Exhibit 10.15
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AMENDMENT NUMBER 3 TO
MASTER LOAN AGENCY AGREEMENT
This Amendment Number 3 to Master Loan Agency Agreement (this "Amendment")
is made as of this 1st day of November, 2002, 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, and by that certain Amendment Number
2 to Master Loan Agency Agreement dated June 30, 2001 (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 and Ace, after consultation with the Bank Regulatory Authority,
have mutually determined that it is in their respective best interests to (i)
provide for termination of the Agreement effective December 31, 2002, or such
later date as the Bank Regulatory Authority may permit (the date of termination
of the Agreement being the "Termination Date"), though certain provisions of the
Agreement as specified herein shall survive the termination of the Agreement,
(ii) provide that Ace will indemnify GNB for 100% of certain losses on and after
November 1, 2002, and (iii) amend the Agreement in certain other respects.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, GNB and Ace hereby agree as follows:
1. Section 1.6 of the Agreement is hereby amended to read as follows:
"1.6 No Exclusivity. On and after November 1, 2002, the Parties'
relationship shall not be exclusive; consequently, on and after
November 1, 2002, Ace may offer, for its own account or for the
account of others, any loans (whether or not similar to Bank
Loans) at any of its Locations, and GNB may offer and provide
any loans (whether or not similar to Bank Loans) through or with
any other person."
2. Section 1.9 of the Agreement is hereby amended to read as follows:
"1.9 Collection of Bank Loans. Contemporaneous with this Agreement,
the Parties are entering into a Collection Servicing Agreement,
under which Ace is appointed as servicer to collect and enforce
the Bank Loans. That Collection Servicing Agreement, as amended
by Amendment Number 1 to Collection Servicing Agreement, is
Exhibit B to this Agreement. To the extent that the terms of the
Collection Servicing Agreement, as amended, conflict with the
terms of this Agreement, the terms of this Agreement shall
control."
3. The first sentence of Section 4.1 of the Agreement is hereby amended to
read as follows:
"4.1 Term of Agreement. Unless otherwise terminated as provided in
Section 4.2, this Agreement shall terminate at 11:59 p.m.,
Central Time, on December 31, 2002, or on such later date as the
Bank Regulatory Authority may permit (the date of termination of
this Agreement being the "Termination Date"). Notwithstanding
the termination of this Agreement on the Termination Date, all
of the provisions of the Amendment (as provided in Section 19
thereof) and the following provisions of this Agreement shall
continue in effect after the Termination Date: Section 4.5,
Section 6.1, Article VII, Article VIII (as amended in this
Amendment) except for Section 8.5 which is terminated, Article
XI, each other provision that by its terms continues in effect
after the expiration or termination of this Agreement and each
other provision of the Agreement to the extent necessary to give
full effect to the provisions that survive termination of this
Agreement as provided herein."
4. 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 Persons or incurred by Ace or any Ace
Indemnified Persons (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 Persons 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
Persons if the Third-Party Claims arise out of one or more Bank
Loans made or services or products provided under this Agreement
solely from April 1, 2001 and prior to November 1, 2002, 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) except as
provided in Section 8.1(b) or Section 8.1(c), the foregoing
percentages of Ace Losses to be indemnified by GNB shall apply
regardless of when any Third-Party Claims are asserted or arise
and regardless of when the Ace Losses are suffered or incurred.
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Notwithstanding the foregoing, GNB shall not be required to
indemnify Ace or any Ace Indemnified Persons against, or hold
Ace or any Ace Indemnified Persons harmless from, any Ace Losses
by reason of, resulting from, or relating to any Third-Party
Claims (except any Third-Party Claims described in Section
8.1(b) or Section 8.1(c)) that are incurred on or after November
1, 2002, regardless of the date that the Bank Loan to which such
Third-Party Claim relates was made or the date the Third-Party
Claim is asserted or arises. (Stated in another way, GNB's
indemnification obligation under the terms of this Section
8.1(a), subject to the exceptions provided in Sections 8.1(b)
and 8.1(c), shall be zero percent (0%) of Ace Losses that are
incurred on or after November 1, 2002.)"
