries, at any date of determination, the
ratio of (a) the Funded Indebtedness to (b) the EBITDA for the twelve month
period preceding such date of determination. For the purposes of calculating the
Debt to EBITDA Ratio only, the Indebtedness outstanding under this Agreement as
of any date of determination shall be deemed to be the arithmetic mean (i.e.,
average) amount outstanding hereunder during the seven calendar days immediately
preceding such date of determination.
"Default" shall mean any condition, act or event which, with notice or
lapse of time or both, would constitute an Event of Default.
"Deferred Payment Obligations" shall mean the amount of the Borrower's (or
any of the Borrower's Subsidiaries') obligations to make payments to sellers of
either stock or assets pursuant to an Acceptable Acquisition, in periods
subsequent to the closing of such acquisition.
8
"Deposit Accounts" shall mean each demand, time, savings, passbook and
other like accounts (including any account evidenced by a non-negotiable
certificate of deposit), whether interest-bearing or not, and if
interest-bearing then all interest accrued and paid or payable thereon,
maintained by the Debtor or any of its Subsidiaries (other than ACE Funding),
and all moneys from time to time in or credited to any and all such deposit
accounts, including all earnings or profits therefrom in the form of interest or
otherwise.
"Dispute" shall have the meaning set forth in Section 9.14(a) hereof.
"Dollars", "dollars" or the symbol "$" shall mean dollars in lawful
currency of the United States of America.
"Domestic Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name in Schedule 2.02(a) annexed hereto, or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the Agent.
"EBITDA" shall mean, with respect to any Person for any period of
determination, the sum of (a) Net Income for such Person on a Consolidated
basis, plus (b) Interest Expense deducted in arriving at such Net Income, plus
(c) Federal, state and local income taxes deducted in arriving at such Net
Income, plus (d) depreciation, amortization and other non-cash charges deducted
in arriving at such Net Income as computed and calculated in accordance with
GAAP (excluding, however, any reserves or non-cash charges relating to, or in
respect of, Payday Loans or any other loan program administered by the Borrower
or its Subsidiaries), minus (e) extraordinary gains computed and calculated in
accordance with GAAP, plus (f) extraordinary losses computed and calculated in
accordance with GAAP.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Legislation" shall have the meaning assigned to such term
in Section 5.12 hereof.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
9
"Equity Interest" of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, but excluding any debt securities convertible into such equity, and
including, in the case of a partnership, partnership interests (whether general
or limited) and any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, such partnership.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder, as in effect from
time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which would be treated together with the Borrower or any
Subsidiary of the Borrower, as a single employer under the provisions of Title I
or Title IV of ERISA.
"Eurodollar Loan" shall mean any Revolving Credit Loan bearing interest at
an interest rate based upon the LIBO Rate.
"Event of Default" shall have the meaning assigned to such term in Article
VII hereof.
"Excluded Taxes" shall mean, with respect to the Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.12(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.12(a).
"Existing Credit Agreement" shall have the meaning assigned to such term
in the Preliminary Statements hereof.
"Existing Lender" shall have the meaning assigned to such term in the
Preliminary Statements hereof.
"Eurodollar Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name in
10
Schedule 2.02(a) annexed hereto, or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Loan" shall mean any Revolving Credit Loan bearing interest at
an interest rate based upon the LIBO Rate.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Final Maturity Date" shall mean March 31, 2006.
"Fiscal Year" shall mean the fiscal year of the Borrower and its
Subsidiaries for accounting purposes as designated by the Borrower to the Agent
from time to time.
"Foreign Lender" shall mean any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Funded Indebtedness" shall mean and include, as of any date of
determination (without duplication) (a) all obligations of the Borrower and its
Consolidated Subsidiaries for borrowed money, including but not limited to the
Loans (and all other outstanding amounts under the Total Commitment), other bank
debt, the American Capital Notes, other senior notes, and subordinated debt, (b)
all obligations of the Borrower and its Consolidated Subsidiaries evidenced by
bonds, debentures, notes or similar instruments (excluding Deferred Payment
Obligations which are unsecured and in an amount not to exceed $2,000,000 in the
aggregate outstanding at any time), (c) all obligations of the Borrower and its
Consolidated Subsidiaries upon which interest charges are customarily paid, (d)
all contingent obligations of the Borrower and its Consolidated Subsidiaries,
(e) all Capitalized Lease Obligations of the Borrower and its Consolidated
Subsidiaries, and (f) the LC Exposure and all other outstanding letters of
credit issued for the account of the Borrower and its Consolidated Subsidiaries,
but shall exclude all amounts owed by ACE Funding and all current accounts
payable arising in the ordinary course of business.
"GAAP" shall have the meaning assigned to such term in Section 1.02
hereof.
"Global Assignment and Acceptance" shall mean the Global Assignment and
Acceptance to be executed by each Existing Lender and each Lender that is a
party hereto substantially in the form of Exhibit E attached hereto
"Goleta" shall mean Goleta National Bank.
11
"Goleta Agreement" shall mean that Master Loan Agency Agreement between
the Borrower and Goleta dated as of August 11, 1999, as in effect on the date
hereof.
"Governmental Authority" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business
(including, but not limited to, third-party xxxx payment receipts and
remittances, money-transfer services, or money-order sales).
"Guarantor" shall mean, individually and collectively, each Person who
guaranties the Obligations, including, without limitation, each Subsidiary
(other than ACE Funding) of the Borrower which is or becomes a guarantor of the
Obligations on or after the date hereof.
"Guaranty Agreement" shall mean the Unconditional Guaranty Agreement
executed by each Guarantor of even date herewith pursuant to which such
Guarantor guaranties the payment of the Obligations and the other therein
described obligations of the Borrower.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Contract" shall mean (a) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases involving
interest rates, commodities or commodity prices, equities, currencies, bonds, or
indexes based on any of
12
the foregoing (b) any option, futures, or forwarded contract traded on an
exchange, and (c) any other derivative agreement or other similar agreement or
arrangement.
"Incremental Facility" shall mean the aggregate Incremental Commitments of
a Person which are made available to the Borrower and become effective pursuant
to an Incremental Loan Amendment.
"Incremental Loan Amendment", "Incremental Commitment", "Incremental
Loans", "Incremental Revolving Credit Loan" and "Incremental Seasonal Revolving
Credit Loan" shall have the meanings given to such terms in Section 2.15.
"Indebtedness" of any Person, shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capitalized Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations of such Person in
respect of any Hedging Contract, and (k) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances, but shall not
include accounts payable which are not aged more that 120 days from the billing
date therefor. The Indebtedness of any Person shall include, but without
duplication, the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitees" shall have the meaning assigned to such term in Section
9.03(b) hereof.
"Information" shall have the meaning assigned to such term in Section 9.12
hereof.
"Intercreditor Agreement" shall mean that certain Intercreditor Agreement
dated as of the Closing Date by and among the Borrower, the Administrative
Agent, Travelers, and American Capital Agent, as the same may be amended,
restated or modified from time to time.
13
"Interest Expense" shall mean, with respect to any Person for any period,
the interest expense of such Person during such period determined in accordance
with GAAP.
"Interest Payment Date" shall mean (a) with respect to any Loan, the last
Business Day of each month commencing on the month following the Closing Date,
(b) with respect to any Revolving Credit Loan, the Revolving Credit Termination
Date, and (c) with respect to any Seasonal Revolving Credit Loan, the Seasonal
Revolving Credit Termination Date.
"Interest Period" shall mean, (a) with respect to any Eurodollar Loan, the
period commencing on the date of such Eurodollar Loan and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect and (b) with respect to any
Reference Rate Loan, the period commencing on the date of such Reference Rate
Loan and ending on the numerically corresponding day in the calendar month that
is one month thereafter; provided, that (i) if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Loan or Reference Rate Loan that commences on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a borrowing of any Eurodollar Loan or Reference Rate Loan
initially shall be the date on which such borrowing is made and thereafter such
date shall be the effective date of the most recent conversion or continuation
of such borrowing. In no event shall any Interest Period end after the Final
Maturity Date.
"Investment" shall have the meaning assigned to such term in Section 6.17
hereof.
"Issuing Bank" shall mean WFB, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in Section
2.14(i). The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term "Issuing Bank" shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
"JPMCB" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Key Management" shall mean shall mean Xxxxxx X. Xxxxxxxx, Xxx X.
Xxxxxxxxx, Xxx X. Xxxxxx and Xxxxx X. Xxxxxx.
"LC Disbursement" shall mean a payment made by the Issuing Bank to the
beneficiary of, and pursuant to, a Letter of Credit.
14
"LC Exposure" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lender Control Agreement" shall mean any Letter Agreement in the form of
Exhibit F-1 or F-2 hereto or any other written agreement or other authenticated
record, whether executed prior to, on, or after the date hereof, pursuant to
which any Lender agrees to follow the instructions of the Administrative Agent,
the American Capital Agent, or Travelers with respect to any Deposit Account
maintained by such Lender without the further consent of the Borrower.
"Lenders" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Letter Agreement" shall mean the letter agreements substantially in the
forms of Exhibits F-1, F-2, and G attached hereto (or any other similar
agreements in form and substance satisfactory to Agent in its sole discretion).
"Letter of Credit" shall mean any letter of credit issued pursuant to this
Agreement.
"LIBO Rate" shall mean, for any Interest Period, the rate appearing on
Page 3750 of the Dow Xxxxx Market Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page of
such Service, as determined by the Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate" for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in
or on such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, Capitalized Lease or other title retention agreement relating to
such asset (or any financing having substantially the same economic effect as
any of the foregoing), (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities or (d) any
other right of or arrangement with any creditor to have such creditor's claim
satisfied out of such assets, or the proceeds therefrom, prior to the general
creditors of the owner thereof.
15
"Liquid Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Xxxxx'x;
(c) investments in deposit accounts, certificates of deposit,
banker's acceptances and time deposits maturing within 180 days from the
date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000 or any Lender;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above or any Lender; and
(e) money market funds that (i) comply with the criteria set forth
in Securities and Exchange Commission Rule 2a-7 under the Investment
Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Xxxxx'x and
(iii) have portfolio assets of at least $5,000,000,000.
"Loan" shall mean each advance under the Total Commitment to the Borrower
made pursuant to this Agreement, whether as a Reference Rate Loan, an ABR Loan,
or Eurodollar Loan.
"Loan and Servicing Agreement" shall mean that certain agreement between
and among Borrower, ACE Funding and ACE Funding Lender dated as of December 18,
2002, as in effect on the date hereof.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean (a) a material adverse effect upon
the Collateral or the business, assets, liabilities, operations, condition
(financial or otherwise) or prospects of (i) the Borrower or (ii) the Borrower
and its Subsidiaries taken as a whole or (b) the impairment of the ability of
Borrower or any of its Subsidiaries (other than ACE Funding) to perform any of
its respective obligations under this Agreement or any other Credit Document on
a timely basis or an impairment of the validity or enforceability of the rights
and benefits available to, or the Liens granted by the Borrower and its
16
Subsidiaries (other than ACE Funding) in favor of, the Agent, the Lenders, or
the Collateral Agent (under the Credit Documents or otherwise). In determining
whether any individual event would result in a Material Adverse Effect,
notwithstanding that such event does not of itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative effect of such
event and all other then existing events would result in a Material Adverse
Effect.
"Money Order Agreement" shall mean that certain money order agreement
between the Borrower and Travelers, dated April 16, 1998, as amended,
supplemented or restated from time to time in accordance herewith.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
"Net Income" shall mean, with respect to any Person for any period, the
aggregate income (or loss) of such Person for such period which shall be an
amount equal to (a) net revenues and other items of income for such Person less
(b) the aggregate for such Person of any and all items that are treated as
expenses under GAAP, less (c) Federal, state and local income taxes, but
excluding any extraordinary gains or losses or any gains or losses from the sale
or disposition of assets other than in the ordinary course of business, all
computed and calculated in accordance with GAAP.
"Net Worth" shall mean, with respect to any Person at any date of
determination, the sum of (a) the total amount of capital stock, including
preferred stock, of such Person, plus (b) the paid-in-capital of such Person,
plus (c) the retained earnings of such Person, minus (d) the treasury stock of
such Person, all calculated in accordance with GAAP.
"Notes" shall mean, collectively, the Revolving Credit Notes and the
Seasonal Revolving Credit Notes of the Borrower, executed and delivered as
provided in Section 2.04 hereof.
"Obligations" shall mean all obligations, liabilities and indebtedness of
each of the Borrower and its Subsidiaries (other than ACE Funding) to the
Lenders or their Affiliates and the Agent arising under or in connection with
this Agreement or any other document or instrument executed in connection
herewith (including without limitation the other Credit Documents), and all
obligations, liabilities and indemnities of the Borrower and such Subsidiaries
under or in respect of any Hedging Contract entered into by Borrower or any of
such Subsidiaries with any Lender or any Affiliate of any Lender, whether now
existing or hereafter created, direct or indirect, matured or unmatured,
liquidated or unliquidated, primary or secondary, due or not, including without
limitation all of their respective obligations, liabilities and indebtedness
with respect to the principal of and interest on the Loans (including but not
limited to interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization, or like proceeding relating
to the Borrower or any of such Subsidiaries, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), drawings
under any Letter of Credit, and the payment or performance of all other
obligations, liabilities, and
17
indebtedness owed by any of them to the Lenders or their Affiliates and the
Agent hereunder or under any one or more documents or instruments executed and
delivered in connection herewith (including without limitation the other Credit
Documents) or with any Letter of Credit or Hedging Contract entered into by
Borrower or any of such Subsidiaries with any Lender or any Affiliate of any
Lender, including without limitation all fees, costs, expenses and indemnity
obligations hereunder and thereunder.
"Other Financial Institutions" shall mean any financial institution other
than WFB.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Payday Loans" shall mean small, short-term, retail loans provided by the
Borrower and its Consolidated Subsidiaries (other than ACE Funding) which
consist of providing a consumer cash in exchange for the consumer's pay check
(endorsed to the order of the Borrower) or an ACH authorization to debit a
consumer's bank account, along with an agreement to defer the presentment or
deposit of such check, or the initiation of the applicable ACH debit on such
consumer's bank account, as the case may be, until the consumer's next payday.
"Payment Blockage Notice" shall have the meaning given to such term in the
Intercreditor Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean any Plan which is subject to the provisions of
Title IV of ERISA (other than any Multiemployer Plan).
"Permitted Liens" shall have the meaning given to such term in Section
6.01.
"Person" shall mean any natural Person, corporation, business trust,
association, company, joint venture, partnership or government or any agency or
political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Preferred Stock", as applied to the Equity Interests of any Person, shall
mean Equity Interests of any class or classes (however designated) that are
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Equity Interests of any other class of such
Person.
18
"Pricing Grid" shall mean the pricing grid containing the Applicable
Margin to be added to the Adjusted LIBO Rate, in the case of Eurodollar Loans or
Reference Rate Loans, and Alternate Base Rate, in the case of ABR Loans, set
forth in Schedule 1 hereto.
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by WFB as its prime rate in effect at its principal office in
San Francisco; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Reference Rate" shall mean the Adjusted LIBO Rate applicable to an
Interest Period of one (1) month. The Reference Rate shall be reset on each
Business Day.
"Reference Rate Loan" shall mean any Revolving Credit Loan bearing
interest at an interest rate based upon the Reference Rate.
"Register" shall have the meaning assigned to such term in Section
9.04(b)(iv) hereof.
"Regulation D" shall mean Regulation D of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation T" shall mean Regulation T of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Related Parties" shall mean, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Remedial Work" shall have the meaning assigned to such term in Section
5.12(b) hereof.
"Reportable Event" shall mean a Reportable Event as defined in Section
4043(c) of ERISA.
"Required Lenders" shall mean at any time (a) two (2) or more Lenders
holding at least sixty six and two thirds percent (66 2/3%) of the then
aggregate unpaid principal amount of the Loans or (b) if no such principal
amount is then outstanding, two (2) or more Lenders having at least sixty six
and two thirds percent (66 2/3%) of the Total Commitment.
19
"Responsible Officer" shall mean, with respect to any Person other than
the Borrower, such Person's president, chairman, senior vice president, vice
president, chief financial officer or treasurer and shall mean with respect to
the Borrower, its chief executive officer, its president, its chief financial
officer, its senior vice president-operations, and its controller.
"Restated EBITDA" shall mean, with respect to any Person, such Person's
actual EBITDA restated to substitute, in lieu of actual expenses deducted in
determining such actual EBITDA, expenses that are, in the judgment of Agent and
Borrower, contractually controllable by Borrower (e.g., officer or employee
compensation, bank and/or depository fees, courier fees and other similar
expense items).
"Revolving Credit Commitment" shall mean, with respect to any Lender, the
Revolving Credit Commitment of such Lender as set forth in Part I of Schedule
2.01(a) annexed hereto or, after the effectiveness of an Incremental Loan
Amendment, as set forth in Part II of Schedule 2.01(a) annexed hereto, as the
same may be terminated or reduced from time to time in accordance with the
provisions of this Agreement.
"Revolving Credit Loan" shall mean advances under the Revolving Credit
Commitment to the Borrower made pursuant to this Agreement.
"Revolving Credit Notes" shall mean the Revolving Credit Notes of the
Borrower, executed and delivered as provided in Section 2.04 hereof, in
substantially the form of Exhibit A annexed hereto, as amended, modified,
supplemented or extended from time to time.
"Revolving Credit Termination Date" shall mean the earlier of (a) Final
Maturity Date or (b) such date as the Revolving Credit Loans shall otherwise be
payable in full and the Revolving Credit Commitment shall terminate, expire or
be canceled in accordance with the terms of this Agreement.
"Seasonal Revolving Credit Availability Period" shall mean any of the
following periods: (a) December 1, 2003 until and including Xxxxx 00, 0000, (x)
December 1, 2004 until and including March 15, 2005, and (c) December 1, 2005
until and including March 15, 2006.
"Seasonal Revolving Credit Commitment" shall mean, with respect to any
Seasonal Revolving Credit Lender, the Seasonal Revolving Credit Commitment of
such Lender as set forth in Part I of Schedule 2.01(b) annexed hereto or, after
the effectiveness of an Incremental Loan Amendment, as set forth in Part II of
Schedule 2.01(b) annexed hereto, as the same may be terminated or reduced from
time to time in accordance with the provisions of this Agreement.
"Seasonal Revolving Credit Lender" shall mean any Lender that makes
Seasonal Revolving Credit Loans pursuant to this Agreement.
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"Seasonal Revolving Credit Loan" shall mean advances under the Seasonal
Revolving Credit Commitment to the Borrower made pursuant to this Agreement.
"Seasonal Revolving Credit Notes" shall mean the Seasonal Revolving Credit
Notes of the Borrower, executed and delivered as provided in Section 2.04
hereof, in substantially the form of Exhibit B annexed hereto, as amended,
modified, supplemented or extended from time to time.
"Seasonal Revolving Credit Termination Date" shall mean the earlier of (a)
March 15, 2006 or (b) such date as the Seasonal Revolving Credit Loans shall
otherwise be payable in full and the Seasonal Revolving Credit Commitment shall
terminate, expire or be canceled in accordance with the terms of this Agreement.
"Security Agreement" shall mean individually and collectively the
Assignments of Deposit Accounts and Security Agreements by the Borrower and
certain of its Subsidiaries other than ACE Funding of even date herewith, as
from time to time amended, supplemented, restated or otherwise modified,
securing the Obligations and the other therein described obligations of the
Borrower and its Subsidiaries other than ACE Funding.
"Security Documents" shall mean individually and collectively, the
Security Agreement, the Stock Pledge Agreements executed by the Borrower and
certain of its Subsidiaries other than ACE Funding of even date herewith, the
Guaranty Agreement, all other assignments, deeds, pledges, financing statements
and other documents executed or delivered to any Lender in connection with
granting of a Lien in the Collateral in favor of Administrative Agent or the
Collateral Agent, and all amendments, modifications, supplements, renewals,
extensions, increases, rearrangements of, and substitutions for the foregoing.
"Senior Secured Notes" shall mean those certain 9.03% Senior Secured Notes
due November 15, 2003 by the Borrower payable to Principal Mutual Life Insurance
Company in the aggregate principal amount of twenty million dollars
($20,000,000).
"Statutory Reserve Rate" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject (a) with respect to the
Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D). Such reserve percentages
shall include those imposed pursuant to such Regulation D. Eurodollar Loans and
Reference Rate Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve
21
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"Subsidiary" shall mean, with respect to any Person, any corporation,
association or other business entity in which said Person or one or more
Subsidiaries of said Person owns or controls, directly or indirectly, securities
or other ownership interests representing more than fifty percent (50%) of the
ordinary voting power. As used in this Agreement with respect to the Borrower,
the term "Subsidiary" shall include all direct and indirect Subsidiaries of the
Borrower.
"Subsidiary's Cash Holdings" shall mean, with respect to a Subsidiary of
the Borrower, other than ACE Funding, such Subsidiary's cash in such
Subsidiary's stores, plus such Subsidiary's cash in such Subsidiary's depository
accounts with JPMCB, plus such Subsidiary's cash in such Subsidiary's depository
accounts with Other Financial Institutions, plus the amount of items of such
Subsidiary in clearing at JPMCB and at Other Financial Institutions, plus cash
of such Subsidiary in transit with armored couriers.
"Taxes" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges, or withholdings imposed by any Governmental
Authority.
"Third-Party Payables" shall mean all contractual obligations owing to
third parties in respect of cash and checks received by the Borrower or a
Guarantor for the purchase of lottery tickets, the payment of any type of xxxx
on behalf of a customer, or the payment for any service rendered by the Borrower
or any Guarantor on behalf of a third party for which funds are to be remitted
to a third party, and all sums (to the extent the same are not subject to the
Intercreditor Agreement) which are owed to Travelers under the Money Order
Agreement.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 9:00 a.m., Dallas, Texas time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the Agent
from three negotiable certificate of deposit dealers of recognized standing
selected by it.
"Total Commitment" shall mean the sum of the Lenders' Total Revolving
Credit Commitments and Total Seasonal Revolving Credit Commitments, as the same
may be terminated or reduced from time to time in accordance with the provisions
of this Agreement.
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"Total Revolving Credit Commitment" shall mean the sum of the Lenders'
Revolving Credit Commitments, as the same may be terminated or reduced from time
to time in accordance with the provisions of this Agreement.
"Total Seasonal Revolving Credit Commitment" shall mean the sum of the
Lenders' Seasonal Revolving Credit Commitments, as the same may be terminated or
reduced from time to time in accordance with the provisions of this Agreement.
"Travelers" shall mean Travelers Express Company, Inc.
"Travelers Documents" shall mean the Travelers Primary Agreements and all
agreements, certificates and instruments executed and/or delivered in connection
therewith.
"Travelers Event of Default" shall mean the occurrence of an event or
condition (after giving effect to any applicable notice and cure provisions)
that permits Travelers to terminate the Money Order Agreement under Section 18.b
thereof because of default by Borrower thereunder.
"Travelers Primary Agreements" shall mean the Money Order Agreement, that
certain Money Transfer Agreement dated June 30, 2000, by and between the
Borrower and Travelers, as amended, supplemented, restated or otherwise modified
through and including the Closing Date, and that certain Xxxx Payment Processing
and Funds Transfer Services Agreement dated April 1, 1998, by and between
Travelers and the Borrower, as amended, supplemented, restated or otherwise
modified through and including the Closing Date.
"Type" shall refer to whether a Loan is an ABR Loan, Reference Rate Loan,
or Eurodollar Loan, each of which constitutes a Type of Loan.
"Unrestricted Indebtedness" shall mean Indebtedness (i) as to which
neither the Borrower nor any of its Subsidiaries other than ACE Funding is
directly or primarily liable (by virtue of the Borrower or one of its other
Subsidiaries being the primary obligor on, guarantor of, or otherwise liable
with respect to, such Indebtedness), and (ii) which, upon the occurrence of a
default with respect thereto, does not result in, or permit any holder of any
Indebtedness of the Borrower or any of its Subsidiaries (other than ACE Funding)
to declare a default on such Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Usage Period" shall mean the period from January 7 (or the preceding
Business Day if January 7 is not a Business Day) through April 30 (or the next
Business Day if April 30 is not a Business Day) of each calendar year.
"WFB" shall have the meaning assigned to such term in the preamble to this
Agreement.
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SECTION 1.02. Accounting Terms; Financial Covenants. Unless otherwise
expressly provided herein, each accounting term used herein shall have the
meaning given it under generally accepted accounting principles in effect from
time to time in the United States applied on a basis consistent with those used
in preparing the financial statements referred to in Section 5.05 hereof
("GAAP"). If subsequent to the date hereof, the accounting principles under GAAP
are changed and as a result of such change the calculation of any financial
covenant set forth herein is affected, the Lenders and the Borrower hereby agree
to amend such financial covenants in such a manner as to make such financial
covenants consistent with the financial covenants in effect hereunder prior to
such change in accounting principles and, until such amendment is effected, such
financial covenants shall be calculated from financial statements of the
Borrower adjusted to reflect the accounting principles followed by the Borrower
prior to such change in accounting principles. Notwithstanding anything to the
contrary contained in Sections 6.07, 6.08, 6.09, and 6.10, the financial
covenants contained in such sections shall be calculated in each case on a
Consolidated basis with respect to the Borrower and its Subsidiaries but
excluding the financial results of ACE Funding; provided, however, that such
calculations shall include (a) dividends or other distributions paid by ACE
Funding to the Borrower in respect of Equity Interests issued by ACE Funding and
owned by the Borrower, (b) all payments made by ACE Funding to the Borrower on
loans or other advances made to ACE Funding by the Borrower, and (c) for balance
sheet purposes, amounts invested in or loaned to ACE Funding by Borrower.
SECTION 1.03. Miscellaneous. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Article, Section, Schedule and Exhibit references are to Articles and Sections
of and Schedules and Exhibits to this Agreement, unless otherwise specified.
ARTICLE II. THE LOANS
SECTION 2.01. The Total Commitments.
(a) The Existing Lenders made Revolving Credit Loans (as defined in the
Existing Credit Agreement) to Borrower under the Existing Credit Agreement and,
as of the Closing Date, $84,000,000.00 aggregate principal amount of such
Revolving Credit Loans are outstanding. The Existing Lenders made Seasonal
Revolving Credit Loans (as defined in the Existing Credit Agreement) to Borrower
under the Existing Credit Agreement and, as of the Closing Date, $0.00 aggregate
principal amount of such Seasonal Revolving Credit Loans are outstanding. There
are no letters of credit outstanding under and subject to the Existing Credit
Agreement. From the respective dates of such Revolving Credit Loans and issuance
of such letters of credit to the Closing Date, the Existing Lenders shall
participate therein and be entitled to all interest, fees and other amounts
payable in respect thereof as provided in the Existing Credit Agreement.
Immediately prior to the effectiveness of the amendment and restatement of the
Existing Credit Agreement effected hereby, the Existing Lenders entered into a
Global Assignment and Acceptance, pursuant to which the assignees thereunder
(which assignees are the
24
Lenders hereunder) purchased and assumed all of the rights, titles, interests
and obligations under the Existing Credit Agreement from the assignors
thereunder in respect of, and all commitments relating to, the foregoing
described Revolving Credit Loans and Seasonal Revolving Credit Loans. From and
after the Closing Date, each Lender shall have an undivided interest and
participation in the foregoing described letters of credit in accordance with
Section 2.14 hereof. On the Closing Date, all Interest Periods under and as
defined in the Existing Credit Agreement in respect of any Eurodollar Loans
under and as defined in the Existing Credit Agreement shall automatically be
terminated (and the Borrower shall on the Closing Date make payments to the
Existing Lenders that held such Eurodollar Loans under Section 2.09 and Section
2.12 of the Existing Credit Agreement to compensate for such termination as if
such termination were a payment or prepayment referred to in said Sections 2.09
and 2.12), and subject to the other restrictions contained herein, the Borrower
shall be permitted to continue such Eurodollar Loans or to convert such
Eurodollar Loans into Reference Rate Loans or ABR Loans hereunder.
(b) The Agent shall notify each Lender of the amount of Loans required to
be made by such Lender (if any) to the Borrower on the Closing Date, such that
after giving effect to the transactions contemplated to occur on the Closing
Date, each Lender's Revolving Credit Commitment and Seasonal Revolving Credit
Commitment shall be in accordance with the Revolving Credit Commitment and
Seasonal Revolving Credit Commitment set forth opposite its name on Schedule
2.01(a) and Schedule 2.01(b). Each Lender's Loans to the Borrower shall not
exceed its pro rata portion of all Loans then outstanding to the Borrower, and
the unused Total Commitments of all Lenders plus all outstanding Revolving
Credit Loans and Seasonal Revolving Credit Loans, in each case under and as
defined in the Existing Credit Agreement, as amended hereby, shall not exceed
the Total Commitment. Each Lender hereby agrees to give effect to the
instructions of the Agent to such Lender contained in the notice described
above.
(c) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender, severally and not
jointly, agrees to make Revolving Credit Loans to the Borrower, at any time and
from time to time, the Borrower having the right to borrow, repay and reborrow,
from the Closing Date to the Revolving Credit Termination Date, in an aggregate
principal amount at any time outstanding not to exceed the amount of such
Lender's Revolving Credit Commitment set forth opposite its name in Schedule
2.01(a) hereto. Notwithstanding the foregoing, the Borrower hereby agrees that
the Borrower shall not permit on any date the sum of (i) the aggregate principal
amount of all Loans outstanding plus (ii) the aggregate amount of the LC
Exposure, to exceed the amount of the Borrowing Base on such date.
(d) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Seasonal Revolving Credit
Lender, severally and not jointly, agrees to make Seasonal Revolving Credit
Loans to the Borrower, at any time and from time to time during each Seasonal
Revolving Credit Availability Period, the Borrower having the right to borrow,
repay and reborrow, from the Closing Date to the Seasonal Revolving Credit
Termination Date, in an aggregate principal amount at any time outstanding not
to exceed the amount of such Lender's Seasonal Revolving Credit
25
Commitment set forth opposite its name in Schedule 2.01(b) hereto. The Seasonal
Revolving Credit Loans shall be subject to the Borrowing Base and shall not be
requested by the Borrower if any such Seasonal Revolving Credit Loan would cause
the aggregate principal amount of the Seasonal Revolving Credit Loans, plus the
aggregate principal amount all Revolving Credit Loans, plus the amount of the LC
Exposure to exceed the amount of the Borrowing Base on such date. The Seasonal
Revolving Credit Loans shall be made on, and subject to, the same terms and
conditions as the Revolving Credit Loans, and the Seasonal Revolving Credit
Commitments shall be subject to reduction or termination upon the same terms and
conditions as the Revolving Credit Commitments, in each case to the extent not
expressly provided otherwise in this Agreement.
SECTION 2.02. Loans.
(a) Each ABR Loan and each Reference Rate Loan made by the Lenders on any
date shall not be less than one million dollars ($1,000,000) and in integral
multiples of one hundred thousand dollars ($100,000). Each Eurodollar Loan made
by the Lenders on any date shall not be less than three million dollars
($3,000,000) and in integral multiples of five hundred thousand dollars
($500,000).
(b) Revolving Credit Loans and Seasonal Revolving Credit Loans shall be
made ratably by the Lenders in accordance with their respective Revolving Credit
Commitments and Seasonal Revolving Credit Commitments; provided, however, that
the failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder.
(c) Each Loan shall be either an ABR Loan, Reference Rate Loan or a
Eurodollar Loan as the Borrower may request in accordance with the provisions of
this Agreement. Each Lender may fulfill its obligations under this Agreement by
causing its Applicable Lending Office to make such Loan. Not more than seven (7)
Eurodollar Loans may be outstanding at any one time.
(d) The Borrower shall have the right at any time upon prior irrevocable
written or facsimile notice (promptly confirmed in writing) to the Agent given
in the manner and at the times specified in Section 2.03 hereof with respect to
the Loans into which conversion or continuation is to be made, to convert all or
any portion of Revolving Credit Loans that are Eurodollar Loans or Reference
Rate Loans into ABR Loans, to convert all or any portion of ABR Loans or
Reference Rate Loans into Eurodollar Loans (specifying the Interest Period to be
applicable thereto), to convert the Interest Period with respect to all or any
portion of any Eurodollar Loans to another permissible Interest Period, and to
continue all or any portion of any Loans into a subsequent Interest Period of
the same duration, subject to (x) the terms and conditions of this Agreement
(including with respect to the conversion of ABR Loans into Eurodollar Loans or
Reference Rate Loans, the last sentence of Section 2.02(c) hereof) and (y) the
following:
26
(i) in the case of a conversion or continuation of fewer than all
the Loans made to the Borrower, the aggregate principal amount of Loans
converted or continued shall be an integral multiple of one million
dollars ($1,000,000);
(ii) accrued interest on a Loan (or portion thereof) being converted
or continued shall be paid by the Borrower at the time of conversion or
continuation (but only with respect to the portion thereof being so
converted or continued);
(iii) if any Eurodollar Loan is converted at any time other than the
end of an Interest Period applicable thereto, the Borrower shall make such
payments associated therewith as are required pursuant to Section 2.11
hereof,
(iv) the representations and warranties set forth in Article III
hereof and in any documents delivered in connection herewith shall be true
and correct in all material respects with the same effect as though made
on and as of such date (except insofar as such representations and
warranties relate expressly to an earlier date); and
(v) no Default or Event of Default shall have occurred and be
continuing.
The Interest Period applicable to any Eurodollar Loan resulting from a
conversion shall be specified by the Borrower in the irrevocable notice of
conversion delivered pursuant to this Section 2.02; provided, however, that if
no such Interest Period shall be specified, the Borrower shall be deemed to have
selected an Interest Period of one (1) month's duration. If the Borrower shall
not have given timely notice to continue any Eurodollar Loan into a subsequent
Interest Period (and shall not otherwise have given notice to convert such
Loan), such Loan (unless repaid or required to be repaid pursuant to the terms
hereof) shall automatically be converted into a Reference Rate Loan. The Agent
shall promptly advise the Lenders of any notice given pursuant to this Section
2.02 and of each Lender's portion of the continuation or conversion hereunder.
SECTION 2.03. Notice of Revolving Credit Loans and Seasonal Revolving
Credit Loans; Funding of Loans.
