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EXHIBIT 10.1
CASH SERVICES AGREEMENT
This Cash Services Agreement (the "AGREEMENT") is made to be
effective
as of December 30, 2003, by
and between ACE CASH EXPRESS, INC., a Texas
corporation ("ACE") and TEXAS
CAPITAL BANK, NATIONAL ASSOCIATION ("TEXAS
CAPITAL").
WITNESSETH:
A. ACE
owns or leases a series of cash disbursement
Self-Service
Machines (individually, an
"SSM" and collectively, "SSMs") for the disbursement
of cash which are located in
the offices of H&R Block Tax Services, Inc.
("H&R")
listed on EXHIBIT A hereto
("COVERED SSMs").
B. ACE
and Texas Capital desire that, among other things, Texas
Capital furnish the U.S.
currency and coin which for purposes of this Agreement
shall include (i) all cash in
Covered SSMs and (ii) any Texas Capital cash in
the Contractor vault or
otherwise in Contractor possession or control that was
requested by ACE from Texas
Capital in connection with this Agreement
(collectively, the
"CASH").
C. Cash
will be used to stock the Covered SSMs in order to
permit
cash withdrawals therefrom by
customers of H&R pursuant to tax refund and tax
loan checks ("ICB CHECKS")
issued by Imperial Capital Bank ("ICB") as advance
fundings of income tax
refunds.
D.
Texas Capital and various correspondent banks (each, a
"CORRESPONDENT BANK") will
distribute the Cash to H&R.
NOW THEREFORE,
in consideration of the premises herein contained and
other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the
undersigned agree as follows:
1.
Defined Terms. As used in this Agreement, the following
terms
shall have the meanings set
forth below:
"ACE" means Ace Cash Express, Inc., a Texas corporation.
"Armored Car Service Agreement" means that certain Armored Car
Service
Agreement dated as of May 1, 1999 (as amended) by and between
Texas
Capital and Contractor.
"Business Day(s)" means any day on which the offices of Texas
Capital
are open to the public for carrying on substantially all
business
functions, other than Saturday or Sunday.
"Cash" has the meaning set forth in the introductory paragraph
hereto.
"Cash Collection Account" means a segregated account established
by
Texas Capital at Texas Capital's Correspondent Banks.
CASH SERVICES AGREEMENT
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"Cash Vault Services Agreement" means that certain Cash Vault
Services
Agreement dated as May 1, 1999 (as amended) by and between
Texas
Capital and the Contractor.
"Check Collection Account" means a segregated account established
by
Texas Capital at Texas Capital's Correspondent Banks.
"Contractor" means Loomis Fargo & Co.
"Contractor Agreements" means collectively, the Armored Car
Service
Agreement and the Cash Vault Services Agreement.
"Correspondent Bank" has the meaning set forth in the
introductory
paragraph hereto.
"Correspondent Delivery Request" means a request by ACE directly
to
Texas Capital to furnish and replenish the Covered SSMs with Cash
from
a Correspondent Bank.
"Correspondent Redelivery Request" means a request by ACE, directly
to
Texas Capital, to redeliver Cash and/or funds from collected
ICB
Checks, previously delivered by Contractor to a Correspondent Bank,
to
Texas Capital.
"Covered SSMs" has the meaning set forth in the introductory
paragraph
hereto.
"Daily Cash Position" has the meaning set forth in Paragraph
6(a).
"Daily Report" means a report substantially in the form attached
hereto
as Exhibit B or as otherwise agreed to in writing between ACE and
Texas
Capital.
"Fee/Expense Account" means a special non interest bearing account
at
Texas Capital against which Texas Capital will deposit
Settlement
Funds, charge fees and expenses or any other amounts owing to
Texas
Capital pursuant to this Agreement and all of the other
related
agreements.
"Final Settlement" means with regards to all parties to this
Agreement
and other related agreements, the closing settlement of each and
every
account, including all fees and expenses, all Cash and other funds,
and
all obligations and duties owed which are subject to this
Agreement.
"H&R" has the meaning set forth in the introductory paragraph
hereto.
"ICB" has the meaning set forth in the introductory paragraph
hereto.
"ICB Checks" has the meaning set forth in the introductory
paragraph
hereto.
"Operating Agreement or Operating Agreements" means that
certain
Operating Agreement between Diebold and ACE dated as of September
29,
1999 (as amended, renewed, extended, or restated).