5. Section 8.1(c) of the Agreement is hereby amended to read as follows:
"(c) All Ace Losses (i) 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, (ii) relating to the failure or alleged
failure of GNB to have, hold or maintain any or all GNB
Authorizations necessary to permit GNB to perform its
obligations under and in accordance with the terms of this
Agreement, and (iii) consisting of all civil money penalties and
similar amounts assessed against GNB by the Bank Regulatory
Authority and any and all other fines or penalties imposed on
GNB by any other federal regulatory authority. For purposes of
this Section 8.1, an Ace Loss that results from the incurrence
by Ace of professional fees or related expenses will be deemed
to be "incurred" on the date that the services were rendered or
the related expense was incurred, in each case regardless of the
date that an invoice covering such services or expense was
rendered. For the avoidance of doubt, Section 8.1 does not apply
to, and Ace shall continue to be responsible for, and GNB shall
not indemnify Ace or any Ace Indemnified Persons with respect
to, (i) any credit losses incurred by Ace as a result of its
ownership of Bank Loans (or portions thereof) or (ii) any civil
money penalties or similar amounts assessed against Ace by the
Bank Regulatory Authority and any and all other fines or
penalties imposed on Ace by any other regulatory authority. For
the avoidance of doubt, any finding or determination by a court,
regulatory authority, or arbitrator that GNB's originating,
renewing, denying or collecting Bank Loans with Ace as its agent
was in violation of 12 U.S.C. ss. 24 or 12 U.S.C. ss. 85, or
regulations issued pursuant thereto, shall not constitute a
failure by GNB to have, hold or maintain any or all GNB
Authorizations necessary to permit GNB to perform its
obligations as required under this Agreement."
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6. 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 Persons or incurred by GNB or
any GNB Indemnified Persons (collectively, "GNB Losses") by
reason of, resulting from, or relating to any Third-Party Claims
asserted against GNB or any GNB Indemnified Persons 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 Claim 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 Persons if the Third-Party
Claims arise out of one or more Bank Loans made or services or
products provided under this Agreement solely from April 1, 2001
and prior to November 1, 2002, 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) except as provided in Section 8.2(b) or Section 8.2(c),
the foregoing percentages of GNB Losses to be indemnified by Ace
shall apply regardless of when any Third-Party Claims are
asserted or arise and regardless of when the GNB Losses are
suffered or incurred. In addition, Ace shall indemnify GNB and
any GNB Indemnified Persons against, and hold GNB and any GNB
Indemnified Persons harmless from, one hundred percent (100%) of
any GNB Losses by reason of, resulting from, or relating to any
Third-Party Claims (except any Third-Party Claims described in
Section 8.2(b) or Section 8.2(c)) that are incurred on or after
November 1, 2002, regardless of the date that the Bank Loan to
which such Third-Party Claim relates was made or the date such
Third-Party Claim is asserted or arises."
7. Section 8.2(c) of the Agreement is hereby amended to read as follows:
"(c) All GNB Losses (i) 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, (ii) relating to
the failure or alleged failure of Ace to have, hold or maintain
any or all Ace Authorizations necessary to permit Ace to perform
its obligations under and in accordance with the terms of this
Agreement, (iii) consisting of all civil money penalties and
similar amounts assessed against Ace by the Bank Regulatory
Authority and any and all other fines or penalties imposed on
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Ace by any other regulatory authority, and (iv) resulting from
claims by Bank Loan customers or applicants to the extent that
such GNB Losses are attributable to (x) GNB giving such notices
as may be required by the Bank Regulatory Authority to Bank Loan
customers or applicants to the effect that their Bank Loan files
may have been destroyed or lost or cannot be located or (y) the
destruction or loss of, or the inability to locate such files.
For purposes of this Section 8.2(a), a GNB Loss that results
from the incurrence by GNB of professional fees or related
expenses will be deemed to be "incurred" on the date that the
services were rendered or the related expense was incurred, in
each case regardless of the date that an invoice covering such
services or expense was rendered. For the avoidance of doubt,
this Section 8.2 does not apply to, and GNB shall continue to be
responsible for, and Ace shall not indemnify GNB or any GNB
Indemnified Parties with respect to, (i) any credit losses
incurred by GNB as a result of its ownership of Bank Loans (or
portions thereof), or (ii) any civil money penalties or similar
amounts assessed against GNB by the Bank Regulatory Authority
and any and all other fines or penalties imposed on GNB by any
other federal regulatory authority."
8. The following subsection (d) is added to Section 8.3:
"(d) Each Party obligated to provide indemnity hereunder shall
promptly discharge its obligations in that regard including,
without limitation, the prompt payment or reimbursement of all
attorneys' fees and expenses, and the prompt payment of all
fines, penalties and judgments, unless such fine, penalty or
judgment is appealed and all necessary appeal bonds have been
posted."
9. GNB will, at its expense, give such notice(s) as may be required by the
Bank Regulatory Authority to Bank Loan customers or applicants to the effect
that their Bank Loan files may have been lost or cannot be located. GNB will
deliver to Ace, at least three days before any such notice is sent, a copy of
the form of such notice.
