EXHIBIT 10.2
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NOTE PURCHASE AGREEMENT
BY AND AMONG
ACE CASH EXPRESS, INC.
AS THE COMPANY
AND
AMERICAN CAPITAL FINANCIAL SERVICES, INC.,
AS AGENT
AND
THE PURCHASERS IDENTIFIED ON
ANNEX A HERETO
MARCH 31, 2003
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS.................................................................. 2
1.1 Certain Definitions...................................................... 2
1.2 Accounting Principles.................................................... 18
1.3 Other Definitional Provisions; Construction.............................. 18
ARTICLE 2 ISSUE AND SALE OF SECURITIES................................................. 18
2.1 Authorization and Issuance of the Notes.................................. 18
2.2 Sale and Purchase........................................................ 19
2.3 The Closing.............................................................. 19
ARTICLE 3 REPAYMENT OF THE NOTES....................................................... 19
3.1 Interest Rates and Interest Payments..................................... 19
3.2 Repayment of the Notes................................................... 20
3.3 Optional Prepayment of Notes............................................. 21
3.4 Notice of Optional Prepayment............................................ 23
3.5 Mandatory Prepayment..................................................... 23
3.6 Home Office Payment...................................................... 24
3.7 Taxes.................................................................... 25
3.8 Maximum Lawful Rate...................................................... 25
3.9 Capital Adequacy......................................................... 26
3.10 Certain Waivers.......................................................... 26
ARTICLE 4 CONDITIONS................................................................... 26
4.1 Conditions to Purchase of the Notes...................................... 26
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................ 31
5.1 Representations and Warranties of Company................................ 31
5.2 Absolute Reliance on the Representations and Warranties.................. 37
ARTICLE 6 TRANSFER OF NOTES............................................................ 37
6.1 Restricted Notes......................................................... 37
6.2 Legends; Purchaser's Representations..................................... 38
6.3 Transfer of Notes........................................................ 38
6.4 Replacement of Lost Notes................................................ 38
6.5 No Other Representations Affected........................................ 38
ARTICLE 7 COVENANTS.................................................................... 39
7.1 Affirmative Covenants.................................................... 39
7.2 Negative Covenants....................................................... 47
7.3 Financial Covenants...................................................... 56
ARTICLE 8 EVENTS OF DEFAULT............................................................ 57
8.1 Events of Default........................................................ 57
8.2 Consequences of Event of Default......................................... 60
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8.3 Security................................................................. 61
ARTICLE 9 THE AGENT.................................................................... 61
9.1 Authorization and Action................................................. 61
9.2 Delegation of Duties..................................................... 61
9.3 Exculpatory Provisions................................................... 61
9.4 Reliance................................................................. 62
9.5 Non-Reliance on Agent and Other Purchasers............................... 62
9.6 Agent in its Individual Capacity......................................... 62
9.7 Successor Agent.......................................................... 62
9.8 Collections and Disbursements............................................ 63
9.9 Reporting................................................................ 64
9.10 Consent of Purchasers.................................................... 64
9.11 This Article Not Applicable to Company................................... 65
ARTICLE 10 MISCELLANEOUS............................................................... 65
10.1 Successors and Assigns................................................... 65
10.2 Modifications and Amendments............................................. 65
10.3 No Implied Waivers; Cumulative Remedies; Writing Required................ 65
10.4 Reimbursement of Expenses................................................ 65
10.5 Holidays................................................................. 66
10.6 Notices.................................................................. 66
10.7 Survival................................................................. 67
10.8 Governing Law............................................................ 67
10.9 Jurisdiction, Consent to Service of Process.............................. 67
10.10 Jury Trial Waiver........................................................ 69
10.11 Severability............................................................. 69
10.12 Headings................................................................. 69
10.13 Indemnity................................................................ 69
10.14 Environmental Indemnity.................................................. 69
10.15 Counterparts............................................................. 70
10.16 Integration.............................................................. 70
10.17 Confidentiality.......................................................... 70
10.18 Subordination............................................................ 71
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NOTE PURCHASE AGREEMENT
$10,000,000 Aggregate Principal Amount of
Senior Subordinated Secured Series A Notes of Company
Due March 31, 2006
$10,000,000 Aggregate Principal Amount of
Senior Subordinated Secured Series B Notes of Company
Due March 31, 2008
$10,000,000 Aggregate Principal Amount of
Senior Subordinated Secured Series C Notes of Company
Due March 31, 2009
$10,000,000 Aggregate Principal Amount of
Senior Subordinated Secured Series D Notes of Company
Due March 31, 2010
THIS NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of March 31,
2003, is by and among ACE CASH EXPRESS, INC., a Texas corporation ("Company"),
and the purchasers that are now and hereafter at any time parties hereto and are
listed in Annex A (or any amendment or supplement thereto) attached hereto (each
a "Purchaser" and collectively, "Purchasers"), and AMERICAN CAPITAL FINANCIAL
SERVICES, INC., a Delaware corporation ("ACFS"), as administrative agent for
Purchasers (in such capacity, "Agent"). Capitalized terms used and not defined
elsewhere in this Agreement are defined in Article 1 hereof.
RECITALS
A. Company has proposed to sell (i) the Series A Notes to the
Purchasers in the aggregate principal amount of $10,000,000, (ii) the Series B
Notes to the Purchasers in the aggregate principal amount of $10,000,000, (iii)
the Series C Notes to the Purchasers in the aggregate principal amount of
$10,000,000, and (iv) the Series D Notes to the Purchasers in the aggregate
principal amount of $10,000,000, in each case for the purpose of refinancing the
Existing Term Debt and paying related transaction fees and expenses.
NOW, THEREFORE, the parties hereto, in consideration of the premises
and their mutual covenants and agreements herein set forth and intending to be
legally bound hereby, covenant and agree as follows:
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ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. In addition to other words and terms
defined elsewhere in this Agreement, the following words and terms have the
meanings set forth below (and such meanings are equally applicable to both the
singular and plural form of the terms defined, as the context may require):
"ACAS" shall mean American Capital Strategies, Ltd., a Delaware
corporation.
"Acceptable Acquisition" shall mean (i) any acquisition by the Company
of all, or substantially all of the business of, any business entity (whatever
organizational form and whether accomplished as an asset acquisition or a stock
purchase or acquisition of other forms of ownership interests) engaged in the
same business or a substantially similar line of business, but only if (a) the
purchase price of such acquisition (including the amount of Indebtedness of the
business entity or of the seller or sellers assumed in connection therewith) is
no more than $7,000,000 and (b) such business entity has either (I) positive
EBITDA for the 12 month period immediately preceding the proposed date of such
acquisition or (II) positive Restated EBITDA for the 12 month period immediately
preceding the proposed date of such acquisition (as determined by Agent and
Company), or (ii) any other acquisition approved by Required Purchasers in their
sole discretion.
"ACE Funding" shall mean ACE Funding, LLC, a Delaware limited liability
company, and wholly-owned Subsidiary of the Company.
"ACFS" shall mean American Capital Financial Services, Inc., a Delaware
corporation.
"Administrative Fee" shall have the meaning assigned to such term in
Section 7.1(l) hereof.
"Affiliate" of any Person shall mean any other Person which, directly
or indirectly, controls or is controlled by or is under common control with such
Person and, without limiting the generality of the foregoing, includes (a) any
Person which beneficially owns or holds 10% or more of any class of voting
securities of such Person or 10% or more of the equity interest in such Person,
(b) any Person of which such Person beneficially owns or holds 10% or more of
any class of voting securities or in which such Person beneficially owns or
holds 10% or more of the equity interest in such Person and (c) any director,
officer or employee of such Person. For the purposes of this definition, the
term "control" (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise. Notwithstanding
anything to the contrary herein, neither Purchasers nor any of their respective
Affiliates shall be deemed to be Affiliates of the Loan Parties by virtue of the
transactions contemplated in this Agreement.
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"Agent" shall have the meaning assigned to such term in the preamble
hereto and any successor agent appointed pursuant to the terms of this
Agreement.
"Agreement" shall mean this Note Purchase Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Asset Sale" shall mean any sale, transfer or other disposition of
assets by Company or any of its Subsidiaries to any Person, other than the
transfer or assignment of assets (a) by a Subsidiary of Company to Company, (b)
any Subsidiary of Company to a Guarantor or (c) any Guarantor to another
Guarantor.
"Business" shall mean the principal business of Company as set forth in
Section 5.1(b) herein and as such shall continue to be conducted following the
purchase and sale of the Notes.
"Business Day" shall mean any day on which banking institutions in
Texas and California are open for substantially all their banking business in
Dallas and San Francisco, provided, however, "Business Day" shall exclude (a) a
Saturday, (b) a Sunday, (c) any other legal holiday, or (d) any day on which
banks are not open for dealings in United States dollar deposits in the London
interbank market.
"By-laws" shall mean the by-laws, partnership agreement, operating
agreement or analogous instrument governing the operations of each of the Loan
Parties, as applicable, including all amendments and supplements thereto.
"Capital Expenditures" shall mean for any period of determination the
sum of capital expenditures and payments under Capitalized Leases of the Loan
Parties for such period determined on a Consolidated basis in accordance with
GAAP.
"Capitalized Leases" shall mean, with respect to any Person, leases of
(or other agreements conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP (as
defined in Section 1.2 hereof), either would be required to be classified and
accounted for as Capitalized Leases on a balance sheet of such Person or
otherwise be disclosed as such in a note to such balance sheet.
"Cash Flow Coverage Ratio" shall mean, in each case, with respect to
the Company and its Consolidated Subsidiaries, (a) the total without
duplication, during the 12-month period preceding the applicable date of
determination, of (i) EBITDA, minus (ii) federal, state and local income taxes
actually paid in cash minus (iii) total capital expenditures paid in cash, minus
(iv) cash dividends paid, minus (v) treasury stock purchased, plus (vi) rent
expense, divided by (b) the total without duplication during the same specified
12 month period of (i) Interest Expense paid in cash, plus (ii) the current
portion of all Capitalized Leases, plus (iii) the current portion of all
long-term debt, plus (iv) rent expense.
"Cash Holdings" shall mean Company's cash in the Company's stores, plus
Company's cash in the Company's depository accounts with Revolving Lenders, plus
Company's cash in the Company's depository accounts with Other Financial
Institutions, plus the amount of items of the Company in clearing at Revolving
Lenders and at Other Financial Institutions, plus cash of the Company in transit
with armored couriers.
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"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C.Section 9601, et seq.), as amended,
and rules, regulations, standards guidelines and publications issued thereunder.
"Certificate of Update" shall mean a Certificate signed by a
Responsible Officer of the Company which sets forth any changes during the prior
month to Schedule 5.1(v) attached hereto, any of the schedules attached to the
Intercreditor Agreement, or any of the schedules attached to the Security
Agreement.
"Change of Control" shall mean the occurrence of any of the following:
(a) any transaction or series of related
transactions resulting in the sale or issuance of securities
or any rights to securities of Company by Company representing
in the aggregate more than 50% of its issued and outstanding
voting securities, on a fully diluted basis, or any
transaction or series of related transactions resulting in the
sale, transfer, assignment or other conveyance or disposition
of any securities or any rights to securities of Company by
any holder or holders thereof representing in the aggregate
more than 50% of the issued and outstanding voting securities
of Company on a fully diluted basis and the receipt of any
consideration in connection therewith;
(b) a merger, consolidation, reorganization,
recapitalization or share exchange in which the stockholders
of Company immediately prior to such transaction receive, in
exchange for securities of Company owned by them, cash,
property or securities of the resulting or surviving entity
and as a result thereof Persons who were holders of voting
securities of Company hold less than 50% of the capital stock,
calculated on a fully diluted basis, of the resulting
corporation entitled to vote in the election of directors;
(c) a sale, transfer or other disposition for
value of 30% or more of the assets of the Loan Parties
(excluding Asset Sales permitted by Section 7.2(f) hereof), on
a Consolidated basis; and
(d) any sale or issuance or series of sales or
issuances of the common stock or any other voting security (or
security convertible into, exchangeable for, or exercisable
for any other voting security) of Company within a 12-month
period that results in a transfer of more than 50% of the
issued and outstanding shares of voting stock of Company or a
transfer of more than 50% of the voting power of Company.
"Charter Documents" shall mean the Articles of Incorporation,
Certificate of Incorporation, certificate of limited partnership, certificate of
limited liability company, charter or analogous organic instrument filed with
the appropriate Governmental Authorities of each of the Loan Parties, as
applicable, including all amendments and supplements thereto.
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"Closing" shall mean the closing of the purchase and sale of the Notes
pursuant to this Agreement.
"Closing Date" shall mean the date and time for delivery and payment of
the Notes as finally determined pursuant to Section 2.3 hereof.
"Closing Processing Fee" shall mean a fee in an amount equal to
$1,000,000 ($100,000 of which was paid by Company to ACFS on or before February
9, 2003) payable by Company to ACFS in consideration of the structuring of the
financing contemplated hereby.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean all assets, tangible or intangible, real,
personal or mixed, of the Company and each of its Subsidiaries (other than ACE
Funding) including, without limitation, all Deposit Accounts in which Cash
Holdings or any Subsidiary's Cash Holdings are maintained, all Cash Holdings and
each Subsidiary's Cash Holdings, all other cash, accounts receivable,
instruments, patents, trademarks, service marks, all other intellectual
property, all software whether purchased by or developed by the Company or any
of its Subsidiaries (other than ACE Funding), general intangibles, furniture and
equipment of the Company and its Subsidiaries (other than ACE Funding), and all
partnership interest, capital stock or other Equity Interests of each Subsidiary
of the Company (other than ACE Funding), but excluding any assets held by the
Company for the benefit of non-Affiliates in which no security interest or other
Lien may be granted, the Company's interest in any Indebtedness of ACE Funding
owed to the Company, and all assets or properties of ACE Funding.
"Collateral Agency Agreement" shall have the meaning assigned to such
term in Section 4.1(d) hereof.
"Collateral Agent" shall have the meaning assigned to such term in the
Collateral Agency Agreement.
"Company" shall have the meaning assigned to such term in the
introductory paragraph hereto.
"Condition" shall mean any condition that results in or otherwise
relates to any Environmental Liabilities.
"Consolidated" shall mean, in respect of any Person, as applied to any
financial or accounting term, such term determined on a consolidated basis in
accordance with GAAP (except as otherwise required herein) for the Person and
all consolidated Subsidiaries thereof.
"Controlled Group" shall mean the "controlled group of corporations" as
that term is defined in Section 1563 of the Internal Revenue Code of 1986, as
amended, of which Company is a part from time to time.
"Covered Taxes" shall have the meaning assigned to such term in Section
3.7 hereof.
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"Default" shall mean any event or condition that, but for the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Deferred Payment Obligations" shall mean the amount of the Company's
(or any of the Company's Subsidiaries') obligations to make payments to sellers
of either stock or assets pursuant to an Acceptable Acquisition, in periods
subsequent to the closing of such acquisition.
"EBITDA" shall mean, for any period of determination, the sum of (a)
Net Income for the Loan Parties on a Consolidated basis, plus (b) Interest
Expense deducted in arriving at such Net Income, plus (c) federal, state and
local income taxes deducted in arriving at such Net Income, plus (d)
depreciation, amortization and other non-cash charges deducted in arriving at
such Net Income as computed and calculated in accordance with GAAP (excluding,
however, any reserves or non-cash charges relating to, or in respect of Payday
Loans or any other loan program administered by the Company or its
Subsidiaries), minus (e) extraordinary gains computed and calculated in
accordance with GAAP, plus (f) extraordinary losses computed and calculated in
accordance with GAAP.
"Environmental Law" or "Environmental Laws" shall mean any Laws which
address, are related to or are otherwise concerned with environmental, health or
safety issues, including any Laws relating to any emissions, releases or
threatened releases or discharges of Pollutants into ambient air, surface water,
ground water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, handling, clean-up
or control of Pollutants or any exposure or impact on worker health and safety.
"Environmental Liabilities" shall mean any obligations or liabilities
(including any claims, suits or other assertions of obligations or liabilities)
that are:
(a) related to environmental, health or safety
issues (including on-site or off-site contamination by
Pollutants of surface or subsurface soil or water, and
occupational safety and health); and
(b) based upon or related to (i) any provision
of past, present or future Environmental Laws (including
CERCLA and RCRA) or common law, or (ii) any judgment, order,
writ, decree, permit or injunction imposed by any court,
administrative agency, tribunal or otherwise.
The term "Environmental Liabilities" includes: (a) fines, penalties,
judgments, awards, settlements, losses, damages (including foreseeable and
unforeseeable consequential damages), costs, fees (including attorney's and
consultant's fees), expenses and disbursements; (b) defense and other responses
to any administrative or judicial action (including claims, notice letters,
complaints, and other assertions of liability); and (c) financial responsibility
for (i) cleanup costs and injunctive relief, including any Removal, Remedial or
other Response actions, and natural resource damages, and (ii) any other
compliance or remedial measures.
"Equity Interests" shall have the meaning ascribed to such term as
Section 7.2(v) hereof.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended, and the rules and regulations of
any governmental agency or authority, as from time to time in effect,
promulgated thereunder.
"Event of Default" shall mean any of the events of default described in
Section 8.1 hereof.
"Excess Cash Flow" means, for any fiscal year, the sum of the
following, (a) EBITDA for such fiscal year, minus (b) the amount equal to actual
cash Capital Expenditures incurred during such fiscal year, minus (c) cash
interest expense paid during such fiscal year, minus (d) cash taxes during such
fiscal year, minus (e) scheduled payments of principal on the Indebtedness
permitted by this Agreement actually paid in cash during such fiscal year, minus
(f) cash payments made to settle any litigation involving any Loan Party (other
than ACE Funding) (provided that the aggregate amount deducted pursuant to this
clause (f) over the term of this Agreement shall not exceed $2,500,000), minus
(g) the amount by which Loan Receivables at the end of such Fiscal Year exceeds
the amount of Loan Receivables at the end of the immediately preceding Fiscal
Year, plus (h) the amount by which Loan Receivables at the end of the
immediately preceding Fiscal Year exceeds the amount of Loan Receivables at the
end of such Fiscal Year, minus (i) the aggregate cash purchase price of all
Acceptable Acquisitions consummated in such Fiscal Year (provided that such
aggregate amount deducted pursuant to this clause (i) during any Fiscal Year
shall not exceed $2,500,000). The calculations of the amounts in clauses (g) and
(h) above shall be determined exclusive of adjustments caused by a Loan
Reduction Event.
"Existing Term Debt" shall mean the obligations of Company pursuant to
the term loan credit facility as set forth in that certain Amended and Restated
Credit Agreement, dated as of November 9, 2000, by and among Company, Xxxxx
Fargo Bank Texas, National Association, as agent for certain lenders party
thereto (as amended, modified or supplemented from time to time).
"Facility Fee" shall have the meaning ascribed to such term as Section
7.1(m) hereof.
"Financial Projections" shall have the meaning assigned to such term in
Section 5.1(c) hereof.
"Financing Statements" shall have the meaning assigned to such term in
Section 4.1(c) hereof.
"Fiscal Year" or "fiscal year" shall mean each twelve month period
ending on June 30 of each year.
"Funded Debt" shall mean and include, as of any date of determination
(without duplication) (a) all obligations of the Loan Parties for borrowed
money, including but not limited to bank debt (including outstanding amounts
under the Revolving Financing), senior notes and subordinated debt, (b) all
obligations of the Loan Parties evidenced by bonds, debentures, notes or similar
instruments (excluding Deferred Payment Obligations which are unsecured and in
an amount not to exceed $2,000,000 in the aggregate outstanding at any time),
(c) all obligations of the Loan Parties upon which interest charges are
customarily paid, (d) all contingent obligations
7
of the Loan Parties, (e) all Capitalized Leases of the Loan Parties, and (f) all
outstanding letters of credit issued for the account of the Loan Parties, but
shall exclude all amounts owed by ACE Funding and all current accounts payable
arising in the ordinary course of business.
"Funded Debt to EBITDA Ratio" shall mean the ratio of (i) Funded Debt
of Company, on a Consolidated basis, as of a particular Measurement Date, to
(ii) the EBITDA for the Measurement Period ending on such Measurement Date. For
purposes of this definition, the EBITDA of any Person acquired by the Loan
Parties pursuant to an Acceptable Acquisition during any period shall be
included in the Funded Debt to EBITDA Ratio on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day of such
period) if (a) with respect to any such Acceptable Acquisition of such Person,
the consolidated balance sheet of such acquired Person as at the end of the
period preceding the acquisition of such Person and its consolidated
subsidiaries and the related statements of income and stockholders' equity and
of cash flows for the period in respect of which the Funded Debt to EBITDA Ratio
is to be calculated have been reported on without a qualification arising out of
the scope of the audit by independent certified public accountants of nationally
recognized standing, unless such audit requirement is waived by Agent, and (b)
if any such Acceptable Acquisition involved the incurrence of Funded Debt, the
incurrence of such Funded Debt was permitted hereunder.
"GAAP" shall have the meaning assigned to such term in Section 1.2
hereof.
"Goleta Agreement" shall mean that Master Loan Agency Agreement between
the Company and Goleta dated as of August 11, 1999, as in effect on the date
hereof, without giving effect to any amendment, restatement or modification
thereof.
"Governmental Authorities" shall mean any federal, state or municipal
court or other governmental department, commission, board, bureau, agency or
instrumentality, governmental or quasi-governmental, domestic or foreign.
"Guarantor" shall mean, individually and collectively, each Person who
guaranties the Indebtedness of the Loan Parties to the Purchasers, including,
without limitation, each Subsidiary of Company (other than ACE Funding) that is
or becomes a guarantor of the Indebtedness of the Loan Parties to the Purchasers
on or after the date hereof.
"Guaranty" shall mean any guaranty of the payment or performance of any
Indebtedness or other obligation and any other arrangement whereby credit is
extended to one obligor on the basis of any promise of another Person, whether
that promise is expressed in terms of an obligation to pay the Indebtedness of
such obligor, or to purchase an obligation owed by such obligor, or to purchase
goods and services from such obligor pursuant to a take-or-pay contract, or to
maintain the capital, working capital, solvency or general financial condition
of such obligor, whether or not any such arrangement is reflected on the balance
sheet of such other Person, or referred to in a footnote thereto, but shall not
include endorsements of items for collection in the ordinary course of business.
For the purpose of all computations made under this Agreement, the amount of a
Guaranty in respect of any obligation shall be deemed to be equal to the maximum
aggregate amount of such obligation or, if the Guaranty is limited to less
8
than the full amount of such obligation, the maximum aggregate potential
liability under the terms of the Guaranty.
"Guaranty Agreement" shall have the meaning assigned to such term in
Section 4.1(c) hereof.
"Hedging Contract" shall mean (a) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases involving
interest rates, commodities or commodity prices, equities, currencies, bonds or
indexes based on any of the foregoing, (b) any option, fixtures or forward
contract traded on an exchange, and (c) any other derivative agreement or other
similar agreement or arrangement.
"Indebtedness" shall mean, for any Person at the time of any
determination, without duplication, all obligations, contingent or otherwise, of
such Person that, in accordance with GAAP, should be classified upon the balance
sheet of such Person as indebtedness, but in any event including: (a) all
obligations for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations arising from installment purchases of property or
representing the deferred purchase price of property or services in respect of
which such Person is liable, contingently or otherwise, as obligor or otherwise
(other than trade payables and other current liabilities incurred in the
ordinary course of business on terms customary in the trade), (c) all
obligations evidenced by notes, bonds, debentures, acceptances or instruments,
or arising out of letters of credit or bankers' acceptances issued for such
Person's account (excluding current accounts payable which are not aged more
than 120 days from the billing date therefor), (d) all obligations, whether or
not assumed, secured by any Lien or payable out of the proceeds or production
from any property or assets now or hereafter owned or acquired by such Person,
(e) all obligations for which such Person is obligated pursuant to a Guaranty,
(f) the capitalized portion of lease obligations under Capitalized Leases, (g)
all obligations for which such Person is obligated pursuant to any Interest Rate
Protection Agreements or derivative agreements or arrangements, and (h) all
obligations of such Person upon which interest charges are customarily paid or
accrued. The Indebtedness of any Person shall include, but without duplication,
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefore as a
result of such Persons ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provided that such
Person is not liable therefore.
"Intellectual Property Schedule" shall have the meaning assigned to
such term in Section 5.1(q) hereof.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement, dated as of the date hereof, by and among the agent for the Revolving
Lenders, Travelers, Agent and the Company.
"Interest Expense" shall mean, with respect to any Person for any
period, the interest expense of such Person during such period determined in
accordance with GAAP.
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"Interest Period" shall mean for any Note, a period of 30 day duration,
as determined in accordance with the customary practice in the applicable LIBOR
market; provided, that, no Interest Period will end after the last day of the
then-current term of this Agreement.
"Interest Rate Protection Agreement" shall mean any interest rate swap,
interest rate cap, interest rate collar or other interest rate hedging agreement
or arrangement.
"Investment" as applied to any Person shall mean the amount paid or
agreed to be paid or loaned, advanced or contributed to other Persons, and in
any event shall include (i) any direct or indirect purchase or other acquisition
of any notes, obligations, instruments, stock, securities or ownership interest
(including partnership interests and joint venture interests) and (ii) any
capital contribution to any other Person.
"Key Management" shall mean Xxxxxx X. Xxxxxxxx, Xxx X. Xxxxxxxxx, Xxx
X. Xxxxxx and Xxxxx X. Xxxxxx.
"Laws" shall mean all U.S. and foreign federal, state or local
statutes, laws, rules, regulations, ordinances, codes, policies, rules of common
law, and the like, now or hereafter in effect, including any judicial or
administrative interpretations thereof, and any judicial or administrative
orders, consents, decrees or judgments.
"Letter Agreement" shall mean the letter agreements substantially in
the forms of Exhibits F-1, F-2, and G attached hereto (or any other or similar
agreements in form and substance satisfactory to Agent, in its sole discretion).
"LIBOR" shall mean with respect to the Interest Period for a Note, an
interest rate per annum determined by Agent to be equal to the London Interbank
Offered Rate for such period set at or about 11:00 a.m. (London time) 2 Business
Days prior to the commencement of such Interest Period for an amount
substantially equal to the then-current principal amount of such Note, with a
maturity of comparable duration to the Interest Period.
"Lien" shall mean (a) any security interest, pledge, bailment,
mortgage, hypothecation, deed of trust, conditional sales and title retention
agreement (including any lease in the nature thereof), charge, encumbrance or
other similar arrangement or interest in real or personal property, now owned or
hereafter acquired, whether such interest is based on common law, statute or
contract, (b) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities or (c) with respect to
any asset, any other right of or arrangement with any creditor to have such
creditor's claim satisfied out of such asset or the proceeds therefrom, prior to
the general creditors of the owner thereof.
"Litigation Schedule" shall have the meaning assigned to such term in
Section 5.1(i) hereof.
"Loan and Servicing Agreement" shall mean that certain agreement, dated
as of December 18, 2002, by and among the Company, ACE Funding, ACE Funding
Lender, as in effect on the Closing Date, without giving effect to any
amendment, restatement or modification thereof.
10
"Loan Parties" shall mean Company and its Subsidiaries. Notwithstanding
the fact that ACE Funding is defined as a Loan Party, the parties hereto hereby
acknowledge that, pursuant to Section 7.2(w), ACE Funding is neither obligated
nor liable for the Indebtedness evidenced by the Notes to the Purchasers and has
not made any covenants with, to, or for the benefit of the Purchasers.
"Loan Receivables" shall mean, as of any date, the aggregate amount of
loan receivables (as accounted for in the Company's SEC Form 10-K most recently
filed with the SEC) of the Loan Parties solely related to Payday Loans as of
such date.
"Loan Receivables Collection Amount" shall mean an amount equal to the
cash actually collected by the Loan Parties (using commercially reasonable
collection methods and efforts) in the 90 day period immediately following a
Loan Reduction Event with respect to all Loan Receivables which originated in
the State or States that originally gave rise to such Loan Reduction Event.
"Loan Receivables Payment Reduction Conditions" shall mean, with
respect to any Loan Reduction Event: (a) the Company has made a mandatory
prepayment to the Agent, for the benefit of the Purchasers, due to such Loan
Reduction Event in accordance with Section 3.5(b)(iii) hereof; (b) prior to the
expiration of 730 days after the occurrence of such Loan Reduction Event, the
Loan Parties resume making Payday Loans in the State that gave rise to such Loan
Reduction Event; and (c) prior to the expiration of 180 days after the
occurrence of the events described in clause (b) above, the Loan Parties make,
and have outstanding, Payday Loans in an aggregate principal amount not less
than the Loan Receivables Prepayment Amount related to the State subject to such
Loan Reduction Event.
"Loan Receivables Prepayment Amount" shall have the meaning assigned to
such term in Section 3.5(b)(iii) hereof.
"Loan Reduction Event" shall mean the occurrence or imposition of a
binding ruling, decision, rulemaking, or regulation by a Governmental Authority
with regulatory or other jurisdiction over a Loan Party whereby any or all of
the Loan Parties are prohibited from making Payday Loans in a State or would be
subject to legal or administrative actions due to the continued making of Payday
Loans in a State.
"London Interbank Offered Rate" shall mean the interest rate per annum
shown on page 3750 of the Dow Xxxxx & Company Telerate screen or any successor
page as the composite offered rate for London interbank deposits.
"Manage" and "Management" shall mean generation, production, handling,
distribution, processing, use, storage, treatment, operation, transportation,
recycling, reuse and/or disposal, as those terms are defined in CERCLA, RCRA and
other Environmental Laws (including as those terms are further defined,
construed, or otherwise used in rules, regulations, standards, guidelines and
publications issued pursuant to, or otherwise in implementation of, such
Environmental Laws).
"Material Adverse Effect" shall mean (a) a material adverse effect upon
the Collateral or on the business, assets, liabilities, condition (financial or
otherwise) or prospects of (i) the
11
Company or (ii) the Loan Parties, taken as a whole or (b) the material
impairment of the ability of any Loan Party (other than ACE Funding) to perform
any of its obligations under any Purchase Document on a timely basis or (c) a
material impairment of (i) the validity or enforceability of the rights or
benefits available to the Agent and/or Purchasers, (ii) the Liens granted by the
Company and the Guarantors to Agent on behalf of the Purchasers or (iii) the
ability of Purchasers to enforce or collect any of the Indebtedness of the
Company or any Guarantor owed to the Purchasers pursuant to the Purchase
Documents. In determining whether any individual amount would result in a
Material Adverse Effect, notwithstanding that such event does not of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred, if the
cumulative effect of such event and all other then existing events would result
in a Material Adverse Effect.
"Measurement Date" shall have the meaning assigned to such term in
Section 7.3 hereof.
"Measurement Period" shall mean the 12-month period ending on a
Measurement Date.
"Money Order Agreement" shall mean that certain money order agreement
between the Company and Travelers, dated April 16, 1998, as amended, restated or
modified from time to time in accordance with the terms of this Agreement.
"Xxxxx'x" shall have the meaning assigned to such term in Section
7.2(i) hereof.
"Multiemployer Plan" shall mean a multiemployer plan (within the
meaning of Section 3(37) of ERISA) that is maintained for the benefit of the
employees of the Loan Parties or any member of the Controlled Group.
"Net Cash Proceeds" shall mean:
(a) with respect to any Asset Sale, the aggregate cash proceeds
(including cash proceeds received by way of deferred payment
of principal pursuant to a note, installment receivable or
otherwise, but only as and when received) received by a Loan
Party pursuant to such Asset Sale, net of (i) the direct costs
relating to such Asset Sale (including brokerage fees, sales
and other commissions, legal, accounting and investment
banking fees, survey costs, title insurance premiums and other
customary fees and expenses incurred in connection therewith),
(ii) taxes paid or reasonably estimated by such Loan Party to
be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be applied to the
repayment of principal of any Indebtedness (and related
prepayment premiums or prepayment fees) secured by a Lien on
the assets subject to such Asset Sale (other than Indebtedness
hereunder and under the Revolving Credit Documents), (iv)
appropriate amounts to be provided by such Loan Party, as a
reserve, in accordance with GAAP, against any liabilities
associated with the assets sold or disposed of in such Asset
Sale and retained by such Loan Party, after such Asset Sale,
including pension and other post-employment benefit
liabilities and liabilities related to environmental matters
and liabilities under any indemnification obligation
associated with the assets sold or disposed of in such
12
Asset Sale (provided that, if and to the extent that such
reserves are no longer required to be maintained in accordance
with GAAP, such amounts shall constitute Net Cash Proceeds, to
the extent such amounts would have otherwise constituted Net
Cash Proceeds under this clause (a)), and (v) in the case of
any proceeds arising out of the sublease of any property,
amounts required to be paid in respect of the lease of such
property; and
(b) with respect to any issuance of equity securities or
Indebtedness (excluding Indebtedness under the Revolving
Facility), the aggregate cash proceeds received by such Loan
Party pursuant to such issuance, net of the direct costs
relating to such issuance (including sales and underwriter's
discounts and commissions and legal, accounting and investment
banking fees).
"Net Income" shall mean, with respect to any Person for any period, the
aggregate income (or loss) of such Person for such period which shall be an
amount equal to (a) net revenues and other items of income for such Person, less
(b) the aggregate for such Person of any and all items that are treated as
expenses under GAAP, less (c) federal, state and local income taxes, but
excluding any extraordinary gains or losses or any gains or losses from the sale
or disposition of assets other than in the ordinary course of business, all
computed and calculated in accordance with GAAP.
"Net Worth" shall mean, with respect to any Person at any date of
determination, the sum of (a) the total amount of capital stock, including
preferred stock, of such Person, plus (b) the paid-in-capital of such Person,
plus (c) the retained earnings of such Person, minus (d) the treasury stock of
such Person, all calculated in accordance with GAAP.
"Notes" shall have the meaning set forth in Section 2.1 hereof.
"Organizational Schedule" shall have the meaning assigned to such term
in Section 5.1(a) hereof.
"Other Financial Institutions" shall mean any financial institution
other than Revolving Lenders.
"Other Taxes" shall have the meaning assigned to such term in Section
3.7 hereof.
"Payday Loan" shall mean a consumer loan with a maturity of less than
30 days provided by a Loan Party (other than ACE Funding) in exchange for which,
the borrower of such consumer loan endorses for presentment or deposit a check
for the benefit of such Loan Party or executes an authorization for such Loan
Party to debit such borrower's bank account and enters into an agreement with
such Loan Party that such Loan Party shall defer the presentment or deposit of
such check or the initiation of such debit (as the case may be) for a period of
time which shall not exceed 30 days.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any other governmental agency,
department or instrumentality succeeding to the functions thereof.
13
"Permitted Encumbrances Schedule" shall have the meaning assigned to
such term in Section 7.2(b)(iv) hereof.
"Permitted Liens" shall have the meaning assigned to such term Section
7.2(b) hereof.
"Person" shall mean any individual, partnership, limited partnership,
corporation, limited liability company, association, joint stock company, trust,
joint venture, unincorporated organization or governmental entity or department,
agency or political subdivision thereof.
"Plan" shall mean any employee benefit plan (within the meaning of
Section 3(3) of ERISA), other than a Multiemployer Plan, established or
maintained by any of Company or any member of the Controlled Group.
"Pledge Agreement" shall have the meaning assigned to such term in
Section 4.1(c) hereof.
"Pollutant" shall include any "hazardous substance" and any "pollutant
or contaminant" as those terms are defined in CERCLA; any "hazardous waste" as
that term is defined in RCRA; and any "hazardous material" as that term is
defined in the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et
seq.), as amended (including as those terms are further defined, construed, or
otherwise used in rules, regulations, standards, guidelines and publications
issued pursuant to, or otherwise in implementation of, said Environmental Laws);
and including without limitation any petroleum product or byproduct, solvent,
flammable or explosive material, radioactive material, asbestos, polychlorinated
biphenyls (PCBs), dioxins, dibenzofurans, heavy metals, and radon gas; and
including any other substance or material that is reasonably determined to
present a threat, hazard or risk to human health or the environment.
"Properties and Facilities" shall have the meaning assigned to such
term in Section 5.1(p) hereof.
"Properties Schedule" shall have the meaning assigned to such term in
Section 5.1(p) hereof.
"Proprietary Rights" shall mean all patents, trademarks, trade names,
service marks, copyrights, inventions, production methods, licenses, formulas,
know-how, trade secrets and goodwill related to any of the foregoing, regardless
of whether such are registered with any Governmental Authorities, including
applications therefor.
"Purchase Documents" shall mean this Agreement, the Notes and the
Security Documents and all other agreements, instruments and documents delivered
in connection therewith, but excluding documentation evidencing the Revolving
Financing and the Travelers Documents, as any or all of the foregoing may be
supplemented or amended from time to time.
"Purchaser" shall have the meaning assigned to such term in the
preamble hereto and in Section 6.2 hereof.
14
"RCRA" shall mean the Resource Conservation and Recovery Act (42
U.S.C.Section 6901 et seq.), as amended, and all rules, regulations, standards,
guidelines, and publications issued thereunder.
"Removal," "Remedial" and "Response" actions shall include the types of
activities covered by CERCLA, RCRA, and other comparable Environmental Laws, and
whether the activities are those which might be taken by a Governmental
Authority or those which a Governmental Authority or any other Person might seek
to require of waste generators, handlers, distributors, processors, users,
storers, treaters, owners, operators, transporters, recyclers, reusers,
disposers, or other Persons under "removal," "remedial," or other "response"
actions.
"Reportable Event" shall mean any of the events which are reportable
under Section 4043 of ERISA and the regulations promulgated thereunder, other
than an occurrence for which the thirty (30) day notice contained in 29 C.F.R.
Section 2615.3(a) is waived.
"Required Purchasers" shall mean, at any time, Purchasers holding a pro
rata percentage of the outstanding principal amount of the Notes aggregating at
least 66-2/3% at such time.
"Responsible Officer" shall mean, with respect to any Person other than
the Company, such Person's president, chairman, senior vice president, vice
president, chief financial officer or vice president-finance and shall mean with
respect to the Company, its chief executive officer, its chief operating
officer, its chief financial officer, its senior vice president-operations, and
its controller.
"Restated EBITDA" shall mean, with respect to any Person, such Person's
actual EBITDA (regardless if calculated pursuant to an audit conducted by
independent public accountants of recognized national standing acceptable to
Agent) restated to substitute, in lieu of actual expenses deducted in
determining such actual EBITDA, expenses that are, in the judgment of Agent and
Company, contractually controllable by Company (e.g., officer or employee
compensation, bank and/or depository fees, courier fees and other similar
expense items).
"Revolving Credit Agreement" shall mean that certain Credit Agreement,
dated March 31, 2003, by and among Company, the lenders from time to time party
thereto, Xxxxx Fargo Bank Texas, National Association, as administrative agent
for such lenders and co-lead arranger, and JPMorgan Chase Bank, as agent for
such lenders and co-lead arranger, as the same may be amended or modified from
time to time as permitted hereunder.
"Revolving Credit Documents" shall mean the Revolving Credit Agreement
and all documents, instruments, certificates, and agreements contemplated
thereby or executed in connection therewith.
"Revolving Financing" shall mean a secured revolving line of credit
facility of Company in an aggregate amount not to exceed $175,000,000.
"Revolving Lenders" shall mean, collectively, the lenders from time to
time party to the Revolving Credit Agreement.
"S&P" shall have the meaning assigned to such term in Section
7.2(i)(ii) hereof.
15
"SEC" shall mean the Securities and Exchange Commission and any
Governmental Authority succeeding to the functions thereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Agreement" shall have the meaning assigned to such term in
Section 4.1(c) hereof.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Guaranty Agreement, the Collateral Agency Agreement, the
Financing Statements, and all other documents, instruments and other materials
now or hereafter executed or delivered by any Loan Party (other than ACE
Funding) to create or perfect a Lien in the Collateral in favor of Agent, for
the benefit of Purchasers, and all amendments, modifications, supplements,
renewals, extensions, increases, rearrangements of, and substitutions for the
foregoing.
"Series A Notes" shall mean the Senior Subordinated Secured Series A
Notes issued pursuant to Section 2.1 hereof.
"Series B Notes" shall mean the Senior Subordinated Secured Series B
Notes issued pursuant to Section 2.1 hereof.
"Series C Notes" shall mean the Senior Subordinated Secured Series C
Notes issued pursuant to Section 2.1 hereof.
"Series D Notes" shall mean the Senior Subordinated Secured Series D
Notes issued pursuant to Section 2.1 hereof.
"Significant Asset Sale" shall have the meaning assigned to such term
in Section 3.5(b)(i)(A) hereof.
"Significant Equity Rights Issuance" shall have the meaning assigned to
such term in Section 3.5(b)(ii)(A) hereof.
"Significant Subsidiary" shall have the meaning given such term by 17
CFR Section 210.1-02(w) (Rule 1-02(w) of Regulation S-X of the Securities and
Exchange Commission).
"SSM" shall mean self-service check-cashing machines.
"State" shall mean one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx
Xxxxxxx, and any territory, possession or protectorate of the United States of
America.
"Stores" shall mean the store locations of the Loan Parties that are a
portion of the Properties and Facilities.
"Structuring Fee" shall mean a fee in an amount equal to $1,575,000
payable by the Company to ACFS in consideration of the structuring of the
financing contemplated hereby.
16
"Subsidiary" shall mean, with respect to any Person, any corporation,
association or other business entity in which said Person or one or more
Subsidiaries of said Person owns or controls, directly or indirectly, securities
or other ownership interests representing more than 50% of the ordinary voting
power. As used in this Agreement with respect to the Company, the term
"Subsidiary" shall include all direct and indirect Subsidiaries of the Company.
"Subsidiary's Cash Holdings" shall mean, with respect to a Subsidiary
of the Company, other than ACE Funding, such Subsidiary's cash in such
Subsidiary's stores, plus such Subsidiary's cash in such Subsidiary's depository
accounts with Revolving Lenders, plus such Subsidiary's cash in such
Subsidiary's depository accounts with Other Financial Institutions, plus the
amount of items of such Subsidiary in clearing at Revolving Lenders and at Other
Financial Institutions, plus cash of such Subsidiary in transit with armored
couriers.
"Transaction Documents" shall have the meaning assigned to such term in
Section 5.1(e) hereof.
"Transactions" shall mean the incurrence of debt and the issuance of
securities in connection therewith, as contemplated by this Agreement, the Notes
and all other agreements contemplated hereby and thereby.
"Travelers" shall mean Travelers Express Company, Inc.
"Travelers Documents" shall mean the Travelers Primary Agreements and
all agreements, certificates and instruments executed and/or delivered in
connection therewith.
"Travelers Primary Agreements" shall mean the Money Order Agreement,
that certain Money Transfer Agreement dated June 30, 2000, by and between
Company and Travelers, as amended, supplemented, restated or otherwise modified
through and including the Closing Date, and that certain Xxxx Payment Processing
and Funds Transfer Services Agreement dated April 1, 1998, by and between
Travelers and Company, as amended, supplemented, restated or otherwise modified
through and including the Closing Date.
"Unrestricted Indebtedness" shall mean Indebtedness (i) as to which
neither the Company nor any other Loan Party (other than ACE Funding) is
directly or primarily liable (by virtue of the Company or one of the other Loan
Parties being the primary obligor on, guarantor of, or otherwise liable with
respect to, such Indebtedness), and (ii) which, upon the occurrence of a default
with respect thereto, does not result in, or permit any holder of any
Indebtedness of the Company or any of the other Loan Parties (other than ACE
Funding) to declare a default on such Indebtedness or cause the payment thereof
to be accelerated or payable prior to its stated maturity.
"Usage Period" shall mean shall mean the period from January 7 (or the
preceding Business Day if January 7 is not a Business Day) through April 30 (or
the next Business Day if April 30 is not a Business Day) of each calendar year.
17
"UST" shall mean an underground storage tank, including as that term is
defined, construed and otherwise used in RCRA and in rules, regulations,
standards, guidelines and publications issued pursuant to RCRA and comparable
state and local laws.
1.2 Accounting Principles. The character or amount of any asset,
liability, capital account or reserve and of any item of income or expense to be
determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, pursuant to
this Agreement shall be determined or made in accordance with generally accepted
accounting principles in the United States of America consistently applied
("GAAP"), unless such principles are inconsistent with the express requirements
of this Agreement.
1.3 Other Definitional Provisions; Construction. Whenever the
context so requires, neuter gender includes the masculine and feminine, the
singular number includes the plural and vice versa. The words "hereof" "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not in any particular provision of this
Agreement, and references to section, article, annex, schedule, exhibit and like
references are references to this Agreement unless otherwise specified. A
Default or Event of Default shall "continue" or be "continuing" until such
Default or Event of Default has been cured or waived by Agent and Purchasers.
References in this Agreement to any Persons shall include such Persons'
successors and permitted assigns. Other terms contained in this Agreement (which
are not otherwise specifically defined herein) shall have meanings provided in
Article 9 of the Texas Uniform Commercial Code on the date hereof to the extent
the same are used or defined therein.
ARTICLE 2
ISSUE AND SALE OF SECURITIES
2.1 Authorization and Issuance of the Notes. Company has duly
authorized the issuance and sale to Purchasers of (a) $10,000,000 in the
aggregate principal amount of Company's Senior Subordinated Secured Series A
Notes Due March 31, 2006, to be substantially in the form of the Note attached
hereto as Exhibit A-1 (including any Notes issued in substitution therefor
pursuant to Sections 6.3 and 6.4 hereof, the "Series A Notes"), (b) $10,000,000
in the aggregate principal amount of Company's Senior Subordinated Secured
Series B Notes Due March 31, 2008, to be substantially in the form of the Note
attached hereto as Exhibit A-2 (including any Notes issued in substitution
therefor pursuant to Sections 6.3 and 6.4 hereof, the "Series B Notes"), (c)
$10,000,000 in the aggregate principal amount of Company's Senior Subordinated
Secured Series C Notes Due March 31, 2009, substantially in the form attached
hereto as Exhibit A-3 (including any Notes issued in substitution thereof
pursuant to Sections 6.3 and 6.4 hereof, the "Series C Notes,") and (d)
$10,000,000 in the aggregate principal amount of Company's Senior Subordinated
Secured Series D Notes Due March 31, 2010, substantially in the form attached
hereto as Exhibit A-4 (including any Notes issued in substitution thereof
pursuant to Sections 6.3 and 6.4 hereof, the "Series D Notes", and together with
the Series A Notes, the Series B Notes and the Series C Notes, the "Notes").
18
2.2 Sale and Purchase. Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein,
Company shall sell to Purchasers, and Purchasers shall purchase from Company, in
an amount equal to the pro rata portion of the Notes as set forth on Annex A
attached hereto, the Notes in the aggregate principal amount set forth in
Section 2.1 hereof for $40,000,000 in the aggregate.
2.3 The Closing. Delivery of and payment for the Notes (the
"Closing") shall be made at the offices of Xxxxxx Xxxxx XXX, Xxxxxx, Xxxxx,
commencing at 10:00 a.m., local time, on March 31, 2003 or at such place or on
such other date on or before March 31, 2003 as may be mutually agreeable to
Company and Purchasers. The date and time of the Closing as finally determined
pursuant to this Section 2.3 are referred to herein as the "Closing Date."
Delivery of the Notes shall be made to Purchasers against payment of the
purchase price therefor, less the Closing Processing Fee, the Structuring Fee
and any other amounts payable pursuant to Section 4.1(h) hereof, by wire
transfer of immediately available funds in the manner agreed to by Company and
Purchasers. The Notes shall be issued in such name or names and in such
permitted denomination or denominations as set forth in Annex A or as Purchasers
may request in writing not less than two (2) Business Days before the Closing
Date.
ARTICLE 3
REPAYMENT OF THE NOTES
3.1 Interest Rates and Interest Payments. Company covenants and
agrees to make payments to Agent, for the ratable benefit of Purchasers, of
accrued interest on the Notes payable in arrears on the last Business Day of
each month commencing on April 30, 2003. Interest on the Notes will be computed
on the basis of a year of 360 days, composed of twelve 30-day months, and the
actual number of days elapsed. The Notes will bear interest as follows:
(a) Series A Notes. The Series A Notes will bear
interest on the outstanding principal amount thereof at a rate
equal to the sum of LIBOR plus 8.0% per annum;
(b) Series B Notes. The Series B Notes will bear
interest on the outstanding principal amount thereof at a rate
equal to the sum of LIBOR plus 10.0% per annum;
(c) Series C Notes. The Series C Notes will bear
interest on the outstanding principal amount thereof at a rate
equal to the sum of LIBOR plus 13.0% per annum; and
(d) Series D Notes. The Series D Notes will bear
interest on the outstanding principal amount thereof at a rate
equal to the sum of LIBOR plus 13.25% per annum.
Notwithstanding anything to the contrary contained herein, Agent and Purchasers
shall not be required to purchase United States dollar deposits in the London
interbank market or other
19
applicable LIBOR market to fund any or all of the Notes, but the provisions
hereof shall be deemed to apply as if Agent and Purchasers had purchased such
deposits to fund such Notes.
3.2 Repayment of the Notes.
(a) Company covenants and agrees to repay to
Agent, for the ratable benefit of Purchasers, the unpaid
principal balance of the Notes in full, together with all
accrued and unpaid interest, fees (including, without
limitation, any breakage or other fees related to all LIBOR
contracts associated therewith) and other amounts due
hereunder as follows:
(i) Series A Notes. On the Series A
Notes, in eleven (11) equal quarterly payments of
$833,333.34, payable on the last Business Day of each
calendar quarter, commencing on June 30, 2003 and one
(1) final payment of the principal amount as is then
outstanding, together with all accrued and unpaid
interest, fees and other amounts due hereunder on
March 31, 2006;
(ii) Series B Notes. On the Series B
Notes, the following quarterly payments shall be
payable on the last Business Day of each calendar
quarter in the following amounts for the
corresponding period set forth below:
Period Quarterly Principal Payment
------------------- ---------------------------
June 30, 2003 $ 125,000
September 30, 2003 $ 125,000
December 31, 2003 $ 125,000
March 31, 2004 $ 125,000
June 30, 2004 $ 125,000
September 30, 2004 $ 125,000
December 31, 2004 $ 125,000
March 31, 2005 $ 125,000
June 30, 2005 $ 125,000
September 30, 2005 $ 125,000
December 31, 2005 $ 125,000
March 31, 2006 $ 125,000
June 30, 2006 $1,062,500
September 30, 2006 $1,062,500
December 31, 2006 $1,062,500
March 31, 2007 $1,062,500
20
June 30, 2007 $1,062,500
September 30, 2007 $1,062,500
December 31, 2007 $1,062,500
March 31, 2008 One (1) final payment of the principal amount
as is then outstanding, together with all
accrued and unpaid interest, fees and other
amounts due hereunder.
(iii) Series C Notes. On the Series C
Notes, on March 31, 2009; and
(iv) Series D Notes. On the Series D
Note, on March 31, 2010.
(b) Notwithstanding anything to the contrary
contained in Section 3.2(a) above, on and after the date
following the occurrence of a Loan Reduction Event and the
subsequent satisfaction by the Loan Parties of all Loan
Receivables Payment Reduction Conditions with respect to such
Loan Reduction Event, (i) the remaining scheduled payments of
principal on the Series B Notes due after such date shall be
reduced by an aggregate amount equal to 50% of the Loan
Receivables Prepayment Amount related to such Loan Reduction
Event (the "Series B Loan Receivables Reduction Amount"), such
reduction to be applied to the remaining principal payments on
the Series B Notes, in order of maturity, until the aggregate
amount of reduced scheduled payments of principal on the
Series B Notes equals the Series B Loan Receivables Reduction
Amount, and (ii) the remaining scheduled payments of principal
on the Series A Notes due after such date shall be reduced by
an aggregate amount equal to the remaining 50% of the Loan
Receivables Prepayment Amount related to such Loan Reduction
Event (the "Series A Loan Receivables Reduction Amount"), such
reduction to be applied to the remaining principal payments on
the Series A Notes, in order of maturity, until the aggregate
amount of reduced scheduled payments of principal on the
Series A Notes equals the Series A Loan Receivables Reduction
Amount. For the avoidance of doubt, the parties hereto hereby
acknowledge and agree that nothing contained in this Section
3.2(b) is intended to reduce the aggregate principal amount of
the Series A Notes or the Series B Notes (rather, this Section
3.2(b) is solely intended to modify, under the circumstances
described above, the amortization schedule related to such
Notes).
3.3 Optional Prepayment of Notes. Subject to the terms of this
Section 3.3, Company may prepay to Agent, for the ratable benefit of Purchasers,
the outstanding principal amount of the Notes in whole or in part in multiples
of $500,000, or such lesser amount as is then outstanding, at any time at a
price equal to (a) the accrued interest, if any, to the date set for prepayment,
plus (b) all breakage and other fees of LIBOR contracts associated with the
Notes being prepaid (if any), plus (c) a prepayment premium representing the
amortization of certain of Purchasers' costs incurred in connection with the
purchase of the:
21
(i) Series A Notes equal to the principal amount of the Series A Note
prepaid multiplied by the following percentage:
If Prepaid During the 12-Month
Period Ending on March 31
of the Following Year: Percentage
2004 1%
2005 and thereafter 0%
(ii) Series B Notes equal to the principal amount of the Series B Note
prepaid multiplied by the following percentage:
If Prepaid During the 12-Month
Period Ending on March 31
of the Following Years: Percentage
2004 3%
2005 1%
2006 and thereafter 0%
(iii) Series C Notes equal to the principal amount of the Series C Note
prepaid multiplied by the following percentage:
If Prepaid During the 12-Month
Period Ending on March 31
of the Following Years: Percentage
2004 4%
2005 3%
2006 2%
2007 1%
2008 and thereafter 0%
(iv) Series D Notes equal to the principal amount of the Series D Note
prepaid multiplied by the following percentage:
22
If Prepaid During the 12-Month
Period Ending on March 31
of the Following Years: Percentage
2004 5%
2005 4%
2006 3%
2007 2%
2008 1%
2009 and thereafter 0%
All such prepayments shall be applied by Agent (w) first, to the Series B Notes,
(x) second, to the Series A Notes, (y) third, to the Series C Notes and (z)
finally, to the Series D Notes, in each case to the outstanding principal in the
inverse order of maturity after application of such prepayment to any accrued
interest, all fees associated therewith, and any prepayment premium payable in
connection therewith. Notwithstanding anything to the contrary in Sections 3.3,
3.4 and/or 3.5, no prepayment premium shall be payable in connection with a
prepayment of the Series A Notes and/or the Series B Notes, if such prepayment
is made pursuant to Section 3.5(b) or if the source of funds of such prepayment
is derived solely from the Loan Parties' Excess Cash Flow.
3.4 Notice of Optional Prepayment. If Company shall elect to
prepay any Notes pursuant to Section 3.3 hereof, Company shall give notice of
such prepayment to Agent and each holder of the Notes to be prepaid not less
than 30 days or more than 90 days prior to the date fixed for prepayment,
specifying (a) the date on which such prepayment is to be made, (b) the
principal amount of such Notes to be prepaid on such date, and (c) the premium,
if any, and accrued interest applicable to the prepayment. Such notice shall be
accompanied by a certificate of a Responsible Officer of Company that such
prepayment is being made in compliance with Section 3.3 hereof. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice, together with accrued interest thereon, all fees
associated therewith, and the premium, if any, shall become due and payable on
the prepayment date set forth in such notice.
3.5 Mandatory Prepayment.
(a) The Notes shall be prepaid in full, together with all
interest, fees (including, without limitation, all breakage fees associated
therewith (if any) and expenses plus a prepayment premium computed in accordance
with Section 3.3 hereof, as if such prepayment was a voluntary prepayment, in
the event of a Change of Control.
(b) The Series A Notes and Series B Notes shall be prepaid (i)
with respect to any Asset Sales permitted by Section 7.2(f) hereof, by the
amounts specified in Section 7.2(f) (together with all interest, fees and
expenses computed in accordance with Section 3.3), as if such prepayment was a
voluntary prepayment; provided, however, that a prepayment by the Loan Parties
pursuant to this Section 3.5(b)(i) shall be made only if (A) an individual Asset
Sale results in Net Cash Proceeds to the Loan Parties in an amount in excess of
$50,000 (a "Significant Asset Sale"), or (B) in any fiscal quarter of the Loan
Parties, the Loan Parties have
23
consummated Assets Sales (other than Significant Asset Sales) resulting in
aggregate Net Cash Proceeds of at least $10,000 since the last prepayment
pursuant to this Section 3.5(b)(i)(B), in which case a prepayment pursuant to
this Section 3.5(b)(i)(B) shall be due and payable at the end of such fiscal
quarter in an amount equal to the aggregate amount of all such Net Cash
Proceeds; (ii) by an amount equal to the Net Cash Proceeds received by any Loan
Party (other than ACE Funding) from any and all issuances of equity (which do
not constitute a Change of Control) or Indebtedness (excluding Indebtedness
under the Revolving Facility or Indebtedness arising under the Money Order
Agreement, in the ordinary course of business) by any Loan Party (other than ACE
Funding) or all Loan Parties (other than ACE Funding), together with all
interest, fees and expenses computed in accordance with Section 3.3, as if such
prepayment was a voluntary prepayment; provided, however, that with respect to
any issuance of equity due to the exercise of stock options, warrants or other
similar rights issued to the officers, directors or employees of any Loan Party,
a prepayment by the Loan Parties pursuant to this Section 3.5(b)(ii) shall be
made only if (A) an individual issuance of equity results in Net Cash Proceeds
to the Loan Parties in an amount in excess of $50,000 (a "Significant Equity
Rights Issuance") or (B) in any fiscal quarter of the Loan Parties, the Loan
Parties have consummated issuances of equity due to the exercise of stock
options, warrants or other similar rights issued to the officers, directors or
employees of any Loan Party (other than Significant Equity Rights Issuances)
resulting in aggregate Net Cash Proceeds of at least $10,000 since the last
payment pursuant to this Section 3.5(b)(ii)(B), in which case a prepayment
pursuant to this Section 3.5(b)(ii)(B) shall be due and payable at the end of
such fiscal quarter in an amount equal to the aggregate amount of all such Net
Cash Proceeds; (iii) prior to the expiration of 91 days after the occurrence of
a Loan Reduction Event, by an amount equal to 50% of the Loan Receivables
Collection Amount (such amount, the "Loan Receivables Prepayment Amount"),
together with all interest, fees and expenses computed in accordance with
Section 3.3, as if such prepayment was a voluntary prepayment; and (iv) prior to
the expiration of 90 days after the end of each fiscal year of the Company
(commencing with the fiscal year ending on June 30, 2004), by an amount equal to
50% of the Loan Parties' Excess Cash Flow for such fiscal year (or, with respect
to the fiscal year ending June 30, 2004, the 15-month period ending on such
date) together with all interest, fees and expenses computed in accordance with
Section 3.3, as if such prepayment was a voluntary prepayment. Any and all
prepayments pursuant to this Section 3.5(b) shall be applied first, to the
Series B Notes and second, to the Series A Notes.
(c) Any prepayment of the Notes under Sections 3.5(a),
3.5(b)(i)(A) and 3.5(b)(ii)(A) shall be made within one (1) Business Day of the
event giving rise to the mandatory prepayment requirement.
3.6 Home Office Payment. Company will pay all sums becoming due on
such Note for principal, premium, if any, and interest to Agent by the method
and at the address specified for such purpose in Annex A attached hereto, or by
such other method or at such other address as Purchasers shall have from time to
time specified to Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of Company made concurrently with or reasonably promptly
after payment or prepayment in full of any Note, each holder of a Note shall
surrender such Note for cancellation, reasonably promptly after such request, to
Company at their principal executive office.
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3.7 Taxes. Any and all payments by Company hereunder or under the
Notes or other Purchase Documents that are made to or for the benefit of
Purchasers shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings
and penalties, interests and all other liabilities with respect thereto
(collectively, "Taxes"), excluding taxes imposed on Agent's or Purchasers' net
income or capital and franchise taxes imposed on any of them by the jurisdiction
under the laws of which any of them is organized or any political subdivision
thereof (all such nonexcluded Taxes being hereinafter referred to as "Covered
Taxes"). If the Company shall be required by law to deduct any Covered Taxes
from or in respect of any sum payable hereunder or under any Notes or other
Purchase Documents to Agent for the benefit of Purchasers, or to Purchasers, the
sum payable shall be increased as may be necessary so that after making all
required deductions of Covered Taxes (including deductions of Covered Taxes
applicable to additional sums payable under this paragraph), each Purchaser
receives an amount equal to the sum it would have received had no such
deductions been made. Company shall make such deductions and Company shall pay
the full amount so deducted to the relevant taxation authority or other
authority in accordance with applicable law. In addition, Company agrees to pay
any present or future stamp, documentary, excise, privilege, intangible or
similar levies that arise at any time or from time to time from any payment made
under any and all Purchase Documents or from the execution or delivery by
Company or from the filing or recording or maintenance of, or otherwise with
respect to the exercise by Agent or Purchasers of their respective rights under
any and all Purchase Documents (collectively, "Other Taxes"). Company will
indemnify Agent and Purchasers for the full amount of Covered Taxes imposed on
or with respect to amounts payable hereunder and Other Taxes, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payment of this indemnification shall be made within 30 days from the
date Agent or Purchasers provide Company with a certificate certifying and
setting forth in reasonable detail the calculation thereof as to the amount and
type of such Taxes. Any such certificates submitted by Agent or Purchasers in
good faith to Company shall, absent manifest error, be final, conclusive and
binding on all parties. The obligation of Company under this Section 3.7 shall
survive the payment of the Notes and the termination of this Agreement. Within
30 days after Company having received a receipt for payment of Covered Taxes
and/or Other Taxes, Company shall furnish to Agent, the original or certified
copy of a receipt evidencing payment thereof.
3.8 Maximum Lawful Rate. This Agreement, the Notes and the other
Purchase Documents are hereby limited by this Section 3.8. In no event, whether
by reason of acceleration of the maturity of the amounts due hereunder or
otherwise, shall interest and fees contracted for, charged, received, paid or
agreed to be paid to Purchasers exceed the maximum amount permissible under such
applicable law. If, from any circumstance whatsoever, interest and fees would
otherwise be payable to Agent or Purchasers in excess of the maximum amount
permissible under such applicable law, the interest and fees shall be reduced to
the maximum amount permitted under applicable law. If from any circumstance,
Agent or Purchasers shall have received anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excess of interest shall be applied to the reduction of the principal amount of
the Notes, in such manner as may be determined by Purchasers, and not to the
payment of fees or interest, or if such excessive interest exceeds the unpaid
balance of the principal amount of the Notes, such excess shall be refunded to
Company.
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3.9 Capital Adequacy. If, after the date hereof, either the
introduction of or any change of the interpretation of any law or the compliance
by Purchasers with any guideline or request from any Governmental Authority
(whether or not having the force of law) has or would have the effect of
reducing the rate of return on the capital or assets of Purchasers as a
consequence of, as determined by Agent or Purchasers in their sole discretion,
the existence of any Purchaser's obligations under this Agreement or any other
Purchase Documents, then, upon demand by Purchasers, Company immediately shall
pay to Purchasers, from the time as specified by Purchasers, additional amounts
sufficient to compensate Purchaser in light of such circumstances. The
obligations of Company under this Section 3.9 shall survive the payments of the
Notes and the termination of this Agreement.
3.10 Certain Waivers. Company unconditionally waives (a) any rights
to presentment, demand, protest or (except as expressly required hereby) notice
of any kind, and (b) any rights of rescission, setoff, counterclaim or defense
to payment under the Notes or otherwise that Company may have or claim against
any Purchaser, the Agent or any prior Purchaser or Agent.
ARTICLE 4
CONDITIONS
4.1 Conditions to Purchase of the Notes. The obligation of
Purchasers to purchase and pay for the Notes is subject to the satisfaction,
prior to or at the Closing, of the following conditions:
(a) Representations and Warranties True. The
representations and warranties contained in Article 5 hereof
shall be true and correct in all material respects at and as
of the Closing Date as though then made, except to the extent
of changes caused by the transactions expressly contemplated
herein.
(b) Material Adverse Change. There will have
been no material adverse change in the business or financial
condition of Company or the capital markets since June 30,
2002.
(c) Security Agreement. The Loan Parties (other
than ACE Funding) shall have executed and delivered to Agent,
for the benefit of the Purchasers, (i) a security agreement or
security agreements granting to Agent a security interest in
substantially all of the assets of the Loan Parties (other
than ACE Funding), subordinate in lien priority only to the
Liens in favor of the Revolving Lenders as contemplated by the
Intercreditor Agreement, in each case in form and substance
substantially as set forth in Exhibit B attached hereto
(individually and collectively, as the same may be
26
amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Security Agreement"),
(ii) a pledge agreement or pledge agreements granting to Agent
a pledge of all equity securities held by the Loan Parties
(other than Company's interest in ACE Funding), in each case
in form and substance substantially as set forth in Exhibit C
attached hereto (individually and collectively, as the same
may be amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Pledge Agreement"),
and (iii) a guaranty agreement or guaranty agreements, in each
case in form and substance substantially as set forth in
Exhibit D attached hereto (individually and collectively, as
the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Guaranty
Agreement"). The Loan Parties (other than ACE Funding) shall
have executed and delivered to Agent, for the benefit of the
Purchasers, such financing statements and other instruments
(collectively, "Financing Statements") as Agent shall require
in order to perfect and maintain the continued perfection of
the security interest created by the Security Documents. Agent
shall have received reports of filings with appropriate
Government Authorities showing that there are no Liens on the
assets of the Loan Parties (other than ACE Funding) other than
Permitted Liens.
(d) Collateral Agency Agreement; Intercreditor
Agreement. Company, Xxxxx Fargo Bank Texas, National
Association, as administrative agent for the Revolving
Lenders, JPMorgan Chase Bank, as agent for the Revolving
Lenders, the Agent, Travelers Express Company, Inc. and
Wilmington Trust Company shall have entered into the
Collateral Agency Agreement, in form and substance as set
forth on Exhibit E attached hereto (as the same may be
amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency
Agreement"). Company, Xxxxx Fargo Bank Texas, National
Association, as administrative agent for the Revolving
Lenders, JPMorgan Chase Bank, as agent for the Revolving
Lenders, the Agent and Travelers shall have entered into the
Intercreditor Agreement (as set forth in Exhibit I hereto), in
form and substance as the same may be amended, modified or
supplemented from time to time in accordance with the terms
thereof.
(e) Environmental Reports. Agent shall have
received reports covering Company's properties in form and
substance satisfactory to Agent regarding Company's compliance
with Environmental Laws.
(f) Senior Secured Notes. The Agent shall have
received evidence that the Company's 9.03% Senior Secured
Notes due November 15, 2003, issued to Principal Mutual Life
Insurance in the aggregate principal amount of $20,000,000,
have been paid in full and that the Liens in favor of
Principal Mutual Life Insurance have been either terminated or
assigned to an agent of the Revolving Lenders, for the benefit
of the Revolving Lenders.
(g) Closing Documents. Company will have
delivered or caused to be delivered to Agent all of the
following documents in form and substance satisfactory to
Agent:
(i) the Notes (as designated by Agent
and Purchasers pursuant to Section 2.1 and Annex A
hereof) in aggregate original principal amounts as
set forth herein, duly completed and executed by
Company;
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(ii) certificates of good standing dated
not more than 10 days prior to the Closing Date for
each of the Loan Parties (other than ACE Funding)
issued by their respective jurisdictions of
organization and each jurisdiction where they are
qualified to operate as a foreign corporation, or its
equivalent;
(iii) a copy of the Charter Documents of
each of the Loan Parties (other than ACE Funding),
certified by the appropriate governmental official of
the jurisdiction of its organization as of a date not
more than 10 days prior to the Closing Date;
(iv) a copy of the By-laws of each of
the Loan Parties (other than ACE Funding), certified
as of the Closing Date by the secretary, assistant
secretary, manager or general partner, as applicable,
of each respective Loan Party (other than ACE
Funding);
(v) a certificate of the secretary,
assistant secretary, manager or general partner of
each of the Loan Parties (other than ACE Funding),
certifying as to the names and true signatures of the
officers or other authorized person of the respective
Loan Party (other than ACE Funding) authorized to
sign this Agreement and the other documents to be
delivered by the respective Loan Party (other than
ACE Funding) hereunder;
(vi) copies of the resolutions duly
adopted by the each of the Loan Party's (other than
ACE Funding's) board of directors, general partners,
board of managers or other governing body,
authorizing the execution, delivery and performance
by the respective Loan Party (other than ACE Funding)
of this Agreement and each of the other agreements,
instruments and documents contemplated hereby to
which the respective Loan Party (other than ACE
Funding) is a party, and the consummation of all of
the other Transactions, certified as of the Closing
Date by the secretary, assistant secretary, manager
or general partner of the respective Loan Party
(other than ACE Funding);
(vii) a certificate dated as of the
Closing Date from an officer of Company stating that
the conditions specified in this Section 4.1 have
been fully satisfied or waived by Agent;
(viii) certificates of insurance
evidencing the existence of all insurance required to
be maintained by the Loan Parties (other than ACE
Funding) pursuant to Section 7.1(c), and Agent shall
be satisfied with the type and extent of such
coverage;
(ix) an opinion of Gardere Xxxxx Xxxxxx,
L.L.P., counsel to Company, in form and substance
satisfactory to Agent;
28
(x) a Guaranty Agreement from each of
the Company's Subsidiaries (other than ACE Funding)
in favor of Agent, for the ratable benefit of the
Purchasers;
(xi) an accountant's letter from the
Loan Parties (other than ACE Funding) to their
accountants regarding their disclosure of financial
information to Agent and Purchasers;
(xii) a certificate regarding financial
statements from the president and the chief financial
officer of the Loan Parties (other than ACE Funding)
regarding the financial statements referenced
therein, together with the appropriate attachments;
(xiii) copies of the Company's Form 10-K
filed with the SEC for the period ending June 30,
2002 and the Company's Form 10-Q filed with the SEC
for the period ending September 30, 2002 and December
31, 2002; and
(xiv) such other documents relating to
the Transactions contemplated by this Agreement as
Agent or its special counsel may reasonably request.
(h) Purchaser's Fees and Expenses.
(i) Closing Processing Fee: On the
Closing Date, Company shall pay the Closing
Processing Fee to ACFS (and Company hereby authorizes
Agent to deduct from the aggregate proceeds from the
sales of the Notes by Company, the unpaid amount of
such Closing Processing Fee);
(ii) Structuring Fee: On the Closing
Date, Company shall pay the Structuring Fee to ACFS
(and Company hereby authorizes Agent to deduct from
the aggregate proceeds from the sales of the Notes by
Company, the unpaid amount of such Structuring Fee);
and
(iii) Other Fees and Expenses. On the
Closing Date, Company shall have paid the fees and
expenses of Agent and Purchasers, payable by Company
pursuant to Section 10.4 hereof (and Company hereby
authorizes Agent to deduct from the aggregate
proceeds of the sale of the Notes by Company, all
such amounts not previously paid).
(i) Legal Investment. On the Closing Date,
Purchasers' purchases of the Notes shall not be prohibited by
any applicable law, rule or regulation of any Governmental
Authority (including, without limitation, Regulations T, U or
X of the Board of Governors of the Federal Reserve System) as
a result of the promulgation or enactment thereof or any
changes therein, or change in the interpretation thereof by
any Governmental Authority, subsequent to the date of this
Agreement.
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(j) Proceedings. All proceedings taken or
required to be taken in connection with the transactions
contemplated hereby to be consummated at or prior to the
Closing and all documents incident thereto will be
satisfactory in form and substance to Agent and its special
counsel and to Purchaser and its special counsel.
(k) Background Investigations. Agent shall be
satisfied with the results of background investigations of Key
Management.
(l) Change of Control Agreements. Company shall
have delivered to Agent, a copy of each change of control
agreement with each member of Key Management, the terms and
conditions of which shall be acceptable to Agent and
Purchasers in their sole discretion. Company shall have
provided Purchaser with copies of all other agreements
providing compensation in any form whatsoever, including but
not limited to, any benefit plans, between Company and any and
all of their respective directors, officers or employees.
(m) Consummation of Revolving Credit Documents.
The Revolving Credit Documents shall be concurrently executed
with the Purchase Documents in form and substance satisfactory
to Agent, in Agent's sole discretion, and Agent shall have
been provided certified copies of all such agreements,
instruments and documents delivered in connection therewith.
(n) Liquidity. Company shall have available cash
and immediately accessible availability in an amount greater
than $10,000,000 under the Revolving Financing on the Closing
Date after giving effect to the payment of (i) prior
Indebtedness, (ii) funding of the Notes, (iii) all fees
payable to Purchasers under the terms of this Agreement and
the Purchase Documents and (iv) all costs and expenses arising
as a result of the Transactions contemplated by this
Agreement, and the Revolving Credit Agreement which Company is
party, and each Purchaser shall have received satisfactory
evidence thereof.
(o) Waiver. Any condition specified in this
Section 4.1 may be waived by Agent; provided that no such
waiver will be effective against Agent unless it is set forth
in a writing executed by Agent.
(p) Perfection Letters. The Company shall have
used its best efforts to cause (i) all financial institutions
at which the Loan Parties' (other than ACE Funding's) deposits
are maintained to have executed and delivered a Letter
Agreement substantially in the form of Exhibit F-1 or F-2
attached hereto, and Agent shall be satisfied that a
sufficient number of such financial institutions have executed
and delivered such Letter Agreements, and (ii) all armored
couriers that transport cash, checks or other remittances for
the Loan Parties (other than ACE Funding) to have executed and
delivered a Letter Agreement substantially in the form of
Exhibit G attached hereto, and Agent shall be satisfied that a
sufficient number of such armored couriers have executed and
delivered such Letter Agreements.
30
(q) Travelers. Travelers shall have released all
Liens which encumber Collateral that are in its favor (or
included such provisions in the Intercreditor Agreement) which
were granted under the Money Order Agreement, and all existing
financing statements which relate to such Lines shall have
been terminated and (ii) all other Liens encumbering the
Collateral, other than Permitted Liens, shall have been
released and all existing financing statements which related
to such Liens shall have been terminated.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 Representations and Warranties of Company. As a material
inducement to Agent and Purchasers to enter into this Agreement and purchase the
Notes, Company hereby represents and warrants to Agent and Purchasers as
follows:
(a) Organization and Power. Each of the Loan
Parties is duly organized, validly existing and in good
standing under the laws of its state of organization. Each of
the Loan Parties has all requisite corporate or other
organizational power and authority and all material licenses,
permits, approvals and authorizations necessary to own and
operate its properties, to carry on its businesses as now
conducted and to carry out the Transactions, and is qualified
to do business in the jurisdictions listed on Schedule 5.1(a)
attached hereto (the "Organizational Schedule"), which
includes every jurisdiction where the failure to so qualify
might reasonably be expected to have a Material Adverse
Effect. Each of the Loan Parties has its principal place of
business as set forth on the "Organizational Schedule". The
copies of the Charter Documents and By-Laws of the Loan
Parties that have been furnished to Agent reflect all
amendments made thereto at any time prior to the date of this
Agreement and are correct and complete.
(b) Principal Business. The Loan Parties are
primarily engaged in the business of providing retail
financial services, including, without limitation, check
cashing, short-term lending and ancillary services, money
order sales, wire transfer, xxxx payment and pre-paid
telecommunications services (the "Business").
(c) Financial Statements and Financial
Projections.
(i) Financial Statements. Company has
delivered to Agent copies of Company's audited
Consolidated year-end financial statements for and as
of the end of the 3 fiscal years ended June 30, 2002
(the "Annual Statements"). The Annual Statements were
compiled from the books and records maintained by
Company's management, are correct and complete in all
material respects and fairly present the Consolidated
financial condition of Company as of their dates and
the results of
31
operations for the fiscal periods then ended and have
been prepared in accordance with GAAP consistently
applied.
(ii) Financial Projections. Company has
delivered to Agent financial projections of the Loan
Parties for the period July 1, 2002 through June 30,
2008 derived from various assumptions of the Loan
Parties' management (the "Financial Projections").
The Financial Projections represent a reasonable
range of possible results in light of the history of
the Business and the Loan Parties, present and
foreseeable conditions, reasonable assumptions, and
the intentions of the Loan Parties' management. The
Financial Projections accurately reflect the Loan
Parties' liabilities (in accordance with GAAP) upon
consummation of the transactions contemplated hereby
as of March 28, 2003.
(iii) Accuracy of Financial Statements.
Company does not have any liabilities, contingent or
otherwise, or forward or long-term commitments that
are not disclosed in the Annual Statements or in the
notes thereto, and except as disclosed therein there
are no unrealized or anticipated losses from any
commitments of the Loan Parties neither of which may
cause a Material Adverse Effect.
(d) Subsidiaries. The Loan Parties do not own,
or hold any rights to acquire, any shares of stock or any
other security or interest in any other Person, and the Loan
Parties have no Subsidiaries, except in each case as set forth
on the Organizational Schedule.
