MASTER LOAN AGENCY AGREEMENT
This Master Loan Agency Agreement ("Agreement") is made on August 11, 1999 (the
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"Effective Date"), by Goleta National Bank, a national banking association
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("GNB"), and Ace Cash Express, Inc., a Texas corporation ("Ace"). GNB and Ace
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are collectively referred to in this Agreement as the "Parties."
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A. GNB's business, as a national bank, includes making loans.
B. GNB's business includes issuing cards that permit electronic access to bank
accounts at GNB.
C. Ace's business includes the operation of locations at which various retail
financial services are offered and sold by Ace ("Locations").
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D. The Parties believe that it is beneficial for them to enter into
arrangements under which GNB will make loans to Ace's customers at various
Locations, GNB will issue cards to borrowers to access the loan proceeds in
those borrowers' accounts at GNB, Ace will serve as administrative agent
for GNB at various Locations in processing those loans, and Ace will
purchase participations in those loans made by GNB.
In consideration of the foregoing and the mutual covenants set forth in this
Agreement, the Parties hereby agree as follows:
ARTICLE I - LOANS AND AGENCY
1.1 Bank Loans. This Agreement describes and governs the Parties' relationship
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regarding Bank Loans. A "Bank Loan" is a loan or extension of credit by
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GNB:
(a) to a potential borrower who submits a loan application to GNB for a
short-term loan and who, in GNB's judgment, meets the Credit Criteria
(as defined below in this Section 1.1),
(b) with a stated term of no more than 33 calendar days (but with up to
three Renewals, as described and defined in Section 1.2), and
(c) that is funded by GNB's credit to the borrower's deposit account at
GNB that may be accessed electronically only by the borrower's use of
a Card (as defined below in this Section 1.1).
The "Credit Criteria" are the credit criteria that must be satisfied by a
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potential borrower to be eligible for a Bank Loan (including a Renewal),
which have been established by GNB and are set forth on Exhibit A to this
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Agreement, as such credit criteria may be amended by GNB from time to time
in its sole discretion by at least 90 days' prior Notice (as defined below
in this Section 1.1) to Ace (with each such amendment to be evidenced by a
superseding Exhibit A); except that if the Office of the Comptroller of the
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Currency or the Board of Governors of the Federal Reserve System (the "Bank
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Regulatory Authority") requires or recommends that GNB change the Credit
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Criteria within 90 days, GNB shall give that Notice to Ace as far in
advance of the change as is reasonably practicable. A "Card" is a plastic
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card issued to a borrower by GNB that, with the corresponding personal
identification number ("PIN"), permits electronic access to the borrower's
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deposit account at GNB into which the Bank Loan is funded. A "Notice" is a
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written communication that complies with Section 11.3.
1.2 Terms of Bank Loans. The Bank Loans shall be made on the following terms:
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(a) Each initially funded Bank Loan must be in the amount (exclusive of
interest or fees) of $100, or in any $50 increment above $100, up to a
maximum of $500.
(b) No more than one Bank Loan may be outstanding to any borrower at one
time.
(c) An initially funded Bank Loan may be renewed by GNB up to three
consecutive times, for up to 33 calendar days each, only if, at the
time each such renewal of a Bank Loan (a "Renewal") is requested, the
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borrower (i) satisfies the Credit Criteria applicable to that Renewal,
(ii) pays all interest accrued (but not yet paid) to date on the
principal amount of the Bank Loan, and (iii) repays at least five
percent of the principal amount of the then outstanding Bank Loan.
(d) The interest charged to the borrower for a Bank Loan may be up to the
maximum rate of interest that GNB may charge from time to time under
applicable law.
GNB may (in its sole discretion) modify the terms of the Bank Loans set
forth in this Section 1.2 upon Notice to Ace at least 90 days before the
modification or, if the Bank Regulatory Authority requires or recommends
that GNB modify the terms within 90 days, then as soon as reasonably
practicable after that requirement or recommendation by the Bank Regulatory
Authority. Except as otherwise provided in this Agreement, neither Party
may charge a prospective borrower or a borrower any fee or other amount in
connection with a Bank Loan (including a Renewal) or any other aspect or
transaction described in this Agreement relating to a Bank Loan (including
the issuance of a Card and the establishment or maintenance of a borrower's
deposit account). Nothing in this Agreement, however, affects a Party's
right to charge for any service or services rendered to its customers (who
may also be prospective borrowers or borrowers) not in connection with any
other transactions described in this Agreement relating to Bank Loans.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
2
1.3 Agency Appointment. GNB hereby appoints Ace as GNB's agent, at the
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Locations at which Ace may legally so serve, to facilitate and provide
administrative services regarding the Bank Loans in accordance with the
terms of this Agreement. Ace hereby accepts that appointment and agrees to
so serve as agent in accordance with the terms of this Agreement. In
addition, Ace may invite franchisees of Ace or Ace's affiliates to enter
into arrangements substantially similar to those in this Agreement,
including serving as GNB's agents at their respective retail financial
services locations to facilitate, and provide administrative services
regarding, the Bank Loans ("Participating Franchisees") if all
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Participating Franchisees enter into an agreement with GNB similar to this
Agreement; Ace agrees that it shall be and remain liable for all acts or
omissions to act of all Participating Franchisees as GNB's agent under that
agreement.
1.4 GNB Lending Activities. For or in connection with the Bank Loans, GNB
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shall:
(a) Establish, maintain, and monitor the Credit Criteria.
(b) Provide to Ace appropriate application forms for Bank Loans, in
electronic or paper format as agreed by the Parties.
(c) Review and evaluate each completed application for a Bank Loan
transmitted by Ace for a prospective borrower, and approve or deny
that request within *____ after transmission of the application.
(d) Create and maintain such forms of disclosure to prospective borrowers
and borrowers as may be required by applicable law.
(e) Create and maintain appropriate documentation as may be required by
applicable law in the event that a loan application is denied.
(f) Create and maintain appropriate documentation for Bank Loans and
provide it (through Ace) to each prospective borrower whose loan
application has been approved by GNB, including an authorization from
each borrower to allow GNB to grant Ace access to that borrower's
information as contemplated by Section 5.1.
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
3
(g) Establish a deposit account at GNB for each borrower under a Bank
Loan, and create appropriate account documentation and provide it
(through Ace) to the borrower.
(h) Fund the amount of the Bank Loan into the borrower's deposit account
at GNB.
(i) Issue a Card (including the corresponding PIN) to the borrower under
Bank Loans thereby enabling the borrower to access the borrower's GNB
Bank account.
(j) Develop (to the extent not yet developed) and maintain
credit-evaluation and decision-making software at GNB's loan approval
center ("Credit Software") that communicates with Ace's POS Software
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(as defined in Section 1.5) at each Location at which Bank Loans are
offered, and maintain a national toll-free telephone access number for
the purpose of that electronic communication.
(k) Take all such other actions, other than those to be performed by Ace
under this Agreement, as may be required or reasonably appropriate to
make Bank Loans.
(l) Reimburse Ace for all legal fees and expenses reasonably incurred by
Ace in excess of $* per year during the effectiveness of this
Agreement for review of the documentation used in connection with Bank
Loans for compliance with applicable bank and lending laws, rules and
regulations.
1.5 Agent Services. Ace shall, at GNB's reasonable direction in accordance with
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the terms of this Agreement, as GNB's agent at each Location at which Bank
Loans are offered:
(a) Obtain (if necessary) and maintain a PIN keypad, a magnetic card
reader that can read the Cards, POS Software (as defined below in this
Section 1.5), and the ability to connect to GNB's loan approval center
through GNB's national toll-free telephone access number, all in such
form as is reasonably acceptable to GNB.
(b) Maintain signage reasonably acceptable to GNB indicating the
availability of Bank Loans and, if the application forms are in paper
format, copies of application forms for Bank Loans.
(c) Provide GNB's application forms for Bank Loans to prospective
borrowers who so request.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
4
(d) Upon request, assist each prospective borrower in completing an
application form and transmit that completed application form for a
Bank Loan to GNB for evaluation.
(e) Deliver to each prospective borrower the appropriate form(s) of
legally required disclosure (prepared by GNB).
(f) Submit to each prospective borrower whose loan application has been
approved by GNB the documentation required by GNB for a Bank Loan, or
deliver to each prospective borrower whose loan application has been
denied the loan denial documentation prepared by GNB.
(g) To the extent required by GNB, deliver to GNB the borrower's signed
loan documentation (including the Bank Loan application and the
promissory note) for a Bank Loan * after approval of the Bank Loan,
with the delivery cost from Ace's regional office to (or as directed
by) GNB to be paid by GNB.
(h) Provide to each borrower GNB's forms to establish an account at GNB,
assist (as requested) each borrower in completing the forms, deliver a
Card (including the corresponding PIN) to each borrower under a Bank
Loan as directed by GNB, and (to the extent required by GNB) deliver
to GNB the borrower's signed Card and account authorization documents
(* after the execution of these documents, with the delivery cost from
Ace's regional office to GNB to be paid by GNB).
(i) Establish a bank account with Xxxxx Fargo Bank (or another bank that
is a part of the syndicate of banks lending to Ace) into which Ace
will deposit payments regarding Bank Loans, including principal and
interest and fees (other than the Ace Administrative Fee, as defined
below in this Section 1.5) received from borrowers (the "Bank Loan
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Repayment Account").
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(j) Accept payments of Bank Loans as reasonably directed by GNB, and
corresponding interest and fees (other than the Ace Administrative
Fee), by or on behalf of borrowers and make the amounts so received
available to GNB, no later than the next business day, for GNB to
initiate a debit entry through the Automated Clearinghouse system
against the Bank Loan Repayment Account; and transmit to GNB the
paying borrower's name, GNB Bank account number, and amount paid
immediately upon Ace's receipt (at a Location or otherwise) or any
form of payment (whether paid by cash, check, or Automatic
Clearinghouse transmission).
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
5
(k) To the extent GNB does not require delivery by Ace of the loan
documentation or Card and account authorization documentation, GNB
hereby appoints Ace as custodian of all such documentation, and Ace
shall maintain that documentation in safekeeping for the benefit of
GNB.
Ace shall develop or cause to be developed software, integrated with Ace's
point-of-sale system at each such Location (the "POS System"), by which
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data and documents regarding Bank Loans or applications for Bank Loans may
be transmitted to and received from GNB's loan approval center; that
software actually developed by Ace is "POS Software." The only fee that Ace
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(for itself) may charge a prospective borrower or a borrower in connection
with any Bank Loan or related transactions described in this Agreement is a
one-time fee per person of up to $* to establish an administrative
relationship with Ace regarding any Bank Loans (the "Ace Administrative
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Fee"). GNB shall have no right to any Ace Administrative Fee.
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1.6 Exclusivity. Subject to Section 8.4(d), the Parties' relationship shall be
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exclusive during the effectiveness of this Agreement in accordance with the
following:
(a) After the Testing Period (as defined in Section 1.7(f)), Ace shall
not, directly or indirectly, offer in any of the Locations, anywhere
in the United States of America, any short-term loan that is the same
as or substantially similar to the Bank Loans (including any deferred
check deposit service or product or similar "payday advance" permitted
under applicable check-cashing statutes); except that (i) when Ace is
unable, in light of applicable operational (including contractual) and
regulatory requirements, to offer Bank Loans at a Location, Ace may
offer short-term loans substantially similar to the Bank Loans,
including payday advances, at that Location, and (ii) if any
regulatory authority having jurisdiction over the check-cashing and
related businesses of Ace requires or recommends that Ace cease to
offer Bank Loans at any Location or Locations, Ace may cease to offer
Bank Loans at that Location or those Locations and may offer
short-term loans substantially similar to the Bank Loans, including
payday advances, at that Location or those Locations. The Parties
acknowledge that Ace's and its affiliates' franchisees are not bound
by this Agreement, and may continue to offer such short-term loans
without regard to this Agreement, unless they become Participating
Franchisees as provided in Section 1.3.
(b) GNB shall not, directly or indirectly, anywhere in the United States
of America, offer or provide any Bank Loan or any short-term loan that
is the same as or substantially similar to the Bank Loans through or
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
6
with any other person; except GNB may make any short-term loan that is
the same as or substantially similar to the Bank Loans to borrowers
who apply in person at an office of GNB or to the limited extent
required by applicable banking regulations.
(c) Ace shall use commercially reasonable efforts to make Bank Loans
available in all of its Locations as soon as reasonably practicable in
light of operational and regulatory considerations.
(d) The Parties anticipate that Ace will submit for GNB's approval
completed applications satisfying the Credit Criteria for at least *
Bank Loans (including Renewals) during each Year (as defined below in
this Section 1.6(d)) commencing with the second Year after the Testing
Period (the "Annual Application Number"). If Ace submits for GNB's
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approval during a Year, commencing with the second Year, a number of
completed applications satisfying the Credit Criteria for Bank Loans
(including Renewals) that is *% of the Annual Application Number, then
the Parties' exclusivity commitment, and (accordingly) the stated term
of this Agreement in Section 4.1, shall be extended for an additional
Year after the expiration date of this Agreement theretofore in
effect. A "Year" is a consecutive 12-month period after the Testing
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Period that begins on the day after the Testing Period expires and on
each anniversary of that day during the Term.
(e) If Ace does not, however, submit for GNB's approval completed
applications satisfying the Credit Criteria for at least * Bank Loans
(including Renewals) during any Year, commencing with the second Year,
then GNB may, within 30 days after the end of such Year, give Ace
Notice of intent to terminate the Parties' continued exclusivity
commitment under this Section 1.6. If, within 90 days after that
Notice of intent to terminate exclusivity, Ace does not submit to GNB
completed applications satisfying the Credit Criteria for at least *
Bank Loans (including Renewals), then the Parties shall have no
further exclusivity commitment under this Section 1.6. The termination
of the Parties' exclusivity commitment shall not, however, affect the
then effective stated term of this Agreement in Section 4.1.
1.7 Software Development. To facilitate the process for Bank Loans described in
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this Agreement, the Parties shall cooperate in developing the Credit
Software and the POS Software as follows:
(a) Ace will provide GNB information regarding the POS System for review
and evaluation by or on behalf of GNB.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
7
(b) GNB will provide Ace information regarding the software that will
serve as the basis for the Credit Software for review and evaluation
by or on behalf of Ace.
(c) The Parties will establish and agree upon the functionality
requirements for the POS Software and the Credit Software. Each Party
shall cooperate, at its own expense, with any reasonable request made
by or on behalf of the other Party in connection with that other
Party's development of its software (i.e., the POS Software or the
Credit Software, as the case may be).