10. (a) After the Termination Date, each Party shall allow the other Party
access to the database of information regarding Bank Loans and/or the payment
history of Bank Loans, as applicable, maintained by such Party (pursuant to
Section 5.1(a) of the Agreement with respect to Ace and pursuant to Section
5.1(b) of the Agreement with respect to GNB) and shall coordinate with the other
Party regarding access to or the use of any software and hardware necessary to
access such database. If a Party wants physical (as opposed to electronic)
access to the other Party's database pursuant hereto, it must request such
access by giving at least 15 days' prior Notice to the other Party. Any such
access shall be only during the regular business hours of the other Party, or at
such time to which the other Party may consent, and without any unreasonable
disruption of the other Party's business operations, and only to the full extent
permitted by applicable law. Neither Party shall impose any cost upon the other
in connection with access to the physical records or database. Ace shall
cooperate in all reasonable respects with GNB to permit it to carry out any Bank
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Loan file audit required of GNB by the Bank Regulatory Authority, and Ace shall
bear the expenses Ace incurs in connection therewith. GNB may request, by at
least 15 days' Notice to Ace, that Ace prepare and send to GNB, at GNB's
expense, a print out of Ace's database of information regarding Bank Loans
and/or the payment history of Bank Loans. Ace will comply with that request as
soon as reasonably practicable (taking into account the scope of the requested
material).
(b) After the Termination Date, 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. The cost of such inspection shall be paid by the inspecting Party.
11. After the Termination Date, Ace may continue to use Confidential
Information of GNB to the extent reasonably necessary in its efforts to collect
Bank Loans.
12. At the request of GNB, Ace will deliver to GNB all completed
applications for and other documentation signed by Borrowers relating to Bank
Loans, all account authorization documents and all other documents relating to
Bank Loans (other than documents used in its Bank Loan collection activities and
files, if any, which are not in the possession or control of Ace or its
affiliates). GNB shall pay the cost of each such delivery (except for deliveries
of any Bank Loan files required for GNB to conduct the Bank Loan file audits
required of GNB by the Bank Regulatory Authority, the cost of which deliveries
shall be paid by Ace). With respect to each such document delivered to GNB by
Ace, GNB shall maintain such document through the date that all applicable
statutes of limitations have run with respect to the Bank Loan to which such
document relates and, to the full extent permitted by applicable law, shall
allow Ace access to such document from time to time as reasonably requested by
Ace. GNB shall have the right to return each such document to Ace for retention
by Ace, provided that GNB shall pay the cost of the return delivery of each such
document to Ace. To the extent that Ace retains any such document, Ace shall
maintain such document through the date that all applicable statutes of
limitations have run with respect to the Bank Loan to which such document
relates and shall allow GNB access to such document from time to time as
reasonably requested by GNB. To the extent that either GNB or Ace retains any
such document after the date that all applicable statutes of limitations
relating to the Bank Loan to which such document relates the party holding such
document shall be entitled to destroy such document, at any time after 30 days
after it gives the other party written notice of its intent to destroy such
documents, unless the party receiving such notice requests in writing that such
documents be delivered to it. Neither Party shall impose any cost upon the other
in connection with access to the documents relating to Bank Loans. Ace shall
cooperate in all reasonable respects with GNB to permit it to carry out any Bank
Loan file audit required of GNB by the Bank Regulatory Authority, and Ace shall
bear the expenses Ace incurs in connection therewith.
13. All Bank Loan Operating Manuals in the possession of Ace shall,
pursuant to Section 7.7 of the Agreement, be returned to GNB promptly after the
Termination Date if theretofore requested by GNB. To the extent GNB does not
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request the return to it of Bank Loan Operating Manuals by the Termination Date,
Ace shall be entitled to destroy any Bank Loan Operating Manuals in its
possession.
14. Promptly following the Termination Date, GNB hereby authorizes Ace to
destroy all blank loan and account applications containing GNB's name, and all
Card inventory and all PIN numbers, in Ace's possession.
15. Promptly after the Termination Date, and in any event within 15
business days after receipt of an invoice therefor, (i) Ace shall pay to GNB all
unpaid Loan Participation Processing Fees described in Exhibit E to the
Agreement, (ii) GNB will pay to Ace the portion of the ATM charges received by
GNB described in Exhibit E to the Agreement and (iii) either Party will pay to
the other the amount, if any, necessary to cause all expenses of lobbying and
related activities accrued but unpaid as of November 1, 2002 to be shared by the
Parties in accordance with Sections 3.2(i) and 3.4(k) of the Agreement.
16. All documents, files and records relating to Ace's Bank Loan collection
activities, and all intellectual property of Ace relating thereto, shall remain
the property of Ace following the Termination Date, but shall be accessible by
GNB in accordance with the provisions of this Amendment.
17. Ace will pay GNB, not later than ten (10) days after an invoice from
GNB therefor (which invoice may not precede the Termination Date), the sum of
$10,000 in cash for the transfer of the Credit Software as of the day after the
Termination Date. GNB acknowledges and agrees that, upon such payment, Ace shall
not owe any amount to GNB for Ace's use of the Credit Software, whether before
or after the Termination Date, with respect to any loan other than a Bank Loan.