CASH SERVICES AGREEMENT
2
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"Overdraft" means a negative position or insufficient funds
available
in any account, including insufficient account funds as the result
of a
Correspondent Delivery Request in excess of the amount of
funds
available to ACE to fund the Covered SSMs or as the result of
a
Correspondent Redelivery Request to Texas Capital from a
Cash
Collection Account or a Check Collection Account in excess of
the
amount of Cash or the Collected ICB Checks.
"Protection Period" has the meaning set forth in Paragraph
2(b).
"Reserve Account" means a special non-interest bearing reserve
account
with Texas Capital in an amount not less than $1,000,000.00 at any
time
during the term of this Agreement; provided, however, at the start
of
the
Protection Period such amount shall be reduced to $100,000 to
be
used to protect Texas Capital against Overdrafts in any
Check
Collection Account.
"Service Provider of Service Providers" means Diebold and/or the
other
equipment service providers listed on Annex 1.
"Settlement Amount" means the difference between the amount
Texas
Capital collects for honoring ICB Checks through the Covered SSMs
and
the amount dispensed to H&R customers in Cash through Covered
SSMs.
"Settlement Funds" means an amount equal to the aggregate of any
and
all Settlement Amounts at any time, and from time to time, now
or
hereafter required to be remitted to Texas Capital for posting
in
accordance with SUBPARAGRAPH 6(d) of this Agreement.
"SSM or SSMs" has the meaning set forth in the introductory
paragraph
hereto.
"Texas Capital" means Texas Capital Bank, National
Association.
"Texas Capital Collection Account" means the relationship between
ACE
and Texas Capital in which Texas Capital records transactions
of
certain Cash furnished, certain Cash received, and certain
funds
received from the collection of ICB Checks by it pursuant to
this
Agreement on its ledgers at Texas Capital. Such funds which
are
received by Texas Capital are pledged by ACE to Texas Capital
pursuant
to a pledge and account control agreement to secure ACE's
performance
under this Agreement and each agreement related hereto, including
but
not limited to the payment of all fees and expenses incurred by
Texas
Capital related to Contractor expenses, legal fees and
expenses,
insurance expenses and courier expenses.
2.
Services
(a) Texas
Capital will perform the transaction described above and
will provide Texas Capital's
Cash to be loaded by its Contractor, into Covered
SSMs to be disbursed to
H&R customers that cash ICB checks. No ownership of
the
Cash or any ICB Checks shall
accrue, transfer or otherwise inure to ACE or any
of its agents.
CASH SERVICES AGREEMENT
3
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(b) During the
term of this Agreement (and upon and after Final
Settlement, until August 31,
2004, the "PROTECTION PERIOD") ACE shall maintain a
Reserve Account which shall
be pledged to Texas Capital pursuant to a pledge and
account control agreement to
secure ACE's performance under this Agreement and
each related agreement
including, but not limited to the payment of all fees
and
expenses incurred by Texas
Capital.
(c) All
handling of the Cash, including all loading and
unloading
of any of the Cash into or
out of any of the Covered SSMs, shall be performed by
Contractor, pursuant to a
contract between Contractor and Texas Capital.
(d) ACE has
purchased or leased the Covered SSMs from the Service
Providers and has entered
into a SSM servicing agreement with each Service
Provider pursuant to which
the Service Providers service and maintain the
Covered SSMs. Neither Texas
Capital nor any of its agents shall have any
responsibility for the
repair, maintenance, care or servicing of the Covered
SSMs.
(e) All of the
Cash, ICB Checks, Settlement Funds, the Cash
Collection Account, the Check
Collection Account and Fee/Expense Account are,
and shall remain, the
property of Texas Capital and shall be treated by Texas
Capital as its asset. Texas
Capital shall have full title, use, rights and
benefits of and to the Cash
and ICB Checks during the time that they are in the
possession, custody or
control of Contractor or stored in any Covered SSM and,
in the case of Cash, until
such time as the Cash is dispensed from any of the
Covered SSMs to customers of
H&R in accordance with this Agreement and the
operating procedures
described on ANNEX II hereto. Neither the Cash, ICB
Checks,
Settlement Funds, the Cash
Collection Account, the Check Collection Account nor
the Fee/Expense Account shall
at any time become the property of ACE or any of
its agents. Neither the Cash,
ICB Checks nor the Settlement Funds shall be
commingled with any other
cash or accounts in the possession, custody or control
of Contractor or ACE. ACE
confirms and agrees that it has no interest or any
other right in the Cash, ICB
Checks, Settlement Funds, the Cash Collection
Account, or the Check
Collection Account. ACE's interest in the Fee/Expense
Account is limited to funds
therein less all expenses and all fees due to Texas
Capital. Any such interest of
Ace in the Fee/Expense Account shall exist only
after all funds and accounts
have been settled and agreed to by Texas Capital
not sooner than the date of
the Final Settlement.