(a) The Borrower shall give the Agent irrevocable written or facsimile
notice (promptly confirmed in writing) of each borrowing to be made by the
Borrower (including, without limitation, a conversion as permitted by Section
2.02(d) hereof) not later than (i) 10:00 a.m., Dallas, Texas time, the third
Business Day before a proposed Revolving Credit Loan consisting of a Eurodollar
Loan borrowing or any Eurodollar Loan conversion and (ii) 10:00 a.m., Dallas,
Texas time, the Business Day of a proposed Revolving Credit Loan or Seasonal
Revolving Credit Loan consisting of an ABR Loan borrowing or Reference Rate Loan
Borrowing or any ABR Loan conversion or Reference Rate Loan conversion;
provided, that any such notice of a proposed ABR Loan borrowing to finance
reimbursement of an LC Disbursement as contemplated by Section 2.14(e) may not
be given later than 10:00 a.m. Dallas, Texas time on the date of the proposed
27
borrowing. Such notice shall be in substantially the form of Exhibit D hereto
(the "Borrowing Notice") and shall (i) state whether the Loans then being
requested are to be Revolving Credit Loans or Seasonal Revolving Credit Loans,
(ii) in the case of Revolving Credit Loans, specify whether the Revolving Credit
Loans then being requested are to be ABR Loans, Reference Rate Loans, or
Eurodollar Loans (specifying the Interest Period to be applicable thereto),
(iii) specify the date of such borrowing (which shall be a Business Day) and
amount thereof, (iv) state that the representations and warranties set forth in
Article III hereof and in any documents delivered in connection herewith shall
be true and correct in all material respects with the same effect as though made
on and as of such date (except insofar as such representations and warranties
relate expressly to an earlier date), (v) state that no Default or Event of
Default has occurred and is continuing or would otherwise be created by such
borrowing and (vi) state that the proceeds of such Loans will be used only to
fund Borrower's working capital requirements in the ordinary course of its
business. If no election as to the Type of Loan is specified in any such notice,
all such Loans shall be ABR Loans. Notwithstanding anything contained in this
Agreement to the contrary, (i) Revolving Credit Loans shall only be, and shall
only be convertible into, ABR Loans, Reference Rate Loans, or Eurodollar Loans
and (ii) Seasonal Revolving Credit Loans shall only be, and shall only be
convertible into, ABR Loans. The Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.03 and of each Lender's portion of the
requested borrowing.
(b) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 11:00
a.m., Dallas, Texas time, to the account of the Agent most recently designated
by it for such purpose by notice to the Lenders. The Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Agent and designated by
the Borrower in the applicable Borrowing Notice; provided that ABR Loans made to
finance the reimbursement of an LC Disbursement as provided herein shall be
remitted by the Agent to the Issuing Bank.
(c) Unless the Agent shall have received notice from a Lender prior to the
proposed date of any Loan that such Lender will not make available to the Agent
such Lender's share of such Loan, the Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (b) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Loan available to the Agent, then the applicable
Lender and the Borrower severally agree to pay to the Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Agent, then such amount shall constitute such Lender's Loan
included in the applicable Borrowing Notice.
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SECTION 2.04. Notes; Repayment of Loans.
(a) Revolving Credit Loans made by a Lender to the Borrower may be
evidenced by a single Revolving Credit Note, duly executed by the Borrower,
dated as of the Closing Date, in substantially the form of Exhibit A hereto,
delivered by the Borrower and payable to such Lender in a principal amount equal
to such Lender's Revolving Credit Commitment on such date and Seasonal Revolving
Credit Loans made by a Lender to the Borrower may be evidenced by a single
Seasonal Revolving Credit Note, duly executed by the Borrower, dated as of the
Closing Date, in substantially the form of Exhibit B hereto, delivered by the
Borrower and payable to such Lender in a principal amount equal to the highest
principal amount at any time outstanding of such Lender's Seasonal Revolving
Credit Commitment; provided, however, that no Lender shall receive a Revolving
Credit Note or Seasonal Revolving Credit Note without first requesting Borrower
to deliver the same to such Lender. Upon receipt of such request, Borrower shall
promptly execute and deliver such Revolving Credit Note or Seasonal Revolving
Credit Note to such Lender.
(b) Each Revolving Credit Loan shall bear interest from its date on the
outstanding principal balance thereof, as provided in Section 2.05 hereof. The
outstanding balance of each Revolving Credit Loan and all accrued and unpaid
interest thereon shall mature and be due and payable in full on the Revolving
Credit Termination Date. Each Seasonal Revolving Credit Loan shall bear interest
from its date on the outstanding principal balance thereof, as provided in
Section 2.05 hereof. The outstanding balance of each Seasonal Revolving Credit
Loan and all accrued and unpaid interest thereon shall mature and be due and
payable in full on the earlier to occur of (i) Seasonal Revolving Credit
Termination Date or (ii) the last day of the Seasonal Revolving Credit
Availability Period during which each such Seasonal Revolving Credit Loan was
made.
(c) Each Lender, or the Agent on its behalf, shall, and is hereby
authorized by the Borrower to, endorse on the schedule attached to any Note of
such Lender (or on a continuation of such schedule attached to such Note and
made a part thereof) an appropriate notation evidencing, for all Notes, the date
and amount of each Loan to the Borrower from such Lender and the date and amount
of each payment and prepayment with respect thereto; provided, however, that the
failure of any Person to make such a notation on a Note shall not affect any
obligations of the Borrower under such Note. Any such notation shall be
conclusive and binding as to the date and amount of such Loan or portion
thereof, or payment or prepayment of principal or interest thereon, absent
manifest error.
SECTION 2.05. Interest on Loans.
(a) Subject to the provisions of Section 2.08 and Section 9.13 hereof,
each ABR Loan shall bear interest at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin then in effect.
29
(b) Subject to the provisions of Section 2.08 and Section 9.13 hereof,
each Eurodollar Loan shall bear interest at a rate per annum equal to the
Adjusted LIBO Rate plus the Applicable Margin then in effect.
(c) Subject to the provisions of Section 2.08 and Section 9.13 hereof,
each Reference Rate Loan shall bear interest at a rate per annum equal to the
Reference Rate plus the Applicable Margin then in effect.
(d) Accrued interest on each Revolving Credit Loan shall be payable in
arrears on each Interest Payment Date for such Revolving Credit Loan and on the
Revolving Credit Termination Date. Accrued interest on each Seasonal Revolving
Credit Loan shall be payable in arrears on each Interest Payment Date for such
Seasonal Revolving Credit Loan and on the Seasonal Revolving Credit Termination
Date. Notwithstanding the foregoing (i) interest accrued pursuant to Section
2.08(a) shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the
Revolving Credit Termination Date or Seasonal Revolving Credit Termination Date,
as applicable), accrued interest on the principal amount repaid or prepaid shall
be payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest on the Loans hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Reference Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.06. Fees.
(a) The Borrower agrees to pay to the Agent for the account of each Lender
a fee (the "Commitment Fee"), which shall accrue at the Applicable Commitment
Fee Rate on the daily amount of the unused Total Commitment of such Lender
during the period from and including the Closing Date to but excluding the date
on which such Total Commitment or any portion thereof terminates. Accrued
Commitment Fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the Revolving Credit Termination Date
or Seasonal Revolving Credit Termination Date, commencing on the first such date
to occur after the date hereof; provided that any Commitment Fees accruing after
the Revolving Credit Termination Date or Seasonal Revolving Credit Termination
Date, as applicable, shall be payable on demand. The Commitment Fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
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(b) The Borrower agrees to pay to each of the Administrative Agent and the
Agent, for its own account, and the Lenders fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent and/or the Agent and/or Lenders.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent (or to Issuing Lender, in the case of
fees payable to it in respect of Letters of Credit) for distribution, in the
case of Commitment Fees, to the Lenders. Fees paid shall not be refundable under
any circumstances.
SECTION 2.07. Termination or Reduction of the Total Revolving Credit
Commitment; Termination of Seasonal Revolving Credit Commitment.
(a) Upon at least five (5) Business Days' prior irrevocable written notice
(or facsimile notice promptly confirmed in writing) to the Agent, the Borrower
may at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Total Revolving Credit Commitment ratably among the
Lenders in accordance with the amounts of their Commitments; provided, however,
the Total Revolving Credit Commitment shall not at any time be reduced to an
amount less than the sum of the Revolving Credit Loans then outstanding. Each
voluntary partial reduction of the Total Revolving Credit Commitment shall be in
an integral multiple of five million dollars ($5,000,000).
(b) Simultaneously with any termination or reduction of the Total
Revolving Credit Commitment pursuant to paragraph (a) above, the Borrower shall
pay to each Lender, through the Agent, the Commitment Fee due and owing through
and including the date of such termination or reduction on the amount of the
Commitment of such Lender so terminated or reduced.
(c) The Revolving Credit Commitment of each Lender shall automatically and
permanently terminate on the Revolving Credit Termination Date, and all
Revolving Credit Loans still outstanding on such date shall be due and payable
in full together with accrued interest thereon. No Lender shall have any
obligation to make any Revolving Credit Loans after the Revolving Credit
Termination Date.
(d) The Seasonal Revolving Credit Commitment of each Lender shall
automatically and permanently terminate on the Seasonal Revolving Credit
Termination Date, and all Seasonal Revolving Credit Loans still outstanding on
such date shall be due and payable in full together with accrued interest
thereon. No Lender shall have any obligation to make any Seasonal Revolving
Credit Loans (i) at any time other than during a Seasonal Revolving Credit
Availability Period or (ii) after the Seasonal Revolving Credit Termination
Date.
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SECTION 2.08. Interest after Default; Alternate Rate of Interest.
(a) Notwithstanding anything to the contrary contained herein, from and
after the occurrence and during the continuance of any Default or Event of
Default, amounts outstanding hereunder shall bear interest at a rate per annum
equal to (i) in the case of overdue principal of any Loan, 3.00% plus the
aggregate rate of interest otherwise applicable to such Loan as provided herein
or (ii) in the case of any other amount outstanding hereunder (whether for
interest, fees, indemnities, or otherwise), 3.00% plus the aggregate rate of
interest applicable to ABR Loans as provided herein, but in no event at a rate
of interest higher than the maximum rate of interest permitted under applicable
law.
(b) If prior to the commencement of any Interest Period in respect of a
Eurodollar Loan or Reference Rate Loan:
(i) the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period; or
(ii) the Agent is advised by the Required Lenders that the Adjusted
LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Eurodollar Loans or Reference Rate Loans (or
its Eurodollar Loan or Reference Rate Loan) for such Interest Period;
then the Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, (x) any interest rate request that requests the
conversion of any Revolving Credit Loan to, or continuation of any Revolving
Credit Loan as, a Eurodollar Loan or Reference Rate Loan shall be ineffective
and (y) if any Borrowing Notice requests a Eurodollar Loan or Reference Rate
Loan, such Loan shall be made as an ABR Loan.
SECTION 2.09. Prepayment of Loans.
(a) Subject to the terms and conditions contained in this Section 2.09 and
elsewhere in this Agreement, the Borrower shall have the right to prepay any
Loan at any time in whole or from time to time in part (except in the case of a
Eurodollar Loan only on the last day of an Interest Period) without penalty
(except as otherwise provided for herein); provided, however, that each such
partial prepayment of a Loan shall not be less than two million dollars
($2,000,000) and in integral multiples of five hundred thousand dollars
($500,000), or if the outstanding principal balance is less than two million
dollars ($2,000,000), such prepayment shall be in whole.
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(b) On the date of any termination or reduction of the Total Revolving
Credit Commitment pursuant to Section 2.07 hereof, the Borrower shall pay or
prepay so much of the aggregate amount of all Loans outstanding as shall be
necessary in order that (i) the sum of the aggregate principal amount of all
Loans then outstanding plus the amount of the LC Exposure then outstanding will
not exceed the Total Revolving Credit Commitment on such date, and (ii) the sum
of the aggregate principal amount of all Loans then outstanding plus the amount
of the LC Exposure then outstanding will not exceed the Borrowing Base on such
date.
(c) If on any date the sum of (i) the aggregate principal amount of all
Loans outstanding plus (ii) the amount of the LC Exposure exceeds the amount of
the Borrowing Base on such date (a "Borrowing Base Deficiency"), the Borrower
shall immediately prepay the principal of the Loans in an amount equal to or
greater than such Borrowing Base Deficiency. Such mandatory payment shall be
accompanied by all accrued and unpaid interest on the amount prepaid.
(d) Each prepayment of the Revolving Credit Loans or Seasonal Revolving
Credit Loans shall be applied ratably to the Loans then being repaid and then as
cash collateral for outstanding Letters of Credit up to the full amount of the
LC Exposure then existing, such cash collateral to be held by the Agent for the
benefit of the Issuing Bank in a special cash collateral account.
(e) Subject to the terms and conditions contained in this Section 2.09 and
elsewhere in this Agreement, when making a prepayment, the Borrower shall
furnish to the Agent, not later than 10:00 a.m., Dallas, Texas time, (i) on the
Business Day prior to such prepayment of ABR Loans and (ii) three (3) Business
Days prior to the date of such prepayment of Eurodollar Loans, written or
facsimile notice (promptly confirmed in writing) or, in the case of an ABR Loan
telephonic notice (promptly confirmed in writing) of prepayment which shall
specify the prepayment date and the principal amount of each Loan (or portion
thereof) to be prepaid, which notice shall be irrevocable and shall commit the
Borrower to prepay such Loan by the amount stated therein on the date stated
therein. All prepayments of Eurodollar Loans shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment. After
prior written notice to the Borrower (with may be by facsimile communication),
the Agent may charge, when due and payable, the Borrower's account with the
Agent for all interest, principal and Commitment Fees and other fees owing to
the Agent or the Lenders on or with respect to this Agreement or the Loans.
(f) Prepayments with respect to any paragraph of this Section 2.09 are in
addition to prepayments made or required to be made under any other paragraph of
this Section 2.09.
SECTION 2.10. Increased Costs.
(a) If any Change in Law shall:
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(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.11. Break Funding Payments.
In the event of (a) the payment of any principal of any Eurodollar Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event
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of Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked hereunder and is revoked in accordance herewith), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.12. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Agent, Lender or Issuing Bank
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Agent, each Lender and the Issuing
Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Agent, such Lender or the Issuing
Bank, as the case may be, on or with respect to any payment by or on account of
any obligation of the Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or the Issuing Bank, or by the Agent on its
35
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Agent or a Lender determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.12, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.12 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of the Agent or such
Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Agent or such Lender in the event the Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall
not be construed to require the Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
SECTION 2.13. Payments Generally; Pro Rata Treatment, Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of obligations
in respect of Letters of Credit, or otherwise) prior to noon, Dallas, Texas
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Agent at its offices in San Francisco, except payments to
be made directly to the Issuing Bank or any Lender as expressly provided herein.
The Agent shall distribute any such payments received by it for the account of
any other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a Business
Day, the
36
date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments hereunder shall be made
in dollars.
(b) If at any time insufficient funds are received by and available to the
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest, fees, and other amounts then due hereunder, such funds shall be
applied (i) first, to any reimbursements due to Agent under Article VIII hereof,
(ii) second, to any reimbursements due to Administrative Agent under Article
VIIIA hereof, (iii) third, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (iv) fourth, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) Subject to Section 9.08, if any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Agent for the account of the Lenders
or the Issuing Bank hereunder that the Borrower will not make such payment, the
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank,
37
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Agent for the
account of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.
SECTION 2.14. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit for its own account, in a
form reasonably acceptable to the Agent and the Issuing Bank, at any time and
from time to time from the Closing Date until the Revolving Credit Termination
Date. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a Borrowing Notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. The Borrower hereby agrees that it
shall not request a Letter of Credit to be issued, amended, renewed or extended
unless (and upon issuance, amendment, renewal or extension of each Letter of
Credit the Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the amount of the
LC Exposure does not exceed $5,000,000 and (ii) the sum of the aggregate
principal amount of all outstanding Loans plus the amount of the LC Exposure
does not exceed the amount of the Borrowing Base on such date.
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(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Final Maturity Date; provided, however,
that a Letter of Credit may have a later date of expiration date in the
reasonable discretion of the Issuing Bank and the Agent if the Borrower deposits
cash collateral with either the Issuing Bank or the Agent upon issuance thereof
in an amount equal to 100% of the face amount of such Letter of Credit (which
cash collateral shall be subject to the provisions of Section 2.14(j) hereof)
and the Borrower complies with such other conditions and requirements to the
issuance thereof as may be required by Agent and/or Issuing Bank (in addition
all other conditions and requirements contained in this Section 2.14).
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account of
the Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement with interest from the date of such LC Disbursement as set forth
in Section 2.14(h) by paying to the Agent an amount equal to such LC
Disbursement not later than 11:00 a.m., Dallas, Texas time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 9:00 a.m., Dallas, Texas time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 11:00 a.m., Dallas, Texas time, on the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance herewith that such payment be financed with an ABR Loan
under the Total Revolving Credit Commitment in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Loan. If the Borrower fails to make
such payment when due, the Agent shall notify each Lender of the
39
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.03(b) with respect to Loans made by such Lender (and
Section 2.03(b) shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the Agent of any
payment from the Borrower pursuant to this paragraph, the Agent shall distribute
such payment to the Issuing Bank or, to the extent that Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality
40
thereof, the parties agree that, with respect to documents presented which
appear on their face to be in substantial compliance with the terms of a Letter
of Credit, the Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Agent and the Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.08(a) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at
any time by written agreement among the Borrower, the Agent, the replaced
Issuing Bank and the successor Issuing Bank. The Agent shall notify the Lenders
of any such replacement of the Issuing Bank. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.12(k). From and after
the effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and obligations of the Issuing Bank under this Agreement
with respect to Letters of Credit to be issued thereafter and (ii) references
herein to the term "Issuing Bank" shall be deemed to refer to such successor or
to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the Agent
or the
41
Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders
with LC Exposure representing greater than 10% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Agent, in the name of the Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (e) or (f) of Article VII. Such
deposit shall be held by the Agent as collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Agent and at the Borrower's risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall be applied by the Agent to reimburse
the Issuing Bank for LC Disbursements for which it has not been reimbursed and,
to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing greater than 10% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.
(k) Letter of Credit Fees. The Borrower agrees to pay (i) to the Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Closing Date to but excluding the later of the date on which such
Lender's Revolving Credit Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate of 0.125% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Total Commitments and the date on which there ceases to be any LC Exposure, as
well as the Issuing Bank's standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the
42
date on which the Total Commitments terminate and any such fees accruing after
the date on which the Total Commitments terminate shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.15. Incremental Facility.
(a) So long as no Default or Event of Default has occurred and is
continuing, at any time prior to March 31, 2005, the Borrower may request
pursuant to the procedure set forth in Section 2.15(c), the addition of an
Incremental Facility consisting of two types of new loans referred to herein as
"Incremental Revolving Credit Loans" and "Incremental Seasonal Revolving Credit
Loans" (collectively, "Incremental Loans"); provided however that the Borrower
may not make a request for an Incremental Facility in an amount other than
$10,000,000. The Incremental Revolving Credit Loans shall: (i) upon the
effectiveness of the Incremental Commitment relating thereto as provided in
Section 2.15(b), be deemed to be Revolving Credit Loans for all purposes under
this Agreement and the other Credit Documents; (ii) have the same interest rates
and related margins and commitment fees as all other Revolving Credit Loans; and
(iii) otherwise have all of the same terms and conditions (other than the amount
of the upfront fee) as each Revolving Credit Loan that is not an Incremental
Revolving Credit Loan. In addition, all references in the Credit Documents to
Revolving Credit Loans shall be deemed, as the context requires, to include
references to Incremental Revolving Credit Loans made pursuant to this
Agreement. The Incremental Seasonal Revolving Credit Loans shall: (i) upon the
effectiveness of the Incremental Commitment relating thereto as provided in
Section 2.15(b), be deemed to be Seasonal Revolving Credit Loans for all
purposes under this Agreement and the other Credit Documents; (ii) have the same
interest rates and related margins and commitment fees as all other Seasonal
Revolving Credit Loans; and (iii) otherwise have all of the same terms and
conditions (other than the amount of the upfront fee) as each Seasonal Revolving
Credit Loan that is not an Incremental Seasonal Revolving Credit Loan. In
addition, all references in the Credit Documents to Seasonal Revolving Credit
Loans shall be deemed, as the context requires, to include references to
Incremental Seasonal Revolving Credit Loans made pursuant to this Agreement. No
Lender shall have any obligation to make an Incremental Loan unless and until it
commits to do so. Incremental Commitments in respect of Incremental Loans shall
become part of the Total Commitments under this Agreement pursuant to (x) an
amendment (an "Incremental Loan Amendment") to this Agreement executed by the
Borrower, each Lender or other financial institution that is approved by the
Administrative Agent which agrees to provide such Incremental Commitment (and no
other Lender shall be required to execute such amendment), and the
Administrative Agent, and (y) any amendments to the other Credit Documents
(executed by the Borrower, its relevant Subsidiaries, and the Administrative
Agent only) as the Administrative Agent shall reasonably deem appropriate to
effect such purpose. Notwithstanding anything to the contrary contained herein,
the effectiveness of such Incremental Loan Amendment shall be subject to the
satisfaction on the date thereof and,
43
if different, on the date on which the Incremental Loans are made, of each of
the conditions set forth in Section 4.01.
(b) So long as (i) the Borrower shall have given the Administrative Agent
no less than five Business Days' prior notice of the effectiveness thereof and
(ii) any financial institution not theretofore a Lender which is providing the
Incremental Commitment shall have become a Lender under this Agreement pursuant
to an Incremental Loan Amendment, the Incremental Commitment being requested by
the Borrower shall become effective under this Agreement upon the effectiveness
of such Incremental Loan Amendment. Upon such effectiveness, (i) Part I of
Schedule 2.01(a) shall be deemed amended and restated in its entirety as set
forth on Part II of Schedule 2.01(a) and (ii) Part I of Schedule 2.01(b) shall
be deemed amended and restated in its entirety as set forth on Part II of
Schedule 2.01(b). In the event that the Incremental Facility shall have become
effective, the Person providing the Incremental Commitment shall be deemed to
have agreed, upon the terms and subject to the conditions of this Agreement,
with respect to the Incremental Commitment, to make from time to time during the
period from the date of the effectiveness of the applicable Incremental Loan
Amendment through the Final Maturity Date, one or more Loans to the Borrower
pursuant to the provisions of Section 2.03 in an aggregate principal amount not
exceeding at any time such Person's aggregate portion of the Total Commitment at
such time.
(c) When the Borrower wishes to request a Lender or other financial
institution to provide proposals for the providing of the Incremental Facility,
the Borrower may solicit requests from any Lender or other financial institution
for the providing of a commitment for Incremental Loans (the "Incremental
Commitment"). Upon the selection by the Borrower of a Lender or such other
financial institution, the Borrower shall promptly notify the Administrative
Agent of the Lender or such other financial institution selected for approval by
the Administrative Agent. Administrative Agent shall promptly thereafter notify
Borrower of its approval or rejection of such Lender or other financial
institution, which approval shall not to be unreasonably withheld.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Organization; Legal Existence. The Borrower and each of its
Subsidiaries is a corporation or other juridical person, validly existing and in
good standing under the laws of the jurisdiction of its organization or
formation, as applicable, has the requisite corporate or other juridical power
and authority to own its property and assets and to carry on its business as now
conducted and is qualified to do business in every jurisdiction where such
qualification is required (all such jurisdictions being listed in Schedule 3.14
hereto), except for those jurisdictions in which the failure to qualify would
not have a Material Adverse Effect. The Borrower has the corporate power to
execute, deliver and perform its obligations under the American Capital
Agreement and this Agreement and the other Credit Documents and to borrow
hereunder and under the
44
American Capital Agreement and to execute and deliver the Notes and the American
Capital Notes.
SECTION 3.02. Authorization. The Credit Transactions and the American
Capital Transactions (a) have been duly authorized by all requisite corporate
action, and (b) will not (i) violate (A) the certificate or articles of
incorporation or other applicable constitutive documents or the bylaws of the
Borrower or any of its Subsidiaries party to the same, or to the Borrower's
knowledge, any provision of law, statute, rule or regulation applicable to the
Borrower and such Subsidiaries, (B) any order of any court, or any rule,
regulation or order of any other agency of government addressed to and binding
upon the Borrower or any of its Subsidiaries, or (C) any provisions of any
material indenture, agreement or other instrument to which the Borrower or any
of such Subsidiaries or any of their respective properties or assets are or may
be bound, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any material indenture,
agreement or other instrument referred to in clause (i)(C) above or (iii) result
in the creation or imposition of any Lien of any nature whatsoever upon any
property or assets of the Borrower or any of its Subsidiaries, other than the
Liens created in favor of the Collateral Agent, the Agent, the Lenders, American
Capital Agent, and the holders of the American Capital Notes.
SECTION 3.03. Governmental Approvals. No registration or filing with,
consent or approval of, or other action by any federal, state or other
governmental agency, authority or regulatory body is or will be required by the
Borrower or any Guarantor as a condition to the Credit Transactions or the
American Capital Transactions.
SECTION 3.04. Binding Effect. This Agreement constitutes a legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, and each of the other Credit Documents to which it or
a Subsidiary is a party, when duly executed and delivered, will constitute a
legal, valid and binding obligation of the Borrower or such Subsidiary, as
applicable.
SECTION 3.05. Material Adverse Effect; Default. Since June 30, 2002, no
event has occurred which has had, or could reasonably be expected to have, a
Material Adverse Effect. No event has occurred and is continuing which
constitutes a Default.
SECTION 3.06. Litigation; Compliance With Laws; Etc.
(a) There are not any actions, suits or proceedings at law or in equity or
by or before any governmental instrumentality or other agency or regulatory
authority now pending or to Borrower's knowledge threatened against or affecting
the Borrower or any of its Subsidiaries or the businesses, assets or rights of
the Borrower or any of its Subsidiaries (i) which, if adversely determined,
could reasonably be expected to materially impair the ability of the Borrower
and its Subsidiaries taken as a whole to conduct business substantially as now
conducted, or otherwise could reasonably be expected to have a Material Adverse
Effect, except as disclosed on Schedule 3.06, (ii) as to which it is probable
(within the meaning of Statement of Financial Accounting
45
Standards No. 5) that there will be an adverse determination, or (iii) which
involve any of the Credit Transactions or the American Capital Transactions.
(b) To the Borrower's knowledge, neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, rule or regulation applicable
to any of them, or in default with respect to any judgment, writ, injunction,
decree, rule or regulation of any court or governmental agency or
instrumentality addressed to and binding on it, the violation of or default with
respect to which could reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Schedule 3.06, there is no remedial or other
corrective action that any of the Borrower or any of its Subsidiaries (other
than ACE Funding) is required to take to remain in compliance with any judgment,
order, writ, injunction or decree of any Governmental Authority or to maintain
any material permits, approvals or licenses granted by any Governmental
Authority in full force and effect. During the past 5 years, none of the
officers or directors of the Borrower or its Subsidiaries (other than ACE
Funding) have been convicted of any felony involving moral turpitude. During the
past 2 years, none of the officers or directors of the Borrower or its
Subsidiaries (other than ACE Funding) have been bankrupt nor an executive
officer of a bankrupt company.
SECTION 3.07. Financial Statements. The Borrower has heretofore furnished
to the Agent (i) an audited Consolidated balance sheet and statement of income
of the Borrower as of and for the Fiscal Year ended June 30, 2002, (ii)
unaudited Consolidated balance sheets of the Borrower as of September 30, 2002,
and December 31, 2002 and the related statement of income for the respective
three-month periods then ended (which may be delivered on the Closing Date),
prepared by management of the Borrower and in form acceptable to Agent, and
(iii) Consolidated financial projections for the Borrower and its Subsidiaries
for its 2003, 2004, 2005, and 2006 Fiscal Years on an annual basis, prepared by
management of the Borrower. The balance sheets and statements of income
described in (i) and (ii) present fairly in all material respects the
Consolidated financial condition and results of operations of the Borrower and
its Subsidiaries, as of the dates and for the periods indicated, and such
balance sheets and the notes thereto (if any) disclose all material liabilities,
direct or contingent, of the Borrower and its Subsidiaries, as of the dates
thereof required to be disclosed by GAAP. The financial statements referred to
in this Section 3.07 have been prepared in accordance with GAAP consistently
applied. The financial projections referred to in this Section 3.07 present the
Borrower's current estimate of the future financial performance of the Borrower
and its Subsidiaries based on historical performance and the Borrower's
knowledge of its business plans and assumptions underlying them, but subject to
uncertainties applicable to projections of future financial performance.
SECTION 3.08. Federal Reserve Regulation. Neither the Borrower nor any of
its Subsidiaries is engaged in the business of extending credit for the purpose
of purchasing or carrying Margin Stock, and no part of the proceeds of the Loans
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase
46
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including, without limitation, Regulation T, U or X thereof. If requested by any
Lender, the Borrower and any Subsidiary (other than ACE Funding) thereof shall
furnish to such Lender a statement on Federal Reserve Form U-1 referred to in
said Regulation U.
SECTION 3.09. Taxes. The Borrower and each of its Subsidiaries has filed
or caused to be filed all federal, state, local, foreign and payroll tax
returns, reports and filings, as the case may be, required to be filed by it, on
or prior to the date hereof, other than tax returns, reports or filings that (a)
are not payroll, franchise, capital or income taxes, (b) in the aggregate are
not material and (c) would not, if unpaid, result in the imposition of any Lien
on any property or assets of the Borrower or any of its Subsidiaries. The
Borrower and each of its Subsidiaries has paid or caused to be paid all taxes
shown to be due and payable on such filed returns, reports or on any assessments
received by it, other than (i) any taxes or assessments the validity of which
the Borrower or such Subsidiary is contesting in good faith by appropriate
proceedings, and with respect to which the Borrower or such Subsidiary has set
aside on its books cash reserves in an amount not less than the aggregate amount
secured by such Liens (including, without limitation, the amount of taxes and
assessments being contested and any interest and penalties payable in respect
thereof) and (ii) taxes other than payroll, income, capital or franchise taxes
that in the aggregate are not material and which would not, if unpaid, result in
the imposition of any Lien on any property or assets of the Borrower or any of
its Subsidiaries. No federal income tax returns of the Borrower or any of its
Subsidiaries have been audited by the United States Internal Revenue Service and
neither the Borrower, nor any of its Subsidiaries has requested or been granted
any extension of time to file any federal, state, local or foreign tax return.
SECTION 3.10. Employee Benefit Plans. With respect to the provisions of
ERISA:
(i) No Reportable Event has occurred or is continuing with respect
to any Pension Plan.
(ii) To the Borrower's knowledge, no prohibited transaction (within
the meaning of Section 406 of ERISA or Section 4975 of the Code) has
occurred with respect to any Plan subject to Part 4 of Subtitle B of Title
I of ERISA.
(iii) Neither the Borrower nor any ERISA Affiliate is now, nor has
been during the preceding five (5) years, obligated to contribute to a
Pension Plan or a Multiemployer Plan. Neither the Borrower nor any ERISA
Affiliate has (A) ceased operations at a facility so as to become subject
to the provisions of Section 4062(e) of ERISA, (B) withdrawn as a
substantial employer so as to become subject to the provisions of Section
4063 of ERISA, (C) ceased making contributions to any Pension Plan subject
to the provisions of Section 4064(a) of
47
ERISA to which the Borrower or any ERISA Affiliate made contributions, (D)
incurred or caused to occur a "complete withdrawal" (within the meaning of
Section 4203 of ERISA) or a "partial withdrawal" (within the meaning of
Section 4205 of ERISA) from a Multiemployer Plan that is subject to the
provisions of Title IV of ERISA so as to incur withdrawal liability under
Section 4201 of ERISA (without regard to subsequent reduction or waiver of
such liability under Section 4207 or 4208 of ERISA), or (E) been a party
to any transaction or agreement under which the provisions of Section 4204
of ERISA were applicable.
(iv) No notice of intent to terminate a Pension Plan has been filed,
nor has any Plan been terminated pursuant to the provisions of Section
4041 (e) of ERISA.
(v) The PBGC has not instituted proceedings to terminate (or appoint
a trustee to administer) a Pension Plan and, to Borrower's knowledge, no
event has occurred or condition exists which might constitute grounds
under the provisions of Section 4042 of ERISA for the termination of (or
the appointment of a trustee to administer) any such Pension Plan.
(vi) With respect to each Pension Plan that is subject to the
provisions of Title I, Subtitle B, Part 3 of ERISA, the funding method
used in connection with such Pension Plan is acceptable under ERISA, and
the actuarial assumptions and methods used in connection with funding such
Pension Plan satisfy the requirements of Section 302 of ERISA. The assets
of each such Pension Plan (other than the Multiemployer Plans) are at
least equal to the present value of the greater of (i) accrued benefits
(both vested and non-vested) under such Pension Plan, or (ii) "benefit
liabilities" (within the meaning of Section 4001(a)(16) of ERISA) under
such Pension Plan, in each case as of the latest actuarial valuation date
for such Pension Plan (determined in accordance with the same actuarial
assumptions and methods as those used by the Pension Plan's actuary in its
valuation of such Pension Plan as of such valuation date). No such Pension
Plan has incurred any "accumulated funding deficiency" (as defined in
Section 412 of the Code), whether or not waived.
(vii) There are no actions or suits pending (other than routine
actions for benefits) or, to the knowledge of the Borrower or any of its
Subsidiaries, which could reasonably be expected to be asserted, against
any Plan or the assets of any such Plan. No civil or criminal action
brought pursuant to the provisions of Title I; Subtitle B, Part 5 of ERISA
is pending or threatened against any fiduciary or any Plan. To the
knowledge of the Borrower, none of the Plans or any fiduciary thereof (in
its capacity as such) has been the direct or indirect subject of any
audit, investigation or examination by any governmental or
quasi-governmental agency.
(viii) All of the Plans comply currently, and have complied in the
past, in all material respects, both as to form and operation, with their
terms and with the provisions of ERISA and the Code, and all other
applicable laws, rules and
48
regulations; all necessary governmental approvals for the Plans have been
obtained and a favorable determination as to the qualification under
Section 401 (a) of the Code of each of the Plans which is an employee
pension benefit plan (within the meaning of Section 3(2) of ERISA) has
been made by the Internal Revenue Service and a recognition of exemption
from federal income taxation under Section 501(a) of the Code of each of
the funded employee welfare benefit plans (within the meaning of Section
3(l) of ERISA) has been made by the Internal Revenue Service, and nothing
has occurred since the date of each such determination or recognition
letter that would adversely affect such qualification.
SECTION 3.11. No Material Misstatements. No information, report, financial
statement, exhibit or schedule prepared by or on behalf of the Borrower and
delivered to the Agent or any Lender in connection with any of the American
Capital Transactions, the Credit Transactions, this Agreement or the other
Credit Documents, or included therein, contained or contains any material
misstatement of fact or omitted or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, when taken as a whole, and as of the date such
information, report, financial statement, exhibit or schedule is or was
prepared.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any of its Subsidiaries is an "investment company" as
defined in, or is otherwise subject to regulation under, the Investment Company
Act of 1940. Neither the Borrower nor any of its Subsidiaries is a "holding
company" as that term is defined in or is otherwise subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The proceeds of each Loan shall be used to
extend and renew in full all Revolving Credit Loans and Seasonal Revolving
Credit Loans outstanding under, and as defined in, the Existing Credit Agreement
and to fund working capital requirements, and for other proper corporate
purposes of the Borrower not otherwise prohibited by the terms hereof. Neither
the Borrower nor any of its Subsidiaries will use proceeds of any Loan for the
purpose of acquiring, or attempting to acquire, control of any Person unless
such acquisition or attempted acquisition is pursuant to an agreement with such
Person or is not resisted by such Person.
SECTION 3.14. Subsidiaries. Schedule 3.14 hereto sets forth (a) each
Subsidiary of the Borrower, (b) its jurisdiction of incorporation, (c) the
states in which it conducts business, (d) the states in which it is qualified to
transact business, (e) its equity ownership and (f) any trade names used by it.
SECTION 3.15. Title to Properties; Possession Under Leases; Trademarks.