18. Each Party shall be responsible for the expenses it incurs in entering
into this Amendment and, except as specifically provided for in this Amendment,
the expenses it incurs in implementing the terms of this Amendment.
19. All of the provisions of this Amendment shall survive and continue in
effect after the Termination Date.
20. GNB hereby withdraws its letter dated May 9, 2002 to Ace indicating its
intent under Section 1.2 of the Agreement to modify the terms of the Bank Loans
to comply with the laws of each state in which GNB currently offers Bank Loans.
21. GNB will continue to participate in all current litigation relating to
or arising out of the activities of Ace pursuant to the Agreement and will not
unreasonably withhold GNB's participation in future litigation relating to or
arising out of the activities of Ace pursuant to the Agreement, as requested by
Ace. Ace agrees, pursuant to its indemnification obligation contained in Section
8.2 of the Agreement, to reimburse GNB for any reasonable out-of-pocket expenses
(including travel and lodging, but not including the compensation of any GNB
employees) incurred as a result of this participation.
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22. GNB will, as of the day after the Termination Date,
(i) cause its parent company, Community West Bancshares, Inc. ("CWB"),
to transfer 100% of its ownership interest in ePacific Incorporated, a
Delaware corporation ("ePacific"), which consists of 300,000 shares of
common stock of ePacific, and all rights related thereto (the "Shares"),
free and clear of all liens and other encumbrances (except for obligations
under the ePacific Incorporated Stockholders Agreement dated March 30, 2000
(the "ePacific Agreement")), to Ace; and
(ii) transfer to Ace, free and clear of all liens and other
encumbrances, all of GNB's right, title and interest in all of the Credit
Software, all developments and improvements thereof in process, and all
related goodwill, all "as is" without any representation or warranty,
including (without limitation) any warranty of fitness for a particular
purpose.
The transfer of the Credit Software will be in consideration of (even if
not simultaneous with) the payment from Ace to GNB described in Section 17 of
this Amendment.
Each of GNB and ACE agrees to use, and GNB agrees to cause CWB to use, its
commercially reasonable best efforts, at its own expense, to give the notices
and follow the other procedures, or to obtain a waiver of those notices and
other procedures, required under the ePacific Agreement, as a condition to CWB's
transfer of the Shares to Ace. The transfer of the Shares will be in exchange
for the payment from Ace to CWB of $0.05 per Share which shall be paid
contemporaneously with CWB's tender of the Shares to Ace. Ace acknowledges that
should the other stockholders of ePacific exercise their "co-sale" rights under
the ePacific Agreement, that may frustrate the intent of the Parties by
preventing CWB from selling all of the Shares to Ace. However, any failure by
CWB to sell all the Shares to Ace because of the exercise of co-sale rights
under the ePacific Agreement, so long as Ace receives a total of 300,000 shares
of common stock of ePacific against the payment of $0.05 per share, shall not
constitute a breach or default of GNB of this Amendment or the Agreement. The
number of shares of ePacific and the price per share shall be adjusted as
necessary to reflect any stock split, reverse stock split, or other
recapitalization of ePacific common stock after the date of this Amendment.
Further, if CWB becomes unable to sell or transfer the Shares to Ace under this
Section 22 because of actions taken by ePacific or any of its stockholders
(other than Ace), notwithstanding GNB's and CWB's commercially reasonable best
efforts to effect that sale and transfer, CWB's inability shall not be deemed an
excuse for Ace not to perform its indemnification obligations to GNB and any GNB
Indemnified Persons under Section 8 of the Agreement. Should ePacific or any of
its stockholders (other than Ace) commence legal action against CWB and/or GNB
to prevent or prohibit the sale and transfer of the Shares to Ace hereunder, Ace
and GNB agree that the expenditure by GNB and CWB, in the aggregate, of up to
$5,000 in legal fees and other expenses in connection with defending any such
action shall constitute GNB's and CWB's commercially reasonable best efforts for
purposes of this paragraph.
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23. Promptly after the Termination Date, Ace will remove from all of its
Locations all advertising and/or other materials containing GNB Marks related to
Bank Loans.
24. The Parties agree to take all further actions necessary on or prior to
the Termination Date to amend all other agreements between them regarding the
Agreement to reflect the fact that from and after the Termination Date, GNB will
not originate or renew any Bank Loans and Ace will not act as GNB's agent to
originate or renew any Bank Loans, but will continue to service and collect all
Bank Loans theretofore originated or renewed.
25. 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.
26. 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/ Xxxxx Xxxxx
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Xxxxx Xxxxx
President and Chief Executive Officer
ACE CASH EXPRESS, INC.
By: /s/ Xxx X. Xxxxxxxxx
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Xxx X. Xxxxxxxxx
President and Chief Operating Officer
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