(d) The POS Software developed by Ace shall be Ace's property, and no
ownership rights in or to that POS Software are granted or transferred
to GNB (or any subsidiary of GNB) in this Agreement or by GNB's (or
any GNB subsidiary's) access to or use of the POS Software under this
Agreement. The Credit Software developed by GNB shall be GNB's
property, and no ownership rights in or to that Credit Software are
granted or transferred to Ace in this Agreement or by Ace's access to
or use of the Credit Software under this Agreement.
(e) Information provided by one Party to or for the benefit of the other
Party under this Article 1.7 shall be Confidential Information in
accordance with Article VII and may not be used for any purpose other
than as provided in this Article 1.7.
(f) Upon completion of the POS Software and the Credit Software, the
Parties will cooperate to (i) conduct initial tests of the POS
Software and the Credit Software at Ace's corporate headquarters and
GNB's loan approval center, (ii) conduct a beta test of the POS
Software and the Credit Software at a Location, and (iii) test the POS
Software and the Credit Software in one or two Ace markets before
offering Bank Loans in other Locations. The time period in which all
such testing will occur is the "Testing Period," and the Testing
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Period shall expire on the date on which Bank Loans are first offered
at 150 Locations or the first anniversary of the Effective Date,
whichever is earlier.
1.8 Training. The Parties shall conduct training sessions for Ace's personnel
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regarding the proper use of equipment and the proper procedures to be
followed in connection with offering and processing Bank Loans and
applications for Bank Loans. That training will be provided at Ace's
regional locations and corporate office with such frequency and on such
schedule as the Parties shall determine.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
8
1.9 Collection of Bank Loans. Contemporaneous with this Agreement, the Parties
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are entering into a Collection Servicing Agreement, under which is Exhibit
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B to this Agreement. To the extent that the terms of the Collection
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Servicing Agreement conflict with the terms of this Agreement, the terms of
this Agreement shall control.
1.10 Advertising.
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(a) Ace may, at its own expense, advertise and promote the availability of
Bank Loans. For this purpose, GNB hereby grants Ace a nonexclusive and
nontransferable license, during the effectiveness of this Agreement,
to use GNB's trade names, trade marks, service marks, and logos
(whether or not registered or protected or protectible) ("GNB Marks").
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All uses of the GNB Marks must be approved in advance by GNB, such
approval not to be unreasonably withheld or delayed. A list of current
GNB Marks is set forth on Exhibit C to this Agreement. GNB is not
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granting to Ace any, and shall retain ownership of the GNB Marks. Ace
shall discontinue all uses of the GNB Marks upon the expiration or
termination of this Agreement.
(b) GNB may, at its own expense, advertise and promote the availability of
Bank Loans through the Locations at which Bank Loans are offered. For
this purpose, Ace hereby grants GNB a nonexclusive and nontransferable
license, during the effectiveness of this Agreement, to use Ace's
trade names, trademarks, service marks, and logos (whether or not
registered or protected or protectible) ("Ace Marks"). All uses of the
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Ace Marks must be approved in advance by Ace, such approval not to be
unreasonably withheld or delayed. A list of current Ace Marks is set
forth on Exhibit C to this Agreement. Ace is not granting to GNB any,
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and shall retain ownership of the Ace Marks. GNB shall discontinue all
uses of the Ace Marks upon the expiration or termination of this
Agreement.
ARTICLE II - LOAN PARTICIPATION
2.1 Participation Agreement. Contemporaneous with this Agreement, the Parties
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are entering into a Master Loan Participation Agreement under which GNB
agrees to sell to Ace, and Ace agrees to purchase from GNB, a 95%
participation in each of the Bank Loans made by GNB. That Master Loan
Participation Agreement is Exhibit D to this Agreement.
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ARTICLE III - REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Representations and Warranties by GNB. GNB represents and warrants to Ace
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as follows:
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
9
(a) GNB has full legal right, power and authority to enter into and
perform this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by GNB
and constitutes the legal, valid and binding agreement of GNB.
(c) No consent, approval, authorization or order of any governmental
agency or authority, except those disclosed to Ace in writing by GNB,
is required to be obtained by GNB to permit it to perform its
obligations under this Agreement.
(d) There is no order, action, suit, proceeding, claim, arbitration or
investigation by any person, including any governmental authority,
pending, issued or outstanding against GNB as a party or, to the
knowledge of GNB, threatened against GNB that challenges GNB's right
to execute, deliver, perform under or consummate the transactions
described in this Agreement.
(e) To the extent related to the services offered and provided by GNB
under this Agreement:
(i) all federal, state and local laws and regulations have been
complied with in all material respects relating to this
Agreement;
(ii) any and all licenses, permits and other authorizations required
of GNB by federal, state or local laws (the "GNB Authorizations")
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have been obtained, are in full force and effect and are valid
under applicable federal, state and local laws; and
(iii) the continuation, validity and effectiveness of all of the GNB
Authorizations shall not be impaired or adversely affected by the
terms hereof.
(f) The Confidential Information of Ace previously provided by GNB has
been kept secret and has not been disclosed by GNB to any person who
is not under a written agreement with GNB or other legal obligation to
hold such Confidential Information in confidence.
3.2 Covenants by GNB. GNB covenants with ACE as follows:
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__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
10
(a) GNB will cooperate with Ace regarding any inspections or
investigations by any governmental agency or authority that may occur
during the Term (as defined in Article IV).
(b) GNB will promptly give Notice to Ace of any order, action, suit,
proceeding, claim, arbitration, or investigation by any person,
including any governmental authority, that is filed, issued, or
threatened against GNB that challenges GNB's legal right to perform
its obligations under this Agreement.
(c) GNB will maintain the effectiveness of all of the GNB Authorizations,
or will obtain new or additional GNB Authorizations, as necessary to
permit it to perform its obligations under this Agreement.
(d) When developed, the Credit Software will not, to the best knowledge of
GNB, infringe upon the proprietary rights, including patent, copyright
or trade-secret rights, of any other person.
(e) The Credit Software will accurately receive, provide and process
date/time data (including calculating, comparing and sequencing) from,
into and between the 20th and 21st centuries, including the years 1999
and 2000, and leap-year calculations and will not malfunction, cease
to function or provide invalid or incorrect results as a result of
date/time data.
(f) GNB will pay Ace the portion of the ATM charges received by GNB
described in, and in accordance with, Exhibit E to this Agreement.
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(g) GNB shall comply in all material respects with all legal and
regulatory requirements, including bank and lending laws, rules, and
regulations, imposed on or applicable to it in connection with the
performance of its obligations and its other activities under this
Agreement.
3.3 Representations and Warranties by Ace. Ace represents and warrants to GNB
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as follows:
(a) Ace has full legal right, power and authority to enter into and
perform this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by Ace
and constitutes the legal, valid and binding agreement of Ace.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
11
(c) No consent, approval, authorization or order of any governmental
agency or authority, except those disclosed to GNB in writing by Ace,
is required to be obtained by Ace to permit it to perform its
obligations under this Agreement.
(d) There is no order, action, suit, proceeding, claim, arbitration or
investigation by any person, including any governmental authority,
pending, issued or outstanding against Ace as a party or, to the
knowledge of Ace, threatened against Ace that challenges Ace's right
to execute, deliver, perform under or consummate the transactions
described in this Agreement.
(e) To the extent related to the services offered and provided by Ace
under this Agreement:
(i) all federal, state and local laws and regulations have been
complied with in all material respects relating to this
Agreement;
(ii) any and all licenses, permits and other authorizations required
of Ace by federal, state or local laws (the "Ace Authorizations")
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have been obtained, are in full force and effect and are valid
under applicable federal, state and local laws; and
(iii) the continuation, validity and effectiveness of all of the Ace
Authorizations shall not be impaired or adversely affected by the
terms hereof.
(f) The Confidential Information of GNB previously provided to Ace has
been kept secret and has not been disclosed by Ace to any person who
is not under a written agreement with Ace or other legal obligation to
hold such Confidential Information in confidence.
3.4 Covenants by Ace. Ace covenants with GNB as follows:
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(a) Ace will cooperate with GNB regarding any inspections or
investigations by any governmental agency or authority that may occur
during the Term.
(b) Ace will promptly give Notice to GNB of any order, action, suit,
proceeding, claim, arbitration, or investigation by any person,
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
12
including any governmental authority, that is filed, issued, or
threatened against Ace that challenges Ace's legal right to perform
its obligations under this Agreement.
(c) Ace will maintain the effectiveness of all of the Ace Authorizations,
or will obtain new or additional Ace Authorizations, as necessary to
permit it to perform its obligations under this Agreement.
(d) When developed, the POS Software will not, to the best knowledge of
Ace, infringe upon the proprietary rights, including patent, copyright
or trade-secret rights, of any other person.
(e) The POS Software will accurately receive, provide and process
date/time data (including calculating, comparing and sequencing) from,
into and between the 20th and 21st centuries, including the years 1999
and 2000, and leap-year calculations and will not malfunction, cease
to function or provide invalid or incorrect results as a result of
date/time data.
(f) Ace will pay GNB the fees for the Cards and the Loan Participation
Processing Fees described in, and in accordance with, Exhibit E to
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this Agreement; Ace shall have no right to any such fees.
(g) As GNB's agent with respect to Bank Loans, Ace will follow GNB's
reasonable instructions in accordance with the terms of this
Agreement.
(h) Ace shall comply in all material respects with all legal and
regulatory requirements, including check-cashing laws, rules, and
regulations, imposed on or applicable to it in connection with the
performance of its obligations and its other activities under this
Agreement.
ARTICLE IV - TERM AND TERMINATION
4.1 Term of Agreement. Unless earlier terminated as provided in Section 4.2,
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this Agreement shall expire at 11:59:59 p.m., Central Time, on the later of
(a) the fifth anniversary of the date on which the Testing Period expires
or (b) the date on which the exclusivity period provided by Section 1.6
expires. As used herein, the "Term" of this Agreement begins on the date
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hereof and shall continue until this Agreement expires or is terminated
earlier under Section 4.2.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
13
4.2 Termination. A Party may terminate this Agreement as follows:
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(a) Either Party may terminate this Agreement immediately upon Notice if:
(i) the other Party makes a general assignment of all or
substantially all of its assets for the benefit of creditors;
(ii) the other Party applies for, consents to or acquiesces in the
appointment of a receiver, trustee, custodian or liquidator for
its business or all or substantially all of its assets, including
a receivership or custody relationship imposed by a governmental
or quasi-governmental regulatory authority; or
(iii) the other Party files a voluntary petition for relief under the
United States Bankruptcy Code or other bankruptcy or insolvency
laws; or
(iv) an involuntary bankruptcy or insolvency petition filed against
the other Party is not dismissed within 90 days.
(b) Either Party may terminate this Agreement on ten business days' Notice
upon the other Party's refusal or failure to make any payment due
under this Agreement which is not cured within such ten business-day
period. Such termination shall be effective immediately upon
expiration of such cure period unless the defaulting Party cures such
default within the applicable cure period.
(c) Either Party may terminate this Agreement upon 30 business days'
Notice upon the occurrence of any material breach or default by the
other Party under this Agreement (other than as described in Section
4.2(b)) which is not cured within such 30 business-day period.
(d) Ace may terminate this Agreement upon 60 business days' Notice if any
change in the Credit Criteria or in the terms of the Bank Loans
(stated in Section 1.2) by GNB, in Ace's judgment, has adversely
affected or would adversely affect the market for Bank Loans.
(e) Either party may terminate this Agreement upon 30 business days'
Notice if the Bank Regulatory Authority requires or recommends that
GNB cease making Bank Loans, in whole or in part, as provided for
under this Agreement, or imposes such conditions on GNB's making of
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
14
Bank Loans as would have a material adverse effect on GNB's ability to
make Bank Loans as provided for under this Agreement, as confirmed to
Ace by GNB's bank regulatory counsel.
4.3 Restrictions on Termination. A Party may not terminate this Agreement if
-----------------------------
the event or circumstance described in Section 4.2 upon which that Party
would rely in so terminating, was caused by that Party's breach of or
default under this Agreement. Termination rights to the Party under Section
4.2 are not exclusive of any other right or remedy available to or granted
to a nonbreaching or nondefaulting Party under this Agreement.
4.4 Change of Control. Each Party agrees to Notify the other Party if the first
-------------------
Party's board of directors votes or consents to change, or to recommend to
that Party's shareholders that they vote or consent to change, the control
of that Party or its business. Regardless of any change and any Notice
thereof in accordance with the preceding sentence, the Parties will remain
obligated under this Agreement until this Agreement expires or is
terminated according to its terms.
4.5 Post-Termination Obligations. Upon the expiration or termination of this
-----------------------------
Agreement, each Party will remit to the other Party all amounts owing to
such Party at the time of such expiration or termination. Each Party will
also remain liable until it has fulfilled all of its obligations to the
other Party that arose or accrued before the expiration or termination
date.
ARTICLE V - ACCESS; INSPECTION RIGHTS
5.1 Loan Databases.
---------------
(a) GNB shall maintain a database of information regarding all Bank Loans,
including information regarding the borrower's name, the Card number
associated with the borrower's deposit account, the balance in such
account, the Bank Loan funding and payment history, and the Location
(or, if applicable, the Participating Franchisee location) through
which the Bank Loan was originated and facilitated. GNB shall allow
Ace access to that database at any time during the Term and shall
coordinate with Ace regarding any software and hardware necessary to
access such database.
(b) Ace shall maintain a database of information regarding the payment
history of all Bank Loans, including information regarding the paying
borrower's name, GNB Bank account number, and amount paid. Ace shall
allow GNB access to that database at any time during the Term and
shall coordinate with GNB regarding any software and hardware
necessary to access such database.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
15
5.2 Inspection Rights. During the Term, but no more often than once each
------------------
calendar year during the Term (or more often only as necessary to comply
with requirements of the Bank Regulatory Authority or of any regulatory
authority having jurisdiction over the check-cashing and related businesses
of Ace or if there is a material discrepancy identified through the
electronic monitoring of the databases described in Section 5.1), either
Party may request an inspection of the financial or other books and records
of the other Party relating to this Agreement by giving at least 30 days'
prior Notice to the other Party. Any such inspection shall be conducted
only during the regular business hours of the other Party, or at such other
reasonable time to which the other Party may consent, and without any
unreasonable disruption of the other Party's business operations. If, based
upon the results of any such inspection, a Party claims or intends to claim
any additional funds are owing from the other Party, then (a) such Party
shall, within ten business days after its receipt of the results of that
inspection, submit to the other Party a copy of the results of that
inspection, and (b) the other Party shall have ten business days to review
and, if it chooses, object to those results by giving notice of its
objection to the Party conducting the inspection. Any Dispute regarding the
results of that inspection that is not resolved by the Parties' agreement
within ten business days after the other Party's notice of objection to the
inspecting Party shall be settled in accordance with Section 8.6. The
disputed results of any inspection shall not be binding on the other Party
for purposes of this Section 5.2 until the Dispute has been resolved by the
Parties' agreement or in accordance with Section 8.6. The cost of such
inspection shall be paid by the inspecting Party.