(f) ACE shall
not have access to, or use of, any of the Cash after
delivery of the Cash to
Contractor, whether during transportation or storage by
Contractor or while it is
stored in the machine cassettes in the Covered SSMs,
except that the Service
Providers, shall be allowed to provide scheduled and
unscheduled repair and
maintenance to the Covered SSMs in accordance with the
terms of each Operating
Agreement. Once any of the Cash is delivered by Texas
Capital to Contractor, it
shall only be transported or stored by Contractor and
finally placed in one of the
Covered SSMs pursuant to the terms of the
Contractor Agreements and the
Operating Agreements.
(g) During the
term of this Agreement, the only currency and coin
to be placed in any of the
Covered SSMs shall be the Cash. None of the Cash
shall be placed in any SSMs
other than the Covered SSMs.
CASH SERVICES AGREEMENT
4
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(h) Texas
Capital may, for the purposes of reporting pursuant to
Regulation D of the Federal
Reserve Board (12 CFR Section 204), treat the Cash
under this Agreement as
"vault cash" on a continuous basis, and no other
financial institution shall
report, treat or consider such funds as "vault cash"
for any similar reporting
purposes.
(i) Any and
all Cash, ICB Checks and Settlement Funds collected or
received by ACE shall be held
by ACE in custody and safekeeping for the benefit
of Texas Capital. ACE shall
have no claim to, nor right of withdrawal of, Cash
or Settlement Funds except to
deliver such funds to Texas Capital for posting in
accordance with PARAGRAPH
6(d). The services provided in this Agreement are in
the nature of a bailment for
the mutual benefit of the parties hereto. The Cash,
ICB Checks and Settlement
Funds shall not be subject to any manner of lien,
security interest, attachment
or other process or agreement created by, or
relating to the property of,
ACE, nor shall ACE intentionally take any actions
which could cause the Cash,
ICB Checks or Settlement Funds to be treated as
property of ACE, nor shall
ACE intentionally take any action which could cause
the Cash, ICB Checks or
Settlement Funds to be treated as property of ACE's
estate in a bankruptcy
proceeding. It is expressly agreed between ACE and Texas
Capital that ACE shall take
all necessary and reasonable steps to identify and
protect Texas Capital's
property rights in the Cash, ICB Checks and the
Settlement Funds. ACE and
Texas Capital expressly agree that ACE has no
possessory or ownership
rights to the Cash, ICB Checks and the Settlement Funds
under Section 541 of the
Bankruptcy Code, 11 U.S.C. Section 541.
(j) Upon written notice
from Texas Capital, ACE shall use all
commercially reasonable
efforts to comply or arrange for compliance with any
regulatory requirement
imposed upon Texas Capital with respect to SSMs and the
security of the Cash, ICB
Checks and the Settlement Funds subject to this
Agreement, and with respect
to any record keeping or reporting requirement
imposed on Texas Capital
relating to the Cash, ICB Checks and the Settlement
Funds, including, without
limiting the generality of the foregoing, the
provisions of the regulations
of the Office of the Comptroller of the Currency,
regarding minimum security
devices and procedures, 12 C.F.R. Section 21.1, and
the provisions of the Bank
Protection Act, as amended, 12 U.S.C. Section 1882 et
seq., as such provisions
relate to the SSMs in off-premises locations. ACE shall
cooperate with Texas Capital
by furnishing all information required by Texas
Capital to meet such
regulatory requirements. In the event Texas Capital is
or
becomes subject to any legal
or regulatory notice or action which could
adversely affect ACE's
uninterrupted operation of the Covered SSMs, Texas
Capital shall, if not
otherwise prohibited by law or regulation, notify ACE of
such event and shall, use
commercially reasonable efforts to continue
performance of Texas
Capital's obligations under this Agreement.
3.