(e) Authorization; No Breach. The execution,
delivery and performance of this Agreement, the other Purchase
Documents, the Revolving Credit Documents and all other
agreements contemplated hereby and thereby to which each of
the Loan Parties (other than ACE Funding) is a party
(collectively, the "Transaction Documents"), and the
consummation of the Transactions have been duly authorized by
each of Loan Parties (other than ACE Funding). The execution
and delivery by each of the Loan Parties (other than ACE
Funding) of the Transaction Documents and the consummation of
the Transactions do not and will not (i) conflict with or
result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) except as created
pursuant to the Security Documents, result in the creation of
any Lien upon any of the Loan Parties' capital stock or assets
pursuant to, (iv) give any third party the right to accelerate
any obligation under, (v) result in a violation of, or (vi)
require any authorization, consent, approval, exemption or
other action by or notice (other than as required by the
Company's status as a public company) to any Governmental
Authority pursuant to, the Charter Documents of any of the
Loan Parties, any law, statute, rule or regulation to which
any of the Loan Parties is subject, or any material agreement,
instrument, order, judgment or decree to which any of the Loan
Parties is a party or to which they or their assets are
subject.
32
(f) Governmental Approvals. Except as
specifically provided by the Transaction Documents, no
registration with or consent or approval of, or other action
by, any Governmental Authority is or will be required in
connection with the consummation of the Transactions by the
Loan Parties.
(g) Enforceability. This Agreement constitutes,
and each of the other Transaction Documents when duly executed
and delivered by each of Loan Parties who are parties thereto
will constitute, legal, valid and binding obligations of each
of the Loan Parties who are the parties thereto enforceable in
accordance with their respective terms, except as
enforceability thereof may be limited by bankruptcy,
insolvency or other laws of general application relating to
the enforcement of creditors' rights.
(h) No Material Adverse Change. Since June 30,
2002, there has been no event or occurrence that is likely to
have a Material Adverse Effect.
(i) Litigation. Except as described in Schedule
5.1(i) attached hereto (the "Litigation Schedule"), there are
no material actions, suits or proceedings at law or in equity
or by or before any arbitrator or any Governmental Authority
now pending or, to the best knowledge of the Loan Parties'
management after due inquiry, threatened against or filed by
or affecting any of the Loan Parties or any of their directors
or officers or the businesses, assets or rights of any of the
Loan Parties. At any Purchaser's request, the Loan Parties
shall promptly provide Agent with a copy of all pleadings of
all lawsuits filed against any of the Loan Parties or any of
their directors or officers or the business, assets or rights
of any of the Loan Parties and, in the case of other actions,
a letter stating the nature of such suits and a copy of all
pleadings. None of the actions, suits or proceedings at law or
in equity now pending against the Loan Parties and described
on the Litigation Schedule, either individually or taken as a
whole, (i) which, if adversely determined, could reasonably be
expected to materially impair the ability of the Loan Parties
(taken as a whole) to conduct business substantially as now
conducted, or otherwise could reasonably be expected to have a
Material Adverse Effect, except as disclosed on the Litigation
Schedule, (ii) as to which it is probable (within the meaning
of Statement of Financial Accounting Standards No. 5) that
there will be an adverse determination, or (iii) which involve
any of the transactions contemplated by the Purchase Documents
or the Revolving Credit Documents.
(j) Compliance with Laws. The Loan Parties are
not in violation in any material respect of any applicable
Law. The Loan Parties are not in default with respect to any
judgment, order, writ, injunction, decree, rule or regulation
of any Governmental Authority. The Loan Parties are not in,
and the consummation of the Transactions will not cause any,
default concerning any judgment, order, writ, injunction or
decree of any Governmental Authority, and there is no
investigation, enforcement action or regulatory action pending
or, to the Company's knowledge, threatened against or
affecting any of the Loan Parties by any Governmental
Authority, except as set forth on the Litigation Schedule.
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Except as set forth in the Litigation Schedule, there is no
remedial or other corrective action that any of the Loan
Parties is required to take to remain in compliance with any
judgment, order, writ, injunction or decree of any
Governmental Authority or to maintain any material permits,
approvals or licenses granted by any Governmental Authority in
full force and effect. During the past 5 years, none of the
officers or directors of the Loan Parties have been convicted
of any felony involving moral turpitude. During the past 2
years, none of the officers or directors of Loan Parties have
been bankrupt nor an executive officer of a bankrupt company.
(k) Environmental Protection. Except as
specified in Schedule 5.1(k) attached hereto (the
"Environmental Schedule") and after giving effect to the
Transactions: (i) the business of the Loan Parties, the
methods and means employed by the Loan Parties in the
operation thereof (including all operations and conditions at
or in the properties of the Loan Parties), and the assets
owned, leased, managed, used, controlled, held or operated by
the Loan Parties, comply in all material respects with all
applicable Environmental Laws; (ii) with respect to the
Properties and Facilities, and except as disclosed in the
Environmental Schedule, the Loan Parties have obtained,
possess, and are in full compliance with all permits,
licenses, reviews, certifications, approvals, registrations,
consents, and any other authorizations required under any
Environmental Laws; (iii) the Loan Parties have not received
(A) any claim or notice of violation, lien, complaint, suit,
order or other claim or notice to the effect that the Loan
Parties are or may be liable to any Person as a result of (1)
the environmental condition of any of their Properties or any
other property, or (2) the release or threatened release of
any Pollutant, or (B) any letter or request for information
under Section 104 of the CERCLA, or comparable state laws, and
to the best of the Loan Parties' knowledge, none of the
operations of the Loan Parties are the subject of any
investigation by a Governmental Authority evaluating whether
any remedial action is needed to respond to a release or
threatened release of any Pollutant at the Properties and
Facilities or at any other location, including any location to
which the Loan Parties have transported, or arranged for the
transportation of, any Pollutants with respect to the
Properties and Facilities; (iv) except as disclosed in the
Environmental Schedule, neither the Loan Parties nor any prior
owner or operator have incurred in the past, or are now
subject to, any Environmental Liabilities; (v) except as
disclosed in the Environmental Schedule, there are no Liens,
covenants, deed restrictions, notice or registration
requirements, or other limitations applicable to the
Properties and Facilities, based upon any Environmental Laws
or other legal obligations; (vi) there are no USTs located in,
at, on, or under the Properties and Facilities other than the
USTs identified in the Environmental Schedule as USTs; and
each of those USTs is in full compliance with all
Environmental Laws and other legal obligations; and (vii)
except as disclosed in the Environmental Schedule, there are
no PCBs, lead paint, asbestos (of any type or form), or
materials, articles or products containing PCBs, lead paint or
asbestos, located in, at, on, under, a part of, or otherwise
related to the Properties and Facilities (including, without
limitation, any building, structure, or other improvement that
is a part of the Properties and Facilities), and all of the
34
PCBs, lead paint, asbestos, and materials, articles and
products containing PCBs, lead paint or asbestos identified in
the Environmental Schedule are in full compliance with all
Environmental Laws and other legal obligations.
(l) Legal Investments; Use of Proceeds. The Loan
Parties (other than ACE Funding) will use the proceeds from
the sale of the Notes to refinance the Existing Term Debt and
to pay related transaction fees and expenses. The Loan Parties
are not engaged in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" or
"margin security" (within the meaning of Regulations T, U or X
issued by the Board of Governors of the Federal Reserve
System), and no proceeds of the sale of the Notes will be used
to purchase or carry any margin stock or margin security or to
extend credit to others for the purpose of purchasing or
carrying any margin stock or margin security.
(m) Taxes. The Loan Parties have filed or caused
to be filed all Federal, state and local tax returns that are
required to be filed by it, and has paid or caused to be paid
all taxes shown to be due and payable on such returns or on
any assessments received by it, including payroll taxes.
(n) Labor and Employment. The Loan Parties are,
and each of its Plans is, in compliance in all material
respects with those provisions of ERISA, the Code, the Age
Discrimination in Employment Act, and the regulations and
published interpretations thereunder which are applicable to
the Loan Parties or any such Plan. As of the date hereof, no
Reportable Event has occurred with respect to any Plan as to
which any of the Loan Parties are or were required to file a
report with the PBGC. No Plan has any material amount of
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) or any accumulated funding deficiency
(within the meaning of Section 302(a)(2) of ERISA), whether or
not waived, and neither the Loan Parties nor any member of the
Controlled Group has incurred or expects to incur any material
withdrawal liability under Subtitle E of Title IV of ERISA to
a Multiemployer Plan. The Loan Parties are in compliance in
all material respects with all labor and employment laws,
rules, regulations and requirements of all applicable domestic
and foreign jurisdictions. There are no pending or threatened
labor disputes, work stoppages or strikes.
(o) Investment Company Act; Public Utility
Holding Company Act. None of the Loan Parties is (i) an
"investment company" or "controlled" by an investment company
within the meaning of the Investment Company Act of 1940, as
amended, or (ii) a "holding company" or a "subsidiary company"
of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(p) Properties; Security Interests. The Loan
Parties have good and marketable title to, or valid leasehold
interests in, all of the material assets and properties used
or useful by the Loan Parties in the Business (collectively,
the
35
"Properties and Facilities", subject to no Liens except for
Permitted Liens. All of the Properties and Facilities are in
good repair, working order and condition (ordinary wear and
tear excepted) and all such assets and properties are owned by
the Loan Parties free and clear of all Liens except for
Permitted Liens. The Properties and Facilities constitute all
of the material assets, properties and rights of any type used
in or necessary for the conduct of the Business. The Security
Agreement creates and grants to Agent a valid and perfected
security interest in all the collateral thereunder, subject
only to Permitted Liens. All real estate owned or leased by
the Loan Parties is listed on Schedule 5.1(p) attached hereto
(the "Properties Schedule"). The Store locations are listed on
Schedule 5.1(p) attached hereto indicating the street address
of each Store.
(q) Intellectual Property; Licenses. Each of the
Loan Parties possesses all Proprietary Rights necessary to
conduct the Business as heretofore conducted or as proposed to
be conducted by it. All Proprietary Rights registered in the
name of any of the Loan Parties and applications therefor
filed by any of the Loan Parties are listed on Schedule 5.1(q)
attached hereto (the "Intellectual Property Schedule"). No
event has occurred that permits, or after notice or lapse of
time or both would permit, the revocation or termination of
any of the foregoing, which taken in isolation or when
considered with all other such revocations or terminations,
could reasonably be expected to have a Material Adverse
Effect. None of the Loan Parties has any notice or knowledge
of any facts or any past, present or threatened occurrence
that could preclude or impair the Loan Parties' ability to
retain or obtain any authorization necessary for the operation
of the Business.
(r) Solvency. Without regard to ACE Funding,
after giving effect to the Transactions, (i) the fair value of
the assets of the Loan Parties, at a fair valuation, will
exceed their debts and liabilities, subordinated, contingent
or otherwise, (ii) the present fair saleable value of the
property of the Loan Parties will be greater than the amount
that will be required to pay the probable liability of their
debts and other liabilities, whether subordinated, contingent
or otherwise, as such debts and other liabilities become
absolute and matured, (iii) the Loan Parties will be able to
pay their debts and liabilities, whether subordinated,
contingent or otherwise, as such debts and liabilities become
absolute and matured, and (iv) the Loan Parties will not have
unreasonably small capital with which to conduct the business
in which they are engaged as such Business is now conducted
and is proposed to be conducted following the Closing Date.
(s) Complete Disclosure. All factual information
furnished by or on behalf of the Loan Parties to Agent for
purposes of or in connection with this Agreement or the
Transactions is, and all other such factual information
hereafter furnished by or on behalf of the Loan Parties will
be, true and accurate in all material respects on the date as
of which such information is furnished and not incomplete by
omitting to state any fact necessary to make such information
not misleading taken as a whole at such time in light of the
circumstances under which such information was provided.
36
(t) Side Agreements. Neither the Loan Parties
nor any Affiliate of the Loan Parties, nor any director,
officer or employee of the Loan Parties or any of their
Affiliates, respectively, has entered into, as of the date
hereof, any material side agreement, either oral or written,
with any individual or business, pursuant to which the
director, officer, employee, Loan Parties or Affiliate agreed
to undertake any material obligation that would be binding on
a Loan Party beyond the requirements of the formal, written
contracts executed by any Loan Party and disclosed to
Purchasers and Agent herein which could be reasonably expected
to have an adverse effect on the Collateral or the business,
assets, liabilities, condition (financial or otherwise) or
prospects of the Loan Parties (individually or taken as a
whole).
(u) Broker's or Finder's Commissions. No
broker's or finder's or placement fee or commission will be
payable to any broker or agent engaged by the Loan Parties or
any of its officers, directors or agents with respect to the
issue of the Notes or the transactions contemplated by this
Agreement, including without limitation the Transactions,
except for fees payable to Xxxxxxxx, Inc. and to ACFS,
Purchasers and Agent. Company agrees to indemnify Agent and
Purchasers and hold them harmless from against any claim,
demand or liability for broker's or finder's or placement fees
or similar commissions, whether or not payable by the Loan
Parties, alleged to have been incurred in connection with such
transactions, other than any broker's or finder's fees payable
to Persons engaged by Agent or Purchasers without the
knowledge of the Loan Parties.
(v) Schedule 5.1(v) lists (i) all Deposit
Accounts (as defined in the Security Agreement) maintained by
Company, (ii) all Deposit Accounts maintained by Company's
Subsidiaries (other than ACE Funding), (iii) each armored
courier service that transports Collateral, and (iv) all
agreements with armored courier services which transport
Collateral to which either Company or a Subsidiary of Company
(other than ACE Funding) is a party.
5.2 Absolute Reliance on the Representations and Warranties. All
representations and warranties contained in this Agreement and any financial
statements, instruments, certificates, schedules or other documents delivered in
connection herewith, shall survive the execution and delivery of this Agreement,
regardless of any investigation made by Agent or Purchasers or on Agent's or
Purchasers' behalf.
ARTICLE 6
TRANSFER OF NOTES
6.1 Restricted Notes. Purchasers acknowledge that the Notes have
not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, and that Company are not required to register
the Notes.
37
6.2 Legends; Purchaser's Representations. Each of the Purchasers
hereby represents and warrants to Company that it is an "accredited investor"
within the meaning of Rule 501(a) under the Securities Act and is acquiring the
Notes for investment for its own account, with no present intention of dividing
its participation with others (except for a potential transfer or transfers of
the Notes to an Affiliate or Affiliates of Purchasers) or reselling or otherwise
distributing the same in violation of the Securities Act or any applicable state
securities laws. Company may place an appropriate legend on the Notes owned by
Purchasers concerning the restrictions set forth in this Article 6. Upon the
assignment or transfer by Purchasers or any of its successors or assignees of
all or any part of the Notes, the term "Purchaser" as used herein shall
thereafter mean, to the extent thereof, the then holder or holders of such
Notes, or portion thereof.
6.3 Transfer of Notes. Subject to Section 6.2 hereof, a holder of
a Note may transfer such Note to a new holder, or may exchange such Note for
Notes of different denominations (but in no event of denominations of less than
$100,000 in original principal amount), by surrendering such Note to Company
duly endorsed for transfer or accompanied by a duly executed instrument of
transfer naming the new holder (or the current holder if submitted for exchange
only), together with written instructions for the issuance of one or more new
Notes specifying the respective principal amounts of each new Note and the name
of each new holder and each address therefor. Company shall simultaneously
deliver to such holder or its designee such new Notes, shall xxxx the
surrendered Notes as canceled and shall provide notice of such transfer to
Agent. In lieu of the foregoing procedures, a holder may assign a Note (in whole
but not in part) to a new holder by sending written notice to Company and Agent
of such assignment specifying the new holder's name and address; in such case,
Company shall promptly acknowledge such assignment in writing to both the old
and new holder. Company shall not be required to recognize any subsequent holder
of a Note unless and until Company have received reasonable assurance that all
applicable transfer taxes have been paid.
6.4 Replacement of Lost Notes. Upon receipt of evidence reasonably
satisfactory to Company of the mutilation, destruction, loss or theft of any
Notes and the ownership thereof, Company shall, upon the written request of the
holder of such Notes, execute and deliver in replacement thereof new Notes in
the same form, in the same original principal amount and dated the same date as
the Notes so mutilated, destroyed, lost or stolen; and such Notes so mutilated,
destroyed, lost or stolen shall then be deemed no longer outstanding hereunder.
If the Notes being replaced have been mutilated, they shall be surrendered to
Company; and if such replaced Notes have been destroyed, lost or stolen, such
holder shall furnish Company with an indemnity in writing to save it harmless in
respect of such replaced Note.
6.5 No Other Representations Affected. Nothing contained in this
Article 6 shall limit the full force or effect of any representation, agreement
or warranty made herein or in connection herewith to Purchaser.
38
ARTICLE 7
COVENANTS
7.1 Affirmative Covenants. The Loan Parties, jointly and
severally, covenant that, so long as all or any of the principal amount of the
Notes or any interest thereon shall remain outstanding, the Loan Parties shall:
(a) Existence. Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect
its legal existence, except for the dissolution or other
cessation of existence of any Subsidiary of the Company which
the Company has reasonably determined to be unnecessary to the
conduct of the Business.
(b) Businesses and Properties; Compliance with
Laws. At all times (i) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect
the rights, licenses, registrations, permits, certifications,
approvals, consents, franchises, patents, copyrights,
trademarks and trade names, and any other authorizations which
may be material to the conduct of their businesses; (ii)
comply in all material respects with all Laws applicable to
the operation of such business, including but not limited to,
all Environmental Laws, whether now in effect or hereafter
enacted, (iii) take all reasonable action which may be
required to obtain, preserve, renew and extend all rights,
patents, copyrights, trademarks, tradenames, franchises,
registrations, certifications, approvals, consents, licenses,
permits and any other authorizations which may be material to
the operation of such business, (iv) maintain, preserve and
protect all property material to the conduct of such business,
and (v) except for obsolete or worn out equipment, keep their
property in good repair, working order and condition and from
time to time make, or cause to be made, all needful and proper
repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
Without limitation of the foregoing, after Company obtains
knowledge that it does not have a license, permit, or other
authorization from a Governmental Authority to conduct any
facet of its or any of its Subsidiary's (other than ACE
Funding) business, Company shall (i) apply for such license,
permit, or other authorization within the earlier of (A) 30
days after Company obtains such knowledge or (B) the date
stated by any Governmental Authority before which Company is
required to apply for such license, permit, or other
authorization and (ii) diligently thereafter pursue the
obtaining of such license, permit, or other authorization.
(c) Insurance. Maintain insurance required by
the Purchase Documents, including but not limited to: (i)
coverage on their insurable properties (including all
inventory, equipment and real property) against the perils of
fire, theft and burglary; (ii) public liability; (iii)
workers' compensation; (iv) business interruption; and (v)
such other risks as are customary with companies similarly
situated and in the same or similar business as that of the
39
Loan Parties under policies issued by financially sound and
reputable insurers in such amounts as are customary with
companies similarly situated and in the same or similar
business. Each of the Loan Parties (other than ACE Funding)
shall pay all insurance premiums payable by it and Company
shall deliver certificates of insurance with copies of such
policies to Agent. All insurance policies of the Loan Parties
(other than ACE Funding) shall contain endorsements, in form
and substance reasonably satisfactory to Agent, providing that
the insurance shall not be cancelable except upon 30 days
prior written notice to Agent. Agent, on behalf of Purchasers,
shall be shown as a loss payee and an additional named insured
party under all such insurance policies.
(d) Obligations and Taxes. Pay and discharge
promptly when due all taxes, assessments and governmental
charges or levies imposed upon them or upon their income or
profits or in respect of their properties before the same
shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which,
if unpaid, would give rise to Liens or charges upon such
properties or any part thereof; provided, however, that the
Loan Parties shall not be required to pay and discharge or to
cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate
proceedings and the Loan Parties shall have set aside on their
books adequate reserves with respect thereto.
(e) Financial Statements; Reports. Furnish to
Agent:
(i) Annual Statements. Within 90 days
after the end of each fiscal year (or such earlier
date as the same are required to be filed with the
SEC under applicable law), a Consolidated and
consolidating balance sheet and statements of
operations, stockholders' equity and cash flows of
the Loan Parties showing the financial condition of
the Loan Parties as of the close of such year and the
results of operations during such year, all the
foregoing Consolidated financial statements to be
audited by Xxxxx Xxxxxxxx LLP or another firm of
independent certified public accountants of
recognized national standing acceptable to Agent and
accompanied by an opinion of such accountants without
material exceptions or qualifications. Additionally,
such financial statements shall be accompanied by a
certificate of such accountants (which shall not
contain any qualification exception or scope
limitation not acceptable to Agent) stating that in
the course of its regular audit of the Business of
the Loan Parties, which audit was conducted in
accordance with GAAP, no Default or Event of Default
relating to covenant compliance has come to their
attention, or if any Default or Event of Default
exists, a statement as to the nature thereof,
together with a copy of the Company's SEC Form 10-K
filed for such fiscal year.
(ii) Monthly Statements. Within 30
calendar days after the end of each calendar month,
(A) financial statements (including a balance sheet
and cash flow and income statements), comparable to
current
40
monthly financial information delivered to the
Company's directors, showing the financial condition
and results of operations of the Loan Parties as of
the end of each such month and for the then elapsed
portion of the current fiscal year, together with
comparisons to the corresponding periods in the
preceding year and the budget for such periods,
accompanied by a certificate of an officer of the
Company that such financial statements have been
prepared in accordance with GAAP (exclusive of
footnotes, year-end adjustments and similar
modifications for interim statements), consistently
applied, and setting forth in comparative form the
respective financial statements for the corresponding
date and period in the previous fiscal year and (B) a
report of all Asset Sales of the Loan Parties
consummated during such calendar month accompanied by
a certificate of an officer of the Company that such
report is true and correct in all material respects.
(iii) Format; Management Report;
Certificate of Compliance: Each balance sheet,
operations statement and cash flow statement
furnished to Agent or Purchasers pursuant to
subsections (i) and (ii) of this Section 7.1(e) will
be furnished by an electronic means in Excel
spreadsheet format containing such line items and
other formatting requirements as may be specified by
Agent. Each financial statement furnished to Agent
pursuant to subsections (i) and (ii) of this Section
7.1(e) shall be accompanied by (A) a written
narrative report by the management of the Loan
Parties explaining material developments and trends
in the Business and such financial statements and (B)
a written certificate signed by the Loan Parties'
chief financial officer to the effect that no Default
or Event of Default has occurred during the period
covered by such statements or, if any such Default or
Event of Default has occurred during such period,
setting forth a description of such Default or Event
of Default and specifying the action, if any, taken
by the Loan Parties to remedy the same, and a
compliance certificate in the form of Exhibit H
showing Loan Parties' compliance with the covenants
set forth in Section 7.3.
(iv) Accountant Reports. Promptly upon
the receipt thereof, copies of all reports, if any,
submitted to the Loan Parties by independent
certified public accountants in connection with each
annual, interim or special audit or review of the
financial statements of the Loan Parties made by such
accountants, including but not limited to, any
comment letter submitted by such accountants to
management in connection with any annual review.
(v) Projections. As soon as available,
but in no event later than 30 days after the
beginning of each fiscal year, a projection of Loan
Parties' balance sheet, and income, retained
earnings, stockholders' equity and cash flow
statements, respectively, for the following 5 fiscal
years and comparable actual and budgeted figures for
the current fiscal year; and
41
within 10 days after the completion of any material
update or amendment of any such plan or forecast, a
copy of such update or amendment, including a
description of and reasons for such update or
amendment. Each such projection, update or amendment
shall have been prepared on the basis of the Loan
Parties' historical financial statements and records,
together with the assumptions set forth in such
projection and that it reasonably reflects
expectations, after considered analysis, of the Loan
Parties' management as to the matters set forth
therein.
(vi) Public Reports. As soon as possible
after being made publicly available, copies of such
registration statements, annual periodic and other
reports (including, without limitation, the Company's
SEC Form 10-Q), and such proxy statements, financial
information and other information, if any, as shall
be filed by any Loan Party with the SEC pursuant to
the Securities Act or the Securities Exchange Act.
(vii) Revolving Financing Reports.
Promptly upon request by Agent, copies of all
information, notices, and reports provided to, or
received from, Revolving Lenders or any agent of
Revolving Lenders under the Revolving Credit
Agreement.
(viii) Certificate of Update. Within ten
(10) days after the end of each month, a Certificate
of Update.
(ix) Additional Information. Promptly,
from time to time, such other information regarding
the compliance by the Loan Parties with the terms of
this Agreement and the other Purchase Documents or
the affairs, operations or condition (financial or
otherwise) of the Loan Parties (other than ACE
Funding) as Agent or Required Purchasers may
reasonably request and that is capable of being
obtained, produced or generated by the Loan Parties
or of which the Loan Parties have knowledge.
(f) Litigation and Other Notices. Give Agent
prompt written notice of the following:
(i) Orders; Injunctions. The issuance
by any court or Governmental Authority of any
injunction, order, decision or other restraint
prohibiting, or having the effect of prohibiting, the
making of any loan or invalidating, or having the
effect of invalidating, any provision of this
Agreement, any of the Notes, any other Purchase
Document or the second priority lien of the Agent on
the Collateral or the initiation of any litigation or
proceeding seeking any such injunction, order,
decision or other restraint.
(ii) Litigation. The notice, filing or
commencement of any action, suit or proceeding
against any of the Loan Parties whether at law or in
equity or by or before any Governmental Authority (A)
that is a class
42
action, (B) that could be reasonably be expected to
result in a settlement by any of the Loan Parties of
$1,000,000 or more, or (C) that, if adversely
determined against any of the Loan Parties, could
reasonably be expected to result in (1) liability of
the Loan Parties in an amount of $1,500,000 or more
or (2) a Material Adverse Effect.
(iii) Environmental Matters. (A) Any
release or threatened release of any Pollutant
required to be reported to any Federal, state or
local governmental or regulatory agency under any
applicable Environmental Laws, (B) any Removal,
Remedial or Response action taken by any of the Loan
Parties or any other person in response to any
Pollutant in, at, on or under, a part of or about any
of the Properties and Facilities, (C) any violation
by any of the Loan Parties of any Environmental Law,
in each case, that could result in a Material Adverse
Effect, or (D) any notice, claim or other information
that any of the Loan Parties might be subject to an
Environmental Liability.
(iv) Default. Any Default or Event of
Default, specifying the nature and extent thereof and
the action (if any) that is proposed to be taken with
respect thereto.
(v) Material Adverse Effect. Any
development in the business or affairs of any of
Company that could have a Material Adverse Effect.
(vi) Board Meetings. Each regular or
special meeting of each Loan Party's board of
directors (but excluding actions taken by unanimous
written consent of such board of directors)
concurrently when delivered to such board of
directors, but in any case such notice shall be
delivered no later than the date on which the members
of the board of directors are notified of such
meeting.
(vii) Asset Sales. Each Asset Sale giving
rise to an obligation to make a prepayment in
accordance with Section 3.5(b)(i) hereof.
(g) ERISA. Comply in all material respects with
the applicable provisions of ERISA and the provisions of the
Code relating thereto and furnish to Agent and if so requested
in writing, Purchasers (i) as soon as possible, and in any
event within thirty (30) days after the Loan Parties know or
have reason to know thereof, notice of (A) the establishment
by the Loan Parties of any Plan, (B) the commencement by the
Loan Parties of contributions to a Multiemployer Plan, (C) any
failure by the Loan Parties or any of their ERISA Affiliates
to make contributions required by Section 302 of ERISA
(whether or not such requirement is waived pursuant to Section
303 of ERISA), or (D) the occurrence of any Reportable Event
with respect to any Plan or Multiemployer Plan for which the
reporting requirement is not waived, together with a statement
of a Responsible Officer setting forth details as to such
Reportable Event and the action which the Loan Parties propose
to take with respect thereto, together with a copy of the
43
notice of such Reportable Event given to the PBGC if any such
notice was provided by the Loan Parties, (ii) promptly after
receipt thereof, a copy of any notice the Loan Parties may
receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Multiemployer Plan, or to appoint a
trustee to administer any Plan or Multiemployer Plan, and
(iii) promptly after receipt thereof, a copy of any notice of
withdrawal liability from any Multiemployer Plan.
(h) Maintaining Records; Access to Premises and
Inspections. Maintain financial records in accordance with
generally accepted practices and, upon reasonable prior
written notice, at all reasonable times and as often as Agent
or any Purchasers may reasonably request (and at any time
regardless of notice after the occurrence and during the
continuation of a Default or Event of Default), permit any
authorized representative designated by Agent to visit, verify
and inspect the Collateral, properties and financial records
of the Loan Parties and to make extracts from such financial
records, all at the Loan Parties' expense, up to one (1) time
annually (or upon the occurrence and during the continuance of
an Event of Default, as often as the Agent may request), and
permit any authorized representative designated by Agent or
any Purchasers to discuss the affairs, finances and conditions
of the Loan Parties with the Loan Parties' chief financial
officer and such other officers as the Loan Parties shall deem
appropriate, and the Loan Parties' independent public
accountants.
(i) Board of Directors. Each of the Loan Parties
shall, (i) within 5 Business Days after any meeting of any
Loan Party's board of directors or any committee thereof
(including, without limitation, any audit committee meeting or
executive committee), provide to Agent the agenda for each
such meeting, (ii) promptly provide to Agent any and all
reports, documents or other materials prepared by management
for, and discussed at, any regular or special meeting of any
Loan Party's board of directors, and (iii) within 10 Business
Days after Agent's request, arrange for a meeting between (x)
Agent and any members of senior management of the Loan Parties
acceptable to Agent, in its reasonable discretion, or (y)
Agent and any directors of the Loan Parties acceptable to
Agent, in its reasonable discretion, but only if necessary to
provide Agent with information regarding any committee meeting
at which no member of senior management of the Loan Parties
was present, in each case for purposes of discussing any
matters included on any agenda described in clause (i) above
(and, if requested by Agent, the Loan Parties shall furnish to
Agent at such meeting copies of all reports, documents and
other materials prepared for and discussed at any meeting of
any committee of any Loan Party's board of directors).
(j) Interest Rate Hedging. From and after July
1, 2003, cause an amount equal to or greater than the
Acceptable Sum to (i) bear interest at a fixed rate or (ii) be
subject to a Hedging Contract that is an Acceptable Hedging
Contract, each for a minimum term of one year. As used herein,
"Acceptable Hedging Contract" shall mean a Hedging Contract
entered into by the Loan Parties (other than ACE Funding) with
the purpose and effect of fixing interest
44
rates on a principal amount of Indebtedness of such Person
that is accruing interest at a variable rate, provided that
(i) the aggregate notional amount of such Hedging Contract
never exceeds 100% of the anticipated outstanding principal
amount of the Indebtedness to be hedged by such Hedging
Contract or an average of such principal balances calculated
using a generally accepted method of matching interest swap
contracts to declining principal balances, (ii) the floating
rate index of such Hedging Contract generally matches the
index used to determine the floating rates of interest on the
corresponding indebtedness to be hedged by such Hedging
Contract, and (iii) each such Hedging Contract is with a
counterparty or has a guarantor of the obligation of the
counterparty which (unless such counterparty is a Revolving
Lender or an Affiliate of a Revolving Lender) at the time such
Hedging Contract is made has long-term unsecured and
unenhanced debt obligations rated AA or Aa2 (or their
equivalents) or better or is an investment-grade industry
participant or otherwise acceptable to Required Purchasers. As
used herein, "Acceptable Sum" shall mean, as of any date of
determination, the sum of $60,000,000, plus 50% of the then
outstanding aggregate principal amount of the Notes.
(k) Further Assurances. The Loan Parties (other
than ACE Funding) will, with reasonable promptness, execute
and deliver to each Purchaser, from time to time, upon the
reasonable request of such Purchaser, supplemental agreements,
statements, assignments and transfers, or instructions or
documents as any Purchaser may request in order that the full
intent of this Agreement and the other Transaction Documents
may be carried into effect.
(l) Administrative Fee. Pay an administrative
fee (the "Administrative Fee") to ACFS equal to $300,000 per
annum, payable in equal quarterly payments, commencing on June
30, 2006, and on each September 30, December 31, March 31 and
June 30 thereafter until the Notes are repaid in full in cash;
provided, however, such administrative fee shall be reduced
(i) upon the repayment in full in cash of the principal amount
of the Series A Notes (including all accrued interest, all
applicable related fees and prepayment premium, if any), to
$270,000 per annum, (ii) upon the repayment in full in cash of
the principal amount of the Series B Notes (including all
accrued interest, all applicable related fees and prepayment
premium, if any), to $225,000 per annum, (iii) upon the
repayment in full in cash of the principal amount of the
Series C Notes (including all accrued interest, all applicable
related fees and prepayment premium, if any), to $120,000 per
annum, and (iv) upon the repayment in full in cash of the
principal amount of the Series D Notes (including all accrued
interest, all applicable related fees and prepayment premium,
if any), to $0 per annum. The adjusted annual payments due
pursuant to clauses (i), (ii), (iii) and (iv) above will be
adjusted upon the date the applicable payment is made by
Company and the subsequent quarterly payments shall be reduced
to reflect such payment and the reduced amount then owing.
(m) Facility Fee. Pay a facility fee (the
"Facility Fee") to ACFS equal to $425,000 per annum, payable
in equally monthly payments in arrears,
45
commencing on April 30, 2006, and continuing on the last
Business Day of each calendar month thereafter until the
Series D Notes are repaid in full in cash. Upon repayment, in
full and in cash, of the Series C Notes, the Facility Fee
shall be reduced to $300,000 per annum. The adjusted annual
payments due will be adjusted upon the date the Series C Notes
are repaid, in full in cash, and the subsequent monthly
payments shall be reduced to reflect such payment and the
reduced amount then owing.
(n) Additional Guarantors and Pledge of Assets.
Inform the Agent within 5 Business Days before the creation or
acquisition of any direct or indirect Subsidiary. The Company
and the Purchasers intend that any such newly formed or
acquired Subsidiary of the Company shall obtain the benefit of
the Notes and shall become a Guarantor pursuant to terms
similar to each Guarantor on the date hereof. Within 15
Business Days from the acquisition or formation of any such
additional Subsidiary, the Company shall cause such Subsidiary
(i) to promptly execute, in form and substance satisfactory to
the Agent, all documents necessary for such Subsidiary to
become a Guarantor hereunder (including a Guaranty Agreement
substantially in the form executed by the Guarantors as of the
Closing Date), and (ii) to effect such Subsidiary's conveyance
of a Lien in its assets (subject only to Permitted Liens) in
favor of the Agent for the benefit of the Purchasers pursuant
to the Security Documents (but only if, with respect to this
clause (ii), such Subsidiary is a Significant Subsidiary). Any
such additional Significant Subsidiary's assets shall
thereupon become part of the Collateral. In addition, within
15 Business Days from the acquisition or formation of any
additional Subsidiary of the Company, the Company shall
execute, or shall cause its Subsidiary to execute, as
applicable, all documents (including a Pledge Agreement in
form and content substantially similar to other Pledge
Agreements executed in connection with the Revolving Credit
Agreement) necessary to effect the Company's or such
Subsidiary's, as applicable, conveyance of a second priority
Lien in the capital stock of such additional Subsidiary in
favor of Agent for the benefit of the Purchasers, and such
additional Subsidiary's capital stock shall thereupon become
part of the Collateral. If reasonably requested by the Agent,
the Company shall cause its legal counsel to deliver to the
Agent, simultaneously with the Purchase Documents referred to
in this Section 7.1(n), a legal opinion containing opinions
reasonably requested by the Agent with respect to, if
applicable, (U) the stock or asset acquisition, (V) the
formation of such Subsidiary, (W) the pledge of such
Subsidiary's capital stock to the Agent, (W) the pledge of
acquired assets to the Agent and the perfection of the Agent's
security interest therein, (Y) the addition of such Subsidiary
as a Guarantor, and (Z) such other matters reasonably related
thereto; such legal opinion to be in form and substance
satisfactory to the Agent.
(o) Assignment of Leases. At the request of
Required Purchasers, or after the occurrence of an Event of
Default at the request of Agent, promptly execute and deliver,
in form and substance satisfactory to Agent, assignments of
leases and/or leasehold deeds of trust with respect to any
real property leases of office space or real property leases
covering any of the Loan Parties' (other than
46
ACE Funding) stores; provided, however, that Loan Parties
shall not be required to deliver an assignment of lease with
respect to any particular lease of office space or store if
(i) the consent of the relevant landlord is required as a
condition to such assignment, and (ii) despite its best
efforts to do so, such Loan Party is unable to obtain such
consent from the relevant landlord.
(p) Mortgages. At the request of Required
Purchasers, or after the occurrence of an Event of Default at
the request of Agent, promptly execute and deliver, in form
and substance satisfactory to Agent, mortgages and/or deeds of
trust with respect to any real property owned by the Loan
Parties (other than ACE Funding).
(q) Supplemental Litigation Meeting. Upon
Agent's or any Purchaser's request, within (i) 5 days after
the Borrower's filing of its quarterly report on SEC Form 10-Q
or its Annual Report on Form 10-K with the SEC or (ii) 15 days
after the occurrence of a material event, condition or change
involving any legal proceeding then pending against or
involving any Loan Party, make available for a meeting with
representatives of Agent and any other Purchaser desiring to
participate at least one knowledgeable executive officer of
the Company to respond to questions about (a) the disclosures
in any such report regarding the Borrower's legal proceedings
and (b) any other actions, suits or proceedings then pending
against or involving any Loan Party.
(r) Perfection Letters. The Company shall use
its best efforts to cause (i) all financial institutions at
which the Loan Parties' (other than ACE Funding's) deposits
are maintained to execute and deliver a Letter Agreement
substantially in the form of Exhibit F-1 or F-2 attached
hereto, and (ii) all armored couriers that transport cash,
checks or other remittances for the Loan Parties (other than
ACE Funding) to execute and deliver a Letter Agreement
substantially in the form of Exhibit G attached hereto.
7.2 Negative Covenants. The Loan Parties, jointly and severally,
covenant that, so long as all or any part of the principal amount of the Notes
or any interest thereon shall remain outstanding:
(a) Indebtedness. None of the Loan Parties
(other than ACE Funding) shall create, incur, assume guarantee
or be or remain liable for, contingently or otherwise, or
suffer to exist any Indebtedness, except:
(i) Indebtedness under this Agreement;
(ii) Indebtedness under the Revolving
Financing;
(iii) Indebtedness secured by Liens
permitted by Section 7.2(b) hereof in an amount not
to exceed $3,000,000 per item of Indebtedness and
$5,000,000 in the aggregate outstanding at any time;
47
(iv) Indebtedness existing on the date
hereof; provided, that, such Indebtedness shall not
after the date hereof (A) increase in amount (except
increases subject to limitations in amount in
existence on the date hereof), (B) be secured by
Liens not in existence on the date hereof, or (C)
change in regard to seniority in any respect;
(v) Indebtedness incurred in the
ordinary course of business with respect to customer
deposits, trade payables and other unsecured current
liabilities incurred in connection with the Business
not the result of borrowing and not evidenced by any
note or other evidence of indebtedness;
(vi) Indebtedness that is unsecured
consisting of (A) current accounts payable and
unsecured current liabilities (not the result of
borrowing) incurred in the ordinary course of
business of the Loan Parties to vendors, suppliers
and Persons providing services, for expenditures for
goods and services normally required by it in the
ordinary course of business and on ordinary trade
terms, including (without limitation) obligations
pursuant to the Money Order Agreement and (B)
Indebtedness evidenced by Deferred Payment
Obligations in an amount not to exceed $4,000,000 in
the aggregate at any time; and
(vii) Hedging Contracts.
(b) Negative Pledge; Liens. Loan Parties (other than ACE
Funding) shall not create, incur, assume or suffer to exist any Lien of
any kind on any of their properties or assets of any kind, except the
following (collectively, "Permitted Liens"):
(i) Liens created pursuant to the
Revolving Financing and the Travelers Documents;
(ii) Liens for or priority claims imposed
by law that are incidental to the conduct of business
or the ownership of properties and assets (including
mechanic's, warehousemen's, attorneys' and
constitutional, statutory and contractual landlords'
liens which secure Indebtedness that are not overdue
for a period of more than 90 days or which are being
contested in good faith by appropriate proceedings)
and deposits, pledges or liens to secure statutory
obligations, surety or appeal bonds or other liens of
like general nature incurred in the ordinary course
of business and not in connection with the borrowing
of money; provided, however, that in each case,
except as set forth hereinabove, the obligation
secured is not more than 15 days overdue, or, if
overdue, is being contested in good faith and
adequate reserves have been set up by the Loan
Parties (other than ACE Funding) as the case may be;
and provided, further, that the lien and security
interest provided in the Security Documents or any
portion thereof created or intended to be created
48
thereby is not, in the opinion of Purchaser,
unreasonably jeopardized thereby;
(iii) Liens securing the payments of
taxes, assessments and governmental charges or levies
incurred in the ordinary course of business that
either (A) are not delinquent, or (B) are being
contested in good faith by appropriate legal or
administrative proceedings and as to which adequate
reserves have been set aside on their books, and so
long as during the period of any such contest, the
Loan Parties (other than ACE Funding) shall suffer no
loss of any privilege of doing business or any other
right, power or privilege necessary or material to
the operation of the Business;
(iv) Liens listed on Schedule 7.2(b)
attached hereto (the "Permitted Encumbrances
Schedule");
(v) extensions, renewals and
replacements of Liens referred to in clauses (i)
through (iv) of this Section 7.2(b); provided,
however, that any such extension, renewal or
replacement Lien shall be limited to the property or
assets covered by the Lien extended, renewed or
replaced and that the obligations secured by any such
extension, renewal or replacement Lien shall be in an
amount not greater than the amount of the obligations
secured by the Lien extended, renewed or replaced;
(vi) Liens created in favor of the
Collateral Agent in accordance with the Collateral
Agency Agreement;
(vii) Liens securing the performance of
bids, tenders, leases, contracts (other than the
repayment of borrowed money), statutory obligations,
surety, customs and appeal bonds and other
obligations of like nature, incurred as an incident
to and in the ordinary course of business of the Loan
Parties; and
(viii) Liens (including any Capitalized
Leases) originally created to secure payment of a
portion of the purchase price or construction costs,
as the case may be, relating to any real property or
equipment or any interest therein, upon such real
property, equipment (including furniture and
fixtures) or interest therein; provided, that, (A)
the outstanding principal Indebtedness secured by
such Lien does not exceed 100% of the purchase price
actually paid by the Loan Parties (other than ACE
Funding) (or in the case of a Capitalized Lease, by
the owner) for the real property or equipment or
interest therein (which is encumbered by such Lien,
and/or the construction costs actually incurred by
the Loan Parties (other than ACE Funding) with
respect to the improvements thereto, as the case may
be, (B) the Indebtedness secured by any such Lien
(including, in the case of any Capitalized Lease, the
Indebtedness related thereto) is permitted by this
Agreement, and (C) any such Lien does not encumber
49
any other asset at any time owned by the Loan Parties
(other than ACE Funding).
(c) Contingent Liabilities. The Loan Parties
shall not become liable for any Guaranties, except for (i)
Guaranties to Revolving Lenders, agents for Revolving Lenders,
for the benefit of the Revolving Lenders and Travelers, and
(ii) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
(d) Deposit Accounts and Armored Couriers.
Company shall not, at any time after June 30, 2003, permit (i)
more than 5% of the aggregate amount of Company's Cash
Holdings and each Subsidiary's Cash Holdings (other than ACE
Funding's Cash Holdings) held in deposit accounts to be held
in deposit accounts maintained by financial institutions with
which there is no Letter Agreement and (ii) more than 5% of
the aggregate dollar amount of Company's Cash Holdings and
instruments and each Subsidiary's Cash Holdings (other than
ACE Funding's Cash Holdings) and instruments to be transported
by armored couriers with which there is no Letter Agreement.
(e) Capital Expenditures. The Loan Parties shall
not incur Capital Expenditures in an amount which exceeds in
the aggregate (i) $5,500,000 in Fiscal Year 2003, (ii)
$10,725,000 in Fiscal Year 2004, (iii) $12,100,000 in Fiscal
Year 2005, (iv) $13,475,000 in Fiscal Year 2006, (v)
$12,500,000 in Fiscal Year 2007, and (vi) $12,250,000 in any
Fiscal Year thereafter. To the extent that any amount of
permitted Capital Expenditures is not used during any Fiscal
Year, then up to $1,000,000 of such unexpended amount may be
carried forward and expended during the next Fiscal Year;
provided, however, that (x) no amount of permitted Capital
Expenditures may be carried forward for more than 1 Fiscal
Year and (y) during any Fiscal Year in which such unexpended
amounts have been carried forward, all Capital Expenditures
shall be deemed to apply first to the amount carried forward
and then to the amount of Capital Expenditures permitted
during such Fiscal Year.
(f) Mergers, Asset Sales, etc. The Loan Parties
shall not merge into or consolidate or combine with any other
Person, or purchase, lease or otherwise acquire (in one
transaction or a series of related transactions) all or any
part of the property or assets of any Person (other than
purchases or other acquisitions of inventory, materials,
leases, property and equipment in the ordinary course of
business) or sell, transfer or otherwise dispose of any of its
assets, except assets which are of nominal value or obsolete,
in each case in the ordinary course of business; provided,
however, that for so long as no Default or Event of Default
has occurred and is continuing hereunder, the Loan Parties
(other than ACE Funding) may consummate any Asset Sale if the
aggregate Net Cash Proceeds derived from such Asset Sale, when
combined with the Net Cash Proceeds derived from all other
Asset Sales consummated during such Fiscal Year, does not
exceed $5,000,000; provided, further, however, that 100% of
the first $2,500,000 of aggregate Net Cash Proceeds derived
from such Asset Sales during
50
any Fiscal Year shall be applied by the Company as a mandatory
prepayment of the Series A Notes and the Series B Notes in
accordance with Section 3.5(b)(i) hereof and 50% of the
aggregate Net Cash Proceeds during any Fiscal Year derived
from such Asset Sales in excess of $2,500,000 are used to
prepay the Series A Notes and the Series B Notes in accordance
with Section 3.5(b)(i) hereof.
(g) Affiliate Transactions. The Loan Parties
shall not make any loan or advance (except as permitted
pursuant to Section 7.2(i)(x) hereof) to any director, officer
or employee of the Loan Parties or any Affiliate of the Loan
Parties, or enter into or be a party to any transaction or
arrangement with any Affiliate of the Loan Parties, including,
without limitation, the purchase from, sale to or exchange of
property with, any merger or consolidation with or into, or
the rendering of any service by or for, any Affiliate, except
pursuant to the reasonable requirements of the Loan Parties'
business and upon fair and reasonable terms no less favorable
to the Loan Parties than would be obtained in a comparable
arm's-length transaction with a Person other than an
Affiliate. The Company shall not make any loan or advance with
the proceeds of the Notes to ACE Funding.
(h) Dividends and Stock Purchases. The Loan
Parties shall not directly or indirectly: declare or pay any
dividends or make any distribution of any kind on their
outstanding capital stock or any other payment related to
their outstanding capital stock of any kind to any of their
stockholders or its Affiliates (including any redemption,
purchase or acquisition of, whether in cash or in property,
securities or a combination thereof, any partnership interests
or capital accounts or warrants, options or any of their other
securities, but excluding (i) repayments upon forfeiture of
restricted stock issued to officers, directors and employees
of amounts paid to Company by such parties for such restricted
stock and (ii) warrants, options or other rights to acquire
common stock which are exercisable into the Company's common
stock), or set aside any sum for any such purpose other than
for such dividends, distributions or payments paid solely to
other Loan Parties.
(i) Advances, Investments and Loans. The Loan
Parties shall not purchase, or hold beneficially any stock,
other securities or evidences of Indebtedness of, or make or
permit to exist any loan, Guaranty or advance to, or make any
Investment or acquire any interest whatsoever in, any other
Person (including, but not limited to, the formation or
acquisition of any Subsidiaries), except:
(i) securities issued or directly and
fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof
having maturities of not more than 6 months from the
date of acquisition;
(ii) United States dollar-denominated
time deposits, certificates of deposit and bankers
acceptances of any bank or any bank whose
51
short-term debt rating from Standard & Poor's Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P"), is at least A-1 or the equivalent or from
Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at
least P-1 or the equivalent with maturities of not
more than six months from the date of acquisition;
(iii) commercial paper with a rating of at
least A-1 or the equivalent by S&P or at least P-1 or
the equivalent by Moody's maturing within six months
after the date of acquisition;
(iv) marketable direct obligations issued
by any state of the United States of America or any
political subdivision of any such state or any public
instrumentality thereof maturing within 6 months from
the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's;
(v) Investments in money market funds
substantially all the assets of which are comprised
of securities of the types described in clauses (i)
through (iv) above;
(vi) deposit accounts maintained in
accordance with the Revolving Credit Agreement;
(vii) Investments (including debt
obligations) received in connection with the
bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations
of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(viii) receivables owing to the Loan
Parties created or acquired in the ordinary course of
business and payable on customary trade terms of the
Loan Parties;
(ix) deposits made in the ordinary course
of business consistent with past practices to secure
the performance of leases or contracts in connection
with bidding on government contracts;
(x) advances to officers and employees
in the ordinary course of business for business
expenses; provided, however, that the aggregate
amount of such advances at any time outstanding shall
not exceed $50,000;
(xi) loans and advances, to the Company's
retail financial service customers in the ordinary
course of business;
(xii) Acceptable Acquisitions, so long as
no Default or Event of Default has occurred and is
then continuing;
52
(xiii) Until September 30, 2003, purchase
of participations in consumer loans originated by
Goleta National Bank in accordance with the terms and
conditions of the Master Agency Agreement dated
August 11, 1999 between Company and Goleta National
Bank, as in effect as of such date;
(xiv) the stock of Public Currency, Inc.
and ePacific Incorporated; and
(xv) securities issued by the Loan
Parties.
(j) Use of Proceeds. The Loan Parties shall not
use any proceeds from the sale of the Notes hereunder,
directly or indirectly, for the purposes of purchasing or
carrying any "margin securities" within the meaning of
Regulations T, U or X promulgated by the Board of Governors of
the Federal Reserve Board or for the purpose of arranging for
the extension of credit secured, directly or indirectly, in
whole or in part by collateral that includes any "margin
securities."
(k) Stock Issuances. The Loan Parties shall not
issue any capital stock or other equity interests or any
options or warrants to purchase, or securities convertible
into capital or equity interests or establish any stock
appreciation rights or similar programs based on the value of
the Loan Parties' equity interests; provided, however, this
Section 7.2(k) shall not restrict issuances by the Company of
its common stock or of warrants, options or other rights to
acquire common stock exercisable into its common stock.
(l) Amendment of Charter Documents. The Loan
Parties shall not amend, terminate, modify or waive or agree
to the amendment, modification or waiver of any material term
or provision of their respective Charter Documents, or
By-laws.
(m) Subsidiaries. None of the Loan Parties shall
establish or acquire any Subsidiary, except for those
established in connection with Acceptable Acquisitions.
(n) Business. None of the Loan Parties shall
engage, directly or indirectly, in any business other than the
Business.
(o) Fiscal Year; Accounting. None of the Loan
Parties shall change its Fiscal Year from ending on June 30 or
method of accounting (other than immaterial changes in
methods), except as required by GAAP.
(p) Establishment of New or Changed Business
Locations; Change in Jurisdiction of Organization. None of the
Loan Parties shall relocate its principal executive offices or
its jurisdiction of incorporation, organization or formation,
or establish new business locations or store any inventory or
other assets at a location not identified to Agent on or
before the date hereof, without providing not less than thirty
(30) days advance written notice to Agent.
53
(q) Changed or Additional Business Names. None
of the Loan Parties shall change its corporate name without
providing less than 30 days advance written notice to Agent.
(r) Other Agreements. None of the Loan Parties
(other than ACE Funding) shall enter into any agreement which
requires it to comply with any financial covenant (excluding
financial covenants contained in the Revolving Credit
Agreement) to the extent that such financial covenant could
reasonably be expected to be more restrictive than any of the
financial covenants contained in this Agreement, unless this
Agreement is amended to include such financial covenant
contemporaneously upon the execution and delivery of such
other agreement.
(s) Modification of Certain Documents. Company
will not agree or consent, without first obtaining the prior
written consent of the Purchasers, to any modification or
amendment of any of the terms or provisions of the Revolving
Credit Documents (as in effect on the date hereof) (provided
that nothing set forth in this Agreement shall require any
Purchasers' consent to a waiver of any failure of Company to
comply with the provisions of the Revolving Credit Documents)
that has the effect of (i) increasing the interest rates on
the Revolving Financing in excess of the stated applicable
maximum non-default rates set forth in the Revolving Credit
Agreement as in effect on the date of this Agreement (other
than the application of default interest as set forth in the
Revolving Credit Agreement or due to fluctuations of the
LIBOR, prime or base rates used in determining the interest
rates under the Revolving Credit Documents), (ii) accelerating
the dates upon which payments of principal on the Revolving
Facility are due (other than an acceleration on account of an
event of default under the Revolving Credit Agreement), (iii)
adding or changing any event of default or condition to a
default with respect to the Revolving Credit Agreement, (iv)
changing or amending any of Sections 6.07 through 6.10,
inclusive, of the Revolving Credit Agreement in a manner that
would make any such covenant more restrictive as to any Loan
Party (other than Loan Party) in comparison with the terms of
such provisions as in effect on the date hereof, (v)
increasing any premiums or fees payable to any Revolving
Lender or any agent for the Revolving Lenders, (vi) increasing
the aggregate maximum principal amount available in respect of
the Total Seasonal Revolving Credit Commitment and/or the
Total Revolving Credit Commitments (in each case, as defined
in the Revolving Credit Agreement in effect on the date
hereof, without giving effect to any amendment, restatement or
modification thereof, other than an amendment, restatement or
modification pursuant to Section 2.15 thereof, as in effect on
the date hereof), (vii) changing the borrowing base related to
the Revolving Financing, or (viii) modifying any covenant or
provision of the Revolving Credit Documents to expressly
prohibit the Loan Parties (other than ACE Funding) from making
payments in respect of the Notes that are permitted to be made
on the date hereof. Company will not agree or consent, without
first obtaining the prior written consent of the Purchasers,
to any modification or amendment of any of the terms or
provisions of (i) the Goleta
54
Agreement or (ii) to the extent such modification or amendment
would have a Material Adverse Effect, the Travelers Documents.
(t) Restrictive Agreements. Except as provided
in the Revolving Credit Agreement or in the Loan and Servicing
Agreement, the Loan Parties shall not create any restriction
of any kind on the ability of any Subsidiary (including, but
not limited to, ACE Funding) to: (i) pay dividends or make any
other distributions to the Company or any Subsidiary of the
Company, (ii) pay any Indebtedness owed to any Loan Party,
(iii) make loans or advances to the any Loan Party, (iv)
transfer any of its properties or assets to any Loan Party, or
(v) xxxxx x Xxxx on any of its properties or assets.
(u) Sale and Lease-Back Transactions. Except as
described on Schedule 7.2(u) hereto, the Loan Parties shall
not enter into any arrangement, directly or indirectly, with
any Person whereby any of them shall sell or transfer any
property, real or personal, used or useful in their respective
business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which
such Loan Party intends to use for substantially the same
purpose or purposes as the property being sold or transferred,
except for any such arrangements that are entered into in the
Company's ordinary course of business.
(v) Equity Interest in Subsidiaries. The Loan
Parties shall not sell, transfer, encumber, pledge or
otherwise dispose of any partnership interests, stock or
equity securities of, or other equity interests (including,
without limitation, any options, warrants or other rights to
acquire any equity interests) ("Equity Interests") in, any
Subsidiary or permit any of its Subsidiaries to issue any
additional equity other than to the Company or to a Subsidiary
of the Company; or otherwise permit any Subsidiary to be other
than a direct or indirect wholly-owned Subsidiary.
(w) ACE Funding. Notwithstanding anything to the
contrary contained in this Agreement, (i) ACE Funding shall
not incur or be liable in respect of any Indebtedness other
than Unrestricted Indebtedness in favor of Autobahn Funding
Company LLC ("ACE Funding Lender"), and such Unrestricted
Indebtedness may be secured by Liens on any or all of ACE
Funding's assets or properties, (ii) the Company shall be
permitted to (A) make an equity investment in ACE Funding not
to exceed $1,000,000 and (B) loan to ACE Funding up to the
lesser of (x) $3,000,000 or (y) 1% of the total aggregate
financial commitment of the ACE Funding Lender to ACE Funding,
during the Usage Period for purposes of allowing ACE Funding
to (1) satisfy its minimum funding requirements under one or
more reserve accounts to be established by ACE Funding in
favor of the ACE Funding Lender and (2) provide cash to its
SSMs in various H&R Block business locations, (iii) ACE
Funding shall not be required to become a Guarantor hereunder,
(iv) neither the Company nor ACE Funding shall allow ACE
Funding Lender to have or obtain a Lien on any assets or
properties of the Company or any of its other Subsidiaries,
(v) except as provided in this Section 7.2(w), neither Company
nor any of its other Subsidiaries
55
will engage in any transaction (excluding transactions
contemplated by the Loan and Servicing Agreement), merger or
consolidation with ACE Funding or provide any credit support
for any Unrestricted Indebtedness which ACE Funding is
permitted to incur hereunder, (vi) ACE Funding shall not own
any equity in, or Indebtedness of, the Company or any of its
other Subsidiaries, (vii) neither Company nor any of its other
Subsidiaries will sell, lease, transfer or otherwise assign
any of its assets or properties to, or acquire, for any amount
of consideration, any assets or properties of, or enter into
any contract or agreement with ACE Funding (provided, however,
that the Company shall be permitted to lease its SSMs to ACE
Funding) and (viii) except as specifically permitted under
clause (ii) above, neither Company nor any of its other
Subsidiaries will make any loans or advances to, or make any
equity investments in, ACE Funding (other than the minimum
equity investment, if any, required to form ACE Funding under
its jurisdiction of organization); provided, however, that at
any time ACE Funding or Company fails to comply with this
Section 7.2(w), ACE Funding shall be immediately required to
execute and deliver Purchase Documents of the type required of
newly created Subsidiaries of Company under Section 7.1(n).
7.3 Financial Covenants. The Loan Parties, jointly and severally,
covenant that, so long as all or any part of the principal amount of the Notes
or any interest thereon shall remain outstanding, they shall maintain, on a
Consolidated basis at the end of each calendar quarter (each such date being a
"Measurement Date") beginning April 30, 2003:
(a) Cash Flow Coverage Ratio. A minimum Cash
Flow Coverage Ratio of at least 1.05 to 1.00
(b) Funded Debt to EBITDA Ratio. A maximum Debt
to EBITDA Ratio as of the Measurement Date as follows:
Measurement Date Ratio
---------------- -----
From Closing Date through and including 3.85 to 1.00
December 31, 2003
March 31, 2004 4.125 to 1.00
June 30, 2004 through and including 3.85 to 1.00
December 31, 2004
March 31, 2005 4.125 to 1.00
June 30, 2005 through and including 3.85 to 1.00
December 31, 2005
March 31, 2006 4.125 to 1.00
June 30, 2006 through and including 3.50 to 1.00
December 31, 2006
March 31, 2007 4.00 to 1.00
56
Measurement Date Ratio
---------------- -----
June 30, 2007 through and including 3.40 to 1.00
December 31, 2007
March 31, 2008 3.90 to 1.00
June 30, 2008 through and including 3.30 to 1.00
December 31, 2008
March 31, 2009 3.80 to 1.00
June 30, 2009 through and including 3.20 to 1.00
December 31, 2009
March 31, 2010 and thereafter 3.70 to 1.00
For the purpose of calculating the Funded Debt to
EBITDA Ratio only, the Indebtedness outstanding under the
Revolving Facility as of any date of determination shall be
deemed to be the average amount outstanding hereunder during
the 7 calendar days immediately preceding such date of
determination.
(c) Net Worth. A minimum Net Worth of at least
the sum of $57,634,200 plus (b) 75% of all Net Income earned
after the Closing Date during any completed fiscal quarter,
provided, however that fiscal quarters in which Net Income is
a negative amount will be excluded from the calculation of Net
Income earned after the Closing Date, plus (c) an amount equal
to all proceeds of any offering of Equity Interests (net of
offering and professional fees and expenses) by the Loan
Parties occurring after the Closing Date that is permitted
hereunder.
(d) Minimum EBITDA. At the end of any fiscal
quarter, permit the aggregate EBITDA on a Consolidated basis
for the four previous quarters to be less than 75% of the
aggregate EBITDA on a Consolidated basis for the four
consecutive fiscal quarters reported at the prior fiscal
quarter end.
Notwithstanding the foregoing, the calculations of the financial covenants
contained in this Section 7.3 shall include (x) dividends or other distributions
paid by ACE Funding to the Company in respect of Equity Interests issued by ACE
Funding and owned by Company, (y) all payments made by ACE Funding to the
Company on loans or other advances made to ACE Funding by the Company, and (z)
for balance sheet purposes, amounts invested in or loaned to ACE Funding by
Company.
ARTICLE 8
EVENTS OF DEFAULT
8.1 Events of Default. An Event of Default means the occurrence of
one or more of the following described events:
(a) any Loan Party (other than ACE Funding)
shall default in the payment of (i) interest on the Notes,
within 5 days after its due date, (ii) principal
57
of the Notes when due, whether at maturity, upon notice of
prepayment in accordance with Sections 3.3 or 3.4, upon any
scheduled payment date, by acceleration or otherwise or (iii)
the Administrative Fee and/or the Facility Fee, within 5 days
after the due date;
(b) any Loan Party (other than ACE Funding)
shall default under any agreement (other than the Revolving
Credit Documents) under which any Indebtedness in an aggregate
principal amount of $500,000 or more is created in a manner
entitling the holder of such Indebtedness to accelerate the
maturity of such Indebtedness.
(c) any representation or warranty herein made
by any Loan Party (other than ACE Funding), or any certificate
or financial statement furnished pursuant to the provisions
hereof, shall prove to have been false or misleading in any
material respect as of the time made or furnished or deemed
made or furnished;
(d) any Loan Party (other than ACE Funding)
shall default in the performance of any covenant, condition or
provision of (i) Sections 7.1(f), 7.1(h), 7.1(n), 7.2 or 7.3;
or (ii) Sections 7.1(a), 7.1(b), 7.1(c), or 7.1(e) of this
Agreement and such default shall continue unremedied for 5 or
more consecutive Business Days after the earlier of (x) the
date notice thereof shall have been given to the Company by
Agent or any Purchaser, or (y) the date on which such failure
becomes known to any Responsible Officer of the Company; or
(iii) default shall be made in the due observance or
performance of any other covenant, condition or agreement to
be observed or performed on the part of any Loan Party (other
than ACE Funding) pursuant to this Agreement and not otherwise
specifically covered by this Section 8.1 and such default
shall continue unremedied for 30 or more consecutive Business
Days after the earlier of (x) the date notice thereof shall
have been given to such Loan Party by Agent or any Purchaser,
or (y) the date on which such failure becomes known to any
Responsible Officer of such Loan Party; provided, however, the
grace periods provided for in this Section 8.1(d) shall be
void and of no effect unless such Loan Party shall, to the
extent such Loan Party has actual knowledge thereof, provide
prompt notice to the Agent (in writing) of (A) the occurrence
or expected occurrence of such Default, with a certification
to the Agent of the Company's good faith expectation that such
Default shall be cured by the Company before the end of the
grace period; and (B) the occurrence of the Company's cure of
the Default before the end of the grace period. During the
grace period, a Default shall be deemed to have occurred and
be continuing until actually cured by the Company. If any such
Default is not cured before the end of the grace period, the
Agent shall have all of the rights described in this Agreement
and each of the other Purchase Documents without any
restriction imposed by this Section 8.1(d) whatsoever;
(e) a default or event of default shall occur
and shall continue, without waiver by the Revolving Lenders
pursuant to the Revolving Credit Agreement, under the
Revolving Credit Documents, beyond any applicable notice or
cure
58
periods, and the Revolving Lenders shall have accelerated the
maturity of the Revolving Financing;
(f) the occurrence of an event or condition
(after giving effect to any applicable notice and cure
provisions) that permits Travelers to terminate the Money
Order Agreement under Section 18.b thereof because of default
by the Company thereunder;
(g) any Loan Party (other than ACE Funding)
shall default in the performance of any covenant, condition or
provision of the Purchase Documents (excluding the Notes and
this Agreement), and such default shall not be remedied to
Agent's or Required Purchasers' satisfaction for a period of
30 days of the earlier of (i) written notice from a Agent of
such default or (ii) actual knowledge by any Loan Party (other
than ACE Funding) of such default;
(h) a proceeding shall have been instituted in a
court having jurisdiction in the premises seeking a decree or
order for relief in respect of any Loan Party in an
involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of any Loan Party
or for any substantial part of its property, or for the
winding-up or liquidation of their affairs, and such
proceeding shall remain undismissed or unstayed and in effect
for a period of 45 days;
(i) any Loan Party shall commence a voluntary
case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the
entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of any
Loan Party or for any substantial part of their property, or
shall make a general assignment for the benefit of creditors,
or shall fail generally to pay their debts as they become due,
or shall take any action in furtherance of any of the
foregoing;
(j) both the following events shall occur: (i) a
Reportable Event, the occurrence of which would have a
Material Adverse Effect which could cause the imposition of a
Lien under Section 4068 of ERISA, shall have occurred with
respect to any Plan or Plans; and (ii) the aggregate amount of
the then "current liability" (as defined in Section 412(l)(7)
of the Code) of all accrued benefits under such Plan or Plans
exceeds the then current value of the assets allocable to such
benefits by more than $500,000 at such time;
(k) (i) a final judgment which, with other
undischarged final judgments against any Loan Party, exceeds
an aggregate of $1,000,000 (excluding judgments to the extent
the applicable Loan Party is fully insured or the deductible
or retention limit does not exceed $1,000,000 and with respect
to which the insurer has assumed responsibility in writing),
shall have been entered
59
against any Loan Party if, within 30 days after the entry
thereof, such judgment shall not have been discharged or
execution thereof stayed pending appeal, or if, within 30 days
after the expiration of any such stay, such judgment shall not
have been discharged or (ii) after the Closing Date, the Loan
Parties (other than ACE Funding) shall settle any lawsuit or
cause of action filed against it or them requiring the Loan
Parties (other than ACE Funding) to pay an amount (net of
insurance proceeds) (x) equal to or greater than $5,000,000
with respect to any single lawsuit or cause of action or (y)
equal to or greater than $10,000,000 with respect to all
lawsuits or causes of action in the aggregate;
(l) this Agreement, any Note or any Security
Document shall for any reason cease to be, or shall be
asserted by the Company or any Guarantor not to be, a legal,
valid and binding obligation of such Person, enforceable in
accordance with its terms;
(m) any Guarantor revokes, terminates or fails
to perform any of the terms, conditions, covenants or
provisions of any Guaranty Agreement, Security Document,
endorsement or other agreement of such Person to the
Purchasers;
(n) any Security Document shall at any time
after the Closing Date cease for any reason to be in full
force and effect or shall cease to create perfected security
interests in favor of Agent in the collateral subject or
purported to be subject thereto, subject to no other Liens
other than Permitted Liens, or such collateral shall have been
transferred to any Person without the prior written consent of
the holders of a majority in principal amount of the
outstanding Notes;
(o) any event or change in circumstances occurs
which would result in a Material Adverse Effect; and/or
(p) a Change of Control shall have occurred.
8.2 Consequences of Event of Default.
(a) Bankruptcy. If an Event of Default specified
in paragraphs (h) or (i) of Section 8.1 hereof shall occur,
the unpaid balance of the Notes and interest accrued thereon
and all other liabilities of the Loan Parties (other than ACE
Funding) to the holders thereof hereunder and thereunder shall
be immediately due and payable, without presentment, demand,
protest or (except as expressly required hereby) notice of any
kind, all of which are hereby expressly waived.
(b) Other Defaults. If any other Event of
Default shall occur, Required Purchasers may at their option,
by written notice to the Loan Parties (other than ACE
Funding), declare the entire unpaid balance of the Notes, and
interest accrued thereon and all other liabilities of the Loan
Parties hereunder and thereunder to be forthwith due and
payable, and the same shall thereupon become immediately due
and payable, without presentment, demand, protest or (except
as expressly required hereby) notice of any kind, all of which
are hereby expressly waived; provided, that in the case of a
default specified in clause (ii) of paragraph
60
(a) of Section 8.1 hereof shall occur, any holder of a Note
may declare the entire unpaid balance of such Note (but only
such Note) and other amounts due hereunder and thereunder with
regard to such Note to become immediately due and payable.
(c) Penalty Interest. Following the occurrence
and during the continuance of any Event of Default, the
holders of the Notes shall be entitled to receive, to the
extent permitted by applicable law, interest on the
outstanding principal of, and premium and overdue interest, if
any, on, the Notes at a rate per annum equal to the interest
rate thereon (determined as provided in Section 3.1) plus two
hundred (200) basis points.
(d) Premium. In the event of any acceleration of
any Note pursuant to Section 8.2(b) hereof, the Loan Parties
shall also pay to Agent, for the ratable benefit of Purchasers
the prepayment premium that would otherwise be payable upon
any voluntary prepayment of such Note.
8.3 Security. Payments of principal of, and premium, if any, and
interest on, the Notes and all other obligations of the Loan Parties (other than
ACE Funding) under this Agreement or the Notes are secured pursuant to the terms
of the Security Documents.
ARTICLE 9
THE AGENT
9.1 Authorization and Action. Each Purchaser and each subsequent
holder of any Note by its acceptance thereof, hereby designates and appoints
ACFS as Agent hereunder and authorizes ACFS to take such actions as agent on its
behalf and to exercise such powers as are delegated to Agent by the terms of
this Agreement and the other Purchase Documents, together with such powers as
are reasonably incidental thereto. Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of Agent shall
be read into this Agreement or otherwise exist for Agent. In performing its
functions and duties hereunder, Agent shall act solely as agent for Purchasers
and does not assume, nor shall be deemed to have assumed, any obligation or
relationship of trust or agency with or for the Loan Parties or any of their
respective successors or assigns. Agent shall not be required to take any action
that exposes Agent to personal liability or that is contrary to this Agreement
or applicable Laws. The appointment and authority of Agent hereunder shall
terminate at the indefeasible payment in full of the Notes and related
obligations.
9.2 Delegation of Duties Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither Agent nor any of its
directors, officers, agents or employees shall be (a) liable for any action
lawfully taken or omitted to be taken by it or them
61
under or in connection with this Agreement (except for its, their or such
Person's own gross negligence or willful misconduct or, in the case of Agent,
the breach of its obligations expressly set forth in this Agreement, unless such
action was taken or omitted to be taken by the Agent at the direction of the
Required Purchasers), or (b) responsible in any manner to any of Purchasers for
any recitals, statements, representations or warranties made by Company
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of Company to perform its respective
obligations hereunder, or for the satisfaction of any condition specified in
Article 4. Agent shall not be under any obligation to any Purchaser to ascertain
or to inquire as to the observance or performance of any of the agreements or
covenants contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of Company.
9.4 Reliance. Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Company), independent accountants and
other experts selected by Agent. Agent shall in all cases be fully justified in
failing or refusing to take any action under this Agreement or any other
document furnished in connection herewith unless it shall first receive such
advice or concurrence of the Required Purchasers or all of the Purchasers, as
applicable, as it deems appropriate or it shall first be indemnified to its
satisfaction by the Purchasers; provided, that, unless and until Agent shall
have received such advice, Agent may take or refrain from taking any action, as
Agent shall deem advisable and in the best interests of the Purchasers. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
in accordance with a request of the Required Purchasers or all of the
Purchasers, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all Purchasers.
9.5 Non-Reliance on Agent and Other Purchasers Each Purchaser
expressly acknowledges that neither Agent, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by Agent or hereafter taken, including,
without limitation, any review of the affairs of the Loan Parties, shall be
deemed to constitute any representation or warranty by Agent. Each Purchaser
represents and warrants to Agent that it has and will, independently and without
reliance upon Agent or any other Purchaser and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Loan Parties (other than ACE
Funding) and made its own decision to enter into this Agreement.
9.6 Agent in its Individual Capacity Agent, and each of its
Affiliates may make loans to, purchase securities from, provide services to,
accept deposits from and generally engage in any kind of business with Company
or any Affiliate of the Loan Parties (other than ACE Funding) as though Agent
were not Agent hereunder.
9.7 Successor Agent. Agent may, upon 45 days' notice to Company
and Purchasers, and Agent will, upon the direction of the Required Purchasers
(other than Agent, in its individual
62
capacity), resign as Agent. If Agent shall resign, then the Required Purchasers
during such 45-day period shall appoint a successor Agent and if the Required
Purchasers direct Agent to resign, such direction shall include an appointment
of a successor Agent. If for any reason no successor Agent is appointed by the
Required Purchasers during such 45-day period, then effective upon the
expiration of such 45-day period, Purchasers shall perform all of the duties of
Agent hereunder and Company shall make all payments in respect of the Notes
directly to the applicable Purchaser and for all purposes shall deal directly
with Purchasers. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
9.8 Collections and Disbursements.
(a) Agent will have the right to collect and
receive all payments of the Notes, and to collect and receive
all reimbursements due hereunder, together with all fees,
charges or other amounts due under this Agreement and the
other Purchase Documents with regard to the Notes, and Agent
will remit to each Purchaser, according to its pro rata
percentage, all such payments actually received by Agent
(other than pursuant to the Fee Letter) in accordance with the
settlement procedures established from time to time.
Settlements shall occur on such dates as Agent may elect in
its sole discretion, but which shall be no later than two (2)
Business Days following receipt thereof.
(b) If any such payment received by Agent is
rescinded or otherwise required to be returned for any reason
at any time, whether before or after termination of this
Agreement or the other Purchase Documents, each Purchaser
will, upon written notice from Agent, promptly pay over to
Agent its pro rata percentage of the amounts so rescinded or
returned, together with interest and other fees thereon so
rescinded or returned.
(c) All payments by Agent and Purchasers to each
other hereunder shall be in immediately available funds. Agent
will at all times maintain proper books of accounts and
records reflecting the interest of each Purchaser in the
Notes, in a manner customary to Agent's keeping of such
records, which books and records shall be available for
inspection by each Purchaser at reasonable times during normal
business hours, at such Purchaser's sole expense. Agent may
treat the payees of any Note as the holder thereof until
written notice of the transfer thereof shall have been
received by Agent in accordance with Section 6.3 hereof. In
the event that any Purchaser shall receive any payment in
reduction of the Notes in an amount greater than its
applicable pro rata percentage in respect of obligations to
Purchaser evidenced hereby (including, without limitation
amounts obtained by reason of setoffs) such Purchaser shall
hold such excess in trust for Agent (on behalf of all other
Purchasers) and shall promptly remit to Agent such excess
amount so that the amounts received by each Purchaser
hereunder shall at all times be in accordance with its
applicable pro rata percentage. If, however, any Purchaser
that has received any such excess amount fails to remit such
amount to the Agent, the Agent shall reallocate the amounts
paid on the next payment date to each Purchaser so that, after
giving effect to such payments, the
63
pro rata obligations owed by Company to each Purchaser shall
be in an amount equal to the pro rata amount owed by Company
before the date of the payment of such excess amount. In no
event shall any Purchaser be deemed to have a participation or
other right in, to or against any other Purchaser's Note as a
result of the payment of any excess amount.
9.9 Reporting During the term of this Agreement, Agent will
promptly furnish each Purchaser with copies of all notices and financial
statements of Company required to be delivered or obtained hereunder and such
other financial statements and reports and other information in Agent's
possession as any Purchaser may reasonably request. Agent will immediately
notify Purchasers when it receives actual knowledge of any Event of Default
under the Purchase Documents.
9.10 Consent of Purchasers
(a) Except as expressly provided herein, Agent
shall have the sole and exclusive right to service, administer
and monitor the Notes and the Purchase Documents related
thereto, including, without limitation, the right to exercise
all rights, remedies, privileges and options under this
Agreement and under the other Purchase Documents, including,
without limitation, the credit judgment with respect to the
purchasing of the Notes and the determination as to the basis
on which and extent to which purchases of Notes may be made.
(b) Notwithstanding anything to the contrary
contained in Section 9.10(a) hereof, Agent shall not without
the prior written consent of all Purchasers then holding
Notes: (i) extend any payment date under the Notes, (ii)
reduce any interest rate applicable to any of the Notes or any
fee payable to Purchasers hereunder, (iii) waive any Event of
Default under Section 8.1(a), (iv) compromise or settle all or
a portion of the Indebtedness under the Note, (v) release any
obligor from the Indebtedness under the Notes except in
connection with full payment and satisfaction of all
Indebtedness under the Notes, (vi) amend the definition of
Required Purchasers, or (vii) amend this Section 9.10(b).
(c) Notwithstanding anything to the contrary
contained in Section 9.10(a) hereof, and subject to any
applicable limitation set forth in Section 9.10(b) hereof,
Agent shall not, without the prior written consent of Required
Purchasers: (i) waive any Event of Default; (ii) consent to
any Loan Party's taking any action that, if taken, would
constitute an Event of Default under this Agreement or under
any of the other Purchase Documents; or (iii) amend or modify
or agree to an amendment or modification of this Agreement or
other Purchase Documents.