ARTICLE VI - NONSOLICITATION
6.1 Nonsolicitation. During the Term and the first year after the expiration or
---------------
termination of this Agreement, a Party may not directly or indirectly
solicit for employment or employ any employee of the other Party or any of
the other Party's affiliates or induce or attempt to induce any employee of
the other Party or any of the other Party's affiliates to terminate that
employee's employment relationship; except that:
(a) general solicitations of employment published in journals, newspapers,
or other publications of general circulation and not specifically
directed toward any employee or group of employees of the other Party
or any of the other Party's affiliates shall not be deemed a violation
of this Section 6.1; and
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
16
(b) a Party shall not be prohibited from employing any person who contacts
that Party or any of that Party's affiliates on that person's own initiative and
without any solicitation, directly or indirectly, by that Party or any of that
Party's affiliates.
ARTICLE VII - CONFIDENTIAL INFORMATION
7.1 Confidential Information. Each Party shall keep confidential the following
-------------------------
information ("Confidential Information") acquired by it under or in
-------------------------
connection with this Agreement:
(a) Information relating to the other Party's business, financial
condition or performance, or operations that the other Party treats as
confidential or proprietary.
(b) Copies of records and other information obtained from that Party's
examination of the other Party's records under Article V.
(c) The terms and performance of, any breach under, or any Dispute (as
defined in Section 8.6) regarding this Agreement.
(d) The Parties' conduct, decisions, documents, and negotiations as part
of, and the status of, any proceedings to resolve any Dispute.
(e) Any other information, including the POS Software and the Credit
Software and the information used in the development or implementation
of the POS Software and the Client Software, whether in a tangible
medium or oral and whether proprietary to the other Party or not, that
is marked or clearly identified by the other Party as confidential or
proprietary.
A Party may not use any of the other Party's Confidential Information other
than as required to perform its obligations or exercise its rights and
remedies, including as part of the resolution of any Dispute, under this
Agreement.
7.2 Excluded Information. A Party has no obligation under this Article VII
---------------------
regarding any information, including information that would otherwise be
Confidential Information, to the extent that the information:
(a) is or becomes publicly available or available in the industry other
than as a result of any breach of this Agreement or any other duty of
that Party; or
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
17
(b) is or becomes available to that Party from a source that, to that
Party's knowledge, is lawfully in possession of that information and
is not subject to a duty of confidentiality, whether to the other
Party or another person, violated by that disclosure.
7.3 Standard of Care. Each Party shall use at least the same degree of care in
----------------
maintaining the confidentiality and restricting the use of the other
Party's Confidential Information as that Party uses with respect to its own
proprietary or confidential information, and in no event less than
reasonable care.
7.4 Permitted Disclosures. A Party may disclose Confidential Information to its
----------------------
officers, directors, agents, or employees as necessary to give effect to
this Agreement. Each Party shall inform each of those persons to whom any
Confidential Information is communicated of the obligations regarding that
information under this Article VII and impose on that person the obligation
to comply with this Article VII regarding the Confidential Information.
Each Party shall be responsible for any breach of that Party's obligations
under this Article VII by its officers, directors, agents, or employees.
7.5 Required Disclosures. Each Party may disclose Confidential Information in
---------------------
response to a request for disclosure by a court or other governmental
authority, including a subpoena, court order, or audit-related request by a
taxing authority, if that Party:
(a) promptly Notifies the other Party of the terms and the circumstances
of that request;
(b) cooperates with the other Party's reasonable instructions (if any) to
resist or narrow that request;
(c) furnishes only information that, according to advice of its legal
counsel, that Party is legally compelled to disclose; and
(d) uses commercially reasonable efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded the
information disclosed.
A Party need not comply with these conditions to disclosure, however, to
the extent that the request or order of the governmental authority in
effect prohibits that compliance. A Party may also disclose Confidential
Information without complying with these conditions to the extent that the
Party is otherwise legally obligated to do so (for example, to comply with
applicable securities and/or banking laws), as confirmed by advice of
counsel.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
18
7.6 Title to Information. The Confidential Information of a Party disclosed by
----------------------
it to the other Party under this Agreement shall remain the property of the
disclosing Party; nothing in this Agreement grants or conveys to the other
Party any ownership rights in, or (except as expressly stated in this
Agreement) rights to use or license, any of that Confidential Information.
7.7 Survival; Return. The obligations under this Article VII shall continue on
-----------------
and after the expiration or termination of this Agreement. Upon request of
the disclosing Party upon or after the expiration or termination of this
Agreement, the other Party shall return or, if requested by the disclosing
Party, destroy the Confidential Information of the disclosing Party that it
holds. The requested return or destruction shall include removal or
deletion of Confidential Information from all data bases and magnetic media
of the other Party.
ARTICLE VIII - INDEMNIFICATION AND REMEDIES
8.1 Indemnification by GNB. GNB shall indemnify Ace and its officers,
------------------------
directors, agents, attorneys and affiliates (collectively, "Ace Indemnified
---------------
Persons") against, and hold Ace and the Ace Indemnified Persons harmless
-------
from, the following:
(a) Five percent of all losses, claims, obligations, demands, assessments,
penalties, liabilities, costs (including reasonable attorneys' fees
and expenses) and damages asserted against Ace or any Ace Indemnified
Person or incurred by Ace or any Ace Indemnified Person (collectively,
"Ace Losses") by reason of, resulting from, or relating to any
-----------
Third-Party Claims (as defined below in this Section 8.1) asserted
against Ace or any Ace Indemnified Person, except any Third-Party
Claims described in Section 8.1(b) or Section 8.1(c).
(b) All Ace Losses by reason of, resulting from, or relating to any
Third-Party Claims asserted against Ace or any Ace Indemnified Person
based on any Infringement (as defined below in this Section 8.1) or
alleged Infringement by any of the GNB Marks or the Credit Software.
(c) All Ace Losses by reason of, resulting from, or relating to any
Third-Party Claims asserted against Ace or any Ace Indemnified Person
in which, or in connection with which, GNB or any GNB Indemnified
Person (as defined in Section 8.2) admits or acknowledges, or any
court or other governmental authority or arbitrator finds or otherwise
determines, that GNB or any GNB Indemnified Person has committed (by
act or omission) any willful misconduct.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
19
GNB shall not be obligated to indemnify Ace or any Ace Indemnified Person,
or hold Ace or any Ace Indemnified Person harmless from, any Ace Losses by
reason of, resulting from, or relating to any Third-Party Claims (i) based
on any Infringement or alleged Infringement by any of the Ace Marks or the
POS Software, or (ii) in which, or in connection with which, Ace or any Ace
Indemnified Person admits or acknowledges, or any court or other
governmental authority or arbitrator finds or determines, that Ace or any
Ace Indemnified Person has committed (by act or omission) any willful
misconduct. A "Third-Party Claim" is any claim of liability asserted
------------------
against a Party by any person other than Ace or any Ace Indemnified Person
or GNB or any GNB Indemnified Person arising out of a Bank Loan or the
services or products provided under this Agreement by either Party.
"Infringement" means any infringement of any copyright established in,
------------
infringement of any patent duly issued in, or misappropriation of any trade
secret protected in the United States of America.
8.2 Indemnification by Ace. Ace shall indemnify GNB and its officers,
------------------------
directors, agents, attorneys and affiliates (collectively, "GNB Indemnified
---------------
Persons") against, and hold GNB and the GNB Indemnified Persons harmless
-------
from, the following:
(a) Ninety-five percent of all losses, claims, obligations, demands,
assessments, penalties, liabilities, costs (including reasonable
attorneys' fees and expenses) and damages asserted against GNB or any
GNB Indemnified Person or incurred by GNB or any GNB Indemnified
Person (collectively, "GNB Losses") by reason of, resulting from, or
----------
relating to any Third-Party Claims asserted against GNB or any GNB
Indemnified Person, except any Third-Party Claims described in Section
8.2(b) or Section 8.2(c).
(b) All GNB Losses by reason of, resulting from, or relating to any
Third-Party Claims asserted against GNB or any GNB Indemnified Person
based on any Infringement or alleged Infringement by any of the Ace
Marks or the POS Software.
(c) All GNB Losses by reason of, resulting from, or relating to any
Third-Party Claims in which or in connection with which, Ace or any
Ace Indemnified Person admits or acknowledges, or any court or
governmental authority or arbitrator finds or otherwise determines,
that Ace or any Ace Indemnified Person has committed (by act or
omission) any willful misconduct.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
20
Ace shall not be obligated to indemnify or hold harmless GNB or any GNB
Indemnified Person regarding any GNB Losses by reason of, resulting from,
or relating to any Third-Party Claims (i) based on any Infringement or
alleged Infringement by any of the GNB Marks or the Credit Software, or
(ii) in which, or connection with which, GNB or any GNB Indemnified Person
admits or acknowledges, or any court or other governmental authority or
arbitrator finds or otherwise determines, that GNB or any GNB Indemnified
Person has committed (by act or omission) any willful misconduct.
8.3 Defense of Certain Third-Party Claims. Each Party shall promptly give
-----------------------------------------
Notice to the other Party of any Third-Party Claim asserted against the
notifying Party (though the failure to give any such Notice shall not
affect any rights or remedies of the Parties or any GNB Indemnified Person
or any Ace Indemnified Person except to the extent that such failure
impairs or prejudices the defense of the Third-Party Claim). If a
Third-Party Claim is asserted against either Party, any GNB Indemnified
Person, or any Ace Indemnified Person and GNB does not acknowledge or admit
any indemnification obligation under Section 8.1(b) or Section 8.1(c),
then:
(a) Ace shall be entitled to assume and conduct the defense and settlement
of that Third-Party Claim, with counsel chosen by Ace, though no such
settlement shall be binding on GNB or any GNB Indemnified Person
without its written consent, which may not be unreasonably withheld or
delayed;
(b) subject to Section 8.3(c), Ace shall treat that Third-Party Claim as
subject to Sections 8.1(a) and 8.2(a); and
(c) if it is subsequently determined in accordance with Section 8.6 or by
the Parties' agreement that the Third-Party Claim is subject to
Sections 8.1(b), Section 8.1(c), Section 8.2(b), or Section 8.2(c)
(rather than Sections 8.1(a) and 8.2(a)) then the responsibility for
Ace Losses or GNB Losses, or both, shall be allocated in accordance
with the applicable provision or provisions of Sections 8.1 and 8.2.
Nevertheless, if Ace acknowledges or admits its indemnification obligation
under Section 8.2(b) or Section 8.2(c), Ace need not comply with Section
8.3(b) and need not obtain the consent of GNB or any GNB Indemnified Person
to any settlement.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
21
8.4 Force Majeure.
--------------
(a) Neither Party shall be in breach or default of its obligations under
this Agreement to the extent that delay or failure in its performance
is caused by an act of God, fire, flood, severe weather conditions,
utilities or telecommunications failures, materials shortage,
unavailability of transportation, government ordinance, laws,
regulations or restrictions, events of war or civil disorder or any
other cause beyond the reasonable control of that Party. However,
nothing in this Section 8.4 shall relieve any Party from its
obligations to make payments to the other Party as provided in this
Agreement.
(b) If a Party anticipates any excusable delay or failure under Section
8.4(a), it shall promptly Notify the other Party of the anticipated
delay or failure, the anticipated effect of that delay or failure and
any actions that are being or are to be taken to alleviate or overcome
the cause of the delay or failure.
(c) If a Party is claiming an excusable delay or failure under Section
8.4(a), it shall use commercially reasonable efforts to alleviate or
overcome the cause of the delay or failure as soon as possible.
(d) If a Party is unable to perform due to an excusable delay or failure
under Section 8.4(a), and such delay or failure continues for more
than 72 hours, then the exclusivity restrictions of Section 1.6
binding on the Party entitled to performance shall be suspended until
the Party whose performance is impaired can again fully perform its
obligations.
8.5 Insurance. The Parties shall make good faith efforts to obtain insurance
---------
against loss for acts or omissions to act by the Parties as provided for in
this Agreement. To the extent the Parties mutually determine that insurance
covering Third-Party Claims is available on commercially reasonable terms
(including premium costs), the Parties will obtain and maintain such
insurance coverage during the Term. The amount of the insurance coverage
will be as mutually determined by the Parties. The premium costs for that
insurance policy shall be paid *% by Ace and * by GNB. The Parties shall be
designated loss payees under that insurance policy in accordance with their
respective responsibility regarding Third-Party Claims under this Article
VIII.
8.6 Arbitration. Any dispute, controversy or claim arising out of or relating
-----------
to this Agreement, or the breach or validity hereof ("Dispute"), shall be
-------
settled by final and binding arbitration in accordance with the Rules for
Commercial Arbitration (the "Rules") of the American Arbitration
-----
Association ("AAA") in effect as of the date of the Dispute and in
---
accordance with the following subsections of this Section 8.6. (In the
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
22
event of any inconsistency between the Rules and the arbitration provisions
of this Section 8.6, the latter shall control.)
(a) The arbitration shall be conducted by a sole arbitrator who has
experience in or is otherwise familiar with the kinds of business to
which this Agreement relates and is not, and has not been, an
affiliate or a family member of either Party. In the event an
arbitrator who has such experience or familiarity cannot be found,
then the Parties shall appoint an arbitrator who is mutually
satisfactory to them. Such arbitrator shall be appointed by the
Parties within 15 days from the filing of the Demand and Submission in
accordance with Section 7 of the Rules. If the Parties fail to agree
upon a sole arbitrator within such 15-day period and fail to agree to
an extension of such period, the arbitration shall be conducted by a
sole arbitrator appointed by the AAA in accordance with Section 14 of
the Rules. The arbitrator appointed shall be knowledgeable in the
subject matter of the Dispute.
(b) The place of arbitration shall be Phoenix, Arizona, and the final
decision or award of the arbitrator shall be issued at the place of
arbitration. The arbitrator may, however, call and conduct hearings
and meetings at such other places as (i) the Parties hereby may agree
or (ii) the arbitrator may, on the motion of a Party, determine to be
necessary to obtain significant testimony or evidence.