(a) The Borrower and each of its Subsidiaries has good and marketable
title to, or valid leasehold interest in, all of its respective properties and
assets shown on the most recent balance sheet referred to in Section 3.07 hereof
and all assets and properties acquired since the date of such balance sheet,
except for such properties as are no longer
49
used or useful in the conduct of its business or as have been disposed of in the
ordinary course of business, and except for minor defects in title or leasehold
interest that do not interfere in any material respect with the ability of the
Borrower or such Subsidiary to conduct its business as now conducted. All such
assets and properties are free and clear of all Liens other than Permitted
Liens. The Security Documents create and grant to Administrative Agent a valid
and perfected security interest in the Collateral thereunder, subject only to
Permitted Liens.
(b) The Borrower and each of its Subsidiaries has complied with all
obligations under all leases to which it is a party and under which it is in
occupancy, except where the failure to comply has not or is not reasonably
expected to have a Material Adverse Effect; and all such leases are in full
force and effect and the Borrower and each of its Subsidiaries enjoys peaceful
and undisturbed possession under all such leases.
(c) (i) The Borrower and each of its Subsidiaries owns or has the right to
use all material permits, trademarks, trademark rights, trade names, trade name
rights, copyrights, patents, patent rights and licenses which are necessary for
the conduct of its business as now conducted, (ii) to the Borrower's knowledge,
neither the Borrower nor any of its Subsidiaries is infringing upon or otherwise
acting adversely to any of such material trademarks, trademark rights, trade
names, trade name rights, copyrights, patent rights or licenses owned by any
other Person or Persons; (iii) there is no suit or action by any such other
Person pending or, to the knowledge of Borrower, threatened in writing against
the Borrower or any of its Subsidiaries with respect to any of the rights or
property referred to in this Section 3.15(c); (iv) Schedule 3.15(c) lists all of
Borrower's trademarks, patents, copyrights, and applications therefor.
(d) Schedule 3.15(d) lists (i) all Deposit Accounts maintained by Borrower
as of the date hereof, (ii) all Deposit Accounts maintained by Borrower's
Subsidiaries (other than ACE Funding) as of the date hereof, (iii) each armored
courier service that transports Collateral as of the date hereof, and (iv) all
agreements with armored courier services which transport Collateral to which
either the Borrower or a Subsidiary of the Borrower (other than ACE Funding) is
a party as of the date hereof.
SECTION 3.16. Solvency.
(a) Without regard to ACE Funding, the present fair salable value of the
assets of the Borrower and its Consolidated Subsidiaries is not less than the
amount that will be required to be paid on or in respect of the probable
liability on the existing debts and other liabilities (including contingent
liabilities) of the Borrower and its Consolidated Subsidiaries, as they become
absolute and mature.
(b) Without regard to ACE Funding, the assets of the Borrower and its
Consolidated Subsidiaries do not constitute unreasonably small capital for the
Borrower and its Consolidated Subsidiaries to carry out their business as now
conducted and as now proposed to be conducted including the capital needs of the
Borrower and its
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Consolidated Subsidiaries, taking into account the particular capital
requirements of the business conducted, by the Borrower and its Consolidated
Subsidiaries and projected capital requirements and capital availability
thereof.
(c) Without regard to ACE Funding, neither the Borrower nor any of its
Consolidated Subsidiaries intends to incur debts beyond its ability to pay such
debts as they mature. Without regard to ACE Funding, the cash flow of the
Borrower and its Consolidated Subsidiaries, after taking into account all
currently anticipated uses of the cash of the Borrower and its Consolidated
Subsidiaries, will be sufficient to pay all such amounts on or in respect of
debt of the Borrower and its Consolidated Subsidiaries when such amounts are
required to be paid.
(d) Neither the Borrower nor any of its Consolidated Subsidiaries believes
that final judgments against it in actions for money damages presently pending
will be rendered at a time when, or in an amount such that, it will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum reasonable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be rendered). Without
regard to ACE Funding, the cash flow of the Borrower and its Consolidated
Subsidiaries, after taking into account all other anticipated uses of the cash
of the Borrower and its Consolidated Subsidiaries (including the payments on or
in respect of debt referred to in paragraph (c) of this Section 3.16), will at
all times be sufficient to pay all such judgments promptly in accordance with
their terms.
SECTION 3.17. Permits, Etc. The Borrower and each of its Subsidiaries
possesses all licenses, permits, approvals and consents of all federal, state
and local governmental authorities as required to lawfully conduct its business,
except where the failure to obtain any such license, permit, approval or consent
does not or is not likely to have a Material Adverse Effect.
SECTION 3.18. Compliance with Environmental Laws. Except as disclosed on
Schedule 3.18 (a) neither the Borrower nor any of its Subsidiaries, or to the
best of Borrower's knowledge after due investigation, no other Person
(including, without limitation, any previous owner, lessor or sublessor of
property of the Borrower or any of its Subsidiaries), has generated, used,
treated, stored, released or disposed of Hazardous Materials or other toxic
substances on any of its properties or any of the properties (whether owned,
leased, subleased or used by such Person) in violation of any Environmental
Legislation and (b) to the best of the Borrower's knowledge after due
investigation, there has been no spill, release, disposal or any other discharge
of Hazardous Materials or other toxic substances on or from any properties
owned, leased, subleased or used by the Borrower or any of its Subsidiaries
that, in any such case, could reasonably be expected to subject the Borrower,
any of its Subsidiaries or any shareholders of any thereof to material
liability.
SECTION 3.19. Labor Matters.
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(i) The Borrower and each of its Subsidiaries has complied in all
material respects with all applicable laws relating to the employment of
labor, including provisions relating to wages, hours, equal opportunity,
collective bargaining, age and sex discrimination and the withholding and
payment of social security and other Taxes.
(ii) There have not been any material labor problems or work
stoppages involving the Borrower or any of its Subsidiaries or, to the
knowledge of the Borrower, any application filed by a union or employee
thereof with the National Labor Relations Board.
(iii) To the knowledge of the Borrower, there are no (a) unfair
labor practice charges or complaints pending or threatened against the
Borrower or any of its Subsidiaries; (b) labor strikes, disputes, slow
downs or stoppages pending or threatened against the Borrower or any of
its Subsidiaries; (c) formal employee grievances filed with or against the
Borrower or any of its Subsidiaries or threatened against the Borrower or
any of its Subsidiaries; and (d) trade union organizing efforts underway
in any facility of the Borrower or any of its Subsidiaries.
(iv) Neither the Borrower nor any of its Subsidiaries has violated,
has liability under, or has received a written notice or charge asserting
any violation of or liability under, the federal Occupational Safety and
Health Act of 1970 or any other federal, state or foreign acts (including
rules and regulations thereunder) regulating or otherwise affecting
employee health and safety.
(v) To the knowledge of the Borrower, there are no uninsured
workers' compensation claims pending or threatened against the Borrower or
any of its Subsidiaries. Neither the Borrower nor any of its Subsidiaries
is liable for any retroactive workers' compensation insurance premiums
relating to any period of time prior to the Closing Date in excess of
reserves set aside for the payment of such premiums on the Borrower's
latest audited financial statements.
(vi) To the knowledge of the Borrower without independent inquiry,
none of the Borrower's or any of its Subsidiary's employees or partners is
subject to any secrecy or noncompetition agreement or any other agreement
or restriction of any kind that would impede their ability to carry out
the responsibilities of such Person to the Borrower or its Subsidiaries.
(vii) The qualifications for employment of each of the Borrower's
and its Subsidiaries' employees under applicable immigration laws have
been reviewed by the Borrower or the applicable Subsidiary and a properly
completed Form I-9 is on file with the Borrower or the applicable
Subsidiary for each employee. The Borrower and each of its Subsidiaries
has complied with the U.S. Immigration and Nationality Act, as amended
from time to time, and the rules and regulations promulgated thereunder,
and to the knowledge of the Borrower, there
52
is no basis for any claim that the Borrower or any of its Subsidiaries is
not in compliance with the terms thereof.
SECTION 3.20. Side Agreements. Neither the Borrower, its Subsidiaries, nor
any their Affiliates, nor any director, officer or employee of the Borrower, its
Subsidiaries, or any of their Affiliates, respectively, has entered into, as of
the date hereof, any side agreement, either oral or written, with any individual
or business, pursuant to which the director, officer, employee, the Borrower,
any Subsidiary of the Borrower, or any or their Affiliates agreed to do anything
beyond the requirements of the formal, written contracts executed by the
Borrower or its Subsidiaries and disclosed to Agent and Lenders herein.
SECTION 3.21. GENERAL. THERE ARE NO MATERIAL FACTS OR CONDITIONS RELATING
TO THE CREDIT DOCUMENTS, ANY OF THE COLLATERAL, THE FINANCIAL CONDITION OR THE
BUSINESS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES WHICH COULD, INDIVIDUALLY OR
COLLECTIVELY, CAUSE A MATERIAL ADVERSE EFFECT WHICH HAVE NOT BEEN RELATED IN
WRITING TO THE LENDERS. ALL WRITINGS HERETOFORE OR HEREAFTER EXHIBITED OR
DELIVERED TO THE AGENT OR ANY LENDER BY OR ON BEHALF OF BORROWER OR ANY OF ITS
SUBSIDIARIES ARE AND WILL BE GENUINE AND IN ALL RESPECTS WHAT THEY PURPORT AND
APPEAR TO BE.
ARTICLE IV. CONDITIONS OF CREDIT EVENTS
The obligation of each Lender to make Loans shall be subject to the
following conditions precedent:
SECTION 4.01. All Credit Events. On each date on which a Credit Event is
to occur:
(a) The Agent shall have received a Borrowing Notice as required by
Section 2.03 or Section 2.14 hereof, as applicable.
(b) The representations and warranties set forth in Article III hereof and
in any documents delivered herewith shall be true and correct in all material
respects with the same effect as though made on and as of such date (except
insofar as such representations and warranties relate expressly to an earlier
date).
(c) The Borrower shall be in compliance with all the terms and provisions
contained herein on its part to be observed or performed, and at the time of and
immediately after such borrowing or issuance of such Letter of Credit no Default
or Event of Default shall have occurred and be continuing.
SECTION 4.02. First Credit Event. The obligation of each Lender in respect
of the first Credit Event is subject to the following additional conditions
precedent:
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(a) The Lenders shall have received the favorable written opinion of
counsel for the Borrower and each of the Guarantors, dated the Closing Date,
addressed to the Lenders and satisfactory to the Agent and its counsel.
(b) The Agent shall have received (i) a copy of the certificate or
articles of incorporation or constitutive documents, in each case as amended, of
the Borrower and each of the Guarantors and a certificate as to the good
standing of each such Person from the Secretary of State or other appropriate
official of the state of such Person's organization, in each case dated as of a
recent date; (ii) a certificate of the Secretary of the Borrower and each of the
Guarantors, dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of its bylaws as in effect on the date of such
certificate and at all times since a date prior to the date of the resolution
described in clause (B) below, (B) that attached thereto is a true and complete
copy of a resolution adopted by its Board of Directors authorizing the
execution, delivery and performance of the Credit Documents to which it is a
party, and that such resolution has not been modified, rescinded or amended and
is in full force and effect, (C) that its certificate or articles of
incorporation or constitutive documents have not been amended since the date of
the last amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each of its officers executing the Credit Documents to which it is
a party; (iii) a certificate of another of its officers as to incumbency and
signature of its Secretary; and (iv) such other documents as the Agent, the
Agent's legal counsel or any Lender may reasonably request.
(c) The Agent shall have received certificates, dated the Closing Date and
the date of the first Credit Event and signed by a Responsible Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01 hereof and the conditions set forth in
this Section 4.02, which certificate shall include a schedule with calculations
demonstrating the Borrower's compliance with the covenants contained in Sections
6.07, 6.08, 6.09, and 6.10 hereof as of the most recent accounting period for
which financial statements would be required hereunder.
(d) Each Lender requesting the same shall have received its Revolving
Credit Note and its Seasonal Revolving Credit Note duly executed by the Borrower
payable to its order and otherwise complying with the provisions of Section 2.04
hereof.
(e) The Agent and the Lenders shall have received and determined to be in
form and substance satisfactory to them (i) copies of the financial statements
described in Section 3.07 hereof; and (ii) the Agent shall be satisfied that the
American Capital Transactions and the Credit Transactions are in compliance with
all applicable laws and regulations.
(f) The Agent and the Administrative Agent shall have received evidence,
in form and substance satisfactory to the Agent and the Administrative Agent,
that the Administrative Agent has valid and first priority security interests in
and Liens upon the
54
Collateral and any other property which is intended to be security for the
Obligations in accordance with the terms of the Security Documents, subject only
to Permitted Liens.
(g) The Agent shall have received, in form and substance satisfactory to
the Agent and the Administrative Agent, all consents, waivers, acknowledgments
and other agreements from third Persons which the Agent or the Administrative
Agent may deem necessary or desirable in order to permit, protect and perfect
the Administrative Agent's security interests in and Liens upon the Collateral
or to effectuate the provisions or purposes of this Agreement and the other
Credit Documents.
(h) The Agent shall have received Borrower's Form 10-K filed with the
Securities Exchange Commission for the period ending June 30, 2002 and
Borrower's Form 10-Q filed with the Securities and Exchange Commission for the
periods ending September 30, 2002 and December 31, 2002.
(i) The Lenders, the Agent, and its counsel shall have received all fees
required to be paid by the Borrower, and payment in full of all expenses for
which the Borrower is liable and for which invoices have been presented.
(j) All governmental and third party approvals necessary or advisable in
connection with the financing contemplated hereby and by the American Capital
Notes and the continuing operations of the Borrower and its Subsidiaries shall
have been obtained, and delivered to Agent and be in full force and effect, to
the extent that a failure to obtain the same could reasonably be expected to
have a Material Adverse Effect;
(k) The placement and funding of the American Capital Notes shall have
occurred concurrently with the execution and delivery of the Credit Documents.
(l) The Credit Documents and all instruments and documents hereunder and
thereunder shall have been duly executed by the parties thereto and delivered to
the Agent, in form and substance satisfactory to the Agent and the
Administrative Agent.
(m) Agent shall have received copies of the American Capital Agreement and
the American Capital Notes, executed and delivered by all parties thereto.
(n) (i) Travelers shall have released all Liens which encumber Collateral
that run in its favor (or included such provisions in the Intercreditor
Agreement), which were granted under the Money Order Agreement, and all existing
financing statements which relate to such Liens shall have been terminated and
(ii) all other Liens encumbering the Collateral, other than Permitted Liens,
shall have been released and all existing financing statements which relate to
such Liens shall have been terminated.
(o) The Borrower and certain of its Subsidiaries other than ACE Funding
shall have duly executed and delivered to the Administrative Agent a Stock
Pledge Agreement pledging the stock of each direct and indirect Subsidiary of
the Borrower (other than ACE Funding).
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(p) The Agent shall have received the Collateral Agency Agreement, duly
executed by the Borrower, Travelers, American Capital Agent, and the Collateral
Agent.
(q) The Agent shall have received the Intercreditor Agreement, duly
executed by the Borrower, Travelers, and American Capital Agent.
(r) The Agent and the Lenders shall be satisfied that there are no
actions, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority now pending
or threatened against or affecting the Borrower or any of its Subsidiaries or
any of their respective businesses, assets or rights which would materially and
adversely affect any of the Credit Transactions or the American Capital
Transactions.
(s) Borrower shall have used its best efforts to cause all financial
institutions at which Borrower's and its Subsidiaries' (other than ACE Funding)
deposits are maintained to have executed and delivered a Letter Agreement
substantially in the form of Exhibit F-1 or F-2 attached hereto, and Agent shall
be satisfied that a sufficient number of such financial institutions have
executed and delivered such a Letter Agreement.
(t) Borrower shall have used its best efforts to cause all armored
couriers which transport cash and checks for the Borrower and its Subsidiaries
(other than ACE Funding) to have executed and delivered a Letter Agreement
substantially in the form of Exhibit G attached hereto, and Agent shall be
satisfied that a sufficient number of such. armored couriers have executed and
delivered such a Letter Agreement.
(u) The Borrower and its Subsidiaries (other than ACE Funding) shall have
delivered to the Agent a Borrowing Base Report and a certificate of a
Responsible Officer of the Borrower certifying: (i) the account number of each
deposit account in which such Persons maintain deposits; (ii) the correct legal
name of each financial institution which maintains each such deposit account;
(iii) whether each such financial institution has executed a Letter Agreement;
(iv) the name of each armored courier which transports cash and checks for such
Persons; and (v) whether such armored courier has executed a Letter Agreement.
(v) The Agent shall have received the Global Assignment and Assumption,
duly executed by each party thereto.
(w) The Agent shall have received evidence that the Senior Secured Notes
shall have been (i) paid in full or (ii) defeased in full.
(x) All other legal matters in connection with the Credit Transactions and
the American Capital Transactions shall be satisfactory to the Agent, the
Lenders and their respective legal counsel.
(y) The Agent shall have received such other documents as the
Administrative Agent, the Agent, or the Agent's legal counsel shall reasonably
deem necessary.
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ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect, or the principal of or interest on any Loan or
Note, Commitment Fee or any fee, expense or amount payable hereunder or in
connection with any of the Credit Transactions shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will, and will cause
each of its Subsidiaries and, with respect to Section 5.07 hereof, each ERISA
Affiliate to:
SECTION 5.01. Legal Existence. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence, except
as otherwise permitted under Section 6.05 hereof and except for the dissolution
or other cessation of existence of any Subsidiary of the Borrower which the
Borrower has determined to be unnecessary for the conduct of its business.
SECTION 5.02. Businesses and Properties. At all times (a) do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect the rights, licenses, permits, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its businesses; (b)
maintain and operate such businesses in the same general manner in which they
are presently conducted and operated; (c) comply with all laws, rules,
regulations and governmental orders (whether federal, state or local) applicable
to the operation of such businesses, whether now in effect or hereafter enacted
(including, without limitation, all applicable laws, rules, regulations and
governmental orders relating to environmental protection and to public and
employee health and safety) the lack of compliance with which could reasonably
be expected to have a Material Adverse Effect; (d) take all actions which may be
required to obtain, preserve, renew and extend all licenses, permits, franchises
and other authorizations which are material to the operation of such businesses;
and (e) at all times maintain, preserve and protect all property material to the
conduct of such businesses and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements of such
property necessary in order to continue its business as currently conducted.
Without limitation of the foregoing, after Borrower obtains knowledge that it
does not have a license, permit, or other authorization from a Governmental
Authority to conduct any facet of its or any of its Subsidiary's (other than ACE
Funding) business, Borrower shall (i) apply for such license, permit, or other
authorization within the earlier of (A) 30 days after Borrower obtains such
knowledge or (B) the date stated by any Governmental Authority before which
Borrower is required to apply for such license, permit, or other authorization
and (ii) diligently thereafter pursue the obtaining of such license, permit, or
other authorization.
SECTION 5.03. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers, (b) maintain
such other insurance, to such extent and against such risks, including casualty
and business interruption and other risks insured against by extended coverage,
as is customary with companies similarly situated and in the same or similar
businesses, naming Administrative Agent as
57
loss payee and additional insured, (c) maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any of its Subsidiaries, in
such amount as the Borrower or such Subsidiary shall reasonably deem necessary
and, as to Borrower and its Subsidiaries other than ACE Funding, naming Lenders
as loss payee and additional insured, and (d) maintain such other insurance as
may be required by law or as may be reasonably requested by the Administrative
Agent for purposes of assuring compliance with this Section 5.03, and naming
Administrative Agent as loss payee and additional insured.
SECTION 5.04. Taxes. Pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might give rise to Liens upon such
properties or any part thereof, other than any taxes or assessments the validity
of which is being contested by it in good faith by appropriate proceedings, and
with respect to which it has set aside on its books cash reserves in an amount
not less than the aggregate amount secured by such Liens (including, without
limitation, the amount of taxes and assessments being contested and any interest
and penalties payable in respect thereof). The Borrower and each of its
Subsidiaries promptly shall make all required payments, deposits and filings
with respect to payroll tax reporting and liability when due.
SECTION 5.05. Financial Statements, Reports, Etc. Furnish to the Agent and
each Lender:
(a) within ninety (90) days after the end of each Fiscal Year or such
earlier time as the same are required to be filed with the Securities and
Exchange Commission under applicable law, audited Consolidated and unaudited
consolidating, balance sheets and statements of income, expenses and retained
earnings, showing the Consolidated financial condition of the Borrower and its
Consolidated Subsidiaries (including, in each case, ACE Funding) as of the close
of such Fiscal Year and the results of their operations during such year, and
audited Consolidated statements of shareholders' equity and cash flow of the
Borrower and its Consolidated Subsidiaries as of the close of such Fiscal Year,
all the foregoing financial statements referred to above to be in reasonable
detail and stating in comparative form the figures as at the end of and for the
previous Fiscal Year and to be audited by independent public accountants of
recognized national standing acceptable to the Agent, which report shall not
contain any qualification except with respect to new accounting principles
mandated by the Financial Accounting Standards Board and be in form reasonably
acceptable to the Agent, together with a copy of the Borrower's SEC Form 10-K
filed for such prior Fiscal Year;
(b) within forty-five (45) days after the end of each quarter (except for
any quarters ending on the last day of a Fiscal Year) in each Fiscal Year,
unaudited Consolidated and, if requested by Agent, consolidating balance sheets
and statements of income, expenses and retained earnings showing the
Consolidated financial condition of
58
the Borrower and its Consolidated Subsidiaries (including, in each case, ACE
Funding) as of the end of each such fiscal quarter and the results of operations
of the Borrower and its Consolidated Subsidiaries as of the end of each such
fiscal quarter, and unaudited Consolidated statements of shareholders' equity
and cash flow of the Borrower and its Consolidated Subsidiaries as of the end of
each such fiscal quarter, each of the foregoing financial statements referred to
above to be in reasonable detail and stating in comparative form the figures as
at the end of and for the comparable periods of the preceding Fiscal Year and to
be prepared and certified by a Responsible Officer of the Borrower as presenting
fairly in all material respects the Consolidated financial condition and results
of operations of the Borrower and its Consolidated Subsidiaries and as having
been prepared in accordance with GAAP consistently applied, in each case subject
to normal year-end audit adjustments and the absence of footnotes, together with
a copy of the Borrower's SEC Form 10-Q filed for such fiscal quarter;
(c) concurrently with any delivery of (i) audited financial statements as
of the close of each of the Borrower's Fiscal Years pursuant to clause (a)
above, and (ii) unaudited financial statements as of the close of each of the
Borrower's fiscal quarters pursuant to clause (b) above, a Compliance
Certificate by a Responsible Officer of the Borrower, together with computations
and work papers demonstrating compliance, as of the dates of the financial
statements being furnished at such time, with the financial covenants set forth
in Section 6.07 through 6.10 hereof;
(d) no later than 3:00 p.m. Dallas, Texas time on Wednesday of each week,
a Borrowing Base Report covering the period from Sunday of the prior week
through Saturday of such prior week and a Cash Holdings Report as of the last
day of such period, each certified by a Responsible Officer of the Borrower;
(e) copies of such registration statements, annual, periodic and other
reports, and such proxy statements, financial information and other information,
if any, as shall be filed by the Borrower or any of its Subsidiaries with the
Securities and Exchange Commission pursuant to the requirements of the
Securities Act of 1933 or the Securities Exchange Act of 1934, as soon as
possible after such statements or information are publicly available;
(f) within thirty (30) days after the beginning of each Fiscal Year,
commencing with Borrower's Fiscal Year beginning July 1, 2003, financial
operation projections for the Borrower and its Subsidiaries for the next three
(3) Fiscal Years and projections for the first such Fiscal Year on a quarterly
basis prepared by management and in form consistent with the financial
projections provided prior to the Closing Date, accompanied by a written
certificate signed by the chief financial officer of Borrower to the effect that
such projections have been prepared on the basis of the Borrower's historical
Consolidated financial statements and records, together with the assumptions set
forth in such projections, and that such projections reasonably reflect the
expectations, after considered analysis, of the Borrower's management as to the
matters set forth therein;
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(g) promptly upon a Responsible Officer of the Borrower becoming aware
thereof, notice to the Agent of the breach by any party of any material
agreement with the Borrower or any of its Subsidiaries;
(h) promptly upon a Responsible Officer of the Borrower becoming aware
thereof, notice to the Agent of any "default" or "event of default" under any
other agreement, document or instrument representing Indebtedness in excess of
one million dollars ($1,000,000) (including but not limited to the American
Capital Agreement);
(i) all management reports delivered to Borrower in connection with the
financial statements delivered pursuant to Section 5.05(a);
(j) promptly upon receipt of request from Agent, copies of all
information, notices, and reports provided to, or received from, American
Capital Agent or the holders of the American Capital Notes under the American
Capital Agreement;
(k) prior to the consummation of the same, written notice of (i) all
issuances or sales of Equity Interests permitted under Section 6.04 and (ii) all
asset sales that are permitted under Section 6.05;
(l) within ten (10) days after the end of each month, a Certificate of
Update; and
(m) such other information as the Agent or any Lender may reasonably
request.
SECTION 5.06. Litigation and Other Notices. Give the Agent written notice
promptly after a Responsible Officer of the Borrower becoming aware thereof, but
in any event within five (5) Business Days, of the following:
(a) the issuance by any court or governmental agency or authority of any
injunction, order, decision or other restraint against the Borrower or a
Guarantor prohibiting, or having the effect of prohibiting, the making of the
Loans, or invalidating, or having the effect of invalidating, any provision of
this Agreement, any of the Loans, any of the Notes, any other Credit Document or
the first priority Lien of the Agent on the Collateral or the initiation of any
litigation or similar proceeding seeking any such injunction, order, decision or
other restraint;
(b) the filing or commencement of any action, suit or proceeding against
the Borrower or any of its Subsidiaries, whether at law or in equity or by or
before any court or any federal, state, municipal or other governmental agency
or authority which, if adversely determined, could reasonably be expected to:
(i) result in liability of the Borrower or any of its Subsidiaries in an amount
of one million five hundred thousand dollars ($1,500,000) or more; or (ii) have
a Material Adverse Effect if there were an adverse determination against the
Borrower or any Subsidiary;
(c) any Default or Event of Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with respect
thereto; and
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(d) any development in the business or affairs of the Borrower or any of
its Subsidiaries which management reasonably expects could have a Material
Adverse Effect.
SECTION 5.07. ERISA.
(a) Pay and discharge promptly any liability imposed upon it pursuant to
the provisions of Title IV of ERISA; provided, however, that neither the
Borrower nor any ERISA Affiliate shall be required to pay any such liability if
(i) the amount, applicability or validity thereof shall be diligently contested
in good faith by appropriate proceedings, and (ii) such Person shall have set
aside on its books reserves which, in the opinion of a Responsible Officer of
such Person, are adequate with respect thereto.
(b) Deliver to the Agent, promptly, and in any event within thirty (30)
days, after (i) the Borrower becomes aware of the occurrence of any Reportable
Event, a copy of the materials that are filed with the PBGC, or the materials
that would have been required to be filed if the thirty-day notice requirement
to the PBGC was not waived, (ii) the Borrower or any ERISA Affiliate or an
administrator of any Pension Plan files with participants, beneficiaries or the
PBGC a notice of intent to terminate any such Plan, a copy of any such notice,
(iii) the Borrower or any ERISA Affiliate or an administrator of any Pension
Plan receives notice from the PBGC of the PBGC's intention to terminate any
Pension Plan or to appoint a trustee to administer any such Plan, a copy of such
notice, (iv) the Borrower or any ERISA Affiliate knows of any event or condition
which could reasonably be expected to constitute grounds under the provisions of
Section 4042 of ERISA for the termination of (or the appointment of a trustee to
administer) any Pension Plan, an explanation of such event or condition, (v) the
receipt by the Borrower or any ERISA Affiliate receives an assessment of
withdrawal liability under Section 4201 of ERISA from a Multiemployer Plan, a
copy of such assessment, (vi) the Borrower or any ERISA Affiliate knows of any
event or condition which could reasonably be expected to cause any one of them
to incur a liability under Section 4062, 4063, 4064 or 4069 of ERISA or Section
412(n) or 4971 of the Code, an explanation of such event or condition, and (vii)
the Borrower or any ERISA Affiliate knows that an application is to be, or has
been, made to the Secretary of the Treasury for a waiver of the minimum funding
standard under the provisions of Section 412 of the Code, a copy of such
application, and in each case described in clauses (i) through (iii) and clauses
(iv) through (vi) together with a statement signed by a Responsible Officer
setting forth details as to such Reportable Event, notice, event or condition
and the action which the Borrower or such ERISA Affiliate proposes to take with
respect thereto; provided, however, that the Borrower shall not have any
reporting obligation under this Section 5.07 with respect to any Reportable
Event, notice, event or condition which, when taken together with all other
Reportable Events, notices, events or conditions, could subject the Borrower or
any ERISA Affiliate to any taxes, penalties or other liabilities which could not
reasonably be expected to have a material adverse effect on the financial
condition of the Borrower or any ERISA Affiliate.
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SECTION 5.08. Maintaining Records; Access to Properties and Collateral;
Inspections. Maintain financial records in accordance with accepted financial
practices and, upon prior written notice, permit any authorized representative
designated by Agent to visit and inspect Borrower's locations and the Collateral
subject to and consistent with the Borrower's security practices) during regular
business hours and the financial records of the Borrower and its Subsidiaries,
and permit any authorized representative designated by Agent to discuss the
affairs, finances and condition of the Borrower with its Responsible Officers
and its independent public accountants, as applicable. At the Borrower's expense
(which expense shall not, prior to the occurrence of any Default or Event of
Default, exceed $5,000 during any Fiscal Year), the Agent or Agent's designee
shall have the right to inspect, verify, and audit, up to two times annually
(or, upon the occurrence and during the continuance of an Event of Default, as
often as the Agent may request), the existence and condition of the Collateral
and the books and records of the Borrower and its Subsidiaries and their
compliance with the terms and conditions of this Agreement and the other Credit
Documents. The Required Lenders shall have the right to cause the Agent to
conduct any such inspection and verification upon written request.
Notwithstanding anything to the contrary contained herein, the Lenders and the
Agent agree to make reasonable efforts to coordinate each of the foregoing
visits and inspections through the Agent.
SECTION 5.09. Use of Proceeds. Use the proceeds of the Revolving Credit
Loans and the Seasonal Revolving Credit Loans as set forth in Section 3.13
hereof and only for such purposes.
SECTION 5.10. [RESERVED].
SECTION 5.11. Additional Guarantors and Pledge of Assets. Inform the Agent
within five (5) Business Days before the creation or acquisition of any direct
or indirect Subsidiary. The Borrower and the Lenders intend that any such new
Subsidiary of the Borrower shall obtain the benefit of the Total Commitment and
shall become a Guarantor pursuant to terms similar to each Guarantor on the date
hereof. Within fifteen (15) Business Days from the acquisition or formation of
any such additional Subsidiary, the Borrower shall cause such Subsidiary (a) to
promptly execute, in form and substance satisfactory to the Agent, all documents
necessary for such Subsidiary to become a Guarantor hereunder (including a
Guaranty Agreement substantially in the form executed by the Guarantors as of
the Closing Date), and (b) to effect such Subsidiary's conveyance of a first
priority Lien in its assets (subject only to Permitted Liens) in favor of the
Agent for the benefit of the Lenders securing the Obligations pursuant to the
Security Documents. Any such additional Subsidiary's assets shall thereupon
become part of the Collateral, and such Subsidiary's Cash Holdings (and other
assets described in Section 1 of the Borrowing Base Report) shall thereupon
become part of the Borrowing Base; provided, however, that the Agent may, in its
sole discretion, audit and inspect such Subsidiary's assets (including, without
limitation, such Subsidiary's Cash Holdings) at the Borrower's expense, and, if
the results of such audit and inspection are not satisfactory to the Agent in
its sole discretion, such Subsidiary's Cash Holdings shall no longer be part of
the Borrowing Base. The Required Lenders shall have the right to cause the Agent
to
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conduct such an audit and inspection upon written request and such audits and
inspections shall be in addition to the audits described in Section 5.08 hereof.
In addition, within fifteen (15) Business Days from the acquisition or formation
of any additional Subsidiary of the Borrower, the Borrower shall execute, or
shall cause its Subsidiary to execute, as applicable, all documents (including a
Stock Pledge Agreement in form and content substantially similar to other Stock
Pledge Agreements executed on the Closing Date) necessary to effect the
Borrower's or such Subsidiary's, as applicable, conveyance of a first priority
Lien in the capital stock of such additional Subsidiary in favor of the Agent
for the benefit of the Lenders securing the Obligations, and such additional
Subsidiary's capital stock shall thereupon become part of the Collateral. If
reasonably requested by the Agent, the Borrower shall cause its legal counsel to
deliver to the Agent, simultaneously with the Credit Documents referred to in
this Section 5.11, a legal opinion containing opinions reasonably requested by
the Agent with respect to, if applicable, (i) the stock or asset acquisition,
(ii) the formation of such Subsidiary, (iii) the pledge of such Subsidiary's
capital stock to the Agent, (iv) the pledge of acquired assets to the Agent and
the perfection of the Agent's security interest therein, (v) the addition of
such Subsidiary as a Guarantor, and (vi) such other matters reasonably related
thereto; such legal opinion to be in form and substance satisfactory to the
Agent.
SECTION 5.12. Environmental Legislation.
(a) Comply in all material respects with all federal, state and local laws
or regulations applicable to it that have been enacted or adopted regulating the
discharge of substances into the environment or primarily for the purpose of
protecting the environment ("Environmental Legislation"), and provide written
notice to the Agent within five (5) days of the receipt by any Responsible
Officer of the Borrower of any notice of any violation of any Environmental
Legislation from any federal, state or local governmental authority charged with
enforcing such Environmental Legislation, which violation alone, or together
with other such violations, notice of which has been previously or concurrently
received, does have or could reasonably be expected to have a Material Adverse
Effect.
(b) In the event that any investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind or nature
("Remedial Work") with respect to any of the properties of the Borrower or any
of its Subsidiaries (whether owned, leased, subleased or used by such Person) is
required to be performed by the Borrower or any of its Subsidiaries under any
applicable local, state or federal law or regulation, any judicial order, or by
any governmental entity because of, or in connection with, the current or future
presence, suspected presence, release or suspected release of a hazardous
substance in or into the air, soil, groundwater, surface water or soil vapor,
commence all such Remedial Work for which the Borrower or such Subsidiary is
legally responsible under applicable federal, state or local law at or prior to
the time required therefor under applicable laws, regulations or orders and
thereafter diligently prosecute to completion all such Remedial Work in
accordance with and within the time allowed under such applicable laws,
regulations or orders of such governmental or nongovernmental entity, except
where the necessity of the conduct of Remedial Work or
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obligation of Borrower is being contested in good faith in the manner provided
by law or would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.13. Pay Obligations to Lenders and Perform Other Covenants. Make
full and timely payment of the Obligations, whether now existing or hereafter
arising, and duly comply with all the terms and covenants contained in this
Agreement (including, without limitation, the borrowing limitations and
mandatory prepayments in accordance with Article II hereof) or in any other
Credit Document at the times and places and in the manner set forth herein or
therein, as applicable.
SECTION 5.14. Assurances. Promptly execute and deliver any and all other
and further agreements, documents, instruments, and other writings which may be
requested by the Agent in good faith to cure any defect in the execution and
delivery of any Credit Document or more fully to describe particular aspects of
the agreements set forth in the Credit Documents or intended to be set forth.