Delivery of the Cash
(a) Subject to
the availability of sufficient currency and coin to
Texas Capital, Texas Capital
will cause to be made available to Contractor the
Cash required to stock the
Covered SSMs (or be available for restocking) in the
amount requested by ACE,
which amount shall not exceed: (i) * Dollars ($*) per
Covered SSM; or (ii) the
aggregate sum of One-Hundred Forty
--------
* Confidential treatment has
been requested for certain portions of this
document pursuant to an
application for confidential treatment sent to the
Securities and Exchange
Commission. Such portions are omitted from this filing
and filed separately with the
Securities and Exchange Commission.
CASH SERVICES AGREEMENT
5
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Million Dollars
($140,000,000.00) which shall include ICB Checks that have
not
been collected and
Cash.
(b) ACE shall
provide Texas Capital with a Correspondent Delivery
Request to deliver to
Contractor (which, solely with respect to currency,
shall
be for a specified number of
bundles) via Texas Capital's electronic cash
ordering service one (1)
Business Day before the Business Day Cash is to be
supplied to Contractor which
specifies the amount and denomination of Cash to be
supplied to Contractor that
is required to replenish the supply of currency and
coin in the Covered SSMs. In
the event that ACE desires to change the amount of
Cash to be supplied from the
amount reflected on the order, ACE shall provide
Texas Capital a change
request reflecting the changed amount by 9:00 a.m.
(Central Standard Time) on
the Business Day immediately preceding the Business
Day that the Cash is to be
delivered to Contractor. Cash requested by ACE will
be delivered on the later of
(i) one Business Day after the Business Day on
which the request by ACE is
received by Texas Capital or (ii) the first Business
Day following the Business
Day on which the applicable Correspondent Bank makes
such Cash available to
Contractor.
(c) In no
event shall Texas Capital be expected to provide Cash
until (i) ACE places a
Correspondent Delivery Request for Cash to the
applicable
Correspondent Bank, (ii) ACE
provides to Texas Capital the same detailed
information provided to the
Correspondent Bank in conjunction with the
Correspondent Delivery
Request, and (iii) ACE, the Correspondent Bank and Texas
Capital collectively agree to
the amount of funds to be delivered. Any requests
by ACE to Correspondent Banks
without prior notification to Texas Capital shall
be considered a breach of
this Agreement, and neither the Service Providers, the
Correspondent Banks, nor
Texas Capital shall be obligated to honor any such
requests. In the event ACE
desires to replenish the Covered SSMs with Cash from
a Correspondent Bank, ACE
shall deliver a Correspondent Delivery Request in
accordance with PARAGRAPH
3(b) above, and Texas Capital, in its sole and
absolute discretion, may
elect whether to honor a Correspondent Redelivery
Request.
(d) In the
event a Correspondent Bank or any branch offices
thereof cannot supply Texas
Capital with the volume of fit U.S. currency and
coin required to meet the
currency needs of the Covered SSMs, Texas Capital
shall use its best
commercially reasonable efforts to obtain as much of
such
currency and coin as possible
to meet such currency and coin needs.
(e) ACE agrees
that any Cash ordered pursuant to a Correspondent
Delivery Request will at no
time result in an Overdraft.
4.
Redelivery of the Cash to Texas Capital
(a) Texas
Capital may demand, at any time without notice or
qualification, and direct
Contractor to the effect that the Cash and ICB Checks
then stored in the Covered
SSMs or otherwise in the possession, custody or
control of Contractor be
delivered to Texas Capital or its designee by
Contractor; provided,
however, Texas Capital shall use commercially reasonable
efforts to give ACE prior
notice of such delivery request to allow Contractor to
collect and deliver the Cash
to Texas Capital or its designee in an orderly
fashion. Funds delivered to
Texas Capital pursuant to this PARAGRAPH 4 shall in
no event exceed the balance
of all undispensed Cash stored in the Covered SSMs
and ICB Checks in the SSMs or
otherwise in the possession,
CASH SERVICES AGREEMENT
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custody or control of
Contractor. ACE shall be responsible for taking all
actions reasonably necessary
to ensure that the Service Providers and H&R
cooperate with redelivery of
the Cash and delivery of ICB Checks by Contractor
once Texas Capital has
directed Contractor to redeliver the same.
(b) Texas
Capital shall not be liable for any damages incurred by
ACE due to the redelivery of
the Cash to Texas Capital as provided in PARAGRAPH
4(a) above, nor for the
resulting inability of customers of H&R to use the
Covered SSMs because they
then contain no currency or coin.