(d) After an acceleration of the Indebtedness,
Agent shall have the sole and exclusive right, after
consultation (to the extent reasonably practicable under the
circumstances) with all Purchasers and, unless otherwise
directed in writing by Required Purchasers, to exercise or
refrain from exercising any and all rights,
64
remedies, privileges and options under this Agreement or the
other Purchase Documents and available at law or in equity to
protect the rights of Agent and Purchasers and collect the
Indebtedness under the Notes, including, without limitation,
instituting and pursuing all legal actions brought against any
Loan Party (other than ACE Funding) or to collect the
Indebtedness under the Notes, or defending any and all actions
brought by any Loan Party or other Person; or incurring
expenses or otherwise making expenditures to protect the
collateral, the Notes or Agent's or any Purchaser's rights or
remedies.
9.11 This Article Not Applicable to Company. This Article 9 is
included in this Agreement solely for the purpose of determining certain rights
as between Agent and Purchasers and does not create, nor shall it give rise to,
any rights in or obligations on the part of Company and all rights and
obligations of Company (other than as specifically set forth herein) under this
Agreement shall be determined by reference to the provisions of this Agreement
other than this Article 9.
ARTICLE 10
MISCELLANEOUS
10.1 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except that (a) Company may not assign or transfer their rights
hereunder or any interest herein or delegate their duties hereunder and (b)
Purchasers shall have the right to assign their rights hereunder and under the
Notes in accordance with Article 6.
10.2 Modifications and Amendments. The provisions of this Agreement
may be modified, waived or amended, but only by a written instrument signed by
Company to be bound thereby, and to the extent such modification, amendment or
waiver relates to the Notes, such instrument must be executed by Agent on behalf
of Purchasers upon satisfaction of the conditions set forth in Section 9.10.
10.3 No Implied Waivers; Cumulative Remedies; Writing Required. No
delay or failure in exercising any right, power or remedy hereunder shall affect
or operate as a waiver thereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder are cumulative and not exclusive of
any rights or remedies that Agent or Purchasers or any holder of Notes would
otherwise have. Any waiver, permit, consent or approval of any kind or character
of any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing, satisfy the
conditions set forth in Section 9.10 and shall be effective only to the extent
in such writing specifically set forth.
10.4 Reimbursement of Expenses. Company upon demand shall pay or
reimburse Agent and Purchasers for all reasonable fees and expenses incurred or
payable by Agent or Purchasers (including, without limitation, reasonable fees
and expenses of special counsel for
65
Agent and Purchasers), from time to time (a) arising in connection with the
negotiation, preparation and execution of this Agreement, the Notes, the other
Purchase Documents and all other instruments and documents to be delivered
hereunder or thereunder or arising in connection with the transactions
contemplated hereunder or thereunder, (b) relating to any amendments, waivers or
consents pursuant to the provisions hereof or thereof, and (c) arising in
connection with the enforcement of this Agreement or collection of the Notes.
10.5 Holidays. Whenever any payment or action to be made or taken
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or action.
10.6 Notices. All notices and other communications given to or made
upon any party hereto in connection with this Agreement shall, except as
otherwise expressly herein provided, be in writing (including telecopy, but in
such case, a confirming copy will be sent by another permitted means) and mailed
via certified mail, telecopied or delivered by guaranteed overnight parcel
express service or courier to the respective parties, as follows:
to Company:
ACE Cash Express, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn.: Xx. Xxx X. Xxxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Gardere Xxxxx Xxxxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
to Agent:
American Capital Financial Services, Inc.
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Compliance Officer
Telecopier: (000) 000-0000
66
with a copy to:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
and to:
American Capital Strategies, Ltd.
0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxxXxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx Xxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: R. Xxxxxxx Xxxx, Esq.
Telecopier: (000) 000-0000
to Purchasers:
As set forth on Annex A attached hereto
or in accordance with any subsequent written direction from the recipient party
to the sending party. All such notices and other communications shall, except as
otherwise expressly herein provided, be effective upon delivery if delivered by
courier or overnight parcel express service; in the case of certified mail, 3
Business Days after the date sent; or in the case of telecopy, when received.
10.7 Survival. All representations, warranties, covenants and
agreements of Company contained herein or made in writing in connection herewith
shall survive the execution and delivery of this Agreement and the purchase of
the Notes and shall continue in full force and effect so long as any Note is
outstanding and until payment in full of all of Company's obligations hereunder
or thereunder. All obligations relating to indemnification hereunder shall
survive any termination of this Agreement and shall continue for the length of
any applicable statute of limitations.
10.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
10.9 Jurisdiction, Consent to Service of Process
67
(a) THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY (i) MARYLAND STATE COURT OR
TEXAS STATE COURT SITTING IN DALLAS COUNTY OR (ii) FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN EITHER THE
STATE OF MARYLAND OR THE NORTHERN DISTRICT OF TEXAS, DALLAS
DIVISION OR (iii) ANY APPELLATE COURT FROM ANY OF THE
AFOREMENTIONED JURISDICTIONS, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY
OTHER PURCHASE DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
MARYLAND OR TEXAS COURT OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT
ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT AGENT
AND PURCHASERS MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER
PURCHASE DOCUMENT AGAINST THE COMPANY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.
(b) THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES OR ANY OTHER PURCHASE DOCUMENT IN ANY MARYLAND STATE
COURT, TEXAS STATE COURT SITTING IN DALLAS COUNTY OR FEDERAL
COURT LOCATED IN EITHER THE STATE OF MARYLAND OR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 10.6 HEREOF. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS
68
AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
10.10 Jury Trial Waiver. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY
RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR (II) ARISING FROM ANY
DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT AND
AGREES THAT ANY SUCH ACTION OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
10.11 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Agreement.
10.12 Headings. Article, section and subsection headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
10.13 Indemnity. Company hereby agrees to indemnify, defend and hold
harmless Agent and Purchasers and their officers, directors, employees, agents
and representatives, and their respective successors and assigns in connection
with any losses, claims, damages, liabilities and expenses, including reasonable
attorneys' fees, to which Agent or any Purchaser may become subject (other than
as a result of the gross negligence or willful misconduct of any such Person),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or by reason of any investigation, litigation or other
proceedings related to or resulting from any act of, or omission by, Company or
its Affiliates or any officer, director, employee, agent or representative of
Company or its Affiliates with respect to the Transactions, the Notes, Charter
Documents, the By-laws or any agreements entered into in connection with any
such agreements, instruments or documents and to reimburse Agent and Purchasers
and each such Person and Affiliate, upon demand, for any legal or other expenses
incurred in connection with investigating or defending any such loss, claim,
damage, liability, expense or action. To the extent that the foregoing
undertakings may be unenforceable for any reason, Company agrees to make the
maximum contribution to the payment and satisfaction of indemnified liabilities
set forth in this Section 10.13 which is permissible under applicable law. This
indemnity and agreement to defend and hold harmless shall survive any
termination or satisfaction of the Notes or the sale, assignment or foreclosure
thereof or the sale, transfer or conveyance of all or part of the past and
present properties and facilities or any other circumstances which might
otherwise constitute a legal or equitable release or discharge, in whole or in
part, of Company under the Notes.
10.14 Environmental Indemnity. Company, and its successors and
assigns, hereby jointly and severally release and discharge, and jointly and
severally agree to defend, indemnify and hold harmless, Agent, Purchasers and
their Affiliates (including their partners, subsidiaries, customers, guests, and
invitees, and the successors and assigns of all of the foregoing, and their
respective officers, employees and agents) from and against any and all
Environmental
69
Liabilities, whenever and by whomever asserted, to the extent that such
Environmental Liabilities are based upon, or otherwise relate to: (a) any
Condition at any time in, at, on, under, a part of, involving or otherwise
related to the Properties and Facilities (including any of the properties,
materials, articles, products, or other things included in or otherwise a part
of the Properties and Facilities); (b) any action or failure to act of any
Person, including any prior owner or operator of the Properties and Facilities
(including any of the properties, materials, articles, products, or other things
included in or otherwise a part of the Properties and Facilities), involving or
otherwise related to the Properties and Facilities or operations of Company; (c)
the Management of any Pollutant, material, article or product (including
Management of any material, article or product containing a Pollutant) in any
physical state and at any time, involving or otherwise related to the Properties
and Facilities or any property covered by clause (d) (including Management
either from the Properties and Facilities or from any property covered by clause
(d), and Management to, at, involving or otherwise related to the Properties and
Facilities or any property covered by clause (d)); (d) Conditions, and actions
or failures to act, in, at, on, under, a part of, involving or otherwise related
to any property other than the Properties and Facilities, which property was, at
or prior to the Closing Date, (i) acquired, held, sold, owned, operated, leased,
managed, or divested by, or otherwise associated with, (A) Company, (B) any of
Company's Affiliates, or (C) any predecessor or successor organization of those
identified in (A) or (B); or (ii) engaged in any tolling, contract manufacturing
or processing, or other similar activities for, with, or on behalf of Company;
(e) any violation of or noncompliance with or the assertion of any Lien under
the Environmental Laws, (f) the presence of any toxic or hazardous substances,
wastes or contaminants on, at or from the past and present properties and
facilities, including, without limitation, human exposure thereto; (g) any
spill, release, discharge or emission affecting the past and present properties
and facilities, whether or not the same originates or emanates from such
properties and facilities or any contiguous real estate, including, without
limitation, any loss of value of such properties and facilities as a result
thereof; or (h) a misrepresentation in any representation or warranty or breach
of or failure to perform any covenant made by Company in this Agreement. This
indemnity and agreement to defend and hold harmless shall survive any
termination or satisfaction of the Notes or the sale, assignment or foreclosure
thereof or the sale, transfer or conveyance of all or part of the past and
present properties and facilities or any other circumstances which might
otherwise constitute a legal or equitable release or discharge, in whole or in
part, of Company under the Notes.
10.15 Counterparts. This Agreement may be executed in any number of
counterparts and by either party hereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together constitute one and the same instrument.
10.16 Integration. This Agreement and the other Purchase Documents
set forth the entire understanding of the parties hereto with respect to all
matters contemplated hereby and supersede all previous agreements and
understandings among them concerning such matters. No statements or agreements,
oral or written, made prior to or at the signing hereof, shall vary, waive or
modify the written terms hereof.
10.17 Confidentiality. Each of Agent and Purchasers agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal
70
counsel and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 10.17 any assignee or
any prospective assignee of any of its rights or obligations under this
Agreement, (g) with the consent of Company, (h) to any Person that provides
financing to any Purchaser, or (i) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 10.17 or
(ii) becomes available to Agent or any Purchaser on a nonconfidential basis from
a source other than Company; provided, however, that with respect to disclosures
of Information pursuant to clauses (b) and (c) above, unless prohibited by law
or applicable court order, each Purchaser and Agent shall make a reasonable
attempt to notify Company of any request by any governmental agency or
representative thereof for disclosure of such Information after receipt of such
request, and, if reasonable, practicable, and permissible, before such
disclosure (it being understood that Company and its Subsidiaries may rely upon
this Section 10.17 in order to comply with Regulation FD promulgated by the SEC
as of the date hereof ("Regulation FD")). For the purposes of this Section
10.17, "Information" means all information (including material non-public
information within the meaning of Regulation FD) received from Company relating
to it or its business, other than any such information that is available to the
Agent or any Purchaser on a nonconfidential basis prior to disclosure by the
Company; provided that, in the case of information received from the Company
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 10.17 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
10.18 Subordination. THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT IS
SUBORDINATE (INCLUDING WITH RESPECT TO LIEN AND PAYMENT PRIORITY) IN THE MANNER
AND TO THE EXTENT SET FORTH IN THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF
THE DATE HEREOF, BY AND AMONG THE COMPANY, AGENT AND CERTAIN OTHER CREDITORS OF
THE COMPANY (AS AMENDED, MODIFIED OR RESTATED FROM TIME TO TIME, THE
"INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY THE
COMPANY UNDER AND PURSUANT TO THAT CERTAIN Credit Agreement, dated as of the
date hereof, by and among the Company, the lenders from time to time party
thereto, xxxxx fargo bank texas, national association, as administrative agent
for such lenders, and JPMorgan Chase Bank, as agent for such lenders, as the
same may be amended or modified from time to time AND EACH RELATED "CREDIT
DOCUMENTs" (AS SUCH TERM IS DEFINED THEREIN), AND EACH HOLDER HEREOF, BY ITS
ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT.
71
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
72
SIGNATURE PAGE TO
NOTE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
COMPANY:
ACE CASH EXPRESS, INC.
By: /s/ XXX X. XXXXXX
-------------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
AGENT:
AMERICAN CAPITAL FINANCIAL SERVICES, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
Xxxxxxx X. XxxXxxxxx
Vice President
PURCHASERS:
AMERICAN CAPITAL STRATEGIES, LTD.
By: /s/ XXXXXXX X. XXXXXXXXX
Xxxxxxx X. XxxXxxxxx
Vice President
ACKNOWLEDGEMENT AND AGREEMENT:
The undersigned have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written for
purposes of acknowledging their obligations hereunder as Loan Parties and, by so
executing this Agreement, the undersigned hereby agree to be bound by the terms
of this Agreement applicable to the Loan Parties or any Loan Party.
LOAN PARTIES:
Q.C. & G. FINANCIAL, INC.
By: /s/ XXX X. XXXXXX
------------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
CHECK EXPRESS, INC.
By: /s/ XXX X. XXXXXX
------------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
CHECK EXPRESS FLORIDA, INC.
By: /s/ XXX X. XXXXXX
------------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
CHECK EXPRESS FINANCE, INC.
By: /s/ XXX X. XXXXXX
-------------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
CHECK-X-CHANGE CORPORATION
By: /s/ XXX X. XXXXXX
------------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
CHECK EXPRESS SOUTH CAROLINA, INC.
By: /s/ XXX X. XXXXXX
-----------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
PUBLIC CURRENCY, INC.
By: /s/ XXX X. XXXXXX
------------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
CHECK EXPRESS USA, INC.
By: /s/ XXX X. XXXXXX
-----------------------------------
Name: Xxx X. Xxxxxx
Title: Sr. Vice President and CFO
ANNEX
Annex A Purchaser and Payment Information
SCHEDULES
---------
"Organizational Schedule" (Section 5.1(a))
"Litigation Schedule" (Section 5.1(i))
"Environmental Schedule" (Section 5.1(k))
"Properties Schedule" (Section 5.1(p))
"Intellectual Property Schedule" (Section 5.1(q))
"Permitted Encumbrances Schedule" (Section 7.2(b)(iv))
"Sale Leaseback" (Section 7.2(b)(v))
EXHIBITS
--------
EXHIBIT A-1 Form of Series A Note
EXHIBIT A-2 Form of Series B Note
EXHIBIT A-3 Form of Series C Note
EXHIBIT A-4 Form of Series D Note
EXHIBIT B Form of Security Agreement
EXHIBIT C Form of Pledge Agreement
EXHIBIT D Form of Guaranty Agreement
EXHIBIT E Form of Collateral Agency Agreement
EXHIBIT F-1 Form of Perfection Letter--Bank (Long Form)
EXHIBIT F-2 Form of Perfection Letter--Bank (Short Form)
EXHIBIT G Form of Perfection Letter--Armored Car Courier
EXHIBIT H Form of Compliance Certificate
EXHIBIT I Intercreditor Agreement
ANNEX A
INFORMATION RELATING TO PURCHASERS
Name and Address
of Purchasers
AMERICAN CAPITAL STRATEGIES, LTD.
0 Xxxxxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
All Notes issued to ACAS will be assigned to:
ACS FUNDING TRUST I
c/o AMERICAN CAPITAL STRATEGIES, LTD.,
as Servicer
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
(1) All payments:
If by wire:
Account Name: ACS Funding Trust I
Account #: 4000037515
Bank: Xxxxx Fargo Bank, N.A.
ABA #: 000000000
If by U.S. mail (make checks payable to "ACS Funding Trust
I"), to:
ACS Funding Trust I
NW 7941
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000
If by overnight delivery service (e.g., FedEx, Airborne, UPS,
etc), to:
ACS Funding Trust I #7941
C/O REGULUS
0000 Xxxxxx Xxxx, Xxxxx 000
Xx. Xxxx, XX 00000
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of
such wire transfers:
American Capital Strategies, Ltd., as Servicer
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Comptroller
Telecopier: (000) 000-0000
(3) All other communications:
American Capital Strategies, Ltd., as Servicer
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Compliance Officer
Telecopier: (000) 000-0000
and to:
American Capital Strategies, Ltd.
0000 Xxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxxXxxxxx
Telecopier: (000) 000-0000
SCHEDULE 5.1(a)
ORGANIZATIONAL SCHEDULE
The principal place of business of each of the Loan Parties is 0000 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
STATES AUTHORIZED TO
COMPANY JURISDICTION OF CONDUCT BUSINESS
INCORPORATION
--------------------- --------------- ---------------------
Ace Cash Express, Inc. Texas Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Washington DC
Florida
Georgia
Indiana
Iowa
Kansas
Louisiana
Maryland
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Jersey
New Mexico
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Texas
Utah
Vermont
Xxxxxxxx
Xxxxxxxxxx
Wisconsin
Wyoming
District of Columbia
JURISDICTION OF STATES AUTHORIZED TO
NAME OF SUBSIDIARY INCORPORATION CONDUCT BUSINESS
--------------------------- --------------- --------------------
Check Express, Inc. (all Florida Florida
outstanding shares of stock
owned by the Company)
--------------------------- --------------- --------------------
CHECK EXPRESS FLORIDA, INC. Florida Florida
(all outstanding shares of California
stock owned by Check Georgia
Express, Inc.) Ohio
Texas
--------------------------- --------------- --------------------
CHECK EXPRESS FINANCE, INC. Florida Florida
(all outstanding shares of
stock owned by Check
Express, Inc.)
--------------------------- --------------- --------------------
CHECK EXPRESS SOUTH Florida Florida
CAROLINA, INC. Indiana
(all outstanding shares of South Carolina
stock owned by Check
Express, Inc.)
--------------------------- --------------- --------------------
Check Express USA, Inc. Florida Florida
(all outstanding shares of
stock owned by Check
Express, Inc.)
--------------------------- --------------- --------------------
CHECK-X-CHANGE CORPORATION California California
(all outstanding shares of
stock owned by Check
Express, Inc.)
--------------------------- --------------- --------------------
Q. C. & G. FINANCIAL, INC. Arizona Arizona
(all outstanding shares of Texas
stock owned by the Company) Virginia
--------------------------- --------------- --------------------
PUBLIC CURRENCY, INC. California California
(all outstanding shares of
stock owned by the Company)
--------------------------- --------------- --------------------
ACE Funding, LLC Delaware Texas
(all membership interests
owned by the Company)
o The Company owns (a) 257,142.96 shares of Series A Convertible Preferred
Stock represented by Certificate No. EP A-0003, (b) 210,000 shares of
non-voting common stock represented by Certificate No. EP-18 and (c) 90,000
shares of common stock represented by Certificate No. EP-17, of ePacific
Incorporated, a Delaware corporation. All of the capital stock of ePacific
Incorporated owned by the Company is subject to a Stockholders' Agreement
dated as of March 30, 2000 which provides, among other things, that no
stockholder of ePacific Incorporated may effect certain sales of such
securities without affording the other stockholders of ePacific a right to
participate in each such sale and no party to such Stockholders' Agreement
may assign its rights thereunder without the prior written consent of the
other parties thereto.
2
SCHEDULE 5.1(i)
LITIGATION SCHEDULE
o Xxxxxxxx Xxxx v. Ace Cash Express, Inc.: This lawsuit regarding Goleta bank
loans (the "Bank Loans") offered and made at the Company's locations in
Florida was filed in Clay County, Florida and served on the Company on
November 8, 2000. The plaintiff, for herself and others similar situated,
alleges that the Bank Loans offered at the Company's locations in Florida
were made by the Company rather than by Goleta and therefore those Bank
Loans violated Florida usury laws and the offering of those Bank Loans
involves misrepresentations and deceptive practices in violation of Florida
law. The plaintiff seeks an unspecified amount of damages, including an
amount equal to all interest charged on the Bank Loans made in Florida, the
plaintiff's attorneys' fees, and court costs. The Company's attempt to
remove this case to federal court was not successful. On October 2, 2001,
the court granted Goleta's motion to intervene as a defendant in this
lawsuit. The Company and Goleta filed a motion to dismiss the plaintiff's
complaint on the basis that Goleta is the lender of the Bank Loans and,
under federal law, is entitled to charge interest at the rate permitted by
California law. But on March 20, 2002, the court denied that motion, and on
April 19, 2002, each of the Company and Goleta filed its answer to the
plaintiff's complaint. On February 10, 2003, the parties signed a
Stipulation to stay the action pending consummation of present settlement
negotiations regarding Xxxxxxx Xxxxxx v. ACE Cash Express, Inc. (described
below).
o Xxxxxx X. Xxxxxx v. Ace Cash Express, Inc. et al.: This lawsuit regarding
the Bank Loans offered and made at the Company's locations in Indiana was
filed on September 11, 2001 in the U.S. District Court for the Southern
District of Indiana. This lawsuit was filed against the Company; Goleta;
the Company's Chairman of the Board, Xxxxxxx X. Xxxxxx; the Company's Chief
Executive Officer, Xxxxxx X. Xxxxxxxx; the Company's President & Chief
Operating Officer, Xxx X. Xxxxxxxxx; and a former employee of the Company.
The plaintiff alleged violations of (1) the Indiana UCCC and the Indiana
"loansharking" statute, because the interest charged for the Bank Loans
exceeded the finance charges permitted by those statutes, (2) the federal
TILA, Regulation Z, and the Indiana UCCC, because the disclosures to
borrowers of Bank Loans did not comply with the disclosure requirements of
those laws, and (3) the federal Racketeer Influenced Corrupt Organizations
(RICO) Act. In the complaint the plaintiff purported to represent a class
of all persons to whom a Bank Loan has been made at any location of the
Company in Indiana (a) since September 11, 1999, regarding the
excess-charge claims, (b) since September 11, 2000, regarding the
disclosure-violation claims, and (c) since September 11, 1997, regarding
the federal RICO Act claims. The plaintiff sought relief of various kinds,
including (i) for the members of the class of plaintiffs who were allegedly
charged excessive interest, an order declaring the Loans to them "void,"
the refund of all finance charges or interest paid by them in excess of the
maximum finance charges permitted under the Indiana UCCC, and a penalty (to
be determined by the court) in a maximum amount equal to the greater of
either all of the finance charges or interest received from them or up to
ten times the amount of all excess finance charges or interest received
from them; (ii) for the members of the class of plaintiffs who allegedly
did not receive proper
disclosures under the federal TILA, Regulation Z, and the Indiana UCCC,
statutory damages of $500,000 each for violations of those statutes; (iii)
for the members of the class of plaintiffs allegedly damaged because of
violations of the RICO Act, an amount equal to three times those damages;
and (iv) the plaintiff's attorneys' fees and court costs. On December 17,
2001, the defendants moved to dismiss the plaintiff's complaint, and on May
30, 2002, the court granted the motion. Based on its review of the
complaint and other filed documents, the court concluded that Goleta made
the Bank Loan to the plaintiff and then sold a participation interest in
that Bank Loan to the Company, so that the claims asserted in the complaint
were not sufficient to entitle the plaintiff to any damages or other legal
relief. The court, however, afforded the plaintiff an opportunity to amend
her complaint to assert legally sufficient claims. On June 25, 2002, the
plaintiff filed an amended complaint that was substantially similar to the
complaint that was dismissed, except the amended complaint did not name
Goleta as a defendant and did not assert any disclosure-violation claims.
On July 8, 2002, the Company and the remaining defendants filed a motion to
dismiss the amended complaint, asserting that the amended complaint did not
allege sufficient new facts to justify relief and that the court's initial
decision was dispositive. On September 30, 2002, the court entered an order
dismissing the amended complaint, with prejudice. On October 15, 2002, the
plaintiff filed a notice of appeal to the United States Court of Appeals
for the Seventh Circuit. On January 15, 2003 the plaintiff's initial brief
in his appeal of the trial court's dismissal of his complaint was filed.
The parties met via telephone for a court-approved settlement conference on
February 28, 2003. The parties have agreed to stay the proceedings in the
plaintiff's appeal pending consummation of present settlement negotiations
regarding Xxxxxxx Xxxxxx v. ACE Cash Express, Inc. (described below).
o Xxxxx Xxxxxxxx Xxxxx v. Ace Cash Express, Inc. et al. This lawsuit
regarding both the Company's former "payday loan" activities and the Bank
Loans offered and made at the Company's locations in
Maryland was filed on
August 20, 2001 in the Circuit Court for Baltimore City,
Maryland. On
September 12, 2001, the plaintiff filed an amended complaint against the
Company and unnamed franchisees of the Company. In the complaint, the
plaintiff purports to represent a class of all consumers with whom the
Company has entered into any payday-loan transaction or to whom a Bank Loan
has been made at any location of the Company in
Maryland since April 1,
2000. The plaintiff alleges that the defendants' loan-related activities
violate the Maryland usury laws, the Maryland Consumer Loan Law, the
Maryland Unsecured Closed End Credit Regulation Act, and the Maryland
Consumer Protection Act and are unconscionable under Maryland law. The
plaintiff seeks relief of various kinds, including a permanent injunction
against any further alleged illegal activities, an order that all
obligations of the class of plaintiffs to the defendants are void, the
return (as restitution) to the class of plaintiffs of all amounts paid to
the defendants, an order dissolving the Company and prohibiting all
defendants from conducting any further financial services business, the
disgorgement and return of all profits from the loan-related activities,
the plaintiff's attorneys' fees and expenses, and court costs. On September
7, 2001, the Company removed this lawsuit to the United States District
Court for the District of Maryland, but on November 14, 2001, the federal
court granted the plaintiff's motion to remand this lawsuit back to the
Circuit
2
Court of Baltimore City. On January 3, 2002, Goleta filed a motion to
intervene as a defendant in this lawsuit, and the court granted that motion
on January 8, 2002.
o Xxxxxxx Xxxxxx v. Ace Cash Express, Inc. et al.: This lawsuit regarding
both the Company's former "payday loan" activities and the Bank Loans
offered and made at the Company's locations was filed on September 6, 2001,
in the United States District Court for the Northern District of Texas. The
original complaint named as defendants the Company and certain executive
officers and directors and a former employee of the Company. As the result
of two amended complaints, however, only the Company and Goleta are
currently defendants in this lawsuit. In her second amended complaint, the
plaintiff purports to represent a class of all consumers in the United
States with whom the Company has entered into any payday-loan transaction
or to whom a Bank Loan has been made at any location of the Company since
September 6, 1997, as well as sub-classes of persons who have engaged in
those kinds of transactions with the Company or at the Company's locations
and are alleged to be victims of usury or of unfair or deceptive lending
practices under the laws of various states in the United States during the
time periods within the various applicable statutes of limitations. The
plaintiffs allege that the defendants' loan-related activities violate the
federal RICO Act and the laws and regulations of various states regarding
usury, deceptive trade practices (including the Texas Deceptive Trade
Practices Act), and other consumer protections. The plaintiff seeks relief
of various kinds, including a permanent injunction against any further
alleged illegal activities; the return (as restitution) to the class and
sub-classes of plaintiffs of all amounts paid to the defendants; damages
equal to three times the amount of all fees and interests paid by the class
& sub-classes of plaintiffs since Sept. 6, 1997; punitive damages of at
least $250 million; the plaintiff's attorneys' fees; and court costs. On
January 18, 2002, the Company and Goleta filed a motion to dismiss the
second amended complaint, asserting that the federal RICO Act claims were
legally deficient and should be dismissed and that, if those claims are
dismissed, the court should not retain jurisdiction of the remaining
state-law claims. On October 29, 2002, the court granted the Company's and
Goleta's motion to dismiss the plaintiff's complaint. The court found that
the plaintiff did not allege sufficient facts to support her federal RICO
claims and, accordingly, dismissed those claims with prejudice. In the
absence of federal-law claims, the court declined to retain jurisdiction
over the plaintiff's state-law claims and, accordingly, dismissed those
claims without prejudice. On November 12, 2002, the plaintiff filed a
motion with the trial court requesting that the court vacate its judgment,
amend its order dismissing her complaint, and grant the plaintiff
permission to file an amended complaint. The Company and Goleta currently
have until April 1, 2003, to respond to the plaintiff's motion. The parties
are engaged in ongoing settlement discussions.
x Xxxx v. Ace Cash Express, Inc.: On December 18, 2002, the Company was
served with a lawsuit that had originally been filed (but not served) in
late October 2002 in the United States District Court for the Western
District of Virginia. The amended class action complaint served on the
Company names only the Company as a defendant and relates to the Company's
activities in connection with the short-term consumer loans of Goleta
offered at the Company's stores in Virginia between April 1, 2000 and
October 10, 2002.
3
The plaintiff, for himself and others similarly situated, alleges that the
Company's loan-related activities during that period violated the federal
RICO Act, the Virginia Consumer Finance (or Small Loan) Act, the Virginia
Payday Loan Act, and the Virginia Consumer Protection Act and constituted
fraud. The plaintiff seeks actual and punitive damages of various kinds,
including (under the RICO Act) an amount equal to three times all of the
Company's proceeds from the loans made in Virginia during the approximate
two and one-half years; an amount equal to three times the actual damages
or $1,000, whichever is greater, for each violation of the Virginia
Consumer Protection Act; attorneys' fees & court costs. The key issue in
this lawsuit is whether the Company or Goleta should properly be
characterized as the lender or the maker of the short-term loans. Contrary
to the plaintiff's contentions, the Company maintains that Goleta was the
lender and that, because Goleta was a national bank located in California,
the short-term loans were governed by federal and California law, not
Virginia law. On February 5, 2003, the Company moved to compel arbitration
and to stay all proceedings until completion of arbitration. The plaintiff
has filed an opposition to the Company's motion to compel arbitration.
o Ace Cash Express, Inc. v. Valley Check Cashiers, Inc., Xxxxxxx X.
Xxxxxxxxx, and Xxxxxx Xxxxxxxxx: On November 27, 2001, the Company filed
this lawsuit in state court in Xxxxxx County, Texas, seeking damages
relating to the defendants' misrepresentations and breaches of warranties
in an Asset Purchase Agreement between the Company and the defendants, and
certain other entities affiliated with the defendants, dated as of November
10, 2000. Under the Asset Purchase Agreement, the Company acquired the
assets of 107 check-cashing and retail financial services locations owned
and managed by the defendants and their affiliated entities for a total
purchase price of $29.7 million in cash. Eleven of the acquired locations
were in third-party grocery stores, operated under the "Xxxxx Xxxx" name,
in and around San Antonio, Texas. Following the foreclosure and sale of
those grocery stores by the secured creditor of the grocery store operator,
the Company (in cooperation with the sellers under the Asset Purchase
Agreement) instituted litigation against that creditor and its purchaser in
January 2001 to maintain the Company's right to operate in those locations.
At a trial in April 2001, the court found that the lease agreement under
which the Company claimed the right to occupy those eleven locations, which
had been assigned to the Company by the defendants and their affiliated
entities, was not enforceable under Texas law. The court therefore ordered
the Company to vacate those eleven locations, which the Company did in June
2001. Because of the court's finding, the Company requested the defendants
to satisfy their monetary obligations to the Company, based on their
representations and warranties, regarding those locations. When it appeared
that further negotiations regarding the Company's request would be
unsuccessful, the Company filed this lawsuit to recover the damages
suffered in connection with, and as a result of, the loss of those eleven
locations. In its complaint, the Company seeks actual damages in excess of
$2 million. On January 14, 2002, the defendants filed their answer denying
all of the Company's material claims. On October 15, 2002, Xxxxxxx
Xxxxxxxxx and Xxxxxx Xxxxxxxxx, but not Valley Check Cashiers, Inc., filed
a motion for summary judgment requesting the court to dismiss the Company's
complaint against them. The hearing on such motion was held on November 12,
2002. By letter dated December 13, 2002, the court advised the parties that
it would grant the motion to dismiss the Company's complaint against those
two defendants. No formal order has yet been submitted to or signed by the
court, however. The Company and the defendants have agreed to sever the
Silvermans' summary judgment to allow the Company to appeal it and have
further agreed to stay the Company's remaining claims against Valley Check
Cashiers pending the outcome of that appeal.
4
o Ace Cash Express, Inc. v. Illinois Union Insurance Company, and Westchester
Surplus Lines Insurance Company: On May 17, 2002, the Company filed suit
against Illinois Union Insurance Company and Westchester Surplus Lines
Insurance Company for failing to defend and indemnify the Company for the
Goleta Bank Loan related lawsuits as the Company claims it was insured for
the Bank Lone business under the insurance policies. The petition alleges
breach of contract - failure to indemnify; breach of contract - failure to
defend; a declaratory judgment declaring the insurance company's ongoing
obligation to pay the defense costs of the lawsuits; an award for attorney
fees for the services of legal counsel to pursue this action and an award
of all damages the Company has suffered as a result of the alleged breaches
of insurance contracts with the two companies including prejudgment and
post-judgment interest and statutory penalties. Each of the defendants
generally denied the Company's allegations. On September 13, 2002, the
defendants filed a counterclaim requesting judgment declaring, inter alia,
no coverage exists for the claims set forth in each of the Goleta Bank Loan
related lawsuits.
o Ace Currency Exchange, Inc. v. Ace Cash Express, Inc.; alleging breach of
Consent Decree dated May 23, 1993 in Ace Currency Exchange, Inc. v. Ace
Cash Express, Inc. This lawsuit regarding the Company's use of the name
"Ace" in the City of Baltimore, Maryland and Baltimore, Xxxxxx and a
portion of Xxxx Arundel counties, Maryland in alleged violation of that
certain Consent Decree dated May 23, 1993 was filed on or about March 4,
2003 in the United States District Court for the District of Maryland. The
plaintiff alleges the Company's violation of the Consent Decree and seeks
that (1) the Company be held in contempt of court, (2) the Company pay
compensatory damages of $500,000 plus interest and costs, (3) the Company
be enjoined from continuing to violate the Consent Decree, (4) the Company
account to and pay the plaintiff all profits received during the period of
violation and that such damages be trebled and (5) costs, attorneys' fees
and other appropriate relief be awarded to the plaintiff against the
Company.
o The Company and its Subsidiaries are also involved from time to time in
various legal proceedings incidental to the conduct of their business.
Management believes that none of these legal proceedings will result in any
material impact on the Company's financial condition and results of
operations.
5.1(j)
o See Ace Currency Exchange, Inc. v. Ace Cash Express, Inc.; alleging breach
of Consent Decree dated May 23, 1993 in Ace Currency Exchange, Inc. v. Ace
Cash Express, Inc. described above. Court order to resolve lawsuit in
accordance with an Agreement dated October 24, 1989, between the Borrower
and Ace Currency Exchange, Inc. In that Agreement, the Borrower agreed to
do the following in the City of Baltimore, Maryland, in the counties of
Baltimore and Xxxxxx, Maryland, and in a portion of the County of Xxxx
Arundel, Maryland: (1) cease using A.C.E. in all permanent storefront
signage, (2) cease using A.C.E. on all temporary banners and signage
(though temporary posters may include the Borrower's logo with A.C.E.
appearing not larger than approximately 1 1/2"), (3) cease reference to ACE
when answering the telephone at its locations, and (4) cease reference to
ACE in all future media advertising.
5
o Settlement Agreement between Ace Cash Express, Inc. and the Ohio Division
of Financial Institutions dated as of December 31, 2002 - See Company's
Form 8-K dated as of December 20, 2002 filed with the Securities and
Exchange Commission ("SEC") on January 6, 2003
o Final Order of the State of Florida, Department of Banking and Finance,
Division of Securities and Finance dated December 30, 2002 In re Ace Cash
Express, Inc. d/b/a Ace America's Cash Express - See Company's Form 8-K
dated as of December 20, 2002 filed with the SEC on January 6, 2003
o Consent Judgment dated December 13, 2002 in State of North Carolina ex rel.
Xxx Xxxxxx, Attorney General and Xxxxxx X. Xxxxx, Xx., Commissioner of
Banks v. Ace Cash Express, Inc. - See Company's Form 10-Q for the quarterly
period ended December 31, 2002 filed with the SEC on February 14, 2003
o Consent Order In the Matter of Ace Cash Express, Inc., Agent and Bank
Service Provider for Goleta National Bank, dated October 25, 2002 - See
Company's Form 8-K dated as of October 25, 2002 filed with the SEC on
November 5, 2002
o Consent Decree dated May 6, 2002 - State of Colorado, ex rel. Xxx Xxxxxxx,
Attorney General for the state of Colorado, and Xxxxx X. Xxxx,
Administrator, Uniform Consumer Credit Code v. Ace Cash Express, Inc. - See
Company's Form 10-Q for the quarterly period ended March 31, 2002 filed
with the SEC on May 15, 2002
o Agreed Final Judgment and Permanent Injunction in Western Union Corporation
v. Ace Cash Express, Inc., dated March 27, 1990 - Injunction prohibiting
the use of the slogan "We Do Western Union Only Better" in connection with
the promotion and advertisement of money transfer services.
o The Company has supplied information regarding certain of its payday loans
to the Federal Trade Commission ("FTC") in response to the FTC's letter
dated December 12, 2002.
6
SCHEDULE 5.1(k)
ENVIRONMENTAL SCHEDULE
o With regard to leased Properties and Facilities, the Company does not have
any knowledge with respect to the presence or absence any USTs, PCBs, lead
paint or asbestos located in, at, on, under or a part of, or otherwise
related thereto and the Company has not undertaken any investigation of
such Properties and Facilities with respect thereto.
SCHEDULE 5.1(p)
PROPERTIES SCHEDULE
00000 XXXXX XXXXXXXX. XXXXXX XX 00000
000000 XXXXXXXXX XX. XXXXXX XX 00000
000000 X. 00XX XX. XXXXXXX XXXXXXX XX 00000
000000 X. XXXXXXXX XXXXXXXXX XX 00000
461305 KRAMERIA UNIT J XXXXXX XX 00000
00000 X XXXXXXX XX XXXXXX XX 00000
000000 XXXXXXXX XXXX XXXXXX XX 00000
000000 XXXXX XXXXXX XXXXXX XX 00000
52640 SIXTEENTH XXXXXX XX 00000
5413110 X. XXXXXXXXXXX XXX. XXXXXX XX 00000
5710390 E. COLFAX XXXXXX XX 00000
5814410 X 0XX XXXXXX XXXXXX XX 00000
000000 XXXXX XXXXXXXXX XXXXXXXX XX 00000
00000-X XXXXXX XXXXXX XXXXXX XX 00000
6111703 E. COLFAX XXXXXX XX 00000
00000 X. XXXXXXXX XXXX XXXXXX XX 00000
000000 X. XXXXXX XXXX XXXXXX XX 00000
000000 X. XXXXXXX XXXX XXXXXX XX 00000
000000 X. XXXXXX XXXX XXXXXX XX 00000
000000 X. XXXXXXXX XXXXXXXXX XX 00000
828800 XXXXXXXXXX XXXXXXXX XX 00000
8415037 X. XXXXXX XXX XXXXXX XX 00000
000000 XXXX XXXXXX XXXXXX XXXXXXXX XX 00000
000000 XXXX 00XX XXXXXX XXXXXX XX 00000
000000 X. XXXXXX XXX XXXXXX XX 00000
000000 X. 00XX XXXXX XXXXXXXX XXXX XX 00000
000000 XXXXXXX XXXX XXXXXXXXXXX XX 00000
000000 X. XXXXXXX XXXXXX XXXXXX XX 00000
000000 XXXXXX XXXXXX XXXXXX XX 00000
1034134 XXXXXX XXXXXX XXXX XXXXXXXX XXXXXXX XX 00000
1075520 XXXXX XXXXXXX 00-00 XXXXXXXX XXXXXXX XX 00000
1102322 X. XXXXXX XXXXXX XXXXXXXX XXXXXXX XX 00000
000000 X. XXXXXX XXXX XXXXXXXX XXXXXXX XX 00000
1122064 X. XXXXXXX XXXX. XXXXXXXX XXXXXXX XX 00000
113893 X. XXXXXXX XXXX. XXXXXXXX XXXXXXX XX 00000
1143279 X XXXXXXX XXXX XXXXXXXX XXXXXXX XX 00000
1153014 X XXXXXX XXX XXXXXXXX XXXXXXX XX 00000
1161640 XXXXX XXXXXX XX. XXXXXXXX XXXXXXX XX 00000
1171406 S. XXXXXX XXX. XXXXXXXX XXXXXXX XX 00000
0000000 X. XXXXXXXX XXX. XXXXXX XX 00000
1193003 NORTH XXXXXXXXX, #B XXXXXX XX 00000
000000 XXXXXXXX XXXXXXX XX. XXXXXXXX XXXXXXX XX 00000
1225863 XXXXXXXXXXXX XXX. XXXXXXXX XXXXXXX XX 00000
1231453 XXXXX XXXXXX XXXX. XXXXXXXX XXXXXXX XX 00000
1246910 X. XXXXXXX XXXX. XXXXXXXX XXXXXXX XX 00000
1503924 WADSWORTH XXXXX XXXXX XX 00000
1513150 S. PEORIA XX. XXXXXX XX 00000
1525335 XXXX 00XX XXX. XXXXXX XX 00000
0000000 XXXXX XXXXXXXX XXXX. XXXXXX XX 00000
1556006 X. XXXXXXX XXXXXX XXXXXXXX XX 00000
1563913B - XXXX 000XX XXXXXX XXXXXXXX XX 00000
0000000 X. XXXXXXXX XXXXXX XX 00000
2016025 X 00XX XXXXXX XXXXXXX XX 00000
0000000 X XXXXXX XXXXXX XXXX XXXXXXX XX 00000
2032835 X 00XX XXXXXX XXXXXXX XX 00000
2063458 X. XXX XXXXX XXXXXXX XX 00000
0000000 X XXXXXX XXXXXX XX XXXXXXX XX 00000
2092410 S. 0XX XXXXXX XXXXX XXXXXX XX 00000
000000 X. XXXXXXXX XXXXXX XX 00000
2112081 X. XXXXXXX XXX. XXXXXXXX XX 00000
2126018 X. XXXXXXX XXXXXX XXXXXXX XX 00000
2174338 XXXX XXXXXX XXXX XXXXXXX XX 00000
2192709 X. XXX XXXXX XXXXXXX XX 00000
2203030 X. 00XX XXXXXX XXXXXX XX 00000
0000000 X. XXX XXX XXXXXX XX 00000
2235114 X. XXXXXXXX XX XXXXXXX XX 00000
000000 X. XXXXXXX XXXX XXXX XX 00000
2256020 X. 00XX XXXXXX XXXXXXXX XX 00000
2271225 X. XX. XXXX'X XXXXXX XX 00000
000000 X. XXXXXXXX XXXXXX XX 00000
2322032 X. XXXXXX XXXX XXXXXXX XX 00000
2341928 X. XXXXXXX XXXX XXXXXXX XX 00000
2366544 X. XXXXXX XX XXXXXXX XX 00000
0000000 X. XXXXXXXX XX. XXXXXXX XX 00000
2403770 X. 0XX XXXXXX XXXXXXX XX 00000
2411029 X. XXXXXXXXXX XX. XXXXXXXXXX XX 00000
2459401 X. XXXX XXXXX XX. XXXXXXX XX 00000
2462716 X. XXXXXX XXXXXX XX. XXXXXXX XX 00000
000000 X. XXXXXXX XXXX XXXX XX 00000
2498385 XXXXXXXXX XXXXX XXXXXX XX 00000
000000 X. XXXX XXXXX XXXXXX XX 00000
2511830 XXXX XXXXXXXXX XXXXXX XX 00000
25215249 XXXXX 00XX XXXXXX XXXXXXX XX 00000
2533205 X. XXXXXXXX XXXX XXXXXXX XX 00000
2578210 X. XXXXXX XXXXXX XX XXXXXXX XX 00000
2614727 E. SOUTHERN XXXXXXX XX 00000
2635011 XXXXX 00XX XXXXXX XXXXXXX XX 00000
000000 XXXXXXXXX XXXXX X XX XXXX XX 00000
000000 X. XXXXXXXX XX XXXX XX 00000
2
26912135 MONTWOOD #103 XX XXXX XX 00000
2736114 X. 00XX XXXXXX XXXXXXXX XX 00000
2746402 S. CENTRAL XXXXXXX XX 00000
275777 X. XXXXXXX XXXXXX XXXXXXXX XX 00000
2763544 X. XXXXXXXX XXXXXX XXXXXXX XX 00000
2776750 X. XXXX XXXX XX 00000
000000 X. XXXX XXXXXX XXXX XXXX XX 00000
2828838 XXXXXXXX XX XXXX XX 00000
2838220 X XXXX XXXXXX XX XXXX XX 00000
0000000 XXXXXXX XX. XX XXXX XX 00000
00000 XXXXX XXXX XXXXXX XXXXXX XX 00000
0000000 X. XXXXX XX. XXXXX XX 00000
2887500 X. XXXX XX XXXX XX 00000
000000 X. 00XX XX. XXXX XX 00000
000000 X. XXXXX XXXXX XXXXXXX XX 00000
000000 XXXXX XX., #0 XXXXXXX XX 00000
2931965 X. XXXXX XXX. XXXXXXX XX 00000
000000 XXXXX XXXX XX XXX XXXX XX 00000
000000 X. XXXXXXXX XXXXXXX XX 00000
2964750 E. BROADWAY XXXXXXX XX 00000
00000 X. XXXXXXX XX. XXXXXXX XX 00000
000000 XXXX XXXXXXXX XXXX XX 00000
2994040 X. 00XX XX. XXXXXXX XX 00000
0000000 XXX XX XXX X XXXXXX XX 00000
0000000 X XXXXXXX XXXX XXXXXX XX 00000
3102980 X. XXXXXXXXX XXX XXXXXX XX 00000
3113504 X. XXXXXX XX. XXXXXXX XX 00000
3122643 X. XXXXXXX XXXX XXXXXX XX 00000
3134119 X XXXXXXXXX XXX XXXX XXXXX XX 00000
3143171 XXXXXX XXXXXXX XXXXXX XXXX XX 00000
0000000 XXXXX XXX XXXXXX XX 00000
3163204 X XXXX XX XXXX XXXXX XX 00000
0000000 XXX. 00 XXXX XXXX XXXXX XX 00000
0000000 X. XXXXXXX XXXX XXXXX XX 00000
0000000 XXXXX XXXXX XXXXXXX XX 00000
000000 X. XXXX XX XXXXX XXXXXXX XX 00000
000000 X. XXXXXXXX XXX XXXXXXXX XX 00000
0000000 XXX XXXX XXX XXXXXX XX 00000
0000000 XXXXXXXXXX XXX. XXXXXX XX 00000
3281914 XXXX XXXXXXXX XXXX XXXXXXXXXX XX 00000
32911355 XXXXX XXXXX XXXX XXXXXX XX 00000
000000 X XXXXXX XXXX XXXX XXXXXXXXX XX 00000
3312243 X XXXXXX XX XXXXXXXXX XX 00000
000000 XXXXXXXXX XXX XXXXXXX XX 00000
0000000 X XXXX XXXXXX XX XXXXXX XX 00000
3373658 XXXXX XXXXXXXX XX XXXXXX XX 00000
0000000 X. XXXX XX XXXXXX XX 00000
3
3411409 X. XXXXXXXX XXXX XXXXXX XX 00000
3422230 X. XXXXXXX XX XXXXXXXXX XX 00000
3442001 X. XXXXXXX XXXX XXXXXX XX 00000
3452302 XXX XXXXXXXXX XX XXXXXX XX 00000
3463004 X. 0XX XXXXXX XXXX XXXXX XX 00000
34812921 XXXXXXX XXXX XXXXXX XX 00000
3503159 X XXXXXXX XXX XXXXXXX XX 00000
0000000 XXXXXXX XX XXXXXXX XX 00000
35214320 XXXXX XXXX XXXXXXX XX 00000
3532810 X. XXXXXXX XXXXX XX. XXXXXXXXXX XX 00000
0000000 XXXXXX XXXX XXXXXX XX 00000
3552905 XXXXXXXX XXXX XXXXX XXXXXXX XX 00000
000000 X. XXXXXX X XXXXX XXXXXXX XX 00000
3574801 X XXXXXX XX XXXXXXXXX XX 00000
35814902 XXXXXXX XXXX XXXXXX XX 00000
3593708 XXXX XXXX XXXX XXXX XXXXX XX 00000
0000000 XXXXXXX 00 XXXX XXXX XXXXX XX 00000
36313519 XXXXXXXX XX XXXXXX XX 00000
000000 XXXX XXXXXXXX XXXX XXXXXXX XX 00000
3671915 X XXXXXXX XXXX XXXXX XXXXXXX XX 00000
000000 X. XXXXXXX XX XXXXXXXXX XX 00000
0000000 XXXXXXXXX XXXX. XXXX XXXXX XX 00000
3753317 XXXXXX XXXX XXXX XXXXXX XX 00000
0000000 X XXXXXXXXX XX XXXXXX XX 00000
37710806 XXXXXXX XXXX XXXXXX XX 00000
000000 X XXXXXXX XX XXXXXXXXXX XX 00000
3801095 XXXXXXXXX XXXXXXX XX XXXXXX XX 00000
3816245 RUFE XXXX XX XXXXXXX XX 00000
0000000 XXXX XXXX XXXXXX XX 00000
0000000 X XXXX XXXXXX XX XXXXXX XX 00000
0000000 XXXXXX XXXXXX XX XXXXXX XX 00000
0000000 XXX. X XXXXX XX 00000
3881060 XXXXX XXXX XX XXXXXX XX 00000
3891125 XXXX 0XX XXXXXX XXXXXX XX 00000
000000 XXXXX XXXXXXX XXX. XXXXXXX XX 00000
3926526 XXXXXXXX XXXXXX XXXXXX XX 00000
000000 X XXXXXXX XXXXXXXXXX XXXXXXXXXX XX 00000
3953801 XXX XXXXXXXXX XX XXXXXXXX XX 00000
0000000 XXXXX XXXX XXXXXX XX 00000
0000000 XXXXX XXX. XXXXXX XX 00000
3982544 X XXXXX XX XXXXXXXXX XX 00000
0000000 XXXXXX XXXX XXXXXX XX 00000
0000000 XXXX XX XXXXXXX XX 00000
0000000 XXXX XXXX XXXXXXX XX 00000
0000000 XXXX XXXXXX XXXXXXX XX 00000
0000000 XXXXXXXX XXXX XXXXXXX XX 00000
4116883 XXXXX XXXXXXX XX XXXXXXX XX 00000
4
4135616 X. XXXXXXX XX XXXXXXX XX 00000
4247917 XXXXXXXXXX XXXX XXXXXXX XX 00000
4257518 XXXXXXXX XXXXXX XXXXXXX XX 00000
0000000 XXXXXXXX XXXX XXXXXXX XX 00000
000000 XXXXXX XXXX XXXXXXX XX 00000
0000000 XX 0000 XX X XXXXXXX XX 00000
4317542 X.XXXXXXX XXXXXX XXXXXXX XX 00000
43211142 XXXXXXXXXX XX XXXXXXX XX 00000
0000000 XXX XXXX XXXX. XXXXXXX XX 00000
4352619 XXX XXXXX XX XXXXXXXX XX 00000
0000000 XXXXXXX XXX XXXXXXXX XX 00000
43813946 XXXXXXXXXX XX XXXXXXX XX 00000
44011843 XXXXXXXXX XX XXXXXXX XX 00000
44111103 XXXXX XXXXXX XX XXXXXXX XX 00000
44213509 XXXXXXXXX XXXXXXX XXXXXXX XX 00000
4439301 BISSONNET XXXXXXX XX 00000
0000 XXXXXX XXXX XXXXXXX XX 00000
44612331 XXXXXXX XX. XXXXXXX XX 00000
44719767 XXXXXXX 00 XXXXXX XX 00000
44810944 XXXXX XX XXXXXXX XX 00000
0000000 XXXXXX XXXX. XXXXXXX XX 00000
0000000 X XXXXXXXX XX XXXXXXX XX 00000
000000 XXXX XXXXXX XXXX XXXXXXX XX 00000
45510990 X-00 XXXXX XXXXXXX XX 00000
4561414 X. XXXXXXX XXXXX XXXXXXX XX 00000
45813640 XXXXXXX XXXXXXX XXXXXXX XX 00000
0000000 XXXXX XXX XXXXXXX XX 00000
0000000 XXXXXXX XXXX XXXXXXX XX 00000
0000000 XXXXXXXX XX XXXXXXX XX 00000
0000000 X XXXXXX XX XXXXXX XX 00000
0000000 XXXXXXXX XX XXXXXXX XX 00000
000000 XX 0000 XX XXXX XXXXXXX XX 00000
46711415 XXXXXXXX XXXXXXXXX XXXXXXX XX 00000
46810008 XXXX XXXXXXX XXXXXXX XX 00000
4715788 XXXXXX XXXX XXXXXXX XX 00000
47211890 XXXXXXXXXX XX XXXXXXX XX 00000
4731400 XXXXXX XX XXXXXXX XX 00000
47517430 XXXXXXXXX XXXX XXXXXXX XX 00000
0000000 XXXXXX XX XXXXXXX XX 00000
4793304 X 00XX XX XXXXX XX 00000
4801217 N LOOP 000 XXXX XXXXXX XX 00000
4811348 X XXXXXXXXX XXX XXXXXXXX XX 00000
4825806 XXXXXXXX XX XXXXXXX XX 00000
4834502 XXXXXX XX XXXXXXX XX 00000
48412603 XXXXXX XX. XXXXXXX XX 00000
4866872 XXXXXXXXXX XXXX XXXXXXX XX 00000
4871213 S. XXXX XX XXXXXXXX XX 00000
5
4883634 XXXXX XXXX XXXXXXX XX 00000
0000000 XXXX XX. XXXXXXX XX 00000
4953010 XXXXX XXXX XXXXXXX XX 00000
49711210 XXXXXXXXX XXX XXXXXXX XX 00000
4989819 XXXXXXXXX XX XXXXXXX XX 00000
4992525 XXXXXXXXX XXXXXXX 00 XXXXXXX XX 00000
5019910 XXX XXXXX XXX XXXXXXX XX 00000
5026804 XXXXXXXX XXXXX XXXX XXX XXXXXXX XX 00000
5038458 XXXXXXXXXXXXXX XXX XXXXXXX XX 00000
5046998 ZARZAMORA XXX XXXXXXX XX 00000
000000 XXXX XXXXXXXX XXX XXXXXXX XX 00000
5071308 XXXXXX XXXXXXX XXX XXXXXXX XX 00000
5094263 XXXXXXXXX XXXX 000 XXX XXXXXXX XX 00000
000000 X.X. XXXXXXXX XX XXX XXXXXXX XX 00000
511933 X.X.X. XXXXX XXXX XXX XXXXXXX XX 00000
000000 XXXXXXXXXXX XXXX XXX XXXXXXX XX 00000
000000 XXXXX XXX XXXXXXXXX XXX XXXXXXX XX 00000
5141151 CULEBRA XXX XXXXXXX XX 00000
0000000-X XXXXXXX XXXX XXXX XXXXXX XX 00000
0000000 XXXXXXXXXXXXXX XX XXX XXXXXXX XX 00000
5176900 XXX XXXXX XXXXXX XXX XXXXXXX XX 00000
5183678 B. CULEBRA XXX XXXXXXX XX 00000
000000 X.XXX XXXXXXXXX XXX XXXXXXX XX 00000
000000 XXX XXXXX XXXXXX XXX XXXXXXX XX 00000
52211751 XXXXXX XXXX XXX XXXXXXX XX 00000
0000000-0 XXXXXXX XXXX XXX XXXXXXX XX 00000
0000000 XX XXXXXXXX XX XXX XXXXXXX XX 00000
5264931 XXXXXX XXXX XXX XXXXXXX XX 00000
0000000 XXXXXX XXXXXX XXXX XXX XXXXXXX XX 00000
5294877 X. XXXXXXXX XXX XXXXXXX XX 00000
5301918 XXX XXXXXX XX. XXXXXXXXX XXXX XX 00000
0000000-0 XXXXXXX XX. XXX XXXXXXX XX 00000
0000000 XXXXX XX-00 XXX XXXXXXX XX 00000
5334802 XXXXXXXX XXXX XXX XXXXXXX XX 00000
5342501 XXXXXXX XXXX XXX XXXXXXX XX 00000
5353815 XXXXXX XXXX XXX XXXXXXX XX 00000
53613900 XXXXXXXXXXX XXXX XXX XXXXXXX XX 00000
5371420 XXXXX XXXXXX XXXX XXXXXXXXXXXX XX 00000
53813410 U.S. 000 XXXXX #000 XXX XXXXXXX XX 00000
5406750 XXXXXX XXXX XXX XXXXXXX XX 00000
0000000-X XXXXX XXXXXX XXXXXX XXXXXXX XX 00000
543727 SO. 00XX XXXXXX XXXXXXXXXX XX 00000
5445425 XXXXX XXXXXX XXXXX XXXXXX XXXXXXX XX 00000
5453504 XXXXXXX XXXXXX XXXXXX XXXXXXX XX 00000
5461508 XXXXXXX XXXXX XXXXXXXX XX 00000
5471132 X. XXXX XXXXX XX 00000
0000000 XXXXXXX XXXX XXXXXX XX 00000
6
000000 X. XXXXXXXX XXXX #000 XXXXXX XX 00000
55210205 X. XXXXX #000 XXXXXX XX 00000
5538728 X XXXXXXXX XXXX XXXXXX XX 00000
5542425 XXXX 0XX XXXXXX XXXXXX XX 00000
0000000 X.XXXXX XXXX. #000 XXXXXX XX 00000
0000000 XXXXXXX XXXX. #000 XXXXXX XX 00000
0000000 XXXXXX XXXX, XXX. X XXXXXX XX 00000
0000000 XXXXXX XXXX XXXXXX XX 00000
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16
24202351 NOBLESTOWN ROAD #B-3 GREENTREE BOROUGH PA 15205
24212020 E. CARSON STREET PITTSBURGH PA 15203
2422710 E. WARRINGTON AVE. E PITTSBURGH PA 15211
24231922 SPRING GARDEN AVE PITTSBURGH PA 15212
24243029 BELMONT AVE. YOUNGSTOWN OH 44505
24252550 1/2 MARKET STREET YOUNGSTOWN OH 44512
25015061 E. 38TH STREET INDIANAPOLIS IN 46218
25032435 N SHERMAN INDIANAPOLIS IN 46218
25062620 S. MADISON AVENUE INDIANAPOLIS IN 46225
25083801 LAFAYETTE ROAD INDIANAPOLIS IN 46254
25107025 PENDLETON PIKE INDIANAPOLIS IN 46225
25114001 E. 10TH STREET INDIANAPOLIS IN 46201
25121017 E. COLISEUM FT. WAYNE IN 46805
25135608 GEORGETOWN INDIANAPOLIS IN 46254
25148091 S. MADISON INDIANAPOLIS IN 46227
25181119 EAST MCGALLIARD RD MUNCIE IN 47303
2519711 W. FRYE ROAD GREENWOOD IN 46142
25208939 E. 38TH STREET INDIANAPOLIS IN 46226
25215841 CRAWFORDSVILLE RD INDIANAPOLIS IN 46224
252340 NORTH DELAWARE INDIANAPOLIS IN 46204
25243915 MADISON AVENUE INDIANAPOLIS IN 46227
25258027 PENDELTON PIKE INDIANAPOLIS IN 46226
25273406 W. 16TH STREET INDIANAPOLIS IN 46222
25289515 E. WASHINGTON STREET INDIANAPOLIS IN 46229
25293762 N. MERIDIAN INDIANPOLIS IN 46208
25331115 EAST 86TH STREET INDIANAPOLIS IN 46240
2534600 TWIN AIRE DRIVE #9 INDIANAPOLIS IN 46203
25358605 N. MICHIGAN ROAD INDIANAPOLIS IN 46268
25362321 EAST 38TH ST.,STE.A INDIANAPOLIS IN 46218
25375357 N. KEYSTONE AVENUE INDIANAPOLIS IN 46220
25384112 N. HIGH SCHOOL ROAD INDIANAPOLIS IN 46254
25395103 WASHINGTON STREET W. INDIANAPOLIS IN 46241
27011535 E CENTRAL AVE WICHITA KS 67214
27021606 S BROADWAY ST WICHITA KS 67211
27031105 W PAWNEE ST WICHITA KS 67213
27046259 E 21ST ST N WICHITA KS 67208
310114615 1ST AVENUE SOUTH BURIEN WA 98168
31022632 SOUTH 38TH STREET TACOMA WA 98406
310313754-A AURORA AVE.N SEATTLE WA 98133
310610519 BRIDGEPORT WAY SW TACOMA WA 98499
310710707 PACIFIC AVENUE #D TACOMA WA 98444
31086302 6TH AVENUE TACOMA WA 98406
31093110 SW CEDAR HILLS BLVD BEAVERTON OR 97005
31102722 NORTH LOMBARD PORTLAND OR 97217
3111407 SW ALDER PORTLAND OR 97204
31127332 POWELL BLVD. PORTLAND OR 97206
311316502 SE DIVISION PORTLAND OR 97236
17
31145108 E. EVERGREEN WAY EVERETTE WA 98208
3115251 SUNSET BLVD. NORTH RENTON WA 98055
31163109 RANIER AVE., SOUTH SEATTLE WA 98144
31182029 N.E. BURNSIDE RD. GRESHAM OR 97030
312113607 S. E. POWELL BLVD. PORTLAND OR 97236
31232105 AUBURN WAY SOUTH AUBURN WA 98002
31242719 FOURTH PLAIN BLVD VANCOUVER WA 98661
312527009 PACIFIC HWY SOUTH DES MOINES WA 98198
312713127 PACIFIC AVE. TACOMA WA 98444
312812965 SW PACIFIC HWY. TIGARD OR 97223
32018207 N. FLORIDA AVENUE TAMPA FL 33604
32032005 GULF-TO-BAY CLEARWATER FL 33765
32045105 SILVER STAR RD. ORLANDO FL 32808
320525720 U.S. HWY 19 NORTH CLEARWATER FL 33763
32062509 E. COLONIAL DRIVE ORLANDO FL 32803
32072940 34TH STREET SOUTH ST. PETERSBURG FL 33711
32081415 N. ARMENIA AVENUE TAMPA FL 33607
32094100 E. BAY DRIVE, B-10 CLEARWATER FL 33764
32104001 E. HILLSBOROUGH TAMPA FL 33610
32122705 54TH AVE #18 ST PETERSBURG FL 33714
3216820 3RD AVENUE SOUTH ST. PETERSBURG FL 33701
32185561 PARK BLVD. PINELLAS PARK FL 33781
32202355-B W. HILLSBOROUGH TAMPA FL 33603
32232520 S. SEMORAN BLVD. ORLANDO FL 32822
32242532-B BEARSS AVENUE TAMPA FL 33613
32264712 S. ORANGE BLOSSOM TR ORLANDO FL 32839
32274756 US HWY 19 NEW PORT RICHEY FL 34652
32281335 BRANDON BLVD. #F BRANDON FL 33511
32291711-B N.50TH STREET TAMPA FL 33619
32375169 14TH ST WEST BRADENTON FL 34207
32385526 66TH STREET NORTH ST. PETERSBURG FL 33709
32415701 EDGEWATER DRIVE ORLANDO FL 32810
32426851 HWY 17-92 SOUTH FERN PARK FL 32730
32483921 N.FLORIDA AVENUE TAMPA FL 33603
324911144 US HIGHWAY 19, #3 PORT RICHEY FL 34668
32533254 CENTRAL AVENUE ST. PETERSBURG FL 33705
3254806 NE WALDO ROAD GAINESVILLE FL 32461
3255246 BLANDING BOULEVARD ORANGE PARK FL 32073
3256810 GOLFAIR BOULEVARD JACKSONVILLE FL 32209
32575124 BLANDING BLVD. SOUTH JACKSONVILLE FL 32210
325810152 ATLANTIC BLVD. JACKSONVILLE FL 32211
32593547 KINGSTON STREET JACKSONVILLE FL 32205
3260854 N. NOVA RD DAYTONA BEACH FL 32117
32616030 MERRILL ROAD JACKSONVILLE FL 32211
32621740 SEMORAN BLVD STE.140 WINTER PARK FL 32792
32636821 W. HILLSBOROUGH #16 TAMPA FL 33634
3264631 W. INTERNATIONAL DAYTONA BEACH FL 32114
18
32651036-50 DUNN AVENUE JACKSONVILLE FL 32218
3266946 CASSAT AVENUE JACKSONVILLE FL 32205
3269833 N. RIDGEWOOD AVENUE DAYTONA BEACH FL 32114
32705631 UNIVERSITY BLVD JACKSONVILLE FL 32216
32711420 NORTH MISSOURI AVE LARGO FL 33770
32729303 N. 56TH @BUSCH TEMPLE TERRACE FL 33617
32731560 S. FRENCH SANFORD FL 32771
32744207 W. COLONIAL ORLANDO FL 32808
327510526 E. COLONIAL DRIVE ORLANDO FL 32817
32774644 GANDY BLVD TAMPA FL 33611
32781523 S. CRYSTAL LAKE DR. ORLANDO FL 32806
32792191 B-TAMIAMI TRAIL PORT CHARLOTTE FL 33948
3280408 N. DALE MABRY HWY TAMPA FL 33609
32842920 35TH ST ORLANDO FL 32839
3287833 BEACH BLVD JACKSONVILLE FL 32250
3288500 34TH STREET SOUTH ST. PETERSBURG FL 33712
32899741 SAN JOSE BLVD JACKSONVILLE FL 32257
32901600 PARK AVENUE ORANGE PARK FL 32073
32911538 N. W. 6TH STREET GAINSVILLE FL 32601
3292905 N. WILSON BARTOW FL 33830
32938230 4TH STREET NORTH ST. PETERSBURG FL 33702
32945509 US HIGHWAY 19 NORTH NEW PORT RICHEY FL 34652
32954812 A EAST BUSCH BLVD. TAMPA FL 33617
32962317 E. HILLSBOROUGH AVE TAMPA FL 33610
32975130 S. DALE MABRY HWY TAMPA FL 33611
329811502 N. NEBRASKA AVE TAMPA FL 33617
32991750 SUN SHADOW DRIVE CASSELBERRY FL 32707
33023050 FIRST AVENUE NORTH ST PETERSBURG FL 33713
33066935 LITTLE ROAD NEW PORT RICHEY FL 34655
33115383 EHRLICH ROAD,STE 101 TAMPA FL 33625
33152400 SW COLLEGE ROAD OCALA FL 34474
33216581 102ND AVE PINELLAS PARK FL 33782
332413502 N. NEBRASKA AVENUE TAMPA FL 33613
3326817 E. BLOOMINGDALE AVE. BRANDON FL 33511
4001658 W. HOLT BLVD. ONTARIO CA 91762
400216920 FOOTHILL BLVD. FONTANA CA 92336
4003804 W. HIGHLAND AVE. SAN BERNARDINO CA 92405
4004527 E. FOOTHILL BLVD. RIALTO CA 92376
40084003 SOUTHWESTERN AVE. LOS ANGELES CA 90062
40091377 WEST IMPERIAL LOS ANGELES CA 90044
40105848 SANTA MONICA BLVD. LOS ANGELES CA 90038
40113025 N. BROADWAY LINCOLN HEIGHTS CA 90032
401422 WEST 7TH ST. CALEXICO CA 92231
40165803 N. FIGUEROA LOS ANGELES CA 90042
4017745 S. VERMONT LOS ANGELES CA 90005
40181049 N. MOUNT VERNON AVE COLTON CA 92324
40198905 VENICE BLVD. LOS ANGELES CA 90034
19
402020469 SHERMAN CANOGA PARK CA 91306
40211803 N. CAHUENGA BLVD. HOLLYWOOD CA 90028
40228652-A WOODMAN AVE. ARLETA CA 91331
40247654 WOODMAN AVENUE VAN NUYS CA 91405
4029507 N. TUSTIN AVENUE ORANGE CA 92667
40321993 E. FLORENCE LOS ANGELES CA 90001
40331232 E. FLORENCE LOS ANGELES CA 90001
40345151 W. PICO BLVD LOS ANGELES CA 90019
40353928 W. ROSECRANS HAWTHORNE CA 90250
40361648 W. CARSON ST TORRANCE CA 90501
40374005 W. 3RD ST LOS ANGELES CA 90020
4038104-A W. ANAHEIM WILMINGTON CA 90744
403913131 HARBOR BLVD GARDEN GROVE CA 92643
40407335 VAN NUYS BLVD. VAN NUYS CA 91405
40421514 S. VERMONT ST. STE.J LOS ANGELES CA 90006
4044500 E. WASHINGTON BLVD LOS ANGELES CA 90015
40451070 STORY ROAD SAN JOSE CA 95122
40471136 W.MAIN STREET MERCED CA 95340
40484970 E. KINGS CANYON FRESNO CA 93727
40493241 W. SHAW FRESNO CA 93711
4050415 PARADISE ROAD MODESTO CA 95351
40514128 CHESTER AVENUE BAKERSFIELD CA 93301
40526300 WHITE LANE BAKERSFIELD CA 93309
40531540 N. FIRST STREET FRESNO CA 93703
405427300 HESPERIAN HAYWARD CA 94541
4055591 TRES PINO'S ROAD HOLLISTER CA 95023
40561825 COUNTRYSIDE TURLOCK CA 95380
40581700 HIGH STREET DELANO CA 93215
4059351 BELLEVUE ATWATER CA 95301
40602020 W.BRIGGS MORE MODESTO CA 95350
40615422 N. BLACKSTONE FRESNO CA 93710
40622517 #B MITCHELL ROAD CERES CA 95307
40631190 EAST F STREET OAKDALE CA 95361
4064420 H STREET MODESTO CA 95354
40652001-C TULLY ROAD MODESTO CA 95350
40661550 YOSEMITE BLVD. MODESTO CA 95354
40674831 BUTLER FRESNO CA 93727
40686465 NILES STREET BAKERSFIELD CA 93306
406950 W. OLIVE PORTERVILLE CA 93257
407013220 SAN PABLO AVENUE SAN PABLO CA 94608
40711833 N. TEXAS FAIRFIELD CA 94533
40721320 STANDIFORD, STE E8 MODESTO CA 95350
40732508 OAKDALE ROAD MODESTO CA 95355
40741187 S. MAIN MANTECA CA 95336
40751610 E.HATCH ROAD MODESTO CA 95351
40762700 SAN PABLO AVENUE OAKLAND CA 94612
40779001 INTERNATIONAL BLVD OAKLAND CA 94601
20
40783229 INTERNATIONAL BLVD OAKLAND CA 94601
40793889 SAN PABLO AVENUE EMERYVILLE CA 94608
4080610 HEGENBERGER OAKLAND CA 94601
40822038 MISSION STREET SAN FRANCISCO CA 94110
40861189 E. MARCH LANE STOCKTON CA 95210
40872300 CUTTING BLVD. RICHMOND CA 94804
40892150 E. ELMONTE DINUBA CA 93618
4090170 E.CROSS TULARE CA 93274
40911550 N. BEN MADDOX VISALIA CA 93292
40923637 S. MOONEY VISALIA CA 93277
40936000 LINDHURST MARYSVILLE CA 95901
40945227 ELKHORN BLVD SACRAMENTO CA 95842
40955427 AUBURN BLVD SACRAMENTO CA 95841
40967615 GREENBACK CITRUS HEIGHTS CA 95610
40977250 FAIR OAKS BLVD,STE.F CARMICHAEL CA 95608
40984341 ELKHORN BLVD. SACRAMENTO CA 95842
41012419 DEL PASO BLVD SACRAMENTO CA 95815
41024211 NORWOOD AVENUE SACRAMENTO CA 95838
41036650 VALLEY HI DRIVE SACRAMENTO CA 95823
41046527 FLORIN ROAD SACRAMENTO CA 95828
41065609 W. SUNSET BLVD. HOLLYWOOD CA 90028
41102774 WILLOW AVE. #115 CLOVIS CA 93612
41111585 N.W. WEST AVENUE FRESNO CA 93728
4112432 E. BULLARD AVENUE FRESNO CA 93710
41132134 WEST SUNSET BLVD. LOS ANGELES CA 90026
41144911 S SEPULVEDA BLVD CULVER CITY CA 90230
45011411 N. JONES BLVD. LAS VEGAS NV 89108
45023125 E. TROPICANA AVE. LAS VEGAS NV 89121
45034300 E. CHARLESTON LAS VEGAS NV 89121
45041155 E. TWAIN LAS VEGAS NV 89109
45051000 N. RANCHO RD. LAS VEGAS NV 89106
45064972 MARYLAND PARKWAY LAS VEGAS NV 89119
45073108 N. LAS VEGAS BLVD. LAS VEGAS NV 89115
4508235 N. EASTERN AVE. LAS VEGAS NV 89101
45092987 N. LAS VEGAS BLVD. LAS VEGAS NV 89030
45102255 LAS VEGAS BLVD. S. LAS VEGAS NV 89104
45111941 N. DECATUR BLVD. LAS VEGAS NV 89108
45123602 E. BONANZA RD. LAS VEGAS NV 89110
4514742 SOUTH BOULDER HWY HENDERSON NV 89015
45165516 BOULDER HWY LAS VEGAS NV 89122
91013278 S. WADSWORTH BLVD. LAKEWOOD CO 80227
61003317 WALNUT HILL LANE IRVING TX 75062SSM
61013658 N. BELTLINE STE3664 IRVING TX 75038SSM
61023418 OAK LAWN AVE DALLAS TX 75219SSM
61049730 ABRAMS ROAD DALLAS TX 75243SSM
61052810 TRINITY MILLS ROAD CARROLLTON TX 75006SSM
21
61082230 NORTH COLLINS STREET ARLINGTON TX 76011SSM
61122540 NORTH JOSEY CARROLLTON TX 75006SSM
614515037 E. COLFAX AVE. AURORA CO 80011SSM
6146320 NORTH BROADWAY DENVER CO 80203SSM
6147640 SIXTEENTH DENVER CO 80202SSM
61531017 E. COLISEUM FT. WAYNE IN 46805SSM
61573675 SATELLITE BLVD. #830 DULUTH GA 30096SSM
61582620 S. MADISON AVE. INDIANAPOLIS IN 46225SSM
61653655 S. GRAND ST. LOUIS MO 63118SSM
61674720 CENTRAL AVE. SE ALBUQUERQUE NM 87108SSM
61698800 WASHINGTON THORNTON CO 80229SSM
61701520 BROAD RIVER RD. COLUMBIA SC 29210SSM
6179810 FM 1960 WEST HOUSTON TX 77090SSM
6181933 S.W.W. WHITE RD. SAN ANTONIO TX 78220SSM
61824447 FREDERICKSBURG RD. SAN ANTONIO TX 78201SSM
6192145 E. COMMERCE @ SAN ANTONIO TX 78205SSM
619811854 BISCAYNE BLVD NORTH MIAMI FL 33181SSM
61991435 W. 49TH STREET HIALEAH FL 33012SSM
62001231 GREENWAY DRIVE IRVING TX 75038SSM
62028215 S. DIXIE HWY MIAMI FL 33143SSM
See also Schedule 7.2(u) with respect to the properties in North Charleston,
South Carolina and the property in Indianapolis, Indiana.
22
SCHEDULE 5.1(q)
INTELLECTUAL PROPERTIES SCHEDULE
o See Litigation Schedule regarding Ace Currency Exchange, Inc. v. Ace
Cash Express, Inc.
TRADEMARKS
OWNER TRADEMARK NAME JURISDICTION APPLICATION REGISTRATION
STATUS NUMBER/
APPLICATION NO.
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. A C E AMERICA'S CASH EXPRESS Mexico Registered 667241
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. A A C E AMERICA'S CASH United States of Registered 1,831,546
EXPRESS and design America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. A A-C-E AMERICA'S CASH Canada Registered TMA445484
EXPRESS and design
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. ACE United States of Registered 2,155,964
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. A A C E and design United States of Registered 1,806,389
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. ACE AMERICA'S CASH EXPRESS Texas Registered 052565
and design
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. ACE AMERICA'S CASH EXPRESS Texas Registered 052564
and design
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. ACE CANADA'S CASH EXPRESS Canada Pending Serial No.
and design 1132776
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. AFTER ALL... IT'S YOUR MONEY! United States of Pending Serial No.
America 76/490562
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. CASH IN ON OUR CONVENIENCE United States of Registered 1,846,958
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. CASH IN ON OUR CONVENIENCE United States of Registered 1,831,538
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. CASH IN ON OUR CONVENIENCE United States of Registered 2,108,173
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. CASH IS OUR MIDDLE NAME United States of Registered 2,318,222
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Ace Cash Express, Inc. IT'S YOUR MONEY. WHY WAIT? United States of Pending Serial No.
America 76/491255
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS United States of Registered 1,370,520
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS Canada Registered TMA496291
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS Mexico Registered 482464
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS Mexico Registered 486677
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS United States of Pending Serial No.
America 76/491366
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS United States of Pending Serial No.
America 76/490563
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS and design United States of Registered 1,476,206
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS MONEY CENTERS Canada Registered TMA503892
and design
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS MONEY CENTERS Mexico Registered 503683
and design
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. CHECK EXPRESS MONEY CENTERS Mexico Registered 514567
and design
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. EXPRESS and check design United States of Registered 1,489,647
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. EXPRESS and check design United States of Registered 2,183,193
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. EXPRESS and check design Canada Registered TMA532292
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. EXPRESS and check design Mexico Pending Serial No.