(c) The arbitrator shall have the power to authorize all forms of
discovery (including depositions, interrogations and document
production) on a showing of particularized need that the requested
discovery (i) is likely to lead to material evidence needed to resolve
the controversy and (ii) is not excessive in scope, timing, or cost.
(d) The arbitrator shall not have the power to (i) rule upon or grant any
extension, renewal or continuance of this Agreement, (ii) award
damages or other remedies expressly prohibited by this Agreement, or
(iii) grant interim injunctive relief before rendering the final
decision or award. Nevertheless, either of the Parties may apply for
and obtain temporary or provisional injunctive relief from any court
having jurisdiction over one or both of the Parties or their assets
regarding any violation or alleged violation by the other Party of its
obligations under this Agreement.
(e) The final decision or award of the arbitrator shall be made as soon as
reasonably practicable after the appointment of the arbitrator under
Section 8.6(a). Such a final decision or award may include (i)
recovery of actual damages for violation of any obligations under this
Agreement or of governing law or (ii) injunctive relief against
threatened or actual violations of any obligations under this
Agreement or of governing law.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
23
(f) The final decision or award of the arbitrator shall be final and
binding on the Parties, and judgment upon such final decision or award
may be entered in any court having jurisdiction over one or both of
the Parties or their assets. The Parties specifically waive any right
they may have to apply to any court for relief from the provisions of
this Agreement or from any decision of the arbitrator made before the
final decision or award of the arbitrator.
(g) Subject to the final decision or award of the arbitrator, each of the
Parties shall bear an equal portion of the arbitrator's fees and
expenses, and each shall bear all of its own expenses. The arbitrator
shall have the power, however, to award recovery of all fees and
expenses (including attorneys' fees, administrative fees, arbitrator's
fees and court costs) to the prevailing Party in the arbitration.
8.7 Equitable Relief. To the extent that monetary relief is not a sufficient
-----------------
remedy for any breach of this Agreement, or upon any breach or impending
breach of Articles VI or VII, the non-breaching Party shall be entitled to
injunctive relief as a remedy for that breach or impending breach by the
other Party, in addition to any other remedies granted to the non-breaching
Party in this Agreement. That injunctive relief shall be sought through
arbitration in accordance with Section 8.6, except as permitted by Section
8.6(d).
8.8 Waiver of Remedies. No forbearance, delay, or indulgence by either Party in
------------------
enforcing this Agreement shall prejudice the rights or remedies of that
Party. No waiver of a Party's rights or remedies regarding a particular
breach of this Agreement constitutes a waiver of those rights or remedies,
or any other rights or remedies, regarding any other or any subsequent
breach of this Agreement.
8.9 Survival. The rights, remedies, and obligations under this Article VIII
--------
shall continue on and after the expiration or termination of this
Agreement.
8.10 Certain Damages. Under no circumstance shall a Party be liable under this
----------------
Agreement for any punitive or exemplary damages (however described) or for
any consequential, indirect, special or incidental damages (however
described), even if a possibility those damages was disclosed or otherwise
known to that Party. A Party may not claim or receive as damages in any
claim or proceeding against the other Party alleging that other Party's
breach or default of this Agreement any amounts paid or incurred by the
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
24
claiming Party in fulfilling its indemnification obligations in connection
with Third-Party Claims in accordance with Sections 8.1 through 8.3.
8.11 Interest on Past Due Amounts. All amounts due under this Agreement, but
--------------------------------
remaining unpaid for 30 days after Notice of non-payment (if so elected by
the Party entitled to the payment), shall bear interest at a rate per annum
equal to the prime rate set forth in the Money Rates section of The Wall
Street Journal plus two percent (2%) until those amounts are paid in full.
ARTICLE IX - PREEMPTIVE AND REFUSAL RIGHTS
9.1 Preemptive and Refusal Rights Agreement. Contemporaneous with this
-------------------------------------------
Agreement, the Parties and Electronic Paycheck, LLC, a California limited
liability that is a subsidiary of GNB, are entering into a Preemptive and
Refusal Rights Agreement, which is Exhibit F to this Agreement.
----------
ARTICLE X - SERVICE LEVEL AGREEMENT
10.1 Service Level Agreement. Contemporaneous with this Agreement, the Parties
-------------------------
are entering into a Service Level Agreement, which is Exhibit G to this
---------
Agreement.
ARTICLE XI - MISCELLANEOUS
11.1 Parties' Relationship. The Parties are independent, and this Agreement does
---------------------
not create or evidence a partnership or joint venture between the Parties.
Each Party is solely responsible for its own employees, including the
compensation and the actions or omissions of those employees, and neither
Party has any authority with respect to the other Party's employees.
11.2 Governing Law. California law governs this Agreement and the rights and
--------------
obligations of the Parties under this Agreement, including the validity or
enforcement and the construction or interpretation of this Agreement.
11.3 Notices. Each notice, request, demand, and other communication from one
-------
Party to the other under this Agreement must be in writing and delivered in
person or by courier or sent by certified mail, overnight mail, or
facsimile, in any case prepaid by the notifying Party, and must be
addressed as follows:
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
25
If to Ace:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxxxxx,
Chief Financial Officer
If to GNB:
Goleta National Bank
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxx,
President and Chief Executive Officer
A Party may change its address for this purpose by giving Notice of that
change to the other Party in accordance with this Section 11.3. Each Notice
delivered or sent as provided above in this Section 11.3 will be deemed
given, received, and effective on the date of actual receipt (or refusal)
by the addressee.
11.4 Assignment. This Agreement shall be binding on each of the Parties and
----------
their respective permitted successors and permitted assigns. Neither Party
may assign its rights or obligations under this Agreement without the prior
written consent of the other Party, except that:
(a) the consent of the other Party may not be unreasonably withheld or
delayed if the proposed assignment is to a person that is capable of
performing the assigning Party's obligations under this Agreement, and
(b) this restriction on assignment will not apply to a merger,
consolidation, or share exchange by a Party or the transfer of the
capital stock of a Party unless that transaction will render that
Party incapable of performing its obligations under this Agreement.
Nothing in this Section 11.4 or otherwise in this Agreement prohibits the
assignment of a Party's right to receive amounts due under this Agreement
or Ace's grant of a security interest or lien in its rights under this
Agreement to its secured creditors. Any purported assignment in violation
of this Section 11.4 is void and ineffective.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
26
11.5 Interpretation and Certain Definitions. This Agreement is the result of the
----------------------------------------
Parties' negotiations, and no provision of this Agreement is to be
construed for or against either Party because of the authorship of that
provision. In the interpretation of this Agreement, except as otherwise
stated or the context otherwise requires:
(a) "business day" means any Monday through Friday, excluding any such day
------------
on which national banks are authorized to be closed;
(b) "person" means an individual or natural person; a corporation,
------
partnership, limited liability company, trust, association, or other
entity of any kind; or a government, court, or governmental agency or
authority;
(c) "including" or "include" does not denote or imply any limitation;
--------- -------
(d) "Article" refers to an Article of this Agreement, and "Section" refers
------- -------
to a Section of this Agreement;
(e) "affiliate" means a person that directly or indirectly through one or
---------
more intermediaries controls, is controlled by, or is under common
control with another person (and for this purpose "control" and
-------
correlative terms means the power to direct the management and affairs
of a person);
(f) the singular includes the plural, and visa versa, and each gender
includes each of the others;
(g) captions or headings in this Agreement are only for reference and are
not to be considered in interpreting this Agreement; and
(h) each Exhibit is an integral part of this Agreement.
11.6 Severability. If any part of this Agreement is or becomes invalid, it is or
------------
will be severed from the rest of this Agreement and the rest of this
Agreement remains or will remain in effect so long as (i) the continued
effectiveness of the rest of this Agreement will not impose or result in
any substantial economic detriment to either Party or (ii) the Parties
amend this Agreement as necessary to preserve their underlying economic or
financial arrangements.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
27
11.7 Integration; Amendment. This Agreement, together with its Exhibits, is the
-----------------------
entire agreement between the Parties relating to the subject matter of this
Agreement and supersedes all prior agreements or understandings regarding
that subject matter. This Agreement may be amended or modified only by a
writing signed by the Parties.
11.8 Counterpart Signatures. This Agreement may be signed in counterparts,
-----------------------
with the same effect as if both Parties had signed the same paper; all
counterparts are to be construed together to be one, and the same, document.
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
28
SIGNATURES:
ACE CASH EXPRESS, INC.
By: /s/ Xxx Xxxxxxxxx
-------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxx Xxxxx
--------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
EXHIBIT A - Credit Criteria
EXHIBIT B - Collection Servicing Agreement
EXHIBIT C - GNB marks and Ace marks
EXHIBIT D - Master Loan Participation Agreement
EXHIBIT E - Schedule of Interest and Fees
EXHIBIT F - Preemptive and Refusal Rights Agreement
EXHIBIT G - Service Level Agreement
__________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
29
EXHIBIT A
CREDIT CRITERIA
_________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
EXHIBIT B
COLLECTION SERVICING AGREEMENT
This COLLECTION SERVICING AGREEMENT ("Agreement"), dated as of August 11,
1999, is between Goleta National Bank, a national banking association (the
"Lender"), and Ace Cash Express, Inc., a Texas corporation (in its capacity as
Servicer, the "Servicer").
WHEREAS, pursuant to the Master Loan Agency Agreement dated as of August
11, 1999 (the "Master Agreement") the Lender has agreed to make certain
short-term loans ("Loans") to borrowers who satisfy the "Credit Criteria" as
that term is defined in the Master Agreement; and
WHEREAS, the Servicer is willing to service the Loans pursuant to the
terms hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Usage of Terms. With respect to all terms in this
----------------
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation."
Section 1.2 Referencess. All section references, unless otherwise
-----------
indicated, shall be to Sections in this Agreement.
Section 1.3 Terms. The defined terms used herein are defined on
-----
Schedule B.
ARTICLE II
SERVICING OF LOANS
Section 2.1 Appointment and Acceptance; Responsibility for Loan
Servicing. Ace Cash Express, Inc. is hereby appointed as Servicer pursuant to
this Agreement. Ace Cash Express, Inc. accepts such appointment and agrees to
act as the Servicer pursuant to this Agreement. The Servicer shall be obligated
to perform such duties and only such duties as are specifically set out in this
Agreement and in the Master Agreement, and no implied duties or obligations on
the part of the Servicer shall be read into this Agreement. This Agreement
shall expire or terminate on the 90th day following the expiration or
termination of the Master Agreement. Servicer hereby waives any fee or payment
from Lender for its services under this Agreement.
(a) The Servicer will have the obligation to service and make collections on
the Loans. The Lender, at the written request of the Servicer, will provide the
Servicer with any powers of attorney or other documents necessary or
appropriate, as mutually agreed to by the Servicer and the Lender, to enable the
Servicer to carry out its servicing duties hereunder.
Section 2.2 General Duties. The Servicer will service and enforce the
--------------
Loans subject to the provisions of this Agreement. The Servicer will perform
the specific duties set forth in Schedule A (as may be amended and in effect
from time to time) and such other duties described in this Agreement
(collectively, the "Loan Services"). The Servicer will service and collect
amounts owing on the Loans with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to comparable assets that it
services for its own account. The Servicer will, subject to the provisions of
this Agreement, follow its customary standards, policies, and procedures in
connection with such servicing and collection. The Servicer shall commence or
participate in a legal proceeding (including a bankruptcy proceeding) relating
to or involving a Loan (a "Loan Legal Proceeding") promptly following any
default in payment on such Loan, subject to the reasonable consent and approval
of Lender. If the Servicer commences or participates in a Loan Legal Proceeding
in accordance with this Section 2.2, the Servicer is authorized and empowered by
the Lender, pursuant to this Section 2.2, to execute and deliver, on behalf of
itself and the Lender, any and all instruments of satisfaction or cancellation,
or partial or full release or discharge, and all other notices, demands, claims,
complaints, responses, affidavit or other document or instruments in connection
with any such proceedings. If the Servicer is legally prohibited from
commencing a legal proceeding to enforce a defaulted Loan, then the Servicer
will retain an attorney qualified to take legal action in the appropriate court.
Section 2.3 Collection Efforts. The Servicer will use reasonable
-------------------
efforts to collect all payments called for under the terms and provisions of the
Loans as and when the same become due, and will follow those collection
procedures which it follows with respect to all comparable assets that it
services for its own account, subject to any reasonable direction of the Lender.
The Servicer shall not, subject to Section 2.4, consent to amend, waive, modify
or otherwise vary any provision of a Loan.
Section 2.4 Modification of Loans. The Servicer shall notify the
-----------------------
Lender upon receipt of any request to amend, waive, modify, extend or otherwise
vary the terms of a Loan, and follow the reasonable instructions of the Lender
with respect to any such request or with respect to any other matter which
requires the consent of the Lender.
Section 2.5 Notice of Default. The Servicer and the Lender shall
-------------------
follow such procedures as they may agree to implement regarding any notice of
the occurrence of any default under any Loan, provided such procedures shall
provide, at a minimum, for periodic reporting of Loans in default. Each party
shall maintain its own system for monitoring such defaults. Each party shall,
in addition to periodic reporting, on the reasonable request of the other party,
provide summary information regarding the Loans such party's records indicate
are in default. In the event that the Servicer becomes aware of a failure by an
Obligor to make a payment on a Loan when due, the Servicer shall follow the
agreed upon procedures and, if required thereby, promptly commence activities as
required pursuant to Section 2.2 and 2.3 hereof without the need for any
additional notice or instructions related thereto from Lender.
ARTICLE III
COOPERATION OF SERVICER
Section 3.1 Servicer to Cooperate with Lender. The Servicer shall, at
---------------------------------
the request of the Lender, provide the Lender with such information and reports
relating to the Loans as the Lender may reasonably require for the proper and
efficient performance by the Lender of its obligations under this Agreement and
the Master Agreement; provided that the Servicer shall not be required to
provide such information if to do so would be contrary to any applicable law or
regulation.
ARTICLE IV
DELEGATION BY THE SERVICER
Section 4.1 General. The Servicer may not, other than as expressly
-------
provided in Section 4.2, subcontract or delegate the provision or performance of
the Loan Services.
Section 4.2 Appointment of Delegates. The Servicer (the "Delegating
-------------------------
Party") may, with the consent of the Lender (not to be unreasonably withheld or
delayed), enter into agreements with one or more other agents or representatives
(including any Affiliate of the Delegating Party) to perform all or a portion of
the Loan Services, provided that the Servicer shall remain liable to the Lender
for acts or omissions to act of any subcontractor, delegatee, agent or
representative. All actions of such agent or representative taken pursuant to
such a delegation agreement will be taken as an agent of the Delegating Party
with the same force and effect as though performed by the Delegating Party.