Without limitation of the foregoing, the Borrower shall use its best efforts to
deliver to Agent (i) Letter Agreements, substantially in the forms of Exhibit
F-1 and F-2 attached hereto, duly executed by the Agent, the Borrower and
depository institutions where the Borrower deposits its cash, checks or other
remittances and (ii) Letter Agreements, substantially in the form of Exhibit G
attached hereto, duly executed by the Agent, the Borrower and armored car
companies that transport Company's cash, checks or other remittances.
SECTION 5.15. Certain Changes. Notify the Agent at least thirty (30) days
prior to the date that any of the Borrower or any Guarantor changes its name or
the location of its chief executive office or principal place of business or the
place where it keeps its books and records or the location of any of the
Collateral.
SECTION 5.16. Assignment of Leases. At the request of Required Lenders, or
after the occurrence of an Event of Default at the request of Agent, promptly
execute and deliver, in form and substance satisfactory to Agent, assignments of
leases and/or leasehold deeds of trust with respect to any real property leases
of office space or real property leases covering any of Borrower's or its
Subsidiaries' stores; provided, however, that Borrower and its Subsidiaries
shall not be required to deliver an assignment of lease with respect to any
particular lease of office space or store if (i) the consent of the relevant
landlord is required as a condition to such assignment, and (ii) despite its
best efforts to do so, Borrower or its Subsidiary, as the case may be, is unable
to obtain such consent from the relevant landlord.
SECTION 5.17. Third-Party Payables. Pay, or otherwise perform in respect
of, all Third-Party Payables in accordance with the terms and provisions of the
agreements governing or otherwise relating to such Third-Party Payables.
SECTION 5.18. Interest Rate Hedging. From and after July 1, 2003, cause an
amount equal to or greater than the Acceptable Sum of the principal amount of
the sum of all Funded Indebtedness of the Borrower and its Subsidiaries (other
than ACE Funding) to (i) bear interest at a fixed rate or (ii) be subject to a
Hedging Contract that is an
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Acceptable Hedging Contract, each for a minimum term of one year. As used
herein, "Acceptable Hedging Contract" shall mean a Hedging Contract entered into
by the Borrower or one of its Subsidiaries (other than ACE Funding) with the
purpose and effect of fixing interest rates on a principal amount of
Indebtedness of such Person that is accruing interest at a variable rate,
provided that (i) the aggregate notional amount of such Hedging Contract never
exceeds one hundred percent (100%) of the anticipated outstanding principal
amount of the Indebtedness to be hedged by such Hedging Contract or an average
of such principal balances calculated using a generally accepted method of
matching interest swap contracts to declining principal balances, (ii) the
floating rate index of such Hedging Contract generally matches the index used to
determine the floating rates of interest on the corresponding indebtedness to be
hedged by such Hedging Contract, and (iii) each such Hedging Contract is with a
counterparty or has a guarantor of the obligation of the counterparty which
(unless such counterparty is a Lender or an Affiliate of a Lender) at the time
such Hedging Contract is made has long-term unsecured and unenhanced debt
obligations rated AA or Aa2 (or their equivalents) or better or is an
investment-grade industry participant or otherwise acceptable to Required
Lenders. As used herein, "Acceptable Sum" shall mean, as of any date of
determination, the sum of (i) $60,000,000 plus (ii) fifty percent of the then
outstanding aggregate principal amount of the American Capital Notes.
SECTION 5.19. Compliance with Agreements. Perform all material obligations
it is required to perform under the terms of each indenture, mortgage, deed of
trust, security agreement, lease, franchise, agreement, contract, or other
instrument or obligation to which it is a party or by which any of its
properties is bound.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect, or the principal of or interest on any Loan or
Note, any Commitment Fee or any other fee, expense or amount payable hereunder
or in connection with any of the Credit Transactions shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will not and will not
cause or permit any of its Subsidiaries and, in the case of Section 6.14 hereof,
any ERISA Affiliate to, either directly or indirectly:
SECTION 6.01. Liens. Incur, create, assume or permit to exist any Lien on
any of its property or assets (including the stock of any direct or indirect
Subsidiary), whether owned at the date hereof or hereafter acquired, or assign
or convey any rights to or security interests in any future revenues, except
("Permitted Liens"):
(a) Liens incurred and pledges and deposits made by the Borrower or any of
its Subsidiaries in the ordinary course of business in connection with workers'
compensation, unemployment insurance, old-age pensions and other social security
benefits;
65
(b) Liens imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's and vendors' liens and other similar liens, incurred in good faith
in the ordinary course of the business of the Borrower or any of its
Subsidiaries and securing obligations which are not overdue for a period of more
than 15 days or which are being contested in good faith by appropriate
proceedings as to which the Borrower or any of its Subsidiaries, as the case may
be, shall, to the extent required by GAAP, applied on a consistent basis, have
set aside on its books adequate reserves;
(c) Liens securing the payment of taxes, assessments and governmental
charges or levies, that are not delinquent or are being diligently contested in
good faith by appropriate proceedings and as to which reserves have been
established in an amount not less than the aggregate amount secured by such
Liens (including, without limitation, the amount of taxes and assessments being
contested and any interest and penalties payable in respect thereof), and for
which levy and execution has not issued or continues to be stayed, provided,
that such Liens do not individually or collectively detract materially from the
value of the property of the Person in question or materially impair the use of
that property in the operation of its business;
(d) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, or restrictions on the use of real property of
the Borrower or any of its Subsidiaries or minor irregularities of title with
respect thereto (and with respect to leasehold interests, mortgages,
obligations, Liens and other encumbrances incurred, created, assumed or
permitted to exist and arising by, through or under a landlord or owner of the
property being leased by the Borrower or its Subsidiaries, but not covering the
leasehold interests or any other property of the Borrower and its Subsidiaries,
with or without consent of the lessee) which do not in the aggregate materially
detract from the value of said property or assets or materially impair the use
thereof in the operation of its business;
(e) Liens (including any Capitalized Lease to the extent the same is an
item of Indebtedness permitted under Section 6.03) originally created to secure
payment of a portion of the purchase price or construction costs, as the case
may be, relating to any real property or equipment or any interest therein, upon
such real property, equipment (including furniture and fixtures) or interest
therein; provided, that (i) the outstanding principal amount of Indebtedness
secured by any such Lien does not exceed one hundred percent (100%) of the
purchase price actually paid by the Borrower or any of its Subsidiaries (or, in
the case of a Capitalized Lease, by the owner) for the real property or
equipment or interest therein which is encumbered by such Lien, and/or the
construction costs actually incurred by the Borrower or any of its Subsidiaries
with respect to the improvements thereto, as the case may be, (ii) the
Indebtedness secured by any such Lien (including, in the case of any Capitalized
Lease, the Capitalized Lease Obligation in respect of such Capitalized Lease) is
permitted under Section 6.03, and (iii) any such Lien does not encumber any
other asset at any time owned by the Borrower or any of its Subsidiaries;
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(f) Liens existing on the Closing Date and described on Schedule 6.01
attached hereto, but not the extension, renewal or refunding of the Indebtedness
secured thereby (except as permitted as described on Schedule 6.01);
(g) Liens created in favor of the Administrative Agent which secure the
Obligations, Liens in favor of the American Capital Agent which secure the
obligations of the Borrower and its Subsidiaries in respect of the American
Capital Notes, Liens in favor of Travelers which secure the obligations of the
Borrower and its Subsidiaries in respect of the Money Order Agreement, and Liens
in favor of the Collateral Agent which secure the obligations of the Borrower to
the Collateral Agent under the Collateral Agency Agreement;
(h) constitutional, statutory and contractual Liens of landlords for sums
not yet due and payable; and good-faith pledges or deposits that may not cover
any other assets except cash proceeds of such pledges or deposits made to secure
(i) the Borrower's or any Subsidiary's performance of bids, tenders, contracts
(except for the repayment of borrowed money), or leases, (ii) statutory
obligations, surety, or appeal bonds, or indemnity, performance, or other
similar bonds benefiting the Borrower or any Subsidiary, or (iii) liabilities to
insurance carriers under insurance or self-insurance arrangements and other
obligations of a like nature, so long as, in each case such Liens (x) do not
secure obligations constituting Indebtedness and (y) are incurred in the
ordinary course of business; and
(i) Liens granted by ACE Funding pursuant to the Loan and Servicing
Agreement.
SECTION 6.02. Sale and Lease-Back Transactions. Except as set forth on
Schedule 6.02, enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property, real or personal, and
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to use
for substantially the same purpose or purposes as the property being sold or
transferred, except for any such arrangements that are entered into in the
Borrower's ordinary course of business.
SECTION 6.03. Indebtedness for Borrowed Money and Guarantees.
(a) Incur, create, assume or permit to exist any Indebtedness for borrowed
money (excluding Guarantees) that is secured by Liens other than (i)
Indebtedness secured by Permitted Liens in an amount not to exceed three million
dollars ($3,000,000) per item of Indebtedness and five million dollars
($5,000,000) in the aggregate; (ii) Indebtedness under the American Capital
Agreement, the American Capital Notes, and the Money Order Agreement and other
Indebtedness existing on the date hereof and listed in Schedule 6.03 hereto;
provided, that, such Indebtedness shall not after the date hereof (A) increase
in amount (except increases subject to limitations in amount in existence on the
date hereof); (B) be secured by Liens not in existence on the date hereof,
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or (C) change in regard to seniority in any respect; and (iii) Indebtedness
incurred hereunder (including, without limitation, any drawings under any Letter
of Credit).
(b) Incur, create, assume or permit to exist any Guarantees other than
(without duplication): (i) Guarantees of the Obligations; (ii) Guarantees for
the benefit of the holders of the American Capital Notes in respect of
Borrower's obligations under the American Capital Notes, and (iii) Guarantees
for the benefit of Travelers in respect of the Borrower's obligations under the
Money Order Agreement.
(c) Incur, create, assume or permit to exist any unsecured Indebtedness
other than (i) current accounts payable and unsecured current liabilities (not
the result of borrowing) incurred in the ordinary course of business of the
Borrower to vendors, suppliers and Persons providing services, for expenditures
for goods and services normally required by it in the ordinary course of
business and on ordinary trade terms, including (without limitation) obligations
pursuant to the Money Order Agreement and (ii) Indebtedness evidenced by
Deferred Payment Obligations in an amount not to exceed four million dollars
($4,000,000) in the aggregate at any time.
(d) Incur, create, assume or permit to exist any Indebtedness under
Hedging Contracts other than Hedging Contracts with a Lender or an Affiliate of
a Lender, in each case in accordance with Section 5.18 hereof.
SECTION 6.04. Equity Interest in Subsidiaries Equity Interests in
Borrower.
(a) Sell, transfer, encumber, pledge or otherwise dispose of any Equity
Interests (including, without limitation, Preferred Stock and any options,
warrants or other rights to acquire any Equity Interests) in any Subsidiary or
permit any of its Subsidiaries to issue any additional Equity Interests other
than to the Borrower or to a Subsidiary of the Borrower that is a Guarantor; or
otherwise permit any Subsidiary to be other than a direct or indirect
wholly-owned Subsidiary.
(b) Sell or otherwise issue any Equity Interests (including, without
limitation, Preferred Stock and any options, warrants or other rights to acquire
any Equity Interests) in Borrower; provided, however, that Borrower may issue
and or sell additional shares of its common stock, and may grant options,
warrants, and other rights to acquire its common stock, in each case after the
Closing Date only if no Event of Default has occurred and is continuing
hereunder or would otherwise occur as a result of any such issuance and sale.
SECTION 6.05. Consolidations, Mergers and Sales of Assets. (a) Directly or
indirectly consolidate with or merge into any other Person, or permit another
Person to merge into it, unless it is a Guarantor merging into the Borrower
(with the Borrower being the surviving entity) or another Guarantor; provided,
that, (i) such entity has provided the Agent with written notice at least ten
(10) Business Days prior to such merger, (ii) all Liens in favor of the Agent
granted by such entities continue to be valid, perfected and first priority
(except for pre-existing Liens on the assets of such other
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Person which are also Permitted Liens, and (iii) in no event shall ACE Funding
merge into Borrower or any Subsidiary of Borrower, (b) acquire all or
substantially all the Equity Interests or other ownership interests in, any
other Person (except for Acceptable Acquisitions that also comply with Section
5.11), (c) sell, lease, transfer or assign to any Persons or otherwise dispose
of (whether in one transaction or a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired), or (d) otherwise
sell any of its assets other than assets which are of nominal value or obsolete
or are replaced by assets of equal suitability and value; provided, however,
that (i) the Borrower and its Subsidiaries may sell only fixed assets (i.e.,
furniture, fixtures, and equipment), goodwill, and leasehold interests in
connection with the disposition of stores in the ordinary course of business
(but in no event cash, checks, accounts, receivables or working capital) in an
amount not to exceed $5,000,000 in the aggregate in any Fiscal Year, and (ii)
any Guarantor may sell or lease any of its assets to the Borrower or to another
Guarantor if and only if all Liens on any such assets in favor of the Agent
continue to be valid, perfected and first priority subsequent to such sale or
lease.
SECTION 6.06. Loans and Advances. Make any loan or advance to any other
Person other than (without duplication):
(a) Advances by Borrower or any Subsidiary to its officers and employees
for salary and other compensatory benefits, travel advances, advances against
commissions and other similar advances in the ordinary course of business,
provided that the amount of such advances does not exceed $50,000 in the
aggregate at any time;
(b) Loans and advances to any wholly-owned Subsidiary which is also a
Guarantor;
(c) Loans and advances existing on the date hereof and listed on Schedule
6.06 hereto, but not the increase, extension, renewal or refunding thereof;
(d) Loans and advances to the Borrower's retail financial service
customers in the ordinary course of its business;
(e) Loans to ACE Funding by Borrower permitted under Section 6.21; or
(f) Until September 30, 2003, loans and advances by Borrower to Goleta
under the Goleta Agreement.
SECTION 6.07. Net Worth. At any time, permit Net Worth of the Borrower and
its Subsidiaries on a Consolidated basis at any time to be less than $64,038,000
plus (b) seventy-five percent (75%) of all Net Income earned after the Closing
Date during any completed fiscal quarter, provided, however that fiscal quarters
in which Net Income is a negative amount will be excluded from the calculation
of Net Income earned after the Closing Date, plus (c) an amount equal to all
proceeds of any offering of Equity Interests (net of offering and professional
fees and expenses) by the Borrower or any of its Subsidiaries occurring after
the Closing Date that is permitted hereunder.
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SECTION 6.08. EBITDA. At the end of any fiscal quarter, permit the
aggregate EBITDA on a Consolidated basis for the four previous quarters to be
less than eighty-five percent (85%) of the aggregate EBITDA of the Borrower and
its Subsidiaries on a Consolidated basis for the four consecutive fiscal
quarters reported at the prior fiscal quarter end.
SECTION 6.09. Debt to EBITDA Ratio. At the end of any fiscal quarter,
permit the Debt to EBITDA Ratio to be more than (i) 3.50 to 1.00 from the
Closing Date until June 30, 2005 and (ii) 3.25 to 1.00 at any time thereafter;
provided, however, that as of the end of each of the fiscal quarters ending on
each of March 31, 2004 and March 31, 2005, the Debt to EBITDA Ratio shall not be
greater than 3.75 to 1.00. For purposes of this Section 6.09 only, the EBITDA of
any Person acquired by the Borrower or its Subsidiaries pursuant to an
Acceptable Acquisition during any period shall be included in the Debt to EBITDA
Ratio on a pro forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period) if (a) with respect to any
such Acceptable Acquisition of such Person, the consolidated balance sheet of
such acquired Person as at the end of the period preceding the acquisition of
such Person and its consolidated subsidiaries and the related statements of
income and stockholders' equity and of cash flows for the period in respect of
which the Debt to EBITDA Ratio is to be calculated have been reported on, unless
such audit requirement is waived by Agent, without a qualification arising out
of the scope of the audit by independent certified public accountants of
nationally recognized standing and (b) if any such Acceptable Acquisition
involved the incurrence of Funded Indebtedness, the incurrence of such Funded
Indebtedness was permitted hereunder; provided, however, that no recalculation
of the Debt to EBITDA Ratio pursuant to this sentence shall have any effect on
the Applicable Margin until the first Adjustment Date occurring after each such
recalculation.
SECTION 6.10. Cash Flow Coverage Ratio. At the end of any fiscal quarter,
permit the Cash Flow Coverage Ratio of the Borrower and its Subsidiaries on a
Consolidated basis to be less than 1.15 to 1.00.
SECTION 6.11. Use of Proceeds. Permit the proceeds of any Loan to be used
for any purpose which entails a violation of, or is inconsistent with,
Regulation T, U or X of the Board or Section 3.13 hereof.
SECTION 6.12. ERISA.
(a) Engage in any transaction in connection with which the Borrower or any
ERISA Affiliate could be subject to either a material civil penalty assessed
pursuant to the provisions of Section 502 of ERISA or a material tax imposed
under the provisions of Section 4975 of the Code.
(b) Terminate any Pension Plan in a "distress termination" under Section
4041 of ERISA, or take any other action which could result in a material
liability of the Borrower or any ERISA Affiliate to the PBGC.
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(c) Fail to make payment when due of all amounts which, under the
provisions of any Plan, the Borrower or any ERISA Affiliate is required to pay
as contributions thereto, or, with respect to any Pension Plan, permit to exist
any material "accumulated funding deficiency" (within the meaning of Section 302
of ERISA and Section 412 of the Code), whether or not waived, with respect
thereto.
(d) Adopt an amendment to any Pension Plan requiring the provision of
security under Section 307 of ERISA or Section 401(a)(29) of the Code.
SECTION 6.13. Modifications of Certain Indebtedness; Other Agreements.
Without the prior written consent of Required Lenders, amend, modify, restate,
or supplement any of the American Capital Agreement or the Goleta Agreement;
without the prior written consent of the Required Lenders, amend, modify,
restate, supplement, renew, increase, or extend the American Capital Notes; or,
without the prior written consent of the Agent, amend, modify, restate, or
supplement the Travelers Documents if such amendment, modification, or
restatement could reasonably be expected to result in a Material Adverse Effect.
Neither the Borrower nor any Subsidiary shall amend or modify any other material
agreement existing on the date hereof, to which the Borrower or any Subsidiary
is a party, if such amendment or modification would adversely affect the
interests of the Lenders.
SECTION 6.14. Transactions with Affiliates. Except as otherwise
specifically set forth in this Agreement and except for (i) leases negotiated in
connection with Acceptable Acquisitions, (ii) transactions permitted pursuant to
the terms of this Agreement, or (iii) leases entered into in the ordinary course
of establishing or maintaining the Borrower's retail locations, directly or
indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or enter into any other transaction with, any of its
Related Parties, Affiliates or agents or any relative thereof, except at fair
and reasonable prices and on terms not less favorable to it than that which
would have been obtained in an arm's-length transaction with a Person which is
not a Related Party or an Affiliate.
SECTION 6.15. Other Agreements. Enter into (a) any agreement which
requires it to comply with any financial covenant to the extent that such
financial covenant could reasonably be expected to be more restrictive than any
of the financial covenants contained in this Agreement, unless this Agreement is
amended to include such financial covenant contemporaneously upon the execution
and delivery of such other agreement, or (b) without the prior written consent
of the Required Lenders, any agreement for the acquisition of the stock or
substantially all assets of any other business entity which cannot be terminated
prior to the closing thereof either in the sole discretion of the Borrower or in
exchange for a payment not to exceed $10,000, unless such proposed acquisition
is an Acceptable Acquisition.
SECTION 6.16. Restricted Payments. At any time (a) through any outlay
other than issuance of the Borrower's or a Subsidiary's own stock or cash
payments in lieu of the issuance of fractional shares (i) redeem, retire,
otherwise acquire, or prepay, directly
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or indirectly, any shares of its capital stock, or any other Equity Interest
(except for repayments upon forfeiture of restricted stock issued to issued to
officers, directors, and employees of amounts paid to Borrower by such parties
for such restricted stock) ; (ii) declare or pay any cash dividend (except for
cash dividends paid to the Borrower or any wholly-owned Subsidiary of Borrower
that is a Guarantor or distributions paid by ACE Funding to Borrower); or (iii)
make any other distribution of any property or cash to owners of an equity
interest in their capacity as such (except distributions of property or cash to
the Borrower or any Guarantor) or (b) make any payment in respect of
Indebtedness that is permitted under Section 6.03; provided, however, that:
(i) the Borrower may make regularly scheduled payments of principal
and interest on all Indebtedness permitted under Section 6.03 so long as
no Default or Event of Default has occurred, is continuing, or would
result therefrom,
(ii) notwithstanding the foregoing clause (i), the Borrower may make
regular payments in respect of the Third Party Payables in the ordinary
course of business irrespective of the occurrence or continuance of a
Default under clause (a), (b), (c), (d), (g), (h), (i), (j), (k), (l),
(m), (n), (o), or (p) of Article VII hereof (or Event of Default resulting
from such a Default) until Agent delivers to Borrower a Payment Blockage
Notice, and
(iii) notwithstanding the foregoing clause (i), the Borrower may
make any and all payments on the American Capital Obligations when due and
payable in accordance with the terms of the American Capital Agreement and
the American Capital Notes, in each case as in effect on the date hereof,
except to the extent such payments are prohibited under the Intercreditor
Agreement.
SECTION 6.17. Limitation on Investments. Make or permit to exist, any
capital contributions to, or make any investment in, or purchase or commit to
purchase any Equity Interest or evidences of indebtedness of or interests in any
Person which is not a Subsidiary ("Investments"), except the following:
(a) Liquid Investments;
(b) Acceptable Acquisitions, so long as no Default or Event of Default has
occurred and is continuing;
(c) trade and customer accounts receivable which are for goods furnished
or services rendered in the ordinary course of business and are payable in
accordance with customary trade terms;
(d) Investments existing on the date hereof and described on Schedule
6.17;
(e) Investments in ACE Funding by Borrower permitted under Section 6.21;
and
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(f) Until September 30, 2003, investments in Goleta by Borrower under the
Goleta Agreement.
SECTION 6.18 Change in Business. Engage in any business not of the same
general type as, or reasonably related to, those conducted by the Borrower on
the Closing Date.
SECTION 6.19. Capital Expenditures. Make any Capital Expenditures in
excess of the aggregate amount of (i) $5,000,000 in Fiscal Year 2003; (ii)
$9,750,000 in Fiscal Year 2004; (iii) $11,000,000 in Fiscal Year 2005; and (iv)
$12,250,000 in Fiscal Year 2006. To the extent that any amount of permitted
Capital Expenditures is not used during any Fiscal Year, then up to $1,000,000
of such unexpended amount may be carried forward and expended during the next
Fiscal Year; provided, however, that (a) no amount of permitted Capital
Expenditures may be carried forward for more than one Fiscal Year and (b) during
any Fiscal Year in which such unexpended amounts have been carried forward, all
Capital Expenditures shall be deemed to apply first to the amount carried
forward and then to the amount of Capital Expenditures permitted during such
Fiscal Year.
SECTION 6.20. Deposit Accounts and Armored Couriers. Borrower shall not,
at any time after June 30, 2003, permit (i) more than 5% of the aggregate amount
of Borrower's Cash Holdings and each Subsidiary's Cash Holdings held in deposit
accounts to be held in Deposit Accounts maintained by financial institutions
with which there is no Letter Agreement and (ii) more than 5% of the aggregate
dollar amount of Borrower's Cash Holdings and instruments and each Subsidiary's
Cash Holdings and instruments to be transported by armored couriers with which
there is no Letter Agreement.
SECTION 6.21. ACE Funding. Notwithstanding anything to the contrary
contained in this Agreement, (i) ACE Funding shall not incur or be liable in
respect of any Indebtedness other than Unrestricted Indebtedness in favor of
Autobahn Funding Company LLC ("ACE Funding Lender"), and such Unrestricted
Indebtedness may be secured by Liens on any or all of ACE Funding's assets or
properties, (ii) ACE Funding shall not be a Borrower under this Agreement and
shall not obtain the benefit of the Revolving Credit Commitment or the Seasonal
Revolving Credit Commitment (provided, however, that the Borrower shall be
permitted to (a) make an equity investment in ACE Funding not to exceed
$1,000,000 and (b) loan to ACE Funding up to the lesser of (x) $3,000,000 or (y)
one percent (1%) of the total aggregate financial commitment of the ACE Funding
Lender to ACE Funding, during the Usage Period for purposes of allowing ACE
Funding to (1) satisfy its minimum funding requirements under one or more
reserve accounts to be established by ACE Funding in favor of the ACE Funding
Lender and (2) provide cash to its self-service check cashing machines in
various H&R Block business locations (hereinafter referred to as "SSMs")), (iii)
ACE Funding shall not be required to become a Guarantor hereunder, (iv) neither
Borrower nor ACE Funding shall allow ACE Funding Lender to have or obtain a Lien
on any assets or properties of the Borrower or any of its other Subsidiaries,
(v) except as provided in this Section 6.21, neither Borrower nor any of its
other Subsidiaries will engage in any transaction (excluding transactions
73
contemplated by the Loan and Servicing Agreement) merger or consolidation with
ACE Funding or provide any credit support for any Unrestricted Indebtedness
which ACE Funding is permitted to incur hereunder, (vi) ACE Funding shall not
own any Equity Interest in, or Indebtedness of, the Borrower or any of its other
Subsidiaries, (vii) neither Borrower nor any of its other Subsidiaries will
sell, lease, transfer or otherwise assign any of its assets or properties to, or
acquire, for any amount of consideration, any assets or properties of, or enter
into any contract or agreement with ACE Funding (provided, however, that the
Borrower shall be permitted to lease its SSMs to ACE Funding) and (viii) except
as specifically permitted under clause (ii) above, neither Borrower nor any of
its other Subsidiaries will make any loans or advances to, or make any equity
investments in, ACE Funding (other than the minimum equity investment, if any,
required to form ACE Funding under its jurisdiction of organization); provided,
however, that at any time ACE Funding or Borrower fails to comply with this
Section 6.21, ACE Funding shall be immediately required to execute and deliver
Credit Documents of the type required of newly created Subsidiaries of Borrower
under Section 5.11.
SECTION 6.22. Restrictive Agreements. Except as provided in the American
Capital Agreement or in the Loan and Servicing Agreement, create any restriction
of any kind on the ability of any Subsidiary (including but not limited to ACE
Funding) to: (i) pay dividends or make any other distributions to the Borrower
or any Subsidiary of the Borrower, (ii) pay any Indebtedness owed to the
Borrower or any Subsidiary of the Borrower, (iii) make loans or advances to the
Borrower or any Subsidiary of the Borrower, (iv) transfer any of its properties
or assets to the Borrower or any Subsidiary of the Borrower, or (v) xxxxx x Xxxx
on any of its properties or assets.
SECTION. 6.23. Miscellaneous.
(a) Neither the Borrower nor any of its Subsidiaries shall change its
Fiscal Year from ending on June 30 or method of accounting (other than
immaterial changes in methods), except as required by GAAP.
(b) Neither the Borrower nor any of its Subsidiaries shall relocate its
principal executive offices or other facilities or its jurisdiction of
incorporation, organization or formation, or establish new business locations or
store any inventory or other assets at a location not identified to Agent on or
before the date hereof, without providing not less than thirty (30) days advance
written notice to Agent.
(c) Neither the Borrower nor any of its Subsidiaries shall change its
corporate name or establish new or additional trade names without providing less
than 30 days advance written notice to Agent.
(d) Without the consent of Agent, neither the Borrower nor any Subsidiary
shall amend, terminate or modify the change of control agreements with the Key
Management in existence as of the Closing Date.
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(e) Neither the Borrower nor any of its Subsidiaries will request any
extension of credit hereunder which causes (after giving effect to such credit
extension) the aggregate principal amount of all Loans outstanding, plus the
amount of the LC Exposure, to exceed the amount of the Borrowing Base on the
date of such request.
ARTICLE VII. EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for a
period of two (2) Business Days after notice thereof from Agent;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with this
Agreement or any other Credit Document or any amendment or modification
hereof or thereof or waiver hereunder or thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to
or in connection with this Agreement or any other Credit Document or any
amendment or modification hereof or thereof or waiver hereunder or
thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) (i) default shall be made in the due observance or performance
of any covenant, condition or agreement to be observed or performed on the
part of the Borrower or any of its Subsidiaries pursuant to Sections 5.06,
5.08, 5.11 or 5.13 or Articles II, VI or IX of this Agreement, or (ii)
default shall be made in the due observance or performance of any
covenant, condition or agreement to be observed or performed on the part
of Borrower or any of its Subsidiaries pursuant to Sections 5.01, 5.02,
5.03 or 5.05 of this Agreement and such default shall continue unremedied
for five (5) or more consecutive Business Days after the earlier of (x)
the date notice thereof shall have been given to the Borrower by any
Lender, or (y) the date on which such failure becomes known to any
Responsible Officer of the Borrower; or (iii) default shall be made in the
due observance or performance of any other covenant, condition or
agreement to be observed or performed on the part of the Borrower or any
of its Subsidiaries pursuant to this Agreement or any other Credit
Document and not otherwise covered by this Article VII and such default
shall continue unremedied for thirty (30) or more consecutive Business
Days after the earlier of (x) the date notice thereof shall have been
given to the Borrower or such Subsidiary by any Lender, or (y) the date
75
on which such failure becomes known to any Responsible Officer of the
Borrower or such Subsidiary; provided, however, the grace periods provided
for in this paragraph (d) shall be void and of no effect unless the
Borrower shall, to the extent the Borrower has actual knowledge thereof,
provide prompt notice to the Agent (in writing) of (A) the occurrence or
expected occurrence of such Default, with a certification to the Agent of
the Borrower's good faith expectation that such Default shall be cured by
the Borrower before the end of the grace period; and (B) the occurrence of
the Borrower's cure of the Default before the end of the grace period.
During the grace period, a Default shall be deemed to have occurred and be
continuing until actually cured by the Borrower. If any such Default is
not cured before the end of the grace period, the Agent shall have all of
the rights described in this Article VII and each of the other Credit
Documents without any restriction imposed by this paragraph (d)
whatsoever;
(e) the Borrower or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to
the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (f) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) take any action for the purpose of effecting any of the
foregoing, or (vii) shall become unable, admit in writing its inability or
fail generally to pay its debts as they become due;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 45 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(g) the aggregate principal amount of all Loans outstanding, plus
the amount of the LC Exposure exceeds the Borrowing Base more than three
(3) times during any consecutive twelve (12) month period;
(h) default shall be made with respect to any Indebtedness or under
any Capitalized Lease Obligation of the Borrower or any Subsidiary of the
Borrower in an amount exceeding one million dollars ($1,000,000) (other
than with respect to the ACAS Notes) if the effect of any such default
shall be to accelerate, or to permit the holder or obligee of any such
Indebtedness or under such Capitalized
76
Lease Obligations (or any trustee on behalf of such holder or obligee) at
its option to accelerate the maturity of such Indebtedness or such
Capitalized Lease Obligation; provided, however, an Event of Default for
purposes of this clause (h) shall not be deemed to exist due to the
acceleration of the maturity of any obligation to a Lender or an affiliate
(within the meaning of Regulation U) of a Lender solely by reason of a
default in the performance of a term or condition in any agreement or
instrument under or by which such obligation is created, evidenced or
secured, which term or condition restricts the right of the Borrower or
any other Person to sell, pledge or otherwise dispose of any margin stock
(within the meaning of Regulation U) held by the Borrower or any such
other Person;
(i) a Reportable Event (other than a Reportable Event with respect
to which the thirty (30) day notice requirement under Section 4043 of
ERISA has been waived) shall have occurred with respect to a Pension Plan,
(ii) the Borrower, any ERISA Affiliate, or an administrator of any Plan
files a notice of intent to terminate such a Plan in a "distress
termination" under the provisions of Section 4041 of ERISA, (iii) the
receipt of notice by the Borrower, any ERISA Affiliate, or an
administrator of a Pension Plan that the PBGC has instituted proceedings
to terminate (or appoint a trustee to administer) such a Pension Plan or
Multiemployer Plan, (iv) any other event or condition exists which might,
in the reasonable opinion of the Agent, constitutes grounds under the
provisions of Section 4042 of ERISA for the termination of (or the
appointment of a trustee to administer) any Pension Plan or Multiemployer
Plan by the PBGC, (v) a Pension Plan fails to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or a waiver
of such standard is sought or granted under the provisions of Section
412(d) of the Code, (vi) the Borrower or any ERISA Affiliate has incurred,
or is likely to incur, a liability under the provisions of Section 4062,
4063, 4064 or 4201 of ERISA, (vii) the Borrower or any ERISA Affiliate
fails to pay the full amount of an installment required under Section
412(m) of the Code, and in each case in clauses (i) through (vii) of this
paragraph (i), such event or condition, together with all other such
events or conditions, if any, could subject the Borrower or any ERISA
Affiliate to any taxes, penalties or other liabilities which could have a
material adverse effect on the financial condition of the Borrower and any
ERISA Affiliate taken as a whole;
(j) the Borrower or any ERISA Affiliate (i) shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred any material
withdrawal liability to such Multiemployer Plan, and (ii) does not have
reasonable grounds for contesting such withdrawal liability and is not in
fact contesting such withdrawal liability in a timely and appropriate
manner;
(k) any final judgment or judgments for the payment of money shall
be rendered by a court or other tribunal against the Borrower or any
Subsidiary of the Borrower (but only to the extent that the same (i) is
not fully covered by insurance or (ii) if fully covered by insurance, the
carrier of such insurance has denied
77
liability under such insurance) which when taken together with all other
such judgments which remain outstanding and unpaid exceed(s) one million
dollars ($1,000,000) (excluding the amount of commercially reasonable
deductibles under insurance) and (x) any such judgment or judgments shall
remain undischarged or unstayed for more than thirty (30) days, whether
consecutive or not, or (y) any judgment creditor shall legally commence
actions to collect on or enforce such judgment; or after the Closing Date,
the Borrower and/or its Subsidiaries (other than ACE Funding) shall settle
any lawsuit or cause of action filed against it or them requiring the
Borrower and/or its Subsidiaries (other than ACE Funding) to pay an amount
(net of insurance proceeds) (i) equal to or greater than $5,000,000 with
respect to any single lawsuit or cause of action or (ii) equal to or
greater than $10,000,000 with respect to all lawsuits or causes of action
in the aggregate;
(l) this Agreement or any other Credit Document shall for any reason
cease to be, or shall be asserted by the Borrower or any Guarantor not to
be, a legal, valid and binding obligation of such Person, enforceable in
accordance with its terms;
(m) any Guarantor revokes, terminates or fails to perform any of the
terms, conditions, covenants or provisions of any Guaranty Agreement,
Security Document, endorsement or other agreement of such Person to the
Lenders;
(n) any Change in Control;
(o) any event or change in circumstances occurs which could
reasonably be expected to result in a Material Adverse Effect;
(p) a Travelers Event of Default; or
(q) a "Default" occurs under the American Capital Agreement and
either (i) such Default has not been cured or waived in writing within
thirty (30) days after the occurrence thereof or (ii) the ACAS Notes have
been accelerated as a result thereof;
then, and in every such event (other than an event with respect to the Borrower
described in clause (e) or (f) of this Article), and at any time thereafter
during the continuance of such event, the Agent may, and at the request of the
Required Lenders shall, by notice to the Borrower, take either or all of the
following actions, at the same or different times: (i) terminate the Total
Revolving Credit Commitments and/or the Total Seasonal Revolving Credit
Commitments, and thereupon the Total Revolving Credit Commitments and/or the
Total Seasonal Revolving Credit Commitments, as applicable, shall terminate
immediately, and terminate the obligations of Issuing Lender to issue or cause
to be issued Letters of Credit, (ii) demand that the Borrower provide to Issuing
Lender, and the Borrower upon such demand agrees to provide, cash collateral in
an amount equal to the LC Exposure of the Borrower then existing, such cash
collateral to be deposited in a cash
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collateral account to be held by Agent for the benefit of Issuing Lender, and
(iii) declare the Loans then outstanding, and all reimbursement obligations in
respect of drawings under Letters of Credit then outstanding, to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans and reimbursement obligations in respect of drawings
under Letters of Credit then outstanding so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (e) or (f) of this Article, the Total Revolving
Credit Commitments and the Total Seasonal Revolving Credit Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII. AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Agent as its agent and authorizes the Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Agent by the terms hereof
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Agent hereunder.