233980
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check Express, Inc. EXPRESS and check design Mexico Registered 514566
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check X Change Corporation CHECK-X-CHANGE United States of Registered 1,793,853
America
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check X Change Corporation CHECK-X-CHANGE and design Oregon Registered 0015726
--------------------------- ------------------------------ --------------------- ----------------- -------------------
Check X Change Corporation X-CHANGE-CHECK-X-CHANGE and United States of Registered 1,374,191
design America
2
PATENT APPLICATIONS
OWNER TITLE FILING DATE APPLICATION NO. ATTY. DOCKET NO.
----------------------------- --------------------------- -------------- ------------------ --------------------------
Ace Cash Express, Inc. Automated Method and 05/09/2002 10/142,351 300003-1001
System for Enrollment
----------------------------- --------------------------- -------------- ------------------ --------------------------
Ace Cash Express, Inc. Check and Cash Dispensing 06/19/2002 10/175,584 300003-1002
Machine and Method
----------------------------- --------------------------- -------------- ------------------ --------------------------
3
SCHEDULE 5.1(v)
DEPOSIT ACCOUNTS AND ARMORED COURIERS
(i) Deposit Accounts of Company:
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
ARKANSAS DEP 89440513 BANK OF AMERICA
ARKANSAS R/I 89440526 BANK OF AMERICA
ARKANSAS CURR 89440539 BANK OF AMERICA
NEW MEXICO DEP 109650382 BANK OF AMERICA
NEW MEXICO CURR 109650390 BANK OF AMERICA
NEW MEXICO R/I 109650408 BANK OF AMERICA
NASHVILLE TN. DEP 112485669 BANK OF AMERICA
NASHVILLE TN. CURR 112485677 BANK OF AMERICA
NASHVILLE TN. R/I 112485685 BANK OF AMERICA
WICHITA KANSAS DEP 2861440603 BANK OF AMERICA
WICHITA KANSAS R/I 2861440616 BANK OF AMERICA
WICHITA KANSAS CURR 2861440629 BANK OF AMERICA
SAVANNAH GA. CURR 3266408527 BANK OF AMERICA
SAVANNAH GA. DEP 3266408535 BANK OF AMERICA
SAVANNAH GA. R/I 3266408543 BANK OF AMERICA
WILMINGTON NC. CURR 3783622508 BANK OF AMERICA
WILMINGTON NC. DEP 3783622511 BANK OF AMERICA
WILMINGTON NC. R/I 3783622524 BANK OF AMERICA
CHARLESTON SC. CURR 3783730461 BANK OF AMERICA
CHARLESTON SC. DEP 3783730474 BANK OF AMERICA
CHARLESTON SC. R/I 3783730487 BANK OF AMERICA
CAPITOL R/I 3783832589 BANK OF AMERICA
CAPITOL CURR 3783832592 BANK OF AMERICA
CAPITOL DEP 3783832602 BANK OF AMERICA
HUNTSVILLE CURR 4771913193 BANK OF AMERICA
HUNTSVILLE DEP 4771913201 BANK OF AMERICA
HUNTSVILLE R/I 4771913219 BANK OF AMERICA
PINE BLUFF DEP 8007072791 BANK OF AMERICA
PINE BLUFF R/I 8007072805 BANK OF AMERICA
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
PINE BLUFF CURR 8007072813 BANK OF AMERICA
OKLAHOMA R/I 70108364923 BANK OF AMERICA
OKLAHOMA DEP 70108364931 BANK OF AMERICA
OKLAHOMA CURR 70108364958 BANK OF AMERICA
ST.LOUIS MO. DEP 100101249510 BANK OF AMERICA
ST.LOUIS MO. CURR 100101249529 BANK OF AMERICA
ST.LOUIS MO. R/I 100101249537 BANK OF AMERICA
FT.WAYNE IN. CURR 715001269599 BANK ONE
FT.WAYNE IN. DEP 715001269615 BANK ONE
FT.WAYNE IN. R/I 715002369607 BANK ONE
SAN / AUS DEP 43509122128 JPMORGAN CHASE BANK
SAN / AUS R/I 43509122144 JPMORGAN CHASE BANK
SAN / AUS CURR 43509122151 JPMORGAN CHASE BANK
EL PASO DEP 43509122169 JPMORGAN CHASE BANK
EL PASO R/I 43509122177 JPMORGAN CHASE BANK
EL PASO CURR 43509122185 JPMORGAN CHASE BANK
VALLEY DEP 84609288218 JPMORGAN CHASE BANK
VALLEY R/I 84609288226 JPMORGAN CHASE BANK
VALLEY CURR 84609288234 JPMORGAN CHASE BANK
NEW ORLEANS DEP 812315781 HIBERNIA NAT'L
NEW ORLEANS CURR 812315803 HIBERNIA NAT'L
NEW ORLEANS R/I 812315811 HIBERNIA NAT'L
LONGVIEW TX CURR 3420000752 HIBERNIA NAT'L
LONGVIEW TX DEP 3420000760 HIBERNIA NAT'L
2
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
LONGVIEW TX R/I 3420000779 HIBERNIA NAT'L
CLEVELAND OH. DEP 3765199 NATIONAL CITY
CLEVELAND OH. CURR 3765201 NATIONAL CITY
CLEVELAND OH. R/I 3765228 NATIONAL CITY
INDIANAN CURR 501912286 NATIONAL CITY
INDIANAN DEP 501912338 NATIONAL CITY
INDIANAN R/I 501912341 NATIONAL CITY
PITTSBURGH CURR 4600658771127 NATIONAL CITY
PITTSBURGH DEP 4600658771143 NATIONAL CITY
PITTSBURGH R/I 4600658771151 NATIONAL CITY
HOMEWOOD AL. DEP 301060694 REGION'S
HOMEWOOD AL. CURR 301060708 REGION'S
HOMEWOOD AL. R/I 301060813 REGION'S
ALBANY CURR 2507841006 REGION'S
ALBANY DEP 2507842206 REGION'S
ALBANY R/I 2507843406 REGION'S
CORPUS CHRISTI R/I 1411001371 TEXAS CAPITOL
CORPUS CHRISTI DEP 1411001678 TEXAS CAPITOL
CORPUS CHRISTI CURR 1411001686 TEXAS CAPITOL
NO. CAROLINA DEP 2000000566115 WACHOVIA
NO. CAROLINA R/I 2000000566128 WACHOVIA
NO. CAROLINA CURR 2000000566131 WACHOVIA
3
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
ACE CollectionsTrustAcct/ALA 2000014786923 WACHOVIA
ACE CollectionsTrustAcct/DITORE 2000014787809 WACHOVIA
SO.CAROLINA DEP 2010000169829 WACHOVIA
SO.CAROLINA R/I 2010000169832 WACHOVIA
SO.CAROLINA CURR 2010000175703 WACHOVIA
VIRGINIA DEP 2050000054237 WACHOVIA
VIRGINIA R/I 2050000054240 WACHOVIA
VIRGINIA CURR 2050000054253 WACHOVIA
GEORGIA DEP 2080000230403 WACHOVIA
GEORGIA R/I 2080000230416 WACHOVIA
GEORGIA CURR 2080000230429 WACHOVIA
FLORIDA DEP 2090001409155 WACHOVIA
FLORIDA CURR 2090001409168 WACHOVIA
FLORIDA R/I 2090001409171 WACHOVIA
2090001409414 WACHOVIA
CALIFORNIA R/I 4091219998 WELLS FARGO
CALIFORNIA DEP 4091220004 WELLS FARGO
CALIFORNIA CURR 4091220012 WELLS FARGO
BRYAN TX. DEP 4122047780 WELLS FARGO
BRYAN TX. CURR 4122049745 WELLS FARGO
BRYAN TX. R/I 4122099898 WELLS FARGO
ACH COLLECTIONS / RETURNS 4123473928 WELLS FARGO
CORE DATA 4127070845 WELLS FARGO
PHOENIX AZ. DEP 4159500198 WELLS FARGO
PHOENIX AZ. R/I 4159500214 WELLS FARGO
PHOENIX AZ. CURR 4159500222 WELLS FARGO
WASHINGTON DEP 4159662725 WELLS FARGO
WASHINGTON CURR 4159662733 WELLS FARGO
4
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
WASHINGTON R/I 4159662741 WELLS FARGO
DENVER CO. CURR 4159663293 WELLS FARGO
DENVER CO. R/I 4159663301 WELLS FARGO
DENVER CO. DEP 4159663319 WELLS FARGO
COLORADO SPRINGS R/I 4159663335 WELLS FARGO
COLORADO SPRINGS CURR 4159663343 WELLS FARGO
COLORADO SPRINGS DEP 4159663350 WELLS FARGO
FRANCHISE REVENUE 4159698323 WELLS FARGO
CORPORATE DEPOSIT 4159698331 WELLS FARGO
DALLAS / FT.WORTH DEP 4159698356 WELLS FARGO
DALLAS / FT.WORTH CURR 4159698364 WELLS FARGO
DALLAS / FT.WORTH R/I 4159698380 WELLS FARGO
MONEY ORDERS 4159698406 WELLS FARGO
HOUSTON TX. DEP 4159698489 WELLS FARGO
HOUSTON TX. CURR 4159698497 WELLS FARGO
HOUSTON TX. R/I 4159698513 WELLS FARGO
INSURANCE 4159698521 WELLS FARGO
CONCENTRATION 4159698539 WELLS FARGO
DEFERRED COMP. 4159698562 WELLS FARGO
401K DEPOSIT 4159698570 WELLS FARGO
PORTLAND OR. DEP 4178528691 WELLS FARGO
PORTLAND OR. R/I 4178528709 WELLS FARGO
PORTLAND OR. CURR 4178528717 WELLS FARGO
NEVADA CURR 4311262364 WELLS FARGO
NEVADA DEP 4311262372 WELLS FARGO
NEVADA R/I 4311262380 WELLS FARGO
DIRECT DEP ACCT 4375652658 WELLS FARGO
GNB DEPOSITORY ACCT 4375669348 WELLS FARGO
MEDICAL BENEFITS 4375669561 WELLS FARGO
CALIFORNIA OPER 4375687324 WELLS FARGO
LAREDO TX. CURR 4496885856 WELLS FARGO
LAREDO TX. DEP 4496886227 WELLS FARGO
LAREDO TX. R/I 4496886235 WELLS FARGO
IBM CREDIT ACCOUNT 4584708721 WELLS FARGO
CENTRAL DISBURSING ACCOUNT 4588542456 WELLS FARGO
PAYROLL 4759630080 WELLS FARGO
ACCOUNTS PAYABLE OPER 4759630098 WELLS FARGO
5
(ii) Deposit Accounts of Company's Subsidiaries (other than ACE Funding):
Q C & G FINANCIAL INC. 328911240 FIRST AMERICAN
(iii) Armored courier services that transport Collateral:
o Arkansas Armored Car Service, L.L.C.
o Armored Transport Texas, Inc. a/k/a AT Systems Southwest, Inc.
o Brink's Incorporated
o Dunbar Armored, Inc.
o First Star Transport
o Loomis Fargo & Co.
o MidFlorida Armored
o Rochester Armored Car Co., Inc.
o Triple D Security, Inc.
(iv) Agreements with armored courier services that transport Collateral:
o Armored Car Service Agreement between Arkansas Armored Car Service,
L.L.C. and the Company
o Armored Car Service Agreement between Armored Transport Texas, Inc.
a/k/a AT Systems Southwest, Inc. and the Company
o Contract No. 447961 between Brink's Incorporated and the Company
o Service Contract No. 11000375 between Dunbar Armored, Inc. and the
Company
o Armored Car Service Agreement between First Star Transport and the
Company
o Service Agreement between Loomis Fargo & Co. and the Company
o Agreement between MidFlorida Armored and the Company
o Agreement between Rochester Armored Car Co, Inc. and the Company
o Agreement between Triple D Security, Inc. and the Company
6
SCHEDULE 7.2(b)(IV)
PERMITTED ENCUMBRANCES
JURISDICTION FILE DATE SECURED PARTY COLLATERAL
------------------- ------------ ------------------------ ----------
California 4/28/97 State of California, Tax Lien
Employment Development
Department
o Liens or security interests on cash used to secure letters of credit.
o The following items are disclosed because the Loan Parties obtain
short-term possession and control over certain assets of third parties:
o that certain Marketing and Servicing Agreement dated as of
October 21, 2002 by and between Republic Bank & Trust
Company and the Company, as the same may be amended,
supplemented, restated, otherwise modified or superceded;
o that certain Money Order Agreement dated as of April 16,
1998 between the Company and Travelers, as the same may be
amended, supplemented, restated, otherwise modified or
superceded;
o that certain Money Transfer Agreement dated as of June 30,
2000 among the Company, Travelers and MoneyGram Payment
Systems, Inc., as the same may be amended, supplemented,
restated, otherwise modified or superceded;
o any contract of the Loan Parties to accept customer payments
of utilities, as the same may be amended, supplemented,
restated, otherwise modified or superceded;
o any contract of the Loan Parties to accept customer funds
for pre-paid calling cards or other debit cards, as the same
may be amended, supplemented, restated, otherwise modified
or superceded;
o any contract of the Loan Parties to sell lottery tickets, as
the same may be amended, supplemented, restated, otherwise
modified or superceded; and
o any and all contracts similar in nature to any of the
foregoing.
SCHEDULE 7.2(u)
SALE LEASE-BACK TRANSACTIONS
o The Company may enter into sale and lease-back transactions for any or
all of the following properties:
o E. Meeting Street, North Charleston, South Carolina (owned
by Check Express of South Carolina, Inc.);
o 2122 Cosgrove Ave., North Charleston, South Carolina (owned
by Check Express South Carolina, Inc.);
o 2620 Madison Ave., Indianapolis, Indiana (owned by Check
Express, Inc.); and
o 3921 N. Florida Ave., Tampa, Florida (owned by Check Express
Florida, Inc.).
EXHIBIT A-1
THIS INSTRUMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO LIEN AND PAYMENT
PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY,
AGENT AND CERTAIN OTHER CREDITORS OF THE COMPANY (AS AMENDED, MODIFIED OR
RESTATED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS
AND OTHER LIABILITIES OWED BY THE COMPANY UNDER AND PURSUANT TO THAT CERTAIN
CREDIT AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY, THE
LENDERS FROM TIME TO TIME PARTY THERETO, WELLS FARGO BANK TEXAS, NATIONAL
ASSOCIATION, AS ADMINISTRATIVE AGENT FOR SUCH LENDERS, AND JPMORGAN CHASE BANK,
AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO
TIME AND EACH RELATED "CREDIT DOCUMENTS" (AS SUCH TERM IS DEFINED THEREIN), AND
EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.
SENIOR SUBORDINATED SECURED SERIES A NOTE
ACE CASH EXPRESS, INC.
DUE MARCH 31, 2006
$10,000,000 March 31, 2003
FOR VALUE RECEIVED, the undersigned, AcE CASH EXPRESS, INC., a Texas
corporation (the "Company"), hereby promises to pay to AMERICAN CAPITAL
STRATEGIES, LTD., a Delaware corporation, or its registered assigns (the
"Holder"), the principal sum of TEN MILLION DOLLARS ($10,000,000), or such
lesser amount as may be outstanding hereunder from time to time, with interest
thereon on the terms and conditions set forth in the hereinafter defined
Purchase Agreement, and the payment of the principal and premium, if any, and
interest on this Note are secured pursuant to the terms of the Security
Documents (as defined in the Purchase Agreement).
Notwithstanding any provision to the contrary in this Note, the
Purchase Agreement, or any other agreement, the Company shall not be required to
pay, and the Holder shall not be permitted to contract for, take, reserve,
charge or receive, any compensation, which constitutes interest under applicable
law in excess of the maximum amount of interest permitted by law.
This Note is one of a series of Series A Notes issued March 31, 2003,
pursuant to the
Note Purchase Agreement, dated as of March 31, 2003 (as amended,
restated or otherwise modified from time to time, the "Purchase Agreement"), by
and among the Company, Holder, the other Purchasers signatory thereto and
American Capital Financial Services, Inc., as Agent for Holder and the other
Purchasers, and Holder is entitled to the benefits thereof. All capitalized
terms used but not defined herein shall have the meanings respectively ascribed
to them in the
Purchase Agreement. Each Holder of this Note will be deemed, by its acceptance
hereof, to have agreed to the provisions and to have made the representations
and warranties set forth in Article 6 of the Purchase Agreement.
This Note is transferable only by surrender hereof at the principal
office of the Company in Irving, Texas, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder of this
Note as shown in the register of the Company or as otherwise provided in the
Purchase Agreement.
This Note is also subject to mandatory and optional prepayment, in
whole or from time to time in part, at the times and on the terms specified in
the Purchase Agreement, but not otherwise.
If an Event of Default (as such term is defined in the Purchase
Agreement) occurs and is continuing, the unpaid principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable premium) and with the effect provided in the Purchase
Agreement.
Payments of principal, interest on and any premium with respect to this
Note are secured by the liens granted pursuant to the terms of the Security
Documents.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said state, except for its rules relating to the conflict of laws.
IN WITNESS WHEREOF, this Note is executed and delivered as of the date
first set forth above.
ACE CASH EXPRESS, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
SCHEDULES
EXHIBIT A-2
THIS INSTRUMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO LIEN AND PAYMENT
PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY,
AGENT AND CERTAIN OTHER CREDITORS OF THE COMPANY (AS AMENDED, MODIFIED OR
RESTATED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS
AND OTHER LIABILITIES OWED BY THE COMPANY UNDER AND PURSUANT TO THAT CERTAIN
CREDIT AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY, THE
LENDERS FROM TIME TO TIME PARTY THERETO, WELLS FARGO BANK TEXAS, NATIONAL
ASSOCIATION, AS ADMINISTRATIVE AGENT FOR SUCH LENDERS, AND JPMORGAN CHASE BANK,
AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO
TIME AND EACH RELATED "CREDIT DOCUMENTS" (AS SUCH TERM IS DEFINED THEREIN), AND
EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.
SENIOR SUBORDINATED SECURED SERIES B NOTE
ACE CASH EXPRESS, INC.
DUE MARCH 31, 2008
$10,000,000 March 31, 2003
FOR VALUE RECEIVED, the undersigned, AcE CASH EXPRESS, INC., a Texas
corporation (the "Company"), hereby promises to pay to AMERICAN CAPITAL
STRATEGIES, LTD., a Delaware corporation, or its registered assigns (the
"Holder"), the principal sum of TEN MILLION DOLLARS ($10,000,000), or such
lesser amount as may be outstanding hereunder from time to time, with interest
thereon on the terms and conditions set forth in the hereinafter defined
Purchase Agreement, and the payment of the principal and premium, if any, and
interest on this Note are secured pursuant to the terms of the Security
Documents (as defined in the Purchase Agreement).
Notwithstanding any provision to the contrary in this Note, the
Purchase Agreement, or any other agreement, the Company shall not be required to
pay, and the Holder shall not be permitted to contract for, take, reserve,
charge or receive, any compensation, which constitutes interest under applicable
law in excess of the maximum amount of interest permitted by law.
This Note is one of a series of Series B Notes issued March 31, 2003,
pursuant to the
Note Purchase Agreement, dated as of March 31, 2003 (as amended,
restated or otherwise modified from time to time, the "Purchase Agreement"), by
and among the Company, Holder, the other Purchasers signatory thereto and
American Capital Financial Services, Inc., as Agent for Holder and the other
Purchasers, and Holder is entitled to the benefits thereof. All capitalized
terms used but not defined herein shall have the meanings respectively ascribed
to them in the
Purchase Agreement. Each Holder of this Note will be deemed, by its acceptance
hereof, to have agreed to the provisions and to have made the representations
and warranties set forth in Article 6 of the Purchase Agreement.
This Note is transferable only by surrender hereof at the principal
office of the Company in Irving, Texas, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder of this
Note as shown in the register of the Company or as otherwise provided in the
Purchase Agreement.
This Note is also subject to mandatory and optional prepayment, in
whole or from time to time in part, at the times and on the terms specified in
the Purchase Agreement, but not otherwise.
If an Event of Default (as such term is defined in the Purchase
Agreement) occurs and is continuing, the unpaid principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable premium) and with the effect provided in the Purchase
Agreement.
Payments of principal, interest on and any premium with respect to this
Note are secured by the liens granted pursuant to the terms of the Security
Documents.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said state, except for its rules relating to the conflict of laws.
IN WITNESS WHEREOF, this Note is executed and delivered as of the date
first set forth above.
ACE CASH EXPRESS, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
EXHIBIT A-3
THIS INSTRUMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO LIEN AND PAYMENT
PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY,
AGENT AND CERTAIN OTHER CREDITORS OF THE COMPANY (AS AMENDED, MODIFIED OR
RESTATED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS
AND OTHER LIABILITIES OWED BY THE COMPANY UNDER AND PURSUANT TO THAT CERTAIN
CREDIT AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY, THE
LENDERS FROM TIME TO TIME PARTY THERETO, WELLS FARGO BANK TEXAS, NATIONAL
ASSOCIATION, AS ADMINISTRATIVE AGENT FOR SUCH LENDERS, AND JPMORGAN CHASE BANK,
AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO
TIME AND EACH RELATED "CREDIT DOCUMENTS" (AS SUCH TERM IS DEFINED THEREIN), AND
EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.
SENIOR SUBORDINATED SECURED SERIES C NOTE
ACE CASH EXPRESS, INC.
DUE MARCH 31, 2009
$10,000,000 March 31, 2003
FOR VALUE RECEIVED, the undersigned, AcE CASH EXPRESS, INC., a Texas
corporation (the "Company"), hereby promises to pay to AMERICAN CAPITAL
STRATEGIES, LTD., a Delaware corporation, or its registered assigns (the
"Holder"), the principal sum of TEN MILLION DOLLARS ($10,000,000), or such
lesser amount as may be outstanding hereunder from time to time, with interest
thereon on the terms and conditions set forth in the hereinafter defined
Purchase Agreement, and the payment of the principal and premium, if any, and
interest on this Note are secured pursuant to the terms of the Security
Documents (as defined in the Purchase Agreement).
Notwithstanding any provision to the contrary in this Note, the
Purchase Agreement, or any other agreement, the Company shall not be required to
pay, and the Holder shall not be permitted to contract for, take, reserve,
charge or receive, any compensation, which constitutes interest under applicable
law in excess of the maximum amount of interest permitted by law.
This Note is one of a series of Series C Notes issued March 31, 2003,
pursuant to the
Note Purchase Agreement, dated as of March 31, 2003 (as amended,
restated or otherwise modified from time to time, the "Purchase Agreement"), by
and among the Company, Holder, the other Purchasers signatory thereto and
American Capital Financial Services, Inc., as Agent for Holder and the other
Purchasers, and Holder is entitled to the benefits thereof. All capitalized
terms used but not defined herein shall have the meanings respectively ascribed
to them in the
Purchase Agreement. Each Holder of this Note will be deemed, by its acceptance
hereof, to have agreed to the provisions and to have made the representations
and warranties set forth in Article 6 of the Purchase Agreement.
This Note is transferable only by surrender hereof at the principal
office of the Company in Irving, Texas, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder of this
Note as shown in the register of the Company or as otherwise provided in the
Purchase Agreement.
This Note is also subject to mandatory and optional prepayment, in
whole or from time to time in part, at the times and on the terms specified in
the Purchase Agreement, but not otherwise.
If an Event of Default (as such term is defined in the Purchase
Agreement) occurs and is continuing, the unpaid principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable premium) and with the effect provided in the Purchase
Agreement.
Payments of principal, interest on and any premium with respect to this
Note are secured by the liens granted pursuant to the terms of the Security
Documents.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said state, except for its rules relating to the conflict of laws.
IN WITNESS WHEREOF, this Note is executed and delivered as of the date
first set forth above.
ACE CASH EXPRESS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT A-4
THIS INSTRUMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO LIEN AND PAYMENT
PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY,
AGENT AND CERTAIN OTHER CREDITORS OF THE COMPANY (AS AMENDED, MODIFIED OR
RESTATED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS
AND OTHER LIABILITIES OWED BY THE COMPANY UNDER AND PURSUANT TO THAT CERTAIN
CREDIT AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY, THE
LENDERS FROM TIME TO TIME PARTY THERETO, WELLS FARGO BANK TEXAS, NATIONAL
ASSOCIATION, AS ADMINISTRATIVE AGENT FOR SUCH LENDERS, AND JPMORGAN CHASE BANK,
AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO
TIME AND EACH RELATED "CREDIT DOCUMENTS" (AS SUCH TERM IS DEFINED THEREIN), AND
EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.
SENIOR SUBORDINATED SECURED SERIES D NOTE
ACE Cash Express, Inc.
Due March 31, 2010
$10,000,000 March 31, 2003
FOR VALUE RECEIVED, the undersigned, ACE CASH EXPRESS, INC., a Texas
corporation (the "Company"), hereby promises to pay to AMERICAN CAPITAL
STRATEGIES, LTD., a Delaware corporation, or its registered assigns (the
"Holder"), the principal sum of TEN MILLION DOLLARS ($10,000,000), or such
lesser amount as may be outstanding hereunder from time to time, with interest
thereon on the terms and conditions set forth in the hereinafter defined
Purchase Agreement, and the payment of the principal and premium, if any, and
interest on this Note are secured pursuant to the terms of the Security
Documents (as defined in the Purchase Agreement).
Notwithstanding any provision to the contrary in this Note, the
Purchase Agreement, or any other agreement, the Company shall not be required to
pay, and the Holder shall not be permitted to contract for, take, reserve,
charge or receive, any compensation, which constitutes interest under applicable
law in excess of the maximum amount of interest permitted by law.
This Note is one of a series of Series A Notes issued March 31, 2003,
pursuant to the
Note Purchase Agreement, dated as of March 31, 2003 (as amended,
restated or otherwise modified from time to time, the "Purchase Agreement"), by
and among the Company, Holder, the other Purchasers signatory thereto and
American Capital Financial Services, Inc., as Agent for Holder and the other
Purchasers, and Holder is entitled to the benefits thereof. All capitalized
terms used but not defined herein shall have the meanings respectively ascribed
to them in the
Purchase Agreement. Each Holder of this Note will be deemed, by its acceptance
hereof, to have agreed to the provisions and to have made the representations
and warranties set forth in Article 6 of the Purchase Agreement.
This Note is transferable only by surrender hereof at the principal
office of the Company in Irving, Texas, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder of this
Note as shown in the register of the Company or as otherwise provided in the
Purchase Agreement.
This Note is also subject to mandatory and optional prepayment, in
whole or from time to time in part, at the times and on the terms specified in
the Purchase Agreement, but not otherwise.
If an Event of Default (as such term is defined in the Purchase
Agreement) occurs and is continuing, the unpaid principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable premium) and with the effect provided in the Purchase
Agreement.
Payments of principal, interest on and any premium with respect to this
Note are secured by the liens granted pursuant to the terms of the Security
Documents.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said state, except for its rules relating to the conflict of laws.
IN WITNESS WHEREOF, this Note is executed and delivered as of the date
first set forth above.
ACE CASH EXPRESS, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT B - ACE
THIS ASSIGNMENT OF DEPOSIT ACCOUNTS AND SECURITY AGREEMENT IS SUBORDINATE
(INCLUDING WITH RESPECT TO LIEN PRIORITY) IN THE MANNER AND TO THE EXTENT SET
FORTH IN THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY
AND AMONG THE DEBTOR, AGENT AND CERTAIN OTHER CREDITORS OF THE DEBTOR (AS
AMENDED, MODIFIED OR RESTATED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT")
TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY THE DEBTOR UNDER AND PURSUANT
TO THAT CERTAIN Credit Agreement, dated as of the date hereof, by and among the
DEBTOR, the lenders from time to time party thereto, wells fargo bank texas,
national association, as administrative agent for such lenders ("BANK AGENT"),
and JPMorgan Chase Bank, as agent for such lenders, as the same may be amended
or modified from time to time AND EACH RELATED "CREDIT DOCUMENT" (AS SUCH TERM
IS DEFINED THEREIN).
ASSIGNMENT OF DEPOSIT ACCOUNTS AND SECURITY AGREEMENT
This ASSIGNMENT OF DEPOSIT ACCOUNTS AND SECURITY AGREEMENT (this
"Security Agreement") dated as of March 31, 2003, is made by ACE CASH EXPRESS,
INC., a Texas corporation (the "Debtor"), in favor of AMERICAN CAPITAL FINANCIAL
SERVICES, INC., a Delaware corporation ("ACFS"), as administrative agent (ACFS
in such capacity, "Agent") for the purchasers (the "Purchasers") from time to
time a party to the Note Agreement (as such term is defined below).
W I T N E S S E T H:
WHEREAS, the Debtor, Agent, and Purchasers have entered into that
certain
Note Purchase Agreement of even date herewith (as amended, supplemented,
restated, or otherwise modified from time to time, the "Note Agreement"); and
WHEREAS, it is a condition precedent to the extension of credit under
the Note Agreement and to Purchasers' obligations under the Note Agreement, that
the Debtor, Agent and certain other creditors of the Pledgor enter into that
certain Intercreditor Agreement of even date herewith (as amended, modified or
restated from time to time, the "Intercreditor Agreement"), pursuant to which,
among other things, Agent and the other parties thereto shall establish their
relative rights and respective lien priorities in and to the Collateral.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, in order to induce the Purchasers under the Note
Agreement to extend credit thereunder, Debtor, intending to be legally bound,
hereby agrees as follows:
1. DEFINITIONS. As used herein, all terms describing items or
types of collateral defined in the Uniform Commercial Code in effect in the
State of Texas shall have the meanings
given therein unless otherwise defined herein, capitalized terms used herein
that are not otherwise defined in this Security Agreement shall have the
meanings ascribed to them in the Note Agreement, and the following terms shall
have the meanings given in this Section 1.
1.1. The term "Center" shall mean a location where the Debtor
conducts check cashing and related business. All of the Debtor's Centers are
identified on Schedule 2 hereto, and the term Center shall include, without
limitation, each and every location where the Debtor conducts check cashing and
related business irrespective of whether such location is listed on Schedule 2
hereto or is timely disclosed on a Certificate of Update.
1.2. The term "Collateral" shall mean and include:
a. All of the Deposit Accounts;
b. All of the Cash Holdings (to the extent Cash Holdings
are not otherwise included in the definitions of Deposit Accounts or Inventory);
c. All of the Receivables;
d. All of the Inventory;
e. All of the Equipment;
f. All documents and instruments (whether negotiable or
nonnegotiable), chattel paper, checks (of any nature), money orders (in blank
form or completed), drafts, notes, investments, securities (including the stock
of any Subsidiaries of Debtor, other than ACE Funding), acceptances,
certificates of deposit, trust receipts, and any other writings evidencing a
right to the payment of money, and all cash and currency, whether now or
hereafter owned by the Debtor, whether or not in the possession of the Debtor
(collectively, the "Instruments");
g. All certificates of title, documents of title,
certificates and policies of insurance, and fidelity bonds, whether now or
hereafter owned by the Debtor, and whether or not in the possession of the
Debtor;
h. All patents, trademarks, trade names, service marks,
registration marks, logos and the like, whether now or hereafter owned by the
Debtor;
i. (i) All of the Debtor's rights as a consignee or an
unpaid vendor, whether now owned or hereafter acquired; (ii) all additional
amounts, whether now owned or hereafter acquired, due to the Debtor from any
Person, irrespective of whether such additional amounts have been specifically
assigned to Agent; and (iii) all of the Debtor's right, title and interest in
other property, including warranty claims, relating to any goods whatsoever
securing the Obligations;
j. All of the Debtor's ledger sheets, files, records,
books of account, business papers and documents (including, but not limited to,
computer programs, source codes, object
2
codes, tapes and related electronic data processing software and system
documentation and manuals), whether now owned or hereafter acquired;
k. All of the Debtor's rights under the agreements and
contracts with Custodial Agents set forth in Schedule 5.1(v) to the Note
Agreement and such other agreements or contracts whether now or hereafter
entered into by the Debtor for the collection, safekeeping and/or deposit of
checks, drafts and other instruments or Collateral, together with all renewals,
extensions, amendments and modifications thereof (all such contracts and
agreements and rights of the Debtor thereunder are herein collectively called
the "Custodial Agreement Rights");
l. All of the Debtor's other tangible and intangible
assets, including, but not limited to, any and all general intangibles, payment
intangibles, and contract rights, all liens or charges arising under the laws of
any state securing any portion of the Debtor's obligations in respect of any of
the Obligations and any guaranties by any Person related to the Obligations,
whether or not specifically enumerated above and whether now owned or hereafter
acquired; and
m. All accessions or accretions to, substitutes for and
proceeds and products of the assets of the Debtor described in the above
subsections a. through l., in whatever form, and all insurance proceeds and
proceeds of tort claims paid or payable in connection with the loss or damage of
any of the assets of the Debtor described in the above subsections a. through
l.; excluding, however, from the above subsections a. through l., all hazardous
and nonhazardous wastes, including, but not limited to, recyclable waste
materials.
Notwithstanding the foregoing or any other provision of the Security
Documents, Agent acknowledges and agrees that the Collateral shall not include
(i) any of the food stamp coupons or any other items held in trust by the Debtor
or any of the rights of the Debtor under that certain Food Stamp Issuing Agent
Contract with the Texas Department of Human Services or under similar contracts
with similar governmental entities in Texas or in other states, or (ii) any of
the lottery tickets or similar lottery items, together with any Deposit Accounts
established for purposes of complying with any applicable jurisdiction's lottery
statutes or governing regulations or any applicable lottery contracts, any and
all rights of the Debtor under lottery contracts and applications with lottery
authorities, and all cash and currency held in trust by the Debtor and due to
any of the various state lottery authorities, or (iii) any demand accounts
(whether interest-bearing or not, and if interest-bearing, then all interest
accrued and paid or payable thereon, whether now or hereafter established and
maintained from time to time by Debtor, and all moneys from time to time in or
credited to any and all such deposit accounts, including all earnings or profits
therefrom, in the form of interest or otherwise) held by the Debtor as agent for
third parties containing funds owned by such third parties to be used for the
payment of utility bills, payday loans, or similar customer services to the
extent (in the case of each of clause (i), (ii) and (iii)) a grant of any
security interest therein would be void or otherwise impermissible in respect of
such contract or property. In addition, notwithstanding the foregoing or any
other provision of the Security Documents, Agent acknowledges and agrees that
the Collateral shall not include (i) any Equipment that is owned by Travelers
and that is provided by Travelers to the Debtor for use in the Debtor's
business, or (ii) any money order stock (in blank form) that is owned by
Travelers and that is provided by Travelers to the Debtor for use in the
Debtor's
3
business. Nothing contained in this Section 1.2 or elsewhere in this Security
Agreement shall be deemed or interpreted to limit or otherwise diminish the
exception provided for in Section 7.2(f) of the Note Agreement related to the
sale of assets.
1.3. The term "Custodial Agent" shall mean an armored car service
organization utilized by the Debtor to transport Collateral from Centers to
Depositories at which Deposit Accounts are maintained. All of the Debtor's
Custodial Agents, and all of the Debtor's agreements with its Custodial Agents,
are identified on Schedule 5.1(v) to the Note Agreement, and the term Custodial
Agent shall include, without limitation, each and every armored car service
organization utilized by the Debtor irrespective of whether it is listed on
Schedule 5.1(v) to the Note Agreement or is timely disclosed on a Certificate of
Update.
1.4. The term "Custodial Agreement Rights" shall have the meaning
set forth in Section 1.2.k of this Security Agreement.
1.5. The term "Debtor" shall mean Ace Cash Express, Inc., a Texas
corporation, together with its successors and assigns. The Debtor also transacts
business under the trade name(s) identified on Schedule 1 hereto.
1.6. The term "Deposit Accounts" shall mean all demand, time,
savings, passbook and other like accounts (including any account evidenced by a
certificate of deposit), whether interest-bearing or not, and if
interest-bearing then all interest accrued and paid or payable thereon, whether
now or hereafter established and maintained from time to time by the Debtor, and
all moneys from time to time in or credited to any and all such deposit
accounts, including all earnings or profits therefrom in the form of interest or
otherwise. All of the Debtor's Deposit Accounts are identified on Schedule
5.1(v) to the Note Agreement, and the term Deposit Account shall include,
without limitation each and every account established and maintained by the
Debtor at a Depository irrespective of whether such account is listed on
Schedule 5.1(v) to the Note Agreement or is timely disclosed on a Certificate of
Update.
1.7. The term "Depository" shall mean each financial institution at
which a Deposit Account is maintained.
1.8. The term "Equipment" shall mean and include all of the
Debtor's equipment, whether now owned or hereafter acquired, and includes all
goods for use in the Debtor's business (including, without limitation, all
vehicles, motor vehicles, mobile goods, machinery, furniture and trade fixtures)
with all parts, equipment and attachments relating thereto. The Equipment is
located at the locations of Collateral identified on Schedule 2 hereto.
1.9. The term "Instruments" shall have the meaning set forth in
Section 1.2.f of this Security Agreement.
1.10. The term "Inventory" shall mean and include all of the
Debtor's inventory, whether now owned or hereafter acquired, including, without
limitation, all Instruments, cash and currency maintained by the Debtor for sale
at its operating locations. The Inventory is located at the locations of
Collateral identified on Schedule 2 hereto.
4
1.11. As used herein, the term "Obligations" means:
(a) all indebtedness, obligations and liabilities, including all
costs, expenses and fees, now or hereafter owing by Borrower to Agent or
Purchasers under the Note Agreement, the Notes or any other Purchase Document;
(b) any and all renewals, extensions, modifications and increases
of such Obligations; and
(c) all costs, expenses and fees, including but not limited to all
court costs and reasonable attorneys' fees, arising in connection with the
collection of any or all amounts, indebtedness, obligations and liabilities
described in items (a) through (b) above, including all costs, expenses and fees
arising in connection with the enforcement of this Security Agreement.
1.12 The term "Obligor" shall mean any Person, other than the
Debtor, obligated on or with respect to any Receivable, Instrument, document,
chattel paper or general intangible, however such obligation may arise or be
evidenced, whether such liability is direct or indirect, contingent or mature,
primary or secondary.
1.13. The term "Purchasers" shall have the meaning given to such
term in the preamble of this Security Agreement.
1.14. The term "Receivables" shall mean and include the following,
whether now existing or hereafter arising: all of the Debtor's accounts and
rights to payment for goods sold or leased or for services rendered, all sums of
money due or becoming due with respect thereto, documents, instruments or
agreements pertaining thereto, all guaranties and security therefor, and
including all goods giving rise thereto and the rights pertaining to such goods
(e.g., the right of stoppage in transit), and all related insurance and proceeds
payable with respect to claims thereunder.
2. GRANT OF SECURITY INTEREST. To secure the full and prompt
payment, observance and performance of all of the Obligations, the Debtor hereby
grants to Agent for the benefit of Agent and each Purchaser a continuing
security interest in all of the Collateral, wherever located, whether in the
Debtor's possession or in the possession and control of a third party for the
Debtor's account. The Debtor agrees that all the Debtor's ledger sheets, files,
records, books of account, business papers and documents shall, until delivered
to or removed by Agent, be kept by the Debtor in trust for Agent and without
cost to Agent in appropriate containers in safe places. Each confirmatory
assignment schedule or other form of assignment hereafter executed by the Debtor
shall be deemed to include the foregoing security interest grant, whether or not
the same appears therein.
3. CUSTODY, INSPECTION, COLLECTION AND MAINTENANCE OF THE
COLLATERAL AND RECORDS.
5
3.1. The Debtor will safeguard and protect all of the Collateral
and make no disposition thereof, except for the disposition of Inventory in the
ordinary and usual course of the Debtor's business or as otherwise permitted
under the Note Agreement.
3.2. The Debtor shall maintain books and records pertaining to the
Collateral in such detail, form and scope as it currently does, or as Agent
hereafter shall reasonably require. At all reasonable times in accordance with
the Note Agreement, Agent shall have full access to, and the right to audit,
check, inspect and make abstracts and copies from, the Debtor's books, records,
audits, correspondence and all other papers relating to the Collateral. In
accordance with the Note Agreement, Agent and its agents, may enter upon any of
the Debtor's premises at any time during business hours and at any other
reasonable time, and from time to time, for the purpose of inspecting the
Collateral and any and all records pertaining thereto, provided that prior to a
Default or an Event of Default, the Debtor's expense for any of the items
referenced in this sentence and the preceding sentence shall be limited to
$5,000 during any Fiscal Year. Agent acknowledges that the Debtor's security
procedures may preclude unannounced inspections of some aspects of the Debtor's
business, and the Debtor agrees to cooperate fully with Agent in the exercise of
its rights hereunder. At any time a Event of Default exists, the Debtor shall
pay when billed the reasonable costs and expenses (including attorneys' fees)
incurred by Agent in connection with any inspections in accordance with this
Section 3.2. Nothing in this Section 3.2 shall in any way diminish the Debtor's
obligations under Sections 7.1(h), 10.4 or 10.13 of the Note Agreement.
3.3. The Debtor hereby irrevocably authorizes and directs all
accountants and auditors employed by the Debtor or Agent at any time during the
term of this Security Agreement during reasonable business hours (unless an
Event of Default has occurred and is continuing, then at any time) to exhibit
and deliver to Agent copies of any of the Debtor's financial statements, trial
balances or other accounting records of any sort in the accountant's or
auditor's possession, and to disclose to Agent any information they may have
concerning the Debtor's financial status and business operations, provided that
Agent notify the Debtor of such exhibition or delivery to the Agent of such
financial statements, trial balances or other accounting records or information
concerning the Debtor's financial status and operations. The Debtor hereby
authorizes all federal, state and municipal authorities to furnish to Agent
copies of reports or examinations relating to the Debtor, whether made by the
Debtor or otherwise; provided that Agent notify the Debtor of Agent's receipt of
such reports and examinations. At any time a Event of Default exists, the Debtor
shall pay when billed the reasonable costs and expenses (including attorneys'
fees) incurred by Agent in connection with this Section 3.3. Nothing in this
Section 3.3 shall in any way diminish the Debtor's obligations under Sections
7.1(h), 10.4 or 10.13 of the Note Agreement.
3.4. The Debtor will, immediately upon learning thereof, report to
Agent all matters materially affecting the loss, value, enforceability or
collectability of any material portion of the Collateral.
3.5. Except as otherwise expressly provided herein, nothing herein
contained shall be construed to constitute the Debtor as Agent's agent for any
purpose whatsoever, and Agent shall
6
not be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof, unless the same results from Agent's gross
negligence or willful misconduct. Agent does not, by any provision contained
herein or in any assignment or otherwise, assume any of the Debtor's obligations
under any contract or agreement assigned to Agent, and Agent shall not be
responsible in any way for the performance by the Debtor of any of the terms and
conditions thereof except as Agent hereafter shall assume such responsibility
expressly in writing.
3.6. The Debtor has paid and shall continue to pay, when due, all
taxes, assessments and other charges levied or assessed upon any of the
Collateral; provided, however, the Debtor shall not be required to pay any such
taxes, assessments or other charges if any such nonpayment will not have a
Material Adverse Effect, or if (a) the amount, applicability or validity thereof
is currently being contested in good faith by appropriate action promptly
initiated and diligently conducted, (b) the Debtor shall have set aside on its
books reserves (segregated to the extent required by GAAP) reasonably determined
by the Debtor to be adequate with respect thereto, and (c) the Debtor has
notified Agent of such circumstances in detail reasonably satisfactory to the
Required Purchasers.
3.7. The Debtor presently complies with, and shall continue to
comply with, all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official applicable to the Collateral or any
part thereof or to the operation of the Debtor's business, noncompliance with
which would have a Material Adverse Effect. The Debtor may, however, contest or
dispute any acts, rules, regulations, orders and directions of those bodies or
officials in any reasonable manner; provided that Required Purchasers are
satisfied that the contest or dispute will not have a Material Adverse Effect.
3.8. Agent may at any time take such steps as Agent deems necessary
to protect Agent's security interest in and to preserve the Collateral,
including, but not limited to, the hiring of such security guards or the placing
of other security protection measures as Agent may deem appropriate. Agent may,
upon the occurrence and continuance of an Event of Default, employ and maintain
at any of the Debtor's premises a custodian who shall have full authority to do
all acts necessary to protect Agent's security interest in the Collateral. The
Debtor agrees to cooperate fully with all of Agent's efforts to preserve the
Collateral and will take such actions to preserve the Collateral as Agent may
direct, in each case subject to the Intercreditor Agreement. All of Agent
reasonable expenses of preserving the Collateral, including any expenses
relating to the compensation and bonding of a custodian, shall be charged to the
Debtor's account and shall be deemed a part of the Obligations secured
hereunder.
3.9. All costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred by Agent in all efforts made to enforce
payment of the Obligations or otherwise affect collection of any of the
Collateral, as well as all costs and expenses, including attorneys' fees and
legal expenses, incurred in connection with the entering into a proposed or
actual modification to this Security Agreement or the enforcement of this
Security Agreement and/or instituting, maintaining, preserving, protecting,
enforcing or foreclosing Agent's security interest in any of the collateral,
whether through judicial proceedings or otherwise, or in defending or
prosecuting
7
any actions or proceedings arising out of or relating to Agent's transactions
with the Debtor, shall be charged to the Debtor's account and shall be deemed a
part of the Obligations secured hereunder.
3.10. The Debtor shall bear the full risk of loss with respect to
the Instruments, Inventory or Equipment in which Agent has a security interest,
except for any loss caused by Agent's gross negligence or willful misconduct. At
the Debtor's own cost and expense, the Debtor shall keep all of the Instruments,
Inventory and Equipment insured, with reputable insurance companies in amounts
reasonably acceptable to Agent, against the hazards of fire, flood, sprinkler
leakage, hazards covered by extended coverage insurance and such other hazards
as may be required by the Debtor pursuant to the Note Agreement; provided that
such insurance coverage shall be consistent with industry practices. The Debtor
shall cause to be delivered to Agent, upon request, the insurance policies or
binders therefor and, at least fifteen (15) days prior to the expiration of any
such insurance, additional policies or duplicates thereof, or binders,
evidencing the renewal or replacement of such insurance and the payment of the
premiums therefor. Such policies shall provide, in a manner reasonably
satisfactory to Agent, that any losses thereunder shall be payable first to
Agent as Agent's interest may appear. Each insurance policy to be provided under
this Section 3.10 shall contain an agreement by the insurer that it will not
cancel such policy except upon at least thirty (30) calendar days' prior written
notice to Agent, and that any loss otherwise payable thereunder shall be payable
notwithstanding any act or negligence of the Debtor which might, absent such
agreement, result in a forfeiture of all or part of such insurance payment. In
the event of any loss thereunder, the insurers are directed by the Debtor to
make payment for such loss to Agent as its interest may appear if (a) the loss
involves claims which exceed in the aggregate Twenty Five Thousand and 00/100
Dollars ($25,000.00) or (b) an Event of Default has occurred and is continuing,
otherwise the payment for such losses shall be made directly to the Debtor. If
any insurance losses are paid by check, draft or other instrument payable to the
Debtor and Agent jointly, Agent may endorse the Debtor's name thereon and do
such other things as Agent may deem advisable to reduce the same to cash. All
loss recoveries received by Agent upon any such insurance and not remitted to
the Debtor shall be applied to the Obligations in the order provided in the Note
Agreement. The Debtor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required in this Section 3.10,
unless Agent is included therein as a named insured, with loss payable as
required in this Section 3.10. The Debtor shall immediately notify Agent
whenever any such separate insurance is applied for and shall promptly deliver
to Agent the policy or policies or binders evidencing the same.
3.11. Until the Debtor's authority to do so is terminated following
the occurrence and continuance of an Event of Default, the Debtor will, at the
Debtor's sole cost and expense, but on Agent's behalf and for Agent's account,
collect in trust for Agent all Instruments, cash and currency included in the
Collateral and received or receivable in the ordinary course of its business
(including all amounts unpaid on the Debtor's Receivables), and shall not
commingle such collections with the Debtor's other funds or use the same except
as permitted by the Note Agreement. In the event of any commingling, such
collected amounts shall be deemed impressed with a trust for the benefit of
Agent.
8
3.12. At any time following the occurrence and continuance of an
Event of Default, without notice to the Debtor, Agent shall have the right to
send notice of the assignment of and Agent's security interest in Receivables to
any Obligor of the Debtor or any third party holding or otherwise concerned with
any of the Collateral. Thereafter, following the occurrence and continuance of
an Event of Default, Agent shall have the sole right, to collect Receivables and
take possession of the Collateral. Any of Agent's actual, but reasonable,
accrued collection expenses under such circumstances, including, but not limited
to, stationery and postage, telephone and telegraph, secretarial and clerical
expenses and the salaries of any collection personnel used for collection, shall
be charged to the Debtor's account and be deemed a part of the Obligations
secured hereby.
3.13. Upon Agent's request and upon the creation of any Receivables,
or at such intervals as Agent may require, the Debtor shall provide Agent with
such schedules, documents and/or information regarding the Receivables as Agent
reasonably may require. Agent shall have the right to confirm and verify all
Receivables and do whatever Agent reasonably may deem necessary to protect
Agent's security interest. The items to be provided under this Section 3.13 are
to be in form reasonably satisfactory to Agent and executed by the Debtor and
delivered to Agent from time to time solely for Agent's convenience in
maintaining records of the Collateral, and the Debtor's failure to deliver any
of such items to Agent shall not affect, terminate, modify or otherwise limit
Agent's security interest in any of the Collateral.
3.14. The Debtor shall not, without Agent's consent, compromise or
adjust any of the Receivables (or extend the time for payment thereof) or grant
any additional discounts, allowances or credits thereon other than, in each
case, in the ordinary and usual course of the Debtor's business.
3.15. If any of the Receivables includes a charge for any tax
payable to any governmental taxing authority, Agent is hereby authorized in its
discretion to pay the amount thereof to the proper taxing authority for the
Debtor's account and to charge the Debtor's account therefor, such amount shall
be deemed a part of the Obligations. The Debtor shall notify Agent if any of the
Receivables includes any tax due to any such taxing authority, and in the
absence of the Debtor's notice or Agent's actual knowledge of the inclusion of
any tax due, Agent shall have the right to retain the full proceeds of such
Receivables and shall not be liable for any taxes that may be due from the
Debtor by reason of the sale and delivery creating such Receivables.
3.16. Agent shall have the irrevocable right, upon the occurrence
and continuance of an Event of Default, to receive, endorse, assign and/or
deliver in the name of Agent or the Debtor any check, draft or other Instrument,
and the Debtor hereby waives notice of presentment, protest and nonpayment of
any Instrument so endorsed. The Debtor hereby irrevocably appoints Agent or
Agent's designee as the Debtor's attorney-in-fact with power to endorse the
Debtor's name upon any Instruments or other evidences of payment or Collateral
that may come into Agent's possession; to sign the Debtor's name on any invoice
relating to any of the Receivables, drafts against Obligors, assignments and
verifications of Receivables and notices to Obligors; to send verifications of
Receivables to any Obligor; to notify the postal authorities to change the
address for delivery of mail addressed to the Debtor to such address as Agent
may designate; to sign the
9
Debtor's name on all financing statements or any other documents or instruments
deemed necessary or appropriate by Agent to preserve, protect or perfect Agent's
interest in the Collateral and to file the same; and to do all other acts and
things necessary to carry out the full intent of this Security Agreement. All
acts of said attorney or designee are hereby ratified and approved, and said
attorney or designee shall not be liable for any acts of omission or commission,
nor for any error of judgment or mistake of fact or law, unless resulting from
gross negligence or willful misconduct; this power being coupled with an
interest is irrevocable while any of the Obligations remains unpaid.
Notwithstanding the generality of the foregoing provisions, Agent acknowledges
that its exercise of such powers and authority shall be solely in a manner
consistent with, and for the purpose of, enforcement, maintenance and protection
of its rights under this Security Agreement.
3.17. Agent shall not, under any circumstances or in any event
whatsoever, have any liability for any error or omission or delay of any kind
occurring in the settlement, collection or payment of any of the Receivables or
any Instrument, or for any damage resulting therefrom unless resulting from its
gross negligence or willful misconduct. When entitled to exercise its rights,
and powers hereunder, Agent may, without consent from the Debtor, sue upon or
otherwise collect, extend the time of payment of, or compromise or settle for
cash, credit or otherwise upon any terms, any of the Receivables or any
securities, instruments or insurance applicable thereto and/or release the
Obligor thereon; provided that Agent shall provide the Debtor written notice of
any actions taken by Agent pursuant to this Section 3; provided further,
however, that Agent's failure to provide the Debtor with such written notice
shall not affect the validity of Agent's actions taken hereunder.
3.18. The Debtor shall keep and maintain the Equipment in good order
and repair, ordinary wear and tear excepted, and shall not sell or otherwise
dispose of the Equipment except as permitted under the Note Agreement.
3.19. The Equipment shall be and shall remain personal property, and
nothing shall affect the character of the Equipment or cause the Equipment to
become part of realty, or prevent Agent from removing it from the premises on
which it is located or to which it may be attached following the occurrence and
continuance of an Event of Default.
4. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Debtor hereby
makes the following representations, covenants and warranties, which shall be
deemed to be incorporated by reference, as true and correct in all material
respects, in any request for an advance in connection with any indebtedness of
the Debtor to the Purchasers for borrowed money, and each of the following
representations, covenants and warranties shall be deemed repeated and
confirmed, in all material respects, with respect to each item of the Collateral
as it is created or otherwise acquired by the Debtor:
4.1. The information set forth herein with respect to the
definitions of "Custodial Agent," "Debtor," "Deposit Accounts," "Inventory" and
"Equipment," as defined in Section 1 of this Security Agreement, and the
agreements with Custodial Agents listed in Schedule 5.1(v) to
the Note Agreement is complete and accurate in all material respects as of the
date of this Security Agreement.
4.2. The execution, delivery and performance hereof and of any
other document executed and delivered by the Debtor in connection with the
Obligations are within the Debtor's corporate powers, have been duly authorized
by the Debtor, and comply in all material respects with any applicable law, rule
or regulation and the terms of the Debtor's current Restated Articles of
Incorporation, Bylaws or other applicable documents, instruments or agreements
relating to the Debtor's corporate organization or governance or material to the
conduct of the Debtor's business, or of any indenture or other material
agreement or undertaking to which the Debtor is a party or by which the Debtor
is bound, except as permitted under the Note Agreement.
4.3. There is no litigation or proceeding pending or, to the best
knowledge of the Debtor, threatened against the Debtor or any of its assets
which, if determined adversely to the Debtor, reasonably may be expected to
result in a Material Adverse Effect.
4.4 At the time the Collateral becomes subject to Agent's security
interest: (a) the Debtor shall be the sole owner of and fully authorized to
sell, transfer, pledge and/or grant a first security interest in each and every
item of the Collateral, which interests shall be prior to any other already
existing secured interests in favor of any other creditor; (b) all documents,
instruments and agreements shall be true and correct and in all respects what
they purport to be; (c) all signatures and endorsements that appear thereon
shall be genuine and all signatories and endorsers shall have full capacity to
contract; and (d) none of the transactions underlying or giving rise to the
Collateral shall violate in any material respect any applicable state or federal
laws or regulations, and all documents or instruments relating to the Collateral
shall be legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms (subject to exceptions for insolvency
laws and equitable principles). Notwithstanding anything to the contrary
contained in this Section 4.4, all of the capital stock of ePacific
Incorporated, a Delaware corporation ("ePacific") owned by the Debtor is subject
to a Stockholders' Agreement dated as of March 30, 2000 which provides, among
other things, that no stockholder of ePacific may effect certain sales of such
securities without affording the other stockholders of ePacific a right to
participate in each such sale and no party to such Stockholders' Agreement may
assign its rights thereunder without the prior written consent of the other
parties thereto.
4.5. The Debtor shall from time to time take such actions as Agent
may from time to time reasonably request in writing by way of obtaining,
executing, delivering and/or filing financing statements, landlord's or
mortgagee's waivers, and other notices and amendments and renewals thereof, and
the Debtor shall take any and all steps and observe such formalities as may be
necessary or as Agent may reasonably request, in order to create and maintain a
valid first lien upon, pledge of, or paramount security interest in the
Collateral, except with respect to any Permitted Lien. All charges, expenses and
fees which Agent may incur in filing any of the foregoing, and any local taxes
relating thereto, shall be charged to the Debtor's account and be deemed a part
of the Obligations secured hereby, or, at Agent's option, shall be paid to Agent
immediately upon demand. The Debtor hereby authorizes Agent to (a) file one or
more UCC-1
11
financing statements indicating the Collateral as "all assets of Debtor and
proceeds thereof" (or using substantially similar words) in such jurisdictions
as Agent shall deem necessary or appropriate and (b) file the original or a
photocopy of this Security Agreement as a financing statement.
4.6. Until termination and release of the security interests
granted pursuant to this Security Agreement, the security interest in the
Collateral hereby granted to Agent shall continue in full force and effect.
Until such time, the Debtor shall not, without Agent's prior written consent,
pledge, sell, assign, transfer, create a security interest in, or encumber or
allow to be encumbered in any way, any part of the Collateral to anyone other
than Agent except for the Permitted Liens. The Debtor hereby agrees to defend
Agent's interest in the Collateral against any and all persons whatsoever.
4.7. The Debtor shall execute and deliver, or cause to be executed
and delivered, to Agent, from time to time, upon Agent's reasonable request (in
writing), such supplemental agreements, statements, assignments, and transfers,
or instructions or documents relating to the Collateral, and such other
instruments as Agent so request, in order that the full intent of this Security
Agreement may be carried into effect.
4.8. All balance sheets, earnings statements and other financial
data which have been or may hereafter be furnished to Agent did and do and shall
fairly represent the Debtor's financial condition as of the dates thereof and/or
the results of the Debtor's operations for the period for which the same are
furnished and have been and shall be prepared in accordance with GAAP, except
that interim financial statements will not contain footnotes and will be subject
to year-end adjustments, and any material adverse change in such financial
condition or the Debtor's operations since the date of each such report shall be
disclosed at the time of delivery thereof. The Debtor shall continue to furnish
whatever information or reports concerning the Collateral and the Debtor's
financial condition that Agent may reasonably request during the term of this
Security Agreement. All other information, reports and other papers and data
furnished to Agent is and shall be, at the time the same are so furnished,
accurate and correct in all material respects and complete insofar as
completeness may be necessary to give Agent a true and accurate knowledge of the
subject matter; provided, however, that any information, reports and other
papers or data furnished by the Debtor to Agent as (a) budgets or forecasts
shall be only what the Debtor believes to be reasonable under the circumstances,
and (b) drafts of documents shall be subject to completion by any subsequent
drafts and the final version of such documents. Agent acknowledges that only the
annual financial statements of the Debtor will be audited.
4.9. To the best knowledge of the Debtor, (a) each of the
Receivables is and shall be a good and valid account representing the amount of
the undisputed bona fide indebtedness incurred by the customer therein named,
for a fixed sum as set forth in the invoice relating thereto with respect to an
absolute sale and delivery of goods by the Debtor, or work, labor and/or
services rendered by the Debtor, and (b) none of the Receivables is or shall be
subject to any defense, setoff, counterclaim, discount or allowance, except as
permitted by Section 3.14 or as disclosed in writing by the Debtor to Agent.
12
4.10. The Debtor shall give Agent written notice of each office at
which the Debtor keeps its records pertaining to accounts, contract rights,
payment intangibles, and general intangibles and the location of the Debtor's
chief executive office. Until and except as such notice is given, all such
records shall be kept at the Debtor's address as it appears in Section 10.6 of
the Note Agreement. The Debtor shall promptly (but in any event no later than
five (5) days after the Debtor first has knowledge of any event described in
clause (c) and (d) below in this Section 4.10) give Agent written notice of: (a)
any change in the location of such records, its chief executive office, or its
corporate name; (b) any additional trade name under which the Debtor transacts
business; (c) the filing of any liens or judgments against the assets of the
Debtor; and (d) any litigation or proceedings which if determined adversely to
the Debtor reasonably may be expected to have a Material Adverse Effect.
4.11. (a) Except as otherwise permitted under Section 7.2(d) of the
Note Agreement, the Debtor and Agent have delivered or will be delivering
letters of instruction to, and have obtained or will be obtaining agreements
from, the Depositories with respect to the Deposit Accounts. Such letters of
instruction shall be substantially similar to Exhibits F-1 or F-2, except for
changes approved by Agent; provided such changes approved by Agent do not (i)
prejudice the Lenders, or Travelers to a greater extent than Agent or (ii)
substantially adversely affect the security interests and liens granted to the
Bank Agent pursuant to the Credit Documents. To enable the Depositories'
continuing compliance with all such instructions or agreements, the Debtor
agrees that all cash, checks and other Instruments received in its operations
shall be deposited initially by or for the account of the Debtor only in those
Deposit Accounts designated as either a "Currency Account" (with respect to
cash) or a "Deposit Account" (with respect to checks and other Instruments) in
each such letter of instruction, except for cash retained at or delivered to the
premises at which the Debtor conducts its business or funds transfers between
Deposit Accounts, in either case as permitted by such instructions or
agreements.
(b) No deposit, account, certificate of deposit, check,
note, draft or other Instrument has been or shall be received by the Debtor
unless the same is pledged and assigned to Agent, and each check, draft and all
other Instruments are or shall be (i) duly endorsed by the Debtor "for deposit
only" to a Deposit Account (or an equivalent endorsement), (ii) delivered to
Agent, a Custodial Agent or another designated agent, bailee or trustee for
Agent no later than the next Business Day following receipt by the Debtor and
(iii) deposited into a Deposit Account no later than the next Business Day
following the date the Debtor receives the same; provided that, for purposes of
subclauses (ii) and (iii) , the Debtor need not so deliver or deposit checks
made payable to the Debtor (including post-dated checks) until the aggregate
amount thereof received by the Debtor from time to time shall exceed Fifty
Thousand and 00/100 Dollars ($50,000.00).
(c) Except for cash in Centers and cash in possession of
Custodial Agents, all cash received by the Debtor has been and shall, unless
otherwise approved by Agent in writing or as Debtor is otherwise directed in
accordance with the Intercreditor Agreement, continue to be deposited in one or
more Deposit Accounts. Except as otherwise expressly permitted herein, in the
Intercreditor Agreement or in Section 7.2(d) of the Note Agreement, cash,
checks, drafts and other Instruments used or arising in connection with business
operations at the Centers shall be
13
delivered, picked up and otherwise moved or transported only by a Custodial
Agent that has executed a Letter Agreement substantially similar to Exhibit G to
the Note Agreement.
(d) The Debtor is and shall remain in full compliance
with all agency and trust agreements with Custodial Agents and Depositories, and
all representations, warranties and certifications of the Debtor, and, to the
best knowledge of the Debtor, all representations, warranties and certifications
of the Custodial Agent or Depository, as applicable, contained therein are and
shall continue to be true and correct in all material respects, and, to the best
knowledge and belief of the Debtor, all Custodial Agents and Depositories are
and shall continue to be in full compliance therewith.
4.12. With respect to any Deposit Account for which a Depository
shall not agree to provide a copy of the periodic bank statement therefor
directly to Agent, the Debtor agrees to provide a copy of such statement
(exclusive of all detail relating to items thereon) to Agent by facsimile
transmission no later than the next Business Day following the date such
statement is received by the Debtor. The Debtor shall promptly provide a copy of
any such detail to Agent by mail or courier for delivery on the next Business
Day following the facsimile transmission of the statement without detail.
4.13. Schedule 1 to the Intercreditor Agreement, Schedule 5.1(v) to
the Note Agreement and each of the Schedules to this Security Agreement, each as
amended and revised pursuant to the Certificate of Update delivered pursuant to
the Note Agreement, are complete and accurate in all material respects.
4.14. The Debtor shall not grant any liens or security interests in
any of its property to any Person except for Permitted Liens.
4.15 Between the date which is 54 months after the date hereof and
the date which is 56 months after the date hereof (and every 60 months
thereafter) the Debtor shall provide a legal opinion issued by its outside
counsel addressed to Agent confirming the perfection of the liens and security
interests granted hereunder and specifying any action required to be taken
between the date of such opinion and the date of such next opinion to maintain
the perfection of Agent's liens and security interests.
5. AGENT'S RIGHTS AND REMEDIES.
5.1. Upon the occurrence and continuance of an Event of Default:
(a) Agent may at any time, without further notice to the
Debtor, notify the Obligors and other Persons whose obligations have been
assigned, or in which a security interest has been granted hereunder, that such
obligations have been assigned, or a security interest therein has been granted,
to Agent and/or that payments thereunder or in respect thereof shall be made
directly to Agent or to Agent's designee. If requested by Agent, the Debtor will
so notify the Obligors and other Persons whose obligations to the Debtor have
been assigned or in which a security interest has been granted hereunder. Agent
may in its own name or in the name of others (including, without limitation, the
Debtor) communicate with such Obligors and other Persons,
14
enforce payment or collect any of the Collateral by legal proceedings or
otherwise, and adjust, settle or compromise the amount or payment thereof;
(b) All payments received by the Debtor under or in
connection with any of the Collateral shall be held by the Debtor in trust for
Agent, shall be segregated from other funds of the Debtor and shall, forthwith
upon receipt by the Debtor, be turned over to Agent; and
(c) Any and all such payments so received by the Agent
(whether from the Debtor or otherwise) shall, subject to the terms of the
Intercreditor Agreement, be immediately applied to the Obligations in the order
specified in Article 3 of the Note Agreement.
5.2. Upon the occurrence and continuance of an Event of Default,
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein, the Intercreditor Agreement or otherwise
available to it, all the rights and remedies of a secured party on default under
the Uniform Commercial Code (whether or not the Uniform Commercial Code applies
to the affected Collateral), and under all other applicable law as in effect in
any relevant jurisdiction. In addition, Agent may also:
(a) require the Debtor to, and the Debtor hereby agrees
that it will at its expense and upon request of Agent, assemble all or any part
of the Collateral as directed by Agent and make such Collateral available to
Agent at a place to be designated by Agent, which place shall be reasonably
convenient to Agent and the Debtor, whether at the premises of the Debtor or
otherwise;
(b) enter, with or without process of law and without
breach of the peace, any premises where any of the Collateral or the books and
records of the Debtor related thereto are or may be located and, without charge
or liability to Agent, seize and remove such Collateral and such books and
records from such premises or remain upon such premises and use the same for the
purpose of enforcing any and all rights and remedies of Agent under this
Security Agreement; and
(c) sell, lease, assign, grant an option or options to
purchase or otherwise dispose of all or any part of the Collateral in one or
more parcels, at public or private sale or sales, at any exchange, broker's
board or at any of Agent's offices or elsewhere, at such prices as Agent may
deem best, for cash, on credit or for future delivery, and upon such other terms
as Agent may deem commercially reasonable; provided, however, that the Debtor
shall not be credited with the net proceeds of any such credit sale, future
delivery or lease of the Collateral until the cash proceeds thereof are actually
received by Agent. The Debtor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days' notice to the Debtor of the time and
place of any public sale, or the time after which any private sale is to be
made, shall constitute reasonable notification. No notification required by law
need be given to the Debtor if the Debtor has signed, a statement renouncing any
right to notification of sale or other intended disposition. Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be
15
made at the time and place to which it was so adjourned. Agent shall have the
right upon any such public sale or sales and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Debtor
which right or equity is hereby expressly waived and released. In the event of a
sale of Collateral, or any part thereof, to Agent following the occurrence of an
Event of Default, Agent shall not deduct or offset from any part of the purchase
price to be paid therefor any indebtedness owing to it by the Debtor. Any and
all Proceeds received by Agent with respect to any sale of, collection from or
other realization upon all or any part of the Collateral whether consisting of
monies, checks, notes, drafts, bills of exchange, money orders or commercial
paper of any kind whatsoever, shall, subject to the terms of the Intercreditor
Agreement, be immediately applied to the Obligations in the order specified in
Article 3 of the Note Agreement. Agent is hereby granted a license or other
right to use, without charge, the Debtor's labels, copyrights, patents, rights
of use of any name, trade names, trademarks and advertising matter, or any
property of a similar nature, in advertising for sale and selling any
Collateral.
5.3. To the extent permitted by applicable law, the Debtor waives
all claims, damages and demands against Agent arising out of the repossession,
retention or sale of the Collateral, or any part or parts thereof, except any
such claims, damages and awards arising out of the gross negligence or willful
misconduct of Agent, as the case may be. In no event, however, does the Debtor
waive any obligations of Agent under applicable law to act in a commercially
reasonable manner.
5.4. The Debtor recognizes that in the event the Debtor fails to
perform, observe or discharge any of its obligations or liabilities under this
Security Agreement, no remedy at law will provide adequate relief to Agent and
Agent shall be entitled to temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages.
5.5. The rights and remedies provided under this Security Agreement
are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law or equity.
5.6. All rights of action and rights to assert claims upon or under
this Security Agreement and the other Purchase Documents may be enforced by
Agent without the possession of any promissory note or other instrument,
document or agreement evidencing the Obligations or the production thereof in
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Agent shall be brought in its name on behalf of the Purchasers
and any recovery of judgment shall be held as part of the Collateral.
6. WAIVERS.
6.1. The Debtor hereby waives notice of nonpayment of any of the
Obligations, demand, presentment, protest and notice thereof with respect to any
and all Instruments, notice of acceptance thereof, notice of loans or advances
made, credit extended, Collateral received or delivered, or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.
16
6.2. No failure, omission or delay on the part of Agent in
exercising any right, remedy, option or power under this Security Agreement, or
in giving or insisting upon strict performance by the Debtor hereunder or in
giving notice hereunder shall operate as a waiver of the same or any other power
or right, and no single or partial exercise of any such power or right shall
preclude any other or further exercise thereof or the exercise of any other such
power or right. Agent, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by the Debtor of any and all of
the terms and provisions of this Security Agreement to be performed by the
Debtor. The collection and application of proceeds, the entering and taking
possession of the Collateral, and the exercise of the rights of Agent contained
in the Security Documents, including, without limitation, this Security
Agreement, shall not cure or waive any Event of Default. No waiver by Agent of
any breach or default of or by any party hereunder shall be deemed to alter or
affect Agent's rights under this Security Agreement with respect to any prior or
subsequent default.
6.3. The Debtor waives and releases the benefit of all valuation,
appraisal, redemption and exemption laws to the extent permitted by applicable
law. In the event Agent seeks to take possession of any of the Collateral by
replevin or other court process, the Debtor hereby irrevocably waives (a) any
bonds, and any surety or security relating thereto required by any statute,
court rule or otherwise as an incident to such possession and (b) any demand for
possession of the Collateral prior to the commencement of any suit or action to
recover possession thereof.
6.4 The Debtor, to the extent it may lawfully do so, on behalf of
itself and all who may claim through or under it, including, without limitation,
any and all subsequent creditors, vendees, assignees and lienors, expressly
waives and releases any, every and all rights to demand or to have any
marshaling of the Collateral upon any sale, whether made under any power of sale
granted under this Security Agreement, or pursuant to judicial proceedings or
upon any foreclosure or any enforcement of this Security Agreement or the other
Purchase Documents and consents and agrees that all the Collateral may at any
such sale be offered and sold as an entirety. In no event, however, does the
Debtor waive any obligations of the Agent or the Purchasers under applicable law
to dispose of the Collateral in a commercially reasonable manner.
7. MISCELLANEOUS.
7.1. THIS SECURITY AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
INTERPRETED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Notwithstanding the general limitations set forth in Section 10.9 of the Note
Agreement, or any applicable provisions of any other Purchase Document, the
Debtor hereby consents and submits to the jurisdiction of any local, state or
federal court located within a jurisdiction in which any of the Collateral shall
be located for purposes of any action related to such Collateral that is
commenced by Agent to enforce or foreclose its security interest hereunder. The
Debtor warrants and represents that it has appointed CT Corporation or one of
its affiliates as its registered agent in the jurisdictions of Alabama,
Arkansas, Arizona, California, Colorado, Florida, Georgia, Indiana, Louisiana,
Maryland, Missouri, North Carolina, New Mexico, Nevada, Ohio, Oklahoma, Oregon,
South Carolina, Tennessee, Virginia, Washington,
17
Wyoming, and the District of Columbia, and covenants with Agent that such
registered agent shall not be changed without written notice to, and the written
consent of, Agent. The Debtor hereby waives any right it may have to transfer or
change the venue of any litigation brought against it by Agent in accordance
with this Section 7.1.
7.2. Neither this Security Agreement nor any portion or provisions
hereof may be changed, modified, amended, waived, supplemented, discharged,
canceled or terminated orally or by any course of dealing, or in any manner
other than by an agreement in writing, signed by the parties hereto.
7.3. All notices or other communications hereunder shall be given
in the manner and to the addresses set forth in Section 10.6 of the Note
Agreement.
7.4. The Debtor agrees that checks and other Instruments delivered
to Agent in payment or on account of the Obligations constitute conditional
payment only until payment is actually received in immediately payable funds by
Agent, and, subject to the provisions of Article 3 of the Note Agreement, and
similar provisions in any other Purchase Document, the Debtor waives the right
to direct the application of any and all payments at any time or times hereafter
received by Agent on account of the Obligations. The Debtor agrees that Agent
shall have the continuing exclusive right to apply and reapply any and all such
payments in such manner as Agent may deem advisable, notwithstanding any entry
by Agent upon any of its books and records.
7.5. If any part of this Security Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
7.6. The captions in this Security Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Security Agreement.
7.7. To the extent that any of Agent receive payments on the
Obligations or receive Proceeds of Collateral which are subsequently
invalidated, declared to be fraudulent or preferential, or are required to be
repaid to a trustee, receiver or any other Person under the Bankruptcy Code or
under state, federal or common law, then, to the extent the payments or Proceeds
are so repaid, the Obligations or part thereof which was intended to be
satisfied shall be revived and will continue to be in full force and effect as
if those payments or Proceeds had never been received by Agent.
7.8. This Security Agreement may be executed and delivered in
counterparts, all of which taken together shall constitute this Security
Agreement. Delivery of an executed signature page by any of the parties by
facsimile transmission shall be deemed execution and delivery of this Security
Agreement for all purposes hereof. Notwithstanding execution and delivery of
this Security Agreement by facsimile transmission as provided above, the parties
shall undertake to provide each other with original executed copies of this
Security Agreement within two (2)
18
Business Days following the date hereof. In making proof of this Security
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
7.9. In the event of any conflict between the terms, conditions,
covenants, or agreements contained herein and in the Intercreditor Agreement,
the terms, conditions, covenants and agreements contained in the Intercreditor
Agreement shall control. Notwithstanding anything to the contrary contained
herein, (a) each exercise of rights or remedies in respect of the Collateral
hereunder by Agent shall be subject to, and shall only be made in accordance
with, the Intercreditor Agreement and (b) any and all Proceeds received by Agent
with respect to any sale of, collection from or other realization upon all or
any part of the Collateral whether consisting of monies, checks, notes, drafts,
bills of exchange, money orders or commercial paper of any kind whatsoever,
shall, subject to the terms, of the Intercreditor Agreement, be immediately
applied to the Obligations in the order specified in Article 3 of the Note
Agreement.
7.10. WAIVER OF JURY TRIAL, ETC.
(A) EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS SECURITY
AGREEMENT OR ANY OF THE OTHER PURCHASE DOCUMENTS OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
SECURITY AGREEMENT OR ANY OF THE OTHER PURCHASE DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS SECURITY AGREEMENT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(b) EACH PARTY HERETO (I) CERTIFIES THAT NEITHER ANY
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS SECURITY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND
CERTIFICATIONS HEREIN.
7.11. SUBMISSION TO JURISDICTION.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY
AGREEMENT MAY BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION AND, BY EXECUTION AND DELIVERY OF THIS
SECURITY AGREEMENT, THE DEBTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURT.
19
(b) THE DEBTOR HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH ANY
SUCH ACTION OR PROCEEDING, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH JURISDICTION.
(c) THE DEBTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF THE AFOREMENTIONED COURT IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT ITS ADDRESS AT ACE CASH EXPRESS, INC., 0000 XXXXXXXX XXXXX, XXXXX 000,
XXXXXX, XXXXX 00000, ATTENTION: CHIEF FINANCIAL OFFICER, OR AT SUCH OTHER
ADDRESS AS SHALL BE DESIGNATED BY IT IN A WRITTEN NOTICE TO BANK AGENT.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF ANY OF
THE OBLIGATIONS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE DEBTOR IN ANY OTHER
JURISDICTION.
[Remainder of the Page Intentionally Left Blank]
20
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement or caused this Security Agreement to be executed and delivered by
their duly authorized officers as of the date first set forth above.