Section 4.3 Notice of Appointment. The Delegating Party shall, prior
----------------------
to the appointment of the agent or representative pursuant to Section 4.2,
provide written notice to the parties hereto of such appointment.
Section 4.4 Enforcement of Rights by Delegating Party. The Lender may
-----------------------------------------
require the Delegating Party to enforce any right which such Delegating Party
may have against such agent or representative arising from the provision or
performance of such delegated duties by such agent or representative.
Section 4.5 Further Assurance. The Lender will furnish the Delegating
-----------------
Party, and the Delegating Party will furnish any agents or representatives, with
any powers of attorney and other documents necessary or appropriate to enable
the Delegating Party or such agent or representative, as applicable, to carry
out the Loan Services under this Agreement, as mutually agreed to by the
Servicer and the Lender.
ARTICLE V
COLLECTIONS
Section 5.1 Collection of Money. Except as otherwise expressly
---------------------
provided in the Master Agreement, (i) the Servicer, on behalf of the Lender, may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable on any Loan, and (ii) all moneys received
by the Servicer shall be held in trust for the benefit of the Lender. The
Servicer, acting on behalf of the Lender, shall apply all such money as provided
in the Master Agreement.
Section 5.2 Establishment of Accounts. The Servicer shall establish
---------------------------
and maintain such accounts and sub-accounts as described in, and in accordance
with the terms of, the Master Agreement on behalf of the parties specified
therein.
ARTICLE VI
LIMITATION ON LIABILITY
Section 6.1 Consequential Damages. Notwithstanding anything to the
----------------------
contrary set forth herein: (i) the Servicer shall not have any obligations
under this Agreement other than those specifically set forth herein, and no
implied obligations shall be read into this Agreement; and (ii) in no event
shall the Servicer be liable under or in connection with this Agreement for
indirect, special, or consequential losses or damages of any kind, including
lost profits, even if advised of the possibility thereof and regardless of the
form of action by which such losses or damages may be claimed.
Section 6.2 Limitation on Liabilities. Neither the Servicer nor any of
-------------------------
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken in good faith by it or them under or in connection
with this Agreement, except for its or their own negligence or willful
misconduct and except as provided in Section 4.2 hereof.
Notwithstanding anything to the contrary set forth herein, in no event
shall the Servicer be liable for payment from its own funds for (i) any taxes on
or by reference to any Loans or payments thereon or (ii) any alleged duty to
make advances or (iii) except as set forth in the Master Agreement, any amount
paid or to be paid by or for the account of the Lender.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
(a) The Servicer represents and warrants to the Lender that:
(1) such party is a Texas corporation validly existing and in good
standing under the laws of the State of Texas;
(2) such party has the power and authority to make, execute, deliver
and perform its obligations under this Agreement, and has taken all
necessary corporate action to authorize its execution, delivery and
performance of this Agreement;
(3) this Agreement constitutes the legal, valid and binding obligation
of such party, enforceable against such party in accordance with its terms,
except as may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles of general application; and
(4) the execution and delivery of this Agreement by such party and its
fulfillment of or compliance with the terms and conditions of this
Agreement does not and shall not, in any manner which would materially
adversely affect its ability to perform its obligations under this
Agreement, result in a breach of, or constitute a default under (i) any
term, condition or provision of such party's charter or by-laws; (ii) the
terms or provisions of any material indenture agreement, deed or trust,
contract or other agreement or instrument to which such party is a party or
by which such party is bound; or (iii) any law, rule, regulation, order,
judgment or decree of any court or governmental authority having
jurisdiction over such party which materially and adversely affects the
ability of such party to perform its obligations.
(b) The Lender represents and warrants to the Servicer that:
(1) such party is a banking association duly established, validly
existing and in good standing under the laws of the United States;
(2) such party has the power and authority to make, execute, deliver
and perform its obligations under this Agreement, and has taken all
necessary corporate action to authorize its execution, delivery and
performance of this Agreement;
(3) this Agreement constitutes the legal, valid and binding obligation
of such party, enforceable against such party in accordance with its terms,
except as may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles of general application; and
(4) the execution and delivery of this Agreement by such party and its
fulfillment of or compliance with the terms and conditions of this
Agreement does not and shall not, in any manner which would materially
adversely affect its ability to perform its obligations under this
Agreement, result in a breach of, or constitute a default under (i) any
term, condition or provision of such party's charter or by-laws; (ii) the
terms or provisions of any material indenture, agreement, deed or trust,
contract or other agreement or instrument to which such party is a party or
by which such party is bound; or (iii) any law, rule, regulation, order,
judgment or decree of any court or governmental authority having
jurisdiction over such party which materially and adversely affects the
ability of such party to perform its obligations.
ARTICLE VIII
COVENANTS
Section 8.1 Covenants of the Servicer. The Servicer, in addition to
---------------------------
its duties and obligations set forth elsewhere in this Agreement or the Master
Agreement, hereby covenants with the Lender that:
(a) Performance of Duties and Obligations. It will give such time and
attention and will exercise such skill, care and diligence and allocate
sufficient resources as is necessary for the proper performance of its
obligations under this Agreement in accordance with the standards imposed by and
the terms of this Agreement.
(b) Instructions from the Lender. It will, subject to the provisions
of the Master Agreement, comply with all reasonable directions, orders and
instructions which the Lender may from time to time give in accordance with the
terms of this Agreement and the Master Agreement, provided that it shall not be
obligated to act on any such instructions if it believes it has not received
sufficient information to enable it to act and it shall not be liable for any
failure to act on any such instructions in such circumstances.
(c) Applications and Filings. It will prepare and submit in a timely
manner all applications and filings as may be necessary to enable it to comply
with its duties and obligations under this Agreement and the Master Agreement.
(d) Maintenance of Records and Files. It will, at its own cost and
expense, maintain all records and files required to be maintained by it pursuant
to this Agreement and the Master Agreement in accordance with its customary
procedures.
(e) Compliance with Law. It will comply, in all material respects,
with all material laws and regulations of any Governmental Authority applicable
to it in connection with the performance of its obligations under this
Agreement; provided that the Servicer, as the case may be, may contest any such
law or regulation in any reasonable manner which will not materially and
adversely affect the value of the Loans.
(f) Use of Endorsement. Servicer will not use the authority granted to it to
endorse items made payable to Lender for any purpose or in any manner other than
in connection with the collection of Loans hereunder.
ARTICLE IX
EXPENSES
Section 9.1 Payment of Certain Expenses of Servicer. The Servicer
-------------------------------------------
shall be responsible for payment of all normal and customary expenses of
collection, but shall be reimbursed for any extraordinary expenses relating to a
Loan Legal Proceeding that Lender specifically requests be undertaken to collect
a Loan.
ARTICLE X
MISCELLANEOUS
Section 10.1 Amendment. This Agreement may be amended from time to
---------
time by the Servicer and the Lender for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement, provided such amendment must be in writing and signed by the Servicer
and the Lender to be effective.
Section 10.2 Governing Law. This Agreement shall be construed in
--------------
accordance with the laws of the State of California and the obligations, rights,
and remedies of the parties under the Agreement shall be determined in
accordance with such laws.
Section 10.3 Notices. All notices, demands, certificates, requests and
-------
communications hereunder ("notices") shall be in writing and in English and
shall be effective (a) upon receipt when sent through the registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, (b) on the
date personally delivered or delivered by courier to the party to which sent or
(c) on the date received by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient as follows:
(i) If to the Servicer:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: Chief Financial Officer
(ii) If to the Lender:
Goleta National Bank
0000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxxxxx 00000
Fax No: (000) 000-0000
Attention: Chief Executive Officer
Each party hereto may, by notice given in accordance herewith to each the other
party hereto, designate any further or different address to which subsequent
notices shall be sent.
Section 10.4 Severability of Provisions. If one or more of the
----------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Loans; except
that the continued effectiveness of the other provisions of this Agreement will
be conditioned on their not imposing or resulting in any substantial economic
detriment to either party or on the parties' amending this Agreement as
necessary to preserve their underlying economic or financial arrangements.
Section 10.5 Third Party Beneficiaries. This Agreement shall inure
--------------------------
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The parties hereto hereby manifest their
intent that no third party shall be deemed a third-party beneficiary of this
Agreement, and specifically that the Obligors are not third-party beneficiaries
of this Agreement.
Section 10.6 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.
Section 10.7 Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.8 Incorporation by Reference. The Lender and the Servicer
--------------------------
hereby agree that the provisions of Articles V through VIII of the Master
Agreement, are hereby incorporated by reference, including the indemnification
and arbitration provisions set forth therein. To the extent that the terms of
this Agreement conflict with the terms of the Master Agreement, the terms of the
Master Agreement shall control
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
GOLETA NATIONAL BANK, as Lender
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
ACE CASH EXPRESS, INC.,
as Servicer
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Schedule A
Loan Services
I. Loan Services
The Servicer's duties with respect to the Loans will include:
(a) monitoring receipt and taking reasonable action consistent with
procedures developed by Servicer and Lender to facilitate payments on Loans;
(b) if requested by Lender, notifying the Lender as promptly as
practicable as to any payments due but not received or any defaults by the
Obligors;
(c) undertaking enforcement procedures with respect to payments in
arrears in accordance with Sections 2.2 and 2.3 of this Agreement;
(d) providing the information to the Lender required under this
Agreement; and
(e) performing all such other services as are incidental to the above
services and as are from time to time agreed upon with the Lender, including the
services described in Section 1.5(i) and Section 1.5(j) of the Master Agreement.
Schedule B
Definitions
"Affiliate" B a Person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with
another Person (and for this purpose "control"and correlative terms means the
power to direct the management and affairs of a Person)
"Agreement" - as defined in the Recitals
"Delegating Party" - as defined in Section 4.2
"Lender" - as defined in the Recitals
"Loan Services" - as defined in Section 2.2
"Loan Legal Proceeding" - as defined in Section 2.2
"Loans" - as defined in the Recitals
"Master Agreement" - as defined in the Recitals
"notices" - as defined in Section 10.3
"Obligor" shall mean the individual obligated to repay a Loan
"Person" shall mean any individual, corporation, business trust, association,
company, partnership, joint venture, governmental entity or any other legal
entity
"Servicer" - as defined in the Recitals
COLLECTION SERVICING AGREEMENT
between
GOLETA NATIONAL BANK,
as Lender,
and
ACE CASH EXPRESS, INC.,
as Servicer
Dated as of __________________, 1999
EXHIBIT D
MASTER LOAN
PARTICIPATION AGREEMENT
This Master Loan Participation Agreement (the "Agreement") is made as of
the 11th day of August, 1999, between Goleta National Bank, a national banking
association (hereinafter called "GNB") and Ace Cash Express, Inc., a Texas
corporation (hereinafter called "Participant").
WHEREAS, GNB may hereafter extend credit to various individual borrowers
(hereinafter referred to as "Obligors") whose obligations to GNB are evidenced
by a Promissory Note and other loan documents ("Loan Documents"), samples of
which are attached hereto as Exhibit A (such extensions of credit are
hereinafter referred to collectively as "Bank Loans");
WHEREAS, as a result of its independent review, Participant has agreed to
purchase an undivided interest in the Bank Loans upon the terms and conditions
of this Agreement, which is intended to govern the purchase and sale of an
undivided interest in each Bank Loan, the administration of the Bank Loans, the
procedures upon default by any Obligor and other related matters; and
WHEREAS, Participant desires to purchase, and GNB desires to sell to
Participant, an undivided ninety-five percent (95%) interest in each of the Bank
Loans.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, GNB and Participant hereby
mutually agree as follows:
1. GNB agrees to sell to Participant, from time to time, and Participant
agrees to purchase from GNB, from time to time, an undivided
ninety-five percent (95%) interest in each and every Bank Loan made by
GNB.
2. The purchase price for each Bank Loan purchased by Participant shall
be ninety-five percent (95%) of the principal amount of such Bank Loan
("Purchase Price"). In no event shall Participant acquire any
participation in a Bank Loan related to an overdraft or funding by
Lender in excess of the approved Bank Loan.
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
3. Within five (5) business days after the execution of this Agreement,
Participant will establish an account or accounts (the "Account") at a
bank chosen by Participant for the exclusive purpose of the
transactions contemplated by this Agreement.
4. The Purchase Price for each Bank Loan shall be transferred from the
Account to GNB on the day such Bank Loan is funded and ninety-five
percent (95%) of any payment of fees, interest or principal received
by GNB on such Bank Loan shall be transferred to the Account on the
day received by GNB; provided however, that if any instrument
representing payment of the fee, principal or interest on a Bank Loan
is later dishonored, rescinded or revoked, or GNB, for any reason,
fails to receive good funds, then the credit to the Account of
Participant shall be transferred to GNB.
5. GNB shall be responsible for administering the Bank Loans, collecting
all payments (principal, interest, late fees, or receipts resulting
from the liquidation of any collateral) and disbursing to Participant
its share of all amounts received.
6. GNB hereby represents, warrants and covenants that it shall exercise
that degree of ordinary care that would be exercised by bankers or
financiers, in the industry, in administering a Bank Loan in
accordance with the usual practices and procedures employed by GNB on
similar loans for its own accounts taking into consideration the size
of the Bank Loan, creditworthiness of the applicable Obligor, other
credit extended to the applicable Obligor and other matters
customarily taken into account in underwriting and administering
similar loans in the ordinary course of GNB's business. GNB hereby
represents, warrants and covenants that it shall use reasonable
efforts, consistent with the efforts or GNB utilizes in connection
with loans for its own account, to insure that the Loan Documents are
enforceable in accordance with their terms, comply with regulatory
requirements related thereto, and provide customary rights and
remedies to the holder thereof.
7. In the event of a default in the payment of principal, interest or
fees due on a Bank Loan by Obligor, GNB shall not be required to remit
Participant's share thereof until collected. GNB shall, subject to the
standard set forth in Section 6, have discretion with respect to the
collection of any defaulted Bank Loan and may employ the services of
agents, including Participant, to assist it in these collection
efforts.
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
2
8. Participant shall pay the "Expenses," related to the collection or
enforcement of a defaulted Bank Loan unless otherwise provided in this
Agreement or other Agreements between the parties. The term "Expenses"
shall mean all reasonable out of pocket expenses incurred by GNB or
any agent of GNB, which may be Participant, in connection with the
collection of a Bank Loan including, but not limited to, outside
attorneys' fees, and all other costs and expenses typically incurred
by a lender in connection with the collection of a similar loan.