The Agent shall not have any duties or obligations except those expressly
set forth herein. Without limiting the generality of the foregoing, (a) the
Agent shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing, (b) the Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby
that the Agent is required to exercise in writing as directed by the Required
Lenders (or such other number or percentage of the Lenders and/or other Persons
as shall be necessary hereunder), and (c) except as expressly set forth herein,
the Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its Affiliates in any capacity. The Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders and/or other
Persons as shall be necessary hereunder) or in the absence of its own gross
negligence or willful misconduct. The Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Agent by
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the Borrower or a Lender, and the Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, (v) the satisfaction of any condition set
forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Agent, or (vi) the existence,
genuineness, or value of any Collateral or the validity, effectiveness,
perfection, priority or enforceability of Liens in or on any of the Collateral.
The Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
The Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as provided
in this paragraph, the Agent may resign at any time by notifying the
Administrative Agent, the Lenders, the Issuing Bank and the Borrower. Upon any
such resignation, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Administrative Agent, the Lenders, and
the Issuing Bank, appoint a successor Agent. Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Agent's resignation
hereunder, the provisions of this Article and Section 9.03(b) shall continue in
effect for the benefit of such retiring Agent, its sub-agents and their
respective
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Related Parties in respect of any actions taken or omitted to be taken by any of
them while it was acting as Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.
EACH LENDER SEVERALLY AGREES TO INDEMNIFY (TO THE EXTENT NOT REIMBURSED BY
THE BORROWER UNDER SECTION 9.03(B)) EACH OF THE AGENT AND THE ISSUING BANK AND
EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING
CALLED IN THIS PARAGRAPH AN "INDEMNITEE") AGAINST, AND HOLD EACH INDEMNITEE
HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED
EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY
INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (COLLECTIVELY BEING CALLED IN THIS PARAGRAPH,
THE "COSTS"): (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT, OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM
(INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A
LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO
NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) THE
COLLATERAL OR THE EXERCISE OF REMEDIES IN RESPECT OF THE COLLATERAL, (IV) ANY
ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY
ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES, OR (V) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION
OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO,
IN EACH CASE IN ACCORDANCE WITH SUCH LENDER'S APPLICABLE PERCENTAGE (DETERMINED
AS OF THE TIME THAT THE APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY PAYMENT IS
SOUGHT) OF SUCH COSTS. THE FOREGOING IS INTENDED TO INDEMNIFY AND HOLD HARMLESS
EACH INDEMNITEE TO THE EXTENT THAT SUCH COSTS RESULTED FROM THE NEGLIGENCE OR
ALLEGED NEGLIGENCE OF SUCH INDEMNITEE (WHETHER SOLE, COMPARATIVE, CONTRIBUTORY,
OR OTHERWISE); PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE
AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
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DAMAGES, LIABILITIES OR RELATED EXPENSES RESULTED FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH INDEMNITEE.
A person may serve as both Agent and Administrative Agent hereunder
concurrently.
ARTICLE VIIIA. ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, the Security Documents, and the
other Credit Documents together with such actions and powers as are reasonably
incidental thereto. Each Lender hereby authorizes Administrative Agent to
execute and deliver each of the Intercreditor Agreement and the Collateral
Agency Agreement on behalf of such Lender.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Credit Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Credit Documents that the Administrative Agent is required to
exercise in writing as directed by the Required Lenders (or such other number or
percentage of the Lenders and/or other Persons as shall be necessary hereunder),
and (c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders and/or
other Persons as shall be necessary hereunder) or in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the
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covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent, or (vi)
the existence, genuineness, or value of any Collateral or the validity,
effectiveness, perfection, priority or enforceability of Liens in or on any of
the Collateral.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Agent, the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.03(b) shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
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Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
EACH LENDER SEVERALLY AGREES TO INDEMNIFY (TO THE EXTENT NOT REIMBURSED BY
THE BORROWER UNDER SECTION 9.03(B)) EACH OF THE ADMINISTRATIVE AGENT AND EACH
RELATED PARTY OF THE ADMINISTRATIVE AGENT (EACH SUCH PERSON BEING CALLED IN THIS
PARAGRAPH AN "INDEMNITEE") AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY
AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE
FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY
OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF (COLLECTIVELY BEING CALLED IN THIS PARAGRAPH, THE "COSTS"): (I) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (II) ANY LOAN
OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL
BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF
THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY
WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) THE COLLATERAL OR THE EXERCISE
OF REMEDIES IN RESPECT OF THE COLLATERAL, (IV) ANY ACTUAL OR ALLEGED PRESENCE OR
RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN
ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (V) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN EACH CASE IN
ACCORDANCE WITH SUCH LENDER'S APPLICABLE PERCENTAGE (DETERMINED AS OF THE TIME
THAT THE APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY PAYMENT IS SOUGHT) OF SUCH
COSTS. THE FOREGOING IS INTENDED TO INDEMNIFY AND HOLD HARMLESS EACH INDEMNITEE
TO THE EXTENT THAT SUCH COSTS RESULTED FROM THE NEGLIGENCE OR ALLEGED NEGLIGENCE
OF SUCH INDEMNITEE (WHETHER SOLE, COMPARATIVE, CONTRIBUTORY, OR OTHERWISE);
PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO
THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE
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ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices Except as otherwise expressly provided, notices,
consents and other communications provided for herein shall be in writing and
shall be delivered or mailed (or in the case of facsimile communication,
delivered by graphic scanning, telecopier or other telecommunications equipment,
with receipt confirmed) addressed to (or such other address as shall be
designated by such party in a written notice to the other parties):
if to the Borrower: ACE Cash Express, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn.: Xxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Gardere Xxxxx Xxxxxx L.L.P.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Administrative
Agent: Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Agent: JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn.: D. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to: Xxxxx Xxxxx L.L.P.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to any Lender: At the address set forth below its name in
Schedule 2.02(a) hereto.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Agent,
the Issuing Bank or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Agent, the
Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower, the
Administrative Agent, and the Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Revolving Credit
Commitment or Seasonal Revolving Credit Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of the Revolving Credit Commitment or Seasonal
Revolving Credit Commitment, without the written consent of each Lender affected
thereby, (iv) change Section 2.13 in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, (v) change the definition of "Seasonal Revolving Credit Availability
Period", (vi) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, (vii) waive any of the
conditions specified in Article IV, (viii) release Borrower from its obligations
to pay
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any Lender's Loan or any Guarantor from its guaranty of such payment, or (ix)
release any Collateral (other than releases of Collateral that are expressly
permitted under any Credit Document) without the written consent of each Lender;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Agent or the Issuing Bank
hereunder without the prior written consent of the Administrative Agent, the
Agent or the Issuing Bank, as the case may be. Notwithstanding anything to the
contrary contained herein, a waiver or modification in respect of Section 6.20
hereof shall not be deemed to be a release of Collateral under this Section
9.02(b).
SECTION 9.03. Expenses; Indemnity, Damage Waiver (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by each of the
Administrative Agent and the Agent and each of its respective Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, the Agent, the Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Agent, the Issuing Bank or any Lender, in connection
with the enforcement or protection of its rights in connection with this
Agreement, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) THE BORROWER SHALL INDEMNIFY EACH OF THE ADMINISTRATIVE AGENT, AGENT,
THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING
PERSONS (EACH SUCH PERSON BEING CALLED IN THIS SECTION 9.03(B) AN "INDEMNITEE")
AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND
DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF EACH OF:
(I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR
ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY
THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (II) ANY
LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY
REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF
CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY
COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) THE COLLATERAL OR THE
EXERCISE OF REMEDIES IN RESPECT OF
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THE COLLATERAL, (IV) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF
ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR (V) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER
ANY INDEMNITEE IS A PARTY THERETO. THE FOREGOING IS INTENDED TO INDEMNIFY AND
HOLD HARMLESS EACH INDEMNITEE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES, OR RELATED EXPENSES RESULTED FROM THE NEGLIGENCE OR ALLEGED
NEGLIGENCE OF SUCH INDEMNITEE (WHETHER SOLE, COMPARATIVE, CONTRIBUTORY, OR
OTHERWISE); PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE
AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
RELATED EXPENSES RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH INDEMNITEE.
(c) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, any Loan
or Letter of Credit or the use of the proceeds thereof.
(d) All amounts due under this Section shall be payable not later than 5
days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Total
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
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(A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default under clause (a), (b), (e) or (f)
of Article VII has occurred and is continuing, any other assignee; and
(B) the Agent, provided that no consent of the Agent shall be
required for an assignment of (x) any Revolving Credit Commitment to an
assignee that is a Lender with a Revolving Credit Commitment immediately
prior to giving effect to such assignment or (y) any Seasonal Revolving
Credit Commitment to an assignee that is a Lender with a Seasonal
Revolving Credit Commitment immediately prior to giving effect to such
assignment
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Revolving Credit Commitment, Seasonal Revolving Credit
Commitment, or Loans the amount of the Revolving Credit Commitment,
Seasonal Revolving Credit Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the Agent)
shall not be less than $5,000,000 unless each of the Borrower and the
Agent otherwise consent, provided that no such consent of the Borrower
shall be required if an Event of Default under clause (a), (b), (e) or (f)
of Article VII has occurred and is continuing;
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement, provided that this clause shall not be construed to
prohibit the assignment of a proportionate part of all the assigning
Lender's rights and obligations in respect of either the Revolving Credit
Commitments and Revolving Credit Loans or the Seasonal Revolving Credit
Commitment and Seasonal Revolving Credit Loans;
(C) the parties to each assignment shall execute and deliver to the
Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver to the
Agent means an Administrative Questionnaire in a form supplied by the
Agent.
For the purposes of this Section 9.04(b), the term "Approved Fund"
has the following meaning:
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit
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in the ordinary course of its business and that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.10, 2.11, 2.12, and 9.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(iv) The Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Total Commitment of, and principal amount of the Loans and
LC Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
administrative questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Agent shall accept such Assignment and Assumption and
record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower, the Agent or
the Issuing Bank, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Total Commitment and the Loans
owing to it); provided that (A) such Lender's obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for
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the performance of such obligations and (C) the Borrower, the Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.10, 2.11, 2.12, to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.10 or 2.12 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.12 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.12(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Total Commitments have not expired or terminated.
The provisions of Sections 2.10,
91
2.11, 2.12, and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Letters of
Credit and the Total Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Sections 4.01 and
4.02, this Agreement shall become effective when it shall have been executed by
the Agent and when the Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law
(except as provided in any Lender Control Agreement), to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of the Borrower against any of and
all the Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
Obligations may be unmatured; provided, however, that each Lender agrees that
all proceeds of each such set off or application shall be promptly remitted to
the Agent and applied to the payment of the Obligations as set forth in the
Intercreditor Agreement. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by
the law of the State of Texas; provided, that the Administrative Agent, the
Agent, and each Lender shall retain all rights arising under federal law.
92
(b) Subject to the requirement for arbitration pursuant to Section 9.14
hereof, the Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the courts of the State of
Texas situated in Dallas County or of the United States District Court for the
Northern District of Texas, Dallas Division, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Texas State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Agent, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
93
SECTION 9.12. Confidentiality. Each of the Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the Agent, the
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower; provided, however, that with respect to disclosures of Information
pursuant to clauses (b) and (c) above, unless prohibited by law or applicable
court order, each Lender, Issuing Bank, and the Agent shall make a reasonable
attempt to notify the Borrower of any request by any governmental agency or
representative thereof for disclosure of such Information after receipt of such
request, and, if reasonable, practicable, and permissible, before such
disclosure (it being understood that Borrower and its Subsidiaries may rely upon
this Section 9.12 in order to comply with Regulation FD promulgated by the
Securities Exchange Commission as of the date hereof ("Regulation FD")). For the
purposes of this Section, "Information" means all information (including
material non-public information within the meaning of Regulation FD) received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest. (a) It is the intention of the parties hereto that
the Agent and each Lender shall conform strictly to usury laws applicable to it,
if any. Accordingly, if the transactions with the Agent or any Lender
contemplated hereby would be usurious under applicable law, then, in that event,
notwithstanding anything to the contrary in this Agreement, the Notes, or any
other Credit Document, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under applicable law that is contracted
for, taken, reserved, charged or received by the Agent or such
94
Lender, as the case may be, under this Agreement, the Notes, or under any other
Credit Document shall under no circumstances exceed the maximum amount allowed
by such applicable law and any excess shall be canceled automatically and, if
theretofore paid, shall at the option of the Agent or such Lender be credited by
the Agent or such Lender on the principal amount of the obligations owed to the
Agent or such Lender by the Borrower or refunded by the Agent or such Lender to
the Borrower, and (ii) in the event that the maturity of any Loan or any Note or
other Obligation payable to the Agent or such Lender is accelerated or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to the Agent or such Lender may never
include more than the maximum amount allowed by such applicable law and excess
interest, if any, to the Agent or such Lender provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall, at the option of the Agent or such
Lender be credited by the Agent or such Lender on the principal amount of the
obligations owed to the Agent or such Lender by the Borrower or refunded by the
Agent or such Lender to the Borrower. It is further agreed that without
limitation of the foregoing, that all calculations of the rate of interest
contracted for, charged or received by any Lender in respect of the Loans made
by it or under the Notes held by it, or under this Agreement, shall be made, to
the extent permitted by usury laws applicable to such Lender (now or hereafter
enacted) by amortizing, prorating and spreading in equal parts during the period
of the full stated term of said Loans or Notes all interest at any time
contracted for, taken, charged, reserved or received by such Lender in
connection therewith.
(b) In the event that at any time the interest rate applicable to any Loan
made by any Lender would exceed the maximum non-usurious rate allowed by
applicable law, the rate of interest to accrue on the Loans by such Lender shall
be limited to the maximum non-usurious rate allowed by applicable law, but shall
accrue, to the extent permitted by law, on the principal amount of the Loans
made by such Lender from time to time outstanding, if any, at the maximum
nonusurious rate allowed by applicable law until the total amount of interest
accrued on the Loans made by such Lender equals the amount of interest which
would have accrued if the interest rates applicable to the Loans pursuant to
Article II had at all times been in effect. In the event that upon the final
payment of the Loans made by any Lender and termination of the Total Commitment
of such Lender, the total amount of interest paid to such Lender hereunder and
under the Notes is less than the total amount of interest which would have
accrued if the interest rates applicable to such Loans pursuant to Article II
had at all times been in effect, then the Borrower agrees to pay to such Lender,
to the extent permitted by law, an amount equal to the excess of (i) the lesser
of (x) the amount of interest which would have accrued on such Loans if the
maximum nonusurious rate allowed by applicable law had at all times been in
effect or (y) the amount of interest rates applicable to such Loans pursuant to
Article II had at all times been in effect over (ii) the amount of interest
otherwise accrued on such Loans in accordance with this Agreement.
SECTION 9.14. [RESERVED].
95
SECTION 9.15. Nonapplicability of Chapter 346 et seq. The Borrower, the
Agent and the Lenders hereby agree that the provisions of Chapter 346 of the
Texas Finance Code, which replaced Tex. Rev. Civ. Stat. Xxx. art. 5069-15.01 et
seq. (Xxxxxx 1987) (regulating certain revolving credit loans and revolving
tri-party accounts), shall not apply to this Agreement or any of the other
Credit Documents.
SECTION 9.16. Waiver of Consumer Rights. THE BORROWER HEREBY WAIVES ITS
RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION
17.41 ET. SEQ. BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL
RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN
SELECTION, THE BORROWER VOLUNTARILY CONSENTS TO THIS WAIVER. THE BORROWER
EXPRESSLY WARRANTS AND REPRESENTS THAT IT (a) IS NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION RELATIVE TO THE AGENT AND THE LENDERS, AND (b) HAS
BEEN REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
SECTION 9.17. Entire Agreement. PURSUANT TO SECTION 26.02 OF THE TEXAS
BUSINESS AND COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE
LOAN AGREEMENT EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN
AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S
AUTHORIZED REPRESENTATIVE. THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN
AGREEMENT SUBJECT TO THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE
WRITTEN LOAN AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES
RELATED TO SUCH LOAN AGREEMENT ARE SUPERSEDED BY AND MERGED INTO THE LOAN
AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THIS
AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
SECTION 9.18. Amendment and Restatement of Existing Credit Agreement. Upon
satisfaction with each of the conditions set forth in Sections 4.01 and 4.02
(except any condition the performance of which has been waived as a condition to
the making of the initial Loans or initial issuance of Letters of Credit
pursuant to this Agreement), this Agreement shall be deemed to amend and restate
in its entirety the Existing Credit Agreement, at which time each Lender and
Borrower hereby agrees that (i) the Total Commitment of each Lender shall be as
set forth in the definition of such term in this Agreement, and (ii) the
Revolving Credit Loans and Seasonal Revolving Credit Loans outstanding under the
Existing Credit Agreement and all accrued and unpaid interest thereon, and all
accrued and unpaid fees and expenses under the Existing Credit Agreement, shall
be extended, renewed, and deemed to be outstanding under
96
and governed by this Agreement; provided, however, that in no event shall the
Liens or Guaranty Agreements securing the Existing Credit Agreement or the
obligations thereunder be deemed affected hereby, it being the intent and
agreement of the Borrower that the Guaranty Agreements and the Liens on the
Collateral granted to secure the obligations of the Borrower and its
Subsidiaries in connection with the Existing Credit Agreement and/or the
Guaranty Agreements, shall not be extinguished and shall remain valid, binding
and enforceable securing the obligations under the Existing Credit Agreement as
amended and restated hereby.
Section 9.19. Documentation Agent and Syndication Agent. The Lenders
identified on the facing page of this Agreement as "Syndication Agent" and
"Documentation Agent", respectively, have no right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limitation of the foregoing, the
Lenders so identified as "Syndication Agent" and "Documentation Agent",
respectively, shall not have and shall not be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on the Lenders so identified as "Syndication Agent" and
"Documentation Agent", respectively, in taking or not taking action hereunder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
97
IN WITNESS WHEREOF, the Borrower and the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
ACE CASH EXPRESS, INC., as Borrower
By: /s/ XXX X. XXXXXX
Name: Xxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial Officer
ACE CASH EXPRESS, INC., as Borrower
By: /s/ XXX X. XXXXXX
------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial Officer
XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent,
Issuing Bank, and as a Lender
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
JPMORGAN CHASE BANK, as Agent and
as a Lender
By: /s/ D. XXXXX XXXXXX
------------------------
Name: D. Xxxxx Xxxxxx
Title: Senior Vice President
BANK OF AMERICA, N.A., as a Lender
By: /s/ XXXXXXX HONEY
-----------------
Name: Xxxxxxx Honey
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ XXXX XXXXXX
------------------
Name: Xxxx Xxxxxx
Title: Director
NATIONAL CITY BANK, as a Lender
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
FIRST AMERICAN BANK, SSB, as a Lender
By: /s/ XXXX XXXXXXXX
----------------
Name: Xxxx Xxxxxxxx
Title: Vice President
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ XXXXXX X. XXXXX
---------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
SOUTHWEST BANK OF TEXAS, N.A., as a
Lender
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
US BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ XXXXXX X XXXXXX, XX.
--------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
EXHIBIT A
[FORM OF REVOLVING CREDIT NOTE]
U.S. $____________ Dallas, Texas March 31, 2003
FOR VALUE RECEIVED, the undersigned, ACE CASH EXPRESS, INC., a Texas
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
__________________ (the "Lender"), for the account of its Applicable Lending
Office, as defined in that certain Credit Agreement, dated as of the date
hereof, by and among the Borrower, the Lender, certain other lenders from time
to time parties thereto (collectively, the "Lenders"), and Xxxxx Fargo Bank
Texas, National Association, as Administrative Agent for the Lenders, (as
amended, modified or supplemented from time to time, the "Credit Agreement")
(capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement) or any other office designated by the Lender,
the lesser of (i) the principal sum of __________________ DOLLARS
($________________), or (ii) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Lender to the Borrower pursuant to the Credit
Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Loan from the date of such Revolving Credit Loan until
such principal amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Lender at Agent's principal place of business in New York,
New York, in same day funds. Each Revolving Credit Loan made by the Lender to
the Borrower and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Revolving Credit Note (this "Note"),
provided, however, that failure of the Lender to make such notation or any error
therein shall not in any manner affect the obligation of the Borrower to repay
such Revolving Credit Loans in accordance with the terms of this Note.
This Note is one of the Revolving Credit Notes referred to in, and is
subject to and entitled to the benefits of, the Credit Agreement. This Note is
secured by the Collateral described in the Credit Documents. The Credit
Agreement, among other things, (i) provides for the making of Revolving Credit
Loans by the Lender to the Borrower from time to time pursuant to Section 2.01
of the Credit Agreement in an aggregate outstanding amount not to exceed at any
time the U.S. dollar amount first above mentioned, the indebtedness of the
Borrower resulting from each such Revolving Credit Loan being evidenced by this
Note, and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
1
The Borrower hereby waives presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and any other notice of any kind,
except as provided in the Credit Agreement. No failure to exercise, and no delay
in exercising, any rights hereunder on the part of the holder hereof shall
operate as a waiver of such rights.
This Note amends, modifies and restates, but does not extinguish or
constitute a novation of, the indebtedness evidenced by that certain Amended and
Restated Revolving Credit Note dated November ___, 2002 in the principal amount
of $____________ executed by the Borrower and payable to the order of the
Lender. All rights, titles, liens and security interests securing the prior note
are preserved, maintained and carried forward to secure this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS (EXCEPT THAT THE PROVISIONS OF CHAPTER 346 OF THE
TEXAS FINANCE CODE, WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS,
SHALL NOT APPLY TO THIS NOTE).
ACE CASH EXPRESS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
2
LOANS, MATURITIES
AND PAYMENTS OF PRINCIPAL AND INTEREST
Rate of Amount of Amount of
Amount Interest Principal Interest Unpaid
Borrowing and Type Applicable Paid or Paid or Principal Notation
Date of Loan to Loan Prepaid Prepaid Balance Made By
--------- -------- ---------- --------- --------- --------- --------
3
EXHIBIT B
[FORM OF SEASONAL REVOLVING CREDIT NOTE]
U.S. $______________ Dallas, Texas March 31, 2003
FOR VALUE RECEIVED, the undersigned, ACE CASH EXPRESS, INC., a Texas
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender"), for the account of its Applicable
Lending Office (as defined in that certain Credit Agreement, dated as of March
31, 2003, by and among the Borrower, the Lender, certain other lenders from time
to time parties thereto (collectively, the "Lenders"), Xxxxx Fargo Bank Texas,
National Association, as Administrative Agent for the Lenders, (as amended,
modified or supplemented from time to time, the "Credit Agreement") (capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Credit Agreement) or any other office designated by the Lender, the lesser
of (i) the principal sum of ______________________________ DOLLARS
($______________), or (ii) the aggregate unpaid principal amount of all Seasonal
Revolving Credit Loans made by the Lender to the Borrower pursuant to the Credit
Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
each Seasonal Revolving Credit Loan from the date of such Seasonal Revolving
Credit Loan until such principal amount is paid in full, at such interest rates,
and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Lender at Agent's principal place of business in New York,
New York, in same day funds. Each Seasonal Revolving Credit Loan made by the
Lender to the Borrower and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed on
the grid attached hereto which is part of this Seasonal Revolving Credit Note
(this "Note"), provided, however, that failure of the Lender to make such
notation or any error therein shall not in any manner affect the obligation of
the Borrower to repay such Seasonal Revolving Credit Loans in accordance with
the terms of this Note.
This Note is one of the Seasonal Revolving Credit Notes referred to in,
and is subject to and entitled to the benefits of, the Credit Agreement. This
Note is secured by the Collateral described in the Credit Documents. The Credit
Agreement, among other things, (i) provides for the making of Seasonal Revolving
Credit Loans by the Lender to the Borrower from time to time pursuant to Section
2.01 of the Credit Agreement in an aggregate outstanding amount not to exceed at
any time the U.S. dollar amount first above mentioned, the indebtedness of the
Borrower resulting from each such Seasonal Revolving Credit Loan being evidenced
by this Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
The Borrower hereby waives presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and any other notice of any kind,
except as provided in the Credit Agreement. No failure to exercise, and no delay
in exercising, any rights hereunder on the part of the holder hereof shall
operate as a waiver of such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS (EXCEPT THAT THE PROVISIONS OF CHAPTER 346 OF THE
TEXAS FINANCE CODE, WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS,
SHALL NOT APPLY TO THIS NOTE).
ACE CASH EXPRESS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
2
LOANS, MATURITIES
AND PAYMENTS OF PRINCIPAL AND INTEREST
Rate of Amount of
Interest Principal Amount of Unpaid
Amount and Applicable Paid or Interest Paid Principal Notation
Borrowing Date Type of Loan to Loan Prepaid or Prepaid Balance Made By
-------------- ------------ ---------- --------- ------------- --------- --------
3
EXHIBIT C
[FORM OF BORROWING BASE REPORT]
Borrowing Base Report for Week Beginning Sunday ___, 200__ and Ending Saturday
___, 200__ (the "Prior Week"):
All capitalized terms used herein, unless otherwise defined herein, shall have
the meanings set forth in that certain Credit Agreement, dated as
[_________________], 2003, by and among ACE Cash Express, Inc. (the "Borrower"),
Xxxxx Fargo Bank Texas, National Association, as Administrative Agent, and the
other Lenders party thereto (as amended, supplemented or extended from time to
time, the "Agreement").
1. Calculation of the Borrower's Cash Holdings and
the Guarantors' Cash Holdings as of the end of the
Prior Week: Sunday Monday Tuesday Wednesday Thursday Friday Saturday
-------- ------- ------- --------- -------- ------- --------
a. Aggregate amount of cash of the Borrower
and each of its Subsidiaries that is a Guarantor
(the "Guarantors") in their respective stores as
of the end of the Prior Week. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
b. Aggregate amounts of deposits of the
Borrower and the Guarantors held in depository
accounts with financial institutions. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
c. Aggregate dollar amount of checks which are
payable to the order of, or endorseable to the
order of, the Borrower and/or the Guarantors,
other than checks which have been deposited into
any deposit or other account (i.e., the aggregate
dollar amount of all checks in the Borrower's
and/or the Guarantor's stores or in transit with
any armored couriers). $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
d. Aggregate amount of cash of the Borrower
and the Guarantors in transit with armored
couriers. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
e. Total Borrower's Cash Holdings and
Guarantors' Cash Holdings as of the end of the
Prior Week (sum of a through d above). $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
2. Less: Aggregate amount owed by the Borrower and
its Subsidiaries to Travelers Express Company,
Inc. under the Money Order Agreement dated April
16, 1998, as of the end of the Prior Week. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
3. Less: Aggregate amount of any cash and/or
checks received and/or held by the Borrower or the
Guarantors for payment to third parties,
including, but not limited to, cash and checks
received by the Borrower or a Subsidiary for the
purchase of lottery tickets or the payment of any
type of xxxx on behalf of a customer, in excess of
$12,500,000. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
4. Equals: Amount available for Borrowing, subject
to the terms of the Agreement, before taking into
account the outstanding principal amount of all
Revolving Credit Loans and Seasonal Revolving
Credit Loans. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
5. Less: Aggregate principal amount of a Revolving
Credit Loans and Seasonal Revolving Credit Loans
outstanding as of the end of the Prior Week. $ $ $ $ $ $ $
-------- ------- ------- -------- ------- ------- -------
6. Equals: Net Amount Available for Borrowing,
subject to the terms of the Agreement, if
positive, or amount due, if negative. $ $ $ $ $ $ $
======== ======= ======= ======== ======= ======= =======
The undersigned hereby certifies that the above information and computations are
true and correct and not misleading as of the date hereof.
ACE CASH EXPRESS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Date:
-------------------------------------
EXHIBIT D
[FORM OF BORROWING NOTICE]
_______, 200_
Xxxxx Fargo Bank Texas, National Association,
as Administrative Agent
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Loan Administration
Ladies and Gentlemen:
The undersigned, ACE Cash Express, Inc., a Texas corporation (the
"Borrower"), refers to the Credit Agreement, dated as of March 31, 2003 (as
amended, supplemented, restated, or otherwise modified, the "Credit Agreement";
capitalized terms defined therein and not defined herein being used herein as
therein defined), among the undersigned, certain Lenders parties thereto, and
Xxxxx Fargo Bank Texas, National Association, as Administrative Agent for such
Lenders, and hereby gives you notice, irrevocably pursuant to Section 2.03 of
the Credit Agreement, that the undersigned hereby requests a borrowing under, or
the issuance of a Letter of Credit under, the Credit Agreement, and in that
connection sets forth below the information relating to such a borrowing or such
issuance (the "Proposed Borrowing") as required by Section 2.03 of the Credit
Agreement:
(A) Borrowing Date of a Proposed Borrowing
(which is a Business Day)
------------------------
(B) Aggregate Principal Amount of Proposed
Borrowing
------------------------
(C) Revolving Credit Loan or Seasonal Revolving
Credit Loan
------------------------
(D) Eurodollar Loan, Reference Rate Loan, or
ABR Loan
------------------------
(E) Interest Period (if applicable)
------------------------
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
1
(a) the representations and warranties contained in Article III of the
Credit Agreement are true and correct in all material respects on and as of the
date of the Proposed Borrowing, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date;
(b) no event has occurred and is continuing, or would result from the
Proposed Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or a Default;
(c) after giving effect to the Proposed Borrowing, the aggregate
principal amount of all Loans outstanding plus the amount of the LC Exposure
does not exceed the lesser of (i) the Total Commitment then in effect or (ii)
the amount of the Borrowing Base on the date of the Proposed Borrowing.
(d) the proceeds of such Proposed Borrowing will be used only to fund
Borrower's working capital requirements in the ordinary course of its business.
Sincerely,
ACE CASH EXPRESS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
EXHIBIT E
FORM OF GLOBAL ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit
Agreement, dated as of November 9, 2000 (as amended through the date hereof and
amended and restated as described below, the "Credit Agreement"), among ACE Cash
Express, Inc. ("Borrower"), the several lenders parties thereto, and Xxxxx Fargo
Bank Texas, National Association, as Administrative Agent, which Credit
Agreement as in effect prior to the Transfer Effective Date (as defined below)
will be amended and restated concurrently with this Global Assignment becoming
effective on the Transfer Effective Date to, among other things, exchange
certain existing Revolving Credit Commitments, outstanding Revolving Credit
Loans, existing Seasonal Revolving Credit Commitments, and outstanding Seasonal
Revolving Credit Loans for new Revolving Credit Commitments, Revolving Credit
Loans, Seasonal Revolving Credit Commitments and Seasonal Revolving Credit
Loans. Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
The undersigned Lenders, in their respective capacities as
assignors of the percentage or dollar amount of Revolving Credit Commitments and
Seasonal Revolving Credit Commitments, together with the corresponding
percentage of outstanding Revolving Credit Loans and Seasonal Revolving Credit
Loans owned by such assignors (the "Assigned Interests"), reflected by the
reductions in such interests owned by such assignors prior to such assignments
in Schedule 1 (in such capacities, the "Assignors") and the undersigned Lenders
and other financial institutions, in their respective capacities as assignees of
such Assigned Interests as reflected by the increases in such interests owned by
such assignees in Schedule 1 (in such capacities, the "Assignees") agree as
follows:
1. In accordance with Section 9.04 of the Credit Agreement,
each Assignor hereby irrevocably sells and assigns to the Assignees, without
recourse to such Assignor, and each of the Assignees hereby irrevocably
purchases and assumes from the Assignors, without recourse to the Assignors, as
of March 31, 2003 (the "Transfer Effective Date"), the portion of the Assigned
Interests owned by such Assignor (and any and all liens and security interests
securing such portion) such that the interests owned by such Assignor and the
Assignees after such transfer and exchange of Revolving Credit Commitments and
Seasonal Revolving Credit Commitments and Revolving Credit Loans and Seasonal
Revolving Credit Loans referred to in the first paragraph hereof are as
reflected in Schedule 1.
2. No Assignor (a) makes any representation or warranty or
assumes any responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Credit Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Credit
Document or any other instrument or document furnished pursuant thereto, other
than that it has not created any adverse claim upon the interest being assigned
by it hereunder and that such interest is free and clear of any such adverse
claim; or (b) makes any representation or warranty or assumes any responsibility
with respect to the financial condition of the Borrower or any of its
Subsidiaries or the performance
or observance by the Borrower or any of its Subsidiaries of any of their
respective obligations under the Credit Agreement, any other Credit Document or
any other instrument or document furnished pursuant hereto or thereto.
3. Each Assignee (a) represents and warrants that it is
legally authorized to enter into this Global Assignment and Acceptance; (b)
confirms that, if it is not prior to the Transfer Effective Date a party to the
Credit Agreement, it has received a copy of the Credit Agreement, together with
copies of such financial statements of the Borrower and it Subsidiaries and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Global Assignment and Acceptance
and to become thereby a party to the Credit Agreement; (c) agrees that it will,
independently and without reliance upon any Assignor, the Agent or any other
Lender and based on such financial statements, documents and information as it
shall deem appropriate at the time, make and continue to make its own credit
decisions in taking or not taking action under the Credit Agreement, the other
Credit Documents or any other instrument or document furnished pursuant hereto
or thereto; (d) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.
4. Following the execution of this Global Assignment and
Acceptance, it will be accepted by the Agent pursuant to Section 9.04 of the
Credit Agreement, and it shall be effective as of the Transfer Effective Date.
5. From and after the Transfer Effective Date, the Agent shall
make all payments in respect of the Assigned Interests (including payments of
principal, interest, fees and other amounts) to the Assignees, whether such
amounts have accrued prior to the Transfer Effective Date or accrue subsequent
to the Transfer Effective Date. The Assignors and the Assignees shall make all
appropriate adjustments through the Agent for payments by the Agent for periods
prior to the Transfer Effective Date or with respect to the making of this
assignment.
6. From and after the Transfer Effective Date, (a) each of the
Assignees that is not prior to the Transfer Effective Date a party to the Credit
Agreement shall become a party thereto and, to the extent provided in this
Global Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Credit Documents and shall be bound by the
provisions thereof and (b) each of the Assignors shall, to the extent of its
assignment pursuant to this Global Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement, but
shall nevertheless continue to be entitled to the benefits of the indemnities
provided under the Credit Agreement.