ACE CASH EXPRESS, INC., as Debtor
By:_____________________________________
Name:___________________________________
Title:__________________________________
21
Schedule 1
Trade names
Schedule 2
Centers and Collateral Locations
EXHIBIT B - ACE SUBSIDIARIES
THIS ASSIGNMENT OF DEPOSIT ACCOUNTS AND SECURITY AGREEMENT IS SUBORDINATE
(INCLUDING WITH RESPECT TO LIEN PRIORITY) IN THE MANNER AND TO THE EXTENT SET
FORTH IN THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY
AND AMONG BORROWER, AGENT AND CERTAIN OTHER CREDITORS OF BORROWER (AS AMENDED,
MODIFIED OR RESTATED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE
INDEBTEDNESS AND OTHER LIABILITIES OWED BY BORROWER UNDER AND PURSUANT TO THAT
CERTAIN CREDIT AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG BORROWER,
THE LENDERS FROM TIME TO TIME PARTY THERETO, XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, AS ADMINISTRATIVE AGENT FOR SUCH LENDERS ("BANK AGENT"), AND
JPMORGAN CHASE BANK, AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR
MODIFIED FROM TIME TO TIME AND EACH RELATED "CREDIT DOCUMENT" (AS SUCH TERM IS
DEFINED THEREIN).
ASSIGNMENT OF DEPOSIT ACCOUNTS AND SECURITY AGREEMENT
This ASSIGNMENT OF DEPOSIT ACCOUNTS AND SECURITY AGREEMENT (this
"Security Agreement") dated as of March 31, 2003, is made by each Subsidiary (as
such term is defined in the hereinafter defined Note Agreement ) of Borrower (as
hereinafter defined) now a signatory hereto and which shall hereafter become a
party hereto pursuant to Section 7.12 hereof (each a "Debtor" and collectively,
the "Debtors"), in favor of AMERICAN CAPITAL FINANCIAL SERVICES, INC., a
Delaware corporation ("ACFS"), as administrative agent (ACFS in such capacity,
"Agent") for the purchasers (the "Purchasers") from time to time a party to the
Note Agreement (as such term is defined below).
W I T N E S S E T H:
WHEREAS, each Debtor is a direct or indirect wholly-owned Subsidiary of
Ace Cash Express, Inc., a Texas corporation ("Borrower");
WHEREAS, Borrower, Agent, and Purchasers have entered into that certain
Note Purchase Agreement of even date herewith (as amended, supplemented,
restated, or otherwise modified from time to time, the "Note Agreement");
WHEREAS, it is a condition precedent to the extension of credit under
the Note Agreement and to the Purchasers' obligation under the Note Agreement
that the Debtors shall have executed and delivered this Security Agreement;
WHEREAS, the board of directors of each Debtor has determined that each
Debtor will significantly benefit, directly or indirectly, from the extensions
of credit by the Purchasers to Borrower under the Note Agreement and the other
transactions contemplated by the Purchase Documents (as defined in the Note
Agreement); and
WHEREAS, it is a condition precedent to the extension of credit under
the Note Agreement and to Purchasers' obligations under the Note Agreement, that
the Debtors, Agent and certain other creditors of the Debtor enter into that
certain Intercreditor Agreement of even date herewith (as amended, modified or
restated from time to time, the "Intercreditor Agreement"), pursuant to which,
among other things, Agent and the other parties thereto shall establish their
relative rights and respective lien priorities in and to the Collateral. The
Debtors have acknowledged and accepted the terms of the Intercreditor Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, in order to induce the Purchasers under the Note
Agreement to extend credit thereunder to Borrower, each Debtor, intending to be
legally bound, hereby agrees as follows:
1. DEFINITIONS. As used herein, all terms describing items or
types of collateral defined in the Uniform Commercial Code in effect in the
State of Texas shall have the meanings given therein unless otherwise defined
herein, capitalized terms used herein that are not otherwise defined in this
Security Agreement shall have the meanings ascribed to them in the Note
Agreement, and the following terms shall have the meanings given in this Section
1.
1.1. The term "Center" shall mean a location where any Debtor
conducts check cashing and related business. All of the Debtors' Centers are
identified on Schedule 2 hereto, and the term Center shall include, without
limitation, each and every location where any Debtor conducts check cashing and
related business irrespective of whether such location is listed on Schedule 2
hereto or is timely disclosed on a Certificate of Update.
1.2. The term "Collateral" shall mean and include:
a. All of the Deposit Accounts;
b. All of the Cash Holdings (to the extent Cash Holdings
are not otherwise included in the definitions of Deposit Accounts or Inventory);
c. All of the Receivables;
d. All of the Inventory;
e. All of the Equipment;
f. All documents and instruments (whether negotiable or
nonnegotiable), chattel paper, checks (of any nature), money orders (in blank
form or completed), drafts, notes, investments, securities, acceptances,
certificates of deposit, trust receipts, and any other writings evidencing a
right to the payment of money, and all cash and currency, whether now or
hereafter owned by any Debtor, whether or not in the possession of any Debtor
(collectively, the "Instruments");
2
g. All certificates of title, documents of title,
certificates and policies of insurance, and fidelity bonds, whether now or
hereafter owned by any Debtor, and whether or not in the possession of any
Debtor;
h. All patents, trademarks, trade names, service marks,
registration marks, logos and the like, whether now or hereafter owned by any
Debtor;
i. (i) All of Debtors' rights as a consignee or an
unpaid vendor, whether now owned or hereafter acquired; (ii) all additional
amounts, whether now owned or hereafter acquired, due to any Debtor from any
Person, irrespective of whether such additional amounts have been specifically
assigned to Agent; and (iii) all of Debtors' right, title and interest in other
property, including warranty claims, relating to any goods whatsoever securing
the Obligations;
j. All of Debtors' ledger sheets, files, records, books
of account, business papers and documents (including, but not limited to,
computer programs, source codes, object codes, tapes and related electronic data
processing software and system documentation and manuals), whether now owned or
hereafter acquired;
k. All of Debtors' rights under the agreements and
contracts with Custodial Agents set forth in Schedule 5.1(v) to the Note
Agreement and such other agreements or contracts whether now or hereafter
entered into by any Debtor for the collection, safekeeping and/or deposit of
checks, drafts and other instruments or Collateral, together with all renewals,
extensions, amendments and modifications thereof (all such contracts and
agreements and rights of any Debtor thereunder are herein collectively called
the "Custodial Agreement Rights");
l. All of Debtors' other tangible and intangible assets,
including, but not limited to, any and all general intangibles, payment
intangibles, and contract rights, all liens or charges arising under the laws of
any state securing any portion of any Debtor's obligations in respect of any of
the Obligations and any guaranties by any Person related to the Obligations,
whether or not specifically enumerated above and whether now owned or hereafter
acquired; and
m. All accessions or accretions to, substitutes for and
proceeds and products of the assets of any Debtor described in the above
subsections a. through l., in whatever form, and all insurance proceeds and
proceeds of tort claims paid or payable in connection with the loss or damage of
any of the assets of any Debtor described in the above subsections a. through
l.; excluding, however, from the above subsections a. through l., all hazardous
and nonhazardous wastes, including, but not limited to, recyclable waste
materials.
Notwithstanding the foregoing or any other provision of the Security
Documents, Agent acknowledges and agrees that the Collateral shall not include
(i) any of the food stamp coupons or any other items held in trust by any Debtor
or any of the rights of any Debtor under that certain Food Stamp Issuing Agent
Contract with the Texas Department of Human Services or under similar contracts
with similar governmental entities in Texas or in other states, or (ii) any of
the lottery tickets or similar lottery items, together with any Deposit Accounts
established for purposes of complying with any applicable jurisdiction's lottery
statutes or governing regulations
3
or any applicable lottery contracts, any and all rights of any Debtor under
lottery contracts and applications with lottery authorities, and all cash and
currency held in trust by any Debtor and due to any of the various state lottery
authorities, or (iii) any demand accounts (whether interest-bearing or not, and
if interest-bearing, then all interest accrued and paid or payable thereon,
whether now or hereafter established and maintained from time to time by any
Debtor, and all moneys from time to time in or credited to any and all such
deposit accounts, including all earnings or profits therefrom, in the form of
interest or otherwise) held by any Debtor as agent for third parties containing
funds owned by such third parties to be used for the payment of utility bills,
payday loans, or similar customer services to the extent (in the case of each of
clause (i), (ii) and (iii)) a grant of any security interest therein would be
void or otherwise impermissible in respect of such contract or property. In
addition, notwithstanding the foregoing or any other provision of the Security
Documents, Agent acknowledges and agrees that the Collateral shall not include
(i) any Equipment that is owned by Travelers and that is provided by Travelers
to any Debtor for use in such Debtor's business, or (ii) any money order stock
(in blank form) that is owned by Travelers and that is provided by Travelers to
any Debtor for use in such Debtor's business. Nothing contained in this Section
1.2 or elsewhere in this Security Agreement shall be deemed or interpreted to
limit or otherwise diminish the exception provided for in Section 7.2(f) of the
Note Agreement related to the sale of assets.
1.3. The term "Custodial Agent" shall mean an armored car service
organization utilized by any Debtor to transport Collateral from Centers to
Depositories at which Deposit Accounts are maintained. All of Debtors' Custodial
Agents, and all of Debtors' agreements with its Custodial Agents, are identified
on Schedule 5.1(v) to the Note Agreement, and the term Custodial Agent shall
include, without limitation, each and every armored car service organization
utilized by any Debtor irrespective of whether it is listed on Schedule 5.1(v)
to the Note Agreement or is timely disclosed on a Certificate of Update.
1.4. The term "Custodial Agreement Rights" shall have the meaning
set forth in Section 1.2.k of this Security Agreement.
1.5. The term "Debtor" shall mean each Subsidiary of Borrower
signatory hereto and which shall hereafter become a party hereto pursuant to
Section 7.12 hereof, together with their respective successors and assigns. The
Debtors also transact business under the trade name(s) identified on Schedule 1
hereto.
1.6. The term "Deposit Accounts" shall mean all demand, time,
savings, passbook and other like accounts (including any account evidenced by a
certificate of deposit), whether interest-bearing or not, and if
interest-bearing then all interest accrued and paid or payable thereon, whether
now or hereafter established and maintained from time to time by any Debtor, and
all moneys from time to time in or credited to any and all such deposit
accounts, including all earnings or profits therefrom in the form of interest or
otherwise. All of Debtors' Deposit Accounts are identified on Schedule 5.1(v) to
the Note Agreement, and the term Deposit Account shall include, without
limitation each and every account established and maintained by any Debtor at a
Depository irrespective of whether such account is listed on Schedule 5.1(v) to
the Note Agreement or is timely disclosed on a Certificate of Update.
4
1.7. The term "Depository" shall mean each financial institution at
which a Deposit Account is maintained.
1.8. The term "Equipment" shall mean and include all of Debtors'
equipment, whether now owned or hereafter acquired, and includes all goods for
use in such Debtor's business (including, without limitation, all vehicles,
motor vehicles, mobile goods, machinery, furniture and trade fixtures) with all
parts, equipment and attachments relating thereto. The Equipment is located at
the locations of Collateral identified on Schedule 2 hereto.
1.9. The term "Instruments" shall have the meaning set forth in
Section 1.2.f of this Security Agreement.
1.10. The term "Inventory" shall mean and include all of the
Debtors' inventory, whether now owned or hereafter acquired, including, without
limitation, all Instruments, cash and currency maintained by such Debtor for
sale at its operating locations. The Inventory is located at the locations of
Collateral identified on Schedule 2 hereto.
1.11. As used herein, the term "Obligations" means:
(a) all indebtedness, obligations and liabilities, including all
costs, expenses and fees, now or hereafter owing by Borrower to Agent or
Purchasers under the Note Agreement, the Notes or any other Purchase Document;
(b) any and all renewals, extensions, modifications and increases
of such Obligations; and
(c) all costs, expenses and fees, including but not limited to all
court costs and reasonable attorneys' fees, arising in connection with the
collection of any or all amounts, indebtedness, obligations and liabilities
described in items (a) through (b) above, including all costs, expenses and fees
arising in connection with the enforcement of this Security Agreement.
1.12 The term "Obligor" shall mean any Person, other than the
Debtors, obligated on or with respect to any Receivable, Instrument, document,
chattel paper or general intangible, however such obligation may arise or be
evidenced, whether such liability is direct or indirect, contingent or mature,
primary or secondary.
1.13. The term "Purchasers" shall have the meaning given to such
term in the preamble of this Security Agreement.
1.14. The term "Receivables" shall mean and include the following,
whether now existing or hereafter arising: all of Debtors' accounts and rights
to payment for goods sold or leased or for services rendered, all sums of money
due or becoming due with respect thereto, documents, instruments or agreements
pertaining thereto, all guaranties and security therefor, and including all
goods giving rise thereto and the rights pertaining to such goods (e.g., the
right of
5
stoppage in transit), and all related insurance and proceeds payable with
respect to claims thereunder.
2. GRANT OF SECURITY INTEREST. To secure the full and prompt
payment, observance and performance of all of the Obligations, each Debtor
hereby grants to Agent for the benefit of Agent and each Purchaser a continuing
security interest in all of the right, title and interest of such Debtor in the
Collateral, wherever located, whether in such Debtor's possession or in the
possession and control of a third party for such Debtor's account. Each Debtor
agrees that all such Debtor's ledger sheets, files, records, books of account,
business papers and documents shall, until delivered to or removed by Agent, be
kept by such Debtor in trust for Agent and without cost to Agent in appropriate
containers in safe places. Each confirmatory assignment schedule or other form
of assignment hereafter executed by any Debtor shall be deemed to include the
foregoing security interest grant, whether or not the same appears therein.
3. CUSTODY, INSPECTION, COLLECTION AND MAINTENANCE OF THE
COLLATERAL AND RECORDS.
3.1. Each Debtor will safeguard and protect all of the Collateral
and make no disposition thereof, except for the disposition of Inventory in the
ordinary and usual course of such Debtor's business or as otherwise permitted
under the Note Agreement.
3.2. Each Debtor shall maintain books and records pertaining to the
Collateral in such detail, form and scope as it currently does, or as Agent
hereafter shall reasonably require. At all reasonable times in accordance with
the Note Agreement, Agent shall have full access to, and the right to audit,
check, inspect and make abstracts and copies from, each Debtor's books, records,
audits, correspondence and all other papers relating to the Collateral. In
accordance with the Note Agreement, Agent and its agents, may enter upon any of
the Debtors' premises at any time during business hours and at any other
reasonable time, and from time to time, for the purpose of inspecting the
Collateral and any and all records pertaining thereto, provided that prior to a
Default or an Event of Default, the Debtors' expense for any of the items
referenced in this sentence and the preceding sentence shall be limited to
$5,000 during any Fiscal Year. Agent acknowledges that each Debtor's security
procedures may preclude unannounced inspections of some aspects of such Debtor's
business, and each Debtor agrees to cooperate fully with Agent in the exercise
of its rights hereunder. At any time a Event of Default exists, each Debtor
shall pay when billed the reasonable costs and expenses (including attorneys'
fees) incurred by Agent in connection with any inspections in accordance with
this Section 3.2. Nothing in this Section 3.2 shall in any way diminish each
Debtor's obligations under Sections 7.1(h), 10.4 or 10.13 of the Note Agreement.
3.3. Each Debtor hereby irrevocably authorizes and directs all
accountants and auditors employed by such Debtor or Agent at any time during the
term of this Security Agreement during reasonable business hours (unless an
Event of Default has occurred and is continuing, then at any time) to exhibit
and deliver to Agent copies of any of such Debtor's financial statements, trial
balances or other accounting records of any sort in the accountant's or
auditor's possession, and to disclose to Agent any information they may have
concerning such
6
Debtor's financial status and business operations, provided that Agent notify
such Debtor of such exhibition or delivery to the Agent of such financial
statements, trial balances or other accounting records or information concerning
such Debtor's financial status and operations. Each Debtor hereby authorizes all
federal, state and municipal authorities to furnish to Agent copies of reports
or examinations relating to such Debtor, whether made by such Debtor or
otherwise; provided that Agent notify such Debtor of Agent's receipt of such
reports and examinations. At any time an Event of Default exists, each Debtor
shall pay when billed the reasonable costs and expenses (including attorneys'
fees) incurred by Agent in connection with this Section 3.3. Nothing in this
Section 3.3 shall in any way diminish each Debtor's obligations under Sections
7.1(h), 10.4 or 10.13 of the Note Agreement.
3.4. Each Debtor will, immediately upon learning thereof, report to
Agent all matters materially affecting the loss, value, enforceability or
collectability of any material portion of the Collateral.
3.5. Except as otherwise expressly provided herein, nothing herein
contained shall be construed to constitute any Debtor as Agent's agent for any
purpose whatsoever, and Agent shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof, unless the
same results from Agent's gross negligence or willful misconduct. Agent does
not, by any provision contained herein or in any assignment or otherwise, assume
any obligations of any Debtor under any contract or agreement assigned to Agent,
and Agent shall not be responsible in any way for the performance by any Debtor
of any of the terms and conditions thereof except as Agent hereafter shall
assume such responsibility expressly in writing.
3.6. Each Debtor has paid and shall continue to pay, when due, all
taxes, assessments and other charges levied or assessed upon any of the
Collateral; provided, however, no Debtor shall be required to pay any such
taxes, assessments or other charges if any such nonpayment will not have a
Material Adverse Effect, or if (a) the amount, applicability or validity thereof
is currently being contested in good faith by appropriate action promptly
initiated and diligently conducted, (b) such Debtor shall have set aside on its
books reserves (segregated to the extent required by GAAP) reasonably determined
by such Debtor to be adequate with respect thereto, and (c) such Debtor has
notified Agent of such circumstances in detail reasonably satisfactory to the
Required Purchasers.
3.7. Each Debtor presently complies with, and shall continue to
comply with, all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official applicable to the Collateral or any
part thereof or to the operation of such Debtor's business, noncompliance with
which would have a Material Adverse Effect. Each Debtor may, however, contest or
dispute any acts, rules, regulations, orders and directions of those bodies or
officials in any reasonable manner; provided that Required Purchasers are
satisfied that the contest or dispute will not have a Material Adverse Effect.
3.8. Agent may at any time take such steps as Agent deems necessary
to protect Agent's security interest in and to preserve the Collateral,
including, but not limited to, the hiring
7
of such security guards or the placing of other security protection measures as
Agent may deem appropriate. Agent may, upon the occurrence and continuance of an
Event of Default, employ and maintain at any of the Debtor's premises a
custodian who shall have full authority to do all acts necessary to protect
Agent's security interest in the Collateral. Each Debtor agrees to cooperate
fully with all of Agent's efforts to preserve the Collateral and will take such
actions to preserve the Collateral as Agent may direct, in each case subject to
the Intercreditor Agreement. All of Agent reasonable expenses of preserving the
Collateral, including any expenses relating to the compensation and bonding of a
custodian, shall be charged to Borrower's account and shall be deemed a part of
the Obligations secured hereunder.
3.9. All costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred by Agent in all efforts made to enforce
payment of the Obligations or otherwise affect collection of any of the
Collateral, as well as all costs and expenses, including attorneys' fees and
legal expenses, incurred in connection with the entering into a proposed or
actual modification to this Security Agreement or the enforcement of this
Security Agreement and/or instituting, maintaining, preserving, protecting,
enforcing or foreclosing Agent's security interest in any of the collateral,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions or proceedings arising out of or relating to Agent's
transactions with the Debtors, shall be charged to Borrower's account and shall
be deemed a part of the Obligations secured hereunder.
3.10. Each Debtor shall bear the full risk of loss with respect to
the Instruments, Inventory or Equipment in which Agent has a security interest,
except for any loss caused by Agent's gross negligence or willful misconduct. At
each Debtor's own cost and expense, each Debtor shall keep all of the
Instruments, Inventory and Equipment insured, with reputable insurance companies
in amounts reasonably acceptable to Agent, against the hazards of fire, flood,
sprinkler leakage, hazards covered by extended coverage insurance and such other
hazards as may be required by Agent pursuant to the Note Agreement; provided
that such insurance coverage shall be consistent with industry practices. Each
Debtor shall cause to be delivered to Agent, upon request, the insurance
policies or binders therefor and, at least fifteen (15) days prior to the
expiration of any such insurance, additional policies or duplicates thereof, or
binders, evidencing the renewal or replacement of such insurance and the payment
of the premiums therefor. Such policies shall provide, in a manner reasonably
satisfactory to Agent, that any losses thereunder shall be payable first to
Agent as Agent's interest may appear. Each insurance policy to be provided under
this Section 3.10 shall contain an agreement by the insurer that it will not
cancel such policy except upon at least thirty (30) calendar days' prior written
notice to Agent, and that any loss otherwise payable thereunder shall be payable
notwithstanding any act or negligence of the applicable Debtor which might,
absent such agreement, result in a forfeiture of all or part of such insurance
payment. In the event of any loss thereunder, the insurers are directed by each
Debtor to make payment for such loss to Agent as its interest may appear if (a)
the loss involves claims which exceed in the aggregate Twenty Five Thousand and
00/100 Dollars ($25,000.00) or (b) an Event of Default has occurred and is
continuing, otherwise the payment for such losses shall be made directly to the
applicable Debtor. If any insurance losses are paid by check, draft or other
instrument payable to any Debtor and Agent jointly, Agent may endorse such
Debtor's name thereon and do such other things as Agent may deem advisable to
8
reduce the same to cash. All loss recoveries received by Agent upon any such
insurance and not remitted to the applicable Debtor shall be applied to the
Obligations in the order provided in the Note Agreement. No Debtor shall take
out separate insurance concurrent in form or contributing in the event of loss
with that required in this Section 3.10, unless Agent is included therein as a
named insured, with loss payable as required in this Section 3.10. The Debtors
shall immediately notify Agent whenever any such separate insurance is applied
for and shall promptly deliver to Agent the policy or policies or binders
evidencing the same.
3.11. Until the Debtors' authority to do so is terminated following
the occurrence and continuance of an Event of Default, each Debtor will, at such
Debtor's sole cost and expense, but on Agent's behalf and for Agent's account,
collect in trust for Agent all Instruments, cash and currency included in the
Collateral and received or receivable in the ordinary course of its business
(including all amounts unpaid on any Debtor's Receivables), and shall not
commingle such collections with such Debtor's other funds or use the same except
as permitted by the Note Agreement. In the event of any commingling, such
collected amounts shall be deemed impressed with a trust for the benefit of
Agent.
3.12. At any time following the occurrence and continuance of an
Event of Default, without notice to the Debtors, Agent shall have the right to
send notice of the assignment of and Agent's security interest in Receivables to
any Obligor of the Debtors or any third party holding or otherwise concerned
with any of the Collateral. Thereafter, following the occurrence and continuance
of an Event of Default, Agent shall have the sole right, to collect Receivables
and take possession of the Collateral. Any of Agent's actual, but reasonable,
accrued collection expenses under such circumstances, including, but not limited
to, stationery and postage, telephone and telegraph, secretarial and clerical
expenses and the salaries of any collection personnel used for collection, shall
be charged to Borrower's account and be deemed a part of the Obligations secured
hereby.
3.13. Upon Agent's request and upon the creation of any Receivables,
or at such intervals as Agent may require, the Debtors shall provide Agent with
such schedules, documents and/or information regarding the Receivables as Agent
reasonably may require. Agent shall have the right to confirm and verify all
Receivables and do whatever Agent reasonably may deem necessary to protect
Agent's security interest. The items to be provided under this Section 3.13 are
to be in form reasonably satisfactory to Agent and executed by each Debtor and
delivered to Agent from time to time solely for Agent's convenience in
maintaining records of the Collateral, and any Debtor's failure to deliver any
of such items to Agent shall not affect, terminate, modify or otherwise limit
Agent's security interest in any of the Collateral.
3.14. No Debtor shall, without Agent's consent, compromise or adjust
any of the Receivables (or extend the time for payment thereof) or grant any
additional discounts, allowances or credits thereon other than, in each case, in
the ordinary and usual course of such Debtor's business.
3.15. If any of the Receivables includes a charge for any tax
payable to any governmental taxing authority, Agent is hereby authorized in its
discretion to pay the amount
9
thereof to the proper taxing authority for Borrower's account and to charge the
applicable Debtor's account therefor, such amount shall be deemed a part of the
Obligations. Each Debtor shall notify Agent if any of the Receivables includes
any tax due to any such taxing authority, and in the absence of any Debtor's
notice or Agent's actual knowledge of the inclusion of any tax due, Agent shall
have the right to retain the full proceeds of such Receivables and shall not be
liable for any taxes that may be due from such Debtor by reason of the sale and
delivery creating such Receivables.
3.16. Agent shall have the irrevocable right, upon the occurrence
and continuance of an Event of Default, to receive, endorse, assign and/or
deliver in the name of Agent or any Debtor any check, draft or other Instrument,
and each Debtor hereby waives notice of presentment, protest and nonpayment of
any Instrument so endorsed. Each Debtor hereby irrevocably appoints Agent or
Agent's designee as such Debtor's attorney-in-fact with power to endorse such
Debtor's name upon any Instruments or other evidences of payment or Collateral
that may come into Agent's possession; to sign such Debtor's name on any invoice
relating to any of the Receivables, drafts against Obligors, assignments and
verifications of Receivables and notices to Obligors; to send verifications of
Receivables to any Obligor; to notify the postal authorities to change the
address for delivery of mail addressed to such Debtor to such address as Agent
may designate; to sign such Debtor's name on all financing statements or any
other documents or instruments deemed necessary or appropriate by Agent to
preserve, protect or perfect Agent's interest in the Collateral and to file the
same; and to do all other acts and things necessary to carry out the full intent
of this Security Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for any
acts of omission or commission, nor for any error of judgment or mistake of fact
or law, unless resulting from gross negligence or willful misconduct; this power
being coupled with an interest is irrevocable while any of the Obligations
remains unpaid. Notwithstanding the generality of the foregoing provisions,
Agent acknowledges that its exercise of such powers and authority shall be
solely in a manner consistent with, and for the purpose of, enforcement,
maintenance and protection of its rights under this Security Agreement.
3.17. Agent shall not, under any circumstances or in any event
whatsoever, have any liability for any error or omission or delay of any kind
occurring in the settlement, collection or payment of any of the Receivables or
any Instrument, or for any damage resulting therefrom unless resulting from its
gross negligence or willful misconduct. When entitled to exercise its rights,
and powers hereunder, Agent may, without consent from the Debtors, xxx upon or
otherwise collect, extend the time of payment of, or compromise or settle for
cash, credit or otherwise upon any terms, any of the Receivables or any
securities, instruments or insurance applicable thereto and/or release the
Obligor thereon; provided that Agent shall provide the Debtors written notice of
any actions taken by Agent pursuant to this Section 3; provided further,
however, that Agent's failure to provide the Debtors with such written notice
shall not affect the validity of Agent's actions taken hereunder.
3.18. Each Debtor shall keep and maintain the Equipment in good
order and repair, ordinary wear and tear excepted, and shall not sell or
otherwise dispose of the Equipment except as permitted under the Note Agreement.
10
3.19. The Equipment shall be and shall remain personal property, and
nothing shall affect the character of the Equipment or cause the Equipment to
become part of realty, or prevent Agent from removing it from the premises on
which it is located or to which it may be attached following the occurrence and
continuance of an Event of Default.
4. REPRESENTATIONS, COVENANTS AND WARRANTIES. Each Debtor hereby
makes the following representations, covenants and warranties, which shall be
deemed to be incorporated by reference, as true and correct in all material
respects, in any request for an advance in connection with any indebtedness of
Borrower to the Purchasers for borrowed money, and each of the following
representations, covenants and warranties shall be deemed repeated and
confirmed, in all material respects, with respect to each item of the Collateral
as it is created or otherwise acquired by such Debtor:
4.1. The information set forth herein with respect to the
definitions of "Custodial Agent," "Debtor," "Deposit Accounts," "Inventory" and
"Equipment," as defined in Section 1 of this Security Agreement, and the
agreements with Custodial Agents listed in Schedule 5.1(v) to the Note Agreement
is complete and accurate in all material respects as of the date of this
Security Agreement.
4.2. The execution, delivery and performance hereof and of any
other document executed and delivered by each Debtor in connection with the
Obligations are within such Debtor's corporate powers, have been duly authorized
by such Debtor, and comply in all material respects with any applicable law,
rule or regulation and the terms of such Debtor's current Articles of
Incorporation, Bylaws or other applicable documents, instruments or agreements
relating to such Debtor's corporate organization or governance or material to
the conduct of such Debtor's business, or of any indenture or other material
agreement or undertaking to which such Debtor is a party or by which such Debtor
is bound, except as permitted under the Note Agreement.
4.3. There is no litigation or proceeding pending or, to the best
knowledge of any Debtor, threatened against such Debtor or any of its assets
which, if determined adversely to such Debtor, reasonably may be expected to
result in a Material Adverse Effect.
4.4 At the time the Collateral becomes subject to Agent's security
interest: (a) each Debtor shall be the sole owner of and fully authorized to
sell, transfer, pledge and/or grant a first security interest in each and every
item of the Collateral, which interests shall be prior to any other already
existing secured interests in favor of any other creditor; (b) all documents,
instruments and agreements shall be true and correct and in all respects what
they purport to be; (c) all signatures and endorsements that appear thereon
shall be genuine and all signatories and endorsers shall have full capacity to
contract; and (d) none of the transactions underlying or giving rise to the
Collateral shall violate in any material respect any applicable state or federal
laws or regulations, and all documents or instruments relating to the Collateral
shall be legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms (subject to exceptions for insolvency
laws and equitable principles).
11
4.5. Each Debtor shall from time to time take such actions as Agent
may from time to time reasonably request in writing by way of obtaining,
executing, delivering and/or filing financing statements, landlord's or
mortgagee's waivers, and other notices and amendments and renewals thereof, and
each Debtor shall take any and all steps and observe such formalities as may be
necessary or as Agent may reasonably request, in order to create and maintain a
valid first lien upon, pledge of, or paramount security interest in the
Collateral, except with respect to any Permitted Lien. All charges, expenses and
fees which Agent may incur in filing any of the foregoing, and any local taxes
relating thereto, shall be charged to the applicable Debtor's account and be
deemed a part of the Obligations secured hereby, or, at Agent's option, shall be
paid to Agent immediately upon demand. Each Debtor hereby authorizes Agent to
(a) file one or more UCC-1 financing statements indicating the Collateral as
"all assets of Debtor and proceeds thereof" (or using substantially similar
words) in such jurisdictions as Agent shall deem necessary or appropriate and
(b) file the original or a photocopy of this Security Agreement as a financing
statement.
4.6. Until termination and release of the security interests
granted pursuant to this Security Agreement, the security interest in the
Collateral hereby granted to Agent shall continue in full force and effect.
Until such time, no Debtor shall, without Agent's prior written consent, pledge,
sell, assign, transfer, create a security interest in, or encumber or allow to
be encumbered in any way, any part of the Collateral to anyone other than Agent
except for the Permitted Liens. Each Debtor hereby agrees to defend Agent's
interest in the Collateral against any and all persons whatsoever.
4.7. Each Debtor shall execute and deliver, or cause to be executed
and delivered, to Agent, from time to time, upon Agent's reasonable request (in
writing), such supplemental agreements, statements, assignments, and transfers,
or instructions or documents relating to the Collateral, and such other
instruments as Agent so request, in order that the full intent of this Security
Agreement may be carried into effect.
4.8. All balance sheets, earnings statements and other financial
data which have been or may hereafter be furnished to Agent did and do and shall
fairly represent the applicable Debtor's financial condition as of the dates
thereof and/or the results of such Debtor's operations for the period for which
the same are furnished and have been and shall be prepared in accordance with
GAAP, except that interim financial statements will not contain footnotes and
will be subject to year-end adjustments, and any material adverse change in such
financial condition or such Debtor's operations since the date of each such
report shall be disclosed at the time of delivery thereof. Each Debtor shall
continue to furnish whatever information or reports concerning the Collateral
and each Debtor's financial condition that Agent may reasonably request during
the term of this Security Agreement. All other information, reports and other
papers and data furnished to Agent is and shall be, at the time the same are so
furnished, accurate and correct in all material respects and complete insofar as
completeness may be necessary to give Agent a true and accurate knowledge of the
subject matter; provided, however, that any information, reports and other
papers or data furnished by any Debtor to Agent as (a) budgets or forecasts
shall be only what such Debtor believes to be reasonable under the
circumstances, and (b) drafts of documents shall be subject to completion by any
subsequent drafts and the final
12
version of such documents. Agent acknowledges that only the annual financial
statements of Borrower will be audited.
4.9. To the best knowledge of each Debtor, (a) each of the
Receivables is and shall be a good and valid account representing the amount of
the undisputed bona fide indebtedness incurred by the customer therein named,
for a fixed sum as set forth in the invoice relating thereto with respect to an
absolute sale and delivery of goods by any Debtor, or work, labor and/or
services rendered by any Debtor, and (b) none of the Receivables is or shall be
subject to any defense, setoff, counterclaim, discount or allowance, except as
permitted by Section 3.14 or as disclosed in writing by any Debtor to Agent.
4.10. Each Debtor shall give Agent written notice of each office at
which any Debtor keeps its records pertaining to accounts, contract rights,
payment intangibles, and general intangibles and the location of any Debtor's
chief executive office. Until and except as such notice is given, all such
records shall be kept at Borrower's address as it appears in Section 10.6 of the
Note Agreement. Each Debtor shall promptly (but in any event no later than five
(5) days after any Debtor first has knowledge of any event described in clause
(c) and (d) below in this Section 4.10) give Agent written notice of: (a) any
change in the location of such records, its chief executive office, or its
corporate name; (b) any additional trade name under which any Debtor transacts
business; (c) the filing of any liens or judgments against the assets of any
Debtor; and (d) any litigation or proceedings which if determined adversely to
any Debtor reasonably may be expected to have a Material Adverse Effect.
4.11. (a) Except as otherwise permitted under Section 7.2(d) of the
Note Agreement, each Debtor and Agent have delivered or will be delivering
letters of instruction to, and have obtained or will be obtaining agreements
from, the Depositories with respect to the Deposit Accounts. Such letters of
instruction shall be substantially similar to Exhibits F-1 or F-2, except for
changes approved by Agent; provided such changes approved by Agent do not (i)
prejudice the Lenders, or Travelers to a greater extent than Agent or (ii)
substantially adversely affect the security interests and liens granted to the
Bank Agent pursuant to the Credit Documents. To enable the Depositories'
continuing compliance with all such instructions or agreements, each Debtor
agrees that all cash, checks and other Instruments received in its operations
shall be deposited initially by or for the account of such Debtor only in those
Deposit Accounts designated as either a "Currency Account" (with respect to
cash) or a "Deposit Account" (with respect to checks and other Instruments) in
each such letter of instruction, except for cash retained at or delivered to the
premises at which any Debtor conducts its business or funds transfers between
Deposit Accounts, in either case as permitted by such instructions or
agreements.
(b) No deposit, account, certificate of deposit, check,
note, draft or other Instrument has been or shall be received by any Debtor
unless the same is pledged and assigned to Agent, and each check, draft and all
other Instruments are or shall be (i) duly endorsed by such Debtor "for deposit
only" to a Deposit Account (or an equivalent endorsement), (ii) delivered to
Agent, a Custodial Agent or another designated agent, bailee or trustee for
Agent no later than the next Business Day following receipt by such Debtor and
(iii) deposited into a
13
Deposit Account no later than the next Business Day following the date such
Debtor receives the same; provided that, for purposes of subclauses (ii) and
(iii) each Debtor need not so deliver or deposit checks made payable to such
Debtor (including post-dated checks) until the aggregate amount thereof received
by such Debtor from time to time shall exceed Fifty Thousand and 00/100 Dollars
($50,000.00).
(c) Except for cash in Centers and cash in possession of
Custodial Agents, all cash received by each Debtor has been and shall, unless
otherwise approved by Agent in writing or as Debtor is otherwise directed in
accordance with the Intercreditor Agreement, continue to be deposited in one or
more Deposit Accounts. Except as otherwise expressly permitted herein, in the
Intercreditor Agreement or in Section 7.2(d) of the Note Agreement, cash,
checks, drafts and other Instruments used or arising in connection with business
operations at the Centers shall be delivered, picked up and otherwise moved or
transported only by a Custodial Agent that has executed a Letter Agreement
substantially similar to Exhibit G to the Note Agreement.
(d) Each Debtor is and shall remain in full compliance
with all agency and trust agreements with Custodial Agents and Depositories, and
all representations, warranties and certifications of such Debtor, and, to the
best knowledge of each Debtor, all representations, warranties and
certifications of the Custodial Agent or Depository, as applicable, contained
therein are and shall continue to be true and correct in all material respects,
and, to the best knowledge and belief of each Debtor, all Custodial Agents and
Depositories are and shall continue to be in full compliance therewith.
4.12. With respect to any Deposit Account for which a Depository
shall not agree to provide a copy of the periodic bank statement therefor
directly to Agent, each Debtor agrees to provide a copy of such statement
(exclusive of all detail relating to items thereon) to Agent by facsimile
transmission no later than the next Business Day following the date such
statement is received by such Debtor. Each Debtor shall promptly provide a copy
of any such detail to Agent by mail or courier for delivery on the next Business
Day following the facsimile transmission of the statement without detail.
4.13. Schedule 1 to the Intercreditor Agreement, Schedule 5.1(v) to
the Note Agreement and each of the Schedules to this Security Agreement, each as
amended and revised pursuant to the Certificate of Update delivered pursuant to
the Note Agreement, are complete and accurate in all material respects.
4.14. No Debtor shall grant any liens or security interests in any
of its property to any Person except for Permitted Liens.
4.15 Between the date which is 54 months after the date hereof and
the date which is 56 months after the date hereof (and every 60 months
thereafter) the Debtors shall provide a legal opinion issued by its outside
counsel addressed to Agent confirming the perfection of the liens and security
interests granted hereunder and specifying any action required to be taken
between the date of such opinion and the date of such next opinion to maintain
the perfection of Agent's liens and security interests.
14
5. AGENT'S RIGHTS AND REMEDIES.
5.1. Upon the occurrence and continuance of an Event of Default:
(a) Agent may at any time, without further notice to the
Debtors, notify the Obligors and other Persons whose obligations have been
assigned, or in which a security interest has been granted hereunder, that such
obligations have been assigned, or a security interest therein has been granted,
to Agent and/or that payments thereunder or in respect thereof shall be made
directly to Agent or to Agent's designee. If requested by Agent, each Debtor
will so notify the Obligors and other Persons whose obligations to any Debtor
have been assigned or in which a security interest has been granted hereunder.
Agent may in its own name or in the name of others (including, without
limitation, any Debtor) communicate with such Obligors and other Persons,
enforce payment or collect any of the Collateral by legal proceedings or
otherwise, and adjust, settle or compromise the amount or payment thereof;
(b) All payments received by the Debtors under or in
connection with any of the Collateral shall be held by such Debtor in trust for
Agent, shall be segregated from other funds of such Debtor and shall, forthwith
upon receipt by such Debtor, be turned over to Agent; and
(c) Any and all such payments so received by the Agent
(whether from the Debtors or otherwise) shall, subject to the terms of the
Intercreditor Agreement, be immediately applied to the Obligations in the order
specified in Article 3 of the Note Agreement.
5.2. Upon the occurrence and continuance of an Event of Default,
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein, the Intercreditor Agreement or otherwise
available to it, all the rights and remedies of a secured party on default under
the Uniform Commercial Code (whether or not the Uniform Commercial Code applies
to the affected Collateral), and under all other applicable law as in effect in
any relevant jurisdiction. In addition, Agent may also:
(a) require each Debtor to, and each Debtor hereby agrees
that it will at its expense and upon request of Agent, assemble all or any part
of the Collateral as directed by Agent and make such Collateral available to
Agent at a place to be designated by Agent, which place shall be reasonably
convenient to Agent and such Debtor, whether at the premises of such Debtor or
otherwise;
(b) enter, with or without process of law and without
breach of the peace, any premises where any of the Collateral or the books and
records of any Debtor related thereto are or may be located and, without charge
or liability to Agent, seize and remove such Collateral and such books and
records from such premises or remain upon such premises and use the same for the
purpose of enforcing any and all rights and remedies of Agent under this
Security Agreement; and
(c) sell, lease, assign, grant an option or options to
purchase or otherwise dispose of all or any part of the Collateral in one or
more parcels, at public or private sale or
15
sales, at any exchange, broker's board or at any of Agent's offices or
elsewhere, at such prices as Agent may deem best, for cash, on credit or for
future delivery, and upon such other terms as Agent may deem commercially
reasonable; provided, however, that no Debtor shall credited with the net
proceeds of any such credit sale, future delivery or lease of the Collateral
until the cash proceeds thereof are actually received by Agent. Each Debtor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days' notice to such Debtor of the time and place of any public sale, or
the time after which any private sale is to be made, shall constitute reasonable
notification. No notification required by law need be given to any Debtor if
such Debtor has signed, a statement renouncing any right to notification of sale
or other intended disposition. Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Agent shall have the right upon any such
public sale or sales and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Debtor which right or equity is
hereby expressly waived and released. In the event of a sale of Collateral, or
any part thereof, to Agent following the occurrence of an Event of Default,
Agent shall not deduct or offset from any part of the purchase price to be paid
therefor any indebtedness owing to it by the Debtors. Any and all Proceeds
received by Agent with respect to any sale of, collection from or other
realization upon all or any part of the Collateral whether consisting of monies,
checks, notes, drafts, bills of exchange, money orders or commercial paper of
any kind whatsoever, shall, subject to the terms of the Intercreditor Agreement,
be immediately applied to the Obligations in the order specified in Article 3 of
the Note Agreement. Agent is hereby granted a license or other right to use,
without charge, each Debtor's labels, copyrights, patents, rights of use of any
name, trade names, trademarks and advertising matter, or any property of a
similar nature, in advertising for sale and selling any Collateral.
5.3. To the extent permitted by applicable law, each Debtor waives
all claims, damages and demands against Agent arising out of the repossession,
retention or sale of the Collateral, or any part or parts thereof, except any
such claims, damages and awards arising out of the gross negligence or willful
misconduct of Agent, as the case may be. In no event, however, does any Debtor
waive any obligations of Agent under applicable law to act in a commercially
reasonable manner.
5.4. Each Debtor recognizes that in the event any Debtor fails to
perform, observe or discharge any of its obligations or liabilities under this
Security Agreement, no remedy at law will provide adequate relief to Agent and
Agent shall be entitled to temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages.
5.5. The rights and remedies provided under this Security Agreement
are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law or equity.
5.6. All rights of action and rights to assert claims upon or under
this Security Agreement and the other Purchase Documents may be enforced by
Agent without the possession
16
of any promissory note or other instrument, document or agreement evidencing the
Obligations or the production thereof in any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Agent shall be
brought in its name on behalf of the Purchasers and any recovery of judgment
shall be held as part of the Collateral.
6. WAIVERS.
6.1. Each Debtor hereby waives notice of nonpayment of any of the
Obligations, demand, presentment, protest and notice thereof with respect to any
and all Instruments, notice of acceptance thereof, notice of loans or advances
made, credit extended, Collateral received or delivered, or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.
6.2. No failure, omission or delay on the part of Agent in
exercising any right, remedy, option or power under this Security Agreement, or
in giving or insisting upon strict performance by any Debtor hereunder or in
giving notice hereunder shall operate as a waiver of the same or any other power
or right, and no single or partial exercise of any such power or right shall
preclude any other or further exercise thereof or the exercise of any other such
power or right. Agent, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by each Debtor of any and all
of the terms and provisions of this Security Agreement to be performed by such
Debtor. The collection and application of proceeds, the entering and taking
possession of the Collateral, and the exercise of the rights of Agent contained
in the Security Documents, including, without limitation, this Security
Agreement, shall not cure or waive any Event of Default. No waiver by Agent of
any breach or default of or by any party hereunder shall be deemed to alter or
affect Agent's rights under this Security Agreement with respect to any prior or
subsequent default.
6.3. Each Debtor waives and releases the benefit of all valuation,
appraisal, redemption and exemption laws to the extent permitted by applicable
law. In the event Agent seeks to take possession of any of the Collateral by
replevin or other court process, each Debtor hereby irrevocably waives (a) any
bonds, and any surety or security relating thereto required by any statute,
court rule or otherwise as an incident to such possession and (b) any demand for
possession of the Collateral prior to the commencement of any suit or action to
recover possession thereof.
6.4 Each Debtor, to the extent it may lawfully do so, on behalf of
itself and all who may claim through or under it, including, without limitation,
any and all subsequent creditors, vendees, assignees and lienors, expressly
waives and releases any, every and all rights to demand or to have any
marshaling of the Collateral upon any sale, whether made under any power of sale
granted under this Security Agreement, or pursuant to judicial proceedings or
upon any foreclosure or any enforcement of this Security Agreement or the other
Purchase Documents and consents and agrees that all the Collateral may at any
such sale be offered and sold as an entirety. In no event, however, does any
Debtor waive any obligations of the Agent or the Purchasers under applicable law
to dispose of the Collateral in a commercially reasonable manner.
17
7. MISCELLANEOUS.
7.1. THIS SECURITY AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
INTERPRETED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Notwithstanding the general limitations set forth in Section 10.9 of the Note
Agreement, or any applicable provisions of any other Purchase Document, each
Debtor hereby consents and submits to the jurisdiction of any local, state or
federal court located within a jurisdiction in which any of the Collateral shall
be located for purposes of any action related to such Collateral that is
commenced by Agent to enforce or foreclose its security interest hereunder. Each
Debtor warrants and represents that it has appointed CT Corporation or one of
its affiliates as its registered agent in the State of Texas, and covenants with
Agent that such registered agent shall not be changed without written notice to,
and the written consent of, Agent. Each Debtor hereby waives any right it may
have to transfer or change the venue of any litigation brought against it by
Agent in accordance with this Section 7.1.
7.2. Neither this Security Agreement nor any portion or provisions
hereof may be changed, modified, amended, waived, supplemented, discharged,
canceled or terminated orally or by any course of dealing, or in any manner
other than by an agreement in writing, signed by the parties hereto.
7.3. All notices or other communications hereunder shall be given
in the manner and to the addresses set forth in Section 10.6 of the Note
Agreement, with the address of Borrower serving as the address of each Debtor.
7.4. Each Debtor agrees that checks and other Instruments delivered
to Agent in payment or on account of the Obligations constitute conditional
payment only until payment is actually received in immediately payable funds by
Agent, and, subject to the provisions of Article 3 of the Note Agreement, and
similar provisions in any other Purchase Document, each Debtor waives the right
to direct the application of any and all payments at any time or times hereafter
received by Agent on account of the Obligations. Each Debtor agrees that Agent
shall have the continuing exclusive right to apply and reapply any and all such
payments in such manner as Agent may deem advisable, notwithstanding any entry
by Agent upon any of its books and records.
7.5. If any part of this Security Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
7.6. The captions in this Security Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Security Agreement.
7.7. To the extent that any of Agent receive payments on the
Obligations or receive Proceeds of Collateral which are subsequently
invalidated, declared to be fraudulent or preferential, or are required to be
repaid to a trustee, receiver or any other Person under the
18
Bankruptcy Code or under state, federal or common law, then, to the extent the
payments or Proceeds are so repaid, the Obligations or part thereof which was
intended to be satisfied shall be revived and will continue to be in full force
and effect as if those payments or Proceeds had never been received by Agent.
7.8. This Security Agreement may be executed and delivered in
counterparts, all of which taken together shall constitute this Security
Agreement. Delivery of an executed signature page by any of the parties by
facsimile transmission shall be deemed execution and delivery of this Security
Agreement for all purposes hereof. Notwithstanding execution and delivery of
this Security Agreement by facsimile transmission as provided above, the parties
shall undertake to provide each other with original executed copies of this
Security Agreement within two (2) Business Days following the date hereof. In
making proof of this Security Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
7.9. In the event of any conflict between the terms, conditions,
covenants, or agreements contained herein and in the Intercreditor Agreement,
the terms, conditions, covenants and agreements contained in the Intercreditor
Agreement shall control. Notwithstanding anything to the contrary contained
herein, (a) each exercise of rights or remedies in respect of the Collateral
hereunder by Agent shall be subject to, and shall only be made in accordance
with, the Intercreditor Agreement and (b) any and all Proceeds received by Agent
with respect to any sale of, collection from or other realization upon all or
any part of the Collateral whether consisting of monies, checks, notes, drafts,
bills of exchange, money orders or commercial paper of any kind whatsoever,
shall, subject to the terms, of the Intercreditor Agreement, be immediately
applied to the Obligations in the order specified in Article 3 of the Note
Agreement.
7.10. WAIVER OF JURY TRIAL, ETC.
(a) EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS SECURITY
AGREEMENT OR ANY OF THE OTHER PURCHASE DOCUMENTS OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
SECURITY AGREEMENT OR ANY OF THE OTHER PURCHASE DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS SECURITY AGREEMENT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(b) EACH PARTY HERETO (I) CERTIFIES THAT NEITHER ANY
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS SECURITY
19
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS HEREIN.
7.11. SUBMISSION TO JURISDICTION.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY
AGREEMENT MAY BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION AND, BY EXECUTION AND DELIVERY OF THIS
SECURITY AGREEMENT, EACH DEBTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURT.
(b) EACH DEBTOR HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH ANY
SUCH ACTION OR PROCEEDING, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH JURISDICTION.
(c) EACH DEBTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF THE AFOREMENTIONED COURT IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT ITS ADDRESS AT ACE CASH EXPRESS, INC., 0000 XXXXXXXX XXXXX, XXXXX 000,
XXXXXX, XXXXX 00000, ATTENTION: CHIEF FINANCIAL OFFICER, OR AT SUCH OTHER
ADDRESS AS SHALL BE DESIGNATED BY IT IN A WRITTEN NOTICE TO BANK AGENT.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF ANY OF
THE OBLIGATIONS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY DEBTOR IN ANY OTHER
JURISDICTION.
7.12. Any Person that becomes a Subsidiary of Borrower subsequent to
the date hereof and that was not a "Debtor" under this Security Agreement at the
time of initial execution hereof shall become a "Debtor" hereunder by executing
and delivering to Agent an Additional Subsidiaries Supplement in the form
attached hereto as Exhibit A. Any such Subsidiary shall thereafter be deemed a
"Debtor" for all purposes under this Security Agreement.
[Remainder of the Page Intentionally Left Blank]
20
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement or caused this Security Agreement to be executed and delivered by
their duly authorized officers as of the date first set forth above.
CHECK EXPRESS, INC.
Q. C. & G. FINANCIAL, INC.
PUBLIC CURRENCY, INC.
CHECK EXPRESS FLORIDA, INC.
CHECK EXPRESS FINANCE, INC.
CHECK-X-CHANGE CORPORATION
CHECK EXPRESS SOUTH CAROLINA, INC.
CHECK EXPRESS USA, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
21
Schedule 1
Trade names
Schedule 2
Centers and Collateral Locations
EXHIBIT A
ADDITIONAL SUBSIDIARIES SUPPLEMENT
THIS ADDITIONAL SUBSIDIARIES SUPPLEMENT is made by the undersigned as
of [_________], to the Assignment of Deposit Accounts and Security Agreement
dated as of March 31, 2003 (as amended, supplemented and otherwise modified, the
"Security Agreement"), made by certain Subsidiaries of ACE Cash Express, Inc., a
Texas corporation ("Borrower"), in favor of American Capital Financial Services,
Inc. a Delaware corporation ("ACFS"), as administrative agent for the Purchasers
(as defined in the Security Agreement), from time to time parties hereto
(collectively, the "Debtors").
WITNESSETH:
WHEREAS, the Security Agreement provides that any Subsidiary of
Borrower, although not a Debtor thereunder at the time of the initial execution
thereof, may become a Debtor under the Security Agreement upon the delivery to
the Agent of a supplement in substantially the form of this Additional
Subsidiaries Supplement; and
WHEREAS, the undersigned was not a Subsidiary of Borrower on the date
of the Security Agreement and, therefore, was not a party to the Security
Agreement but now desires to become a Debtor thereunder;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of the
Security Agreement applicable to a Debtor thereunder and agrees that it shall,
on the date this Additional Subsidiaries Supplement is accepted by Agent, become
a Debtor, for all purposes of the Security Agreement to the same extent as if
originally a party thereto with the representations and warranties contained
therein being deemed to be made by the undersigned as of the date hereof.
Unless otherwise defined herein, capitalized terms which are defined in
the Security Agreement are used herein as so defined.
IN WITNESS WHEREOF, the undersigned has caused this Additional
Subsidiaries Supplement to be executed and delivered by a duly authorized
officer on the date first above written.
[NAME OF SUBSIDIARY]
By:_____________________________________
Name:___________________________________
Title:__________________________________
THIS STOCK PLEDGE AGREEMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO LIEN
PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG PLEDGOR,
AGENT AND CERTAIN OTHER CREDITORS OF PLEDGOR (AS AMENDED, MODIFIED OR RESTATED
FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY PLEDGOR UNDER AND PURSUANT TO THAT CERTAIN CREDIT AGREEMENT,
DATED AS OF THE DATE HEREOF, BY AND AMONG PLEDGOR, THE LENDERS FROM TIME TO TIME
PARTY THERETO, XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, AS ADMINISTRATIVE
AGENT FOR SUCH LENDERS (THE "BANK AGENT"), AND JPMORGAN CHASE BANK, AS AGENT FOR
SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO TIME (THE
"CREDIT AGREEMENT") AND EACH RELATED "CREDIT DOCUMENT" (AS SUCH TERM IS DEFINED
THEREIN).
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is executed as of the
day of March 31, 2003 by ACE CASH EXPRESS, INC., a Texas corporation
("Pledgor"), in favor of AMERICAN CAPITAL FINANCIAL SERVICES, INC., a Delaware
corporation ("ACFS"), as administrative agent ("ACFS" in such capacity, "Agent")
for the purchasers (the "Purchasers") from time to time a party to the Note
Agreement (as such term is defined below).
RECITALS:
WHEREAS, Pledgor, Agent and Purchasers have entered into that certain
Note Purchase Agreement of even date herewith (as amended, modified, increased,
supplemented and/or restated from time to time the "Note Agreement"); and
WHEREAS, it is a condition precedent to the extension of credit under
the Note Agreement and to Purchasers' obligations under the Note Agreement, that
the Pledgor, Agent and certain other creditors of the Pledgor enter into that
certain Intercreditor Agreement of even date herewith (as amended, modified or
restated from time to time, the "Intercreditor Agreement"), pursuant to which,
among other things, Agent and the other parties thereto shall establish their
relative rights and respective lien priorities in and to the Collateral (as
hereafter defined).
NOW, THEREFORE, in consideration of these premises and in order to
induce the Purchasers to extend the credit represented by the Obligations, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENTS:
1
1. Defined Terms. Unless otherwise defined herein, terms defined
in the Note Agreement shall have such defined meanings when used herein. For
purposes of this Agreement, the following terms shall have the respective
meanings assigned thereto below:
"Obligations" means
(a) all indebtedness, obligations and liabilities, including all
costs, expenses and fees, now or hereafter owing by Pledgor to Agent or
Purchasers under the Note Agreement, the Notes, this Agreement or any other
Purchase Document;
(b) any and all renewals, extensions, modifications and increases
of such Obligations; and
(c) all costs, expenses and fees, including but not limited to all
court costs and reasonable attorneys' fees, arising in connection with the
collection of any or all amounts, indebtedness, obligations and liabilities
described in items (a) through (b) above, including all costs, expenses and fees
arising in connection with the enforcement of this Agreement.
2. Pledge. The Pledgor hereby pledges, assigns, hypothecates,
transfers and delivers (subject to Section 26 hereof) to Agent, and hereby
grants to Agent, a lien on, a security interest in and control (as defined in
the Code (as defined in Section 10 hereof)) of: (a) all investment property (as
defined in the Code) now owned or hereafter acquired by Pledgor (other than its
membership interests in Ace Funding, LLC, a Delaware limited liability company)
including but not limited to the pledged stock described on Schedule I hereto
(the "Initial Pledged Stock") issued by the Persons described on Schedule I
(each, an "Issuer"), (b) all shares of stock, common or preferred, certificate
or uncertificated securities (as defined in the Code), options, interests,
participations, and other equivalents, warrants, convertible debentures and all
agreements, instruments and documents convertible, in whole or part, into any
one or more of the foregoing (the property described in the foregoing clauses
(a) and (b) is referred to herein as the "Stock") of each Issuer or any other
judicial person (each, an "Additional Issuer") which Pledgor shall, from time to
time, become entitled to receive or shall receive as set forth in Section 3
hereof (together with any Stock options or rights received pursuant to Section 3
hereof, the "Additional Pledged Stock"; the Additional Pledged Stock and the
Initial Pledged Stock being sometimes hereinafter referred to as the "Pledged
Stock"), (c) all other Collateral (as defined in Section 4 hereto as may be
pledged to Agent, at any time and from time to time hereunder, and (d) all
Proceeds (as defined in the Intercreditor Agreement) thereof, together with
appropriate undated stock powers duly executed in blank, as collateral security
for the Obligations.
3. Stock Dividends, Distributions, etc. If, while this Agreement
is in effect, the Pledgor shall become entitled to receive or shall receive any
Stock (including, without limitation, any Stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), option or rights, whether as an
2
addition to, in substitution of, or in exchange for any shares of any Pledged
Stock, or otherwise, the Pledgor agrees (a) to cause the same to be
certificated, and (b) to accept the same as Agent's agent and to hold the same
in trust on behalf of and for the benefit of Agent segregated from the other
assets of the Pledgor and to deliver (subject to Section 26 hereof) the same
forthwith to Agent, in the exact form received, with the endorsement of the
Pledgor, when necessary and/or appropriate, to execute undated stock powers,
duly executed in blank, to be held by Agent, subject to the terms hereof, as
additional collateral security for the Obligations, and such other documents as
Agent shall reasonably request in order to perfect Agent's security interest
therein and grant Agent control thereof. Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of an Issuer or any Additional
Issuer shall be paid over to Agent, to be held by it in trust as additional
collateral security for the Obligations; and in case any distribution of capital
shall be made on or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of an Issuer or pursuant to
the reorganization thereof, the property so distributed shall be delivered
(subject to Section 26 hereof) to Agent, to be held by it as additional
collateral security for the Obligations. All sums of money and property so paid
or distributed in respect of the Pledged Stock which are received by the Pledgor
shall, until paid or delivered to Agent, be held by the Pledgor in trust,
segregated from the other assets of the Pledgor, as additional collateral
security for the Obligations.
4. Collateral. The Pledged Stock and all other property at any
time and from time to time pledged to Agent hereunder (whether described in
Schedule I hereof or not) and all income therefrom and proceeds thereof, are
herein collectively sometimes called the "Collateral".
5. Record Ownership of Pledged Stock. Whether or not an Event of
Default has occurred and is continuing, Agent at any time may have the Pledged
Stock registered in its name, or in the name of its nominee or nominees, as
pledgee, and, as to any Pledged Stock so registered, Agent shall execute and
deliver (or cause to be executed and delivered) to Pledgor all such proxies,
powers of attorney, entitlement orders, dividend coupons or orders, and other
documents as Pledgor may reasonably request for the purpose of enabling Pledgor
to exercise the voting rights and powers which it is entitled to exercise under
this Agreement and to receive the dividends and other payments in respect of the
Pledged Stock which it is authorized to receive and retain under this Agreement
and the Purchase Documents.
6. Voting of Pledged Stock. So long as no Event of Default shall
have occurred and be continuing, Pledgor shall be entitled to exercise all
voting rights pertaining to the Pledged Stock; provided, however, that no vote
shall be cast or consent, waiver or ratification given or action taken which
would impair the Collateral or violate any provision of this Agreement or the
Purchase Documents, including, without limitation, any act which would increase
the authorized issued or outstanding shares of capital Stock of an Issuer or any
Additional Issuer. Upon the occurrence and during the continuance of an Event of
Default, the right to vote the Pledged Stock and all other corporate rights
pertaining to the Pledged Stock shall be vested exclusively in Agent, including
any and all rights of conversion, exchange, subscription or any other rights,
3
privileges or options pertaining to any shares of the Pledged Stock as if Agent
were the absolute owner thereof, including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other readjustment of an
Issuer or any Additional Issuer or upon the exercise by an Issuer or any
Additional Issuer or Agent of any right, privilege or option pertaining to any
shares of the Pledged Stock, and in connection therewith, to deposit and deliver
any and all of the Pledged Stock with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it, but Agent shall have no duty to exercise any of the aforesaid
rights, privileges or options or be responsible for any failure to do so or
delay in so doing. TO THIS END, PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS AGENT THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR, WITH FULL POWER OF
SUBSTITUTION, TO VOTE, AND TO ACT WITH RESPECT TO, THE PLEDGED STOCK STANDING IN
THE NAME OF PLEDGOR OR WITH RESPECT TO WHICH PLEDGOR IS ENTITLED TO VOTE AND
ACT, SUBJECT TO THE UNDERSTANDING THAT SUCH PROXY MAY NOT BE EXERCISED UNLESS AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, IN EACH CASE PURSUANT TO NOTE
AGREEMENT. THE PROXY HEREIN GRANTED IS COUPLED WITH AN INTEREST, IS IRREVOCABLE,
AND SHALL CONTINUE UNTIL ALL COMMITMENTS OF ANY PURCHASER TO EXTEND CREDIT TO
PLEDGOR HAVE BEEN TERMINATED AND THE OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN
FULL.
7. Limitations on Agent's Obligations. Agent shall not be liable
for failure to collect or realize upon the Obligations or any collateral
security or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall Agent be under any obligation to take any action whatsoever with
regard thereto.
8. Agent's Appointment as Attorney-in-Fact. (a) In addition to,
and without limiting the scope of any other provision in this Agreement, the
Pledgor hereby irrevocably constitutes and appoints Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Pledgor and in the name of the Pledgor or in its own name, from
time to time in Agent's discretion, for the purpose of carrying out the actions
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives Agent, the power and right, on behalf
of the Pledgor, without notice to or assent by the Pledgor upon the occurrence
and during the continuance of an Event of Default, but with notice to and assent
by Pledgor prior to the occurrence of an Event of Default, to do the following:
(i) to ask, demand, collect, receive and give acquittances and receipts for any
and all monies due and to become due under the Collateral; (ii) in the name of
the Pledgor or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under the Collateral; (iii) to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under the Collateral whenever payable; (iv) to pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against the Collateral; (v) to direct any party liable for any payment under the
Collateral to make payment of
4
any and all moneys due and to become due thereunder directly to Agent, or as
Agent shall direct; (vi) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (vii) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of the Collateral; (viii) to defend any suit, action or
proceeding brought against the Pledgor with respect to any Collateral; (ix) to
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, to give such discharges or releases as Agent may deem
appropriate; (x) exercise voting rights attributable to the Pledged Stock
pursuant to Section 6 hereof; and (xi) generally to sell, transfer, pledge, make
any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though Agent were the absolute owner thereof for all
purposes, and to do, at Agent's option and the Pledgor's expense, at any time,
or from time to time, all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and Agent's security interest
therein, in order to effect the intent of this Agreement, all as fully and
effectively as the Pledgor might do.
The Pledgor hereby ratifies all that said attorneys shall lawfully do
or cause to be done.
(b) The powers conferred on Agent, hereunder are solely
to protect its interests in the Collateral and shall not impose any duty upon it
to exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to the
Pledgor for any act or failure to act.
(c) The Pledgor also authorizes Agent, at any time and
from time to time, to execute, in connection with any sale of the Collateral,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
9. Performance by Agent of the Pledgor's Obligations. If the
Pledgor fails to perform or comply with any of its agreements contained herein
and Agent, as provided for by the terms of this Agreement, shall itself perform
or comply, or otherwise cause performance or compliance, with such agreement,
then the expenses of Agent incurred in connection with such performance or
compliance, together with interest thereon to accrue at a rate of interest equal
to the rate of interest set forth in Section 8.2(c) of the Note Agreement from
the date five days after notice from Agent that such expenses are incurred,
shall be payable by the Pledgor to Agent, on demand and shall constitute
Obligations secured hereby.
10. Remedies. (a) Upon the occurrence and during the continuance
of an Event of Default and at any time thereafter, Agent may declare all of the
Obligations or any part thereof immediately due and payable and, without demand
of performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other Person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect,
5
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give option or options to purchase, contract
to sell or otherwise dispose of and deliver said Collateral, or any part
thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at Agent's offices or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk,
with the right to Agent upon any such sale or sales, public or private, to
purchase the whole or any part of said Collateral so sold, free of any right or
equity of redemption in the Pledgor, which right or equity is hereby expressly
waived or released. Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, in accordance with the
terms of the Intercreditor Agreement, the Pledgor remaining liable for any
deficiency remaining unpaid after such application, and only after so applying
such net proceeds and after the payment by Agent of any amount required by any
provision of law, including, without limitation, Section 9.615 of the Uniform
Commercial Code of the State of Texas (as amended, the "Code"), need Agent
account for the surplus, if any, to the Pledgor. The Pledgor agrees that, to the
extent permitted by law, Agent need not give more than ten (10) days' notice of
the time and place of any public sale or of the time after which a private sale
or other intended disposition is to take place and that such notice is
reasonable notification of such matters. No notification need be given to the
Pledgor if it has signed after default a statement renouncing or modifying any
right to notification of sale or other intended disposition. IN ADDITION TO THE
RIGHTS AND REMEDIES GRANTED TO IT IN THIS AGREEMENT AND IN ANY OTHER INSTRUMENT
OR AGREEMENT SECURING, EVIDENCING OR RELATING TO ANY OF THE OBLIGATIONS, PLEDGEE
SHALL HAVE ALL THE RIGHTS AND REMEDIES OF A SECURED PARTY UNDER THE CODE. All
waivers by the Pledgor of rights (including rights to notice) and all rights and
remedies afforded the Pledgor herein, and all other provisions of this
Agreement, are expressly made subject to any applicable mandatory provisions of
law limiting, or imposing conditions (including conditions as to reasonableness)
upon such waivers of the effectiveness thereof or any such rights and remedies.
Any sale or other disposition of the Collateral shall be in compliance with all
provisions of law (including applicable securities laws, and regulations and
applicable provisions of the Code).
(b) The Pledgor recognizes that Agent may be unable to
effect a public sale of any or all the Pledged Stock by reason of certain
prohibitions contained in the Securities Act of 1933 (as amended, the
"Securities Act") and applicable state securities laws, but may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. The Pledgor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner. Agent shall be under no obligation to delay a sale of any of the Pledged
Stock for the period of time necessary to permit any Issuer or Additional Issuer
of such securities to register such
6
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer or Additional Issuer would agree to do so.
(c) The Pledgor further agrees to do or cause to be done
all such other acts and things as may be necessary to make such sale or sales of
any portion of all of the Pledged Stock valid and binding and in compliance with
any and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at the
Pledgor's expense. The Pledgor further agrees that a breach of any of the
covenants contained in this Section 10 will cause irreparable injury to Agent,
that Agent has no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this paragraph
shall be specifically enforceable against the Pledgor and the Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default of the
covenants, terms or conditions of the Purchase Documents has occurred. The
Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by Agent by reason of a breach of any such
covenants and, consequently, agrees that, if Agent, shall xxx for damages for
breach, Pledgor shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Pledged Stock on the date Agent shall demand
compliance with this paragraph.
11. Waiver of Subrogation. Notwithstanding anything to the
contrary in this Agreement, unless and until all commitments of any Purchaser to
extend credit to Pledgor have terminated and the Obligations have been
indefeasibly paid and performed in full, the Pledgor hereby irrevocably waives
all rights Pledgor may have at law or in equity (including, without limitation,
any law subrogating the Pledgor to the rights of Agent) to seek contribution,
indemnification, or any other form of reimbursement from any Issuer of
Additional Issuer, any other guarantor or pledgor, or any other Person now or
hereafter primarily or secondarily liable for any obligations of such Issuer or
Additional Issuer to Agent, for any disbursement made by the Pledgor under or in
connection with this Agreement or otherwise. The Pledgor further agrees that, to
the extent that the waiver of any such subrogation, contribution, reimbursement,
indemnity or otherwise is found to be void or voidable for any reason, any such
rights which the Pledgor may have shall be junior and subordinate in all
respects to the rights of Agent against any Issuer or any Additional Issuer.
12. Actions by Agent. No action that any Purchaser may take or
omit to take in connection with any of the Purchase Documents, any indebtedness
owing by Pledgor to such Purchaser (including, without limitation, renewals,
extensions, modifications and increases thereof), or any security for the
payment of any indebtedness of Pledgor to any Purchaser, or for the performance
of any obligation or undertaking of Pledgor, nor any course of dealing with
Pledgor or any other Person, shall release the Pledgor from his obligations
hereunder, affect this Agreement in any way, or afford the Pledgor any recourse
against any Purchaser. By way of example, but not in limitation of the
foregoing, the Pledgor hereby expressly agrees that Agent and any Purchaser may,
from time to time, without notice to the Pledgor:
7
(a) sell, assign, transfer or grant participations in any
Obligation and/or any right held by any Purchaser pursuant to or in connection
with the Purchase Documents;
(b) amend, change, or modify, in whole or in part, any
documents or instruments evidencing, securing or relating to any indebtedness or
undertaking of Pledgor to any Purchaser;
(c) accelerate, change, extend, or renew the time for
payment of the Obligations or any other indebtedness arising under any documents
or instruments evidencing, securing or relating to any indebtedness or
undertaking of Pledgor to any Purchaser;
(d) compromise or settle any amount due or owing, or
claimed to be due or owing, under the Obligations or under any documents or
instruments evidencing, securing or relating to any indebtedness or undertaking
of Pledgor to any Purchaser;
(e) surrender, release, or subordinate any or all
security for any indebtedness or undertaking of Pledgor to Agent or accept
additional or substituted security therefor;
(f) release any guarantor or pledgor of any indebtedness
or undertaking of the Pledgor to Agent, or substitute or add additional
guarantors or pledgors; and
(g) apply collateral securing the Obligations to other
indebtedness also secured by such collateral.
The provisions of this Agreement shall extend and be applicable to all
renewals, increases, amendments, extensions, modifications of and substitutions
for the Purchase Documents, and all references herein to the Purchase Documents
shall be deemed to include any renewal, increase, extension, amendment or
modification thereof or substitution therefor.
13. No Impairment. The obligations, guaranties, undertakings,
covenants, agreements and duties of the Pledgor under this Agreement shall not
be affected or impaired by any of the following, although without notice to or
consent of the Pledgor:
(a) any failure, omission or delay on the part of any
Purchaser (i) to enforce, assert or exercise any right, power or remedy
conferred by the provisions of the Purchase Documents or otherwise inuring to
the holders of the rights of any Purchaser under the Purchase Documents, or (ii)
to make demand first upon Pledgor or to proceed against Pledgor;
(b) the voluntary or involuntary liquidation,
dissolution, sale of all or substantially all assets, marshaling of assets or
liabilities, receivership, conservatorship,
8
assignment for the benefit of creditors, insolvency, bankruptcy, reorganization,
arrangement, composition or other proceedings under laws for the protection of
debtors affecting any Issuer or Additional Issuer or any of the assets of any
Issuer or Additional Issuer, or any discharge from liability or rejection of
burdensome contracts or obligations in the course of or resulting from any such
proceedings;
(c) the release, by operation of law or otherwise, of any
guarantor from any obligation under any of the Purchase Documents;
(d) the invalidity, deficiency, illegality or
unenforceability of any of the Purchase Documents, in whole or in part, or of
any of the provisions thereof, or failure to perfect or maintain perfection of
any security, or any defense or excuse for failure to perform on account of
force majeure, act of God, casualty, impossibility, impracticability, or other
defense or excuse whatsoever; or
(e) without limiting the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of this
provision would or might constitute or afford a legal or equitable discharge or
release of or defense to a guarantor or surety.
None of the foregoing shall be a defense to this Agreement, and this
Agreement is a primary obligation of the Pledgor.
14. Other Pledgors or Guarantors. The liabilities and obligations
of the Pledgor hereunder shall not be reduced or limited by reason of any
guaranty or pledge executed in favor of any Purchaser by any other Person, and
this Agreement shall be enforceable against the Pledgor without regard to any
such guaranty or pledge.
15. Representations, Warranties and Covenants of the Pledgor. The
Pledgor represents and warrants that (a) it owns 100% of the issued and
outstanding capital stock of each Subsidiary listed on Schedule I hereto (except
with respect to ePacific Incorporated, a Delaware corporation ("ePacific"), in
which Pledgor owns the capital stock of ePacific as set forth on Schedule I
hereto); (b) it is the legal, record and beneficial owner of, and has good and,
subject to applicable securities laws described in Section 10 hereof, marketable
title to, the Initial Pledged Stock, subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option, voting proxy or other
encumbrance whatsoever, except the existing lien and security interest created
by this Agreement and those created by the Stock Pledge Agreements of even date
herewith executed by Pledgor in favor of Bank Agent and Travelers; (c) it is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full power, authority and legal right to
pledge the Initial Pledged Stock pursuant to this Agreement; (d) this Agreement
has been duly authorized, executed and delivered by Pledgor and constitutes a
legal, valid and binding obligation of the Pledgor, and is enforceable in
accordance with its terms; (e) no consent of any other party (including, without
limitation, the stockholders
9
or creditors of the Pledgor) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority, domestic or foreign, is required
to be obtained by the Pledgor or Agent in connection with the execution,
delivery or performance of this Agreement or the pledge of such shares
hereunder, in each case which has not been obtained or made, as the case may be,
and is not in full force and effect; (f) to its best knowledge after due
investigation, the execution, delivery and performance of this Agreement will
not violate any provision of any applicable law, or of any material mortgage,
indenture, lease, contract, or other agreement, instrument or undertaking to
which Pledgor is a party or which purports to be binding upon Pledgor or upon
any of its assets and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the assets of Pledgor
except as contemplated by this Agreement or the Purchase Documents; (g) all the
shares of the Initial Pledged Stock have been duly and validly issued, are fully
paid and non-assessable and have not been issued in violation of any preemptive
or other rights of any Person; (h) the Pledgor has not created any options,
warrants, rights, calls, commitments, plans, contracts or other agreements of
any character, which provide for the purchase, issuance, transfer or control of
any shares of capital stock of any Issuer pledged hereby; and (i) the pledge,
assignment and delivery of such Initial Pledged Stock pursuant to this Agreement
constitutes and, provided Agent retains possession of the Initial Pledged Stock,
at all times (disregarding, however the effects of the change in any law
relating to the pledge of stock generally) will constitute a valid first lien on
and a first perfected security interest in such shares of the Initial Pledged
Stock, and the proceeds thereof, subject to no prior lien, or to any agreement
purporting to grant to any third party other than Agent a security interest in
or control of the property or assets of the Pledgor which would include the
Initial Pledged Stock. Pledgor covenants and agrees that at its expense it will
defend the right, title and security interest of Agent in and to the Pledged
Stock and the proceeds thereof against the claims and demands of all Persons
whomsoever; and covenants and agrees that it will have like title to and right
to pledge any other property at any time hereafter pledged to Agent, as
Collateral hereunder and will likewise defend the right of Agent and the
Purchasers thereto and security interest therein. Notwithstanding anything to
the contrary contained in this Section 15, all of the capital stock of ePacific
owned by Pledgor is subject to a Stockholders' Agreement dated as of March 30,
2000 which provides, among other things, that no stockholder of ePacific may
effect certain sales of such securities without affording the other stockholders
of ePacific a right to participate in each such sale and no party to such
Stockholders' Agreement may assign its rights thereunder without the prior
written consent of the other parties thereto.
16. No Disposition, etc. Except in accordance with the Purchase
Documents, Pledgor agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, nor will it create, incur or permit to exist any pledge, lien,
mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to, or transfer or grant control of any of the
Collateral, or any interest therein, or any proceeds thereof, except for the
lien and security interest and control provided for by this Agreement and except
as permitted by this Agreement or by the Purchase Documents. Without the prior
written consent of Agent, the Pledgor agrees that it will not vote to enable any
Issuer or any Additional
10
Issuer to issue or sell any stock or other securities of any nature in addition
to or in exchange or substitution for the Pledged Stock or grant or issue any
options, warrants, or rights of any kind to acquire, or securities convertible
into, shares of any Issuer's or any Additional Issuer's stock.
17. Further Assurances. Pledgor agrees that at any time and from
time to time upon the written request of Agent, the Pledgor will, or will cause
each Issuer and each Additional Issuer to, execute and deliver such further
documents and do such further acts and things which are necessary in the
reasonable judgment of Agent to effect the purpose of this Agreement or to
obtain, maintain and perfect the security interest and control granted under
this Agreement in any applicable jurisdiction, and any expense of Agent so
incurred shall be a part of the Obligations.
18. Financing Statement. Agent shall be entitled at any time to
file this Agreement or a carbon, photographic, or other reproduction of this
Agreement, as a financing statement, but the failure of Agent to do so shall not
impair the validity or enforceability of this Agreement. Pledgor shall pay all
fees associated with such filing.
19. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
20. No Waiver; Cumulative Remedies. Agent shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by
Agent, and then only to the extent therein set forth. A waiver by Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Agent would otherwise have on any future occasion. No
failure to exercise nor any delay in exercising on the part of Agent, any right,
power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
21. Waivers, Amendments. None of the terms or provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by Agent. This Agreement and all obligations of the
Pledgor hereunder shall be binding upon the successors and assigns of the
Pledgor, and shall, together with the rights and remedies of Agent hereunder,
inure to the benefit of Agent, the Purchasers and their respective successors
and assigns.