9. GNB, or a custodian appointed by it, shall retain in trust physical
possession of the Loan Documents and any other documents or
instruments in its physical possession relating to the Bank Loans in
accordance with the terms of this Agreement for the account of GNB and
Participant as owners thereof. Any person, firm or corporation may
deal with GNB concerning the Bank Loans in the same manner as if GNB
were the sole owner thereof and no participation therein were
outstanding.
10. GNB, or its agents, shall maintain customary books and records
relating to the Bank Loans, which shall be made available to
Participant or its duly authorized agents at all reasonable times for
the purposes of inspection, examination or audit upon three business
days' written notice from Participant to GNB.
11. GNB and Participant shall share any losses (but not unreimbursed
Expenses) with respect to any defaulted Bank Loan in accordance with
their respective interests in such Bank Loan (i.e. ninety-five percent
(95%) of such loss shall be borne by Participant and five percent (5%)
shall be borne by GNB).
12. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by both of the parties.
13. This Agreement may be executed in several counterparts, each of which
shall constitute an original, but all of which together shall
constitute but one instrument.
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
3
14. Each notice, request, demand, and other communication under this
Agreement must be in writing and delivered in person, or by courier,
or sent by certified mail, overnight mail, or confirmed facsimile, in
any case prepaid by notifying party, and must be addressed as follows:
If to GNB:
Goleta National Bank
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xx. Xxxxxxxxx X. Xxxxx, President and Chief Executive Officer
If to Participant:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xx. Xxx X. Xxxxxxxxx, Chief Financial Officer
Notices shall be deemed to be delivered, given and effective on the
first business day after the date of delivery. A party may change its
address for this purpose by giving notice of that change to the other
party in accordance with this Section 14. Each notice delivered or
sent as provided above will be deemed given, received, and effective
on the date of actual receipt (or refusal) by the addressee.
15. This Agreement shall be construed fairly as to both parties and not in
favor of or against either party, regardless of which party prepared
this Agreement.
16. This Agreement shall be construed and interpreted in accordance with
the laws of the State of California. This Agreement shall be governed
by and construed in accordance with the laws of the State of
California. Any dispute, controversy or claim arising out of or
relating to this Agreement, or the breach or validity hereof
("Dispute"), shall be settled by final and binding arbitration in
accordance with the Rules for Commercial Arbitration (the "Rules") of
the American Arbitration Association ("AAA") in effect as of the date
of the Dispute and in accordance with the following subsections of
this Section 16. (In the event of any inconsistency between the Rules
and the arbitration provisions of this Section 16, the latter shall
control.)
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
4
(a) The arbitration shall be conducted by a sole arbitrator who has
experience in or is otherwise familiar with the kinds of business to
which this Agreement relates and is not, and has not been, an
affiliate or a family member or either Party. In the event an
arbitrator who has such experience or familiarity cannot be found,
then the Parties shall appoint an arbitrator who is mutually
satisfactory to them. Such arbitrator shall be appointed by the
Parties within fifteen (15) days from the filing of the Demand and
Submission in accordance with Section 7 of the Rules. If the Parties
fail to agree upon a sole arbitrator within such 15-day period and
fail to agree to an extension of such period, the arbitration shall be
conducted by a sole arbitrator appointed by the AAA in accordance with
Section 14 of the Rules. The arbitrator appointed shall be
knowledgeable in the subject matter of the Dispute.
(b) The place of arbitration shall be Phoenix, Arizona, and the final
decision or award of the arbitrator shall be issued at the place of
arbitration. The arbitrator may, however, call and conduct hearings
and meetings at such other places as (i) the Parties hereby may agree
or (ii) the arbitrator may, on the motion of a Party, determine to be
necessary to obtain significant testimony or evidence.
(c) The arbitrator shall have the power to authorize all forms of
discovery (including depositions, interrogations and document
production) on a showing of particularized need that the requested
discovery (i) is likely to lead to material evidence needed to resolve
the controversy and (ii) is not excessive in scope, timing, or cost.
(d) The arbitrator shall not have the power to (i) rule upon or grant any
extension, renewal or continuance of this Agreement, (ii) award
damages or other remedies expressly prohibited by this Agreement, or
(iii) grant interim injunctive relief before rendering the final
decision or award. Nevertheless, either of the Parties may apply for
an obtain temporary or provisional injunctive relief from any court
having jurisdiction over one or both of the Parties or their assets
regarding any violation or alleged violation by the other Party of its
obligations under this Agreement.
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
5
(e) The final decision or award of the arbitrator shall be made as soon as
reasonably practicable after the appointment of the arbitrator under
Section 16(a). Such a final decision or award may include (i) recovery
of actual damages for violation of any obligations under this
Agreement or of governing law or (ii) injunctive relief against
threatened or actual violations of any obligations under this
Agreement or of governing law.
(f) The final decision or award of the arbitrator shall be final and
binding on the Parties, and judgment upon such final decision or award
may be entered in any court having jurisdiction over one or both of
the Parties or their assets. The parties specifically waive any right
they may have to apply to any court for relief from the provisions of
this Agreement or from any decision of the arbitrator made before the
final decision or award of the arbitrator.
(g) Subject to the final decision or award of the arbitrator, each of the
Parties shall bear an equal portion of the arbitrator's fees and
expenses, and each shall bear all of its own expenses. The arbitrator
shall have the power, however, to award recovery of all fees and
expenses (including attorneys' fees, administrative fees, arbitrator's
fees and court costs) to the prevailing Party in the arbitration.
17. If any provision of this Agreement shall be declared to be unenforceable or
invalid, the remainder of this Agreement shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
18. Time is of the essence of this Agreement and every provision hereof in
which time of performance is a factor.
19. Neither the execution of this Agreement, the sharing of the Loan Documents,
nor any agreement to share in the Bank Loans is intended to create a
partnership or joint venture between Participant and Lender.
20. Except as specifically provided in Section 21 of this Agreement, none of
the provisions of this Agreement shall inure to the benefit of any Obligor
or any person other than Participant and Lender.
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
6
21. GNB acknowledges that Participant's interest in each and every Bank Loan
made by GNB (i.e., Participant's participation interest) is subject to a *
in favor of * ("Trustee"), pursuant to the terms of (i) that certain *,
dated as of *, by and between Participant and Trustee, for the ratable
benefit of the beneficiaries from time to time a party to the * (as
hereinafter defined), as the same may be amended, modified or extended from
time to time, and (ii) that contain *, by and among Participant, *, as
Agent, *, and Trustee, as the same may be amended, modified or extended
from time to time (the "Collateral Trust Agreement"). Notwithstanding any
provision of this Agreement to the contrary, any payments to be made to
Participant (in that capacity and not as loan servicing agent) under this
Agreement shall, upon receipt of written notice by GNB from Trustee, be
paid directly to Trustee at its principal office in *, for application
pursuant to the Collateral Trust Agreement. GNB is entitled to rely upon
and is authorized and directed to follow all written instructions of
Trustee contained in any notice described in the preceding sentence, and
GNB shall have no duty to inquire as to the authorization or authenticity
of any such instructions. GNB further acknowledges that Participant's
rights in this Agreement may be assigned to Trustee as additional
collateral security for the beneficiaries from time to time a party to the
Collateral Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title President and Chief Executive Officer
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
7
EXHIBIT E
SCHEDULE OF INTEREST AND FEES
1. Interest. GNB will charge the borrower interest on each Bank Loan
--------
including each Renewal, which interest will be shared by GNB and Ace in
accordance with the participation percentage of the corresponding Bank Loan as
set forth in that certain Master Loan Participation Agreement by and between GNB
and Ace.
2. Loan Participation Processing Fee. GNB will charge Ace (and not the
------------------------------------
borrower), and Ace will pay to GNB, a Loan Participation Processing Fee for
processing the out participation of each Bank Loan (including each Renewal) to
Ace equal to the sum of (a) * of all interest charged to the borrower on each
Bank Loan (including each Renewal) plus (b) *. The Loan Participation
Processing Fee will be charged by GNB and paid by Ace at the time interest is
actually paid by the borrower on each Bank Loan (including each Renewal).
3. Card Fee. GNB will charge Ace and Ace will pay to GNB, not later than 60
--------
days from the date of delivery of the Card to the Ace Location, * for each Card
so delivered.
4. ATM Charges. Borrowers who access the Bank Loan proceeds with the Card
------------
through an automated teller machine will pay all costs charged by the ATM in
addition to GNB's charge of * per withdrawal (the "Withdrawal Fee"). There will
be no charge for disbursement of Bank Loan proceeds at a Location at which Bank
Loans are offered. GNB will pay Ace a commission equal to * for each Withdrawal
Fee collected by GNB, which commission will be paid not later than the fifteenth
(15th) day of the month immediately following the month in which the Withdrawal
Fee is collected.
________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
EXHIBIT F
PREEMPTIVE AND REFUSAL RIGHTS AGREEMENT
______________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
EXHIBIT G
SERVICE LEVEL AGREEMENT
Servicing Agreement
--------------------
Goleta National Bank will operate or cause to be operated a facility to
authorize loans described in this agreement. The facility will include computer
servers that electronically authorize and process transactions.
Operation of Computer System
-------------------------------
The authorization computer system will be expected to operate 24 hrs/day 7
days/week with scheduled maintenance to take place during off peak hours. Any
scheduled down times will not be planned to exceed 2 hours and will be announced
at least 24 hours prior to such down time.
Unscheduled Down Time
-----------------------
Computer Systems Fail. As a result Bank will have in place prudent backup
systems that can be started within 15 minutes of failure when staffed and within
30 minutes of failure during un-staffed times. If the system failure is
expected to exceed 5 minutes, then Bank will allow the manual authorization of
loans through telephone calls and/or fax to the Bank's designated servicing
office.
Staffing Hours (Pacific Time) Testing Period After Testing
-------------------------------- -------------- -------------
Monday-Friday 7am - 6pm 6am - 9pm
Saturday 8am - 4pm 7am - 9pm
Sunday Closed 7am - 5pm
Non-Staffed Hours
------------------
Bank Representatives will be on call through an Answering Service 24 hours for
emergencies during non-staffed hours at a designated toll free telephone number
to be announced later.
AGREED to this 11th day of August, 1999, by the undersigned.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
AMENDMENT NUMBER 1 TO
MASTER LOAN AGENCY AGREEMENT
This Amendment Number 1 to Master Loan Agency Agreement (this "Amendment")
is made as of this 29th day of March, 2001, by and between Goleta National Bank,
a national banking association ("GNB"), and Ace Cash Express, Inc., a Texas
corporation ("Ace"), with regard to the following:
A. GNB and Ace entered into that certain Master Loan Agency Agreement
dated August 11, 1999 (the "Agreement").
B. Section 11.7 of the Agreement permits GNB and Ace to amend the
Agreement by a writing signed by them.
C. GNB, after consultation with the Bank Regulatory Authority, has
determined that it is in the best interests of GNB to implement certain
revisions and adjustments to the origination, processing and collection of Bank
Loans, which revisions and adjustments are set forth in, and have been
communicated to Ace in the form of, a set of compliance manuals, which may be
amended from time to time by GNB.
D. GNB and Ace wish to amend the Agreement to reflect revisions in
their relationship as a result of the implementation of the bank loan compliance
manuals and as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, Ace and GNB hereby agree as follows:
1. The first sentence of Section 1.6(a) of the Agreement is hereby
amended by deleting the "and" preceding "(ii)," deleting the "." at the end of
that sentence, and adding the following after clause (ii):
", and (iii) Ace may offer, in lieu of Bank Loans, short-term loans
substantially similar to the Bank Loans from one or more other bank or
other financial institution lenders in approximately * Locations, but
not more than * Locations, in the aggregate at any one time from the
one or more other bank or other financial institution lenders."
2. Section 2.1 of the Agreement is hereby amended to read as follows:
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
"2.1 Participation Agreement. Contemporaneous with this Agreement, the
------------------------
Parties are entering into a Master Loan Participation Agreement
under which GNB agrees to sell to Ace, and Ace agrees to purchase
from GNB, a 95% participation in each of the Bank Loans made by
GNB from the Effective Date and prior to the POS Compliance Date
(as defined in Section 3.4(i)), and a 90% participation in each
of the Bank Loans made by GNB from and after the POS Compliance
Date. That Master Loan Participation Agreement (as amended by
Amendment Number 1 to Master Loan Participation Agreement dated
March 29, 2001) is Exhibit D to this Agreement."
----------
3. Section 3.2(f) of the Agreement is hereby amended to read as follows:
"(f) GNB will pay Ace the portion of the ATM charges received by GNB
described in, and in accordance with, Exhibit E to this Agreement
---------
(as amended by Amendment Number 1 to Schedule of Interest and
Fees dated March 29, 2001)."
4. The following is hereby added as Section 3.2(h) of the Agreement:
"(h) GNB has delivered to Ace, in written form, a set of manuals
setting forth the policies, procedures, training, and systems
regarding the origination, processing, and collection of Bank
Loans resulting from GNB's consultation with the Bank Regulatory
Authority through the date thereof, for Ace to implement and make
operational in order to serve as GNB's agent to facilitate and
provide administrative services regarding Bank Loans at
Locations; a complete set thereof shall be delivered to Ace on or
before April 27, 2001, and that complete set as so delivered and
as identified separately by GNB to Ace as definitive as of March
30, 2001, will collectively be the "Initial Bank Loan Operating
---------------------------
Manuals." (In this Agreement, "Bank Loan Operating Manuals"
------- -----------------------------
refers collectively to the Initial Bank Loan Operating Manuals
and the Initial Bank Loan Operating Manuals as amended or
revised, including any further amendment or revision, in any case
as in effect from time to time.) GNB may amend and revise the
Bank Loan Operating Manuals, in its sole discretion to reasonably
comply with requirements or recommendations of the Bank
Regulatory Authority, from time to time, and shall deliver all
such amendments and revisions to Ace; all such amendments and
revisions shall, upon their effectiveness in accordance with this
Agreement, be deemed part of the "Bank Loan Operating Manuals."
---------------------------
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
2
GNB shall also conduct such training sessions for Ace's personnel
regarding the Bank Loan Operating Manuals, including any
amendments and revisions thereto, as the Parties may deem
necessary or reasonably appropriate to permit or facilitate Ace's
implementation and operation of the requirements of the Bank Loan
Operating Manuals or any amendments or revisions thereto, as the
case may be."