(c) In lieu of
the provisions of PARAGRAPH 4(a) above, Texas
Capital may elect to receive
a Correspondent Delivery Request of good funds in
an amount equal to the
undispensed Cash and ICB Checks stored in the Covered
SSMs and in the possession,
custody or control of Contractor, delivered to the
Main Office of Texas Capital,
by wire transfer or any other mutually agreed upon
method.
(d)
ACE shall
be responsible for notifying Texas Capital to
redeliver funds, including
Cash, collected ICB Checks and other funds from fees,
from the Correspondent Banks
to Texas Capital. Funds which represent Cash,
collected ICB Checks and
other funds from fees, may be redelivered to Texas
Capital upon receipt of a
Correspondent Redelivery Request made directly to
Texas Capital in accordance
with PARAGRAPH 4(a).
(e) ACE agrees
that in no event shall it make a Correspondent
Redelivery Request to Texas
Capital which shall cause or result in an Overdraft
in any Cash Collection
Account or Check Collection Account.
5. SSM
Transaction
The Cash loaded in each Covered SSM may be dispensed from Covered
SSMs
only to customers of H&R
by means ICB Checks and pursuant to a special personal
identification number of the
customer provided by H&R.
6.
Settlement for Cash Disbursements
(a) On each
Business Day following the initial delivery of the
Cash to any Covered SSM, ACE
will deliver electronically to Texas Capital at its
central cash vault, a Daily
Report describing the cash withdrawal transactions
occurring at Covered SSMs
since the delivery of the previous Daily Report,
including without limitation,
a statement of (i) the total number of
transactions involving the
withdrawal of Cash from the Covered SSMs, (ii) the
amount of Cash contained in
the Covered SSMs, (iii) the total Cash dispensed
from the Covered SSMs, (iv)
the total number of ICB Checks deposited in each
Covered SSM, and (v) any
other information Texas Capital may reasonably require
to verify the amount of Cash
stored in the Covered SSMs and in the possession,
custody or control of
Contractor (together, the "DAILY CASH POSITION").
(b) The Daily
Report and any related data shall contain sufficient
detail and specificity to
allow Texas Capital to accurately determine each day
the Daily Cash
Position.
CASH SERVICES AGREEMENT
7
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(c) All Cash
delivered to Texas Capital by Contractor shall be
deposited into a Cash
Collection Account. Pursuant to a Correspondent
Redelivery
Request as described in
PARAGRAPH 4, Texas Capital shall reconcile the amounts
in the Cash Collection
Accounts and withdraw the Cash from the Cash Collection
Accounts. Each withdrawal
from a Cash Collection Account shall then be posted by
Texas Capital to the Texas
Capital Collection Account. The Cash may be
redelivered to ACE by Texas
Capital pursuant to a Correspondent Delivery Request
in accordance with PARAGRAPH
3(b) or held by Texas Capital until the Final
Settlement.
(d) All ICB
Checks delivered to Texas Capital by Contractor shall
be deposited into a Check
Collection Account. Pursuant to a Correspondent
Redelivery Request as
described in PARAGRAPH 4, Texas Capital shall reconcile
the amounts in the Check
Collection Accounts and withdraw the Cash representing
the collected ICB Checks from
the Check Collection Accounts. Each withdraw from
a Check Collection Account
shall then be posted by Texas Capital to the Texas
Capital Collection Account.
From the Cash from collected ICB Checks, Texas
Capital shall withdraw the
Settlement Amount and deposit it to the Fee/Expense
Account. Cash from the
collected ICB Checks may be redelivered to ACE by Texas
Capital pursuant to a
Correspondent Delivery Request in accordance with
PARAGRAPH 3(b) or held by
Texas Capital until the Final Settlement. Texas
Capital agrees to allow Cash
from collected ICB Checks in the Check Collection
Account to be combined into
the Cash in the Cash Collection Account on a daily
basis.