11
22. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS RULES THEREOF. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PLEDGOR HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURT.
23. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
24. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Pledgor or any Issuer or any Additional Issuer for liquidation or
reorganization, should the Pledgor or such Issuer or Additional Issuer become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Pledgor's assets or the assets of such Issuer or Additional Issuer and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount and not so rescinded, reduced, restored
or returned.
25. ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES, THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
26. Intercreditor Agreement. In the event of any conflict between
the terms, conditions, covenants, or agreements contained herein and in the
Intercreditor Agreement, the terms, conditions, covenants and agreements
contained in the Intercreditor Agreement shall control. Notwithstanding anything
to the contrary contained herein, (a) each exercise of rights or remedies in
respect of the Collateral hereunder by Agent shall be subject to, and shall only
be made in accordance with, the Intercreditor Agreement and (b) any and all
Proceeds received by Agent with respect to any sale of, collection from or other
realization upon all or any part of the Collateral whether consisting of
investment property, monies, checks, notes, drafts, bills of
12
exchange, money orders or commercial paper of any kind whatsoever, shall,
subject to the terms of the Intercreditor Agreement, be immediately applied to
the Obligations in the order specified in Article 3 of the Note Agreement. In
addition, notwithstanding anything herein to the contrary, from the date hereof
through and until the date that the Obligations (as such term is defined in the
Credit Agreement) have been satisfied in full, any delivery requirements
hereunder for purposes of perfecting the Agent's lien in the Pledged Stock,
together with all appropriate powers and/or endorsements duly executed in blank
by the Pledgor, shall be waived; provided, however, once the Obligations (as
such term is defined in the Credit Agreement) have been satisfied in full, the
Pledgor shall immediately deliver the Pledged Stock, together with all
appropriate powers and/or endorsements duly executed in blank by the Pledgor, to
the Agent.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
13
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered as of the day and year first above written.
PLEDGOR:
ACE CASH EXPRESS, INC.
By:_________________________________
Name:
Title:
SCHEDULE I
Pledged Stock
THIS STOCK PLEDGE AGREEMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO LIEN
PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG BORROWER,
AGENT AND CERTAIN OTHER CREDITORS OF BORROWER (AS AMENDED, MODIFIED OR RESTATED
FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY BORROWER UNDER AND PURSUANT TO THAT CERTAIN CREDIT
AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG BORROWER, THE LENDERS FROM
TIME TO TIME PARTY THERETO, XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT FOR SUCH LENDERS (THE "BANK AGENT"), AND JPMORGAN CHASE
BANK, AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM
TIME TO TIME (THE "CREDIT AGREEMENT") AND EACH RELATED "CREDIT DOCUMENT" (AS
SUCH TERM IS DEFINED THEREIN).
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is executed as of the
day of March 31, 2003 by CHECK EXPRESS, INC., a Florida corporation ("Pledgor"),
in favor of AMERICAN CAPITAL FINANCIAL SERVICES, INC., a Delaware corporation
("ACFS"), as administrative agent ("ACFS" in such capacity, "Agent") for the
purchasers (the "Purchasers") from time to time a party to the Note Agreement
(as such term is defined below).
RECITALS:
WHEREAS, the Pledgor is a wholly-owned subsidiary of Ace Cash Express,
Inc., a Texas corporation ("Borrower");
WHEREAS, Borrower, Agent and Purchasers have entered into that certain
Note Purchase Agreement of even date herewith (as amended, modified, increased,
supplemented and/or restated from time to time the "Note Agreement");
WHEREAS, it is a condition precedent to the extension of credit under
the Note Agreement and to the Purchasers' obligations under the Note Agreement
that the Pledgor shall have executed and delivered this Agreement;
WHEREAS, the board of directors of the Pledgor has determined that the
Pledgor will significantly benefit, directly or indirectly, from the extensions
of credit by the Purchasers to Borrower under the Note Agreement and the other
transactions contemplated by the Purchase Documents (as defined in the Note
Agreement); and
WHEREAS, it is a condition precedent to the extension of credit under
the Note Agreement and to Purchasers' obligations under the Note Agreement, that
Borrower, Agent and certain other creditors of Borrower enter into that certain
Intercreditor Agreement of even date
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herewith (as amended, modified or restated from time to time, the "Intercreditor
Agreement"), pursuant to which, among other things, Agent and the other parties
thereto shall establish their relative rights and respective lien priorities in
and to the Collateral (as hereafter defined).
NOW, THEREFORE, in consideration of these premises and in order to
induce the Purchasers to extend the credit to Borrower represented by the
Obligations, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENTS:
1. Defined Terms. Unless otherwise defined herein, terms defined
in the Note Agreement shall have such defined meanings when used herein. For
purposes of this Agreement, the following terms shall have the respective
meanings assigned thereto below:
"Obligations" means
(a) all indebtedness, obligations and liabilities, including all
costs, expenses and fees, now or hereafter owing by Borrower to Agent or
Purchasers under the Note Agreement, the Notes, this Agreement or any other
Purchase Document;
(b) any and all renewals, extensions, modifications and increases
of such Obligations; and
(c) all costs, expenses and fees, including but not limited to all
court costs and reasonable attorneys' fees, arising in connection with the
collection of any or all amounts, indebtedness, obligations and liabilities
described in items (a) through (b) above, including all costs, expenses and fees
arising in connection with the enforcement of this Agreement.
2. Pledge. The Pledgor hereby pledges, assigns, hypothecates,
transfers and delivers (subject to Section 26 hereof) to Agent, and hereby
grants to Agent, a lien on, a security interest in and control (as defined in
the Code (as defined in Section 10 hereof)) of: (a) all investment property (as
defined in the Code) now owned or hereafter acquired by Pledgor including but
not limited to the pledged stock described on Schedule I hereto (the "Initial
Pledged Stock") issued by the Persons described on Schedule I (each, an
"Issuer"), (b) all shares of stock, common or preferred, certificate or
uncertificated securities (as defined in the Code), options, interests,
participations, and other equivalents, warrants, convertible debentures and all
agreements, instruments and documents convertible, in whole or part, into any
one or more of the foregoing (the property described in the foregoing clauses
(a) and (b) is referred to herein as the "Stock") of each Issuer or any other
judicial person (each, an "Additional Issuer") which Pledgor shall, from time to
time, become entitled to receive or shall receive as set forth in Section 3
hereof (together
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with any Stock options or rights received pursuant to Section 3 hereof, the
"Additional Pledged Stock"; the Additional Pledged Stock and the Initial Pledged
Stock being sometimes hereinafter referred to as the "Pledged Stock"), (c) all
other Collateral (as defined in Section 4 hereto as may be pledged to Agent, at
any time and from time to time hereunder, and (d) all Proceeds (as defined in
the Intercreditor Agreement) thereof, together with appropriate undated stock
powers duly executed in blank, as collateral security for the Obligations.
3. Stock Dividends, Distributions, etc. If, while this Agreement
is in effect, the Pledgor shall become entitled to receive or shall receive any
Stock (including, without limitation, any Stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), option or rights, whether as an
addition to, in substitution of, or in exchange for any shares of any Pledged
Stock, or otherwise, the Pledgor agrees (a) to cause the same to be
certificated, and (b) to accept the same as Agent's agent and to hold the same
in trust on behalf of and for the benefit of Agent segregated from the other
assets of the Pledgor and to deliver (subject to Section 26 hereof) the same
forthwith to Agent, in the exact form received, with the endorsement of the
Pledgor, when necessary and/or appropriate, to execute undated stock powers,
duly executed in blank, to be held by Agent, subject to the terms hereof, as
additional collateral security for the Obligations, and such other documents as
Agent shall reasonably request in order to perfect Agent's security interest
therein and grant Agent control thereof. Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of an Issuer or any Additional
Issuer shall be paid over to Agent, to be held by it in trust as additional
collateral security for the Obligations; and in case any distribution of capital
shall be made on or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of an Issuer or pursuant to
the reorganization thereof, the property so distributed shall be delivered
(subject to Section 26 hereof) to Agent, to be held by it as additional
collateral security for the Obligations. All sums of money and property so paid
or distributed in respect of the Pledged Stock which are received by the Pledgor
shall, until paid or delivered to Agent, be held by the Pledgor in trust,
segregated from the other assets of the Pledgor, as additional collateral
security for the Obligations.
4. Collateral. The Pledged Stock and all other property at any
time and from time to time pledged to Agent hereunder (whether described in
Schedule I hereof or not) and all income therefrom and proceeds thereof, are
herein collectively sometimes called the "Collateral".
5. Record Ownership of Pledged Stock. Whether or not an Event of
Default has occurred and is continuing, Agent at any time may have the Pledged
Stock registered in its name, or in the name of its nominee or nominees, as
pledgee, and, as to any Pledged Stock so registered, Agent shall execute and
deliver (or cause to be executed and delivered) to Pledgor all such proxies,
powers of attorney, entitlement orders, dividend coupons or orders, and other
documents as Pledgor may reasonably request for the purpose of enabling Pledgor
to exercise the voting rights and powers which it is entitled to exercise under
this Agreement and to receive the
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dividends and other payments in respect of the Pledged Stock which it is
authorized to receive and retain under this Agreement and the Purchase
Documents.
6. Voting of Pledged Stock. So long as no Event of Default shall
have occurred and be continuing, Pledgor shall be entitled to exercise all
voting rights pertaining to the Pledged Stock; provided, however, that no vote
shall be cast or consent, waiver or ratification given or action taken which
would impair the Collateral or violate any provision of this Agreement or the
Purchase Documents, including, without limitation, any act which would increase
the authorized issued or outstanding shares of capital Stock of an Issuer or any
Additional Issuer. Upon the occurrence and during the continuance of an Event of
Default, the right to vote the Pledged Stock and all other corporate rights
pertaining to the Pledged Stock shall be vested exclusively in Agent, including
any and all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any shares of the Pledged Stock as if Agent
were the absolute owner thereof, including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other readjustment of an
Issuer or any Additional Issuer or upon the exercise by an Issuer or any
Additional Issuer or Agent of any right, privilege or option pertaining to any
shares of the Pledged Stock, and in connection therewith, to deposit and deliver
any and all of the Pledged Stock with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it, but Agent shall have no duty to exercise any of the aforesaid
rights, privileges or options or be responsible for any failure to do so or
delay in so doing. TO THIS END, PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS AGENT THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR, WITH FULL POWER OF
SUBSTITUTION, TO VOTE, AND TO ACT WITH RESPECT TO, THE PLEDGED STOCK STANDING IN
THE NAME OF PLEDGOR OR WITH RESPECT TO WHICH PLEDGOR IS ENTITLED TO VOTE AND
ACT, SUBJECT TO THE UNDERSTANDING THAT SUCH PROXY MAY NOT BE EXERCISED UNLESS AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, IN EACH CASE PURSUANT TO NOTE
AGREEMENT. THE PROXY HEREIN GRANTED IS COUPLED WITH AN INTEREST, IS IRREVOCABLE,
AND SHALL CONTINUE UNTIL ALL COMMITMENTS OF ANY PURCHASER TO EXTEND CREDIT TO
PLEDGOR HAVE BEEN TERMINATED AND THE OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN
FULL.
7. Limitations on Agent's Obligations. Agent shall not be liable
for failure to collect or realize upon the Obligations or any collateral
security or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall Agent be under any obligation to take any action whatsoever with
regard thereto.
8. Agent's Appointment as Attorney-in-Fact. (a) In addition to,
and without limiting the scope of any other provision in this Agreement, the
Pledgor hereby irrevocably constitutes and appoints Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Pledgor and in the name of the Pledgor or in its own name, from
time to time in Agent's discretion, for the purpose of carrying out the actions
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement
4
and, without limiting the generality of the foregoing, hereby gives Agent, the
power and right, on behalf of the Pledgor, without notice to or assent by the
Pledgor upon the occurrence and during the continuance of an Event of Default,
but with notice to and assent by Pledgor prior to the occurrence of an Event of
Default, to do the following: (i) to ask, demand, collect, receive and give
acquittances and receipts for any and all monies due and to become due under the
Collateral; (ii) in the name of the Pledgor or its own name or otherwise, to
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under the
Collateral; (iii) to file any claim or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by Agent for the
purpose of collecting any and all such moneys due under the Collateral whenever
payable; (iv) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral; (v) to
direct any party liable for any payment under the Collateral to make payment of
any and all moneys due and to become due thereunder directly to Agent, or as
Agent shall direct; (vi) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (vii) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of the Collateral; (viii) to defend any suit, action or
proceeding brought against the Pledgor with respect to any Collateral; (ix) to
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, to give such discharges or releases as Agent may deem
appropriate; (x) exercise voting rights attributable to the Pledged Stock
pursuant to Section 6 hereof; and (xi) generally to sell, transfer, pledge, make
any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though Agent were the absolute owner thereof for all
purposes, and to do, at Agent's option and the Pledgor's expense, at any time,
or from time to time, all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and Agent's security interest
therein, in order to effect the intent of this Agreement, all as fully and
effectively as the Pledgor might do.
The Pledgor hereby ratifies all that said attorneys shall lawfully do
or cause to be done.
(b) The powers conferred on Agent, hereunder are solely
to protect its interests in the Collateral and shall not impose any duty upon it
to exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to the
Pledgor for any act or failure to act.
(c) The Pledgor also authorizes Agent, at any time and
from time to time, to execute, in connection with any sale of the Collateral,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
9. Performance by Agent of the Pledgor's Obligations. If the
Pledgor fails to perform or comply with any of its agreements contained herein
and Agent, as provided for by the terms of this Agreement, shall itself perform
or comply, or otherwise cause performance or
5
compliance, with such agreement, then the expenses of Agent incurred in
connection with such performance or compliance, together with interest thereon
to accrue at a rate of interest equal to the rate of interest set forth in
Section 8.2(c) of the Note Agreement from the date five days after notice from
Agent that such expenses are incurred, shall be payable by the Pledgor to Agent,
on demand and shall constitute Obligations secured hereby.
10. Remedies. (a) Upon the occurrence and during the continuance
of an Event of Default and at any time thereafter, Agent may declare all of the
Obligations or any part thereof immediately due and payable and, without demand
of performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other Person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or at Agent's offices or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk, with the right to Agent
upon any such sale or sales, public or private, to purchase the whole or any
part of said Collateral so sold, free of any right or equity of redemption in
the Pledgor, which right or equity is hereby expressly waived or released. Agent
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, in accordance with the terms of the
Intercreditor Agreement, the Pledgor remaining liable for any deficiency
remaining unpaid after such application, and only after so applying such net
proceeds and after the payment by Agent of any amount required by any provision
of law, including, without limitation, Section 9.615 of the Uniform Commercial
Code of the State of Texas (as amended, the "Code"), need Agent account for the
surplus, if any, to the Pledgor. The Pledgor agrees that, to the extent
permitted by law, Agent need not give more than ten (10) days' notice of the
time and place of any public sale or of the time after which a private sale or
other intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to the Pledgor if it
has signed after default a statement renouncing or modifying any right to
notification of sale or other intended disposition. IN ADDITION TO THE RIGHTS
AND REMEDIES GRANTED TO IT IN THIS AGREEMENT AND IN ANY OTHER INSTRUMENT OR
AGREEMENT SECURING, EVIDENCING OR RELATING TO ANY OF THE OBLIGATIONS, PLEDGEE
SHALL HAVE ALL THE RIGHTS AND REMEDIES OF A SECURED PARTY UNDER THE CODE. All
waivers by the Pledgor of rights (including rights to notice) and all rights and
remedies afforded the Pledgor herein, and all other provisions of this
Agreement, are expressly made subject to any applicable mandatory provisions of
law limiting, or imposing conditions (including conditions as to reasonableness)
upon such waivers of the effectiveness thereof or any such rights and remedies.
Any sale or other disposition of the Collateral shall be in compliance with all
provisions of law (including applicable securities laws, and regulations and
applicable provisions of the Code).
6
(b) The Pledgor recognizes that Agent may be unable to
effect a public sale of any or all the Pledged Stock by reason of certain
prohibitions contained in the Securities Act of 1933 (as amended, the
"Securities Act") and applicable state securities laws, but may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. The Pledgor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner. Agent shall be under no obligation to delay a sale of any of the Pledged
Stock for the period of time necessary to permit any Issuer or Additional Issuer
of such securities to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
or Additional Issuer would agree to do so.
(c) The Pledgor further agrees to do or cause to be done
all such other acts and things as may be necessary to make such sale or sales of
any portion of all of the Pledged Stock valid and binding and in compliance with
any and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at the
Pledgor's expense. The Pledgor further agrees that a breach of any of the
covenants contained in this Section 10 will cause irreparable injury to Agent,
that Agent has no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this paragraph
shall be specifically enforceable against the Pledgor and the Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default of the
covenants, terms or conditions of the Purchase Documents has occurred. The
Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by Agent by reason of a breach of any such
covenants and, consequently, agrees that, if Agent, shall xxx for damages for
breach, Pledgor shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Pledged Stock on the date Agent shall demand
compliance with this paragraph.
11. Waiver of Subrogation. Notwithstanding anything to the
contrary in this Agreement, unless and until all commitments of any Purchaser to
extend credit to Borrower have terminated and the Obligations have been
indefeasibly paid and performed in full, the Pledgor hereby irrevocably waives
all rights Pledgor may have at law or in equity (including, without limitation,
any law subrogating the Pledgor to the rights of Agent) to seek contribution,
indemnification, or any other form of reimbursement from Borrower, any Issuer of
Additional Issuer, any other guarantor or pledgor, or any other Person now or
hereafter primarily or secondarily liable for any obligations of such Issuer or
Additional Issuer to Agent, for any disbursement made by the Pledgor under or in
connection with this Agreement or otherwise. The Pledgor further agrees that, to
the extent that the waiver of any such subrogation, contribution, reimbursement,
indemnity or otherwise is found to be void or voidable for any reason, any such
7
rights which the Pledgor may have shall be junior and subordinate in all
respects to the rights of Agent against any Issuer or any Additional Issuer.
12. Actions by Agent. No action that any Purchaser may take or
omit to take in connection with any of the Purchase Documents, any indebtedness
owing by Borrower or Pledgor to such Purchaser (including, without limitation,
renewals, extensions, modifications and increases thereof), or any security for
the payment of any indebtedness of Borrower or Pledgor to any Purchaser, or for
the performance of any obligation or undertaking of Borrower or Pledgor, nor any
course of dealing with Borrower, Pledgor or any other Person, shall release the
Pledgor from his obligations hereunder, affect this Agreement in any way, or
afford the Pledgor any recourse against any Purchaser. By way of example, but
not in limitation of the foregoing, the Pledgor hereby expressly agrees that
Agent and any Purchaser may, from time to time, without notice to the Pledgor:
(a) sell, assign, transfer or grant participations in any
Obligation and/or any right held by any Purchaser pursuant to or in connection
with the Purchase Documents;
(b) amend, change, or modify, in whole or in part, any
documents or instruments evidencing, securing or relating to any indebtedness or
undertaking of Borrower or Pledgor to any Purchaser;
(c) accelerate, change, extend, or renew the time for
payment of the Obligations or any other indebtedness arising under any documents
or instruments evidencing, securing or relating to any indebtedness or
undertaking of Borrower or Pledgor to any Purchaser;
(d) compromise or settle any amount due or owing, or
claimed to be due or owing, under the Obligations or under any documents or
instruments evidencing, securing or relating to any indebtedness or undertaking
of Borrower or Pledgor to any Purchaser;
(e) surrender, release, or subordinate any or all
security for any indebtedness or undertaking of Borrower or Pledgor to Agent or
accept additional or substituted security therefor;
(f) release any guarantor or pledgor of any indebtedness
or undertaking of Borrower or Pledgor to Agent, or substitute or add additional
guarantors or pledgors; and
(g) apply collateral securing the Obligations to other
indebtedness also secured by such collateral.
The provisions of this Agreement shall extend and be applicable to all
renewals, increases, amendments, extensions, modifications of and substitutions
for the Purchase
8
Documents, and all references herein to the Purchase Documents shall be deemed
to include any renewal, increase, extension, amendment or modification thereof
or substitution therefor.
13. No Impairment. The obligations, guaranties, undertakings,
covenants, agreements and duties of the Pledgor under this Agreement shall not
be affected or impaired by any of the following, although without notice to or
consent of the Pledgor:
(a) any failure, omission or delay on the part of any
Purchaser (i) to enforce, assert or exercise any right, power or remedy
conferred by the provisions of the Purchase Documents or otherwise inuring to
the holders of the rights of any Purchaser under the Purchase Documents, or (ii)
to make demand first upon Borrower or to proceed against Borrower;
(b) the voluntary or involuntary liquidation,
dissolution, sale of all or substantially all assets, marshaling of assets or
liabilities, receivership, conservatorship, assignment for the benefit of
creditors, insolvency, bankruptcy, reorganization, arrangement, composition or
other proceedings under laws for the protection of debtors affecting any Issuer
or Additional Issuer or any of the assets of any Issuer or Additional Issuer, or
any discharge from liability or rejection of burdensome contracts or obligations
in the course of or resulting from any such proceedings;
(c) the release, by operation of law or otherwise, of any
guarantor from any obligation under any of the Purchase Documents;
(d) the invalidity, deficiency, illegality or
unenforceability of any of the Purchase Documents, in whole or in part, or of
any of the provisions thereof, or failure to perfect or maintain perfection of
any security, or any defense or excuse for failure to perform on account of
force majeure, act of God, casualty, impossibility, impracticability, or other
defense or excuse whatsoever; or
(e) without limiting the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of this
provision would or might constitute or afford a legal or equitable discharge or
release of or defense to a guarantor or surety.
None of the foregoing shall be a defense to this Agreement, and this
Agreement is a primary obligation of the Pledgor.
14. Other Pledgors or Guarantors. The liabilities and obligations
of the Pledgor hereunder shall not be reduced or limited by reason of any
guaranty or pledge executed in favor of any Purchaser by any other Person, and
this Agreement shall be enforceable against the Pledgor without regard to any
such guaranty or pledge.
9
15. Representations, Warranties and Covenants of the Pledgor. The
Pledgor represents and warrants that (a) it owns 100% of the issued and
outstanding capital stock of each Subsidiary listed on Schedule I hereto; (b) it
is the legal, record and beneficial owner of, and has good and, subject to
applicable securities laws described in Section 10 hereof, marketable title to,
the Initial Pledged Stock, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option, voting proxy or other encumbrance whatsoever,
except the existing lien and security interest created by this Agreement and
those created by the Stock Pledge Agreements of even date herewith executed by
Pledgor in favor of Bank Agent and Travelers; (c) it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has full power, authority and legal right to pledge the
Initial Pledged Stock pursuant to this Agreement; (d) this Agreement has been
duly authorized, executed and delivered by Pledgor and constitutes a legal,
valid and binding obligation of the Pledgor, and is enforceable in accordance
with its terms; (e) no consent of any other party (including, without
limitation, the stockholders or creditors of the Pledgor) and no consent,
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority,
domestic or foreign, is required to be obtained by the Pledgor or Agent in
connection with the execution, delivery or performance of this Agreement or the
pledge of such shares hereunder, in each case which has not been obtained or
made, as the case may be, and is not in full force and effect; (f) to its best
knowledge after due investigation, the execution, delivery and performance of
this Agreement will not violate any provision of any applicable law, or of any
material mortgage, indenture, lease, contract, or other agreement, instrument or
undertaking to which Pledgor is a party or which purports to be binding upon
Pledgor or upon any of its assets and will not result in the creation or
imposition of any lien, charge or encumbrance on or security interest in any of
the assets of Pledgor except as contemplated by this Agreement or the Purchase
Documents; (g) all the shares of the Initial Pledged Stock have been duly and
validly issued, are fully paid and non-assessable and have not been issued in
violation of any preemptive or other rights of any Person; (h) the Pledgor has
not created any options, warrants, rights, calls, commitments, plans, contracts
or other agreements of any character, which provide for the purchase, issuance,
transfer or control of any shares of capital stock of any Issuer pledged hereby;
and (i) the pledge, assignment and delivery of such Initial Pledged Stock
pursuant to this Agreement constitutes and, provided Agent retains possession of
the Initial Pledged Stock, at all times (disregarding, however the effects of
the change in any law relating to the pledge of stock generally) will constitute
a valid first lien on and a first perfected security interest in such shares of
the Initial Pledged Stock, and the proceeds thereof, subject to no prior lien,
or to any agreement purporting to grant to any third party other than Agent a
security interest in or control of the property or assets of the Pledgor which
would include the Initial Pledged Stock. Pledgor covenants and agrees that at
its expense it will defend the right, title and security interest of Agent in
and to the Pledged Stock and the proceeds thereof against the claims and demands
of all Persons whomsoever; and covenants and agrees that it will have like title
to and right to pledge any other property at any time hereafter pledged to
Agent, as Collateral hereunder and will likewise defend the right of Agent and
the Purchasers thereto and security interest therein.
10
16. No Disposition, etc. Except in accordance with the Purchase
Documents, Pledgor agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, nor will it create, incur or permit to exist any pledge, lien,
mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to, or transfer or grant control of any of the
Collateral, or any interest therein, or any proceeds thereof, except for the
lien and security interest and control provided for by this Agreement and except
as permitted by this Agreement or by the Purchase Documents. Without the prior
written consent of Agent, the Pledgor agrees that it will not vote to enable any
Issuer or any Additional Issuer to issue or sell any stock or other securities
of any nature in addition to or in exchange or substitution for the Pledged
Stock or grant or issue any options, warrants, or rights of any kind to acquire,
or securities convertible into, shares of any Issuer's or any Additional
Issuer's stock.
17. Further Assurances. Pledgor agrees that at any time and from
time to time upon the written request of Agent, the Pledgor will, or will cause
each Issuer and each Additional Issuer to, execute and deliver such further
documents and do such further acts and things which are necessary in the
reasonable judgment of Agent to effect the purpose of this Agreement or to
obtain, maintain and perfect the security interest and control granted under
this Agreement in any applicable jurisdiction, and any expense of Agent so
incurred shall be a part of the Obligations.
18. Financing Statement. Agent shall be entitled at any time to
file this Agreement or a carbon, photographic, or other reproduction of this
Agreement, as a financing statement, but the failure of Agent to do so shall not
impair the validity or enforceability of this Agreement. Pledgor shall pay all
fees associated with such filing.
19. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
20. No Waiver; Cumulative Remedies. Agent shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by
Agent, and then only to the extent therein set forth. A waiver by Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Agent would otherwise have on any future occasion. No
failure to exercise nor any delay in exercising on the part of Agent, any right,
power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
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21. Waivers, Amendments. None of the terms or provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by Agent. This Agreement and all obligations of the
Pledgor hereunder shall be binding upon the successors and assigns of the
Pledgor, and shall, together with the rights and remedies of Agent hereunder,
inure to the benefit of Agent, the Purchasers and their respective successors
and assigns.
22. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS RULES THEREOF. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PLEDGOR HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURT. The Pledgor represents and warrants that it
has appointed CT Corporation or one of its affiliates as its registered agent
for service of process in the State of Texas.
23. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
24. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Pledgor or any Issuer or any Additional Issuer for liquidation or
reorganization, should the Pledgor or such Issuer or Additional Issuer become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Pledgor's assets or the assets of such Issuer or Additional Issuer and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount and not so rescinded, reduced, restored
or returned.
25. ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR
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SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES, THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
26. Intercreditor Agreement. In the event of any conflict between
the terms, conditions, covenants, or agreements contained herein and in the
Intercreditor Agreement, the terms, conditions, covenants and agreements
contained in the Intercreditor Agreement shall control. Notwithstanding anything
to the contrary contained herein, (a) each exercise of rights or remedies in
respect of the Collateral hereunder by Agent shall be subject to, and shall only
be made in accordance with, the Intercreditor Agreement and (b) any and all
Proceeds received by Agent with respect to any sale of, collection from or other
realization upon all or any part of the Collateral whether consisting of
investment property, monies, checks, notes, drafts, bills of exchange, money
orders or commercial paper of any kind whatsoever, shall, subject to the terms
of the Intercreditor Agreement, be immediately applied to the Obligations in the
order specified in Article 3 of the Note Agreement. In addition, notwithstanding
anything herein to the contrary, from the date hereof through and until the date
that the Obligations (as such term is defined in the Credit Agreement) have been
satisfied in full, any delivery requirements hereunder for purposes of
perfecting the Agent's lien in the Pledged Stock, together with all appropriate
powers and/or endorsements duly executed in blank by the Pledgor, shall be
waived; provided, however, once the Obligations (as such term is defined in the
Credit Agreement) have been satisfied in full, the Pledgor shall immediately
deliver the Pledged Stock, together with all appropriate powers and/or
endorsements duly executed in blank by the Pledgor, to the Agent.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered as of the day and year first above written.
PLEDGOR:
CHECK EXPRESS, INC.
By:_________________________________
Name:
Title:
SCHEDULE I
Pledged Stock
EXHIBIT D
THIS UNCONDITIONAL GUARANTY AGREEMENT IS SUBORDINATE (INCLUDING WITH RESPECT TO
LIEN PRIORITY) IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
INTERCREDITOR AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG BORROWER,
AGENT AND CERTAIN OTHER CREDITORS OF BORROWER (AS AMENDED, MODIFIED OR RESTATED
FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY BORROWER UNDER AND PURSUANT TO THAT CERTAIN CREDIT
AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG BORROWER, THE LENDERS FROM
TIME TO TIME PARTY THERETO, XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT FOR SUCH LENDERS ("BANK AGENT"), AND JPMORGAN CHASE BANK,
AS AGENT FOR SUCH LENDERS, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO
TIME AND EACH RELATED "CREDIT DOCUMENT" (AS SUCH TERM IS DEFINED THEREIN).
UNCONDITIONAL GUARANTY AGREEMENT
THIS UNCONDITIONAL GUARANTY AGREEMENT (this "Guaranty") is made as of
March 31, 2003 by each Subsidiary (as defined in the hereinafter defined Note
Agreement) of Borrower (hereinafter defined) now a signatory hereto and which
shall hereafter become a party hereto pursuant to Section 5.11 hereof (each a
"Guarantor", and collectively, the "Guarantors"), for the benefit of AMERICAN
CAPITAL FINANCIAL SERVICES, INC., a Delaware corporation ("ACFS"), as
administrative agent (ACFS in such capacity, "Agent") for the purchasers from
time to time party to the Note Agreement (as such term is defined below).
RECITALS
1. Pursuant to that certain Note Purchase Agreement (as the same
may be amended, modified, increased, supplemented and/or restated from time to
time, the "Note Agreement"), dated as of the date hereof and executed by and
among Ace Cash Express, Inc., a Texas corporation ("Borrower"), Agent, and the
purchasers named in Annex A thereto (collectively, together with all successors
and assigns, the "Purchasers"), Agent and the Purchasers have agreed to make
certain loans to Borrower in the principal amount set forth therein;
2. The Purchasers are willing to make certain loans under the
Note Agreement but only on the condition, among others, that Guarantors shall
have executed and delivered to Agent this Guaranty;
3. Each Guarantor will derive substantial direct and indirect
benefit from the making of the loans under the Note Agreement; and
4. It is a condition precedent to the extension of credit under
the Note Agreement and to Purchasers' obligations under the Note Agreement that
the Borrower, Agent and certain other creditors of Borrower enter into that
certain Intercreditor Agreement of even date herewith
(as amended, modified or restated from time to time, the "Intercreditor
Agreement"), pursuant to which, among other things, Agent and the other parties
thereto shall establish the relative rights of all obligations owing by the
Borrower and the Guarantors to Agent and Purchasers, Bank Agent and Revolving
Lenders, and Travelers, respectively, including, but not limited to, the payment
priority of all obligations of the Guarantors owing to Agent and Purchasers
hereunder.
NOW, THEREFORE, as an inducement to the Purchasers to extend credit to
Borrower, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantors hereby agree as
follows:
AGREEMENTS
ARTICLE I
NATURE AND SCOPE OF GUARANTY
Section 1.01. Guaranty of Obligations. (a) Each Guarantor, jointly and
severally, hereby irrevocably and unconditionally guarantees to Agent and each
Purchaser the due and punctual payment of the Obligations (hereinafter defined)
and each Guarantor hereby irrevocably and unconditionally covenants and agrees
that it is liable for the Obligations as primary obligor; provided, however,
that, anything herein or in any other Credit Document (as herein defined) to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Purchase Documents shall in no event exceed such Guarantor's
Maximum Guaranteed Amount as determined at the Determination Date for such
Guarantor, and provided further, that the Maximum Guaranteed Amount for each
Guarantor hereunder shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to insolvency
of debtors.
(b) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the Maximum Guaranteed Amount of such Guarantor without
impairing this Guaranty or affecting the rights and remedies of Agent and
Purchasers hereunder.
(c) For purposes of this Guaranty, the following terms shall have
the respective meanings assigned thereto below:
"Adjusted Net Worth" of any Guarantor shall mean, as of any date of
determination thereof, the excess of (i) the amount of the "present fair salable
value" of the assets of such Guarantor as of the date of such determination,
over (ii) the amount of all "liabilities of such Guarantor, contingent or
otherwise," as of the date of such determination, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors.
"Purchase Documents" shall have the meaning given to such term in the
Note Agreement.
"Determination Date" shall mean, with respect to any Guarantor, the
earlier of (a) the date of commencement of a case under Title 11 of the United
States Code in which such Guarantor is a debtor, and (b) the date enforcement
hereunder is sought with respect to such Guarantor.
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"Extension of Credit" shall mean (i) all Loans (as defined in the Note
Agreement) made to Borrower under any Credit Document, (ii) all other extensions
of credit to or for the benefit of Borrower under any Credit Document, and (iii)
to the extent not otherwise included in the foregoing, all Obligations.
"Maximum Guaranteed Amount" for any Guarantor shall mean, as of the
Determination Date for such Guarantor, the greater of (i) ninety-five percent
(95%) of the Adjusted Net Worth of such Guarantor at the date of the execution
of this Guaranty before giving effect to any Extensions of Credit made on such
date, and (ii) ninety-five percent (95%) of the Adjusted Net Worth of such
Guarantor at the Determination Date for such Guarantor.
Section 1.02. Defined Terms. Unless otherwise defined herein, terms
defined in the Note Agreement shall have such defined meanings when used herein.
As used herein, the term "Obligations" means:
(a) all indebtedness, obligations and liabilities, including all
costs, expenses and fees, now or hereafter owing by Borrower to Agent or
Purchasers under the Note Agreement, the Notes or any other Purchase Document;
(b) any and all renewals, extensions, modifications and increases
of such Obligations; and
(c) all costs, expenses and fees, including but not limited to all
court costs and reasonable attorneys' fees, arising in connection with the
collection of any or all amounts, indebtedness, obligations and liabilities
described in items (a) through (b) of this SECTION 1.02, including all costs,
expenses and fees arising in connection with the enforcement of this Guaranty.
Section 1.03. Obligations Not Reduced by Offset. The Obligations, and
the liabilities and obligations of any Guarantor to Agent or Purchasers
hereunder, shall not be reduced, discharged or released because or by reason of
any existing or future offset, claim or defense of Borrower, or any other party,
against Agent or any Purchaser or against payment of the Obligations, whether
such offset, claim or defense arises in connection with the Obligations (or the
transactions creating the obligations) or otherwise. Without limiting the
foregoing or each Guarantor's liability hereunder, to the extent that any
Purchaser advances funds or extends credit to Borrower, and does not receive
payments or benefits thereon in the amounts and at the times required or
provided by applicable agreements or laws, each Guarantor is absolutely liable
to make such payments to (and confer such benefits on) Agent, on a timely basis
up to its Maximum Guaranteed Amount.
Section 1.04. "Borrower" and "Guarantor" to Include Successors. The
terms "Borrower" and "Guarantor" as used herein shall include any new or
successor entity formed as a result of any merger or reorganization of Borrower
or Guarantor, respectively, and all other successors and assigns of Borrower or
Guarantor, respectively.
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Section 1.05. Payment by Guarantor. If all or any part of the
Obligations shall not be punctually paid when due, whether at maturity or
earlier by acceleration or otherwise, each Guarantor shall, immediately upon
demand by Agent or any Purchaser, and without presentment, protest, notice of
protest, notice of non-payment, notice of intention to accelerate or
acceleration or any other notice whatsoever, pay in lawful money of the United
States of America, the amount due on the Obligations to Agent or such Purchaser
at Agent's principal office in Bethesda, Maryland. Such demand(s) may be made at
any time coincident with or after the time for payment of all or part of the
Obligations, and may be made from time to time with respect to the same or
different items of Obligations. Such demand shall be deemed made, given and
received in accordance with SECTION 5.02 hereof.
Section 1.06. No Duty to Pursue Others. It shall not be necessary for
Agent or any Purchaser (and each Guarantor hereby waives any rights which such
Guarantor may have to require Agent or any Purchaser), in order to enforce such
payment by Guarantor, first to (a) institute suit or exhaust its remedies
against Borrower or others liable on the Obligations or any other person, (b)
enforce Agent's rights against any security which shall ever have been given to
secure the Obligations, (c) enforce Agent's rights against any other guarantors
of the Obligations, (d) join Borrower or any others liable on the Obligations in
any action seeking to enforce this Guaranty, (e) exhaust any remedies available
to Agent against any security which shall ever have been given to secure the
Obligations, or (f) resort to any other means of obtaining payment of the
Obligations. Without limitation of the foregoing, each Guarantor hereby waives
all rights of such Guarantor under Chapter 34 of the Texas Business and Commerce
Code, as amended from time to time. Neither Agent nor any Purchaser shall be
required to mitigate damages or take any other action to reduce, collect or
enforce the Obligations.
Section 1.07. Waiver of Notices, etc. Each Guarantor hereby waives
notice of (a) any loans or advances made by any Purchaser to Borrower, (b)
acceptance of this Guaranty, (c) any amendment or extension of any Credit
Document or of any other instrument or document pertaining to all or any part of
the Obligations, (d) the execution and delivery by Borrower and any Purchaser of
any Credit Document or of Borrower's execution and delivery of any promissory
notes or other documents in connection therewith, (e) the occurrence of any
breach by Borrower or Event of Default, (f) any transfer or disposition of the
Obligations, or any part thereof, by any Purchaser, (g) protest, proof of
non-payment or default by Borrower, or (h) any other action at any time taken or
omitted by Agent or any Purchaser, and, generally, all demands and notices of
every kind in connection with this Guaranty, or any documents or agreements
evidencing, securing or relating to any of the Obligations, except as otherwise
specifically provided herein or in the Purchase Documents or the Intercreditor
Agreement.
Section 1.08. Nature of Guaranty. This Guaranty is an irrevocable,
absolute, continuing guaranty of payment and performance and not a guaranty of
collection. This Guaranty shall continue to be effective with respect to any
Obligations existing or which arise out of commitments made by any Purchaser,
prior to any attempted revocation by any Guarantor, and as to all renewals and
extensions thereof, in whole or in part, whenever made. The fact that at any
time or from time to time the Obligations may be increased or reduced shall not
release, discharge or reduce the obligation of Guarantors with respect to
indebtedness or obligations of Borrower any Purchaser thereafter incurred (or
other Obligations thereafter arising). This
4
Guaranty may be enforced by Agent or any Purchaser and shall not be discharged
by the assignment or negotiation of all or part of the Obligations.
Section 1.09. Payment of Expenses. In the event that any Guarantor
should breach or fail to timely perform any provisions of this Guaranty,
Guarantors shall, within ten (10) days of written demand, pay Agent all
reasonable costs and expenses (including court costs and reasonable attorneys'
fees) incurred by Agent or any Purchaser in the enforcement hereof or the
preservation of Agent's and the Purchasers' rights hereunder. Without limiting
the foregoing, Borrower shall be directly liable for, and shall pay Agent within
ten (10) days of written demand by Agent or any Purchaser, all reasonable costs
and expenses (including court costs and reasonable attorneys' fees) incurred by
Agent or any Purchaser in the enforcement of any breach of any Guarantor or
failure by any Guarantor to timely perform any provision of this Guaranty or the
preservation of Agent's, and the Purchasers' rights thereunder. The covenant
contained in this SECTION 1.09 shall survive the payment of the Obligations.
Section 1.10. Effect of Bankruptcy. In the event that, pursuant to any
insolvency, bankruptcy, reorganization, receivership or other debtor relief law,
or any judgment, order or decision thereunder, Agent or any Purchaser must
rescind or restore any payment, or any part thereof, received by Agent or any
Purchaser in satisfaction of the Obligations, any prior release or discharge
from the terms of this Guaranty given to any Guarantor by Agent shall be without
effect, and this Guaranty shall remain in full force and effect. It is the
intention of each Guarantor that such Guarantor's obligations hereunder shall
not be discharged except by such Guarantor's performance of such obligations and
then only to the extent of such performance.
ARTICLE II
EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING
GUARANTORS' OBLIGATIONS
Each Guarantor hereby consents and agrees to each of the following, and
agrees that such Guarantor's obligations under this Guaranty shall not be
released, diminished, impaired, reduced or adversely affected by any of the
following, and waives any common law, equitable, statutory or other rights and
defenses (including without limitation rights to notice) which such Guarantor
might otherwise have as a result of or in connection with any of the following:
Section 2.01. Modifications, etc. Any renewal, extension, increase,
modification, alteration or rearrangement of all or any part of the Obligations,
or any Credit Document or any loan agreement, security agreement, collateral
document or other document, instrument, contract or understanding between
Borrower and Agent or any Purchaser or any other parties, pertaining to the
Obligations;
Section 2.02. Adjustment, etc. Any adjustment, indulgence, forbearance
or compromise that might be granted or given by Agent or any Purchaser to the
Borrower;
Section 2.03. Condition of Borrower. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of Borrower or any
5
other party at any time liable for the payment of all or part of the
Obligations; or any dissolution of Borrower, or any sale, lease or transfer of
any or all of the assets of Borrower, or any changes in the shareholders of
Borrower; or any reorganization of Borrower;
Section 2.04. Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations, or any document or
agreement executed in connection with the Obligations, for any reason
whatsoever, including without limitation the fact that (a) the Obligations, or
any part thereof, exceeds the amount permitted by law, (b) the act of creating
the Obligations or any part thereof is ultra xxxxx, (c) the officers or
representatives executing the documents creating the Obligations acted in excess
of their authority, (d) the Obligations violate applicable usury laws, (e)
Borrower has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Obligations wholly or partially uncollectible from
Borrower, (f) the creation, performance or repayment of the Obligations (or the
execution, delivery and performance of any document or instrument representing
part of the Obligations or executed in connection with the Obligations, or given
to secure the repayment of the Obligations) is illegal, uncollectible or
unenforceable, or (g) the documents or instruments pertaining to the Obligations
have been forged or otherwise are irregular or not genuine or authentic;
Section 2.05. Release of Obligors. Any full or partial release of the
liability of Borrower on the Obligations or any part thereof, or of any
co-guarantors, or any other person or entity now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to pay,
perform, guarantee or assure the payment of the Obligations or any part thereof,
it being recognized, acknowledged and agreed by each Guarantor that such
Guarantor may be required to pay the Obligations in full, without assistance or
support of any other Guarantor or any other party, and no Guarantor has been
induced to enter into this Guaranty on the basis of a contemplation, belief,
understanding or agreement that other parties will be liable to perform the
Obligations, or that Agent or any Purchaser will look to other parties to
perform the Obligations;
Section 2.06. Other Security. The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment, for all or any
part of the Obligations;
Section 2.07. Release of Collateral, etc. Any release, surrender,
exchange, subordination, deterioration, waste, loss or impairment of any
collateral, property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
Section 2.08. Care and Diligence. The failure of Agent or any Purchaser
or any other party to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, property, or security;
Section 2.09. Status of Liens. The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to any
other security interest or lien, it being recognized and agreed by each
Guarantor that such Guarantor is not entering into this Guaranty in reliance on,
or in contemplation of the benefits of, the validity, enforceability,
collectibility or value of any collateral for the Obligations;
6
Section 2.10. Offset. The Obligations, and the liabilities and
obligations of each Guarantor to Agent hereunder, shall not be reduced,
discharged or released because of or by reason of any existing or future right
of offset, claim or defense of Borrower against Agent, any Purchaser or any
other party, or against payment of the Obligations, whether such right of
offset, claim or defense arises in connection with the Obligations (or the
transactions creating the Obligations) or otherwise;
Section 2.11. Merger. The reorganization, merger or consolidation of
Borrower into or with any other entity;
Section 2.12. Preference. Any payment by Borrower to Agent or any
Purchaser is held to constitute a preference under bankruptcy laws, or for any
reason any Purchaser is required to refund such payment or pay such amount to
Borrower or someone else; or
Section 2.13. Other Actions Taken or Omitted. Any other action taken or
omitted to be taken with respect to the Obligations, or security and collateral
therefor, if any, whether or not such action or omission prejudices any
Guarantor or increases the likelihood that such Guarantor will be required to
pay the Obligations pursuant to the terms hereof. IT IS THE UNAMBIGUOUS AND
UNEQUIVOCAL INTENTION OF EACH GUARANTOR THAT SUCH GUARANTOR SHALL BE OBLIGATED
TO PAY THE OBLIGATIONS WHEN DUE UP TO ITS MAXIMUM GUARANTEED AMOUNT,
NOTWITHSTANDING ANY OCCURRENCE, CIRCUMSTANCE, EVENT, ACTION, OR OMISSION
WHATSOEVER, (INCLUDING, WITHOUT LIMITATION, THE UNENFORCEABILITY OF THE
OBLIGATIONS AGAINST THE BORROWER) WHETHER OR NOT CONTEMPLATED, AND WHETHER OR
NOT OTHERWISE OR PARTICULARLY DESCRIBED HEREIN, EXCEPT FOR THE FULL AND FINAL
PAYMENT AND SATISFACTION OF THE OBLIGATIONS.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Purchasers to extend credit to Borrower, each Guarantor
represents and warrants to Agent that:
Section 3.01. Familiarity and Reliance. Such Guarantor is familiar
with, and has independently reviewed books and records regarding the financial
condition of Borrower and the terms of the Obligations and the Purchase
Documents;
Section 3.02. No Representation by Agent or any Purchaser. Neither
Agent, any Purchaser nor any other party has made any representation, warranty
or statement to such Guarantor in order to induce such Guarantor to execute this
Guaranty;
Section 3.03. Guarantor's Financial Condition. As of the date hereof,
and after giving effect to this Guaranty and the contingent obligation evidenced
hereby, as limited in Section 1.01 hereof, such Guarantor is, and will be,
solvent, and has and will have assets which, fairly valued,
7
exceed its obligations, liabilities and debts, and has property and assets
sufficient to satisfy and repay its obligations and liabilities as they mature;
Section 3.04. Benefit. Such Guarantor has received, or will receive,
direct or indirect benefit from the making of this Guaranty and the Obligations.
Section 3.05. Directors' Determination of Benefit. Such Guarantor's
board of directors, acting pursuant to a duly called and constituted meeting,
after proper notice, or pursuant to a valid unanimous consent, has determined
that this Guaranty directly or indirectly benefits such Guarantor and is in its
best interests.
Section 3.06. Legality. The execution, delivery and performance by such
Guarantor of this Guaranty and the consummation of the transactions contemplated
hereunder (a) have been duly authorized by all necessary corporate and
stockholder action, or limited liability company or member action, as the case
may be, of such Guarantor, and (b) do not, and will not, contravene or conflict
with any law, statute or regulation whatsoever to which such Guarantor is
subject or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or result in the breach of, any
material indenture, mortgage, deed of trust, charge, lien, or any material
contract, agreement or other instrument to which such Guarantor is a party or
which may be applicable to such Guarantor or any of its assets, or violate any
provisions of its Articles (or Certificate) of Incorporation or Organization, as
the case may be, Bylaws or Operating Agreement, as the case may be, or any other
organizational document of such Guarantor; this Guaranty is a legal, valid and
binding obligation of such Guarantor and is enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to the enforcement of creditors' rights;
Section 3.07. Organization and Good Standing. Each Guarantor (a) is,
and will continue to be, a legal entity duly organized, validly existing, and in
good standing under the laws of the state in which it is organized, and (b)
possesses all requisite power and authority to execute and deliver and comply
with the terms of this Guaranty; and
Section 3.08. Survival. All representations and warranties made by such
Guarantor herein shall survive the execution hereof.
ARTICLE IV
SUBORDINATION OF CERTAIN INDEBTEDNESS
Section 4.01. Subordination of All Guarantor Claims. As used herein,
the term "Guarantor Claims" shall mean all debts and liabilities of Borrower to
any Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by Grantor. Until all commitments of any
8
Purchaser to extend credit to Borrower shall have been terminated and the
Obligations shall be indefeasibly paid and satisfied in full, and in cash as to
monetary Obligations, and each Guarantor shall have performed all of its
obligations hereunder, no Guarantor shall receive or collect, directly or
indirectly, from Borrower or any other party any amount upon the Guarantor
Claims.
Section 4.02. Claims in Bankruptcy. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving Borrower as debtor, Agent and each Purchaser shall have
the right to prove the Guarantors' claims in any such proceeding so as to
establish the Guarantors' rights hereunder and receive directly from the
receiver, trustee or other court custodian dividends and payments which would
otherwise be payable upon Guarantor Claims. Each Guarantor hereby assigns such
dividends and payments to Agent for the benefit of the Purchasers.
Section 4.03. Payments Held in Trust. In the event that,
notwithstanding SECTIONS 4.01 and 4.02 above, any Guarantor should receive any
funds, payment, claim or distribution which is prohibited by such Sections, each
Guarantor agrees to hold in trust for Agent an amount equal to the amount of all
funds, payments, claims or distributions so received, and agrees that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions, except to pay them promptly to Agent, and each Guarantor
covenants promptly to pay the same to Agent.
Section 4.04. Liens Subordinate. Each Guarantor agrees that any liens,
security interests, judgment liens, charges or other encumbrances upon
Borrower's assets securing payment of the Guarantor Claims shall be and remain
inferior and subordinate to any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower's assets securing payment of the
Obligations, regardless of whether such encumbrances in favor of such Guarantor,
Agent or any Purchaser presently exist or are hereafter created or attached.
Without the prior written consent of Agent, no Guarantor shall (a) exercise or
enforce any creditor's right it may have against Borrower, or (b) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any liens, mortgages, deeds
of trust, security interest, collateral rights, judgments or other encumbrances
on assets of Borrower held by such Guarantor.
Section 4.05. Notation of Records. All promissory notes, accounts
receivable ledgers or other evidences of the Guarantor Claims accepted by or
held by any Guarantor shall contain a specific written notice thereon that the
indebtedness evidenced thereby is subordinated under the terms of this Guaranty.
Section 4.06. Disgorged Payments. If after receipt of any payment of
all or any part of the Obligations, Agent or any Purchaser is for any reason
compelled to surrender such payment to any person or entity because such payment
is determined to be void or voidable as a preference, impermissible setoff, or a
diversion of trust funds, or for any reason, this Guaranty shall continue in
full force notwithstanding any contrary action which may have been taken by
Agent or any Purchaser in reliance upon such payment, and any such contrary
action so taken
9
shall be without prejudice to the rights of Agent any Purchaser under this
Guaranty and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
ARTICLE V
MISCELLANEOUS
Section 5.01. Waiver. No failure to exercise, and no delay in
exercising, on the part of Agent or any Purchaser, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. The rights of Agent and the Purchasers hereunder shall be in addition to
all other rights provided by law. No modification or waiver of any provision of
this Guaranty, nor consent to departure therefrom, shall be effective unless in
writing and signed by Agent and no such consent or waiver shall extend beyond
the particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.
Section 5.02. Notices. Any notices or other communications required or
permitted to be given by this Guaranty must be given in writing and in the
manner and at the addresses set forth in the Note Agreement.
Section 5.03. Usury Compliance. It is the intention of Borrower, each
Guarantor, Agent, and each Purchaser to confirm strictly to applicable usury
laws. Accordingly, no agreements, conditions, provisions or stipulations
contained in this Guaranty or any other instrument, document or agreement
between any Guarantor or Borrower and Agent, or any Purchaser or default of any
Guarantor or Borrower, or the exercise by Agent or any Purchaser of the right to
accelerate the payment of the maturity of principal and interest, or to exercise
any option whatsoever contained in this Guaranty or any other agreement between
any Guarantor or Borrower and Agent and each Purchaser, or the arising of any
contingency whatsoever, shall entitle Agent or any Purchaser to collect, in any
event, interest exceeding the maximum rate of interest permitted by applicable
state or federal law in effect from time to time hereafter (the "Maximum Legal
Rate") and in no event shall any Guarantor be obligated to pay interest
exceeding such Maximum Legal Rate and all agreements, conditions or
stipulations, if any, which may in any event or contingency whatsoever operate
to bind, obligate or compel any Guarantor to pay a rate of interest exceeding
the Maximum Legal Rate, shall be without binding force or effect, at law or in
equity, to the extent only of the excess of interest over such Maximum Legal
Rate. In the event any interest is charged in excess of the Maximum Legal Rate
("Excess"), each Guarantor acknowledges and stipulates that any such charge
shall be the result of an accident and bona fide error, and such Excess shall
be, first applied to reduce the Obligations; and second, returned to the
respective Guarantor, it being the intention of the parties hereto not to enter
at any time into a usurious or otherwise illegal relationship. Each Guarantor
recognizes that, with fluctuations in the applicable rate on the Obligations and
the Maximum Legal Rate, such an unintentional result could inadvertently occur.
By the execution of this Guaranty, each Guarantor covenants that the credit or
return of any Excess shall constitute the acceptance by such Guarantor of such
Excess.
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SECTION 5.04. CHOICE OF LAW; FORUM SELECTION. THIS GUARANTY AND THE
OTHER PURCHASE DOCUMENTS ARE BEING EXECUTED AND DELIVERED, AND ARE INTENDED TO
BE PERFORMED IN THE STATE OF MARYLAND. EXCEPT TO THE EXTENT THAT THE LAWS OF THE
UNITED STATES MAY APPLY TO THE TERMS OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT, THE SUBSTANTIVE LAWS OF THE STATE OF MARYLAND SHALL GOVERN THE
VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS GUARANTY. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT IN THE STATE OF MARYLAND, AND, BY EXECUTION AND DELIVERY
OF THIS GUARANTY, EACH GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURT.
Section 5.05. Invalid Provisions. In the case any one or more of the
provisions contained in this Guaranty should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained therein shall not in any way be affected thereby,
unless such continued effectiveness of this Guaranty, as modified, would be
contrary to the basic understandings and intentions of the parties as expressed
herein.
Section 5.06. Parties Bound. This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives; provided, however, that no Guarantor may,
without the prior written consent of Agent, assign any of its rights, powers,
duties or obligations hereunder.
Section 5.07. Headings. Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Guaranty.
Section 5.08. Multiple Counterparts. This Guaranty may be executed in
multiple counterparts, all of which taken together shall constitute one and the
same agreement, and any of the parties hereto may execute this Guaranty by
signing any counterpart.
Section 5.09. Rights and Remedies. If any Guarantor becomes liable for
any indebtedness owing by Borrower to Agent or any Purchaser, by endorsement or
otherwise, other than under this Guaranty, such liability shall not be in any
manner impaired or affected hereby and the rights of Agent hereunder shall be
cumulative of any and all other rights that Agent may ever have against such
Guarantor. The exercise by Agent of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
SECTION 5.10. INDEMNITY. EACH GUARANTOR HEREBY AGREES TO INDEMNIFY,
HOLD HARMLESS, AND DEFEND AGENT AND ITS RESPECTIVE DIRECTORS, OFFICERS, AGENTS,
COUNSEL AND EMPLOYEES ("INDEMNIFIED PERSONS") FROM AND AGAINST ANY AND ALL
LOSSES, LIABILITIES, DAMAGES, COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION,
11
ATTORNEYS' FEES AND EXPENSES), SUITS, ACTIONS AND PROCEEDINGS ("LOSSES") EVER
SUFFERED OR INCURRED BY ANY INDEMNIFIED PERSON ARISING OUT OF OR RELATING TO
THIS GUARANTY, ANY OTHER CREDIT DOCUMENT OR ANY OTHER TRANSACTION CONTEMPLATED
HEREBY AND THEREBY, INCLUDING, WITHOUT LIMITATION, ANY LOSSES CAUSED BY THE
NEGLIGENCE OF SUCH INDEMNIFIED PERSON, BUT NOT INCLUDING ANY LOSSES CAUSED BY
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON, AND EACH
GUARANTOR SHALL REIMBURSE AGENT AND EACH OTHER INDEMNIFIED PERSON FOR ANY
EXPENSES (INCLUDING IN CONNECTION WITH THE INVESTIGATION OF, PREPARATION FOR OR
DEFENSE OF ANY ACTUAL OR THREATENED CLAIM, ACTION OR PROCEEDING ARISING HEREFROM
AND THEREFROM, INCLUDING ANY SUCH COSTS OF RESPONDING TO DISCOVERY REQUESTS OR
SUBPOENAS, REGARDLESS OF WHETHER AGENT OR SUCH OTHER INDEMNIFIED PERSON IS A
PARTY THERETO). WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THIS INDEMNITY
SHALL EXTEND TO ANY CLAIMS ASSERTED AGAINST AGENT OR ANY OTHER INDEMNIFIED
PERSON BY ANY PERSON OR ENTITY UNDER ANY ENVIRONMENTAL LAWS OR SIMILAR LAWS BY
REASON OF THE BORROWER'S, ANY GUARANTOR'S OR ANY OTHER PERSON'S OR ENTITY'S
FAILURE TO COMPLY WITH LAWS APPLICABLE TO SOLID OR HAZARDOUS WASTE MATERIALS OR
OTHER TOXIC SUBSTANCES. NOTWITHSTANDING ANY CONTRARY PROVISION OF THIS GUARANTY,
THE OBLIGATION OF EACH GUARANTOR UNDER THIS SECTION 5.10 SHALL SURVIVE THE
PAYMENT IN FULL OF THE BORROWER'S OBLIGATIONS UNDER THE NOTE AGREEMENT AND THE
TERMINATION OF THE NOTE AGREEMENT AND THIS GUARANTY.
Section 5.11. Additional Guarantors. Any Person that becomes a
Subsidiary of Borrower subsequent to the date hereof and that was not a
"Guarantor" under this Guaranty at the time of initial execution hereof shall
become a "Guarantor" hereunder by executing and delivering to Agent an
Additional Subsidiaries Supplement in the form attached hereto as Exhibit A. Any
such Subsidiary shall thereafter be deemed a "Guarantor" for all purposes under
this Guaranty.
Section 5.12. Intercreditor Agreement. In the event of any conflict
between the terms, conditions, covenants, or agreements contained herein and in
the Intercreditor Agreement, the terms, conditions, covenants and agreements
contained in the Intercreditor Agreement shall control. Notwithstanding anything
to the contrary contained herein, (a) each exercise of rights or remedies in
respect of the Obligations hereunder by Agent or the Purchasers shall be subject
to, and shall only be made in accordance with, the Intercreditor Agreement and
(b) any and all amounts collected by Agent or any Purchaser hereunder shall,
subject to the terms of the Intercreditor Agreement, be immediately applied to
the Obligations in the order specified in Article 3 of the Note Agreement.
SECTION 5.13. NOTICE OF FINAL AGREEMENT. THIS GUARANTY CONSTITUTES A
WRITTEN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES. SUCH
WRITTEN AGREEMENT MAY
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NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES RELATING TO THIS GUARANTY.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXECUTED as of the day and year first above written.
GUARANTORS:
CHECK EXPRESS, INC.
Q. C. & G. FINANCIAL, INC.
PUBLIC CURRENCY, INC.
CHECK EXPRESS FLORIDA, INC.
CHECK EXPRESS FINANCE, INC.
CHECK-X-CHANGE CORPORATION
CHECK EXPRESS SOUTH CAROLINA, INC.
CHECK EXPRESS USA, INC.
By:____________________________________
Name:
Time:
ACKNOWLEDGED AND AGREED TO:
BORROWER:
ACE CASH EXPRESS, INC.
By:_______________________________
Name:
Title:
14
EXHIBIT A
ADDITIONAL SUBSIDIARIES SUPPLEMENT
THIS ADDITIONAL SUBSIDIARIES SUPPLEMENT, dated [_________], to the
Unconditional Guaranty Agreement, dated as of [_________], 2003 (as amended,
supplemented and otherwise modified, the "Guaranty Agreement"), made by certain
Subsidiaries of ACE Cash Express, Inc., a Texas corporation ("Borrower"), in
favor of American Capital Financial Services, Inc., as Agent, from time to time
parties hereto (collectively, the "Guarantors").
WITNESSETH:
WHEREAS, the Guaranty Agreement provides that any Subsidiary of
Borrower, although not a Guarantor thereunder at the time of the initial
execution thereof, may become a Guarantor under the Guaranty Agreement upon the
delivery to Agent of a supplement in substantially the form of this Additional
Subsidiaries Supplement; and
WHEREAS, the undersigned was not a Subsidiary of Borrower on the date
of the Guaranty Agreement and, therefore, was not a party to the Guaranty
Agreement but now desires to become a Guarantor thereunder;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of the
Guaranty Agreement applicable to a Guarantor thereunder and agrees that it
shall, on the date this Additional Subsidiaries Supplement is accepted by Agent,
become a Guarantor, for all purposes of the Guaranty Agreement to the same
extent as if originally a party thereto with the representations and warranties
contained therein being deemed to be made by the undersigned as of the date
hereof.
Unless otherwise defined herein, capitalized terms which are defined in
the Guaranty Agreement are used herein as so defined.
IN WITNESS WHEREOF, the undersigned has caused this Additional
Subsidiaries Supplement to be executed and delivered by a duly authorized
officer on the date first above written.
[NAME OF SUBSIDIARY]
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT E
COLLATERAL AGENCY AGREEMENT
This COLLATERAL AGENCY (this "Agreement") dated as of March 31, 2003 is
by and among ACE CASH EXPRESS, INC. (doing business sometimes under the name of
Ace America's Cash Express), a Texas corporation (the "Debtor"), XXXXX FARGO
BANK TEXAS, NATIONAL ASSOCIATION ("WFB"), as Administrative Agent (WFB in such
capacity, the "Bank Agent") for the lenders from time to time a party to the
Bank Agreement (as hereinafter defined), AMERICAN CAPITAL FINANCIAL SERVICES,
INC., a Delaware corporation ("ACFS"), as Administrative Agent (ACFS in such
capacity, the "ACFS Agent") for the purchasers time to time party to the ACFS
Note Agreement (as hereinafter defined), TRAVELERS EXPRESS COMPANY, INC., a
Minnesota corporation ("Travelers"), and WILMINGTON TRUST COMPANY, a Delaware
banking corporation (the "Collateral Agent").
WITNESSETH:
WHEREAS, the Debtor, Bank Agent, certain other parties in other
capacities, and certain lenders (the "Lenders") have entered into that certain
Credit Agreement of even date herewith (as amended, supplemented, restated or
otherwise modified from time to time, the "Bank Agreement");
WHEREAS, the Debtor, ACFS Agent and certain purchasers (the
"Purchasers") have entered into that certain Note Purchase Agreement of even
date herewith (as amended, supplemented, restated or otherwise modified from
time to time, the "ACFS Note Agreement");
WHEREAS, the Debtor and Travelers have entered into that certain Money
Order Agreement dated April 16, 1998, pursuant to which Travelers has agreed to
serve as Debtor's money order supplier (as amended, supplemented, restated or
otherwise modified from time to time, the "Money Order Agreement"); and the
Debtor and Travelers have entered into that certain Money Transfer Agreement
dated June 30, 2000, pursuant to which Travelers has agreed to serve as the
Debtor's money transfer service supplier (as amended, supplemented, restated or
otherwise modified from time to time, the "Money Transfer Agreement"), and the
Debtor and Travelers have entered into that certain Xxxx Payment Processing and
Funds Transfer Services Agreement dated April 1, 1998, pursuant to which
Travelers has agreed to serve as the Debtor's xxxx payment processing supplier
(as amended, supplemented, restated or otherwise modified from time to time, the
"Xxxx Payment Agreement", and together with the Money Order Agreement and the
Transfer Agreement, the "Travelers Agreements");
WHEREAS, in order to secure the payment and performance of its
obligations to the Collateral Agent under this Agreement, Debtor has entered
into that certain Assignment of Deposit Accounts and Security Agreement of even
date herewith (as from time to time amended, supplemented, restated or otherwise
modified, the "Collateral Agent Security Agreement"), pursuant to which the
Debtor has assigned the Subject Deposit Accounts (as such term is defined below)
to Collateral Agent;
WHEREAS, in order to secure the payment and performance of its
obligations to the Bank Agent and the Lenders, Debtor has entered into that
certain Assignment of Deposit Accounts and Security Agreement of even date
herewith (as from time to time amended, supplemented, restated or otherwise
modified, the "Bank Security Agreement"), pursuant to which Debtor has assigned
certain of its deposit accounts, including but not limited to the Subject
Deposit Accounts (collectively, the "Deposit Accounts"), and granted a security
interest in certain of its assets (collectively, the "Collateral") to Bank Agent
for the benefit of the Bank Agent and the Lenders;
WHEREAS, in order to secure the payment and performance of its
obligations to the ACFS Agent and the Purchasers, Debtor has entered into that
certain Assignment of Deposit Accounts and Security Agreement of even date
herewith (as from time to time amended, supplemented, restated or otherwise
modified, the "ACFS Security Agreement"), pursuant to which, subject to the
security interests granted under the Bank Security Agreement, Debtor has
assigned the Deposit Accounts and granted a security interest in the Collateral
to ACFS Agent for the benefit of the ACFS Agent and the Lenders;
WHEREAS, in order to secure the payment and performance of its
obligations to Travelers, Debtor has entered into that certain Assignment of
Deposit Accounts and Security Agreement of even date herewith (as from time to
time amended, supplemented, restated or otherwise modified, the "Travelers
Security Agreement"; the Collateral Agent Security Agreement, the Bank Security
Agreement, the ACFS Security Agreement, and the Travelers Security Agreement, as
from time to time amended, supplemented, restated, or otherwise modified, are
collectively referred to herein as the "Subject Security Agreements" and each
individually as a "Subject Security Agreement"), pursuant to which, subject to
the security interests granted under the Bank Security Agreement and the ACFS
Security Agreement, Debtor has assigned the Deposit Accounts and granted a
security interest in the Collateral to Travelers;
WHEREAS, Debtor, Bank Agent, ACFS Agent, and Travelers have entered
into that certain Intercreditor Agreement of even date herewith (as from time to
time amended, supplemented, restated, or otherwise modified, the "Intercreditor
Agreement"), pursuant to which Bank Agent, ACFS Agent, and Travelers
memorialized agreements, without limitation, with respect to the application of
the proceeds of the Collateral upon foreclosure thereon and with respect to the
subordination of the rights of ACFS Agent and Travelers in the Collateral to the
rights of Bank Agent in the Collateral;
WHEREAS, prior the date hereof, the Collateral Agent has entered into
agreements with the depository institutions which maintain the Subject Deposit
Accounts (the "Depository Institutions"), pursuant to which the Depository
Institutions have agreed to follow the instructions of the Trustee with respect
to the Subject Deposit Accounts;
WHEREAS, it is a condition precedent to the extension of credit under
the Bank Agreement and the ACFS Note Agreement and to Travelers' obligations
under the Money Order Agreement that the Debtor, the Collateral Agent, Bank
Agent (on behalf of itself and the Lenders), ACFS Agent (on behalf of itself and
the Purchasers), and Travelers enter into this Agreement, pursuant to which
Collateral Agent shall be appointed collateral agent for itself, the Bank Agent,
on behalf of itself and the Lenders, ACFS Agent, on behalf of itself and the
2
Purchasers, and Travelers solely with respect to the Subject Deposit Accounts
and pursuant to which the Collateral Agent shall agree to follow the
instructions originated by the Bank Agent or the ACFS Agent with respect to the
Depository Institutions and the Subject Deposit Accounts;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, in order to induce the Lenders under the Bank
Agreement, and the Purchasers under the ACFS Note Agreement, to extend credit
thereunder, and in order to induce Travelers to perform its obligations under
the Money Order Agreement, the parties hereto, intending to be legally bound,
agree as follows:
SECTION 1
DEFINITIONS AND OTHER MATTERS
(a) Capitalized terms used but not defined herein shall have the
meanings given to them in the Intercreditor Agreement.
(b) As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"ACFS Agent" shall mean American Capital Financial Services, Inc., a
Delaware corporation, in its capacity as Agent under the ACFS Note Agreement,
and its successors and assigns in such capacity.
"ACFS Note Agreement" shall have the meaning set forth in the recitals
to this Agreement.
"Agreement" shall mean this Collateral Agency Agreement, as it may be
amended, restated or otherwise modified from time to time.
"Bank Agent" shall mean WFB and any successor Administrative Agent
appointed pursuant to the terms of the Bank Agreement.
"Bank Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Collateral Agent" shall mean Wilmington Trust Company, a Delaware
banking corporation, and its successors and assigns as provided herein.
"Collateral Agent's Fees" shall mean all fees, costs and expenses of
the Collateral Agent of the types described in Sections 5.1, 5.2, 5.3, and 5.4
of this Agreement.
"Collateral Agent's Liens" shall mean all liens and security interests
against any of the property or assets of the Debtor or its Subsidiaries which
result from (i) claims against the Collateral Agent unrelated to the
transactions contemplated by this Agreement and the Subject Security Documents
or (ii) affirmative acts by the Collateral Agent creating a lien or security
interest other than as contemplated by this Agreement or the Subject Security
Documents.
3
"Debtor" shall mean Ace Cash Express Inc., a Texas corporation, and all
other trade names under which Ace Cash Express Inc. transacts business as
identified on Schedule 2 to the Intercreditor Agreement.
"Depository" shall mean each financial institution at which a Subject
Deposit Account is maintained.
"Intercreditor Agreement" shall have the meaning given to such term in
the recitals hereto.
"Letter Agreement" shall mean any written agreement or other
authenticated record, whether executed prior to, on, or after the date hereof,
pursuant to which any Depository has agreed to follow the instructions of the
Collateral Agent with respect to any Subject Deposit Account maintained by such
Depository.
"Letter of Termination" shall mean a letter substantially in the form
of Exhibit A attached hereto.
"Secured Parties" shall mean, collectively, the Collateral Agent, the
Bank Agent (for the benefit of itself and the Lenders), the ACFS Agent (for the
benefit of itself and the Purchasers), and Travelers.
"Subject Collateral" shall mean each Subject Deposit Account, all
property contained in each Subject Deposit Account, and all Proceeds thereof.
"Subject Deposit Accounts" shall mean each demand, time, savings,
passbook and other like accounts (including any account evidenced by a
certificate of deposit), whether interest-bearing or not, and if
interest-bearing then all interest accrued and paid or payable thereon,
maintained by the Debtor that are identified on Schedule 1 hereto, and all
moneys from time to time in or credited to any and all such deposit accounts,
including all earnings or profits therefrom in the form of interest or
otherwise.
"Subject Security Agreement" shall have the meaning given to such term
in the recitals hereto.
"Subject Security Documents" shall mean each Security Agreement and any
additional documents executed to reflect the grant to any Secured Party of a
lien upon or security interest in any Subject Collateral, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
their respective terms.
"Travelers" shall mean Travelers Express Company, Inc., a Minnesota
corporation.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement and section references are to
this Agreement unless otherwise specified.
4
(d) All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and vice versa, unless otherwise
specified.
SECTION 2
APPOINTMENT OF COLLATERAL AGENT; CERTAIN OBLIGATIONS AND DUTIES OF THE
COLLATERAL AGENT AND THE DEBTOR; POWERS OF ATTORNEY
Section 2.1. Appointment of Collateral Agent; Authorization to Execute
Subject Security Documents; Other Authority. In order to expedite the
enforcement of the rights and remedies set forth herein and in the Subject
Security Documents and in order to take such other actions with respect to the
Subject Collateral as specifically set forth herein and in the Subject Security
Documents, the Collateral Agent is hereby appointed to act as agent hereunder
and thereunder for itself, the Bank Agent, the Lenders, the ACFS Agent, the
Purchasers, and Travelers. The Collateral Agent is hereby authorized to take
such action on behalf of the Secured Parties under the terms and provisions of
the Subject Security Documents and to exercise such rights and remedies
hereunder and thereunder as are specifically delegated to or required of the
Collateral Agent under the terms and provisions hereof and thereof. The
Collateral Agent is hereby expressly further authorized on behalf of the Secured
Parties, and in each case subject to and in accordance with the terms of this
Agreement and the Intercreditor Agreement:
(a) to follow all instructions originated under Section 2.3 by the Bank
Agent or the ACFS Agent or Travelers, as the case may be, with respect or
relating to the Depositories, the Subject Security Agreements, the Subject
Collateral, or the Letter Agreements;
(b) to receive on behalf of each of the Secured Parties any payment of
monies paid to the Collateral Agent in accordance herewith or with the Subject
Security Documents, and to distribute all payments so received in accordance
with the terms of this Agreement;
(c) to receive all documents and items to be furnished under the
Subject Security Documents;
(d) to maintain physical possession of any of the Subject Collateral as
contemplated in any of the Subject Security Documents;
(e) to act on behalf of the Secured Parties in and under the Subject
Security Documents;
(f) to execute and deliver to the Secured Parties, the Debtor and its
Subsidiaries and others requests, demands, notices, approvals, consents and
other communications received from the Secured Parties in connection herewith
and with the Subject Security Documents, subject to the terms and conditions set
forth herein and therein;
5
(g) to the extent permitted by this Agreement and the Subject Security
Documents, to exercise on behalf of each Secured Party all remedies of the
Secured Parties under the Subject Security Documents; and
(h) to take such other actions, subject to Section 2.3, as may be
requested by the Secured Parties in accordance herewith or as are reasonably
incident to any powers granted to the Collateral Agent hereunder and not in
conflict with applicable law or regulation.
Section 2.2. Certain Representations and Warranties. The Collateral
Agent, in its capacity as collateral agent hereunder, and Wilmington Trust
Company, in its individual capacity, each represent and warrant to the Secured
Parties as follows:
(a) Wilmington Trust Company is a banking corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to enter into and perform its obligations under this Agreement and the
Subject Security Documents to which it is a party.
(b) The execution, delivery and performance by the Collateral Agent of
this Agreement and the Subject Security Documents to which it is a party have
been duly authorized by all necessary corporate action on the part of Wilmington
Trust Company.
(c) There are no Collateral Agent's Liens and Wilmington Trust Company,
in its individual capacity and not in its capacity as Collateral Agent
hereunder, has no liens or security interests against the Subject Collateral.
(d) There are no actions or proceedings pending or, to the actual
knowledge of any officers of Wilmington Trust Company's Corporate Trust
Administration, threatened against it before any Governmental Authority (i)
which question the validity or enforceability of this Agreement or any Subject
Security Documents to which it is a party; or (ii) which relate to the banking
or trust powers of Wilmington Trust Company and which, if determined adversely
to the position of Wilmington Trust Company, would materially and adversely
affect the ability of Wilmington Trust Company or the Collateral Agent to
perform their respective obligations under this Agreement or any of the Subject
Security Documents to which any one or more of them is a party.
(e) This Agreement and each of the Subject Security Documents to which
the Collateral Agent is a party have been duly executed and delivered by the
Collateral Agent (assuming, with respect to the Subject Security Documents, that
this Agreement has been duly authorized, executed and delivered by the other
parties hereto) and are the legal, valid and binding obligations of the
Collateral Agent enforceable in accordance with their terms, except to the
extent enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
the enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(f) No Uniform Commercial Code financing statements or other filings or
recordations executed by or on behalf of Wilmington Trust Company (in its
individual capacity) have been filed by or against it with respect to any of the
Subject Collateral.
6
Section 2.3 Instructions to the Collateral Agent.
(a) Collateral Agent hereby agrees to comply with all instructions
originated by the Bank Agent or ACFS Agent with respect or relating to the
Depositories, the Subject Security Agreements, the Subject Collateral or the
Letter Agreements or directing disposition of the Subject Collateral or any or
all monies, funds, checks, negotiable instruments or any other items or
properties in the Subject Deposit Accounts, in each case without joinder or
further consent by the Debtor or any other Person and as promptly after receipt
thereof as is reasonably possible so long as each such instruction is
accompanied by (i) if such instruction is originated by the Bank Agent, a
written certification from Bank Agent stating that Bank Agent is authorized to
originate such instruction under, and in accordance with, the Intercreditor
Agreement, (ii) if such instruction is originated by the ACFS Agent, a written
certification from Bank Agent stating that ACFS Agent is authorized to originate
such instruction under, and in accordance with, the Intercreditor Agreement, or
(iii) if such instruction is originated by Travelers a written certification
from Bank Agent and a written certification from ACFS Agent stating that
Travelers is authorized to originate such instruction under, and in accordance
with, the Intercreditor Agreement. Collateral Agent may fully rely upon and
shall be protected as set forth in Section 5.4 hereof in relying on any such
instruction.