5. The following is hereby added as Section 3.2(i) of the Agreement:
"(i) GNB shall pay its proportionate share, in accordance with its
interest in the Bank Loans made from time to time after giving
effect to the participations in the Bank Loans sold to Ace, of
all of the expenses of the lobbying and related activities,
regarding legislation and pending legislation affecting
short-term loans, which the Parties mutually determine to engage
in or support from time to time during the Term; provided, that
the maximum amount GNB shall be obligated to pay for such
expenses in any one year is $20,000, unless the Parties agree
otherwise; and provided further, that such lobbying and related
activities shall not involve any direct or indirect contribution,
payment, distribution, loan, advance, deposit, gift of money or
any services, or anything of value to any candidate, campaign
committee, political action committee or political party or
organization in connection with any election."
6. The following is hereby added as Section 3.4(i) of the Agreement:
"(i) Ace shall use its commercially reasonable efforts in good faith
to develop, implement and make operational all revisions or
adjustments to the POS System as are necessary to comply with the
software requirements of the Initial Bank Loan Operating Manuals,
on or before 5:00 p.m., Pacific Time, on April 30, 2001, but in
any event, Ace shall develop, implement and make operational all
adjustments to the POS System as are necessary to comply with the
software requirements of the Initial Bank Loan Operating Manuals
not later than 11:59:59 p.m., Pacific Time, on June 30, 2001. For
purposes of this Agreement, the "POS Compliance Date" shall mean
-------------------
the earlier of (i) the day on which Ace has developed,
implemented, and made operational all revisions or adjustments to
the POS System necessary to comply with the software requirements
of the Bank Loan Operating Manuals as required in this Section
3.4(i), or (ii) July 1, 2001."
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
3
7. The following is hereby added as Section 3.4(j) of the Agreement:
"(j) Ace shall use its commercially reasonable efforts in good faith
to substantially comply with and implement all of the terms,
conditions, policies, and procedures required by the Initial Bank
Loan Operating Manuals on or before 5:00 p.m., Pacific Time, on
April 30, 2001, but in any event, Ace shall comply with and
implement all of the terms, conditions, policies and procedures
required by the Initial Bank Loan Operating Manuals on or before
5:00 p.m., Pacific Time, on October 1, 2001 (the "Final
-----
Compliance Date"). In addition, Ace shall take all action
----------------
necessary to comply with and implement the terms, conditions,
policies, and procedures required by each amendment or revision
to the Bank Loan Operating Manuals not later than 60 days from
and after the date of delivery to Ace of such amendment or
revision by GNB, when Ace must be in compliance."
8. The following is hereby added as Section 3.4(k) of the Agreement:
"(k) Ace shall pay its proportionate share, in accordance with its
participations in the Bank Loans purchased from GNB from time to
time, of all of the expenses of the lobbying and related
activities, regarding legislation and pending legislation
affecting short-term loans, which the Parties mutually determine
to engage in or support from time to time during the Term;
provided, that such lobbying and related activities shall not
involve any direct or indirect contribution, payment,
distribution, loan, advance, gift of money or any services, or
anything of value to a candidate, campaign committee, political
action committee, or political party or organization in
connection with any election."
9. Section 4.2(c) of the Agreement is hereby amended to read as follows:
"(c) Either Party may terminate this Agreement upon 30 business days'
Notice upon the occurrence of any material breach or default by
the other Party under this Agreement (other than as described in
Section 4.2(b), Section 4.2(f), Section 4.2(g), or the provisions
of Section 4.2 after Section 4.2(g)) which is not cured within
such 30 business-day period."
10. The following is hereby added as Section 4.2(f) of the Agreement:
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
4
"(f) GNB may terminate this Agreement at any time after the Final
Compliance Date, upon nine (9) months' Notice, if GNB reasonably
determines that Ace is not in compliance with the requirements of
the Bank Loan Operating Manuals. Such Notice must describe with
reasonable specificity the basis or bases for the termination and
the corrective actions to be taken to make Ace in compliance with
the requirements of the Bank Loan Operating Manuals. Such
termination shall be effective immediately upon the expiration of
such nine (9) month period, unless Ace is in compliance with the
requirements of the Bank Loan Operating Manuals within forty-five
(45) days after GNB has given the nine (9) months' Notice to
terminate."
11. The following is hereby added as Section 4.2(g) of the Agreement:
"(g) Ace may terminate this Agreement at any time after the Final
Compliance Date, upon nine (9) months' Notice (which Notice must
describe with reasonable specificity the basis or bases for the
termination) if GNB amends and/or revises the Bank Loan Operating
Manuals and any such amendment or revision changes the operation,
policies, procedures, training and/or system(s) regarding the
origination, processing, or collection of Bank Loans in a
material way, Ace uses its commercially reasonable efforts to
comply with the amendment or revision, and Ace reasonably
determines that compliance, or the use of resources to effect or
maintain compliance, by Ace with the amendment or revision would
have a material adverse effect upon Ace's loan-related business,
operations or financial condition. Such termination shall be
effective immediately upon the expiration of such nine (9) month
period, unless Ace, by Notice to GNB within forty-five (45) days
after Ace has given the nine (9) months' Notice to terminate,
withdraws such termination Notice and has effected compliance
with the amendment or revision to the Bank Loan Operating
Manuals."
12. The following is hereby added at the end of Section 4.2, after Section
4.2(g), of the Agreement:
"In addition, if GNB should reasonably determine, from time to time,
that Ace's operations regarding the Bank Loans at any particular
Locations or Locations ("Noncomplying Locations") are not in
-----------------------
substantial compliance with the requirements of the Bank Loan
Operating Manuals, GNB may give Ace a Notice which (i) describes with
reasonable specificity both the
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
5
circumstances that constitute noncompliance at each Noncomplying
Location and the corrective actions to be taken to make the operations
at each Noncomplying Location comply with the requirements of the Bank
Loan Operating Manuals, and (ii) states that the agency appointment
made in Section 1.3 with respect to each Noncomplying Location will be
revoked if the specified corrective actions are not taken. If the
specified corrective actions are not taken regarding Ace's operations
at a Noncomplying Location within ten (10) business days after the
giving of the Notice, Ace shall no longer have the right to legally
serve as GNB's agent to facilitate and provide administrative services
regarding new Bank Loans at any continuing Noncomplying Location
unless thereafter authorized by GNB (though Ace may continue to serve
as agent regarding any and all then-outstanding Bank Loans made at
such Noncomplying Location). If, however, Ace's right to legally serve
as GNB's agent is terminated by GNB in accordance with the preceding
two sentences at more than * Locations, in the aggregate from the
Effective Date, then either Party may terminate this Agreement upon
nine (9) months' Notice to the other Party. Such termination, when
Notice is given by Ace, shall be effective immediately upon the
expiration of such nine (9) month period. Such termination, when
Notice is given by GNB, shall be effective immediately upon the
expiration of such nine (9) month period, unless Ace has, within
forty-five (45) days after GNB has given the nine (9) months' Notice
to terminate, corrected the noncompliance at each Noncomplying
Location which was the subject of GNB's last Notice of noncompliance
which caused the number of Noncomplying Locations to exceed *
Locations, in the aggregate from the Effective Date."
13. The following is hereby added as Section 5.3 of the Agreement:
"5.3 Compliance Examination. At such reasonable intervals as GNB shall
----------------------
deem appropriate during the Term and upon reasonable prior Notice
from GNB, Ace shall afford GNB, through its authorized
representatives, counsel, accountants, agents, and employees (the
"GNB Representatives"), reasonable access during normal business
--------------------
hours to all of Ace's business operations, properties (including
each Location at which Bank Loans are offered), books, files and
records, and will take all such other actions reasonably
necessary, to enable the GNB Representatives to make a complete
examination of Ace's financial statements and business operations
regarding the origination, documentation, processing and
collection of Bank Loans for the sole purpose of determining
Ace's compliance with the requirements of the Bank Loan Operating
Manuals. Such examination shall be conducted in cooperation with
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
6
the officers and agents of Ace and in such a manner as to
minimize, to the extent possible consistent with the reasonable
conduct of a comprehensive examination, any disruption of, or
interference with, the normal business operations of Ace. The
cost of such examination shall be paid by GNB."
14. Section 8.1(a) of the Agreement is hereby amended to read as follows:
"(a) Five percent (5%) of all losses, claims, obligations, demands,
assessments, penalties, liabilities, costs (including reasonable
attorneys' fees and expenses) and damages asserted against Ace or
any Ace Indemnified Person or incurred by Ace or any Ace
Indemnified Person (collectively, "Ace Losses") by reason of,
-----------
resulting from, or relating to any Third-Party Claims (as defined
below in this Section 8.1) asserted against Ace or any Ace
Indemnified Person if the Third-Party Claims arise out of one or
more Bank Loans made or services or products provided under this
Agreement solely from the Effective Date and prior to April 1,
2001, except any Third-Party Claims described in Section 8.1(b)
or Section 8.1(c); and ten percent (10%) of all Ace Losses by
reason of, resulting from, or relating to any Third-Party Claims
asserted against Ace or any Ace Indemnified Person if the
Third-Party Claims arise out of one or more Bank Loans made or
services or products provided under this Agreement solely from
and after April 1, 2001, except any Third-Party Claims described
in Section 8.1(b) or Section 8.1(c); and for purposes of this
Section 8.1(a), (i) each Renewal of a Bank Loan shall be deemed
made on the date the Bank Loan was originally made or funded by
GNB and (ii) the foregoing percentages of Ace Losses to be
indemnified by GNB shall apply regardless of when any Third-Party
Claims are asserted or arise (i.e., whether before or after April
1, 2001) and regardless of when the Ace Losses are suffered or
incurred."
15. Section 8.2(a) of the Agreement is hereby amended to read as follows:
"(a) Ninety-five percent (95%) of all losses, claims, obligations,
demands, assessments, penalties, liabilities, costs (including
reasonable attorneys' fees and expenses) and damages asserted
against GNB or any GNB Indemnified Person or incurred by GNB or
any GNB Indemnified Person (collectively, "GNB Losses") by reason
----------
of, resulting from, or relating to any Third-Party Claims
asserted against GNB or any GNB Indemnified Person if the
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
7
Third-Party Claims arise out of one or more Bank Loans made or
services or products provided under this Agreement solely from
the Effective Date and prior to April 1, 2001, except any
Third-Party Claims described in Section 8.2(b) or Section 8.2(c);
and ninety percent (90%) of all GNB Losses by reason of,
resulting from, or relating to any Third-Party Claims asserted
against GNB or any GNB Indemnified Person if the Third-Party
Claims arise out of one or more Bank Loans made or services or
products provided under this Agreement solely from and after
April 1, 2001, except any Third-Party Claims described in Section
8.2(b) or Section 8.2(c); and for purposes of this Section
8.2(a), (i) each Renewal of a Bank Loan shall be deemed made on
the date the Bank Loan was originally made by GNB and (ii) the
foregoing percentages of GNB Losses to be indemnified by Ace
shall apply regardless of when any Third-Party Claims are
asserted or arise (i.e., whether before or after April 1, 2001)
and regardless of when the GNB Losses are suffered or incurred."
16. The fourth sentence of Section 8.5 of the Agreement is hereby amended
to read as follows:
"The premium cost of that insurance policy shall be paid (a) * by Ace
and * by GNB from the Effective Date and prior to the POS Compliance
Date, and (b) * by Ace and * by GNB from and after the POS Compliance
Date."
17. Section 11.3 of the Agreement is hereby amended to substitute
"President and Chief Operating Officer" for the title "Chief Financial Officer"
after "Xxx X. Xxxxxxxxx," in the address for any Notice to Ace.
18. Section 11.5 of the Agreement is hereby amended by deleting the
"and" at the end of subsection (g) thereof, deleting the "." at the end of
subsection (h) hereof, adding "; and" at the end of subsection (h) thereof, and
adding a new subsection (i) to read as follows:
"(i) a reference in this Agreement to any agreement or other document
or to any Exhibit to this Agreement shall include any amendment or
supplement to, or restatement of, that agreement or other document or
that Exhibit to this Agreement to the extent permitted by the terms of
that agreement or other document or that Exhibit to which reference is
made."
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
8
19. GNB and Ace hereby acknowledge that the Preemptive and Refusal
Rights Agreement, which was Exhibit F to the Agreement, has been terminated and
superseded effective March 30, 2000.
20. Except as set forth in this Amendment, all terms used herein that
are defined in the Agreement shall have the respective meanings set forth in the
Agreement.
21. Except as amended hereby, the Agreement is hereby affirmed in its
entirety.
22. This Amendment may be signed in counterparts with the same effect
as if both Parties had signed the same paper; all counterparts are to be
construed together to be one and the same document.
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed by their respective officers as of the day and year first above
written.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
____________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
9
AMENDMENT NUMBER 1 TO
MASTER LOAN PARTICIPATION AGREEMENT
THIS AMENDMENT NUMBER 1 TO MASTER LOAN PARTICIPATION AGREEMENT (THIS
"AMENDMENT") IS MADE AS OF THE 29TH DAY OF MARCH, 2001, BY AND BETWEEN GOLETA
NATIONAL BANK, A NATIONAL BANKING ASSOCIATION ("GNB"), AND ACE CASH EXPRESS,
INC., A TEXAS CORPORATION ("PARTICIPANT"), WITH REGARD TO THE FOLLOWING:
1. GNB and Participant entered into that certain Master Loan Agency
Agreement dated August 11, 1999, and contemporaneously with the execution of
this Amendment are amending the Master Loan Agency Agreement by that certain
Amendment Number 1 to Master Loan Agency Agreement of even date herewith (as so
amended, the "Agency Agreement").
B. GNB and Participant entered into that certain Master Loan
Participation Agreement dated August 11, 1999 (the "Participation Agreement"),
and wish to amend the Participation Agreement to correspond with the terms of
the Agency Agreement and as set forth herein.
C. Section 12 of the Participation Agreement permits GNB and
Participant to amend the Participation Agreement by a writing signed by them.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, GNB and Participant hereby agree as
follows:
1. The third recital (or "WHEREAS") paragraph of the Participation
Agreement is amended to read as follows:
"WHEREAS, Participant desires to purchase, and GNB desires to sell to
Participant, an undivided interest in each of the Bank Loans."
2. The following sentences are hereby added to, at the end of, Section
1 of the Participation Agreement:
"But from and after the POS Compliance Date (as that term is defined in the
Agency Agreement, as defined below) (the "POS Compliance Date"), GNB agrees
to sell to Participant, from time to time, and Participant agrees to
purchase from GNB, from time to time, an undivided ninety percent (90%)
interest in each and every Bank Loan made by GNB from and after the POS
Compliance Date. For purposes of this Agreement, (a) the "Agency Agreement"
is that certain Master Loan Agency Agreement between GNB and Participant
dated August 11, 1999, as amended to date, and (b) each and every renewal
of a Bank Loan shall be deemed made on the date the Bank Loan was
originally made or funded by GNB and shall be treated in the same manner as
that original Bank Loan."