(e) Texas
Capital may also establish any number of other accounts
at Texas Capital for the
administrative convenience of Texas Capital, including
the Fee/Expense Account,
against which Texas Capital will charge on the 15th day
of each calendar month and
the first day of each calendar month all known fees
and expenses owing to Texas
Capital pursuant to this Agreement and all of the
other agreements related
hereto. Funds transferred into the Fee/Expense Account
may be transferred by Texas
Capital from the Settlement Funds posted to the
account of Texas Capital in
accordance with this Agreement or any other account
of ACE referenced in this
Agreement, and to the extent the Reserve Account
balance falls below
$1,000,000 as a result of such transfer, ACE shall
replenish
the Reserve Account to an
amount equal to or exceeding $1,000,000 by 11:00 a.m.
on the Business Day following
the Business Day on which the Reserve Account
balance fell below
$1,000,000. Notwithstanding any other provision in this
PARAGRAPH 6(e), to the extent
that ACE is in breach of this Agreement or any
agreement related hereto or
this Agreement has been terminated or any reason,
Texas Capital may transfer
funds into the Fee/Expense Account from the Cash
Collection Account, the Check
Collection Account or the Reserve Account and
collect such fees as
frequently as Texas Capital deems appropriate.
(f) Prior to
the Final Settlement, ACE shall provide to Texas
Capital a certificate of an
authorized officer of ACE who is covered by ACE's
directors' and officers' and
general liability policy but not by the insurance
policy attached as EXHIBIT C
hereto certifying that (i) ACE has used its best
efforts, by contacting ICB
and taking other appropriate action, to determine
that there are no outstanding
and unpaid ICB Checks that will not be paid for
any reason, (ii) ACE has
contacted each Service Provider to determine that there
are no additional fees or
expenses owing to any such Service Provider, (iii) to
the best of such officer's
knowledge, there are no unpaid fees owing under this
Agreement (other than fees
owed directly to Texas Capital for its services under
this Agreement) or any
agreement related hereto, and (iv) to the best of such
officer's knowledge, no
employee, officer or director of ACE has had access to
any
CASH SERVICES AGREEMENT
8
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Cash, ICB Checks or any
Covered SSM other than officers and employees covered by
the insurance policy attached
as EXHIBIT C hereto. Within two Business Days
after ACE has provided the
referenced officer's certificate, all accounts have
been reconciled, all fees and
expenses of Texas Capital have been paid by ACE,
all ICB Checks have been
collected by Texas Capital, Contractor has delivered to
Texas Capital all Cash and
ICB Checks from the Covered SSMs and all Cash
supplied to ACE during the
term of the Agreement have been returned to Texas
Capital in an amount not less
that the amount of Cash provided by Texas Capital
to ACE during the term of
this Agreement, Texas Capital shall complete the
process of Final Settlement
and deliver to ACE the remaining balance, if any, in
the Reserve Account (less
$100,000 which shall be retained by Texas Capital for
Overdraft protection in the
Check Collection Accounts until August 31, 2004, and
on September 1, 2004, Texas
Capital shall deliver to ACE the remaining balance,
if any, in the Reserve
Account, and any ICB Checks that have been returned but
not yet delivered to ACE) and
all other accounts maintained pursuant to this
Agreement. Notwithstanding
anything contained in this PARAGRAPH 6, ACE will
remain responsible to Texas
Capital and Texas Capital shall remain responsible
to ACE for any fees or
expenses that are related to this Agreement or any
agreement related hereto and
that are identified after Final Settlement. To the
extent that any such fees or
expenses are identified, the obligated party shall
pay all such fees and
expenses within two Business Days of receipt of notice
of
same. Both ACE and Texas
Capital shall endeavor to complete the Final Settlement
process within 30 calendar
days after the earlier of the expiration or
termination of this
Agreement.
7. Risk
of Loss
Upon deposit of the Cash by Contractor, or an ICB Check by a
customer
of H&R into a Covered
SSM, ACE shall bear all risk of loss and all liability
with respect to any of the
Cash, ICB Checks and any and all activities related
to the use of the Covered
SSMs including, but not limited to, loss due to theft,
damage, or destruction of the
Cash and ICB Checks, malfunction of any Covered
SSM, injuries incurred or
torts inflicted directly or indirectly related to the
use of any Covered SSM or the
receipt of Cash or the misfeasance or malfeasance
of ACE its agents or
employees, excepting, however, losses directly
attributable
to Contractor. Texas Capital
and ACE shall each cooperate with and comply with
all reasonable requests by
each other for documents, statements or any other
proofs relating to any claims
for reimbursement or recovery from other persons.