(b) Notwithstanding anything to the contrary contained in Section
2.3(a), from and after the occurrence of any Insolvency Event, Collateral Agent
hereby agrees to comply with all instructions originated by the Bank Agent or
ACFS Agent with respect or relating to the Depositories, the Subject Security
Agreements, the Subject Collateral or the Letter Agreements or directing
disposition of the Subject Collateral or any or all monies, funds, checks,
negotiable instruments or any other items or properties in the Subject Deposit
Accounts, in each case without joinder or further consent by the Debtor or any
other Person and as promptly after receipt thereof as is reasonably possible so
long as each such instruction is accompanied by a written certification from
either Bank Agent or ACFS Agent, as the case may be, stating that a court of
competent jurisdiction has authorized such Person to originate such instruction
and having attached thereto a copy of an order of such court granting to such
Person. Bank Agent, ACFS Agent, and Travelers shall notify Collateral Agent in
writing of the occurrence of an Insolvency Event.
(c) The Collateral Agent shall not be obligated to follow any written
instructions received pursuant to this Agreement to the extent independent
counsel has advised that such written instructions are in conflict with any
provisions of law or this Agreement; provided, however, under no circumstances
shall the Collateral Agent be liable for following the written instructions of
Bank Agent or ACFS Agent at such times as such Persons do not have the authority
to act as herein provided.
(d) Nothing in this Agreement shall impair the right of the Collateral
Agent in its discretion to take or omit to take any action deemed proper by the
Collateral Agent and which action or omission is not inconsistent with any
instruction received by the Collateral Agent in accordance with this Agreement;
provided, however, the Collateral Agent shall not be under any
7
obligation, as a result of this Agreement, to take any action which is
discretionary with the Collateral Agent under the provisions hereof or under any
Subject Security Document unless so instructed by the applicable Secured Parties
in accordance herewith.
Section 2.4. Powers of Attorney. The Debtor hereby irrevocably
constitutes and appoints each Secured Party and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full power and authority in the name of the Debtor or the name of such
attorney-in-fact, from time to time in such Secured Party's discretion, for the
purpose of signing documents and taking other action to perfect, promote and
protect the liens and security interests of each Secured Party in the Subject
Collateral. This power of attorney is a power coupled with an interest and shall
be irrevocable.
Section 2.5. Copies of Letters and Documents. The Collateral Agent
shall promptly provide each Secured Party copies of any letters or documents it
receives in connection with any Subject Deposit Account, including, but not
limited to, letters and documents related to the termination or opening of any
Subject Deposit Account or the termination of, or the entering into any new
agreements with, any Depositories. In addition, if not already required to do
so, the Collateral Agent shall provide to any Secured Party, upon such Secured
Party's request, copies of any letters or documents the Collateral Agent
receives from the Debtor or any other Person in connection with this Agreement,
including additional Subject Security Documents.
SECTION 3
REMEDIES
Section 3.1. Remedies.
(a) Upon receipt of instructions pursuant to Section 2.3, the
Collateral Agent shall be entitled to exercise the rights and remedies provided
in this Section 3 and the rights and remedies provided in any of the Subject
Security Documents.
(b) The Debtor hereby waives presentment, demand, protest or any notice
(to the extent permitted by applicable law and except as otherwise expressly
provided in this Agreement) of any kind in connection with this Agreement, any
Subject Collateral or any Subject Security Document.
(c) The Debtor hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full power and
authority in the name of the Debtor or in its own name, from time to time in
such Person's discretion, upon the occurrence and during the continuance of any
Actionable Default, for the purpose of carrying out the terms of this Agreement
and any of the Subject Security Documents, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes hereof and thereof and,
without limiting the generality of the foregoing, hereby gives the Collateral
Agent the power and right on behalf of the Debtor, without assent by the Debtor,
to the extent permitted by applicable law, to do the following:
8
(i) to ask for, demand, xxx for, collect, receive and give acquittance
for any and all moneys due or to become due with respect to the Subject
Collateral,
(ii) to receive, take, endorse, assign and deliver any and all checks
notes, drafts, acceptances, documents and other negotiable and nonnegotiable
instruments documents and chattel paper taken or received by the Collateral
Agent in connection herewith and therewith,
(iii) to commence, file, prosecute, defend, settle, compromise or adjust
any claim, suit, action or proceeding with respect to the Subject
Collateral,
(iv) to sell, transfer, assign or otherwise deal in or with the Subject
Collateral or any part thereof pursuant to the terms and conditions
hereunder and thereunder, and
(v) to do, at its option and at the expense and for the account of the
Debtor, at any time or from time to time, all acts and things which the
Collateral Agent or such Secured Party deems necessary to protect or
preserve the Subject Collateral and to realize upon the Subject Collateral;
provided that either Bank Agent or ACFS Agent or Travelers shall provide the
Debtor written notice of any actions taken by Collateral Agent pursuant to this
subsection (c); provided further, however, that the failure to provide the
Debtor with such written notice shall not affect the validity of the Collateral
Agent's actions taken hereunder.
Section 3.2. Right to Initiate Judicial Proceedings, etc.
(a) Prior to the occurrence of an Insolvency Event:
(i) even if the Collateral Agent has not received instructions
pursuant to Section 2.3, the Collateral Agent shall nevertheless have
the right and power to institute and maintain such suits and
proceedings as it may deem appropriate to protect and enforce the
rights vested in it by this Agreement and each Subject Security
Document;
(ii) if and only if the Collateral Agent shall have received
instructions pursuant to Section 2.3 and during such time as such
instructions shall not have been withdrawn, the Collateral Agent may,
either after entry or without entry, proceed by suit or suits at law or
in equity to foreclose upon the Subject Collateral and to sell all or,
from time to time, any of the Subject Collateral under the judgment or
decree of a court of competent jurisdiction; and
(iii) the Secured Parties (other than the Collateral Agent)
hereby agree to refrain from exercising any and all rights each may
individually (i.e., other than through the Collateral Agent) now or
hereafter have with respect to the Subject Collateral to exercise any
right pursuant to the Subject Security Documents, the Uniform
Commercial Code as in effect in any applicable jurisdiction, or under
similar provisions of the laws of any jurisdiction or otherwise dispose
of or retain any of the Subject Collateral, and, in furtherance
thereof, such Secured Parties hereby agree not to take any action
whatsoever to enforce any term or provision of the Subject Security
Documents with respect to the Subject Collateral or to enforce any
right with respect to the Subject Collateral, in
9
conflict with this Agreement or the terms and provisions of the Subject
Security Documents.
(b) After the occurrence of any Insolvency Event, each Secured Party
shall have the right and power to institute and maintain such suits and
proceedings as it may deem appropriate to protect and enforce the rights vested
in it by this Agreement and each Subject Security Document as further set forth
in the Intercreditor Agreement.
Section 3.3. Appointment of a Receiver. If a receiver of the Subject
Collateral shall be appointed in judicial proceedings, Wilmington Trust Company
may be appointed as such receiver. Notwithstanding the appointment of a
receiver, the Collateral Agent shall be entitled to retain possession and
control of all cash held by or deposited with it or its agents or co-agents
pursuant to any provision of this Agreement or any Subject Security Document.
Section 3.4. Exercise of Powers. All of the powers, remedies and rights
of the Collateral Agent as set forth in this Agreement may be exercised by the
Collateral Agent in respect of any Subject Security Document as though set forth
at length therein and all the powers, remedies and rights of the Collateral
Agent as set forth in any Subject Security Document may be exercised from time
to time as herein and therein provided.
Section 3.5. Remedies Not Exclusive.
(a) No remedy conferred upon or reserved to the Collateral herein or in
the Subject Security Documents is intended to be exclusive of any other remedy
or remedies, but every such remedy shall be cumulative and shall be in addition
to every other remedy conferred herein or in any of the Subject Security
Documents or now or hereafter existing at law or in equity or by statute.
(b) No delay or omission of the Collateral Agent to exercise any right,
remedy or power accruing upon any Actionable Default shall impair any such
right, remedy or power or shall be construed to be a waiver of any such
Actionable Default or an acquiescence therein; and every right, power and remedy
given by this Agreement or any Subject Security Document to the Collateral Agent
or any other Secured Party may be exercised from time to time and as often as
may be deemed expedient by the Collateral Agent or any other Secured Party.
(c) In case the Collateral Agent shall have proceeded to enforce any
right, remedy or power under this Agreement or any Subject Security Document and
the proceeding for the enforcement thereof shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Collateral Agent, then and in every such case the Debtor, the Collateral Agent
and the Secured Parties shall, subject to any effect of or determination in such
proceeding, severally and respectively be restored to their former positions and
rights hereunder and under such Subject Security Document with respect to the
Subject Collateral and in all other respects, and thereafter all rights,
remedies and powers of the Collateral Agent and the other Secured Parties shall
continue as though no such proceeding had been taken.
(d) All rights of action and rights to assert claims upon or under this
Agreement and the Subject Security Documents may be enforced by the Collateral
Agent without the possession of any Debt Instrument or the production thereof in
any trial or other proceeding relative thereto,
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and any such suit or proceeding instituted by the Collateral Agent shall be
brought in its name as Collateral Agent and any recovery of judgment shall be
held as part of the Subject Collateral.
Section 3.6. Waiver of Certain Rights. The Debtor, to the extent it may
lawfully do so, on behalf of itself and all who may claim through or under it,
including, without limitation, any and all subsequent creditors, vendees,
assignees and lienors, expressly waives and releases any, every and all rights
to demand or to have any marshaling of the Subject Collateral upon any sale,
whether made under any power of sale granted under the Subject Security
Documents, or pursuant to judicial proceedings or upon any foreclosure or any
enforcement of this Agreement or the Subject Security Documents and consents and
agrees that all the Subject Collateral may at any such sale be offered and sold
as an entirety. In no event, however, does the Debtor waive any obligations of
the Collateral Agent under applicable law to dispose of the Subject Collateral
in a commercially reasonable manner.
Section 3.7. Limitation on Collateral Agent's Duties in Respect of
Subject Collateral. Beyond its duties set forth in this Agreement as to the
custody thereof and the accounting to the Debtor and the Secured Parties for
moneys received by it hereunder, the Collateral Agent shall not have any duty to
the Debtor or the Secured Parties as to any Subject Collateral in its possession
or control or in the possession or control of any agent or nominee of it or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto. To the extent, however, that the Collateral
Agent or an agent or nominee of the Collateral Agent maintains possession or
control of any of the Subject Collateral or the Subject Security Documents at
any office of the Debtor, the Collateral Agent shall, or shall instruct such
agent or nominee to, grant the Debtor the access to such Subject Collateral or
Subject Security Documents which the Debtor requires for the conduct of its
business, as permitted by the Bank Agreement, the ACFS Note Agreement and the
Travelers Agreements, so long as the Collateral Agent shall not have received
contrary instructions under Section 2.3.
Section 3.8. Limitation by Law. All the provisions of this Section 3
are intended to be subject to all applicable mandatory provisions of law which
may be controlling in the premises and to be limited to the extent necessary so
that they will not render this Agreement invalid or unenforceable in whole or in
part.
Section 3.9. Absolute Rights of the Secured Parties. Notwithstanding
any other provision of this Agreement or any provision of any Subject Security
Document, nothing contained in this Agreement shall affect or impair the right,
if any, that any Secured Party (other than the Collateral Agent) may have under
the terms and conditions governing the Obligations owing to it under the Secured
Party Agreements to which it is a party to accelerate and demand repayment of
such Obligations. Each Secured Party (other than the Collateral Agent) retains
the right to exercise freely its rights and remedies as a general creditor of
the Debtor or any Subsidiary in accordance with applicable law and subject to
the terms of the Secured Party Agreements, including without limitation the
right to file a lawsuit and obtain a judgment in connection therewith against
the Debtor or any Subsidiary, and to otherwise exercise any other right it may
have (other than the right to commence enforcement actions against the Subject
Collateral, which shall in all circumstances prior to an Insolvency Event be
exercisable only by the Collateral Agent and only as provided in this Agreement
and the Subject Security Documents). Any Secured Party (other than the
Collateral Agent) may (but in no event shall be
11
required to), without instruction from the Collateral Agent, take action
permitted by applicable law or in accordance with the terms of the Subject
Security Documents to preserve its rights, security interests and liens in any
item of Subject Collateral securing the payment and performance of the
obligations under the Secured Party Agreements to which it is a party, including
but not limited to curing any default or alleged default under any contract
entered into by the Debtor or any Subsidiary paying any tax, fee or expense on
behalf of the Debtor or any Subsidiary exercising any offset or recoupment
rights and paying insurance premiums on behalf of the Debtor or any Subsidiary
so long as such action shall not impair the rights of the Collateral Agent or of
any other Secured Party.
SECTION 4
APPLICATION OF MONEYS
Section 4.1. The Subject Collateral Account. All moneys which are
received by the Collateral Agent with respect to the Subject Collateral (whether
by means of foreclosure or otherwise and whether received before or after an
Insolvency Event), net of Collateral Agent's Fees, shall be deposited
(reasonably and promptly after receipt thereof by Collateral Agent) with the
Bank Agent and thereafter shall be held, applied and/or disbursed by the Secured
Parties in accordance with the terms of the Intercreditor Agreement.
SECTION 5
AGREEMENTS WITH THE COLLATERAL AGENT
Section 5.1. Compensation and Expenses. The Debtor agrees to pay to the
Collateral Agent as compensation for the Collateral Agent's services hereunder
and under the Subject Security Documents and for administering the Subject
Collateral, (a) such fees as shall be agreed to in writing from time to time
between the Debtor and the Collateral Agent (with a copy of each such fee
agreement and any amendments thereto to be sent by the Collateral Agent to each
Secured Party) and (b) from time to time, upon demand, all of the fees, costs
and expenses of the Collateral Agent (including without limitation, the
reasonable fees and disbursements of its agents and counsel and such special
counsel as the Collateral Agent elects to retain) (x) arising in connection with
the preparation, execution, delivery, modification, restatement, amendment or
termination of this Agreement and each Subject Security Document or the
enforcement (whether in the context of a civil action, adversary proceeding,
workout or otherwise) of any of the provisions hereof or thereof, or (y)
incurred or required to be advanced in connection with the administration of the
Subject Collateral (including, but not limited to, reimbursements made by the
Collateral Agent to Depositories), the sale or other disposition of Subject
Collateral pursuant to any Subject Security Document, the preservation,
protection or defense of the Collateral Agent's rights under this Agreement and
in and to the Subject Collateral and the transactions contemplated hereby. As
security for such payment, the Collateral Agent shall have a lien prior to the
liens securing the Secured Debt upon all Collateral Agent Subject Collateral.
Section 5.2. Stamp and Other Similar Taxes. The Debtor agrees to
indemnify and hold harmless the Collateral Agent and each Secured Party from,
and shall reimburse the Collateral Agent and each Secured Party for, any present
or future claim for liability for any stamp or other
12
similar tax and any penalties or interest with respect thereto, which may be
assessed, levied or collected by any jurisdiction in connection with this
Agreement, any Subject Security Document, the Subject Collateral, or the
attachment or perfection of the security interest granted to the Collateral
Agent in any Subject Collateral. The obligations of the Debtor under this
Section 5.2 shall survive the termination of the other provisions of this
Agreement.
Section 5.3. Filing Fees, Excise Taxes, etc. The Debtor agrees to pay
or to reimburse the Collateral Agent for any and all amounts in respect of all
search, filing, recording and registration fees, taxes, excise taxes and other
similar imposts which may be payable or determined to be payable in respect of
the execution, delivery, performance and enforcement of this Agreement and each
Subject Security Document and agrees to save the Collateral Agent harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees. The obligations of the Debtor
under this Section 5.3 shall survive the termination of the other provisions of
this Agreement.
Section 5.4. Indemnification.
(a) Each of the Bank Agent, the ACFS Agent, Travelers, and the Debtor
agrees to pay, indemnify and hold the Collateral Agent (including in its
individual capacity) and each of its agents, officers, directors, and employees
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and the Subject Security
Documents, unless arising from the gross negligence or willful misconduct of the
Collateral Agent or such of the agents as are seeking indemnification. As
security for such payment, the Collateral Agent shall have a lien prior to the
liens securing the Secured Debt upon all Subject Collateral and other property
and funds held or collected by the Collateral Agent as part of the Subject
Collateral.
(b) In any suit, proceeding or action brought by the Collateral Agent
with respect to the Subject Collateral, or to enforce any provisions of the
Subject Security Documents or this Agreement, each of the Bank Agent, the ACFS
Agent, Travelers, and the Debtor will save, indemnify and keep the Collateral
Agent harmless from and against all expense, loss or damage suffered by reason
of any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of the obligee thereunder, arising out of a breach by the Debtor of
any of its obligations hereunder or thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
obligee or its successors from the Debtor.
(c) The agreements in this Section 5.4 shall survive the termination of
the other provisions of this Agreement.
Section 5.5 Further Assurances. At any time and from time to time, upon
the written request of the Collateral Agent or any other Secured Party, and at
the expense of the Debtor, the Debtor will promptly execute and deliver any and
all such further instruments and documents and take such further action as the
Collateral Agent or any other Secured Party reasonably deems necessary or
desirable in obtaining the full benefits of this Agreement and the Subject
Security Documents and of the rights and powers herein and therein granted,
including, without
13
limitation, the filing of any financing or continuation statements to perfect
the liens and security interests granted thereby. The Debtor shall, in all of
its published financial statements customarily prepared with footnotes or filed
with the Securities and Exchange Commission, indicate by footnote or otherwise
that the Secured Debt is secured pursuant to this Agreement and the Subject
Security Documents.
SECTION 6
THE COLLATERAL AGENT
Section 6.1. Exculpatory Provisions.
(a) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained herein or in the Subject Security Documents, except for
those made by the Collateral Agent. The Collateral Agent makes no
representations as to the value or condition of the Subject Collateral or any
part thereof, or as to the title of the Debtor thereto or as to the security
afforded by the Subject Security Documents or this Agreement or, except as set
forth in Section 2.2 of this Agreement, as to the validity, execution,
enforceability, legality or sufficiency of this Agreement, any Subject Security
Document or of the Secured Debt secured hereby and thereby, and the Collateral
Agent shall incur no liability or responsibility in respect of any such matters.
The Collateral Agent shall not be responsible for insuring the Subject
Collateral or for the payment of taxes, charges, assessments or liens upon the
Subject Collateral or otherwise as to the maintenance of the Subject Collateral,
except that (i) in the event the Collateral Agent enters into possession of a
part or all of the Subject Collateral, the Collateral Agent shall preserve the
part in its possession, and (ii) the Collateral Agent will promptly, and at its
own expense, take such action as may be necessary duly to remove and discharge
(by bonding or otherwise) any Collateral Agent's Lien on any part of the Subject
Collateral or any other lien on any part of the Subject Collateral resulting
from claims against it not related to the administration of the Subject
Collateral or (if so related) resulting from gross negligence or willful
misconduct on its part.
(b) The Collateral Agent may consult with counsel, accountants and
other experts, and the advice of Xxxxxxxx, Xxxxxx & Finger, P.A. or such other
independent counsel reasonably satisfactory to the Secured Parties, any such
accountant, and any such other expert shall be full and complete authorization
and protection in respect of any action taken or suffered by it hereunder in
accordance therewith. The Collateral Agent shall have the right at any time to
seek instructions concerning the administration of the Subject Collateral from
any court of competent jurisdiction, the Bank Agent or the ACFS Agent.
(c) The Collateral Agent may rely, and shall be fully protected in
acting, upon any resolution, instruction, statement, certificate, instrument,
opinion, report, notice, request, consent, order, bond or other paper or
document which it has no reason to believe to be other than genuine and to have
been signed or presented by the proper party or parties or, in the case of
cables, telecopies and telexes, to have been sent by the proper party or
parties. In the absence of its bad faith, the Collateral Agent may rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Collateral Agent and
conforming to the requirements of this Agreement or any Subject Security
Document.
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(d) In acting hereunder, including if the Collateral Agent has been
instructed to take action pursuant to Section 2.3 of this Agreement, the
Collateral Agent shall not be under any obligation to exercise any of the rights
or powers vested in the Collateral Agent by this Agreement or any Subject
Security Document unless the Collateral Agent shall have been provided adequate
security and indemnity against the costs, expenses and liabilities which may be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Collateral Agent.
(e) The Collateral Agent shall not be personally liable for any error
of judgment made in good faith by an officer or employee of the Collateral
Agent. All funds deposited with the Collateral Agent hereunder and not
immediately paid out pursuant hereto may be held in a non-interest bearing trust
account and the Collateral Agent shall not be liable for any interest thereon.
To the extent that, at law or in equity, the Collateral Agent has duties and
liabilities relating hereto, the parties hereto agree that such duties and
liabilities are replaced by the terms of this Agreement. In the exercise of its
duties or administration hereunder, the Collateral Agent may act directly or
through agents or attorneys, and the Collateral Agent shall not be liable for
the default or misconduct of such agents or attorneys if such agents or
attorneys shall have been selected by the Collateral Agent in good faith. In
acting hereunder, the Collateral Agent acts solely as agent and not in its
individual capacity, and all persons having any claim against the Collateral
Agent by reason of the transactions contemplated by this Agreement shall look
only to the property held by the Collateral Agent for payment or satisfaction
thereof.
Section 6.2. Limitations on Duties of the Collateral Agent.
(a) The Collateral Agent shall be obliged to perform such duties and
only such duties as are specifically set forth in this Agreement or in any
Subject Security Document, and no implied covenants or obligations shall be read
into this Agreement or any Subject Security Document against the Collateral
Agent. Further, any power, authority, or entitlement hereunder shall not be
construed as a duty. The Collateral Agent shall, upon receipt of instructions
under Section 2.3 hereof and during such time as such instructions shall not
have been withdrawn, exercise the rights and powers vested in it by this
Agreement, by any Subject Security Document or by any Letter Agreement, and the
Collateral Agent shall not be liable with respect to any action taken or omitted
by it in accordance with the instruction of Bank Agent or the ACFS Agent or
Travelers pursuant to this Agreement.
(b) Except as herein otherwise expressly provided, including, without
limitation, upon the written request of Bank Agent or the ACFS Agent or
Travelers, the Collateral Agent shall not be under any obligation to take
any action which is discretionary with the Collateral Agent under the
provisions hereof or under any Subject Security Document. The Collateral
Agent shall furnish to each Secured Party promptly upon receipt thereof, a
copy of each certificate or other paper furnished to the Collateral Agent by
the Debtor under or in respect of this Agreement, any Subject Security
Document or any of the Subject Collateral.
Section 6.3. Moneys to Be Held in Trust. All moneys received by the
Collateral Agent under or pursuant to any provision of this Agreement or any
Subject Security Document shall be held in trust for the purposes for which they
were paid or are held.
15
Section 6.4. Resignation and Removal of the Collateral Agent.
(a) The Collateral Agent may at any time, by giving thirty (30) days'
prior written notice to the Debtor, Bank Agent, ACFS Agent each of the Travelers
and each other Secured Party, resign and be discharged of the responsibilities
hereby created, such resignation to become effective upon the appointment of a
successor collateral agent or collateral agents by the other Secured Parties,
and the acceptance of such appointment by such successor collateral agent or
collateral agents. The Collateral Agent may be removed at any time without cause
and a successor collateral agent appointed by the affirmative vote of the other
Secured Parties; provided that the Collateral Agent shall be entitled to its
fees and expenses to the date of removal. If no successor collateral agent or
collateral agents shall be appointed and approved within thirty (30) days from
the date of the giving of the aforesaid notice of resignation or within thirty
(30) days from the date of such removal, the Collateral Agent shall, or any
Secured Party may, apply to any court of competent jurisdiction to appoint a
successor collateral agent or collateral agents (which may be an individual or
individuals) to act until such time, if any, as a successor collateral agent or
collateral agents shall have been appointed as above provided. Any successor
collateral agent or collateral agents so appointed by such court shall
immediately and without further act be superseded by any successor collateral
agent or collateral agents appointed by the other Secured Parties.
(b) If at any time the Collateral Agent shall resign, be removed or
otherwise become incapable of acting, or if at any time a vacancy shall occur in
the office of the Collateral Agent for any other cause, a successor collateral
agent or collateral agents may be appointed by the other Secured Parties, and
the powers, duties, authority and title of the predecessor collateral agent or
collateral agents terminated and canceled without procuring the resignation of
such predecessor collateral agent or collateral agents, and without any other
formality (except as may be required by applicable law) than the appointment and
designation of a successor collateral agent or collateral agents in writing,
duly acknowledged, delivered to the predecessor collateral agent or collateral
agents and the Debtor, and filed for record in each public office, if any, in
which this Agreement is required to be filed.
(c) The appointment and designation referred to in Section 6.4(b) of
this Agreement shall, after any required filing, be full evidence of the right
and authority to make the same and of all the facts therein recited, and this
Agreement shall vest in such successor collateral agent or collateral agents,
without any further act, deed or conveyance, all of the estate and title of its
predecessor or their predecessors, and upon such filing for record the successor
collateral agent or collateral agents shall become fully vested with all the
estates, properties, rights, powers, trusts, duties, authority and title of its
predecessor or their predecessors; but such predecessor or predecessors shall,
nevertheless, on the written request of any Secured Party, the Debtor, or its or
their successor collateral agent or collateral agents, execute and deliver an
instrument transferring to such successor or successors all the estates,
properties, rights, powers, trusts, duties, authority and title of such
predecessor or predecessors hereunder and shall deliver all securities and
moneys held by it or them to such successor collateral agent or collateral
agents. Should any deed, conveyance or other instrument in writing from the
Debtor be required by any successor collateral agent or collateral agents for
more fully and certainly vesting in such successor collateral agent or
collateral agents the estates, properties, rights, powers, trusts, duties,
authority and title vested or intended to be vested in the predecessor
collateral agent or collateral
16
agents, any and all such deeds, conveyances and other instruments in writing
shall, on request of such successor collateral agent or collateral agents, be so
executed, acknowledged and delivered.
(d) Any required filing for record of the instrument appointing a
successor collateral agent or collateral agents as hereinabove provided shall be
at the expense of the Debtor. The resignation of any collateral agent or
collateral agents and the instrument or instruments removing any collateral
agent or collateral agents, together with all other instruments, deeds and
conveyances provided for in this Section 6 shall, if required by law, be
forthwith recorded, registered and filed by and at the expense of the Debtor,
wherever this Agreement is recorded, registered and filed.
(e) Notwithstanding any provision to the contrary in this Section 6.4,
unless there is an Actionable Default, the Secured Parties shall consult with
the Debtor when appointing a successor collateral agent or collateral agents;
provided that the Debtor may not under any circumstances reject, block or
prevent such appointment.
Section 6.5. Status of Successors to the Collateral Agent. Every
successor to Wilmington Trust Company appointed pursuant to Section 6.4 of this
Agreement and every corporation resulting from a merger or consolidation
pursuant to Section 6.6 of this Agreement shall be a bank or trust company in
good standing and having power so to act, incorporated under the laws of the
United States or any State thereof or the District of Columbia, and having its
principal corporate trust office within the forty-eight (48) contiguous States,
and shall also have capital, surplus and undivided profits of not less than
$250,000,000 and a rating from Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc. of A or better.
Section 6.6. Merger of the Collateral Agent. Any corporation into which
the Collateral Agent shall be merged, or with which it shall be consolidated, or
any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, shall be the Collateral Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of the parties hereto.
Section 6.7. Additional Co-Collateral Agents; Separate Collateral
Agents.
(a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Subject Collateral
shall be located, or the Collateral Agent shall be advised by counsel,
satisfactory to it, that it is so necessary, or prudent in the interest of the
Secured Parties, or the Secured Parties shall in writing so request, or the
Collateral Agent shall deem it desirable for its own protection in the
performance of its duties hereunder, the Collateral Agent and the Debtor shall
execute and deliver all instruments and agreements necessary or proper to
constitute another bank or trust company, or one or more persons approved by the
Collateral Agent and the Debtor either to act as co-collateral agent or
co-collateral agents of all or any of the Subject Collateral, jointly with the
Collateral Agent originally named herein or any successor or successors, or to
act as separate collateral agent or collateral agents of any such property. In
the event the Debtor shall not have joined in the execution of such instruments
and agreements within ten (10) days after the receipt of a written request from
the Collateral Agent so to do, or in case an Actionable Default shall have
occurred and be continuing, the Collateral Agent may act under the foregoing
provisions of this Section
17
6.7 without the concurrence of the Debtor, and the Debtor hereby irrevocably
appoints the Collateral Agent as its agent and attorney to act for it under the
foregoing provisions of this Section 6.7 in either of such contingencies.
(b) Every separate collateral agent and every co-collateral agent,
other than any collateral agent which may be appointed as successor to
Wilmington Trust Company shall, to the extent permitted by law, be appointed and
act and be such, subject to the following provisions and conditions, namely:
(i) all rights, powers, duties and obligations conferred upon the
Collateral Agent in respect of the custody, control and management of
moneys, papers or securities shall be exercised solely by Wilmington Trust
Company, or its successors as Collateral Agent hereunder;
(ii) all rights, powers, duties and obligations conferred or imposed
upon the Collateral Agent hereunder shall be conferred or imposed and
exercised or performed by the Collateral Agent and such separate collateral
agent or separate collateral agents or co-collateral agent or co-collateral
agents, jointly, as shall be provided in the instrument appointing such
separate collateral agent or separate collateral agents or co-collateral
agent or co-collateral agents, except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed,
the Collateral Agent shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations shall be
exercised and performed by such separate collateral agent or separate
collateral agents or co-collateral agent or co-collateral agents;
(iii) no power given hereby to, or which it is provided hereby may be
exercised by, any such co-collateral agent or co-collateral agents or
separate collateral agent or separate collateral agents, shall be exercised
hereunder by such co-collateral agent or co-collateral agents or separate
collateral agent or separate collateral agents, except jointly with, or with
the consent in writing of, the Collateral Agent, anything herein contained
to the contrary notwithstanding;
(iv) no collateral agent hereunder shall be personally liable by reason
of any act or omission of any other collateral agent hereunder; and
(v) the Debtor and the Collateral Agent, at any time by an instrument in
writing, executed by them jointly, may accept the resignation of or remove
any such separate collateral agent or co-collateral agent with or without
cause, and in that case may, by an instrument in writing executed by the
Debtor and the Collateral Agent jointly, appoint a successor to such
separate collateral agent or co-collateral agent, as the case may be,
anything herein contained to the contrary, notwithstanding. In the event
that the Debtor shall not have joined in the execution of any such
instrument within ten (10) days after the receipt of a written request from
the Collateral Agent so to do, or in case an Actionable Default shall have
occurred and be continuing, the Collateral Agent shall have the power to
accept the resignation of or remove any such separate collateral agent or
co-collateral agent and to appoint a successor without the concurrence of
the Debtor, the Debtor hereby irrevocably appointing the Collateral Agent
its agent and attorney to act for it in such connection in either
18
of such contingencies. In the event that the Collateral Agent shall have
appointed a separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents as above provided, it may at any
time, by an instrument in writing, accept the resignation of or remove any
such separate collateral agent or co-collateral agent, the successor to any
such separate collateral agent or co-collateral agent to be appointed by the
Debtor and the Collateral Agent, or by the Collateral Agent alone, as
hereinabove provided in this Section 6.7.
SECTION 7
RELEASE OF COLLATERAL; TERMINATION OF AGREEMENT
Section 7.1. Conditions to Release of Subject Collateral.
(a) Subject to this Section 7.1(a), Section 7.2, and Section 7.3, the
Collateral Agent shall release its security interest in all of the Subject
Collateral on the earlier of:
(i) the date on which (A) Bank Agent, ACFS Agent, and Travelers shall
notify Collateral Agent that all the Secured Debt shall have been
indefeasibly paid in full and the unfunded commitments of all Secured
Parties shall have been terminated and (B) accrued and unpaid Collateral
Agent's Fees shall have been paid in full; or
(ii) the date which is three (3) days after the date on which (A) the
Collateral Agent shall have received written instructions from the Bank
Agent and the ACFS Agent and Travelers instructing the Collateral Agent to
release its security interest in all of the Subject Collateral, and (B)
accrued and unpaid Collateral Agent's Fees shall have been paid in full.
(b) Subject to this Section 7.1(b) and Section 7.2, the Collateral
Agent shall release its security interest in specific items or portions of the
Subject Collateral on the date which is three (3) days after the date on which
(i) the Collateral Agent shall have received written instructions from the Bank
Agent and the ACFS Agent instructing the Collateral Agent to release its
security interest in specific items or portions of the Subject Collateral, and
(ii) accrued and unpaid Collateral Agent's Fees shall have been paid in full.
(c) Without limitation of anything contained in Section 7.1(a) or (b),
each of the Debtor and the Collateral Agent shall from time to time execute and
deliver to Bank Agent a Letter of Termination with respect to each Subject
Deposit Account promptly upon request therefor by Bank Agent.
Section 7.2. Actions Following Release of the Subject Collateral. To
the extent that the Collateral Agent is required to release, and each other
Secured Party releases, its security interests in the Subject Collateral in
accordance with this Agreement, or the security interest in any Subject
Collateral granted to the Collateral Agent pursuant to any of the Subject
Security Documents is otherwise terminated or released in accordance with the
terms thereof, all right, title and interest of the Collateral Agent in, to and
under such Subject Collateral and the security interest of the Collateral Agent
therein shall terminate. Following such request, instructions or other
termination or release, the Collateral Agent shall, upon the written request of
any Secured Party and at the cost and expense of the Secured Parties execute
such instruments and take such
19
other actions as are necessary or desirable to terminate any such security
interest and otherwise to effectuate the release of the specified portions of
the Subject Collateral from the lien of such security interest. Such termination
and release shall be without prejudice to the rights of the Collateral Agent or
any successor collateral agent or any other Secured Party to charge and be
reimbursed for any expenditures which it may thereafter incur in connection
therewith.
Section 7.3. Termination of Agency Relationship; Termination of
Agreement.
(a) Upon the execution and delivery by Collateral Agent of each Letter
of Termination in accordance with Section 7.1(c), (a) Collateral Agent shall
cease to be the agent of Bank Agent, ACFS Agent, and Travelers with respect to
the Subject Deposit Accounts to which each such Letter of Termination Relates,
(b) all of Collateral Agent's right, titles, and interests in and to such
Subject Deposit Accounts and all Subject Collateral held therein shall
automatically be released and shall cease and terminate without any further
action of any party hereto, and (c) each such Subject Deposit Account shall
cease to be a Subject Deposit Account for all purposes hereunder.
(b) This Agreement and the agency relationship created hereby shall
automatically cease and terminate without any further action of any party hereto
on the date on which Collateral Agent has released all of its rights, titles, or
interests in and to each Subject Deposit Account and all of the Subject
Collateral, whether as a result of the execution and delivery of one or more
Letters of Termination or otherwise.
SECTION 8
MISCELLANEOUS
Section 8.1. Amendments, Supplements and Waivers. This Agreement may
not be amended, revised, restated or supplemented without the prior written
consent of the Secured Parties, the Debtor and the Collateral Agent.
Section 8.2. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing
(including telex and telecopy communications), shall be sent by mail, telex,
telecopier or hand delivery and, except as otherwise provided in this Agreement,
the cost thereof shall be for the sole account of the Debtor and shall be added
to the Obligations:
(a) If to the Debtor, to Ace Cash Express, Inc., 0000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Chief Financial Officer, or at such
other address as shall be designated by it in a written notice to the Collateral
Agent (a copy of which the Collateral Agent shall send to all other Secured
Parties), with a copy thereof to Gardere & Xxxxx, L.L.P., 000 Xxxx Xxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 Attention: Xxxxxx X. Xxxxxxxxx; provided, however,
that the failure to provide a copy of such communications to Gardere & Xxxxx,
L.L.P. shall not affect the validity or effectiveness of such communications.
(b) If to the Collateral Agent, to the Collateral Agent at: Wilmington
Trust Company, Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust Administration, or at such other address as shall be designated
by it in a written notice to the
20
Debtor and the other Secured Parties, with a copy thereof to Xxxxxxxx, Xxxxxx &
Finger, 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, Attention: Xxxxxxx X.
Xxxx; provided, however, that the failure to provide a copy of such
communications to Xxxxxxxx, Xxxxxx & Finger shall not affect the validity or
effectiveness of such communications.
(c) If to Bank Agent, to Xxxxx Fargo Bank Texas, National Association,
0000 Xxxxxxx Xxxx Xxxx, Xxxxx, Xxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx or at
such other address as shall be designated by it in a written notice to the other
Secured Parties, with a copy thereof to Xxxxxxxx, Xxxxxxxx & Xxxxxx P.C., 0000
Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxx X. Xxxxxxxxxx;
provided, however, that the failure to provide a copy of such communications to
Xxxxxxxx, Xxxxxxxx & Xxxxxx P.C. shall not affect the validity or effectiveness
of such communications.
(d) If to ACFS Agent, to American Capital Financial Services, Inc., 0
Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Compliance Officer and to American Capital Financial Strategies, Ltd., 0000 Xxxx
Xxxxxx, Xxxxx 0000 Xxxx, Xxxxxx, Xxxxx 00000 Attention: Xxxxxxx X. XxxXxxxxx, or
at such other address as shall be designated by it in a written notice to the
other Secured Parties, with a copy thereof to Xxxxxx Xxxxx L.L.P., 0000 Xxxx
Xxxxxx, Xxxxxx, Xxxxx 00000 Attention: Xxxxxx X. Xxxx; provided, however, that
the failure to provide a copy of such communications to Xxxxxx Xxxxx L.L.P.
shall not affect the validity or effectiveness of such communications.
(d) If to Travelers, to Travelers Express Company, Inc., 0000 Xxxxx
Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Chief Legal Counsel, or
at such other address as shall be designated by it in a written notice to the
other Secured Parties.
All such notices, requests, demands and communications shall, to be
effective hereunder, be in writing or by a telecommunications device capable of
creating a written record, and shall be deemed to have been given or made when
delivered by hand or five (5) days after its deposit in the mail, first class or
air postage prepaid, or in the case of notice by such a telecommunications
device, when properly transmitted if on the same day the sender sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid); provided, however, that any notice, request, demand or other
communication to the Collateral Agent shall not be effective until received.
Section 8.3. Headings. Section, subsection and other headings used in
this Agreement are for convenience only and shall not affect the construction of
this Agreement.
Section 8.4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction; provided that this Agreement shall be construed so as to
give effect to the intention expressed in Section 3.9 hereof.
Section 8.5. Dealings with the Debtor.
(a) Upon any application or demand by the Debtor to the Collateral
Agent or any other Secured Party to take or permit any action under any of the
provisions of this Agreement or
21
any Subject Security Document, the Debtor shall furnish to the Collateral Agent,
with copies to each Secured Party, a certificate signed by a Responsible Officer
of the Debtor stating that all conditions precedent, if any, provided for in
this Agreement or any Subject Security Document relating to the proposed action
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required by
any provision of this Agreement or any Subject Security Document, relating to
such particular application or demand, no additional certificate or opinion need
be furnished.
(b) Any opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate of Responsible Officers of the Debtor
delivered to the Collateral Agent and each other Secured Party.
Section 8.6. Claims Against the Collateral Agent; Payment of Collateral
Agent's Fees.
(a) Any claims or causes of action which any Secured Party or the
Debtor shall have against the Collateral Agent shall survive the termination of
this Agreement and the release of the Subject Collateral hereunder.
(b) In the event the Debtor does not pay the Collateral Agent's Fees,
each Secured Party (other than the Collateral Agent) agrees to pay the
Collateral Agent's Fees ratably in accordance with the proportion of the Secured
Debt held by such Secured Party or, if there has been any recovery of the
Secured Debt, in accordance with the proportion of (i) the Secured Debt
recovered by such Secured Party to (ii) the aggregate amount of Secured Debt
recovered by all Secured Parties.
Section 8.7. Binding Effect.
(a) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and shall inure to the benefit of the Secured Parties
and their respective successors and assigns, and nothing herein or in any
Subject Security Document is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement, any
Subject Security Document, the Subject Collateral.
(b) The Debtor has agreed to pay on demand the Collateral Agent's Fees.
In the event the Debtor fails to pay the Collateral Agent's Fees, each Secured
Party (other than the Collateral Agent) has agreed in Section 8.6(b) of this
Agreement to pay the Collateral Agent's Fees, ratably in accordance with the
proportion of the Secured Debt held by such Secured Party or, if there has been
any recovery of the Secured Debt, in accordance with the proportion of (i) the
Secured Debt recovered by such Secured Party to (ii) the aggregate amount of
Secured Debt recovered by all Secured Parties, all as set forth in this
Agreement.
Section 8.8. Conflict with Other Agreements. The parties agree that in
the event of any conflict between the provisions of this Agreement and the
provisions of any of the Subject Security Documents, the provisions of this
Agreement shall control. The parties agree that in the event of any conflict
between the provisions of this Agreement and the provisions of the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall control.
22
Section 8.9. Governing Law. The provisions of this Agreement setting
forth the rights, duties, obligations and responsibilities of the Collateral
Agent hereunder shall be governed by and construed in accordance with the
internal laws (as opposed to conflicts of law provisions) and decisions of the
State of Delaware, so long as Wilmington Trust Company shall serve as Collateral
Agent hereunder. In all other respects, including, without limitation, all
matters governed by the Uniform Commercial Code, and if Wilmington Trust Company
shall cease to serve as Collateral Agent hereunder, this Agreement shall be
governed by and construed in accordance with the internal laws (as opposed to
conflicts of law provisions) and decisions of the State of Texas.
Section 8.10. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.
Section 8.11. Waiver of Jury Trial, Etc.
(a) EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OF
THE OTHER CREDIT DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE
OTHER SUBJECT SECURITY DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE. EACH PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF
A COPY OF THIS AGREEMENT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(b) EACH PARTY HERETO (I) CERTIFIES THAT NEITHER ANY REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS
HEREIN.
Section 8.12. Submission to Jurisdiction.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
TEXAS, DALLAS DIVISION, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
DEBTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURT.
23
(b) THE DEBTOR HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH ANY SUCH
ACTION OR PROCEEDING, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH JURISDICTION.
(c) THE DEBTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
THE AFOREMENTIONED COURT IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AT ITS
ADDRESS SET FORTH IN SECTION 8.2 HEREOF.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR
ANY HOLDER OF ANY OF THE OBLIGATIONS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE DEBTOR IN ANY OTHER JURISDICTION.
24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
ACE CASH EXPRESS, INC., as Debtor
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as Bank Agent
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
AMERICAN CAPITAL FINANCIAL SERVICES,
INC., as ACFS Agent
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
TRAVELERS EXPRESS COMPANY, INC.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
WILMINGTON TRUST COMPANY, not in its
individual capacity (except as otherwise
expressly provided in this Agreement)
but solely as Collateral Agent
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
2
Schedule 1
Subject Deposit Accounts
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
ARKANSAS DEP 00000000 BANK OF AMERICA
ARKANSAS R/I 00000000 BANK OF AMERICA
ARKANSAS CURR 00000000 BANK OF AMERICA
XXX XXXXXX XXX 000000000 XXXX XX XXXXXXX
XXX XXXXXX CURR 109650390 BANK OF AMERICA
NEW MEXICO R/I 109650408 BANK OF AMERICA
NASHVILLE TN. DEP 112485669 BANK OF AMERICA
NASHVILLE TN. CURR 112485677 BANK OF AMERICA
NASHVILLE TN. R/I 112485685 BANK OF AMERICA
WICHITA KANSAS DEP 2861440603 BANK OF AMERICA
WICHITA KANSAS R/I 2861440616 BANK OF AMERICA
WICHITA KANSAS CURR 2861440629 BANK OF AMERICA
SAVANNAH GA. CURR 3266408527 BANK OF AMERICA
SAVANNAH GA. DEP 3266408535 BANK OF AMERICA
SAVANNAH GA. R/I 3266408543 BANK OF AMERICA
WILMINGTON NC. CURR 3783622508 BANK OF AMERICA
WILMINGTON NC. DEP 3783622511 BANK OF AMERICA
WILMINGTON NC. R/I 3783622524 BANK OF AMERICA
CHARLESTON SC. CURR 3783730461 BANK OF AMERICA
CHARLESTON SC. DEP 3783730474 BANK OF AMERICA
CHARLESTON SC. R/I 3783730487 BANK OF AMERICA
CAPITOL R/I 3783832589 BANK OF AMERICA
CAPITOL CURR 3783832592 BANK OF AMERICA
CAPITOL DEP 3783832602 BANK OF AMERICA
HUNTSVILLE CURR 4771913193 BANK OF AMERICA
HUNTSVILLE DEP 4771913201 BANK OF AMERICA
HUNTSVILLE R/I 4771913219 BANK OF AMERICA
XXXX XXXXX XXX 0000000000 XXXX XX XXXXXXX
XXXX XXXXX X/X 0000000000 XXXX XX XXXXXXX
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
XXXX XXXXX XXXX 0000000000 XXXX XX XXXXXXX
OKLAHOMA R/I 70108364923 BANK OF AMERICA
OKLAHOMA DEP 70108364931 BANK OF AMERICA
OKLAHOMA CURR 70108364958 BANK OF AMERICA
ST.LOUIS MO. DEP 100101249510 BANK OF AMERICA
ST.LOUIS MO. CURR 100101249529 BANK OF AMERICA
ST.LOUIS MO. R/I 100101249537 BANK OF AMERICA
FT.XXXXX IN. CURR 715001269599 BANK ONE
FT.XXXXX IN. DEP 715001269615 BANK ONE
FT.XXXXX IN. R/I 715002369607 BANK ONE
NEW ORLEANS DEP 812315781 HIBERNIA NAT'L
NEW ORLEANS CURR 812315803 HIBERNIA NAT'L
NEW ORLEANS R/I 812315811 HIBERNIA NAT'L
LONGVIEW TX CURR 3420000752 HIBERNIA NAT'L
LONGVIEW TX DEP 3420000760 HIBERNIA NAT'L
XXXXXXXX XX X/X 0000000000 XXXXXXXX XXX'X
XXXXXXXXX XX. DEP 3765199 NATIONAL CITY
CLEVELAND OH. CURR 3765201 NATIONAL CITY
CLEVELAND OH. R/I 3765228 NATIONAL CITY
INDIANAN CURR 501912286 NATIONAL CITY
INDIANAN DEP 501912338 NATIONAL CITY
INDIANAN R/I 501912341 NATIONAL CITY
PITTSBURGH CURR 4600658771127 NATIONAL CITY
PITTSBURGH DEP 4600658771143 NATIONAL CITY
PITTSBURGH R/I 4600658771151 NATIONAL CITY
HOMEWOOD AL. DEP 301060694 REGION'S
HOMEWOOD AL. CURR 301060708 REGION'S
HOMEWOOD AL. R/I 301060813 REGION'S
ALBANY CURR 2507841006 REGION'S
ALBANY DEP 2507842206 REGION'S
ALBANY R/I 2507843406 REGION'S
-------------------------------------------------------------------------------
ACCOUNT NAME BANK ACCT # BANK NAME
-------------------------------------------------------------------------------
CORPUS CHRISTI R/I 1411001371 TEXAS CAPITOL
CORPUS CHRISTI DEP 1411001678 TEXAS CAPITOL
CORPUS CHRISTI CURR 1411001686 TEXAS CAPITOL
NO. CAROLINA DEP 2000000566115 WACHOVIA
NO. CAROLINA R/I 2000000566128 WACHOVIA
NO. CAROLINA CURR 2000000566131 WACHOVIA
ACE CollectionsTrustAcct/ALA 2000014786923 WACHOVIA
ACE CollectionsTrustAcct/XXXXXX 2000014787809 WACHOVIA
SO.CAROLINA DEP 2010000169829 WACHOVIA
SO.CAROLINA R/I 2010000169832 WACHOVIA
SO.CAROLINA CURR 2010000175703 WACHOVIA
VIRGINIA DEP 2050000054237 WACHOVIA
VIRGINIA R/I 2050000054240 WACHOVIA
VIRGINIA CURR 2050000054253 WACHOVIA
GEORGIA DEP 2080000230403 WACHOVIA
GEORGIA R/I 2080000230416 WACHOVIA
GEORGIA CURR 2080000230429 WACHOVIA
FLORIDA DEP 2090001409155 WACHOVIA
FLORIDA CURR 2090001409168 WACHOVIA
FLORIDA R/I 2090001409171 WACHOVIA
2090001409414 WACHOVIA
Exhibit A
[Form of Letter of Termination]
_____________________, 200__
[Name and address of Depository]
------------------------------------
------------------------------------
-------------------------------------
Re: Accounts described on the attached schedule maintained by you for ACE
Cash Express, Inc. (the "Accounts")
Ladies and Gentlemen:
Please be advised that Wilmington Trust Company, as Collateral Agent,
no longer claims any security interest or lien in the Accounts or any property
of ACE Cash Express, Inc. contained in any of the Accounts (the "Account
Property"). Accordingly, each of the undersigned hereby (a) terminates any and
all rights Collateral Agent may have to originate instructions with respect to
the Accounts and the Account Property and (b) acknowledges that Collateral Agent
no longer has any rights with respect to the Accounts and the Account Property
whatsoever.
WILMINGTON TRUST COMPANY, not individually but solely as Collateral Agent
By:
------------------------------------
Name:
Title
ACE CASH EXPRESS, INC.
By:
------------------------------------
Name:
Title
[Schedule of Accounts to be attached]
EXHIBIT F-1
[COMPANY LETTERHEAD]
___________ ___, 2003
SUBORDINATED CONTROL AGREEMENT
[NAME OF FINANCIAL INSTITUTION]
[ ]
-----------------------------------
[ ]
-----------------------------------
Attn: [ ]
--------------------------
Re: Each of the accounts described on the attached Account Schedule
(collectively, the "ACCOUNTS" and individually, an "ACCOUNT")
Ladies and Gentlemen:
Reference is made to (i) that certain Intercreditor Agreement dated as
of [___________ ___], 2003, by and among Ace Cash Express, Inc., a Texas
corporation (the "COMPANY"), Xxxxx Fargo Bank Texas, National Association, as
Administrative Agent (the "BANK AGENT") for the lenders (the "LENDERS") from
time to time party to the Bank Agreement (as such term is defined in the
Intercreditor Agreement), American Capital Financial Services, Inc., as Agent
("ACFS AGENT") for the purchasers ("PURCHASERS") from time to time party to the
ACFS Note Agreement (as such term is defined in the Intercreditor Agreement),
and Travelers Express Company, Inc. ("TRAVELERS")(as such Intercreditor
Agreement may be amended, restated, supplemented or otherwise modified from time
to time, the "INTERCREDITOR AGREEMENT") and (ii) that certain Assignment of
Deposit Accounts and Security Agreement dated as of [___________ ___], 2003, by
the Company in favor of the ACFS Agent for the benefit of the Purchasers (as
such Assignment of Deposit Accounts and Security Agreement may be amended,
restated, supplemented or otherwise modified from time to time, the "SECURITY
AGREEMENT").
Pursuant to the Security Agreement, the Company has granted control of
the Accounts to the ACFS Agent and granted to the ACFS Agent a security interest
in the Accounts and the Company's monies, funds, checks, negotiable instruments
and any other items or property deposited and/or held in the Accounts from time
to time and all proceeds thereof (all of the foregoing hereinafter collectively
referred to as the "ACCOUNT PROPERTY") subject only to the prior perfected
security interest of the Bank Agent therein as set forth below, in each case, to
secure certain obligations and indebtedness of the Company owing to the ACFS
Agent and the Purchasers described therein. The Company hereby notifies you, and
you hereby acknowledge, that the Company has granted a security interest to the
ACFS
[NAME OF FINANCIAL INSTITUTION]
Page 2
Agent in, and control of, the Accounts and the other Account Property
subject to the rights of the Bank Agent therein as set forth below.
This letter shall become effective as of 6:00 a.m., Dallas, Texas time
(the "EFFECTIVE TIME"), on the date first written above upon execution of this
letter by each party hereto and delivery of the same to you.
The Company hereby agrees with the ACFS Agent, and you hereby
acknowledge, that (a) the Company has no power to withdraw from the Accounts
except as expressly permitted hereunder and under that certain letter agreement
between you and the Bank Agent of even date herewith (the "BANK CONTROL LETTER")
and (b) subject to the following paragraph, the ACFS Agent may, at any time by
written notice to you, terminate or suspend any and all rights of the Company
related to the Accounts.
The Company hereby irrevocably and unconditionally authorizes,
instructs and directs you to comply, and you hereby agree to comply, with all
instructions originated by the ACFS Agent with respect to the Accounts or
directing disposition of any or all monies, funds, checks, negotiable
instruments or any other items or properties in the Accounts, in each case
without joinder or further consent by the Company and as promptly after receipt
thereof as is reasonably possible so long as each such instruction is
accompanied by a written certification from ACFS Agent stating that ACFS Agent
is authorized to originate such instruction under, and in accordance with, the
Intercreditor Agreement; provided, however, that in the event of any insolvency,
bankruptcy, liquidation, reorganization or other similar proceedings or any
receivership proceedings in connection therewith, relative to the Company, the
Company hereby irrevocably and unconditionally authorizes, instructs and directs
you to comply, and you hereby agree to comply, with all instructions originated
by the ACFS Agent with respect to the Accounts or directing disposition of any
or all monies, funds, checks, negotiable instruments or any other items or
properties in the Accounts, so long as each such instruction is accompanied by a
written certification from ACFS Agent stating that a court of competent
jurisdiction has authorized ACFS Agent to originate such instruction and having
attached thereto a copy of an order of such court granting to ACFS Agent such
authority, in each case without joinder or further consent by the Company and as
promptly after receipt thereof as is reasonably possible. You are entitled to
rely upon and are authorized and directed to follow all instructions of the ACFS
Agent and you have no duty of inquiry as to the authorization or authenticity of
any such instructions so long as they are given by an individual designated by
the ACFS Agent and accompanied by either of the foregoing described
certifications.
You agree to indicate by appropriate entry in your records with respect
to the Accounts or the Account Property the security interest of the ACFS Agent
therein.
This notification and the directions and instructions contained herein
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
[NAME OF FINANCIAL INSTITUTION]
Page 3
You agree to deliver copies of all correspondence, notices, bank
statements and other information which you are otherwise obligated or permitted
to send to the Company (by law, agreement or otherwise) to the ACFS Agent at the
address specified herein, if so requested by the ACFS Agent in writing. You are
further authorized, and the Company hereby consents, to deliver any information
requested by the ACFS Agent related to the Accounts, with any reasonable expense
therefor to be paid by the Company. Any reasonable additional charge for
providing such information shall be billed to the Company, with a copy to the
ACFS Agent; if such charge is not paid by the Company within ten (10) days after
its receipt of such invoice, you may set off such charge against any of the
Accounts or the Account Property; if such charge cannot be paid by set off
against the Account or the Account Property, then unless the ACFS Agent agrees
to pay such charge, your obligation to provide such information shall cease. All
other notices, communications and information to be delivered to the ACFS Agent
shall be delivered to the ACFS Agent as set forth in the first sentence of this
paragraph. Such address and the name or names of the individual or individuals
who are entitled to receive notices and copies of statements sent to the ACFS
Agent may be changed by written notice from the ACFS Agent. Requests, consents
or notices from the ACFS Agent with respect to the Accounts or Account Property
will be effective only if obtained in writing from an individual designated by
the ACFS Agent for purposes thereof from time to time. The ACFS Agent and the
Company acknowledge and agree that you shall not be bound by any change in
address or designation of any responsible party prior to your actual receipt of
written notice thereof.
You hereby waive and release any and all rights of offset, claims or
counterclaims against, and any and all security interests, banker's liens or
similar rights in or to, the Accounts or the Account Property (whether arising
under law, agreement or otherwise) other than the security interests in the
Accounts and the Account Property and your interests therein (if any) which have
been granted to Bank Agent.
These instructions may only be modified in writing by an agreement
executed by you, the Company and the ACFS Agent; provided, however, that the
attached Account Schedule may be amended by delivery of a revised schedule from
the Company and the ACFS Agent to you. All notices, approvals, or instructions
hereunder shall be sent to the following addressee:
If to the Company:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to the ACFS Agent:
American Capital Financial Services, Inc.
Two Bethesda Metro Center, 14th Floor
[NAME OF FINANCIAL INSTITUTION]
Page 4
Xxxxxxxx, Xxxxxxxx 00000
Attention: Compliance Officer -- ACS/ACE
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
with a copy to:
American Capital Strategies, Ltd.
0000 Xxxx Xxx., Xxx. 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxXxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to you: As indicated on the attached Account Schedule
All notices or other communications provided for hereunder shall be in
writing (including by facsimile transmission) and shall be deemed to have been
duly given or made (i) in the case of delivery by hand, when delivered, (ii) in
the case of delivery by mail, three business days (meaning a day other than
Saturday, Sunday or a day on which commercial banks in [CITY, STATE] are
authorized to close) after being deposited in the mails, postage prepaid, or
(iii) in the case of delivery by facsimile transmission, when delivered or
transmitted by facsimile machine, provided that any matter transmitted by
facsimile (a) shall be immediately confirmed by a telephone call to the
recipient at the number specified herein and (b) shall be followed promptly by a
hard copy original thereof.
Notwithstanding anything to the contrary in this letter agreement: (i)
you shall have only the duties and responsibilities with respect to the matters
set forth herein as is expressly set forth in writing herein and shall not be
deemed to be an agent, bailee or fiduciary for any party hereto; (ii) you shall
be fully protected in acting or refraining from acting in good faith without
investigation on any notice, instruction or request purportedly furnished to you
by the Company or ACFS Agent in accordance with the terms hereof, in which case
the parties hereto agree that you have no duty to make any further inquiry
whatsoever; (iii) it is hereby acknowledged and agreed that you have no
knowledge of (and are not required to know) the terms and provisions of the
Intercreditor Agreement, the Security Agreement, or any other related
documentation or whether any actions by ACFS Agent, the Company or any other
person or entity are permitted thereunder or consistent or inconsistent
therewith; (iv) you shall not be liable to any party hereto or any other person
for any action or failure to act under or in connection with this letter
agreement except to the extent such conduct constitutes your own willful
misconduct or gross negligence (and to the maximum extent permitted by law, you
shall under no circumstances be liable for any incidental, indirect, special,
consequential or punitive damages); and (v) you shall not be liable for losses
or delays caused by force majeure, interruption or malfunction of computer,
transmission or communications facilities, labor difficulties, court order or
decree, the commencement of bankruptcy or other similar proceedings or other
matters beyond your reasonable control.
[NAME OF FINANCIAL INSTITUTION]
Page 5
The Company hereby agrees to indemnify, defend and save you harmless
against any loss, liability or expense (including reasonable fees and
disbursements of counsel who may be your employee) incurred in connection with
this letter agreement or the Accounts (except to the extent due to your willful
misconduct or gross negligence) or any interpleader proceeding relating thereto
or incurred at the Company's direction or instruction. ACFS Agent hereby agrees
to indemnify, defend and save you harmless against any loss, liability or
expense (including reasonable fees and disbursements of counsel who may be your
employee) incurred in connection with any actions taken by you under this letter
agreement with respect to the Accounts (except to the extent due to your willful
misconduct or gross negligence). ACFS Agent's and the Company's responsibilities
shall survive the termination hereof.
You hereby agree that (i) you are a "bank" within the meaning of
Section 9.102 of the Uniform Commercial Code as in effect in the State of Texas
(the "UCC"), (ii) each Account constitutes a "deposit account" within the
meaning of Section 9.102 of the UCC, (iii) this letter agreement shall
constitute an "authenticated record" for purposes of the UCC, and (iv) other
than the Bank Control Letter and the "Prior Letters" (as defined in the Bank
Control Letter), you have not entered into any agreement that grants to or
confers upon any other party control of any Account or any of the Account
Property and you will not enter into any such agreement during the term of this
letter agreement, other than such agreements regarding control of the Accounts
and the other Account Property that you may enter into after the Effective Time
with Travelers; provided, however, that you and the Company hereby further agree
that (a) the interests of each of ACFS Agent and Travelers in the Accounts and
the other Account Property are and shall at all times be subject to and
subordinate to the interests of the Bank Agent therein and (b) the interests of
Travelers in the Accounts and the other Account Property are and shall at all
times be subject to and subordinate to the interests of each of the Bank Agent
and ACFS Agent therein, in each case to the extent and in the manner provided in
the Intercreditor Agreement.
Each of you and the Company hereby agrees that this letter agreement
grants to and confers upon the ACFS Agent "control" of each Account as
contemplated in Section 9.104 (and similar related provisions) of the UCC, and
the security interest in the Accounts and the other Account Property in favor of
the ACFS Agent is and shall at all times be (a) junior and inferior in right of
priority to any security interest in any Account or any other Account Property
which may have been, or hereafter be, granted to Bank Agent and (b) senior and
superior in right of priority to any security interest in any Account or any
other Account Property which may have been, or hereafter be, granted to
Travelers.
The Company and you hereby agree that no Account (i) is evidenced by an
instrument (as that term is defined in the UCC) or (ii) constitutes a securities
account or contains securities or investment property (as such terms are defined
in the UCC).
You hereby agree to comply with the restrictions, authorizations and
instructions set forth or described above in this letter agreement. Further, the
Company hereby agrees and you also acknowledge and agree that each "deposit
account" (as such term is defined in the UCC) maintained by you in the name of,
or for the benefit of, the Company and identified on the attached Account
Schedule (as amended as permitted hereunder) shall be deemed to be an Account
and shall be subject to this letter agreement in all respects.
[NAME OF FINANCIAL INSTITUTION]
Page 6
Nothing in this letter agreement shall require you to act in violation
of any applicable laws or any court order.
This letter agreement supplements, rather than replaces, your deposit
account agreement, terms and conditions and other standard documentation in
effect from time to time with respect to the Accounts or services provided in
connection with the Accounts (the "ACCOUNT DOCUMENTATION"), which Account
Documentation will continue to apply to the Accounts and such services, and the
respective rights, powers, duties, obligations, liabilities and responsibilities
of the parties thereto and hereto, to the extent not expressly conflicting with
the provisions of this letter (however, in the event of any such conflict, the
provisions of this letter agreement shall control).
This letter agreement shall be governed in accordance with the laws of
the State of Texas. The State of Texas shall be deemed to be your location for
purposes of Section 9.304(b) of the UCC.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
[NAME OF FINANCIAL INSTITUTION]
Page 7
If the foregoing accurately sets forth our agreements with respect to
the subject matter hereof, please sign below as indicated and return a signed
copy thereof to the ACFS Agent or its legal counsel at such address as the ACFS
Agent shall provide. This letter agreement may be executed in multiple
counterparts.
Thank you.
ACE CASH EXPRESS, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Approved as of the date first above written:
AMERICAN CAPITAL FINANCIAL SERVICES, INC., as ACFS Agent
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Accepted and agreed to as of the date first above written:
[NAME OF FINANCIAL INSTITUTION]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[NAME OF FINANCIAL INSTITUTION]
Page 8
ACCOUNT SCHEDULE - [NAME OF FINANCIAL INSTITUTION]
[DATE OF SCHEDULE]
Account Account Custodial
State Number Type Agent
----- ------- ------- ---------
*BANK CONTACT FOR THE FOLLOWING IS [NAME OF CONTACT], FACSIMILE NUMBER [_______]
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
----------
(1) Currency Account (the "CURRENCY ACCOUNT")
(2) Depository Account (the "DEPOSITORY ACCOUNT")
(3) Operating Account (the "OPERATING ACCOUNT")
(4) Returned Items Account (the "RETURNED ITEMS ACCOUNT")
and each other "deposit account" (as such term is defined in the UCC) maintained
by [NAME OF FINANCIAL INSTITUTION] from time to time in the name of, or for the
benefit of, the Company and identified on a supplemental schedule
EXHIBIT F-2
[COMPANY LETTERHEAD]
___________ ___, 2003
SUBORDINATED CONTROL AGREEMENT
[NAME OF FINANCIAL INSTITUTION]
[ ]
-----------------------------------
[ ]
-----------------------------------
Attn: [ ]
--------------------------
Re: Each of the accounts described on the attached Account Schedule
(collectively, the "ACCOUNTS" and individually, an "ACCOUNT")
Ladies and Gentlemen:
Reference is made to (i) that certain Intercreditor Agreement dated as
of [___________ ___], 2003, by and among Ace Cash Express, Inc., a Texas
corporation (the "COMPANY"), Xxxxx Fargo Bank Texas, National Association, as
Administrative Agent (the "BANK AGENT") for the lenders (the "LENDERS") from
time to time party to the Bank Agreement (as such term is defined in the
Intercreditor Agreement), American Capital Financial Services, Inc., as Agent
("ACFS AGENT") for the purchasers ("PURCHASERS") from time to time party to the
ACFS Note Agreement (as such term is defined in the Intercreditor Agreement),
and Travelers Express Company, Inc. ("TRAVELERS")(as such Intercreditor
Agreement may be amended, restated, supplemented or otherwise modified from time
to time, the "INTERCREDITOR AGREEMENT") and (ii) that certain Assignment of
Deposit Accounts and Security Agreement dated as of [___________ ___], 2003, by
the Company in favor of the ACFS Agent for the benefit of the Purchasers (as
such Assignment of Deposit Accounts and Security Agreement may be amended,
restated, supplemented or otherwise modified from time to time, the "SECURITY
AGREEMENT").
Pursuant to the Security Agreement, the Company has granted control of
the Accounts to the ACFS Agent and granted to the ACFS Agent a security interest
in the Accounts and the Company's monies, funds, checks, negotiable instruments
and any other items or property deposited and/or held in the Accounts from time
to time and all proceeds thereof (all of the foregoing hereinafter collectively
referred to as the "ACCOUNT PROPERTY") subject only to the prior perfected
security interest of the Bank Agent therein as set forth below, in each case, to
secure certain obligations and indebtedness of the Company owing to the ACFS
Agent and the Purchasers described therein. The Company hereby notifies you, and
you hereby acknowledge, that the Company has granted a security interest to the
ACFS
[NAME OF FINANCIAL INSTITUTION]
Page 2
Agent in, and control of, the Accounts and the other Account Property subject to
the rights of the Bank Agent therein as set forth below.
This letter shall become effective as of 6:00 a.m., Dallas, Texas time
(the "EFFECTIVE TIME"), on the date first written above upon execution of this
letter by each party hereto and delivery of the same to you.
The Company hereby agrees with the ACFS Agent, and you hereby
acknowledge, that (a) the Company has no power to withdraw from the Accounts
except as expressly permitted hereunder and under that certain letter agreement
between you and the Bank Agent of even date herewith (the "BANK CONTROL LETTER")
and (b) subject to the following paragraph, the ACFS Agent may, at any time by
written notice to you, terminate or suspend any and all rights of the Company
related to the Accounts.
The Company hereby irrevocably and unconditionally authorizes,
instructs and directs you to comply, and you hereby agree to comply, with all
instructions originated by the ACFS Agent with respect to the Accounts or
directing disposition of any or all monies, funds, checks, negotiable
instruments or any other items or properties in the Accounts, in each case
without joinder or further consent by the Company and as promptly after receipt
thereof as is reasonably possible so long as each such instruction is
accompanied by a written certification from ACFS Agent stating that ACFS Agent
is authorized to originate such instruction under, and in accordance with, the
Intercreditor Agreement; provided, however, that in the event of any insolvency,
bankruptcy, liquidation, reorganization or other similar proceedings or any
receivership proceedings in connection therewith, relative to the Company, the
Company hereby irrevocably and unconditionally authorizes, instructs and directs
you to comply, and you hereby agree to comply, with all instructions originated
by the ACFS Agent with respect to the Accounts or directing disposition of any
or all monies, funds, checks, negotiable instruments or any other items or
properties in the Accounts, so long as each such instruction is accompanied by a
written certification from ACFS Agent stating that a court of competent
jurisdiction has authorized ACFS Agent to originate such instruction and having
attached thereto a copy of an order of such court granting to ACFS Agent such
authority, in each case without joinder or further consent by the Company and as
promptly after receipt thereof as is reasonably possible. You are entitled to
rely upon and are authorized and directed to follow all instructions of the ACFS
Agent and you have no duty of inquiry as to the authorization or authenticity of
any such instructions so long as they are given by an individual designated by
the ACFS Agent and accompanied by either of the foregoing described
certifications.
You agree to indicate by appropriate entry in your records with respect
to the Accounts or the Account Property the security interest of the ACFS Agent
therein.
You agree to deliver copies of all bank statements which you send to
the Company (by law, agreement or otherwise) to the ACFS Agent at the address
specified herein, if so requested by the ACFS Agent in writing. You are further
authorized, and the Company
[NAME OF FINANCIAL INSTITUTION]
Page 3
hereby consents, to deliver any information requested by the ACFS Agent related
to the Accounts, with any reasonable expense therefor to be paid by the Company.
You hereby waive and release any and all rights of offset, claims or
counterclaims against, and any and all security interests, banker's liens or
similar rights in or to, the Accounts or the Account Property (whether arising
under law, agreement or otherwise) other than the security interests in the
Accounts and the Account Property and your interests therein (if any) which have
been granted to Bank Agent.
These instructions may only be modified in writing by an agreement
executed by you, the Company and the ACFS Agent; provided, however, that the
attached Account Schedule may be amended by delivery of a revised schedule from
the Company and the ACFS Agent to you. All notices hereunder shall be sent to
the following addressee:
If to the Company:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to the ACFS Agent:
American Capital Financial Services, Inc.
Two Bethesda Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Compliance Officer -- ACS/ACE
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
with a copy to:
American Capital Strategies, Ltd.
0000 Xxxx Xxx., Xxx. 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxXxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to you:
[NAME OF FINANCIAL INSTITUTION]
[ ]
----------------------------------
[ ]
----------------------------------
Attention: [ ]
----------------
Telephone No.: [ ]
------------
Facsimile No.: [ ]
------------
[NAME OF FINANCIAL INSTITUTION]
Page 4
All notices or other communications provided for hereunder shall be in
writing (including by facsimile transmission) and shall be deemed to have been
duly given or made (i) in the case of delivery by hand, when delivered, (ii) in
the case of delivery by mail, three business days (meaning a day other than
Saturday, Sunday or a day on which commercial banks in [CITY, STATE] are
authorized to close) after being deposited in the mails, postage prepaid, or
(iii) in the case of delivery by facsimile transmission, when delivered or
transmitted by facsimile machine, provided that any matter transmitted by
facsimile (a) shall be immediately confirmed by a telephone call to the
recipient at the number specified herein and (b) shall be followed promptly by a
hard copy original thereof.
Notwithstanding anything to the contrary in this letter agreement: (i)
you shall have only the duties and responsibilities with respect to the matters
set forth herein as is expressly set forth in writing herein and shall not be
deemed to be an agent, bailee or fiduciary for any party hereto; (ii) you shall
be fully protected in acting or refraining from acting in good faith without
investigation on any notice, instruction or request purportedly furnished to you
by the Company or ACFS Agent in accordance with the terms hereof, in which case
the parties hereto agree that you have no duty to make any further inquiry
whatsoever; (iii) it is hereby acknowledged and agreed that you have no
knowledge of (and are not required to know) the terms and provisions of the
Intercreditor Agreement, the Security Agreement, or any other related
documentation or whether any actions by ACFS Agent, the Company or any other
person or entity are permitted thereunder or consistent or inconsistent
therewith; (iv) you shall not be liable to any party hereto or any other person
for any action or failure to act under or in connection with this letter
agreement except to the extent such conduct constitutes your own willful
misconduct or gross negligence (and to the maximum extent permitted by law, you
shall under no circumstances be liable for any incidental, indirect, special,
consequential or punitive damages); and (v) you shall not be liable for losses
or delays caused by force majeure, interruption or malfunction of computer,
transmission or communications facilities, labor difficulties, court order or
decree, the commencement of bankruptcy or other similar proceedings or other
matters beyond your reasonable control.
The Company hereby agrees to indemnify, defend and save you harmless
against any loss, liability or expense (including reasonable fees and
disbursements of counsel who may be your employee) incurred in connection with
this letter agreement or the Accounts (except to the extent due to your willful
misconduct or gross negligence) or any interpleader proceeding relating thereto
or incurred at the Company's direction or instruction. ACFS Agent hereby agrees
to indemnify, defend and save you harmless against any loss, liability or
expense (including reasonable fees and disbursements of counsel who may be your
employee) incurred in connection with any actions taken by you under this letter
agreement with respect to the Accounts (except to the extent due to your willful
misconduct or gross negligence). ACFS Agent's and the Company's responsibilities
shall survive the termination hereof.
You hereby agree that (i) you are a "bank" within the meaning of
Section 9.102 of the Uniform Commercial Code as in effect in the State of Texas
(the "UCC"), (ii) each Account constitutes a "deposit account" within the
meaning of Section 9.102 of the UCC, (iii) this letter agreement shall
constitute an "authenticated record" for purposes of the UCC, and (iv) other
than the Bank Control Letter and the "Prior Letters" (as defined in the Bank
Control Letter), you have
[NAME OF FINANCIAL INSTITUTION]
Page 5
not entered into any agreement that grants to or confers upon any other party
control of any Account or any of the Account Property and you will not enter
into any such agreement during the term of this letter agreement, other than
such agreements regarding control of the Accounts and the other Account Property
that you may enter into after the Effective Time with Travelers; provided,
however, that you and the Company hereby further agree that (a) the interests of
each of ACFS Agent and Travelers in the Accounts and the other Account Property
are and shall at all times be subject to and subordinate to the interests of the
Bank Agent therein and (b) the interests of Travelers in the Accounts and the
other Account Property are and shall at all times be subject to and subordinate
to the interests of each of the Bank Agent and ACFS Agent therein, in each case
to the extent and in the manner provided in the Intercreditor Agreement.
Each of you and the Company hereby agrees that this letter agreement
grants to and confers upon the ACFS Agent "control" of each Account as
contemplated in Section 9.104 (and similar related provisions) of the UCC, and
the security interest in the Accounts and the other Account Property in favor of
the ACFS Agent is and shall at all times be (a) junior and inferior in right of
priority to any security interest in any Account or any other Account Property
which may have been, or hereafter be, granted to Bank Agent and (b) senior and
superior in right of priority to any security interest in any Account or any
other Account Property which may have been, or hereafter be, granted to
Travelers.
The Company and you hereby agree that no Account (i) is evidenced by an
instrument (as that term is defined in the UCC) or (ii) constitutes a securities
account or contains securities or investment property (as such terms are defined
in the UCC).
You hereby agree to comply with the restrictions, authorizations and
instructions set forth or described above in this letter agreement. Further, the
Company hereby agrees and you also acknowledge and agree that each "deposit
account" (as such term is defined in the UCC) maintained by you in the name of,
or for the benefit of, the Company and identified on the attached Account
Schedule (as amended as permitted hereunder) shall be deemed to be an Account
and shall be subject to this letter agreement in all respects.
Nothing in this letter agreement shall require you to act in violation
of any applicable laws or any court order.
This letter agreement supplements, rather than replaces, your deposit
account agreement, terms and conditions and other standard documentation in
effect from time to time with respect to the Accounts or services provided in
connection with the Accounts (the "ACCOUNT DOCUMENTATION"), which Account
Documentation will continue to apply to the Accounts and such services, and the
respective rights, powers, duties, obligations, liabilities and responsibilities
of the parties thereto and hereto, to the extent not expressly conflicting with
the provisions of this letter (however, in the event of any such conflict, the
provisions of this letter agreement shall control).
This letter agreement shall be governed in accordance with the laws of
the State of Texas. The State of Texas shall be deemed to be your location for
purposes of Section 9.304(b) of the UCC.
[NAME OF FINANCIAL INSTITUTION]
Page 6
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
[NAME OF FINANCIAL INSTITUTION]
Page 7
If the foregoing accurately sets forth our agreements with respect to
the subject matter hereof, please sign below as indicated and return a signed
copy thereof to the ACFS Agent or its legal counsel at such address as the ACFS
Agent shall provide. This letter agreement may be executed in multiple
counterparts.
Thank you.
ACE CASH EXPRESS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Approved as of the date first above written:
AMERICAN CAPITAL FINANCIAL SERVICES, INC., as ACFS Agent
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Accepted and agreed to as of the date first above written:
[NAME OF FINANCIAL INSTITUTION]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[NAME OF FINANCIAL INSTITUTION]
Page 8
Account Schedule - [NAME OF INSTITUTION]
State Account Number Account Type
----- -------------- ------------
[(1)/(2)/(3)]
----------
(1) Currency Account (the "CURRENCY ACCOUNT")
(2) Depository Account (the "DEPOSITORY ACCOUNT")
(3) Returned Items Account (the "RETURNED ITEMS ACCOUNT")
and each other "deposit account" (as such term is defined in the UCC) maintained
by [NAME OF FINANCIAL INSTITUTION] from time to time in the name of, or for the
benefit of, the Company and identified on a supplemental schedule
EXHIBIT G
[COMPANY LETTERHEAD]
_______________ ___, 2003
[NAME OF ARMORED COURIER]
[ ]
--------------------------
[ ]
--------------------------
Attn: [ ]
-----------------
Re: Custodial Arrangement
Ladies and Gentlemen:
Reference is made to that certain Intercreditor Agreement dated as of
[_____________ ___], 2003, by and among Ace Cash Express, Inc., a Texas
corporation (the "COMPANY"), Xxxxx Fargo Bank Texas, National Association, as
Administrative Agent ("BANK AGENT") for itself and all other lenders ("LENDERS")
from time to time party to the Bank Agreement (as such term is defined in the
Intercreditor Agreement), American Capital Financial Services, Inc., as Agent
("ACFS AGENT") for the purchasers ("PURCHASERS") from time to time party to the
ACFS Note Agreement (as such term is defined in the Intercreditor Agreement),
and Travelers Express Company, Inc. ("TRAVELERS") (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT").