3. The first sentence of Section 2 of the Participation Agreement is
hereby amended to read as follows:
"The purchase price for each Bank Loan purchased by Participant shall be
ninety-five percent (95%) of the principal amount of such Bank Loan made
prior to the POS Compliance Date and shall be ninety percent (90%) of the
principal amount of each Bank Loan made from and after the POS Compliance
Date ("Purchase Price").
4. Section 4 of the Participation Agreement is hereby amended to read
as follows:
"4. The Purchase Price for each Bank Loan shall be transferred from
the Account to GNB on the day such Bank Loan is funded and either
(a) ninety-five percent (95%) of any payment of fees, interest or
principal received by GNB on each such Bank Loan purchased by
Participant regarding Bank Loans made prior to the POS Compliance
Date, or (b) ninety percent (90%) of any payment of fees,
interest or principal received by GNB on each such Bank Loan
purchased by Participant regarding Bank Loans made from and after
the POS Compliance Date, shall be transferred to the Account on
the day received by GNB; provided, however, that if any
instrument representing payment of the fee, principal or interest
on a Bank Loan is later dishonored, rescinded or revoked, or GNB,
for any reason, fails to receive good funds, then the credit to
the Account of Participant shall be transferred to GNB."
5. Section 11 of the Participation Agreement is hereby amended to read
as follows:
"11. GNB and Participant shall share any losses (but not unreimbursed
Expenses) with respect to any defaulted Bank Loan in accordance
with their respective interests in such Bank Loan (i.e.,
ninety-five percent (95%) of such Loss shall be borne by
Participant and five percent (5%) shall be borne by GNB on each
such Bank Loan purchased by Participant regarding Bank Loans made
prior to the POS Compliance Date, and ninety percent (90%) of
such Loss shall be borne by Participant and ten percent (10%)
shall be borne by GNB on each such Bank Loan purchased by
Participant regarding Bank Loans made from and after the POS
Compliance Date).
6. Section 14 of the Participation Agreement is hereby amended to
substitute "President and Chief Operating Officer" for the title "Chief
Financial Officer" after "Xxx X. Xxxxxxxxx," in the address for any notice,
request, demand, or other communication to Participant.
7. The following is hereby added as a new Section 22 of the
Participation Agreement:
2
"22. GNB's obligation to sell to Participant, and Participant's
obligation to purchase from GNB, an interest in Bank Loans shall
cease upon termination of the Agency Agreement."
8. Except as set forth in this Amendment, all terms used herein that
are defined in the Participation Agreement shall have the respective meanings
set forth in the Participation Agreement.
9. Except as amended hereby, the Participation Agreement is hereby
affirmed in its entirety.
10. This Amendment may be signed in counterparts with the same effect as
if both parties hereto had signed the same paper; all counterparts are to be
construed together to be one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers as of the day and year first above
written.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
3
AMENDMENT NUMBER 1 TO THE
SCHEDULE OF INTEREST AND FEES
This Amendment Number 1 to the Schedule of Interest and Fees ("Schedule
Amendment") is made as of this 29th day of March, 2001, by and between Goleta
National Bank, a national banking association ("GNB"), and Ace Cash Express,
Inc., a Texas corporation ("Ace"), with regard to the following:
A. GNB and Ace entered into that certain Master Loan Agency Agreement
dated August 11, 1999 (the "Agreement"), which included as Exhibit "E" thereto
that certain Schedule of Interest and Fees (the "Schedule").
B. Contemporaneously with the execution of this Schedule Amendment, GNB
and Ace are amending the Agreement by that certain Amendment Number 1 to Master
Loan Agency Agreement of even date herewith (as so amended, the "Agency
Agreement") and wish to amend the Schedule as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth in the Agency Agreement and in this Schedule Amendment,
Ace and GNB hereby agree as follows:
The following Paragraph 5 is added to, immediately after Paragraph 4 of,
the Schedule:
5. Exclusivity and Loan Compliance Fee. In consideration of the grant
-----------------------------------
of exclusivity by GNB to Ace provided in Section 1.6(b) of the Agency
Agreement, and to assist GNB in offsetting the costs of complying with
regulatory requirements for originating the Bank Loans, Ace shall pay
to GNB a one-time Exclusivity and Loan Compliance Fee of * on March
30, 2001, and * on the last business day of each calendar month,
commencing April 30, 2001, up to and including the earlier of (a) the
last day of the month in which the POS Compliance Date (as that term
is defined in the Agency Agreement) occurs, or (b) June 30, 2001."
1. Except as set forth in this Schedule Amendment, all terms used
herein that are defined in the Agency Agreement shall have the respective
meanings set forth in the Agency Agreement.
2. Except as amended hereby, the Schedule is hereby affirmed in its
entirety.
_______________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
3. This Schedule Amendment may be signed in counterparts with the same
effect as if both Parties had signed the same paper; all counterparts are to be
construed together to be one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule Amendment
to be duly executed by their respective officers as of the day and year first
above written.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
----------------------
Name: Xxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
_______________________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this
filing and filed separately with the Securities and Exchange Commission.
2
AMENDMENT NUMBER 2 TO
MASTER LOAN AGENCY AGREEMENT
This Amendment Number 2 to Master Loan Agency Agreement (this "Amendment")
is made as of this 30th day of June, 2001, by and between Goleta National Bank,
a national banking association ("GNB"), and Ace Cash Express, Inc., a Texas
corporation ("Ace"), with regard to the following:
A. GNB and Ace entered into that certain Master Loan Agency Agreement
dated August 11, 1999, as amended by that certain Amendment Number 1
to Master Loan Agency Agreement dated March 29, 2001 (the
"Agreement").
B. Section 11.7 of the Agreement permits GNB and Ace to amend the
Agreement by a writing signed by them.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth, GMB and Ace hereby agree as follows:
1. Section 2.1 of the Agreement is hereby amended to read as follows:
"2.1 Participation Agreement. Contemporaneous with this Agreement, the
-----------------------
Parties are entering into a Master Loan Participation Agreement
under which GNB agrees to sell to Ace, and Ace agrees to purchase
from GNB, a 95% participation in each of the Bank Loans made by
GNB from the Effective Date and prior to the POS Compliance Date
(as defined in Section 3.4(i)), and a 90% participation in each
of the Bank Loans made by GNB from and after the POS Compliance
Date. That Master Loan Participation Agreement (as amended by
Amendment Number 1 to Master Loan Participation Agreement dated
March 29, 2001 and by Amendment Number 2 to Master Loan
Participation Agreement dated June 30, 2001) is Exhibit D to this
---------
Agreement."
2. Except as set forth in this Amendment, all terms used herein that are
defined in the Agreement shall have the respective meanings set forth
in the Agreement.
3. Except as amended hereby, the Agreement is hereby affirmed in its
entirety.
4. This Amendment may be signed in counterparts with the same effect as
if both Parties had signed the same paper; all counterparts are to be
construed together to be one and the same document.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly
executed by their respective officers as of the day and year first above
written.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Executive Vice President
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
AMENDMENT NUMBER 2 TO
MASTER LOAN PARTICIPATION AGREEMENT
This Amendment Number 2 to Master Loan Participation Agreement (this
"Amendment") is made as of this 30th day of June, 2001, by and between Goleta
National Bank, a national banking association ("GNB"), and Ace Cash Express,
Inc., a Texas corporation ("Participant"), with regard to the following:
A. GNB and Participant entered into that certain Master Loan Agency
Agreement dated August 11, 1999, as amended by that certain Amendment
Number 1 to Master Loan Agency Agreement dated March 29, 2001 (the
"Agency Agreement"), and contemporaneously with, and to reflect, the
execution of this Amendment are amending the Agency Agreement by that
certain Amendment Number 2 to Master Loan Agency Agreement of even
date herewith.
B. GNB and Participant entered into that certain Master Loan
Participation Agreement dated August 11, 1999, as amended by that
certain Amendment Number 1 to Master Loan Participation Agreement
dated March 29, 2001 (the "Participation Agreement").
C. Section 12 of the Participation Agreement permits GNB and Participant
to amend the Participation Agreement by a writing signed by them.
D. GNB and Participant wish to implement the decrease in Participant's
undivided interest in the Bank Loans as of the POS Compliance Date
(i.e., July 1, 2001) described in the Participation Agreement from
ninety-five percent (95%) to ninety percent (90%), but are not readily
able to, and currently prefer not to, modify their respective software
systems for that purpose.
E. GNB and Participant wish to amend the Participation Agreement to
provide for a method, different than stated in the Participation
Agreement, to pay the price for and the earnings on Participant's
decreased undivided interest in the Bank Loans from and after the POS
Compliance Date.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth, GNB and Participant hereby agree as follows:
1. Section 2 of the Participation Agreement is hereby amended to read as
follows:
"2. The purchase price for the undivided interest in each Bank Loan
made prior to the POS Compliance Date that is purchased by
Participant shall be ninety-five percent (95%) of the principal
amount of such Bank Loan. The purchase price for the undivided
interest in each Bank Loan made from and after the POS Compliance
Date that is purchased by
______________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities; and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
Participant shall be ninety percent (90%) of the principal amount
of such Bank Loan, paid in accordance with Section 4(b) of this
Agreement. In no event shall Participant acquire any
participation in a Bank Loan related to an overdraft or funding
by GNB in excess of the approved Bank Loan."
2. Section 4 of the Participation Agreement is hereby amended to read as
follows:
"4. (a) The purchase price for the undivided interest in each Bank
Loan made prior to the POS Compliance Date that is purchased
by Participant shall be transferred from the Account to GNB
on the day such Bank Loan is funded and ninety-five percent
(95%) of any payment of fees, interest or principal received
by GNB each such Bank Loan shall be transferred to the
Account on * by GNB; provided however, that if any
instrument representing payment of the fee, principal or
interest on a Bank Loan is later dishonored, rescinded or
revoked, or GNB, for any reason, fails to receive good
funds, then credit to the Account of Participant shall be
transferred to GNB.
(b) The purchase price for the undivided interest in each Bank
Loan made from and after the POS Compliance Date that is
purchased by Participant shall be paid by transfer from the
Account to GNB, *, of an amount equal to ninety-five percent
(95%) of the principal amount of such Bank Loan and by GNB's
establishing an account payable to Participant equal to five
percent (5%) of the principal amount of such Bank Loan. This
account payable shall be satisfied and paid to Participant,
and earnings on Participant's participation interest shall
be paid to Participant, by transfer to the Account by GNB,
on * by GNB, of an amount equal to ninety-five percent (95%)
of all fees, interest or principal received by GNB on each
such Bank Loan, subject to the monthly adjustment described
in Section 4(c) of this Agreement.
(c) An adjustment (intended to reflect Participant's ownership
of a ninety percent (90%) rather than a ninety-five percent
(95%) undivided interest in each Bank Loan made from and
after the POS Compliance Date) shall be effected for each
______________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities; and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
2
calendar month (or partial calendar month), commencing July
2001, by the wire transfer from Participant to GNB of the
Participation Adjustment Amount on or before the *. For this
purpose:
(i) "Participation Adjustment Amount" shall mean, for each
calendar month (or partial calendar month), the Gross
Amount for that calendar month (or partial calendar
month) minus the Loan Loss for that calendar month (or
partial calendar month).
(ii) "Gross Amount" shall mean, for each calendar month (or
partial calendar month), an amount equal to five
percent (5%) of the Finance Charge Collections for that
calendar month (or partial calendar month).
(iii) "Finance Charge Collections" shall mean, for each
calendar month (or partial calendar month), the total
finance charges for all Bank Loans, made from and after
the POS Compliance Date, charged by GNB in that
calendar month (or partial calendar month), as reported
in the GNB Loan Performance Report prepared as part of
the GNB Monthly Loan Analysis Report.
(iv) "Loan Loss" shall mean, for each calendar month (or
partial calendar month), the product of the Gross
Amount for that calendar month (or partial calendar
month) multiplied by the Loan Loss Ratio for that
calendar month (or partial calendar month).
(v) "Loan Loss Ratio" shall mean, (A) for each of July,
August, and September 2001 (or any partial time period
in any such calendar month), fifty percent (50%), and
(B) for each calendar month (or partial calendar month)
after September 2001, a percentage equal to the Bank
Loan Loss for that calendar month (or partial calendar
month) divided by the Finance Charge Collections for
that calendar month (or partial calendar month).
______________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities; and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
3
(vi) "Bank Loan Loss" shall mean, for each calendar month
(or partial calendar month), an amount equal to the
result of (A) the Provision for Loan Losses of
Participant, as reported in the Supplemental
Statistical Data of Participant's Quarterly Report on
Form 10-Q or Annual Report on Form 10-K (as applicable)
filed with the Securities and Exchange Commission for
the fiscal quarter or the fiscal year (as applicable)
immediately preceding the calendar quarter most
recently ended before the particular calendar month
(so, for example, the Provision for Loan Losses of
Participant reported in Participant's Annual Report on
Form 10-K for its fiscal year ended June 30, 2001 will
be used for each of October, November, and December of
2001, and the Provision for Loan Losses of Participant
reported in Participant's Quarterly Report on Form 10-Q
for its fiscal quarter ended September 30, 2001 will be
used for each of January, February, and March 2002),
divided by (B) ninety-five percent (95%).
(d) GNB and Participant acknowledge that application of the
method described in Sections 4(b) and 4(c) of this Agreement
may result in some variance from an exact allocation of
earnings and losses on each Bank Loan made from and after
the POS Compliance Date of ten percent (10%) to GNB and
ninety percent (90%) to Participant. Nevertheless, GNB and
Participant agree that such method (i) is acceptable to and
sufficient for them under the circumstances and (ii) shall
supersede any inconsistent provision in this Agreement or
the Agency Agreement regarding Bank Loans made from and
after the POS Compliance Date."
3. Except as set forth in this Amendment, all terms herein that are
defined in the Participation Agreement shall have the respective
meanings set forth in the Participation Agreement.
4. Except as amended hereby, the Participation Agreement is hereby
affirmed in its entirety.
______________________
* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities; and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
4
5. This Amendment may be signed in counterparts with the same effect as
if both Parties had signed the same paper; all counterparts are to be
construed together to be one and the same document.
IN WITNESS WHEREOF, GNB and Participant have caused this Amendment to be
duly executed by their respective officers as of the day and year first above
written.
GOLETA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Executive Vice President
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------
Name: Xxx X. Xxxxxxxxx
Title: President and Chief Operating Officer
5