7. THIS GLOBAL ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
2
8. This Global Assignment and Acceptance may be executed by
one or more of the parties to this Global Assignment and Acceptance on any
number of separate counterparts (including by facsimile transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
3
IN WITNESS WHEREOF, the parties hereto have caused this Global
Assignment and Acceptance to be executed as of the dates indicated below by the
signatures of their respective duly authorized officers.
ASSIGNORS:
XXXXX FARGO BANK TEXAS,
NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By:
--------------------------------
Name:
Title:
JPMORGAN CHASE BANK
By:
--------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
NATIONAL CITY BANK
By:
--------------------------------
Name:
Title:
ASSIGNORS:
FIRST AMERICAN BANK, SSB
By:
--------------------------------
Name:
Title:
HIBERNIA NATIONAL BANK
By:
--------------------------------
Name:
Title:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:
--------------------------------
Name:
Title:
ASSIGNEES:
XXXXX FARGO BANK TEXAS,
NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By:
--------------------------------
Name:
Title:
JPMORGAN CHASE BANK
By:
--------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
NATIONAL CITY BANK
By:
--------------------------------
Name:
Title:
ASSIGNEES:
FIRST AMERICAN BANK, SSB
By:
--------------------------------
Name:
Title:
HIBERNIA NATIONAL BANK
By:
--------------------------------
Name:
Title:
TEXAS CAPITAL BANK, NATIONAL
ASSOCIATION
By:
--------------------------------
Name:
Title:
SOUTHWEST BANK OF TEXAS, N.A.
By:
--------------------------------
Name:
Title:
US BANK NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
CONSENTED TO AND ACCEPTED:
X.X. XXXXXX XXXXX BANK
as Agent
By:
--------------------------------
Name:
Title:
XXXXX FARGO BANK TEXAS,
NATIONAL ASSOCIATION
as Administrative Agent
By:
--------------------------------
Name:
Title:
Consented to:
ACE CASH EXPRESS, INC.
By:
--------------------------------
Name:
Title:
SCHEDULE 1 TO
GLOBAL ASSIGNMENT AND ACCEPTANCE
COMMITMENTS
PRIOR TO ASSIGNMENT AND REALLOCATION OF COMMITMENTS
REVOLVING CREDIT SEASONAL REVOLVING
BANK COMMITMENT CREDIT COMMITMENT
---- ---------------- -----------------
Xxxxx Fargo Bank Texas, N.A. 32,796,000 21,065,500
Bank of America, N.A. 31,296,000 9,128,000
JPMorgan Chase Bank 20,460,000 10,967,500
Wachovia Bank, N.A. 20,460,000 5,967,500
National City Bank 6,816,000 1,988,000
Texas Capital Bank, N.A. 2,724,000 4,294,500
Hibernia National Bank 2,724,000 794,500
First American Bank, SSB 2,724,000 794,500
------------ -----------
TOTAL $120,000,000 $55,000,000
------------ -----------
AFTER ASSIGNMENT AND REALLOCATION OF COMMITMENTS
REVOLVING CREDIT SEASONAL REVOLVING
BANK COMMITMENT CREDIT COMMITMENT
---- ---------------- -----------------
Xxxxx Fargo Bank Texas, National Association 34,285,714.29 5,714,285.71
JPMorgan Chase Bank 23,314,285.71 10,685,714.29
Bank of America, N.A. 17,142,857.14 7,857,142.86
US Bank National Association 13,714,285.71 6,285,714.29
First American Bank SSB 10,285,714.29 4,714,285.71
Southwest Bank of Texas N.A. 6,857,142.86 3,142,857.14
Texas Capital Bank National Association 5,828,571.43 2,671,428.57
National City Bank 5,142,857.14 2,357,142.86
Wachovia Bank, N.A. 3,428,571.43 1,571,428.57
TOTAL $120,000,000.00 $ 45,000,000.00
Schedule 1 - Page 1
EXHIBIT F-1
[COMPANY LETTERHEAD]
___________ ___, 2003
SENIOR CONTROL AGREEMENT
[NAME OF FINANCIAL INSTITUTION]
[ ]
-----------------------------------
[ ]
-----------------------------------
Attn: [ ]
--------------------------
Re: Each of the accounts described on the attached Account Schedule
(collectively, the "ACCOUNTS" and individually, an "ACCOUNT")
Ladies and Gentlemen:
Reference is made to (i) that certain Intercreditor Agreement dated as
of [___________ ___], 2003, by and among Ace Cash Express, Inc., a Texas
corporation (the "COMPANY"), Xxxxx Fargo Bank Texas, National Association, as
Administrative Agent (the "BANK AGENT") for the lenders (the "LENDERS") from
time to time party to the Bank Agreement (as such term is defined in the
Intercreditor Agreement), American Capital Financial Services, Inc., as Agent
("ACFS AGENT") for the purchasers ("PURCHASERS") from time to time party to the
ACFS Note Agreement (as such term is defined in the Intercreditor Agreement),
and Travelers Express Company, Inc. ("TRAVELERS")(as such Intercreditor
Agreement may be amended, restated, supplemented or otherwise modified from time
to time, the "INTERCREDITOR AGREEMENT") and (ii) that certain Assignment of
Deposit Accounts and Security Agreement dated as of [___________ ___], 2003, by
the Company in favor of the Bank Agent for the benefit of the Lenders (as such
Assignment of Deposit Accounts and Security Agreement may be amended, restated,
supplemented or otherwise modified from time to time, the "SECURITY AGREEMENT").
Pursuant to the Security Agreement, the Company has granted control of
the Accounts to the Bank Agent and granted to the Bank Agent a first priority
security interest in the Accounts and the Company's monies, funds, checks,
negotiable instruments and any other items or property deposited and/or held in
the Accounts from time to time and all proceeds thereof (all of the foregoing
hereinafter collectively referred to as the "ACCOUNT PROPERTY"), in each case,
to secure certain obligations and indebtedness of the Company owing to the Bank
Agent and the Lenders described therein. The Company hereby notifies you, and
you hereby acknowledge, that the Company has granted a security interest to the
Bank Agent in, and control of, the Accounts and the other Account Property.
[NAME OF FINANCIAL INSTITUTION]
Page 2
WITH RESPECT TO ANY AND ALL INSTRUCTIONS YOU MAY RECEIVE FROM THE BANK
AGENT, THIS LETTER AGREEMENT, EFFECTIVE AS OF THE EFFECTIVE TIME (AS HEREINAFTER
DEFINED), SUPERSEDES ALL PRIOR LETTERS OF INSTRUCTION IN RESPECT OF THE ACCOUNTS
AND THE OTHER ACCOUNT PROPERTY TO WHICH YOU ARE A PARTY OR WHICH HAVE BEEN
DELIVERED TO YOU BY THE COMPANY ("PRIOR LETTERS").
This letter shall become effective as of 12:01 a.m., Dallas, Texas time
(the "EFFECTIVE TIME"), on the date first written above upon execution of this
letter by each party hereto and delivery of the same to you.
The Company hereby agrees with the Bank Agent, and you hereby
acknowledge, that the Company has no power to withdraw from the Accounts except
as expressly permitted hereunder and that the Bank Agent may, at any time by
written notice to you, terminate or suspend any and all rights of the Company
related to the Accounts.
The Company hereby irrevocably and unconditionally authorizes,
instructs and directs you to comply, and you hereby agree to comply, with all
instructions originated by the Bank Agent with respect to the Accounts or
directing disposition of any or all monies, funds, checks, negotiable
instruments or any other items or properties in the Accounts, in each case
without joinder or further consent by the Company and as promptly after receipt
thereof as is reasonably possible so long as each such instruction is
accompanied by a written certification from Bank Agent stating that Bank Agent
is authorized to originate such instruction under, and in accordance with, the
Intercreditor Agreement; provided, however, that in the event of any insolvency,
bankruptcy, liquidation, reorganization or other similar proceedings or any
receivership proceedings in connection therewith, relative to the Company, the
Company hereby irrevocably and unconditionally authorizes, instructs and directs
you to comply, and you hereby agree to comply, with all instructions originated
by the Bank Agent with respect to the Accounts or directing disposition of any
or all monies, funds, checks, negotiable instruments or any other items or
properties in the Accounts, so long as each such instruction is accompanied by a
written certification from Bank Agent stating that a court of competent
jurisdiction has authorized Bank Agent to originate such instruction and having
attached thereto a copy of an order of such court granting to Bank Agent such
authority, in each case without joinder or further consent by the Company and as
promptly after receipt thereof as is reasonably possible. You are entitled to
rely upon and are authorized and directed to follow all instructions of the Bank
Agent and you have no duty of inquiry as to the authorization or authenticity of
any such instructions so long as they are given by an individual designated by
the Bank Agent and accompanied by either of the foregoing described
certifications.
Notwithstanding the foregoing two paragraphs, until you receive notice
from the Bank Agent as set forth above, the Company shall be permitted to make
withdrawals from the Accounts from time to time subject to the conditions set
forth in this paragraph. The Bank Agent and the Company hereby inform you that
the Company will be making
[NAME OF FINANCIAL INSTITUTION]
Page 3
daily requests of the Monitoring Agent to permit the Company to use funds in the
Currency Account for the Company's operations. As used herein, the term
"MONITORING AGENT" shall mean the Bank Agent until such time as the Bank Agent,
the Company and the Bank Agent notify you in writing that a different party is
the Monitoring Agent. Subject to obtaining prior approval from the Monitoring
Agent as to the dollar amount of any day's release of funds, and unless the Bank
Agent shall notify you in writing to the contrary, you shall be entitled to
follow the instructions provided to you by the Company to release funds from the
Currency Account daily to the Company for its use, so long as such funds are
designated for delivery to the Custodial Agent (as defined below) or transferred
as permitted herein. You shall have no obligation or liability hereunder to the
Company or the Bank Agent if you follow such instructions so long as the Bank
Agent has not terminated, by notice to you, the authority of the Company granted
by this paragraph. Any such notice of termination shall be effective only as to
transfers to be effected following your actual receipt of such notice, and in
any event, shall be effective (a) if received before noon on any banking day, as
to deliveries or transfers after the close of the banking day of receipt of such
notice, or (b) if received at or after noon on any banking day, as to deliveries
or transfers after the close of the next succeeding banking day after the
banking day of receipt of such notice. Approvals, notices or instructions given
with respect to this paragraph and the two preceding paragraphs of this letter
agreement shall be given by facsimile at the numbers set forth below, except
that as to any funds deposited into the Currency Account by wire transfer from
the Monitoring Agent, such deposit shall constitute the deemed authorization or
prior approval by the Bank Agent for the Company to use and withdraw the dollar
amount of such funds as permitted by the provisions of this letter agreement,
unless the Bank Agent shall notify you in writing to the contrary.
The Company and the Bank Agent irrevocably approve of the use of wire
transfers, depository transfer checks or automatic clearinghouse electronic
transfers, at the Monitoring Agent's option, for the above-mentioned purposes.
The use of any such wire transfers, checks or electronic transfers are intended
to affirm the right and the interest of the Bank Agent in the Accounts and all
funds and items credited to or deposited therein and not to derogate therefrom.
Your regular monthly maintenance fees, activity fees and service
charges in connection with the Accounts, items returned or charged back to the
Accounts, and the amount of any daylight overdraft by the Company incurred
solely by reason of the transfer of funds to the Monitoring Agent each banking
day as provided above (the "OVERDRAFT AMOUNT"), in each case to the extent
chargeable under the terms of the account agreement(s) governing the Accounts,
but no other fees or charges, may be deducted from the daily deposits to the
Accounts. You are hereby directed to xxxx to the Company directly all other
costs, expenses and other charges associated with the Accounts, and the Company
shall pay directly to you all such costs, expenses and other charges; you agree
not to set off any such other costs, expenses or other charges against the
Accounts or the Account Property. Further, you agree not to charge back any
items deposited in or credited to the Accounts, provisional or otherwise, except
as against the Returned Items Account (as such term is defined in the Account
Schedule attached
[NAME OF FINANCIAL INSTITUTION]
Page 4
hereto). The Bank Agent agrees to reimburse you, but solely from the funds of
the trust property, for the amount of items charged back or returned to any
Account or for any Overdraft Amount to the extent that (a) you have credited an
Account for such amount, (b) the Bank Agent has withdrawn such funds from an
Account, (c) sufficient funds are not available for withdrawal by you from an
Account, and (d) payment of such amount has not been received by you from the
Company within ten (10) days (in the case of items charged back or returned to
an Account) or one (1) banking day (in the case of an Overdraft Amount)
following your request to the Company therefor. Such reimbursement shall be made
within ten (10) days (in the case of items charged back or returned to an
Account) or one (1) banking day (in the case of an Overdraft Amount) following
the Bank Agent's receipt of your written request therefor. Excepting only the
limited rights provided above in this paragraph, you hereby waive and release
any and all rights of offset, claims or counterclaims against, and any and all
security interests, banker's liens or similar rights in or to, the Accounts or
the Account Property (whether arising under law, agreement or otherwise).
You agree to indicate by appropriate entry in your records with respect
to the Accounts or the Account Property the security interest of the Bank Agent
therein.
This notification and the directions and instructions contained herein
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
You agree to deliver copies of all correspondence, notices, bank
statements and other information which you are otherwise obligated or permitted
to send to the Company (by law, agreement or otherwise) to the Bank Agent at the
address specified herein. You are further authorized, and the Company hereby
consents, to deliver any information requested by the Bank Agent related to the
Accounts, with any reasonable expense therefor to be paid by the Company. Any
reasonable additional charge for providing such information shall be billed to
the Company, with a copy to the Bank Agent; if such charge is not paid by the
Company within ten (10) days after its receipt of such invoice, you may set off
such charge against any of the Accounts or the Account Property; if such charge
cannot be paid by set off against the Account or the Account Property, then
unless the Bank Agent agrees to pay such charge, your obligation to provide such
information shall cease. All other notices, communications and information to be
delivered to the Bank Agent shall be delivered to the Bank Agent as set forth in
the first sentence of this paragraph. Such address and the name or names of the
individual or individuals who are entitled to receive notices and copies of
statements sent to the Bank Agent may be changed by written notice from the Bank
Agent. Requests, consents or notices from the Bank Agent with respect to the
Accounts or Account Property will be effective only if obtained in writing from
an individual designated by the Bank Agent for purposes thereof from time to
time. The Bank Agent and the Company acknowledge and agree that you shall not be
bound by any change in address or designation of any responsible party prior to
your actual receipt of written notice thereof.
[NAME OF FINANCIAL INSTITUTION]
Page 5
You hereby waive and release any and all rights of offset, claims or
counterclaims against, and any and all security interests, banker's liens or
similar rights in or to, the Accounts or the Account Property (whether arising
under law, agreement or otherwise) other than the security interests in the
Accounts and the Account Property and your interests therein (if any) which have
been granted to Bank Agent.
These instructions may only be modified in writing by an agreement
executed by you, the Company, the Bank Agent, and the Monitoring Agent;
provided, however, that the attached Account Schedule may be amended by delivery
of a revised schedule from the Company, the Bank Agent, and the Monitoring Agent
to you. All notices, approvals, or instructions hereunder shall be sent to the
following addressee:
If to the Company:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to the Bank Agent:
Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone No.: 000 000-0000
Facsimile No.: 000 000-0000
If to the Monitoring Agent:
Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone No.: 000 000-0000
Facsimile No.: 000 000-0000
If to you: As indicated on the attached Account Schedule
All notices or other communications provided for hereunder shall be in
writing (including by facsimile transmission) and shall be deemed to have been
duly given or made (i) in the case of delivery by hand, when delivered, (ii) in
the case of delivery by mail, three business days (meaning a day other than
Saturday, Sunday or a day on which commercial banks in [CITY, STATE] are
authorized to close) after being deposited in the mails, postage prepaid, or
(iii) in the case of delivery by facsimile transmission, when delivered or
transmitted by facsimile machine, provided that any matter transmitted by
facsimile (a) shall be immediately confirmed by a
[NAME OF FINANCIAL INSTITUTION]
Page 6
telephone call to the recipient at the number specified herein and (b) shall be
followed promptly by a hard copy original thereof.
Notwithstanding anything to the contrary in this letter agreement: (i)
you shall have only the duties and responsibilities with respect to the matters
set forth herein as is expressly set forth in writing herein and shall not be
deemed to be an agent, bailee or fiduciary for any party hereto; (ii) you shall
be fully protected in acting or refraining from acting in good faith without
investigation on any notice, instruction or request purportedly furnished to you
by the Company or Bank Agent in accordance with the terms hereof, in which case
the parties hereto agree that you have no duty to make any further inquiry
whatsoever; (iii) it is hereby acknowledged and agreed that you have no
knowledge of (and are not required to know) the terms and provisions of the
Intercreditor Agreement, the Security Agreement, or any other related
documentation or whether any actions by Bank Agent, the Company or any other
person or entity are permitted thereunder or consistent or inconsistent
therewith; (iv) you shall not be liable to any party hereto or any other person
for any action or failure to act under or in connection with this letter
agreement except to the extent such conduct constitutes your own willful
misconduct or gross negligence (and to the maximum extent permitted by law, you
shall under no circumstances be liable for any incidental, indirect, special,
consequential or punitive damages); and (v) you shall not be liable for losses
or delays caused by force majeure, interruption or malfunction of computer,
transmission or communications facilities, labor difficulties, court order or
decree, the commencement of bankruptcy or other similar proceedings or other
matters beyond your reasonable control.
The Company hereby agrees to indemnify, defend and save you harmless
against any loss, liability or expense (including reasonable fees and
disbursements of counsel who may be your employee) incurred in connection with
this letter agreement or the Accounts (except to the extent due to your willful
misconduct or gross negligence) or any interpleader proceeding relating thereto
or incurred at the Company's direction or instruction. Bank Agent hereby agrees
to indemnify, defend and save you harmless against any loss, liability or
expense (including reasonable fees and disbursements of counsel who may be your
employee) incurred in connection with any actions taken by you under this letter
agreement with respect to the Accounts (except to the extent due to your
willful misconduct or gross negligence). Bank Agent's and the Company's
responsibilities shall survive the termination hereof.
You hereby agree that (i) you are a "bank" within the meaning of
Section 9.102 of the Uniform Commercial Code as in effect in the State of Texas
(the "UCC"), (ii) each Account constitutes a "deposit account" within the
meaning of Section 9.102 of the UCC, (iii) this letter agreement shall
constitute an "authenticated record" for purposes of the UCC, and (iv) other
than the Prior Letters, you have not entered into any agreement that grants to
or confers upon any other party control of any Account or any of the Account
Property and you will not enter into any such agreement during the term of this
letter agreement, other than such agreements regarding control of the Accounts
and the other Account Property that you may enter into after the Effective Time
with ACFS Agent or Travelers; provided, however, that you and the Company hereby
further agree that the interests of each of ACFS Agent and Travelers in the
Accounts and the other Account Property are and shall at all times be subject to
and subordinate to the interests of the Bank Agent therein, in each case to the
extent and in the manner provided in the Intercreditor Agreement.
Each of you and the Company hereby agrees that this letter agreement
grants to and confers upon the Bank Agent "control" of each Account as
contemplated in Section 9.104 (and similar related provisions) of the UCC, and
the security interest in the Accounts and the other Account Property in favor of
the Bank Agent is and shall at all times be senior and superior in
[NAME OF FINANCIAL INSTITUTION]
Page 7
right of priority to any security interest in any Account or any other Account
Property which may have been, or hereafter be, granted to any of ACFS Agent or
Travelers.
The Company and you hereby agree that no Account (i) is evidenced by an
instrument (as that term is defined in the UCC) or (ii) constitutes a securities
account or contains securities or investment property (as such terms are defined
in the UCC).
You hereby agree to comply with the restrictions, authorizations and
instructions set forth or described above in this letter agreement. Further, the
Company hereby agrees and you also acknowledge and agree that (a) each "deposit
account" (as such term is defined in the UCC) maintained by you in the name of,
or for the benefit of, the Company and identified on the attached Account
Schedule (as amended as permitted hereunder) shall be deemed to be an Account
and shall be subject to this letter agreement in all respects, (b) the Company
has a right of withdrawal over the Returned Items Account and the Depository
Account (as such term is defined in the Account Schedule attached hereto) only
by deposit to the Currency Account and the Company has the right to transfer
from the Currency Account to the Returned Items Account to cover overdrafts in
the Returned Items Account, (c) the Company has a right of withdrawal over the
Currency Account only by transfer to the Bank Agent to Account #____________ at
Xxxxx Fargo Bank, National Association (the "CENTRAL DISBURSING ACCOUNT"), (d)
the Company has a right on a daily basis to transfer up to $2,500 from the
Currency Account to the Operating Account (as such term is defined in the
Account Schedule attached hereto) (provided the balance in the Operating Account
does not exceed [$5,000]), (e) the Company has a right on a weekly basis to
transfer up to [$15,000] from the Currency Account to the Operating Account to
replenish postage stamp inventory in the Company's stores [NOTE: COMPANY TO
EXPLAIN INCONSISTENCY BETWEEN (d) AND (e).] and (f) the Company has a right to
instruct you to convert funds deposited in the Currency Account to currency and
deliver the same to the custodial agent indicated on the attached Account
Schedule ("CUSTODIAL AGENT") pursuant to the agreements between Custodial Agent
and the Company, as the same may be amended, modified, or substituted, with
written approval of the Bank Agent if required, or such other armored service
company as the Bank Agent may designate in writing.
Nothing in this letter agreement shall require you to act in violation
of any applicable laws or any court order.
This letter agreement supplements, rather than replaces, your deposit
account agreement, terms and conditions and other standard documentation in
effect from time to time with respect to the Accounts or services provided in
connection with the Accounts (the "ACCOUNT DOCUMENTATION"), which Account
Documentation will continue to apply to the Accounts and such services, and the
respective rights, powers, duties, obligations, liabilities and responsibilities
of the parties thereto and hereto, to the extent not expressly conflicting with
the provisions of this letter (however, in the event of any such conflict, the
provisions of this letter agreement shall control).
This letter agreement shall be governed in accordance with the laws of
the State of Texas. The State of Texas shall be deemed to be your location for
purposes of Section 9.304(b) of the UCC.
[NAME OF FINANCIAL INSTITUTION]
Page 8
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
[NAME OF FINANCIAL INSTITUTION]
Page 9
If the foregoing accurately sets forth our agreements with respect to
the subject matter hereof, please sign below as indicated and return a signed
copy thereof to the Bank Agent or its legal counsel at such address as the Bank
Agent shall provide. This letter agreement may be executed in multiple
counterparts.
Thank you.
ACE CASH EXPRESS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Approved as of the date first above written:
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, as Bank Agent
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, as Monitoring Agent
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Accepted and agreed to as of the date first above written:
[NAME OF FINANCIAL INSTITUTION]
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
[NAME OF FINANCIAL INSTITUTION]
Page 10
ACCOUNT SCHEDULE - [NAME OF FINANCIAL INSTITUTION]
[DATE OF SCHEDULE]
Account Account Custodial
State Number Type Agent
----- ------- ------- ---------
*BANK CONTACT FOR THE FOLLOWING IS [NAME OF CONTACT], FACSIMILE NUMBER [_________]
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
(1) Currency Account (the "CURRENCY ACCOUNT")
(2) Depository Account (the "DEPOSITORY ACCOUNT")
(3) Operating Account (the "OPERATING ACCOUNT")
(4) Returned Items Account (the "RETURNED ITEMS ACCOUNT")
and each other "deposit account" (as such term is defined in the UCC) maintained
by [NAME OF FINANCIAL INSTITUTION] from time to time in the name of, or for the
benefit of, the Company, and identified on a supplemental schedule
EXHIBIT F-2
[COMPANY LETTERHEAD]
___________ ___, 2003
SENIOR CONTROL AGREEMENT
[NAME OF FINANCIAL INSTITUTION]
[ ]
------------------------------------
[ ]
------------------------------------
Attn: [ ]
---------------------------
Re: Each of the accounts described on the attached Account Schedule
(collectively, the "ACCOUNTS" and individually, an "ACCOUNT")
Ladies and Gentlemen:
Reference is made to (i) that certain Intercreditor Agreement dated as
of [___________ ___], 2003, by and among Ace Cash Express, Inc., a Texas
corporation (the "COMPANY"), Xxxxx Fargo Bank Texas, National Association, as
Administrative Agent (the "BANK AGENT") for the lenders (the "LENDERS") from
time to time party to the Bank Agreement (as such term is defined in the
Intercreditor Agreement), American Capital Financial Services, Inc., as Agent
("ACFS AGENT") for the purchasers ("PURCHASERS") from time to time party to the
ACFS Note Agreement (as such term is defined in the Intercreditor Agreement),
and Travelers Express Company, Inc. ("TRAVELERS")(as such Intercreditor
Agreement may be amended, restated, supplemented or otherwise modified from time
to time, the "INTERCREDITOR AGREEMENT") and (ii) that certain Assignment of
Deposit Accounts and Security Agreement dated as of [___________ ___], 2003, by
the Company in favor of the Bank Agent for the benefit of the Lenders (as such
Assignment of Deposit Accounts and Security Agreement may be amended, restated,
supplemented or otherwise modified from time to time, the "SECURITY AGREEMENT").
Pursuant to the Security Agreement, the Company has granted control of
the Accounts to the Bank Agent and granted to the Bank Agent a first priority
security interest in the Accounts and the Company's monies, funds, checks,
negotiable instruments and any other items or property deposited and/or held in
the Accounts from time to time and all proceeds thereof (all of the foregoing
hereinafter collectively referred to as the "ACCOUNT PROPERTY"), in each case,
to secure certain obligations and indebtedness of the Company owing to the Bank
Agent and the Lenders described therein. The Company hereby notifies you, and
you hereby acknowledge, that the Company has granted a security interest to the
Bank Agent in, and control of, the Accounts and the other Account Property.
[NAME OF FINANCIAL INSTITUTION]
Page 2
WITH RESPECT TO ANY AND ALL INSTRUCTIONS YOU MAY RECEIVE FROM THE BANK
AGENT, THIS LETTER AGREEMENT, EFFECTIVE AS OF THE EFFECTIVE TIME (AS HEREINAFTER
DEFINED), SUPERSEDES ALL PRIOR LETTERS OF INSTRUCTION IN RESPECT OF THE ACCOUNTS
AND THE OTHER ACCOUNT PROPERTY TO WHICH YOU ARE A PARTY OR WHICH HAVE BEEN
DELIVERED TO YOU BY THE COMPANY ("PRIOR LETTERS").
This letter shall become effective as of 12:01 a.m., Dallas, Texas time
(the "EFFECTIVE TIME"), on the date first written above upon execution of this
letter by each party hereto and delivery of the same to you.
The Company hereby agrees with the Bank Agent, and you hereby
acknowledge, that the Company has no power to withdraw from the Accounts except
as expressly permitted hereunder and that the Bank Agent may, at any time by
written notice to you, terminate or suspend any and all rights of the Company
related to the Accounts.
The Company hereby irrevocably and unconditionally authorizes,
instructs and directs you to comply, and you hereby agree to comply, with all
instructions originated by the Bank Agent with respect to the Accounts or
directing disposition of any or all monies, funds, checks, negotiable
instruments or any other items or properties in the Accounts, in each case
without joinder or further consent by the Company and as promptly after receipt
thereof as is reasonably possible so long as each such instruction is
accompanied by a written certification from Bank Agent stating that Bank Agent
is authorized to originate such instruction under, and in accordance with, the
Intercreditor Agreement; provided, however, that in the event of any insolvency,
bankruptcy, liquidation, reorganization or other similar proceedings or any
receivership proceedings in connection therewith, relative to the Company, the
Company hereby irrevocably and unconditionally authorizes, instructs and directs
you to comply, and you hereby agree to comply, with all instructions originated
by the Bank Agent with respect to the Accounts or directing disposition of any
or all monies, funds, checks, negotiable instruments or any other items or
properties in the Accounts, so long as each such instruction is accompanied by a
written certification from Bank Agent stating that a court of competent
jurisdiction has authorized Bank Agent to originate such instruction and having
attached thereto a copy of an order of such court granting to Bank Agent such
authority, in each case without joinder or further consent by the Company and as
promptly after receipt thereof as is reasonably possible. You are entitled to
rely upon and are authorized and directed to follow all instructions of the Bank
Agent and you have no duty of inquiry as to the authorization or authenticity of
any such instructions so long as they are given by an individual designated by
the Bank Agent and accompanied by either of the foregoing described
certifications.
Notwithstanding the foregoing two paragraphs, until you receive notice
from the Bank Agent as set forth above, the Company shall be permitted to make
withdrawals from the Accounts from time to time subject to the conditions set
forth in this paragraph. All Accounts shall automatically sweep to the Currency
Account (as such term is defined in the
[NAME OF FINANCIAL INSTITUTION]
Page 3
Account Schedule attached hereto) on a daily basis. The Company is authorized to
make daily transfers from the Currency Account to Account # 4588542456 at Xxxxx
Fargo Bank, National Association (the "CENTRAL DISBURSING ACCOUNT") (adjusted
for cash required by the Company in the ordinary course of operation of its
local stores and funding the Returned Items Account (as such term is defined in
the Account Schedule attached hereto) serviced by you (the "LOCAL CASH NEEDS"),
which shall be deducted from the Currency Account and delivered only to the
applicable armored courier indicated on the attached Account Schedule (the
"CUSTODIAL AGENT")). Under no circumstances shall the Company have the authority
to authorize any transfer from the Accounts except as set forth in the preceding
sentence. In the event you receive written instructions originated by the Bank
Agent in accordance with the immediately preceding paragraph, you (a) are
authorized and directed to immediately transfer to the account designated by the
Bank Agent in such instructions all collected sums credited to or otherwise
deposited in the Accounts and all proceeds thereof and earnings thereon and (b)
hereby agree to immediately terminate all transfers directed by the Company and
at all times thereafter comply with the instructions originated by the Bank
Agent with respect to all subsequent transfers of Account Property from the
Accounts, without joinder or further consent by the Company. The Company, the
Bank Agent and you hereby agree that upon delivery of such written instructions,
(i) the Bank Agent shall have exclusive control over all subsequent transfers
from the Accounts, and the Company and you acknowledge that the Company shall
thereafter have no right to direct any such transfers, (ii) all services to be
performed by you in connection with the Accounts will be performed on behalf of
the Bank Agent, (iii) the Bank Agent will have all rights and remedies given the
Company in any agreement between you and the Company relating to the Accounts,
(iv) upon the request of the Bank Agent (without the Company's consent or
agreement), the Accounts will be transferred to and maintained in the name of
the Bank Agent and (v) the Company shall, notwithstanding the foregoing,
continue to pay all charges for your services rendered and any other charges,
costs or fees incurred by you or the Bank Agent in connection with this letter
agreement.
You agree to indicate by appropriate entry in your records with respect
to the Accounts or the Account Property the security interest of the Bank Agent
therein.
You agree to deliver copies of all bank statements which you send to
the Company (by law, agreement or otherwise) to the Bank Agent at the address
specified herein. You are further authorized, and the Company hereby consents,
to deliver any information requested by the Bank Agent related to the Accounts,
with any reasonable expense therefor to be paid by the Company.
You hereby waive and release any and all rights of offset, claims or
counterclaims against, and any and all security interests, banker's liens or
similar rights in or to, the Accounts or the Account Property (whether arising
under law, agreement or otherwise) other than the security interests in the
Accounts and the Account Property and your interests therein (if any) which have
been granted to Bank Agent.
These instructions may only be modified in writing by an agreement
executed by you, the Company and the Bank Agent; provided, however that the
attached Account Schedule
[NAME OF FINANCIAL INSTITUTION]
Page 4
may be amended by delivery of a revised schedule from the Company and the Bank
Agent to you. All notices hereunder shall be sent to the following addressee:
If to the Company:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to the Bank Agent:
Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone No.: 000 000-0000
Facsimile No.: 214 _________
If to you:
[NAME OF FINANCIAL INSTITUTION]
[ ]
------------------------
[ ]
------------------------
Attention: [ ]
-------------
Telephone No.: [ ]
---------
Facsimile No.: [ ]
---------
All notices or other communications provided for hereunder shall be in
writing (including by facsimile transmission) and shall be deemed to have been
duly given or made (i) in the case of delivery by hand, when delivered, (ii) in
the case of delivery by mail, three business days (meaning a day other than
Saturday, Sunday or a day on which commercial banks in [CITY, STATE] are
authorized to close) after being deposited in the mails, postage prepaid, or
(iii) in the case of delivery by facsimile transmission, when delivered or
transmitted by facsimile machine, provided that any matter transmitted by
facsimile (a) shall be immediately confirmed by a telephone call to the
recipient at the number specified herein and (b) shall be followed promptly by a
hard copy original thereof.
Notwithstanding anything to the contrary in this letter agreement: (i)
you shall have only the duties and responsibilities with respect to the matters
set forth herein as is expressly set forth in writing herein and shall not be
deemed to be an agent, bailee or fiduciary for any party hereto; (ii) you shall
be fully protected in acting or refraining from acting in good faith without
investigation on any notice, instruction or request purportedly furnished to you
by the Company or Bank Agent in accordance with the terms hereof, in which case
the parties hereto agree that you have no duty to make any further inquiry
whatsoever; (iii) it is hereby acknowledged and agreed that you have no
knowledge of (and are not required to know) the terms and provisions of the
Intercreditor Agreement, the Security Agreement, or any other related
documentation or whether any actions
[NAME OF FINANCIAL INSTITUTION]
Page 5
by Bank Agent, the Company or any other person or entity are permitted
thereunder or consistent or inconsistent therewith; (iv) you shall not be liable
to any party hereto or any other person for any action or failure to act under
or in connection with this letter agreement except to the extent such conduct
constitutes your own willful misconduct or gross negligence (and to the maximum
extent permitted by law, you shall under no circumstances be liable for any
incidental, indirect, special, consequential or punitive damages); and (v) you
shall not be liable for losses or delays caused by force majeure, interruption
or malfunction of computer, transmission or communications facilities, labor
difficulties, court order or decree, the commencement of bankruptcy or other
similar proceedings or other matters beyond your reasonable control.
The Company hereby agrees to indemnify, defend and save you harmless
against any loss, liability or expense (including reasonable fees and
disbursements of counsel who may be your employee) incurred in connection with
this letter agreement or the Accounts (except to the extent due to your willful
misconduct or gross negligence) or any interpleader proceeding relating thereto
or incurred at the Company's direction or instruction. Bank Agent hereby agrees
to indemnify, defend and save you harmless against any loss, liability or
expense (including reasonable fees and disbursements of counsel who may be your
employee) incurred in connection with any actions taken by you under this letter
agreement with respect to the Accounts (except to the extent due to your willful
misconduct or gross negligence). Bank Agent's and the Company's responsibilities
shall survive the termination hereof.
You hereby agree that (i) you are a "bank" within the meaning of
Section 9.102 of the Uniform Commercial Code as in effect in the State of Texas
(the "UCC"), (ii) each Account constitutes a "deposit account" within the
meaning of Section 9.102 of the UCC, (iii) this letter agreement shall
constitute an "authenticated record" for purposes of the UCC, and (iv) other
than the Prior Letters, you have not entered into any agreement that grants to
or confers upon any other party control of any Account or any of the Account
Property and you will not enter into any such agreement during the term of this
letter agreement, other than such agreements regarding control of the Accounts
and the other Account Property that you may enter into after the Effective Time
with ACFS Agent or Travelers; provided, however, that you and the Company hereby
further agree that the interests of each of ACFS Agent and Travelers in the
Accounts and the other Account Property are and shall at all times be subject to
and subordinate to the interests of the Bank Agent therein, in each case, to the
extent and in the manner provided in the Intercreditor Agreement.