The Company hereby notifies [NAME OF ARMORED COURIER] ("CUSTODIAL
AGENT"), and Custodial Agent hereby acknowledges, that the Company has assigned,
pledged and granted to the Bank Agent, for the benefit of Bank Agent and the
Lenders, a first priority security interest in certain property of the Company
(the "ASSETS"), including all of the Company's currency, coin, monies, funds,
checks, negotiable instruments, securities and other property and proceeds
thereof received, transported and delivered by Custodial Agent from time to time
(the "PROPERTY") in accordance with certain agreements and/or contracts from
time to time between Custodial Agent and the Company (as amended, restated,
supplemented or otherwise modified from time to time, collectively the
"CONTRACTS"; the Assets, the Property, and the Contracts are collectively
referred to herein as the "COLLATERAL") and pertaining to the store locations of
the Company as set forth on the attached schedule (the "TERRITORY"), to secure
certain obligations and indebtedness of the Company owing to the Bank Agent and
the Lenders. The Company also notifies Custodial Agent that, and Custodial Agent
hereby acknowledges that, (a) the Company has assigned, pledged and granted to
the ACFS Agent, for the benefit of ACFS Agent and the Purchasers, a second
priority security interest in the Collateral to secure certain obligations and
indebtedness of the Company owing to the ACFS Agent and the Purchasers and (b)
the Company has assigned, pledged and granted to Travelers a third priority
security interest in the Collateral to secure certain obligations and
indebtedness of the Company owing to Travelers. Bank Agent, ACFS Agent, and
Travelers are collectively referred to herein as the "SECURED PARTIES" and each
individually as a "SECURED PARTY".
[NAME OF ARMORED COURIER]
Page 2
WITH RESPECT TO ANY AND ALL INSTRUCTIONS CUSTODIAL AGENT MAY RECEIVE
FROM ANY SECURED PARTY, THIS LETTER AGREEMENT, EFFECTIVE AS OF THE EFFECTIVE
DATE (AS HEREINAFTER DEFINED), SUPERSEDES ALL PRIOR LETTERS OF INSTRUCTION TO
WHICH CUSTODIAL AGENT IS A PARTY OR WHICH HAVE BEEN DELIVERED TO CUSTODIAL AGENT
BY THE COMPANY ("PRIOR LETTERS"), BUT EXPRESSLY EXCLUDING LETTERS DELIVERED BY
ACE FUNDING, LLC WHICH SHALL REMAIN IN EFFECT.
This letter shall become effective as of the date first written above
(the "EFFECTIVE DATE") upon execution of this letter by each party hereto and
delivery of the same to Custodial Agent.
1. Notwithstanding any provision to the contrary contained in the
Contracts:
(a) Custodial Agent is hereby irrevocably authorized and directed by
the Company, upon the request of any Secured Party or its designee (as any
Secured Party may direct) delivered in accordance with Paragraph 3 hereof, to
deliver to any Secured Party or its designee (as any Secured Party may direct),
to such location or locations in the Territory as may be specified by any
Secured Party or its designee (as any Secured Party may direct), any and all
Property and other Collateral then and thereafter received, transported and
delivered by Custodial Agent pursuant to the Contracts; provided, however, that
in the event of any insolvency, bankruptcy, liquidation, reorganization or other
similar proceedings or any receivership proceedings in connection therewith,
relative to the Company, Custodial Agent is hereby irrevocably authorized and
directed by the Company, to deliver to such persons any and all Property and
other Collateral then and thereafter received, transported and delivered by
Custodial Agent pursuant to the Contracts as may be directed in writing by any
Secured Party so long as each such written direction is accompanied by a written
certification from such Secured Party stating that a court of competent
jurisdiction has authorized such Secured Party to issue such written direction
and having attached thereto a copy of an order of such court granting to such
Secured Party such authority. Custodial Agent acknowledges and agrees to comply
(i) with the preceding authorization and direction from the Company, (ii) with
any such request or instruction from any Secured Party or its designee (as any
Secured Party may direct), and (iii) with any such written direction from any
Secured Party, in each case delivered in accordance with Paragraph 3 hereof. The
Company and each Secured Party agrees that Custodial Agent shall incur no
liability whatsoever to the Company or any Secured Party in acting upon any
request or instruction which Custodial Agent reasonably believes to have been
given in the manner provided in Paragraph 3 by an authorized representative of
any Secured Party. Instructions of any Secured Party or its designee (as any
Secured Party may direct) shall control, and, except as permitted by any Secured
Party or its designee (as any Secured Party may direct) below in this letter
agreement or otherwise in writing, the Company shall not have any right or
authority whatsoever to instruct Custodial Agent with respect to the Property or
any other Collateral.
(b) The Company shall pay directly to Custodial Agent all costs and
expenses payable to Custodial Agent pursuant to the Contracts, including any
additional cost or expense which Custodial Agent shall require if Custodial
Agent is directed by any Secured Party to perform any service additional to or
different from the services specifically set forth in the Contracts.
[NAME OF ARMORED COURIER]
Page 3
Custodial Agent hereby waives and releases any and all rights of offset or
counterclaim against, and any and all carrier's liens, security interests or
similar rights in, the Property or the other Collateral which Custodial Agent
may have by reason of the Contracts or otherwise, except to the extent necessary
to pay Custodial Agent the fees and expenses due under the Contracts.
(c) This letter agreement shall not be modified or amended without the
prior written consent of Custodial Agent, each Secured Party and the Company. It
is expressly agreed that the Contracts may be amended to add thereto or to
delete therefrom a location by an amendment duly executed by Custodial Agent and
the Company, and that the Contracts as amended shall thereafter continue in full
force and effect. This letter agreement shall apply to the Contracts as amended.
The Company shall notify each Secured Party of any and all such amendments and
will provide copies thereof upon written request from any Secured Party.
(d) Custodial Agent hereby acknowledges that the Bank Agent, for its
benefit and the benefit of the Lenders, has been granted by the Company, and
that the Bank Agent, for its benefit and the benefit of the Lenders, currently
holds, a first priority security interest in the Collateral. Custodial Agent
hereby acknowledges that the ACFS Agent, for its benefit and the benefit of the
Purchasers, has been granted by the Company, and that the ACFS Agent, for its
benefit and the benefit of the Purchasers, currently holds, a second priority
security interest in the Collateral, subject in all cases to the prior security
interest of the Bank Agent, for its benefit and the benefit of the Lenders.
Custodial Agent hereby acknowledges that Travelers has been granted by the
Company, and that Travelers currently holds, a third priority security interest
in the Collateral, subject in all cases to the prior security interest of the
Bank Agent, for its benefit and the benefit of the Lenders, and the prior
security interest of ACFS Agent, for its benefit and the benefit of the
Purchasers. Custodial Agent agrees that at all times during which Custodial
Agent is in possession of any and all Property or other Collateral, Custodial
Agent shall maintain possession of and hold such Property and such other
Collateral for the benefit of Bank Agent, for its benefit and the benefit of the
Lenders, ACFS Agent, for its benefit and the benefit of the Purchasers, and
Travelers.
(e) Custodial Agent agrees that if any Secured Party succeeds to the
interest of the Company in the Contracts by means of enforcement of its security
interest or otherwise, Custodial Agent shall, upon notice to Custodial Agent
from such Secured Party in accordance with Paragraph 3 below of such succession
of interest, accept, recognize and treat such Secured Party, and its
transferees, successors and/or assigns, as a party to the Contracts in the name
and stead of the Company and shall continue to perform all obligations of
Custodial Agent under the Contracts as long as the obligations of the Company
are similarly satisfied by such Secured Party, or its transferees, successors
and/or assigns (including the payment of amounts owed to Custodial Agent
pursuant to the Contracts) and as long as the Contracts otherwise remain in
effect.
(f) Custodial Agent agrees to provide each Secured Party with such
information and records relating solely to the performance of the Contracts as
such Secured Party may reasonably request from time to time; provided that,
Custodial Agent shall furnish to the Company a copy of all such information and
records which are so provided to any Secured Party. The Company agrees to
reimburse Custodial Agent for any additional costs and expenses incurred in
providing such information to the Secured Parties.
[NAME OF ARMORED COURIER]
Page 4
(g) In the event of loss of the Property, Custodial Agent's liability
shall be governed by the terms of the Contracts, provided that either the
Secured Parties or the Company (as agent for the Secured Parties) shall have the
right to present a claim to Custodial Agent for loss reimbursement in the manner
specified and allowed under the terms of the Contracts. Until this letter
agreement shall have been terminated, notwithstanding the terms of the
Contracts, any loss reimbursement for $25,000 or more shall be made payable to
any Secured Party or its designee (as any Secured Party may direct), unless
Custodial Agent is expressly directed in writing by any Secured Party or its
designee (as any Secured Party may direct) to make such loss reimbursement
payable directly to the Company. Any loss reimbursement for less than $25,000
may be made payable to the Company, provided that any loss reimbursement paid
after any Secured Party or its designee (as any Secured Party may direct) has
delivered a notice to Custodial Agent directing disposition of the Property as
provided in Paragraph 1(a) above or Paragraph 2(c) below shall be made payable
to the Secured Parties.
(h) Custodial Agent shall have no liability in the event of any dispute
involving ownership of the Property or any other matter relating to this letter
agreement other than Custodial Agent's nonperformance of its agreements and
obligations set forth herein, and the Company agrees to indemnify and hold
Custodial Agent harmless from liability relating to a dispute over ownership of
the Property, unless such claim is the result of Custodial Agent's gross
negligence or willful misconduct. The Company agrees to pay all court costs and
reasonable attorneys' fees which Custodial Agent may incur as a result of any
such dispute, provided that such dispute or any claim arising therefrom is not
the result of Custodial Agent's nonperformance of its obligations set forth
herein or its gross negligence or willful misconduct.
2. Subject to the terms of Paragraph 1 above:
(a) Custodial Agent shall continue, pursuant to the Contracts, to pick
up sealed shipments said or represented to contain currency from the financial
institution set forth on the attached schedule ("DESIGNATED LOCAL BANK") for
delivery to the retail stores of the Company (the "STORES") in the Territory.
The sealed shipments shall be delivered by Custodial Agent to the Stores
specifically designated by the Company, but (notwithstanding any provision of
the Contracts to the contrary) no shipment shall be delivered to any location
other than one or more of the Stores. Notwithstanding any provision of the
Contracts to the contrary, only shipments said or represented to contain only
the Company employee payroll checks and/or mail (including the Company's
internal correspondence) may be delivered to the regional office or offices of
the Company in the Territory.
(b) Furthermore, Custodial Agent shall continue to pick up sealed
shipments said to contain all excess cash, checks, drafts and other instruments
that are made available to Custodial Agent at the Stores and shall deliver them
only to the Designated Local Bank pursuant to the Contracts.
(c) The instructions contained in this Paragraph 2 may be revoked at
any time by notice to that effect by an authorized representative of any Secured
Party or its designee (as any Secured Party may direct) given to Custodial Agent
in accordance with Paragraph 3 of this letter.
[NAME OF ARMORED COURIER]
Page 5
3. All requests, instructions and notices to be given pursuant to this
letter agreement shall be sent to the following addressee:
If to the Company:
Ace Cash Express, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
If to Custodial Agent:
[NAME OF CUSTODIAL AGENT]
[ ]
----------------------------------
[ ]
----------------------------------
Attention: [ ]
----------------
Telephone No.: [ ]
----------
Facsimile No.: [ ]
---------
If to the Bank Agent:
Xxxxx Fargo Bank Texas, National Association
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone No.: 000 000-0000
Facsimile No.: 000 000-0000
If to the ACFS Agent:
American Capital Financial Services, Inc.
Two Bethesda Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Compliance Officer -- ACS/ACE
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
with a copy to:
American Capital Strategies, Ltd.
0000 Xxxx Xxx., Xxx. 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxXxxxxx
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
[NAME OF ARMORED COURIER]
Page 6
If to Travelers:
Travelers Express Company, Inc.
0000 Xxxxx Xxx. Xxxxx XX 8020
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Legal Counsel
Telephone No.: 000 000 0000
Facsimile No.: 000 000 0000
Unless provided otherwise in this paragraph, all requests, instructions
and notices provided for hereunder shall be in writing (including by facsimile
transmission) and shall be deemed to have been duly given or made (i) in the
case of delivery by hand, when delivered, (ii) in the case of delivery by mail,
three business days (meaning a day other than Saturday, Sunday or a day on which
commercial banks in [CITY, STATE] are authorized to close) after being deposited
in the mails, postage prepaid, or (iii) in the case of delivery by facsimile
transmission, when delivered or transmitted by facsimile machine. All requests,
instructions and notices to be given to Custodial Agent by any Secured Party
hereunder may (a) be oral but shall not be binding until confirmed in writing,
provided that such Secured Party delivers written confirmation of such request,
instruction or notice, as provided in the preceding sentence, within one
business day after such oral request, instruction or notice and provided further
than notwithstanding anything to the contrary contained herein, the Custodial
Agent may immediately rely on such oral notice without liability to the Company
and, (b) in the absence of Custodial Agent's representative named herein, may be
given to the Branch Manager or, in his or her absence, an Assistant Branch
Manager, of the Designated Local Bank as set forth on the attached schedule.
Custodial Agent and Designated Local Bank may rely upon oral instructions from
any Secured Party, pending written confirmation, without liability to the
Company. Custodial Agent shall comply with any request, instruction or notice as
promptly after receipt thereof as is reasonably possible.
4. The information set forth on the attached schedule may be amended by
the Company delivering a revised schedule to Bank Agent, ACFS Agent, Travelers,
and Custodial Agent.
5. By accepting this letter agreement, Custodial Agent represents that
the Contracts are in full force and effect and that Custodial Agent will not
amend the Contracts in any manner except in accordance with paragraph 1(c).
Custodial Agent agrees that the Contracts will not be terminated without at
least ten (10) days' prior written notice to the Secured Parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
[NAME OF ARMORED COURIER]
Page 7
If the foregoing accurately sets forth our agreements with respect to
the subject matter hereof, please sign below as indicated and return a signed
copy thereof to the Bank Agent or its legal counsel at such address as the Bank
Agent shall provide. This letter agreement may be executed in multiple
counterparts.
Yours very truly,
ACE CASH EXPRESS, INC.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Approved as of the date first above written:
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, as Bank Agent
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
AMERICAN CAPITAL FINANCIAL SERVICES, INC., as ACFS Agent
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
TRAVELERS EXPRESS COMPANY, INC., as Travelers
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Accepted and agreed to as of the date first above written:
[NAME OF ARMORED COURIER]
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
[NAME OF ARMORED COURIER]
Page 8
[NAME OF ARMORED COURIER]
[DATE OF SCHEDULE]
Store Number City & State Designated Local Bank and Contact Information
------------ ------------ ---------------------------------------------
EXHIBIT H
TO
NOTE PURCHASE AGREEMENT
FORM OF
COMPLIANCE CERTIFICATE
Date: ______________, _______
This certificate is given by ACE CASH EXPRESS, INC. (the "Company")
pursuant to that certain Note Purchase Agreement, dated as of March 31, 2003,
among Company, the purchasers signatory thereto and American Capital Financial
Services, Inc., as administrative agent for the purchasers (in such capacity,
the "Agent"), as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time (the "Purchase Agreement"). Capitalized
terms used herein without definition shall have the meanings set forth in the
Purchase Agreement.
The officer executing this certificate is the chief financial officer
of the Company and as such is duly authorized to execute and deliver this
certificate on behalf of the Company. By executing this certificate such officer
hereby certifies to Agent that:
(a) the financial statements delivered with this certificate in
accordance with Section 7.1(e) of the Purchase Agreement fairly present in all
material respects the consolidated financial condition of the Company as of the
dates of such financial statements;
(b) he has reviewed the terms of the Purchase Agreement and the
Notes and have made, or caused to be made under my supervision, a review in
reasonable detail of the transactions and conditions of the Company during the
accounting period covered by such financial statements;
(c) such review has not disclosed the existence during or at the
end of such accounting period, and he has no knowledge of the existence, as of
the date hereof, of any condition or event that constitutes a Default or an
Event of Default, [except as set forth in Exhibit A hereto which includes a
description of the nature and period of existence of such Default or an Event of
Default and what action the Company has taken, are undertaking and propose to
take with respect thereto]; and
(d) the Company is in compliance with the covenants contained in
Section 7.3 of the Purchase Agreement, as demonstrated below, except as set
forth below or described in Exhibit A attached hereto.
IN WITNESS WHEREOF , the Company has caused this Certificate to be
executed by its ______________________ this ____ day of ____________, _____.
ACE CASH EXPRESS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT I
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this "Agreement") dated as of March 31,
2003 is by and among ACE CASH EXPRESS, INC., a Texas corporation (the "Debtor"),
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION, a national banking association
("WFB"), as Administrative Agent (WFB in such capacity, the "Bank Agent") for
the lenders from time to time a party to the Bank Agreement (as hereinafter
defined), AMERICAN CAPITAL FINANCIAL SERVICES, INC., a Delaware corporation
("ACFS"), as Administrative Agent (ACFS in such capacity, the "ACFS Agent") for
the purchasers time to time party to the ACFS Note Agreement (as hereinafter
defined), TRAVELERS EXPRESS COMPANY, INC., a Minnesota corporation, on behalf of
itself and MoneyGram Payment Systems, Inc., and Moneyline Express, Inc.,
(collectively, "Travelers").
WITNESSETH:
WHEREAS, the Debtor, Bank Agent, certain other parties in other
capacities, and certain lenders (the "Lenders") have entered into that certain
Credit Agreement of even date herewith (as amended, supplemented, restated or
otherwise modified from time to time, the "Bank Agreement");
WHEREAS, the Debtor, ACFS Agent and certain purchasers (the
"Purchasers") have entered into that certain Note Purchase Agreement of even
date herewith (as amended, supplemented, restated or otherwise modified from
time to time, the "ACFS Note Agreement");
WHEREAS, the Debtor and Travelers have entered into that certain Money
Order Agreement dated April 16, 1998, pursuant to which Travelers has agreed to
serve as Debtor's money order supplier (as amended, supplemented, restated or
otherwise modified from time to time, the "Money Order Agreement"), the Debtor
and Travelers have entered into that certain Money Transfer Agreement dated June
30, 2000, pursuant to which Travelers has agreed to serve as Debtor's money
transfer service supplier (as amended, supplemented, restated or otherwise
modified from time to time, the "Money Transfer Agreement"), and the Debtor and
Travelers have entered into that certain Xxxx Payment Processing and Funds
Transfer Services Agreement dated April 1, 1998, pursuant to which Travelers has
agreed to serve as Debtor's xxxx payment processing supplier (as amended,
supplemented, restated or otherwise modified from time to time, the "Xxxx
Payment Agreement", and together with the Money Order Agreement and the Money
Transfer Agreement, the "Travelers Agreements");
WHEREAS, the Debtor has entered into that certain Assignment of Deposit
Accounts and Security Agreement of even date herewith in favor of the Bank Agent
for the benefit of the Bank Agent and the Lenders (as from time to time amended,
supplemented, restated or otherwise modified, the "Bank Security Agreement"),
pursuant to which the Debtor has assigned certain of its deposit accounts and
granted a first priority security interest in certain of its assets to Bank
Agent for the benefit of the Bank Agent and the Lenders as collateral security
for its obligations to Bank Agent and Lenders under the Credit Documents;
WHEREAS, the Debtor has entered into that certain Assignment of Deposit
Accounts and Security Agreement of even date herewith in favor of the ACFS Agent
for the benefit of the ACFS Agent and the Purchasers (as from time to time
amended, supplemented, restated or otherwise modified, the "ACFS Security
Agreement"), pursuant to which, subject to the security interests granted under
the Bank Security Agreement, the Debtor has assigned certain of its deposit
accounts and granted a second priority security interest in certain of its
assets to ACFS Agent for the benefit of the ACFS Agent and the Purchasers as
collateral security for its obligations to ACFS Agent and the Purchasers under
the ACFS Note Agreement;
WHEREAS, the Debtor has entered into that certain Assignment of Deposit
Accounts and Security Agreement of even date herewith in favor of Travelers (as
from time to time amended, supplemented, restated or otherwise modified, the
"Travelers Security Agreement"; the Bank Security Agreement, the ACFS Security
Agreement, and the Travelers Security Agreement, as each may be amended,
supplemented, restated, or otherwise modified from time to time, are
collectively referred to herein as the "Security Agreements" and each
individually as a "Security Agreement"), pursuant to which, subject to the
security interests granted under the Bank Security Agreement and the ACFS
Security Agreement, the Debtor has assigned certain of its deposit accounts and
granted a third priority security interest in certain of its assets to Travelers
as collateral security for its obligations under the Travelers Agreements;
WHEREAS, it is a condition precedent to the extension of credit under
the Bank Agreement and the ACFS Note Agreement that the Debtor, Bank Agent (on
behalf of itself and the Lenders), ACFS Agent (on behalf of itself and the
Purchasers), and Travelers enter into this Agreement, pursuant to which:
(a) ACFS Agent shall, on behalf of itself and the Purchasers,
subordinate all security interests and liens securing the obligations
of the Debtor and its Subsidiaries (as hereinafter defined) owing to
them (whether granted under the ACFS Security Agreement or otherwise)
to all security interests and liens securing the obligations of the
Debtor and its Subsidiaries owing to Bank Agent and the Lenders
(whether granted under the Bank Security Agreement or otherwise);
(b) Travelers shall subordinate all security interests and
liens securing the obligations of the Debtor and its Subsidiaries owing
to Travelers (whether under the Travelers Security Agreement or
otherwise) to all security interests and liens securing the obligations
of the Debtor and its Subsidiaries owing to Bank Agent and the Lenders
(whether granted under the Bank Security Agreement or otherwise) and
ACFS Agent and the Purchasers (whether granted under the ACFS Security
Agreement or otherwise); and
(c) The Bank Agent, on behalf of itself and the Lenders, ACFS
Agent, on behalf of itself and the Purchasers, and Travelers, shall
establish the relative payment priority of all obligations now or
hereafter owing by the Debtor and/or its Subsidiaries to them.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, in order to induce the Lenders under the Bank
Agreement, and the Purchasers under the ACFS Note Agreement, to extend credit
thereunder, and in order to induce Travelers to
2
perform its obligations under the Travelers Agreements, the parties hereto,
intending to be legally bound, agree as follows:
SECTION 1
DEFINITIONS AND OTHER MATTERS
(a) As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"ACE Funding" shall mean shall mean ACE Funding, LLC, a Delaware
limited liability company.
"ACFS Agent" shall mean American Capital Financial Services, Inc., a
Delaware corporation, in its capacity as Administrative Agent under the ACFS
Note Agreement, and its successors and assigns in such capacity.
"ACFS Event of Default" shall have the meaning attributed to the term
"Event of Default" in Section 1.1 of the ACFS Note Agreement.
"ACFS Financial Covenant Default" shall mean an ACFS Event of Default
occurring as a result of a violation by the Debtor of Section 7.3(a), (b), (c),
or (d) of the ACFS Note Agreement.
"ACFS Note Agreement" shall have the meaning set forth in the recitals
to this Agreement.
"ACFS Notes" shall the "Notes" as such term is defined in Section 1.1
of the ACFS Note Agreement as in effect on the date hereof.
"ACFS Obligations" shall mean all obligations, liabilities and
indebtedness of each of the Debtor and its Subsidiaries to the Purchasers or
their Affiliates and the ACFS Agent arising under or in connection with the ACFS
Note Agreement or any other document or instrument executed in connection
therewith, and all obligations, liabilities and indemnities of the Debtor and
its Subsidiaries under or in respect of any Hedging Contract entered into by the
Debtor or any of its Subsidiaries with any Purchaser or any Affiliate of any
Purchaser, whether now existing or hereafter created, direct or indirect,
matured or unmatured, liquidated or unliquidated, primary or secondary, due or
not, including without limitation all of their respective obligations,
liabilities and indebtedness with respect to the principal of and interest on
the ACFS Notes (including but not limited to interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization, or like proceeding relating to the Debtor or any of its
Subsidiaries, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), and the payment or performance of all other
obligations, liabilities, and indebtedness owed by any of them to the Purchasers
or their Affiliates and the ACFS Agent thereunder or under any one or more
documents or instruments executed and delivered in connection therewith or any
Hedging Contract entered into by the Debtor or any of its Subsidiaries with any
Purchaser or any Affiliate of any Purchaser, including without limitation all
fees, costs, expenses and indemnity obligations thereunder.
3
"ACFS Principal Balance" shall mean, as of any date of determination,
an amount equal to the then outstanding unpaid principal balance of the ACFS
Notes plus the then outstanding amount of any Additional Permitted Term Loans.
"ACFS Principal Payments" shall mean any payments of principal on the
ACFS Notes.
"Actionable Default" shall mean:
(i) with respect to Bank Agent and Lenders, that a Bank Event
of Default has occurred and is continuing;
(ii) with respect to ACFS Agent and Purchasers, that an ACFS
Event of Default has occurred and is continuing; or
(iii) with respect to Travelers, that a Travelers Event of
Default has occurred and is continuing and, as a result thereof, there
has been a termination by Travelers of the Money Order Agreement.
"Additional Permitted Term Loans" shall mean one or more term loans
made after the date hereof by the Purchasers in an aggregate principal amount
not to exceed $15 million.
"Advance Request" shall mean a written request substantially in the
form of Exhibit D to the Bank Agreement delivered by the Debtor to Bank Agent in
accordance with the Bank Agreement, pursuant to which the Debtor requests
Advances, and, if requested by Bank Agent, certifies the Debtor's compliance
with the financial covenants set forth in the Bank Agreement.
"Advances" shall mean the Loans from time to time advanced to the
Debtor pursuant to Advance Requests delivered by the Debtor to Bank Agent in
accordance with the Bank Agreement, which Advances shall be for the purposes
permitted by Section 3.13 of the Bank Agreement as in effect on the date hereof.
Any loan or advance made to the Debtor pursuant to an Advance Request shall be
an Advance and Bank Agent shall have no obligation or duty to any Person to
verify or review the accuracy of the information contained in such Advance
Request.
"Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by or is under common
control with such Person.
"Agreement" shall mean this Intercreditor Agreement, as it may be
amended, restated or otherwise modified from time to time.
"Bank Agent" shall mean WFB and any successor Administrative Agent
appointed pursuant to the terms of the Bank Agreement.
"Bank Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Bank Event of Default" shall have the meaning attributed to the term
"Event of Default" set forth in Article VII of the Bank Agreement.
4
"Bank Financial Covenant Default" shall mean a Bank Event of Default
occurring as a result of a violation by the Debtor of Section 6.07. 6.08, 6.09,
or 6.10 of the Bank Agreement.
"Bank Obligations" shall mean all obligations, liabilities and
indebtedness of each of the Debtor and its Subsidiaries to the Lenders or their
Affiliates and the Bank Agent arising under or in connection with the Bank
Agreement or any other document or instrument executed in connection therewith,
and all obligations, liabilities and indemnities of the Debtor and its
Subsidiaries under or in respect of any Hedging Contract entered into by the
Debtor or any of its Subsidiaries with any Lender or any Affiliate of any
Lender, whether now existing or hereafter created, direct or indirect, matured
or unmatured, liquidated or unliquidated, primary or secondary, due or not,
including without limitation all of their respective obligations, liabilities
and indebtedness with respect to the principal of and interest on the Revolving
Credit Loans and the Seasonal Revolving Credit Loans (including but not limited
to interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization, or like proceeding relating to
the Debtor or any of its Subsidiaries, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), all fees payable to the
Bank Agent and the Lenders under the Bank Agreement, drawings under any letter
of credit issued under the Bank Agreement, contingent obligations in respect of
undrawn amounts under any letter of credit issued under the Bank Agreement, and
the payment or performance of all other obligations, liabilities, and
indebtedness owed by any of them to the Lenders or their Affiliates and the Bank
Agent thereunder or under any one or more documents or instruments executed and
delivered in connection therewith (including without limitation the other Credit
Documents) or with any letter of credit issued under the Bank Agreement or
Hedging Contract entered into by the Debtor or any of its Subsidiaries with any
Lender or any Affiliate of any Lender, including without limitation all fees,
costs, expenses and indemnity obligations thereunder.
"Bank Payment Default" shall mean a Bank Event of Default occurring
under clause (a) or clause (b) of Article VII of the Bank Agreement.
"Bankruptcy Code" shall mean the federal Bankruptcy Code, as amended
from time to time.
"Beneficiary" shall mean Bank Agent, for its benefit and the ratable
benefit of the Lenders, each Lender, ACFS Agent, for its benefit and the ratable
benefit of the Purchasers, each Purchaser, each Affiliate of a Lender or a
Purchaser that is a party to a Hedging Contract with the Debtor, and Travelers.
"Beneficiary Agreement" shall mean the Bank Agreement, the ACFS Note
Agreement, the Travelers Agreements, and any Hedging Contract entered into by
the Debtor or any of its Subsidiaries with any Beneficiary or any Affiliate of
any Beneficiary.
"Xxxx Payment Agreement" shall have the meaning given to such term in
the recitals to this Agreement.
"Borrowing Base" shall have the meaning set forth in Section 1.01 of
the Bank Agreement as in effect on the date hereof.
5
"Borrowing Base Report" shall have the meaning set forth in Section
1.01 of the Bank Agreement as in effect on the date hereof.
"Borrowing Notice" shall mean a notice in the form of Exhibit D to the
Bank Agreement as in the effect on the date hereof.
"Business Day" shall mean any day excluding Saturday, Sunday and any
day which is a legal holiday under the law of the State of Texas or is a day on
which banking institutions located in such State are required or authorized by
law or other governmental action to close.
"Collateral" means (a) all "Collateral" as set forth in each Security
Agreement, (b) all "Collateral" as set forth in any other Security Document, and
(c) all security interests, liens or charges in, upon, or against any other
property or assets of the Debtor or its Subsidiaries (other than ACE Funding)
arising under the Uniform Commercial Code of any state or under any other law in
favor of any Beneficiary securing any portion of the Obligations or the Secured
Debt, whether or not on property of the Debtor, and any guarantees in favor of
any Beneficiary by any Person guaranteeing the payment or performance of any
portion of the Obligations or the Secured Debt.
"Collateral Agency Agreement" shall mean that certain Collateral Agency
Agreement of even date herewith among the Debtor, Collateral Agent, Bank Agent,
ACFS Agent, and Travelers, as the same may from time to time be amended,
supplemented, restated, or otherwise modified.
"Collateral Agent" shall mean Wilmington Trust Company, in its capacity
as collateral agent under the Collateral Agency Agreement, and its successors
and assigns in such capacity.
"Debt Instrument" shall mean any promissory note or other instrument,
document or agreement evidencing any Secured Debt.
"Debtor" shall mean Ace Cash Express Inc., a Texas corporation, and its
successors and assigns.
"Enforcement Action" shall mean (a) with respect to Bank Agent or any
of the Lenders, (i) the acceleration by Bank Agent or any of the Lenders of all
or any portion of the Bank Obligations, (ii) the commencement by the Bank Agent
or any of the Lenders, after the occurrence of a Bank Event of Default, of the
exercise of any of their respective rights under the Bank Agreement, the Bank
Security Agreement, or the other Security Documents executed by the Debtor or
its Subsidiaries (other than ACE Funding) for the benefit of Bank Agent or any
Lender against the Collateral, (iii) the commencement or exercise by Bank Agent
or any of the Lenders of any other right, remedy or enforcement action (whether
at law or in equity) available upon the occurrence of a Bank Event of Default or
(iv) the initiation by Bank Agent or any of the Lenders of an Insolvency
Proceeding against the Debtor or any of its Subsidiaries or any of their
respective assets; (b) with respect to ACFS Agent or any of the Purchasers, (i)
the acceleration by ACFS Agent or any of the Purchasers of all or any portion of
the ACFS Obligations, (ii) the commencement by ACFS Agent or any of the
Purchasers, after the occurrence of an ACFS Event of Default, of the exercise of
any of their respective rights under the ACFS Note Agreement, the ACFS Security
Agreement, or the other Security Documents executed by the Debtor or its
6
Subsidiaries (other than ACE Funding) for the benefit of the ACFS Agent or any
Purchaser against the Collateral, (iii) the commencement or exercise by ACFS
Agent or any of the Purchasers of any other right, remedy or enforcement action
(whether at law or in equity) available upon the occurrence of a ACFS Event of
Default or (iv) the initiation by ACFS Agent or any of the Purchasers of an
Insolvency Proceeding against the Debtor or any of its Subsidiaries or any of
their respective assets; or (c) with respect to Travelers, (i) the acceleration
by Travelers of all or any portion of the Travelers Obligations, (ii) the
commencement by Travelers, after the occurrence of a Travelers Event of Default,
of the exercise of any of its rights under the Travelers Agreements, the
Travelers Security Agreement, or the other Security Documents executed by the
Debtor or its Subsidiaries (other than ACE Funding) for the benefit of Travelers
against the Collateral, (iii) the commencement or exercise by Travelers of any
other right, remedy or enforcement action (whether at law or in equity)
available upon the occurrence of a Travelers Event of Default or (iv) the
initiation by Travelers of an Insolvency Proceeding against the Debtor or any of
its Subsidiaries or any of their respective assets. "Enforcement Actions" shall
include, without limitation, the delivery to the Collateral Agent of
instructions in accordance with the Collateral Agency Agreement and the terms of
this Agreement and shall exclude all actions by Travelers to terminate, or the
termination of, the Travelers Agreements or any action by Travelers to disable,
or the disablement of, any equipment used by the Debtor pursuant to the
Travelers Agreements.
"Enforcement Notice" shall mean a written notice from any of (i) Bank
Agent to ACFS Agent and Travelers certifying that an Actionable Default under
clause (i) of the definition thereof has occurred and is continuing and that
Bank Agent intends to commence Enforcement Actions; (ii) ACFS Agent to Bank
Agent and Travelers certifying that an Actionable Default under clause (ii) of
the definition thereof has occurred and is continuing and that ACFS Agent
intends to commence Enforcement Actions; or (iii) Travelers to Bank Agent and
ACFS Agent certifying that an Actionable Default under clause (iii) of the
definition thereof has occurred and is continuing and that Travelers intends to
commence Enforcement Actions.
"Excess Cash Flow Prepayments" shall mean mandatory prepayments of
principal on the ACFS Notes required pursuant to Section 3.5(b)(iv) of the ACFS
Note Agreement as in effect on the date hereof.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" shall mean each guaranty executed by any of the Debtor's
Subsidiaries (excluding ACE Funding) for the benefit of any Beneficiary, each of
which is identified on Schedule 1 to this Agreement.
"Hedging Contract" shall mean (a) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases involving
interest rates, commodities or commodity prices, equities, currencies, bonds, or
indexes based on any of the foregoing, (b) any option, futures, or forwarded
contract traded on an exchange, and (c) any other derivative agreement or other
similar agreement or arrangement.
7
"Insolvency Event" shall mean occurrence of any of the following:
(a) the Debtor or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (b) below, (iii) apply for or consent to the appointment of a
receiver, collateral agent, custodian, sequestrator, conservator or
similar official for the Debtor or any Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) take any
action for the purpose of effecting any of the foregoing, or (vii)
shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due;
(b) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Debtor or any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, collateral agent, custodian, sequestrator, conservator or
similar official for the Debtor or any Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition
shall continue undismissed for 45 days or an order or decree approving
or ordering any of the foregoing shall be entered; or
(c) any other marshalling of assets of the Debtor or any of
its Subsidiaries.
"Insolvency Proceeding" shall have the meaning given to such term in
Section 5.1(f) hereof.
"Lenders" shall have the meaning set forth in the recitals to this
Agreement.
"Letter of Credit" shall have the meaning given to such term in Section
1.1 of the Bank Agreement as in effect on the date hereof.
"Loans" shall mean the Revolving Credit Loans and the Seasonal
Revolving Credit Loans.
"Majority Holders" shall mean, as of any date, subject to the following
sentence, the Beneficiary or Beneficiaries holding more than 66 2/3% of the
aggregate unpaid principal amount of the Secured Debt. For purposes of
determining Majority Holders, all of the Lenders shall be deemed to have taken
or be bound by any action approved by Bank Agent and all of the Purchasers shall
be deemed to have taken or be bound by any action approved by ACFS Agent.
"Mandatory Holders" shall mean, as of any date, Bank Agent, ACFS Agent,
and Travelers.
8
"Maximum Advances" shall mean, as of any date of determination, the
lesser of (a) the Total Commitment then available to Debtor or (b) the sum of
(i) the outstanding amount of all extensions of credit made by the Lenders
pursuant to any Borrowing Notice (without waiver or amendment) delivered by the
Debtor pursuant to the Bank Agreement, as in effect on the date hereof, plus
(ii) $5,000,000.
"Money Order Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Money Orders" shall mean money orders provided to Debtor pursuant to
the Money Order Agreement.
"Money Transfer Agreement" shall have the meaning given to such term in
the recitals to this Agreement.
"Obligations" shall mean and include, collectively, the Bank
Obligations, the ACFS Obligations, the Travelers Obligations, and all other
obligations secured by any Security Document.
"Payment Blockage Notice" shall mean a written notice from Bank Agent
to ACFS Agent (with a copy to Travelers) stating that (i) a Bank Payment Default
has occurred and is continuing and, as a result thereof, the Debtor and its
Subsidiaries shall not be permitted to make, and ACFS Agent and the Purchasers
shall not be permitted to accept or receive, payments on the ACFS Obligations as
set forth in Section 6.1(a), (ii) a Bank Financial Covenant Default has occurred
and is continuing and, as a result thereof, the Debtor and its Subsidiaries
shall not be permitted to make, and ACFS Agent and the Purchasers shall not be
permitted to accept or receive, Excess Cash Flow Prepayments as set forth in
Section 6.1(b) hereof, or (iii) that an ACFS Financial Covenant Default has
occurred and is continuing, and, as a result thereof, Debtor and its
Subsidiaries shall not be permitted to make, and ACFS Agent and the Purchasers
shall not be permitted to accept or receive, any ACFS Principal Payments until
the date specified in Section 6.1(c) hereof.
"Person" shall mean any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity.
"Proceeds" shall have the meaning ascribed to it in Section 9-306(a) of
the Uniform Commercial Code as in effect in the State of Texas and, whether or
not constituting proceeds under such section, shall include, but shall not be
limited to, (i) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority, and (iii) any and all other amounts
from time to time paid or payable to the Debtor upon the sale, exchange,
collection or other disposition of any part of the Collateral.
9
"Responsible Officer" shall mean, with respect to any Person (other
than individuals and Governmental Authorities), the chief executive officer, the
president, the chief financial officer or the chief accounting officer of such
Person.
"Revolving Credit Loans" shall have the meaning set forth in Section
1.01 of the Bank Agreement as in effect on the date hereof, and shall include
the revolving credit loans to be made by Lenders to Debtor pursuant to Section
2.01 of the Bank Agreement as in effect on the date hereof.
"Seasonal Revolving Credit Loans" shall have the meaning set forth in
Section 1.01 of the Bank Agreement as in effect on the date hereof, and shall
include the seasonal revolving credit loans to be made by the Lenders to Debtor
pursuant to Section 2.01 of the Bank Agreement as in effect on the date hereof.
"Secured Debt" shall mean, as of any date, the Obligations then
outstanding. In no event, unless the Mandatory Holders give their prior written
consent, shall Secured Debt include the unadvanced amount of any commitment
(other than the undrawn face amount of letters of credit).
"Security Agreement" and "Security Agreements" shall have the meanings
set forth in the recitals to this Agreement.
"Security Documents" shall mean each Security Agreement, each Stock
Pledge Agreement, the Guaranties, any additional documents executed to reflect
the grant to any Beneficiary of a lien upon or security interest in any
Collateral, and any agreement or document referred to in Section 4.4 hereof as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with their respective terms but shall not include any of the
Travelers Agreements.
"Standstill Period" shall mean any period commencing on the earlier of:
(i) the day Bank Agent delivers an Enforcement Notice to the ACFS Agent
and Travelers,
(ii) the day Bank Agent delivers to ACFS Agent a Payment Blockage
Notice (with a copy to Travelers) other than a Payment Blockage Notice described
in clause (ii) of such definition,
(iii) the day ACFS Agent delivers an Enforcement Notice to the Bank
Agent and Travelers, or
(iv) the day Travelers delivers an Enforcement Notice to the Bank Agent
and the ACFS Agent,
and ending on the earliest of (w) the date on which such Enforcement Notice or
Payment Blockage Notice, as applicable, is withdrawn by the party which
delivered such notice, (x) the close of business on the day which is 45 days
after the date the Standstill Period commenced, (y) the day on which the Bank
Obligations are indefeasibly paid in full, in cash or other
10
consideration acceptable to Bank Agent in its sole discretion or (z) the
occurrence of an Insolvency Event. Each Standstill Period shall be determined in
accordance with the preceding sentence and shall not terminate any earlier
notwithstanding that the amount of outstanding Bank Obligations (less the amount
of any Letters of Credit issued and Advances made by the Lenders to the Debtor
in excess of the Maximum Advances determined as of the date of each such Advance
or issuance of Letter of Credit) may, at any time during any Standstill Period,
be less than the ACFS Principal Balance. If a Standstill Period commences and
later terminates prior to the expiration of the 45-day period thereof because an
Enforcement Notice or Payment Blockage Notice has been withdrawn by the party
which delivered such notice, additional Standstill Period(s) can be commenced in
the manner, for the period, and subject to the limitations set forth in this
paragraph if a new Enforcement Notice shall be delivered; provided, if a
Standstill Period has commenced as a result of the delivery of an Enforcement
Notice or Payment Blockage Notice by Bank Agent, from the day of delivery
thereof until 365 days thereafter, the total number of days comprising the
Standstill Period(s) during such 365-day period shall be 45 days.
"Stock Pledge Agreement" shall mean each stock pledge agreement or
similar security document executed by Debtor or any of its Subsidiaries (other
than ACE Funding) for the benefit of any Beneficiary, each of which is
identified on Schedule 1 to this Agreement.
"Subsidiary" shall mean, when used with reference to any Person, any
corporation, association or other business entity in which such Person owns
directly or indirectly a majority of the outstanding voting securities or owns
sufficient equity or voting interests to enable it, in the absence of
contingencies, to elect a majority of the directors of such entity or, if such
entity is a partnership or a joint venture, such Person has more than a 50%
interest in the profits or capital thereof. Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Debtor.
"Total Commitment" shall mean, as of any date of determination, the sum
of the Lenders' Total Revolving Credit Commitments and Total Seasonal Revolving
Credit Commitments, as the same may be increased up to, but not in excess of,
the aggregate amount of $175,000,000 as set forth in Section 2.15 of the Bank
Agreement as in effect on the date hereof.
"Total Revolving Credit Commitments" shall have the meaning given to
such term in Section 1.1 of the Bank Agreement as in effect on the date hereof.
"Total Seasonal Revolving Credit Commitments" shall have the meaning
given to such term in Section 1.1 of the Bank Agreement as in effect on the date
hereof.
"Travelers" shall mean Travelers Express Company, Inc., a Minnesota
corporation.
"Travelers Agreements" shall have the meaning given to such term in the
recitals to this Agreement.
"Travelers Event of Default" shall mean the occurrence of an event or
condition (after giving effect to any applicable notice and cure provisions)
that permits Travelers to terminate the Money Order Agreement under Section 18.b
thereof because of default by Debtor thereunder.
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"Travelers Obligations" shall mean, (A) with respect to the following
items for which payment has not been actually received by Travelers or its
assignee and for which the Debtor is liable pursuant to the Money Order
Agreement, the sum of (i) the face amount of all Money Orders either (x) sold by
the Debtor pursuant to the Money Order Agreement or (y) lost, stolen or
misappropriated by or from the Debtor, and paid by Travelers or its assignee,
plus (ii) the per item fee (as adjusted pursuant to the Money Order Agreement)
for each such Money Order, and (B) any and all other payment obligations of
Debtor to Travelers under the Money Order Agreement, and (C) all "Sales
Proceeds", as defined in the Money Transfer Agreement, for which payment has not
been actually received by Travelers or its assignee and for which the Debtor is
liable pursuant to the Money Transfer Agreement, and (D) any and all other
payment obligations of the Debtor to Travelers under the Money Transfer
Agreement, and (E) any and all payment obligations of the Debtor to Travelers
under the Xxxx Payment Agreement, and (F) all interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization, or like proceeding relating to the Debtor or any of its
Subsidiaries, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement and section references are to
this Agreement unless otherwise specified.
(c) All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and vice versa, unless otherwise
specified.
(d) Terms describing items or types of collateral not otherwise defined
herein which are defined in or used in Article 9 of the Uniform Commercial Code
as in effect in the State of Texas shall herein have the respective meanings
given to them in such Article 9.
SECTION 2
STANDSTILL PERIODS AND ENFORCEMENT ACTIONS; REMEDIES
Section 2.1 Standstill Periods and Enforcement Actions.
(a) The Beneficiaries hereby agree to refrain from commencing
any Enforcement Action except as set forth below in this Section 2.1.
(b) Each Beneficiary agrees that it will not take any
Enforcement Action unless and until it first delivers to the other
Beneficiaries an Enforcement Notice. The Beneficiaries hereby agree
that (i) the delivery of any Enforcement Notice will commence a
Standstill Period hereunder, and (ii) the delivery by Bank Agent to
ACFS Agent of a Payment Blockage Notice (other than a Payment Blockage
Notice described in clause (ii) of such definition) will commence a
Standstill Period hereunder.
(c) During any Standstill Period, except as specifically
provided otherwise in Section 2.1(e) below, no Beneficiary other than
Bank Agent may commence any Enforcement Action without the prior
written consent of Majority Holders; provided, however, that if Bank
Agent or any Lender accelerates all or any portion of the Bank
12
Obligations concurrently with the commencement of, or during the
continuation of, any Standstill Period, then, in such event, each of
the other Beneficiaries may, during any such Standstill Period,
accelerate all or any portion of their respective Obligations to the
extent and in the manner permitted by their respective Beneficiary
Agreements, but such other Beneficiaries may not take any other
Enforcement Action during such Standstill Period except as provided in
Section 2.1(e) below.
(d) During any Standstill Period, at all times that the
principal amount of outstanding Bank Obligations (less the amount of
any Letters of Credit issued and Advances made by the Lenders to the
Debtor in excess of the Maximum Advances determined as of the date of
each such Advance or issuance of Letter of Credit) is greater than or
equal to the ACFS Principal Balance, the Bank Agent may commence (or
refrain from commencing) such action with respect to the Collateral and
the Security Documents (including but not limited to Enforcement
Actions) as it may deem necessary or appropriate without the consent of
any other Beneficiary.
(e) Notwithstanding anything to the contrary contained in
Section 2.1(d), ACFS Agent shall have the right to commence Enforcement
Actions during any Standstill Period at any time that the principal
amount of the outstanding Bank Obligations (less the amount of any
Letters of Credit issued and Advances made by the Lenders to the Debtor
in excess of the Maximum Advances determined as of the date of each
such Advance or issuance of Letter of Credit) is less than the ACFS
Principal Balance; provided, however, that in no event shall the ACFS
Agent be permitted to, and the ACFS Agent shall not, cause the
cessation of any Enforcement Action that was commenced by the Bank
Agent during any Standstill Period unless the ACFS Agent is authorized
in writing by the Majority Holders to do so.
(f) After the expiration of any Standstill Period, each
Beneficiary may take any Enforcement Action permitted under its
respective Beneficiary Agreements and the Security Documents benefiting
such Beneficiary, subject, in each case, to Sections 3.1, 5.1(f), 5.2
and 6.4(d) hereof, and, in such event, such party or parties may not
thereafter commence any Enforcement Action unless a new Enforcement
Notice is delivered to the other Beneficiaries in accordance with
Section 2.1(b) above.
Section 2.2. Withdrawal of Enforcement Notice. The party or parties (or
successors in interest thereto) delivering an Enforcement Notice shall be
entitled to withdraw it by delivering written notice of withdrawal to each
Beneficiary to which the related Enforcement Notice was originally delivered.
Section 2.3. Exercise of Powers. All of the powers, remedies and rights
of the Beneficiaries as set forth in this Agreement may be exercised by the
Beneficiaries in respect of any Security Document as though set forth at length
therein and all the powers, remedies and rights of the Beneficiaries as set
forth in any Security Document may be exercised from time to time as herein and
therein provided.
Section 2.4. Limitation on Duties in Respect of Collateral. Beyond the
accounting to the Debtor and the Beneficiaries for moneys received by it
hereunder, no Beneficiary shall have
13
any duty to the Debtor or the other Beneficiaries as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
it or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. To the extent, however, that any
Beneficiary or an agent or nominee of any Beneficiary maintains possession or
control of any of the Collateral or the Security Documents at any office of the
Debtor, such Beneficiary shall, or shall instruct such agent or nominee to,
grant the Debtor the access to such Collateral or Security Documents which the
Debtor requires for the conduct of its business, as permitted by the Bank
Agreement, the ACFS Note Agreement, and the Travelers Agreements, so long as no
Standstill Period or Insolvency Proceeding shall have been commenced or
continuing.
Section 2.5. Limitation by Law. All the provisions of this Section 2
are intended to be subject to all applicable mandatory provisions of law which
may be controlling in the premises and to be limited to the extent necessary so
that they will not render this Agreement invalid or unenforceable in whole or in
part.
Section 2.6. Absolute Rights of the Beneficiaries. Notwithstanding any
other provision of this Agreement or any provision of any Security Document, but
subject in all cases to the rights and obligations of the Beneficiaries under
Section 2.1 hereof, nothing contained in this Agreement shall affect or impair
the right, if any, that any Beneficiary may have under the terms and conditions
governing the Obligations owing to it under the Beneficiary Agreements to which
it is a party to accelerate and demand repayment of such Obligations. Each
Beneficiary retains the right to exercise freely its rights and remedies as a
general creditor of the Debtor or any Subsidiary in accordance with applicable
law and subject to the terms of the Beneficiary Agreements, including without
limitation the right to file a lawsuit and obtain a judgment in connection
therewith against the Debtor or any Subsidiary, and to otherwise exercise any
other right it may have (other than the right to commence Enforcement Actions,
which shall in all circumstances prior to an Insolvency Event be exercisable
only as provided in this Agreement and the Security Documents). Any Beneficiary
may (but in no event shall be required to) take action permitted by applicable
law or in accordance with the terms of the Security Documents to preserve its
rights, security interests and liens in any item of Collateral securing the
payment and performance of the obligations under the Beneficiary Agreements to
which it is a party, including but not limited to curing any default or alleged
default under any contract entered into by the Debtor or any Subsidiary paying
any tax, fee or expense on behalf of the Debtor or any Subsidiary exercising any
offset or recoupment rights and paying insurance premiums on behalf of the
Debtor or any Subsidiary so long as such action shall not impair the rights of
any Beneficiary.
SECTION 3
APPLICATION OF MONEYS
Section 3.1. Application of Proceeds. The net proceeds of any
Collateral received by the Beneficiaries as a result of taking any Enforcement
Action (whether such Enforcement Action is taken before, during, or after a
Standstill Period, an Insolvency Event, or the acceleration of all or any part
of the Obligations), all amounts received by any Beneficiary in contravention of
Section 6.1 or 6.2, all amounts received by any Beneficiary after an
acceleration of any Bank Obligations or any ACFS Obligations, and all payments
or distributions of any kind
14
or character (whether in cash, securities or other property) paid or payable to
the Beneficiaries in any Insolvency Proceeding, shall be applied by the
Beneficiaries in the following order:
FIRST: To Bank Agent in an amount equal to the Bank
Obligations (less the amount of any Letters of Credit issued and
Advances made by the Lenders to the Debtor in excess of the Maximum
Advances determined as of the date of each such Advance or issuance of
Letter of Credit);
SECOND: To ACFS Agent in an amount equal to the ACFS
Obligations (less the amount of any loans made by ACFS Agent or the
Purchasers after the date hereof to the Debtor in excess of the
Additional Permitted Term Loans);
THIRD: To Travelers in an amount equal to the Travelers
Obligations;
FOURTH: To the Bank Agent in an amount equal to the amount of
any Letters of Credit issued and Advances, if any, made by the Lenders
to the Debtor in excess of the Maximum Advances determined as of the
date of each such Advance or issuance of Letter of Credit;
FIFTH: To ACFS Agent in an amount equal to the amount, if any,
of any loans made by ACFS Agent or the Purchasers after the date hereof
to the Debtor in excess of the Additional Permitted Term Loans;
SIXTH: Any surplus then remaining shall be paid to the Debtor
or its successors or assigns, or to whomever may be lawfully entitled
to receive the same, or as a court of competent jurisdiction may
direct.
Notwithstanding the foregoing provisions of this Section 3.1, in connection with
an Insolvency Proceeding each of ACFS Agent and Travelers shall be permitted to
accept and retain all Permitted Junior Securities received by such Person
pursuant to Section 5.1(f).
SECTION 4
[RESERVED]
SECTION 5
AGREEMENTS AMONG BENEFICIARIES IN RESPECT OF SUBORDINATION OF LIENS
AND IN RESPECT OF INSOLVENCY EVENTS
Section 5.1. Subordination of Liens, etc.
(a) Notwithstanding the date, manner or order of perfection or
recording of any security interests or liens granted to the Bank Agent, the
Lenders, the ACFS Agent, the Purchasers, or Travelers by the Debtor or any of
its Subsidiaries which secure all or any part of the Obligations, and
notwithstanding any provisions of the Uniform Commercial Code, of any applicable
law or decision, or of the Security Documents, or whether any Beneficiary holds
possession of all or any part of the Collateral, each party hereto agrees that
the Bank Agent, for
15
the benefit of itself, the Lenders, and any Affiliate of a Lender party to any
Hedging Contract with the Debtor, shall have a first and prior security interest
and lien in and upon the Collateral.
(b) Without limitation of anything contained in Section 5.1(a) hereof,
(i) the ACFS Agent, on behalf of itself and each Purchaser, hereby agrees that
all security interests or liens at any time securing the ACFS Obligations
(whether granted under a Security Document or otherwise) are hereby made, and
will at all times prior to the termination of this Agreement be, subject,
subordinate, junior and inferior in all respects to all security interests and
liens securing the Bank Obligations (whether granted under a Security Document
or otherwise), and (ii) Travelers hereby agrees that all security interests or
liens at any time securing the Travelers Obligations (whether granted under a
Security Document or otherwise) are hereby made, and will at all times prior to
the termination of this Agreement be, subject, subordinate, junior and inferior
in all respects to all security interests and liens securing the Bank
Obligations (whether granted under a Security Document or otherwise), and the
ACFS Obligations (whether granted under a Security Document or otherwise).
(c) Each Beneficiary agrees that it will not challenge the legality,
validity, enforceability or priority of the security interests or liens granted
to any other Beneficiary pursuant to this Agreement or the Security Documents.
The subordination provided for in this Section 5.1 is solely for the benefit of
the Beneficiaries. No Person other than a Beneficiary shall have or be entitled
to assert any rights or benefits under or as a result of this Section 5.1.
(d) Each Beneficiary agrees that with respect to the perfection of the
security interests and liens which secure the Obligations (whether granted
hereunder, under a Security Document, or otherwise) it shall not file any
financing statements in any jurisdiction without the prior written consent of
the Majority Holders; provided, however, that each Beneficiary hereby consents
to the filing by Bank Agent from time to time of one or more financing
statements and amendments thereto which sufficiently indicate the Collateral so
long as each such original financing statement names each of Bank Agent, ACFS
Agent, and Travelers as a secured party.
(e) Each Beneficiary, without the written consent of the Mandatory
Holders, agrees that it will not (i) except for the Security Documents, take or
receive a security interest in or lien upon any of the property or assets of the
Debtor or its Subsidiaries as security for the payment of any indebtedness owed
to it under any Beneficiary Agreement to which it is a party, (ii) except for
the Guaranties and the Security Documents, retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to all or
any part of the indebtedness owed to it under any of the Beneficiary Agreements
to which it is a party, or (iii) contest the validity or enforceability of or
seek to avoid, have declared fraudulent or have set aside any Obligations owing
to any other Beneficiary.
(f) (i) In the event of any insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership proceedings in
connection therewith, relative to the Debtor or its Subsidiaries following the
occurrence of an Insolvency Event (an "Insolvency Proceeding"), any payment or
distribution of any kind or character, whether in cash, property, stock or
obligations, which may be payable or deliverable in respect of the ACFS
Obligations, and the Travelers Obligations shall be paid or delivered directly
to the Bank Agent for application in payment of the Bank Obligations as set
forth in Section 3.1, unless and until all of
16
the Bank Obligations shall have been paid indefeasibly paid in full in cash;
provided, however, that no such delivery shall be made to Bank Agent of stock or
obligations which are issued pursuant to reorganization proceedings in respect
of the ACFS Obligations, or the Travelers Obligations if such obligations are
subordinate and junior (whether by law or agreement) at least to the extent
provided in this Agreement to the payment of all Bank Obligations then
outstanding and to the payment of any stock or obligations which are issued in
exchange or substitution for any Bank Obligations then outstanding ("Permitted
ACFS Junior Securities"). (ii) In the event of any Insolvency Proceeding, but
only after the Bank Obligations shall have been paid indefeasibly paid in full,
any payment or distribution of any kind or character, whether in cash, property,
stock or obligations, which may be payable or deliverable in respect of the
Travelers Obligations shall be paid or delivered directly to the ACFS Agent for
application in payment of the ACFS Obligations as set forth in Section 3.1,
unless and until all of the ACFS Obligations shall have been paid in full in
cash; provided, however, that no such delivery shall be made to ACFS Agent of
stock or obligations which are issued pursuant to reorganization proceedings in
respect of the Travelers Obligations if such obligations are subordinate and
junior (whether by law or agreement) at least to the extent provided in this
Agreement to the payment of all ACFS Obligations then outstanding and to the
payment of any stock or obligations which are issued in exchange or substitution
for any ACFS Obligations then outstanding. (iii) In the event of any Insolvency
Proceeding, but only after the Bank Obligations and the ACFS Obligations shall
have been paid indefeasibly paid in full, any payment or distribution of any
kind or character, whether in cash, property, stock or obligations, which may be
payable or deliverable in respect of the Bank Obligations or the ACFS
Obligations shall be paid or delivered directly to Travelers for application in
payment of the Travelers Obligations as set forth in Section 3.1, unless and
until all of the Travelers Obligations shall have been paid in full in cash;
provided, however, that no such delivery shall be made to Travelers of stock or
obligations which are issued pursuant to reorganization proceedings in respect
of the Bank Obligations or the ACFS Obligations if such obligations are
subordinate and junior (whether by law or agreement) at least to the extent
provided in this Agreement to the payment of all Travelers Obligations then
outstanding and to the payment of any stock or obligations which are issued in
exchange or substitution for any Travelers Obligations then outstanding
("Permitted Travelers Junior Securities"; Permitted ACFS Junior Securities and
Permitted Travelers Junior Securities are collectively referred to herein as
"Permitted Junior Securities").
(g) Travelers hereby releases and terminates all liens and security
interests granted to it by the Debtor or any of its Subsidiaries (including but
not limited to all liens and security interests granted to Travelers under the
Travelers Agreements) other than those granted to Travelers under the Travelers
Security Agreement and any other Security Document benefiting Travelers.
Section 5.2. Insolvency Events. Each Beneficiary stipulates and agrees
that before, from and after the occurrence, and during the continuance, of any
Insolvency Event, each of the Bank Agent (on behalf of itself and the Lenders),
the Lenders, ACFS Agent (on behalf of itself and the Purchasers), the
Purchasers, and Travelers will be entitled to pursue their separate claims
against the Debtor and its Subsidiaries and to exercise any and all of its
respective rights and remedies independently of one another and as separate and
distinct secured creditors of the Debtor and its Subsidiaries; provided, however
that the pursuit of such claims and the exercise of such remedies shall at all
times prior to an Insolvency Event be subject to the terms and
17
conditions of Section 2.1 of this Agreement. Without limitation of the
foregoing, each Beneficiary also stipulates and agrees that all Insolvency
Proceedings, including but not limited to all hearings conducted under Section
1129(b) of the Bankruptcy Code, all cases under the Bankruptcy Code in which the
Debtor or any of its Subsidiaries is a debtor, and all other aspects of any
reorganization of the Debtor and/or its Subsidiaries under the Bankruptcy Code
(including but not limited to classification, voting, impairment, and cramdown),
shall be conducted by the Beneficiaries and the Debtor and/or its Subsidiaries
in a manner that reflects the fact that the Beneficiaries do not comprise a
single group of creditors of the Debtor and its Subsidiaries but rather comprise
multiple and independent groups of creditors of the Debtor and its Subsidiaries.
Section 5.3. Continuity of Agreements. The agreements set forth in
Section 5.1 shall continue in full force and effect after the occurrence of any
Insolvency Event in respect of Debtor or any of its Subsidiaries and in, during,
and after any Insolvency Proceeding (all references herein to Debtor and its
Subsidiaries shall be deemed to apply to such Person as debtor-in-possession and
to a collateral agent for any such person).
SECTION 6
AGREEMENTS AMONG BENEFICIARIES AND DEBTOR IN RESPECT OF PAYMENTS
ON THE OBLIGATIONS AND OTHER AGREEMENTS
Section 6.1. Payment Blockages, etc. Subject to Sections 3.1 and 5.1(f)
above and Sections 6.1(a), 6.1(b), 6.1(c), and 6.2 below, Debtor and its
Subsidiaries may make and pay, and ACFS Agent and the Purchasers may accept and
receive, any and all payments on the ACFS Obligations when due and payable in
accordance with the terms of the ACFS Note Agreement, the ACFS Notes, the ACFS
Security Agreement and the other Security Documents executed by the Debtor and
its Subsidiaries (other than ACE Funding) for the benefit of ACFS Agent or any
Purchaser, in each case as in effect on the date hereof.
(a) After Bank Agent delivers to ACFS Agent a Payment Blockage Notice
(with a copy to Travelers) in respect of a Bank Payment Default, then, until
such Bank Payment Default shall have been remedied by payment in full or waived,
(i) ACFS Agent, on behalf of itself and the Purchasers, hereby agrees that
neither it nor any Purchaser shall accept or receive any direct or indirect
payment of or on account of the ACFS Obligations and (ii) Debtor, on behalf of
itself and its Subsidiaries other than ACE Funding, agrees that neither Debtor
nor any such Subsidiary shall make any direct or indirect payment of or on
account of the ACFS Obligations.
(b) After Bank Agent delivers to ACFS Agent a Payment Blockage Notice
(with a copy to Travelers) in respect of a Bank Financial Covenant Default,
then, until such Bank Financial Covenant Default shall have been remedied or
waived, (i) ACFS Agent, on behalf of itself and the Purchasers, hereby agrees
that neither it nor any Purchaser shall accept or receive any Excess Cash Flow
Prepayments, either directly or indirectly and (ii) Debtor, on behalf of itself
and its Subsidiaries other than ACE Funding, agrees that neither Debtor nor any
such Subsidiary shall make any Excess Cash Flow Prepayments.
(c) After Bank Agent delivers to ACFS Agent a Payment Blockage Notice
(with a copy to Travelers) in respect of an ACFS Financial Covenant Default,
then, until, until the earlier
18
of (1) the day on which such ACFS Financial Covenant Default shall have been
remedied or waived or (2) the 45th day after delivery of such Payment Blockage
Notice by Bank Agent, (i) ACFS Agent, on behalf of itself and the Purchasers,
hereby agrees that neither it nor any Purchaser shall accept or receive any ACFS
Principal Payment and (ii) Debtor, on behalf of itself and its Subsidiaries
other than ACE Funding, agrees that neither Debtor nor any such Subsidiary shall
make any ACFS Principal Payment; provided, however, that Bank Agent shall not be
permitted to deliver to ACFS Agent a Payment Blockage Notice in respect of an
ACFS Financial Covenant Default more than one time in any 365 day period.
Section 6.2. Acceleration, etc. Notwithstanding anything to the
contrary contained herein, after (i) the acceleration of the Bank Obligations or
the ACFS Obligations or (ii) an Insolvency Event, each of ACFS Agent, on behalf
of itself and the Purchasers, and Travelers hereby agrees that that it shall not
accept or receive any direct or indirect payment of or on account of the ACFS
Obligations or the Travelers Obligations (other than Permitted Junior
Securities), as applicable, unless and until the Bank Obligations have been
indefeasibly paid in full in cash and Debtor, on behalf of itself and its
Subsidiaries other than ACE Funding, agrees that neither Debtor nor any such
Subsidiary shall make any such payments (it being the intention of the parties
that all such payments to which ACFS Agent, any Purchaser, or Travelers would be
entitled to receive shall be applied to the Obligations as set forth in Section
3.1).
Section 6.3. Subrogation. Upon indefeasible payment in full of the Bank
Obligations in cash, ACFS Agent and the Purchasers shall be subrogated to the
rights of Bank Agent and the Lenders to receive payments or distributions of
assets of the Debtor and its Subsidiaries made on the Bank Obligations until the
ACFS Obligations shall be paid in full. Upon indefeasible payment in full of the
Bank Obligations, and the ACFS Obligations in cash, Travelers shall be
subrogated to the rights of Bank Agent, the Lenders, ACFS Agent, and the
Purchasers to receive payments or distributions of assets of the Debtor and its
Subsidiaries made on the Bank Obligations and, the ACFS Obligations until the
Travelers Obligations shall be paid in full.
Section 6.4. Miscellaneous Agreements Among Beneficiaries.
(a) Each Beneficiary agrees that it has, independently and without
reliance on any other Beneficiary, and based upon such documents and information
as it has deemed appropriate, made its own credit analysis of the Debtor and its
Subsidiaries and the Collateral, and its independent decision to enter into this
Agreement and the Security Documents, and that it will, independently and
without reliance upon any other Beneficiary, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement and
the Security Documents.
(b) Each Beneficiary acknowledges and agrees that it has not made any
representation or warranty to any other Beneficiary with respect to the
execution, validity, legality, completeness of this Agreement, any Security
Documents or the Collateral or with respect to the collectibility or
enforceability of the Obligations.
(c) Each Beneficiary hereby assumes responsibility for keeping itself
informed of (i) the financial condition of the Debtor and its Subsidiaries and
(ii) all other circumstances bearing upon the risk of nonpayment of the Secured
Debt. Each of the Beneficiaries hereby agrees that
19
no other Beneficiary shall have a duty to advise any of the others of
information known to it regarding such condition or any such circumstances. In
the event any Beneficiary, in its sole discretion, undertakes at any time or
from time to time to provide any such information to any other Beneficiary, it
shall be under no obligation (x) to provide any such information to such other
Beneficiary on any subsequent occasion, (y) to undertake any investigation, or
(z) to disclose any information which such Beneficiary wishes to maintain
confidential.
(d) Each Beneficiary agrees that should it at any time when it is not
entitled to do so hereunder (including, without limitation, under Section 6.1 or
6.2) either (i) obtain, receive or take any payment on the Obligations owed to
it, (ii) receive any Collateral, proceeds thereof, or any other property of
Debtor, or (iii) recover any amounts under any Security Document, any Guaranty,
or any other document or agreement providing security for or guaranteeing the
payment of any Obligations, then the entire amount of such payment, all of such
Collateral or other property received, and all such amounts recovered shall be
held in trust and applied to the payment of the Obligations as set forth in
Section 3.1.
(e) Each party hereto represents that in entering into this Agreement
and related documents, it is not relying on any commitment or agreement made by
any other Beneficiary to make or extend credit to Debtor.
Section 6.5. Cap on ACFS Obligations. ACFS Agent, on behalf of itself
and each Purchaser, agrees that the maximum amount of the ACFS Obligations
(excluding interest, fees, penalties, and all other amounts other than
principal) shall not, without the prior written consent of the Mandatory
Holders, which may be exercised in their sole and absolute discretion, exceed a
principal amount equal to $40,000,000 plus any portion of the Additional
Permitted Term Loans made by ACFS Agent and/or the other Purchasers.
Section 6.6. Assignment. None of the Beneficiaries shall assign any
interest in the Obligations or the Secured Debt unless such assignment is
subject to all terms and conditions of this Agreement.
Section 6.7. Invalidation of Payments. To the extent that any of the
Beneficiaries receive payments on the Secured Debt or receive Proceeds of
Collateral which are subsequently invalidated, declared to be fraudulent or
preferential, or are required to be repaid to a collateral agent, receiver or
any other Person under the Bankruptcy Code or under state, federal or common
law, then, to the extent the payments or Proceeds are so repaid, the Secured
Debt or part thereof which was intended to be satisfied shall be revived and
will continue to be in full force and effect as if those payments or Proceeds
had never been received by the Beneficiary.
Section 6.8. Possessory Collateral. After the indefeasible payment in
full in cash of the Bank Obligations, Bank Agent agrees to deliver all
Collateral that may be in its possession to the ACFS Agent, and the Debtor
hereby consents to such delivery. After the indefeasible payment in full in cash
of the ACFS Obligations, ACFS Agent agrees to deliver all Collateral that may be
in its possession to Travelers, and the Debtor hereby consents to such delivery.
After the indefeasible payment in full in cash of the Travelers Obligations,
Travelers agrees to deliver all Collateral that may be in its possession to the
Debtor.
20
SECTION 7
MISCELLANEOUS
Section 7.1. Amendments, Supplements and Waivers. This Agreement may
not be amended, revised, restated or supplemented without the prior written
consent of the Mandatory Holders.
Section 7.2. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing
(including telex and telecopy communications), shall be sent by mail, telex,
telecopier or hand delivery and, except as otherwise provided in this Agreement,
the cost thereof shall be for the sole account of the Debtor and shall be added
to the Obligations:
(a) If to the Debtor, to Ace Cash Express, Inc., 0000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Chief Financial Officer, or at such
other address as shall be designated by it in a written notice to the
Beneficiaries, with a copy thereof to Gardere Xxxxx Xxxxxx, L.L.P., 0000
Xxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000 Attention: Xxxxxxx X. Xxxxx; provided,
however, that the failure to provide a copy of such communications to Gardere
Xxxxx Xxxxxx, L.L.P. shall not affect the validity or effectiveness of such
communications.
(b) If to Bank Agent, to Xxxxx Fargo Bank Texas, National Association,
0000 Xxxxxxx Xxxx Xxxx., Xxxxx 000, Xxxxx, Xxxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxx or at such other address as shall be designated by it in a written
notice to the Beneficiaries, with a copy thereof to Xxxxxxxx, Xxxxxxxx & Xxxxxx
P.C., 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxx X.
Xxxxxxxxxx; provided, however, that the failure to provide a copy of such
communications to Xxxxxxxx, Xxxxxxxx & Xxxxxx P.C. shall not affect the validity
or effectiveness of such communications.
(c) If to ACFS Agent, to American Capital Financial Services, Inc., 0
Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Compliance Officer and to American Capital Financial Strategies, Ltd., 0000 Xxxx
Xxxxxx, Xxxxx 0000 Xxxx, Xxxxxx, Xxxxx 00000 Attention: Xxxxxxx X. XxxXxxxxx, or
at such other address as shall be designated by it in a written notice to the
Beneficiaries, with a copy thereof to Xxxxxx Xxxxx L.L.P., 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxxx 00000 Attention: Xxxxxx X. Xxxx; provided, however, that the
failure to provide a copy of such communications to Xxxxxx Xxxxx L.L.P. shall
not affect the validity or effectiveness of such communications.
(d) If to Travelers, to Travelers Express Company, Inc., 0000 Xxxxx
Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Chief Legal Counsel, or
at such other address as shall be designated by it in a written notice to the
Beneficiaries.
All such notices, requests, demands and communications shall, to be
effective hereunder, be in writing or by a telecommunications device capable of
creating a written record, and shall be deemed to have been given or made when
delivered by hand or five (5) days after its deposit in the mail, first class or
air postage prepaid, or in the case of notice by such a telecommunications
device, when properly transmitted if on the same day the sender sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid).
21
Section 7.3. Headings. Section, subsection and other headings used in
this Agreement are for convenience only and shall not affect the construction of
this Agreement.
Section 7.4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 7.5. [RESERVED]
Section 7.6. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and shall inure to the
benefit of the Beneficiaries and their respective successors and assigns, and
nothing herein or in any Security Document is intended or shall be construed to
give any other Person any right, remedy or claim under, to or in respect of this
Agreement, any Security Document, or the Collateral.
Section 7.7. Conflict with Other Agreements. The parties agree that in
the event of any conflict between the provisions of this Agreement and the
provisions of any of the Security Documents, the Collateral Agency Agreement, or
any Guaranty, the provisions of this Agreement shall control.
Section 7.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to conflicts of law
provisions) and decisions of the State of Texas.
Section 7.9. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.
Section 7.10. Waiver of Jury Trial, Etc.
(a) EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OF
THE OTHER BENEFICIARY AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR
ANY OF THE OTHER BENEFICIARY AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(b) EACH PARTY HERETO (I) CERTIFIES THAT NEITHER ANY REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND
22
(II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS HEREIN.
Section 7.11. Submission to Jurisdiction.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
TEXAS, DALLAS DIVISION, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
DEBTOR AND EACH BENEFICIARY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURT.
(b) THE DEBTOR AND EACH BENEFICIARY HEREBY IRREVOCABLY WAIVES, IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING, ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH JURISDICTION.
(c) THE DEBTOR AND EACH BENEFICIARY HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF THE AFOREMENTIONED COURT IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO IT, AT ITS ADDRESS SET FORTH IN SECTION 7.2 HEREOF.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF ANY OF THE
OBLIGATIONS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE DEBTOR IN ANY OTHER
JURISDICTION.
23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
ACE CASH EXPRESS, INC., as Debtor
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as Bank Agent
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
AMERICAN CAPITAL FINANCIAL SERVICES,
INC., as ACFS Agent
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
TRAVELERS EXPRESS COMPANY, INC.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Agreed to and acknowledged as of the date first above written:
Check Express, Inc.
Q. C. & G. Financial, Inc.
Public Currency, Inc.
Check Express Florida, Inc.
Check Express Finance, Inc.
Check-X-Change Corporation
Check Express South Carolina, Inc.
Check Express USA, Inc.
By:
--------------------------------------
Name:
Title:
2
Schedule 1
Guaranties and Stock Pledge Agreements
Unconditional Guaranty Agreement by Check Express, Inc., Q. C. & G. Financial,
Inc., Public Currency, Inc., Check Express Florida, Inc., Check Express Finance,
Inc., Check-X-Change Corporation, Check Express South Carolina, Inc., Check
Express USA, Inc. of even date herewith in favor of Bank Agent
Assignment of Deposit Accounts and Security Agreement by Debtor of even date
herewith in favor of Bank Agent
Assignment of Deposit Accounts and Security Agreement by Check Express, Inc., Q.
C. & G. Financial, Inc., Public Currency, Inc., Check Express Florida, Inc.,
Check Express Finance, Inc., Check-X-Change Corporation, Check Express South
Carolina, Inc., Check Express USA, Inc. in favor of Bank Agent
Stock Pledge Agreement by Debtor of even date herewith in favor of Bank Agent
Stock Pledge Agreement by Check Express, Inc. of even date herewith in favor of
Bank Agent
Unconditional Guaranty Agreement by Check Express, Inc., Q. C. & G. Financial,
Inc., Public Currency, Inc., Check Express Florida, Inc., Check Express Finance,
Inc., Check-X-Change Corporation, Check Express South Carolina, Inc., Check
Express USA, Inc. of even date herewith in favor of ACFS Agent
Assignment of Deposit Accounts and Security Agreement by Debtor of even date
herewith in favor of ACFS Agent
Assignment of Deposit Accounts and Security Agreement by Check Express, Inc., Q.
C. & G. Financial, Inc., Public Currency, Inc., Check Express Florida, Inc.,
Check Express Finance, Inc., Check-X-Change Corporation, Check Express South
Carolina, Inc., Check Express USA, Inc. in favor of ACFS Agent
Stock Pledge Agreement by Debtor of even date herewith in favor of ACFS Agent
Stock Pledge Agreement by Check Express, Inc. of even date herewith in favor of
ACFS Agent
Unconditional Guaranty Agreement by Check Express, Inc., Q. C. & G. Financial,
Inc., Public Currency, Inc., Check Express Florida, Inc., Check Express Finance,
Inc., Check-X-Change Corporation, Check Express South Carolina, Inc., Check
Express USA, Inc. of even date herewith in favor of Travelers
Assignment of Deposit Accounts and Security Agreement by Debtor of even date
herewith in favor of Travelers
Assignment of Deposit Accounts and Security Agreement by Check Express, Inc., Q.
C. & G. Financial, Inc., Public Currency, Inc., Check Express Florida, Inc.,
Check Express Finance, Inc., Check-X-Change Corporation, Check Express South
Carolina, Inc., Check Express USA, Inc. in favor of Travelers
Stock Pledge Agreement by Debtor of even date herewith in favor of Travelers
Stock Pledge Agreement by Check Express, Inc. of even date herewith in favor of
Travelers