Each of you and the Company hereby agrees that this letter agreement
grants to and confers upon the Bank Agent "control" of each Account as
contemplated in Section 9.104 (and similar related provisions) of the UCC, and
the security interest in the Accounts and the other Account Property in favor of
the Bank Agent is and shall at all times be senior and superior in right of
priority to any security interest in any Account or any other Account Property
which may have been, or hereafter be, granted to any of ACFS Agent or Travelers.
The Company and you hereby agree that no Account (i) is evidenced by an
instrument (as that term is defined in the UCC) or (ii) constitutes a securities
account or contains securities or investment property (as such terms are defined
in the UCC).
[NAME OF FINANCIAL INSTITUTION]
Page 6
You hereby agree to comply with the restrictions, authorizations and
instructions set forth or described above in this letter agreement. Further, the
Company hereby agrees and you also acknowledge and agree that (a) each "deposit
account" (as such term is defined in the UCC) maintained by you in the name of,
or for the benefit of, the Company and identified on the attached Account
Schedule (as amended as permitted hereunder) shall be deemed to be an Account
and shall be subject to this letter agreement in all respects, (b) the Company
has a right of withdrawal over the Returned Items Account and the Depository
Account (as such term is defined in the Account Schedule attached hereto) only
by deposit to the Currency Account and the Company has the right to transfer
from the Currency Account to the Returned Items Account to cover overdrafts in
the Returned Items Account, and (c) the Company has a right of withdrawal over
the Currency Account only by transfer to the Central Disbursing Account, net of
Local Cash Needs, delivered to the Custodial Agent pursuant to the agreements
between Custodial Agent and the Company, as the same may be amended, modified,
or substituted, with written approval of the Bank Agent if required, or such
other armored service company as the Bank Agent may designate in writing.
Nothing in this letter agreement shall require you to act in violation
of any applicable laws or any court order.
This letter agreement supplements, rather than replaces, your deposit
account agreement, terms and conditions and other standard documentation in
effect from time to time with respect to the Accounts or services provided in
connection with the Accounts (the "ACCOUNT DOCUMENTATION"), which Account
Documentation will continue to apply to the Accounts and such services, and the
respective rights, powers, duties, obligations, liabilities and responsibilities
of the parties thereto and hereto, to the extent not expressly conflicting with
the provisions of this letter (however, in the event of any such conflict, the
provisions of this letter agreement shall control).
This letter agreement shall be governed in accordance with the laws of
the State of Texas. The State of Texas shall be deemed to be your location for
purposes of Section 9.304(b) of the UCC.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
[NAME OF FINANCIAL INSTITUTION]
Page 7
If the foregoing accurately sets forth our agreements with respect to
the subject matter hereof, please sign below as indicated and return a signed
copy thereof to the Bank Agent or its legal counsel at such address as the Bank
Agent shall provide. This letter agreement may be executed in multiple
counterparts.
Thank you.
ACE CASH EXPRESS, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Approved as of the date first above written:
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, as Bank Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Accepted and agreed to as of the date first above written:
[NAME OF FINANCIAL INSTITUTION]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[NAME OF FINANCIAL INSTITUTION]
Page 8
Account Schedule - [NAME OF INSTITUTION]
[DATE OF SCHEDULE]
State Account Number Account Type Custodial Agent
----- -------------- ------------ ---------------
[(1)/(2)/(3)]
(1) Currency Account (the "CURRENCY ACCOUNT")
(2) Depository Account (the "DEPOSITORY ACCOUNT")
(3) Returned Items Account (the "RETURNED ITEMS ACCOUNT")
and each other "deposit account" (as such term is defined in the UCC) maintained
by [NAME OF FINANCIAL INSTITUTION] from time to time in the name of, or for the
benefit of, the Company and identified on a supplemental schedule
EXHIBIT G
[COMPANY LETTERHEAD]
, 2003
------------ ----
[NAME OF ARMORED COURIER]
[ ]
--------------------------
[ ]
--------------------------
Attn: [ ]
-----------------
Re: Custodial Arrangement
Ladies and Gentlemen:
Reference is made to that certain Intercreditor Agreement dated as of
[_____________ ___], 2003, by and among Ace Cash Express, Inc., a Texas
corporation (the "COMPANY"), Xxxxx Fargo Bank Texas, National Association, as
Administrative Agent ("BANK AGENT") for itself and all other lenders ("Lenders")
from time to time party to the Bank Agreement (as such term is defined in the
Intercreditor Agreement), American Capital Financial Services, Inc., as Agent
("ACFS AGENT") for the purchasers ("PURCHASERS") from time to time party to the
ACFS Note Agreement (as such term is defined in the Intercreditor Agreement),
and Travelers Express Company, Inc. ("TRAVELERS") (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT").
The Company hereby notifies [NAME OF ARMORED COURIER] ("CUSTODIAL
AGENT"), and Custodial Agent hereby acknowledges, that the Company has assigned,
pledged and granted to the Bank Agent, for the benefit of Bank Agent and the
Lenders, a first priority security interest in certain property of the Company
(the "ASSETS"), including all of the Company's currency, coin, monies, funds,
checks, negotiable instruments, securities and other property and proceeds
thereof received, transported and delivered by Custodial Agent from time to time
(the "PROPERTY") in accordance with certain agreements and/or contracts from
time to time between Custodial Agent and the Company (as amended, restated,
supplemented or otherwise modified from time to time, collectively the
"Contracts"; the Assets, the Property, and the Contracts are collectively
referred to herein as the "COLLATERAL") and pertaining to the store locations of
the Company as set forth on the attached schedule (the "TERRITORY"), to secure
certain obligations and indebtedness of the Company owing to the Bank Agent and
the Lenders. The Company also notifies Custodial Agent that, and Custodial Agent
hereby acknowledges that, (a) the Company has assigned, pledged and granted to
the ACFS Agent, for the benefit of ACFS Agent and the Purchasers, a second
priority security interest in the Collateral to secure certain obligations and
indebtedness of the Company owing to the ACFS Agent and the Purchasers and (b)
the Company has assigned, pledged and granted to Travelers a third priority
security interest in the Collateral to secure certain obligations and
indebtedness of the Company owing to Travelers. Bank Agent, ACFS Agent, and
Travelers are collectively referred to herein as the "SECURED PARTIES" and each
individually as a "SECURED PARTY".
[NAME OF ARMORED COURIER]
Page 2
WITH RESPECT TO ANY AND ALL INSTRUCTIONS CUSTODIAL AGENT MAY RECEIVE
FROM ANY SECURED PARTY, THIS LETTER AGREEMENT, EFFECTIVE AS OF THE EFFECTIVE
DATE (AS HEREINAFTER DEFINED), SUPERSEDES ALL PRIOR LETTERS OF INSTRUCTION TO
WHICH CUSTODIAL AGENT IS A PARTY OR WHICH HAVE BEEN DELIVERED TO CUSTODIAL AGENT
BY THE COMPANY ("PRIOR LETTERS"), BUT EXPRESSLY EXCLUDING LETTERS DELIVERED BY
ACE FUNDING, LLC WHICH SHALL REMAIN IN EFFECT.
This letter shall become effective as of the date first written above
(the "EFFECTIVE DATE") upon execution of this letter by each party hereto and
delivery of the same to Custodial Agent.
1. Notwithstanding any provision to the contrary contained in
the Contracts:
(a) Custodial Agent is hereby irrevocably authorized and
directed by the Company, upon the request of any Secured Party or its designee
(as any Secured Party may direct) delivered in accordance with Paragraph 3
hereof, to deliver to any Secured Party or its designee (as any Secured Party
may direct), to such location or locations in the Territory as may be specified
by any Secured Party or its designee (as any Secured Party may direct), any and
all Property and other Collateral then and thereafter received, transported and
delivered by Custodial Agent pursuant to the Contracts; provided, however, that
in the event of any insolvency, bankruptcy, liquidation, reorganization or other
similar proceedings or any receivership proceedings in connection therewith,
relative to the Company, Custodial Agent is hereby irrevocably authorized and
directed by the Company, to deliver to such persons any and all Property and
other Collateral then and thereafter received, transported and delivered by
Custodial Agent pursuant to the Contracts as may be directed in writing by any
Secured Party so long as each such written direction is accompanied by a written
certification from such Secured Party stating that a court of competent
jurisdiction has authorized such Secured Party to issue such written direction
and having attached thereto a copy of an order of such court granting to such
Secured Party such authority. Custodial Agent acknowledges and agrees to comply
(i) with the preceding authorization and direction from the Company, (ii) with
any such request or instruction from any Secured Party or its designee (as any
Secured Party may direct), and (iii) with any such written direction from any
Secured Party, in each case delivered in accordance with Paragraph 3 hereof. The
Company and each Secured Party agrees that Custodial Agent shall incur no
liability whatsoever to the Company or any Secured Party in acting upon any
request or instruction which Custodial Agent reasonably believes to have been
given in the manner provided in Paragraph 3 by an authorized representative of
any Secured Party. Instructions of any Secured Party or its designee (as any
Secured Party may direct) shall control, and, except as permitted by any Secured
Party or its designee (as any Secured Party may direct) below in this letter
agreement or otherwise in writing, the Company shall not have any right or
authority whatsoever to instruct Custodial Agent with respect to the Property or
any other Collateral.
(b) The Company shall pay directly to Custodial Agent all
costs and expenses payable to Custodial Agent pursuant to the Contracts,
including any additional cost or expense which Custodial Agent shall require if
Custodial Agent is directed by any Secured Party to perform any service
additional to or different from the services specifically set forth in the
Contracts.
[NAME OF ARMORED COURIER]
Page 3
Custodial Agent hereby waives and releases any and all rights of offset or
counterclaim against, and any and all carrier's liens, security interests or
similar rights in, the Property or the other Collateral which Custodial Agent
may have by reason of the Contracts or otherwise, except to the extent necessary
to pay Custodial Agent the fees and expenses due under the Contracts.
(c) This letter agreement shall not be modified or amended
without the prior written consent of Custodial Agent, each Secured Party and the
Company. It is expressly agreed that the Contracts may be amended to add thereto
or to delete therefrom a location by an amendment duly executed by Custodial
Agent and the Company, and that the Contracts as amended shall thereafter
continue in full force and effect. This letter agreement shall apply to the
Contracts as amended. The Company shall notify each Secured Party of any and all
such amendments and will provide copies thereof upon written request from any
Secured Party.
(d) Custodial Agent hereby acknowledges that the Bank Agent,
for its benefit and the benefit of the Lenders, has been granted by the Company,
and that the Bank Agent, for its benefit and the benefit of the Lenders,
currently holds, a first priority security interest in the Collateral. Custodial
Agent hereby acknowledges that the ACFS Agent, for its benefit and the benefit
of the Purchasers, has been granted by the Company, and that the ACFS Agent, for
its benefit and the benefit of the Purchasers, currently holds, a second
priority security interest in the Collateral, subject in all cases to the prior
security interest of the Bank Agent, for its benefit and the benefit of the
Lenders. Custodial Agent hereby acknowledges that Travelers has been granted by
the Company, and that Travelers currently holds, a third priority security
interest in the Collateral, subject in all cases to the prior security interest
of the Bank Agent, for its benefit and the benefit of the Lenders, and the prior
security interest of ACFS Agent, for its benefit and the benefit of the
Purchasers. Custodial Agent agrees that at all times during which Custodial
Agent is in possession of any and all Property or other Collateral, Custodial
Agent shall maintain possession of and hold such Property and such other
Collateral for the benefit of Bank Agent, for its benefit and the benefit of the
Lenders, ACFS Agent, for its benefit and the benefit of the Purchasers, and
Travelers.
(e) Custodial Agent agrees that if any Secured Party succeeds
to the interest of the Company in the Contracts by means of enforcement of its
security interest or otherwise, Custodial Agent shall, upon notice to Custodial
Agent from such Secured Party in accordance with Paragraph 3 below of such
succession of interest, accept, recognize and treat such Secured Party, and its
transferees, successors and/or assigns, as a party to the Contracts in the name
and stead of the Company and shall continue to perform all obligations of
Custodial Agent under the Contracts as long as the obligations of the Company
are similarly satisfied by such Secured Party, or its transferees, successors
and/or assigns (including the payment of amounts owed to Custodial Agent
pursuant to the Contracts) and as long as the Contracts otherwise remain in
effect.
(f) Custodial Agent agrees to provide each Secured Party with
such information and records relating solely to the performance of the Contracts
as such Secured Party may reasonably request from time to time; provided that,
Custodial Agent shall furnish to the Company a copy of all such information and
records which are so provided to any Secured Party. The Company agrees to
reimburse Custodial Agent for any additional costs and expenses incurred in
providing such information to the Secured Parties.
[NAME OF ARMORED COURIER]
Page 4
(g) In the event of loss of the Property, Custodial Agent's
liability shall be governed by the terms of the Contracts, provided that either
the Secured Parties or the Company (as agent for the Secured Parties) shall have
the right to present a claim to Custodial Agent for loss reimbursement in the
manner specified and allowed under the terms of the Contracts. Until this letter
agreement shall have been terminated, notwithstanding the terms of the
Contracts, any loss reimbursement for $25,000 or more shall be made payable to
any Secured Party or its designee (as any Secured Party may direct), unless
Custodial Agent is expressly directed in writing by any Secured Party or its
designee (as any Secured Party may direct) to make such loss reimbursement
payable directly to the Company. Any loss reimbursement for less than $25,000
may be made payable to the Company, provided that any loss reimbursement paid
after any Secured Party or its designee (as any Secured Party may direct) has
delivered a notice to Custodial Agent directing disposition of the Property as
provided in Paragraph 1(a) above or Paragraph 2(c) below shall be made payable
to the Secured Parties.
(h) Custodial Agent shall have no liability in the event of
any dispute involving ownership of the Property or any other matter relating to
this letter agreement other than Custodial Agent's nonperformance of its
agreements and obligations set forth herein, and the Company agrees to indemnify
and hold Custodial Agent harmless from liability relating to a dispute over
ownership of the Property, unless such claim is the result of Custodial Agent's
gross negligence or willful misconduct. The Company agrees to pay all court
costs and reasonable attorneys' fees which Custodial Agent may incur as a result
of any such dispute, provided that such dispute or any claim arising therefrom
is not the result of Custodial Agent's nonperformance of its obligations set
forth herein or its gross negligence or willful misconduct.
2. Subject to the terms of Paragraph 1 above:
(a) Custodial Agent shall continue, pursuant to the Contracts,
to pick up sealed shipments said or represented to contain currency from the
financial institution set forth on the attached schedule ("DESIGNATED LOCAL
BANK") for delivery to the retail stores of the Company (the "STORES") in the
Territory. The sealed shipments shall be delivered by Custodial Agent to the
Stores specifically designated by the Company, but (notwithstanding any
provision of the Contracts to the contrary) no shipment shall be delivered to
any location other than one or more of the Stores. Notwithstanding any provision
of the Contracts to the contrary, only shipments said or represented to contain
only the Company employee payroll checks and/or mail (including the Company's
internal correspondence) may be delivered to the regional office or offices of
the Company in the Territory.
(b) Furthermore, Custodial Agent shall continue to pick up
sealed shipments said to contain all excess cash, checks, drafts and other
instruments that are made available to Custodial Agent at the Stores and shall
deliver them only to the Designated Local Bank pursuant to the Contracts.
(c) The instructions contained in this Paragraph 2 may be
revoked at any time by notice to that effect by an authorized representative of
any Secured Party or its designee (as any Secured Party may direct) given to
Custodial Agent in accordance with Paragraph 3 of this letter.
[NAME OF ARMORED COURIER]
Page 5
3. All requests, instructions and notices to be given pursuant
to this letter agreement shall be sent to the following addressee:
If to the Company:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to Custodial Agent:
[NAME OF CUSTODIAL AGENT]
[ ]
-------------------------
[ ]
-------------------------
Attention: [ ]
----------
Telephone No.: [ ]
----------
Facsimile No.: [ ]
----------
If to the Bank Agent:
Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone No.: 000 000-0000
Facsimile No.: 000 000-0000
If to the ACFS Agent:
American Capital Financial Services, Inc.
Two Bethesda Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Compliance Officer -- ACS/ACE
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
with a copy to:
American Capital Strategies, Ltd.
0000 Xxxx Xxx., Xxx. 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxXxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
[NAME OF ARMORED COURIER]
Page 6
If to Travelers:
Travelers Express Company, Inc.
0000 Xxxxx Xxx. Xxxxx XX 8020
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Legal Counsel
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
Unless provided otherwise in this paragraph, all requests, instructions
and notices provided for hereunder shall be in writing (including by facsimile
transmission) and shall be deemed to have been duly given or made (i) in the
case of delivery by hand, when delivered, (ii) in the case of delivery by mail,
three business days (meaning a day other than Saturday, Sunday or a day on which
commercial banks in [CITY, STATE] are authorized to close) after being deposited
in the mails, postage prepaid, or (iii) in the case of delivery by facsimile
transmission, when delivered or transmitted by facsimile machine. All requests,
instructions and notices to be given to Custodial Agent by any Secured Party
hereunder may (a) be oral but shall not be binding until confirmed in writing,
provided that such Secured Party delivers written confirmation of such request,
instruction or notice, as provided in the preceding sentence, within one
business day after such oral request, instruction or notice and provided further
than notwithstanding anything to the contrary contained herein, the Custodial
Agent may immediately rely on such oral notice without liability to the Company
and, (b) in the absence of Custodial Agent's representative named herein, may be
given to the Branch Manager or, in his or her absence, an Assistant Branch
Manager, of the Designated Local Bank as set forth on the attached schedule.
Custodial Agent and Designated Local Bank may rely upon oral instructions from
any Secured Party, pending written confirmation, without liability to the
Company. Custodial Agent shall comply with any request, instruction or notice as
promptly after receipt thereof as is reasonably possible.
4. The information set forth on the attached schedule may be
amended by the Company delivering a revised schedule to Bank Agent, ACFS Agent,
Travelers, and Custodial Agent.
5. By accepting this letter agreement, Custodial Agent
represents that the Contracts are in full force and effect and that Custodial
Agent will not amend the Contracts in any manner except in accordance with
paragraph 1(c). Custodial Agent agrees that the Contracts will not be terminated
without at least ten (10) days' prior written notice to the Secured Parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
[NAME OF ARMORED COURIER]
Page 7
If the foregoing accurately sets forth our agreements with respect to
the subject matter hereof, please sign below as indicated and return a signed
copy thereof to the Bank Agent or its legal counsel at such address as the Bank
Agent shall provide. This letter agreement may be executed in multiple
counterparts.
Yours very truly,
ACE CASH EXPRESS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Approved as of the date first above written:
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, as Bank Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
AMERICAN CAPITAL FINANCIAL SERVICES, INC., as ACFS Agent
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
TRAVELERS EXPRESS COMPANY, INC., as Travelers
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Accepted and agreed to as of the date first above written:
[NAME OF ARMORED COURIER]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[NAME OF ARMORED COURIER]
Page 8
[NAME OF ARMORED COURIER]
[DATE OF SCHEDULE]
Store Number City & State Designated Local Bank and Contact Information
------------ ------------ ---------------------------------------------
EXHIBIT H
[FORM OF CASH HOLDING REPORT]
To: Xxxxx Fargo Bank Texas, National Association,
as Administrative Agent
0000 Xxxxxxx Xxxx Xxxx, Xxx. 000
Xxxxx, Xxxxx 00000
Attention: [ ]
----------------
This Report ("REPORT") is delivered pursuant to that certain Credit
Agreement dated as of [____________], 2003, by and among Ace Cash Express, Inc.,
a Texas corporation (the "COMPANY"), the lenders from time to time party thereto
(the "LENDERS"), and Xxxxx Fargo Bank Texas, National Association, as the
Administrative Agent for the Lenders (in such capacity, the "AGENT")(as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the "AGREEMENT"; all capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Agreement). This Report covers
the calendar week ended ________ ___, 200__, and is delivered to the Agent
pursuant to Section 5.05(d) of the Agreement.
The Company and/or its Subsidiaries opened the following accounts in
the calendar week ended _________ ___, 200__, and such accounts are or will be
used to maintain Cash Holdings:
FINANCIAL INSTITUTION HAS
LEGAL NAME OF FINANCIAL INSTITUTION PREVIOUSLY DELIVERED A
ACCOUNT NO. ACCOUNT HOLDER MAINTAINING ACCOUNT LETTER AGREEMENT
----------- -------------- ----------------------------------- -------------------------
The Company and/or its Subsidiaries entered into contracts with the
following armored couriers in the calendar week ended ___________ ___, 200__,
and such armored couriers are or will be used to transport Cash Holdings:
ARMORED COURIER HAS PREVIOUSLY
LEGAL NAME OF ARMORED COURIER DELIVERED A LETTER AGREEMENT
----------------------------- ------------------------------
1
The Company and/or its Subsidiaries opened the following stores during
the calendar week ended ____________, 200_ serviced by the indicated bank and
courier:
STORE NUMBER CITY/STATE BANK COURIER
------------ ------------ --------------- ------------------
The Company hereby represents, warrants, and certifies that as of the
date hereof the Company is in compliance with Section 6.20 of the Agreement.
This Report is executed on ___________ ____, 200__, by the duly
elected, qualified and acting [TITLE] of the Company.
ACE CASH EXPRESS. INC.,
By:
-------------------------------
Name:
Title:
2
EXHIBIT I
[FORM OF COMPLIANCE CERTIFICATE]
FINANCIAL COVENANT AND COMPLIANCE CERTIFICATE
FOR CURRENT REPORTING PERIOD BEGINNING ___________, _______ AND
ENDING __________, _______ ("CURRENT PERIOD")
All capitalized terms used herein, unless otherwise defined herein, shall have
the meanings set forth in that certain Credit Agreement, dated as of March 31,
2003, by and among ACE Cash Express, Inc., Xxxxx Fargo Bank Texas, National
Association, as Administrative Agent, and the other Lenders parties thereto (as
amended, modified, or supplemented, the "Agreement").
FINANCIAL COVENANTS.
Indicate Compliance
1. Net Worth. The Borrower shall not any time permit
the Net Worth of the Borrower and its Subsidiaries
on a Consolidated basis to be less than
$64,038,000 plus (b) seventy-five percent (75%) of
all Net Income earned after the Closing Date
during any fiscal quarter, provided, however that
fiscal quarters in which Net Income is a negative
amount will be excluded from the calculation of
Net Income earned after the Closing Date, plus (c)
an amount equal to the (100%) of all proceeds of
any offering of Equity Interests (net of offering
and professional fees and expenses) by the
Borrower or any of its Subsidiaries occurring
after the Closing Date that is permitted
hereunder. Yes No
Calculation $64,038,000
Plus: 75% of cumulative Net Income
accruing after the Closing Date
(excluding the aggregate amount
of any losses incurred during
any calendar quarters occurring
after the Closing Date)
Plus: Net proceeds of equity offerings $
------------------
Equals: Minimum Net Worth
$
------------------
$
==================
Actual
Calculation Total capital stock $
------------------
Plus: Paid-in capital $
------------------
Plus: Retained Earnings $
------------------
Minus: Treasury Stock $
------------------
Equals: Net Worth $
==================
2. EBITDA. The Borrower shall not at any time permit as of the end of any
fiscal quarter, permit the aggregate EBITDA of the Borrower and its
Subsidiaries on a Consolidated basis for the four-quarter period ending on
the last day of such fiscal quarter to be less than 85% of the aggregate
EBITDA of the Borrower and its
1
Subsidiaries on a Consolidated basis for the four-quarter period ending on
the last day of the immediately preceding fiscal quarter.
Yes No
Required
Calculations a. Consolidated EBITDA for
four consecutive fiscal
quarter period ending
on immediately preceding
Calculation Date* $
----------------
b. Multiplied by 0.85
c. Required EBITDA $
----------------
Actual
Consolidated EBITDA for four
previous fiscal quarter period
ending on Calculation Date** $
----------------
*Calculation of Consolidated
EBITDA for four consecutive
fiscal quarter period ending
on immediately preceding
Calculation Date
Net Income for such period $
----------------
Plus: Interest Expense for
such period
$
----------------
Plus: Federal, state and local
income taxes for such
period $
----------------
Plus: Depreciation, Amortization
and other non-cash
charges for such period
(excluding, however, any
reserves or non-cash $
charges relating to, or ----------------
in respect of, Payday
Loans or any other loan
program administered by
the Borrower or its
Subsidiaries)
Minus: Extraordinary gains for
such period $
----------------
Plus: Extraordinary losses for
such period $
---------------=
Equals: EBITDA for such period $
================
2
**Calculation of Consolidated
EBITDA for four fiscal quarter
period ending on Calculation
Date.
Net Income for such period $
----------------
Plus: Interest Expense
for such period $
----------------
Plus: Federal, state and local
income taxes for such
period $
----------------
Plus: Depreciation, Amortization
and other non-cash
charges for such period
(excluding, however, any
reserves or non-cash $
charges relating to, or ----------------
in respect of, Payday
Loans or any other loan
program administered by
the Borrower or its
Subsidiaries)
Minus: Extraordinary gains for
such period $
----------------
Plus: Extraordinary gains for
such period $
----------------
Equals: EBITDA for such period $
================
3
3. Debt to EBITDA Ratio. At the end of any fiscal quarter, the
Borrower shall not permit the Debt to EBITDA Ratio on a
Consolidated basis to be equal to or more than (i) 3.50 to
1.00 from the Closing Date until June 30, 2005 and (ii) 3.25
to 1.00 at any time thereafter; provided, however, that as
of the end of each of the fiscal quarters ending on each of
March 31, 2004 and March 31, 2005, the Debt to EBITDA Ratio Yes No
shall not be greater than 3.75 to 1.00.
Calculation Funded Indebtedness $
-----------
EBITDA $
-----------
Funded Indebtedness/EBITDA
(Debt to Cash Flow Ratio) = to 1.00
-----------
4. Cash Flow Coverage Ratio. The Borrower shall not permit the
Cash Flow Coverage Ratio of the Borrower and its
Subsidiaries on a Consolidated basis to be less than
1.15:1.00 at any time. Yes No
Calculation: EBITDA: EBITDA for 12 consecutive
month period ending on such
Calculation Date
$
-----------
Minus: Federal, state and local taxes
paid for 12 consecutive month
period ending on such
Calculation Date $
-----------
Minus: total capital expenditures paid
in cash for 12 consecutive month
period ending on such
Calculation Date $
-----------
Plus: Rent expense during 12
consecutive month period
ending on such Calculation
Date $
-----------
Equals: Adjusted EBITDA $
===========
Adjusted Expenditures: cash Interest
Expense paid for 12 consecutive
month period ending on such Calculation
Date $
-----------
Plus: Current portion of long term
debt $
-----------
Plus: Rent expense $
-----------
Equals: Adjusted Expenditures $
-----------
Adjusted EBITDA/Adjusted
Expenditures (Cash Flow Coverage
Ratio) = to 1.00
-----------
4
FINANCIAL STATEMENTS AND REPORTS:
a. Annual CPA audited FYE consolidated and consolidating
financial statements with Compliance Certificate and SEC
Form 10-K on or before 90 days after FYE or such earlier
time as my be required under applicable law Yes No
b. Quarterly unaudited consolidated and consolidating financial
statements with Compliance Certificate and SEC Form 10-Q
within forty-five (45) days of each quarter end (except for
fourth quarter). Yes No
The undersigned hereby certifies that the above information and
computations are true and correct and not misleading as of the
date hereof, and that since the date of the Borrower's most
recent Compliance Certificate (if any):
No Default or Event of Default has occurred under
the Agreement during the Current Period, or been
--------- discovered from a prior period, and not reported.
A Default or Event of Default (as described below)
has occurred during the Current Period or has been
discovered from a prior period and is being
--------- reported for the first time.
Description of Default or Event of Default:______________________________
ACE CASH EXPRESS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
5
EXHIBIT J
[FORM OF ASSIGNMENT AND ASSUMPTION]
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [INSERT NAME OF ASSIGNOR] (the "Assignor") and [INSERT NAME OF ASSIGNEE]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below (i) all of the Assignor's rights and obligations
in its capacity as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including any letters of credit and guaranties included in such facilities) and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
------------------------------
2. Assignee:
------------------------------
[AND IS AN AFFILIATE/APPROVED FUND OF
[IDENTIFY LENDER]1]
3. Borrower(s): ACE Cash Express, Inc. (the "Borrower")
4. Administrative Agent: Xxxxx Fargo Bank Texas, National Association, as
the Administrative Agent under the Credit
Agreement (the "Agent")
----------
(1) Select as applicable.
5. Credit Agreement: Credit Agreement dated as of March 31, 2003 among
Borrower, the Lenders parties thereto, Agent, and the
other agents parties thereto (as amended,
supplemented, restated or otherwise modified, the
"Credit Agreement")
6. Assigned Interest:
Aggregate Amount of Amount of Percentage Assigned
Commitment/Loans for Commitment/Loans of
Facility Assigned(2) all Lenders Assigned Commitment/Loans(3)
-------------------- -------------------- ---------------- --------------------
$ $ %
$ $ %
$ $ %
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------
Title:
----------
(2) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.
"Revolving Commitment" or "Seasonal Revolving Commitment")
(3) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
2
[CONSENTED TO AND](4) Accepted:
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, as
Administrative Agent
By
--------------------------------------
Title:
[CONSENTED TO:](5)
ACE CASH EXPRESS, INC.
By
--------------------------------------
Title:
----------
(4) To be added only if the consent of the Agent is required by the terms of
the Credit Agreement.
(5) To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.
3
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Credit Document or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates
or any other Person of any of their respective obligations under any Credit
Document.
1.2. Assignee. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it satisfies the requirements, if any, specified in the Credit
Agreement that are required to be satisfied by it in order to acquire the
Assigned Interest and become a Lender, (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.05 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Agent or any other
Lender, and (v) if it is a Foreign Lender, attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Agent,
the Assignor or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Documents, and (ii) it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and
4
other amounts) to the Assignor for amounts which have accrued to but excluding
the Effective Date and to the Assignee for amounts which have accrued from and
after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
5
SCHEDULE 1
Pricing Grid
Debt to Applicable Margin Applicable Margin Applicable Margin for
EBITDA Ratio for LIBO Rate Loans for ABR Loans Reference Rate Loans
---------------- ------------------- ----------------- --------------------
=> 3.50x 4.25% per annum 2.75% per annum 4.25% per annum
< 3.50x => 3.25x 4.00% per annum 2.50% per annum 4.00% per annum
< 3.25x => 3.00x 3.75% per annum 2.25% per annum 3.75% per annum
< 3.00x =>2.75x 3.50% per annum 2.00% per annum 3.50% per annum
< 2.75x =>2.50x 3.25% per annum 1.75% per annum 3.25% per annum
< 2.50x 3.00% per annum 1.50% per annum 3.00% per annum
SCHEDULE 2.01(A)
Revolving Credit Commitments
PART I. REVOLVING CREDIT COMMITMENTS ON THE CLOSING DATE
REVOLVING CREDIT
LENDER COMMITMENT
------ ----------------
Xxxxx Fargo Bank Texas, National Association $ 34,285,714.29 28.571%
JPMorgan Chase Bank $ 23,314,285.71 19.429%
Bank of America, N.A $ 17,142,857.14 14.286%
US Bank National Association $ 13,714,285.71 11.429%
First American Bank SSB $ 10,285,714.29 8.571%
Southwest Bank of Texas N.A $ 6,857,142.86 5.714%
Texas Capital Bank National Association $ 5,828,571.43 4.857%
National City Bank $ 5,142,857.14 4.286%
Wachovia Bank, N.A $ 3,428,571.43 2.857%
TOTAL $120,000,000.00
PART II. REVOLVING CREDIT COMMITMENTS UPON EFFECTIVENESS OF INCREMENTAL LOAN
AMENDMENT
REVOLVING CREDIT
LENDER COMMITMENT
------ ----------------
Xxxxx Fargo Bank Texas, National Association $ 27,428,571.43 22.857%
JPMorgan Chase Bank $ 23,314,285.71 19.429%
Bank of America, N.A $ 17,142,857.14 14.286%
US Bank National Association $ 13,714,285.71 11.429%
First American Bank SSB $ 10,285,714.29 8.571%
Southwest Bank of Texas N.A $ 6,857,142.86 5.714%
Texas Capital Bank National Association $ 5,828,571.43 4.857%
National City Bank $ 5,142,857.14 4.286%
Wachovia Bank, N.A $ 3,428,571.43 2.857%
Person providing Incremental Facility $ 6,857,142.86 5.714%
TOTAL $120,000,000.00
SCHEDULE 2.01(B)
Seasonal Revolving Credit Commitments
PART I. SEASONAL REVOLVING CREDIT COMMITMENTS ON THE CLOSING DATE
SEASONAL REVOLVING
LENDER COMMITMENT
------ ----------------
Xxxxx Fargo Bank Texas, National Association $ 5,714,285.71 12.698%
JPMorgan Chase Bank $10,685,714.29 23.746%
Bank of America, N.A $ 7,857,142.86 17.460%
US Bank National Association $ 6,285,714.29 13.968%
First American Bank SSB $ 4,714,285.71 10.476%
Southwest Bank of Texas N.A $ 3,142,857.14 6.984%
Texas Capital Bank National Association $ 2,671,428.57 5.937%
National City Bank $ 2,357,142.86 5.238%
Wachovia Bank, N.A $ 1,571,428.57 3.492%
TOTAL $45,000,000.00
PART II. SEASONAL REVOLVING CREDIT COMMITMENTS UPON EFFECTIVENESS OF INCREMENTAL
LOAN AMENDMENT
SEASONAL REVOLVING
LENDER COMMITMENT
------ ----------------
Xxxxx Fargo Bank Texas, National Association $12,571,428.57 22.857%
JPMorgan Chase Bank $10,685,714.29 19.429%
Bank of America, N.A $ 7,857,142.86 14.286%
US Bank National Association $ 6,285,714.29 11.429%
First American Bank SSB $ 4,714,285.71 8.571%
Southwest Bank of Texas N.A $ 3,142,857.14 5.714%
Texas Capital Bank National Association $ 2,671,428.57 4.857%
National City Bank $ 2,357,142.86 4.286%
Wachovia Bank, N.A $ 1,571,428.57 2.857%
Person providing Incremental Facility $ 3,142,857.14 5.714%
TOTAL $55,000,000.00
SCHEDULE 2.02(a)
Domestic Lending Office
Unless otherwise indicated, each Lender's Domestic Lending Office is the same as
its address for notices.
1. Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2. JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn.: D. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3. Bank of America, N.A.
000 Xxxx Xx.
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Honey
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4. US Bank National Association
One XX Xxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
5. First American Bank SSB
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn.: X. Xxxx. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Schedule 2.02(a)
6. Southwest Bank of Texas, N.A.
Notice Address Domestic Lending Xxxxxx
000 Xxxx Xxxxxxx Xxxxxxx, Xxxxx 0000 0000 Xxxx Xxx Xxxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
7. Texas Capital Bank National Association
Notice Address Domestic Lending Office
6060 N. Central Expwy #000 x/x Xxx Xxxxx
Xxxxxx, Xxxxx 00000 0000 XxXxxxxx Xxx. #000
Attn.: Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8. National City Bank
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9. Wachovia Bank, N.A.
000 X. Xxxxxxx Xxxxxx, XX 0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Schedule 2.02(a)
SCHEDULE 2.02(B)
Eurodollar Lending Office
1. Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2. JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn.: D. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3. Bank of America, N.A.
000 Xxxx Xx.
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Honey
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4. US Bank National Association
One XX Xxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
5. First American Bank SSB
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn.: X. Xxxx. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
6. Southwest Bank of Texas, N.A.
0000 Xxxx Xxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Schedule 2.02(b)
7. Texas Capital Bank National Association
c/o Xxx Xxxxx
0000 XxXxxxxx Xxx. #000
Xxxxxx, Xxxxx 00000
8. National City Bank
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9. Wachovia Bank, N.A.
000 X. Xxxxxxx Xxxxxx, XX 0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Schedule 2.02(b)
SCHEDULE 3.06
LITIGATION
3.06(a)(i)
o Xxxxxxxx Xxxx v. Ace Cash Express, Inc.: This lawsuit regarding Goleta
bank loans (the "Bank Loans") offered and made at the Borrower's
locations in Florida was filed in Clay County, Florida and served on
the Borrower on November 8, 2000. The plaintiff, for herself and
others similar situated, alleges that the Bank Loans offered at the
Borrower's locations in Florida were made by the Borrower rather than
by Goleta and therefore those Bank Loans violated Florida usury laws
and the offering of those Bank Loans involves misrepresentations and
deceptive practices in violation of Florida law. The plaintiff seeks
an unspecified amount of damages, including an amount equal to all
interest charged on the Bank Loans made in Florida, the plaintiff's
attorneys' fees, and court costs. The Borrower's attempt to remove
this case to federal court was not successful. On October 2, 2001, the
court granted Goleta's motion to intervene as a defendant in this
lawsuit. The Borrower and Goleta filed a motion to dismiss the
plaintiff's complaint on the basis that Goleta is the lender of the
Bank Loans and, under federal law, is entitled to charge interest at
the rate permitted by California law. But on March 20, 2002, the court
denied that motion, and on April 19, 2002, each of the Borrower and
Goleta filed its answer to the plaintiff's complaint. On February 10,
2003, the parties signed a Stipulation to stay the action pending
consummation of present settlement negotiations regarding Xxxxxxx
Xxxxxx v. ACE Cash Express, Inc. (described below).
o Xxxxxx X. Xxxxxx v. Ace Cash Express, Inc. et al.: This lawsuit
regarding the Bank Loans offered and made at the Borrower's locations
in Indiana was filed on September 11, 2001 in the U.S. District Court
for the Southern District of Indiana. This lawsuit was filed against
the Borrower; Goleta; the Borrower's Chairman of the Board, Xxxxxxx X.
Xxxxxx; the Borrower's Chief Executive Officer, Xxxxxx X. Xxxxxxxx;
the Borrower's President & Chief Operating Officer, Xxx X. Xxxxxxxxx;
and a former employee of the Borrower. The plaintiff alleged
violations of (1) the Indiana UCCC and the Indiana "loansharking"
statute, because the interest charged for the Bank Loans exceeded the
finance charges permitted by those statutes, (2) the federal TILA,
Regulation Z, and the Indiana UCCC, because the disclosures to
borrowers of Bank Loans did not comply with the disclosure
requirements of those laws, and (3) the federal Racketeer Influenced
Corrupt Organizations (RICO) Act. In the complaint the plaintiff
purported to represent a class of all persons to whom a Bank Loan has
been made at any location of the Borrower in Indiana (a) since
September 11, 1999, regarding the excess-charge claims, (b) since
September 11, 2000, regarding the disclosure-violation claims, and (c)
since September 11, 1997, regarding the federal RICO Act claims. The
plaintiff sought relief of various kinds, including (i) for the
members of the class of plaintiffs who were allegedly charged
excessive interest, an order declaring the Loans to them "void," the
refund of all finance charges or interest paid by them in excess of
the maximum finance charges permitted under the Indiana UCCC, and a
penalty (to be determined by the court) in a maximum amount equal to
the greater of either all of the finance charges or interest received
from
them or up to ten times the amount of all excess finance charges or
interest received from them; (ii) for the members of the class of
plaintiffs who allegedly did not receive proper disclosures under the
federal TILA, Regulation Z, and the Indiana UCCC, statutory damages of
$500,000 each for violations of those statutes; (iii) for the members
of the class of plaintiffs allegedly damaged because of violations of
the RICO Act, an amount equal to three times those damages; and (iv)
the plaintiff's attorneys' fees and court costs. On December 17, 2001,
the defendants moved to dismiss the plaintiff's complaint, and on May
30, 2002, the court granted the motion. Based on its review of the
complaint and other filed documents, the court concluded that Goleta
made the Bank Loan to the plaintiff and then sold a participation
interest in that Bank Loan to the Borrower, so that the claims
asserted in the complaint were not sufficient to entitle the plaintiff
to any damages or other legal relief. The court, however, afforded the
plaintiff an opportunity to amend her complaint to assert legally
sufficient claims. On June 25, 2002, the plaintiff filed an amended
complaint that was substantially similar to the complaint that was
dismissed, except the amended complaint did not name Goleta as a
defendant and did not assert any disclosure-violation claims. On July
8, 2002, the Borrower and the remaining defendants filed a motion to
dismiss the amended complaint, asserting that the amended complaint
did not allege sufficient new facts to justify relief and that the
court's initial decision was dispositive. On September 30, 2002, the
court entered an order dismissing the amended complaint, with
prejudice. On October 15, 2002, the plaintiff filed a notice of appeal
to the United States Court of Appeals for the Seventh Circuit. On
January 15, 2003 the plaintiff's initial brief in his appeal of the
trial court's dismissal of his complaint was filed. The parties met
via telephone for a court-approved settlement conference on February
28, 2003. The parties have agreed to stay the proceedings in the
plaintiff's appeal pending consummation of present settlement
negotiations regarding Xxxxxxx Xxxxxx v. ACE Cash Express, Inc.
(described below).
o Xxxxx Xxxxxxxx Xxxxx v. Ace Cash Express, Inc. et al. This lawsuit
regarding both the Borrower's former "payday loan" activities and the
Bank Loans offered and made at the Borrower's locations in Maryland
was filed on August 20, 2001 in the Circuit Court for Baltimore City,
Maryland. On September 12, 2001, the plaintiff filed an amended
complaint against the Borrower and unnamed franchisees of the
Borrower. In the complaint, the plaintiff purports to represent a
class of all consumers with whom the Borrower has entered into any
payday-loan transaction or to whom a Bank Loan has been made at any
location of the Borrower in Maryland since April 1, 2000. The
plaintiff alleges that the defendants' loan-related activities violate
the Maryland usury laws, the Maryland Consumer Loan Law, the Maryland
Unsecured Closed End Credit Regulation Act, and the Maryland Consumer
Protection Act and are unconscionable under Maryland law. The
plaintiff seeks relief of various kinds, including a permanent
injunction against any further alleged illegal activities, an order
that all obligations of the class of plaintiffs to the defendants are
void, the return (as restitution) to the class of plaintiffs of all
amounts paid to the defendants, an order dissolving the Borrower and
prohibiting all defendants from conducting any further financial
services business, the disgorgement and return of all profits from the
loan-related activities, the plaintiff's attorneys' fees and expenses,
and court costs. On September 7, 2001, the Borrower removed this
lawsuit to the United States District Court for the District of
Maryland, but on November 14, 2001,
2
the federal court granted the plaintiff's motion to remand this
lawsuit back to the Circuit Court of Baltimore City. On January 3,
2002, Goleta filed a motion to intervene as a defendant in this
lawsuit, and the court granted that motion on January 8, 2002.
o Xxxxxxx Xxxxxx v. Ace Cash Express, Inc. et al.: This lawsuit
regarding both the Borrower's former "payday loan" activities and the
Bank Loans offered and made at the Borrower's locations was filed on
September 6, 2001, in the United States District Court for the
Northern District of Texas. The original complaint named as defendants
the Borrower and certain executive officers and directors and a former
employee of the Borrower. As the result of two amended complaints,
however, only the Borrower and Goleta are currently defendants in this
lawsuit. In her second amended complaint, the plaintiff purports to
represent a class of all consumers in the United States with whom the
Borrower has entered into any payday-loan transaction or to whom a
Bank Loan has been made at any location of the Borrower since
September 6, 1997, as well as sub-classes of persons who have engaged
in those kinds of transactions with the Borrower or at the Borrower's
locations and are alleged to be victims of usury or of unfair or
deceptive lending practices under the laws of various states in the
United States during the time periods within the various applicable
statutes of limitations. The plaintiffs allege that the defendants'
loan-related activities violate the federal RICO Act and the laws and
regulations of various states regarding usury, deceptive trade
practices (including the Texas Deceptive Trade Practices Act), and
other consumer protections. The plaintiff seeks relief of various
kinds, including a permanent injunction against any further alleged
illegal activities; the return (as restitution) to the class and
sub-classes of plaintiffs of all amounts paid to the defendants;
damages equal to three times the amount of all fees and interests paid
by the class & sub-classes of plaintiffs since Sept. 6, 1997; punitive
damages of at least $250 million; the plaintiff's attorneys' fees; and
court costs. On January 18, 2002, the Borrower and Goleta filed a
motion to dismiss the second amended complaint, asserting that the
federal RICO Act claims were legally deficient and should be dismissed
and that, if those claims are dismissed, the court should not retain
jurisdiction of the remaining state-law claims. On October 29, 2002,
the court granted the Borrower's and Goleta's motion to dismiss the
plaintiff's complaint. The court found that the plaintiff did not
allege sufficient facts to support her federal RICO claims and,
accordingly, dismissed those claims with prejudice. In the absence of
federal-law claims, the court declined to retain jurisdiction over the
plaintiff's state-law claims and, accordingly, dismissed those claims
without prejudice. On November 12, 2002, the plaintiff filed a motion
with the trial court requesting that the court vacate its judgment,
amend its order dismissing her complaint, and grant the plaintiff
permission to file an amended complaint. The Borrower and Goleta
currently have until April 1, 2003, to respond to the plaintiff's
motion. The parties are engaged in ongoing settlement discussions.
x Xxxx v. Ace Cash Express, Inc.: On December 18, 2002, the Borrower was
served with a lawsuit that had originally been filed (but not served)
in late October 2002 in the United States District Court for the
Western District of Virginia. The amended class action complaint
served on the Borrower names only the Borrower as a defendant and
relates to the Borrower's activities in connection with the short-term
consumer loans of Goleta
3
offered at the Borrower's stores in Virginia between April 1, 2000 and
October 10, 2002. The plaintiff, for himself and others similarly
situated, alleges that the Borrower's loan-related activities during
that period violated the federal RICO Act, the Virginia Consumer
Finance (or Small Loan) Act, the Virginia Payday Loan Act, and the
Virginia Consumer Protection Act and constituted fraud. The plaintiff
seeks actual and punitive damages of various kinds, including (under
the RICO Act) an amount equal to three times all of the Borrower's
proceeds from the loans made in Virginia during the approximate two
and one-half years; an amount equal to three times the actual damages
or $1,000, whichever is greater, for each violation of the Virginia
Consumer Protection Act; attorneys' fees & court costs. The key issue
in this lawsuit is whether the Borrower or Goleta should properly be
characterized as the lender or the maker of the short-term loans.
Contrary to the plaintiff's contentions, the Borrower maintains that
Goleta was the lender and that, because Goleta was a national bank
located in California, the short-term loans were governed by federal
and California law, not Virginia law. On February 5, 2003, the
Borrower moved to compel arbitration and to stay all proceedings until
completion of arbitration. The plaintiff has filed an opposition to
the Borrower's motion to compel arbitration.
o The Borrower has supplied information regarding certain of its payday
loans to the Federal Trade Commission ("FTC") in response to the FTC's
letter dated December 12, 2002.
o Ace Currency Exchange, Inc. v. Ace Cash Express, Inc.; alleging breach
of Consent Decree dated May 23, 1993 in Ace Currency Exchange, Inc. v.
Ace Cash Express, Inc. This lawsuit regarding the Borrower's use of
the name "Ace" in the City of Baltimore, Maryland and Baltimore,
Xxxxxx and a portion of Xxxx Arundel counties, Maryland in alleged
violation of that certain Consent Decree dated May 23, 1993 was filed
on or about March 4, 2003 in the United States District Court for the
District of Maryland. The plaintiff alleges the Borrower's violation
of the Consent Decree and seeks that (1) the Borrower be held in
contempt of court, (2) the Borrower pay compensatory damages of
$500,000 plus interest and costs, (3) the Borrower be enjoined from
continuing to violate the Consent Decree, (4) the Borrower account to
and pay the plaintiff all profits received during the period of
violation and that such damages be trebled and (5) costs, attorneys'
fees and other appropriate relief be awarded to the plaintiff against
the Borrower.
3.06(c)
o See Ace Currency Exchange, Inc. v. Ace Cash Express, Inc.; alleging
breach of Consent Decree dated May 23, 1993 in Ace Currency Exchange,
Inc. v. Ace Cash Express, Inc. described above. Court order to resolve
lawsuit in accordance with an Agreement dated October 24, 1989,
between the Borrower and Ace Currency Exchange, Inc. In that
Agreement, the Borrower agreed to do the following in the City of
Baltimore, Maryland, in the counties of Baltimore and Xxxxxx,
Maryland, and in a portion of the County of Xxxx Arundel, Maryland:
(1) cease using A.C.E. in all permanent storefront signage, (2) cease
using A.C.E. on all temporary banners and signage (though temporary
posters may include the Borrower's logo with A.C.E. appearing not
larger than approximately 1 1/2"),
4
(3) cease reference to ACE when answering the telephone at its
locations, and (4) cease reference to ACE in all future media
advertising.
o Settlement Agreement between Ace Cash Express, Inc. and the Ohio
Division of Financial Institutions dated as of December 31, 2002 - See
Borrower's Form 8-K dated as of December 20, 2002 filed with the
Securities and Exchange Commission ("SEC") on January 6, 2003
o Final Order of the State of Florida, Department of Banking and
Finance, Division of Securities and Finance dated December 30, 2002 In
re Ace Cash Express, Inc. d/b/a Ace America's Cash Express - See
Borrower's Form 8-K dated as of December 20, 2002 filed with the SEC
on January 6, 2003
o Consent Judgment dated December 13, 2002 in State of North Carolina ex
rel. Xxx Xxxxxx, Attorney General and Xxxxxx X. Xxxxx, Xx.,
Commissioner of Banks v. Ace Cash Express, Inc. - See Borrower's Form
10-Q for the quarterly period ended December 31, 2002 filed with the
SEC on February 14, 2003
o Consent Order In the Matter of Ace Cash Express, Inc., Agent and Bank
Service Provider for Goleta National Bank, dated October 25, 2002 -
See Borrower's Form 8-K dated as of October 25, 2002 filed with the
SEC on November 5, 2002
o Consent Decree dated May 6, 2002 - State of Colorado, ex rel. Xxx
Xxxxxxx, Attorney General for the state of Colorado, and Xxxxx X.
Xxxx, Administrator, Uniform Consumer Credit Code v. Ace Cash Express,
Inc. - See Borrower's Form 10-Q for the quarterly period ended March
31, 2002 filed with the SEC on May 15, 2002
o Agreed Final Judgment and Permanent Injunction in Western Union
Corporation v. Ace Cash Express, Inc., dated March 27, 1990 -
Injunction prohibiting the use of the slogan "We Do Western Union Only
Better" in connection with the promotion and advertisement of money
transfer services.
5
SCHEDULE 3.14
ORGANIZATION; SUBSIDIARIES
JURISDICTION OF STATES AUTHORIZED TO
BORROWER INCORPORATION CONDUCT BUSINESS
-------- --------------- --------------------
Ace Cash Express, Inc. Texas Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Washington DC
Florida
Georgia
Indiana
Iowa
Kansas
Louisiana
Maryland
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Jersey
New Mexico
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Texas
Utah
Vermont
Xxxxxxxx
Xxxxxxxxxx
Wisconsin
Wyoming
District of Columbia
STATES
STATES AUTHORIZED TO
JURISDICTION OF CONDUCTING CONDUCT
NAME OF SUBSIDIARY INCORPORATION BUSINESS BUSINESS EQUITY OWNERSHIP TRADE NAMES
------------------ --------------- ---------- ------------- ---------------- -----------
Check Express, Inc. Florida None Florida All outstanding None
shares of common
stock owned by
Borrower
CHECK EXPRESS Florida None Florida All outstanding None
FLORIDA, INC. California shares of common
Georgia stock owned by
Ohio Check Express,
Texas Inc.
CHECK EXPRESS Florida None Florida All outstanding None
FINANCE, INC. shares of common
stock owned by
Check Express,
Inc.
CHECK EXPRESS SOUTH Florida Indiana Florida All outstanding None
CAROLINA, INC. South Carolina Indiana shares of common
South Carolina stock owned by
Check Express,
Inc.
Check Express USA, Florida None Florida All outstanding None
Inc. shares of common
stock owned by
Check Express,
Inc.
CHECK-X-CHANGE California None California All outstanding None
CORPORATION shares of common
stock owned by
Check Express,
Inc.
Q. C. & G. FINANCIAL, Arizona Texas Arizona All outstanding None
INC. Virginia Texas shares of common
Virginia stock owned by
Borrower
All outstanding
PUBLIC CURRENCY, INC. California California California shares of common None
stock owned by
Borrower
All membership
ACE Funding, LLC Delaware Texas Texas interests owned None
by Borrower
2
SCHEDULE 3.15(c)
INTELLECTUAL PROPERTY
o See Schedule 3.06 regarding Ace Currency Exchange, Inc. v. Ace Cash
Express, Inc.
TRADEMARKS
REGISTRATION
APPLICATION NUMBER/
OWNER TRADEMARK NAME JURISDICTION STATUS APPLICATION NO.
----- -------------- ------------ ------ ---------------
Ace Cash Express, Inc. A C E AMERICA'S CASH EXPRESS Mexico Registered 667241
Ace Cash Express, Inc. A A C E AMERICA'S CASH United States of Registered 1,831,546
EXPRESS and design America
Ace Cash Express, Inc. A A-C-E AMERICA'S CASH Canada Registered TMA445484
EXPRESS and design
Ace Cash Express, Inc. ACE United States of Registered 2,155,964
America
Ace Cash Express, Inc. A A C E and design United States of Registered 1,806,389
America
Ace Cash Express, Inc. ACE AMERICA'S CASH EXPRESS Texas Registered 052565
and design
Ace Cash Express, Inc. ACE AMERICA'S CASH EXPRESS Texas Registered 052564
and design
Ace Cash Express, Inc. ACE CANADA'S CASH EXPRESS Canada Pending Serial No.
and design 1132776
Ace Cash Express, Inc. AFTER ALL... IT'S YOUR MONEY! United States of Pending Serial No.
America 76/490562
Ace Cash Express, Inc. CASH IN ON OUR CONVENIENCE United States of Registered 1,846,958
America
Ace Cash Express, Inc. CASH IN ON OUR CONVENIENCE United States of Registered 1,831,538
America
Ace Cash Express, Inc. CASH IN ON OUR CONVENIENCE United States of Registered 2,108,173
America
Ace Cash Express, Inc. CASH IS OUR MIDDLE NAME United States of Registered 2,318,222
America
Ace Cash Express, Inc. IT'S YOUR MONEY. WHY WAIT? United States of Pending Serial No.
America 76/491255
Check Express, Inc. CHECK EXPRESS United States of Registered 1,370,520
America
Check Express, Inc. CHECK EXPRESS Canada Registered TMA496291
Check Express, Inc. CHECK EXPRESS Mexico Registered 482464
Check Express, Inc. CHECK EXPRESS Mexico Registered 486677
Check Express, Inc. CHECK EXPRESS United States of Pending Serial No.
America 76/491366
Check Express, Inc. CHECK EXPRESS United States of Pending Serial No.
America 76/490563
Check Express, Inc. CHECK EXPRESS and design United States of Registered 1,476,206
America
Check Express, Inc. CHECK EXPRESS MONEY CENTERS Canada Registered TMA503892
and design
Check Express, Inc. CHECK EXPRESS MONEY CENTERS Mexico Registered 503683
and design
Check Express, Inc. CHECK EXPRESS MONEY CENTERS Mexico Registered 514567
and design
Check Express, Inc. EXPRESS and check design United States of Registered 1,489,647
America
Check Express, Inc. EXPRESS and check design United States of Registered 2,183,193
America
Check Express, Inc. EXPRESS and check design Canada Registered TMA532292
Check Express, Inc. EXPRESS and check design Mexico Pending Serial No.
233980
Check Express, Inc. EXPRESS and check design Mexico Registered 514566
Check X Change Corporation CHECK-X-CHANGE United States of Registered 1,793,853
America
Check X Change Corporation CHECK-X-CHANGE and design Oregon Registered 0015726
Check X Change Corporation X-CHANGE-CHECK-X-CHANGE and United States of Registered 1,374,191
design America
2
PATENT APPLICATIONS
OWNER TITLE FILING DATE APPLICATION NO. ATTY. DOCKET NO.
----- ----- ----------- --------------- ----------------
Ace Cash Express, Inc. Automated Method and 05/09/2002 10/142,351 300003-1001
System for Enrollment
Ace Cash Express, Inc. Check and Cash Dispensing 06/19/2002 10/175,584 300003-1002
Machine and Method
3
SCHEDULE 3.15(d)
DEPOSIT ACCOUNTS AND ARMORED COURIERS
(i) Deposit Accounts of Borrower:
ACCOUNT NAME BANK ACCT # BANK NAME
------------ ----------- ---------------
ARKANSAS DEP 00000000 BANK OF AMERICA
ARKANSAS R/I 00000000 BANK OF AMERICA
ARKANSAS CURR 00000000 BANK OF AMERICA
XXX XXXXXX XXX 000000000 XXXX XX XXXXXXX
XXX XXXXXX CURR 109650390 BANK OF AMERICA
NEW MEXICO R/I 109650408 BANK OF AMERICA
NASHVILLE TN. DEP 112485669 BANK OF AMERICA
NASHVILLE TN. CURR 112485677 BANK OF AMERICA
NASHVILLE TN. R/I 112485685 BANK OF AMERICA
WICHITA KANSAS DEP 2861440603 BANK OF AMERICA
WICHITA KANSAS R/I 2861440616 BANK OF AMERICA
WICHITA KANSAS CURR 2861440629 BANK OF AMERICA
SAVANNAH GA. CURR 3266408527 BANK OF AMERICA
SAVANNAH GA. DEP 3266408535 BANK OF AMERICA
SAVANNAH GA. R/I 3266408543 BANK OF AMERICA
WILMINGTON NC. CURR 3783622508 BANK OF AMERICA
WILMINGTON NC. DEP 3783622511 BANK OF AMERICA
WILMINGTON NC. R/I 3783622524 BANK OF AMERICA
CHARLESTON SC. CURR 3783730461 BANK OF AMERICA
CHARLESTON SC. DEP 3783730474 BANK OF AMERICA
CHARLESTON SC. R/I 3783730487 BANK OF AMERICA
CAPITOL R/I 3783832589 BANK OF AMERICA
CAPITOL CURR 3783832592 BANK OF AMERICA
CAPITOL DEP 3783832602 BANK OF AMERICA
HUNTSVILLE CURR 4771913193 BANK OF AMERICA
HUNTSVILLE DEP 4771913201 BANK OF AMERICA
HUNTSVILLE R/I 4771913219 BANK OF AMERICA
XXXX XXXXX XXX 0000000000 XXXX XX XXXXXXX
XXXX XXXXX X/X 0000000000 XXXX XX XXXXXXX
ACCOUNT NAME BANK ACCT # BANK NAME
------------ ----------- ---------------
XXXX XXXXX XXXX 0000000000 XXXX XX XXXXXXX
OKLAHOMA R/I 70108364923 BANK OF AMERICA
OKLAHOMA DEP 70108364931 BANK OF AMERICA
OKLAHOMA CURR 70108364958 BANK OF AMERICA
ST.LOUIS MO. DEP 100101249510 BANK OF AMERICA
ST.LOUIS MO. CURR 100101249529 BANK OF AMERICA
ST.LOUIS MO. R/I 100101249537 BANK OF AMERICA
FT.XXXXX IN. CURR 715001269599 BANK ONE
FT.XXXXX IN. DEP 715001269615 BANK ONE
FT.XXXXX IN. R/I 715002369607 BANK ONE
SAN / AUS DEP 43509122128 JPMORGAN CHASE BANK
SAN / AUS R/I 43509122144 JPMORGAN CHASE BANK
SAN / AUS CURR 43509122151 JPMORGAN CHASE BANK
EL PASO DEP 43509122169 JPMORGAN CHASE BANK
EL PASO R/I 43509122177 JPMORGAN CHASE BANK
EL PASO CURR 43509122185 JPMORGAN CHASE BANK
VALLEY DEP 84609288218 JPMORGAN CHASE BANK
VALLEY R/I 84609288226 JPMORGAN CHASE BANK
VALLEY CURR 84609288234 JPMORGAN CHASE BANK
NEW ORLEANS DEP 812315781 HIBERNIA NAT'L
NEW ORLEANS CURR 812315803 HIBERNIA NAT'L
NEW ORLEANS R/I 812315811 HIBERNIA NAT'L
LONGVIEW TX CURR 3420000752 HIBERNIA NAT'L
LONGVIEW TX DEP 3420000760 HIBERNIA NAT'L
2
ACCOUNT NAME BANK ACCT # BANK NAME
------------ ----------- ---------------
LONGVIEW TX R/I 3420000779 HIBERNIA NAT'L
CLEVELAND OH. DEP 3765199 NATIONAL CITY
CLEVELAND OH. CURR 3765201 NATIONAL CITY
CLEVELAND OH. R/I 3765228 NATIONAL CITY
INDIANAN CURR 501912286 NATIONAL CITY
INDIANAN DEP 501912338 NATIONAL CITY
INDIANAN R/I 501912341 NATIONAL CITY
PITTSBURGH CURR 4600658771127 NATIONAL CITY
PITTSBURGH DEP 4600658771143 NATIONAL CITY
PITTSBURGH R/I 4600658771151 NATIONAL CITY
HOMEWOOD AL. DEP 301060694 REGION'S
HOMEWOOD AL. CURR 301060708 REGION'S
HOMEWOOD AL. R/I 301060813 REGION'S
ALBANY CURR 2507841006 REGION'S
ALBANY DEP 2507842206 REGION'S
ALBANY R/I 2507843406 REGION'S
CORPUS CHRISTI R/I 1411001371 TEXAS CAPITOL
CORPUS CHRISTI DEP 1411001678 TEXAS CAPITOL
CORPUS CHRISTI CURR 1411001686 TEXAS CAPITOL
NO. CAROLINA DEP 2000000566115 WACHOVIA
NO. CAROLINA R/I 2000000566128 WACHOVIA
NO. CAROLINA CURR 2000000566131 WACHOVIA
3
ACCOUNT NAME BANK ACCT # BANK NAME
------------ ----------- ---------------
ACE CollectionsTrustAcct/ALA 2000014786923 WACHOVIA
ACE CollectionsTrustAcct/XXXXXX 2000014787809 WACHOVIA
SO.CAROLINA DEP 2010000169829 WACHOVIA
SO.CAROLINA R/I 2010000169832 WACHOVIA
SO.CAROLINA CURR 2010000175703 WACHOVIA
VIRGINIA DEP 2050000054237 WACHOVIA
VIRGINIA R/I 2050000054240 WACHOVIA
VIRGINIA CURR 2050000054253 WACHOVIA
GEORGIA DEP 2080000230403 WACHOVIA
GEORGIA R/I 2080000230416 WACHOVIA
GEORGIA CURR 2080000230429 WACHOVIA
FLORIDA DEP 2090001409155 WACHOVIA
FLORIDA CURR 2090001409168 WACHOVIA
FLORIDA R/I 2090001409171 WACHOVIA
2090001409414 WACHOVIA
CALIFORNIA R/I 4091219998 XXXXX FARGO
CALIFORNIA DEP 4091220004 XXXXX FARGO
CALIFORNIA CURR 4091220012 XXXXX FARGO
BRYAN TX. DEP 4122047780 XXXXX FARGO
BRYAN TX. CURR 4122049745 XXXXX FARGO
BRYAN TX. R/I 4122099898 XXXXX FARGO
ACH COLLECTIONS / RETURNS 4123473928 XXXXX FARGO
CORE DATA 4127070845 XXXXX FARGO
PHOENIX AZ. DEP 4159500198 XXXXX FARGO
PHOENIX AZ. R/I 4159500214 XXXXX FARGO
PHOENIX AZ. CURR 4159500222 XXXXX FARGO
WASHINGTON DEP 4159662725 XXXXX FARGO
WASHINGTON CURR 4159662733 XXXXX FARGO
4
ACCOUNT NAME BANK ACCT # BANK NAME
------------ ----------- ---------------
WASHINGTON R/I 4159662741 XXXXX FARGO
DENVER CO. CURR 4159663293 XXXXX FARGO
DENVER CO. R/I 4159663301 XXXXX FARGO
DENVER CO. DEP 4159663319 XXXXX FARGO
COLORADO SPRINGS R/I 4159663335 XXXXX FARGO
COLORADO SPRINGS CURR 4159663343 XXXXX FARGO
COLORADO SPRINGS DEP 4159663350 XXXXX FARGO
FRANCHISE REVENUE 4159698323 XXXXX FARGO
CORPORATE DEPOSIT 4159698331 XXXXX FARGO
DALLAS / FT.WORTH DEP 4159698356 XXXXX FARGO
DALLAS / FT.WORTH CURR 4159698364 XXXXX FARGO
DALLAS / FT.WORTH R/I 4159698380 XXXXX FARGO
MONEY ORDERS 4159698406 XXXXX FARGO
HOUSTON TX. DEP 4159698489 XXXXX FARGO
HOUSTON TX. CURR 4159698497 XXXXX FARGO
HOUSTON TX. R/I 4159698513 XXXXX FARGO
INSURANCE 4159698521 XXXXX FARGO
CONCENTRATION 4159698539 XXXXX FARGO
DEFERRED COMP. 4159698562 XXXXX FARGO
401K DEPOSIT 4159698570 XXXXX FARGO
PORTLAND OR. DEP 4178528691 XXXXX FARGO
PORTLAND OR. R/I 4178528709 XXXXX FARGO
PORTLAND OR. CURR 4178528717 XXXXX FARGO
NEVADA CURR 4311262364 XXXXX FARGO
NEVADA DEP 4311262372 XXXXX FARGO
NEVADA R/I 4311262380 XXXXX FARGO
DIRECT DEP ACCT 4375652658 XXXXX FARGO
GNB DEPOSITORY ACCT 4375669348 XXXXX FARGO
MEDICAL BENEFITS 4375669561 XXXXX FARGO
CALIFORNIA OPER 4375687324 XXXXX FARGO
LAREDO TX. CURR 4496885856 XXXXX FARGO
LAREDO TX. DEP 0000000000 XXXXX FARGO
LAREDO TX. R/I 0000000000 XXXXX FARGO
IBM CREDIT ACCOUNT 4584708721 XXXXX FARGO
CENTRAL DISBURSING ACCOUNT 4588542456 XXXXX FARGO
PAYROLL 4759630080 XXXXX FARGO
ACCOUNTS PAYABLE OPER 4759630098 XXXXX FARGO
5
(ii) Deposit Accounts of Borrower's Subsidiaries (other than ACE Funding):
Q C & G FINANCIAL INC. 328911240 FIRST AMERICAN
(iii) Armored courier services that transport Collateral:
o Arkansas Armored Car Service, L.L.C.
o Armored Transport Texas, Inc. a/k/a AT Systems Southwest, Inc.
o Brink's Incorporated
x Xxxxxx Armored, Inc.
o First Star Transport
o Loomis Fargo & Co.
o MidFlorida Armored
o Rochester Armored Car Co., Inc.
o Triple D Security, Inc.
(iv) Agreements with armored courier services that transport Collateral:
o Armored Car Service Agreement between Arkansas Armored Car Service,
L.L.C. and the Borrower
o Armored Car Service Agreement between Armored Transport Texas, Inc.
a/k/a AT Systems Southwest, Inc. and the Xxxxxxxx
x Xxxxxxxx Xx. 000000 between Brink's Incorporated and the Borrower
o Service Contract No. 11000375 between Xxxxxx Armored, Inc. and the
Borrower
o Armored Car Service Agreement between First Star Transport and the
Borrower
o Service Agreement between Xxxxxx Fargo & Co. and the Borrower
o Agreement between MidFlorida Armored and the Borrower
o Agreement between Rochester Armored Car Co, Inc. and the Borrower
o Agreement between Triple D Security, Inc. and the Borrower
6
SCHEDULE 3.18
ENVIRONMENTAL
o None
SCHEDULE 6.01
EXISTING LIENS
JURISDICTION FILE DATE SECURED PARTY COLLATERAL
------------ --------- ------------- ----------
California 4/28/97 State of California, Tax Lien
Employment
Development
Department
o See the Letters of Credit set forth on Schedule 6.03, each of which
may be extended, renewed or refunded, so long as the amount thereof is
not increased.
SCHEDULE 6.02
SALE LEASEBACK TRANSACTIONS
o The Borrower may enter into sale and lease-back transactions for any or all
of the following properties:
o X. Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx;
o 0000 Xxxxxxxx Xxx., Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx;
o 0000 Xxxxxxx Xxx., Xxxxxxxxxxxx, Xxxxxxx; and
o 0000 X. Xxxxxxx Xxx., Xxxxx, Xxxxxxx
1
SCHEDULE 6.03
EXISTING SECURED INDEBTEDNESS
o The Senior Secured Notes in favor of Principal Life Insurance Company -
which shall be paid off with the proceeds from the transactions
contemplated by the Agreement
o Letter of Credit No. 246595 issued by Xxxxx Fargo for $57,585.00 to Zurich
Insurance Corp with an expiration of 1/31/04. This letter of credit is cash
collateralized.
o Letter of Credit No. 359386 issued by Xxxxx Fargo for $1,087,000.00 to
Lumbermen's Mutual Casualty Co with an expiration of 7/18/03. This letter
of credit is cash collateralized.
SCHEDULE 6.06
EXISTING LOANS AND ADVANCES
None
SCHEDULE 6.17
PERMITTED INVESTMENTS
o The Borrower owns (a) 257,142.96 shares of Series A Convertible Preferred
Stock represented by Certificate No. EP A-0003, (b) 90,000 shares of
non-voting common stock represented by Certificate No. EP-17 and (c)
210,000 shares of common stock represented by Certificate No. EP-18, of
ePacific Incorporated, a Delaware corporation ("ePacific"). All of the
capital stock of ePacific owned by the Borrower is subject to a
Stockholders' Agreement dated as of March 30, 2000 which provides, among
other things, that no stockholder of ePacific may effect certain sales of
such securities without affording the other stockholders of ePacific a
right to participate in each such sale and no party to such Stockholders'
Agreement may assign its rights thereunder without the prior written
consent of the other parties thereto.