In the event of any loss with respect to any of the Cash, ICB
Checks
and any and all activities
related to the use of the Covered SSMs including, but
not limited to, loss due to
bad checks, chargebacks, theft, damage, or
destruction of the Cash and
ICB Checks, ACE shall (i) notify Texas Capital of
such loss by 11:00 a.m. on
the following Business Day, and (ii) wire the amount
of the loss to the Reserve
Account. Upon receiving such notice, Texas Capital
shall (and ACE hereby
authorizes Texas Capital to) immediately charge the
Reserve Account for the
amount of the loss. In the event that this shall cause
the Reserve Account to have a
balance of less than $1,000,000, ACE shall by
11:00 a.m. on the following
Business Day deposit sufficient funds into the
Reserve Account to obtain a
minimum balance of $1,000,000.
CASH SERVICES AGREEMENT
9
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8.
Indemnity
(a) Regardless of
the existence or continuation of an insurance
policy related to any of the
matters described in this PARAGRAPH 8, ACE shall
indemnify, defend and hold
harmless Texas Capital from, for and against any and
all losses, costs (including
but not limited to legal and consulting fees and
expenses), expenses, claims,
damages, suits, causes of action, and judgments
suffered by, asserted
against, or recovered from Texas Capital as a result of
the transactions contemplated
in this Agreement or breach of this Agreement by
ACE or otherwise in
connection with or as a result of this Agreement or any
related documents, including
but not limited to accidental loss, theft or
mysterious disappearance of
any of the Cash or ICB Checks, or both, or losses of
or the failure of ICB to
honor any ICB Check, however caused, THE NEGLIGENCE OF
TEXAS CAPITAL, EXCEPT FOR ANY
LOSS RESULTING FROM THE SOLE NEGLIGENCE OR WILLFUL
MISCONDUCT OF TEXAS CAPITAL
OR ITS EMPLOYEES, AGENTS (OTHER THAN ACE) OR
REPRESENTATIVES, including,
but not limited to, any loss resulting from the
operation or maintenance of
the Covered SSMs, including any malfunctions
thereof, or losses resulting
from actions of any Service Provider, but excluding
losses directly attributable
to Contractor.
(b)
In
addition to the indemnification set forth in PARAGRAPH
8(a)
above, ACE agrees to
indemnify, defend and hold harmless Texas Capital, its
officers, directors,
employees and agents from, for and against any and all
losses, costs, claims,
damages, suits, causes of action, and judgments suffered
by, asserted against, or
recovered from Texas Capital or liabilities or
penalties (including, but not
limited to, any penalties imposed by any
governmental entity or
agency) and expenses (including, but not limited to,
reasonable attorneys' fees)
suffered or incurred by Texas Capital as a result of
or arising out of, or
attributed, directly or indirectly, to the performance
or
non-performance of any
services or of any obligation under this Agreement by
ACE, its agents (including
all Service Providers) or employees, but excluding
losses directly attributable
to Contractor.
9. Fees
and Expenses
Fees and expenses under this Agreement shall be determined and
payable
in accordance with the
provisions of ANNEX III hereto.
10.
Examinations and Audits
(a) ACE shall
allow Texas Capital and its designees, including any
regulatory or supervisory
body to which Texas Capital is subject, to examine and
audit such book, records,
reports from audits conducted by ACE or its agents
regarding the Cash, ICB
Checks and the Covered SSM facilities which Texas
Capital or its designees may
reasonably deem appropriate in order to determine
compliance with the terms of
this Agreement, the Operating Agreement and
applicable laws and
regulations. ACE shall have the right to have an employee
or
agent present at all times
during any examination or audit of its records or
facilities. Such routine
examinations and audits shall be conducted during ACE's
normal business hours, if
commercially possible. In the event of any financial
discrepancies, Texas
Capital's records of the amounts disbursed, amounts
received by Texas Capital and
amounts owed by ACE to Texas Capital shall be
presumptively correct, absent
manifest error in computation.
CASH SERVICES AGREEMENT
10
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(b) Texas
Capital shall allow ACE and its designees, to examine
and audit such books, records
and reports related to the ICB Checks and any of
the accounts established by
Texas Capital or the Contractor in connection with
this Agreement.
11.
Insurance
ACE shall maintain and furnish written evidence, including
a
Certificate of Insurance, of
insurance in the form attached hereto as EXHIBIT C
and such other insurance
policies as may be reasonably requested by Texas
Capital, provided that such
policy attached as EXHIBIT C shall (i) be in the
minimum amount of
$15,000,000, (ii) have a deductible of no more than
$1,000,000, (iii) provide
that Texas Capital shall receive no less than 30 days
written notice prior to the
effectiveness of any policy change or cancellation
and (iv) shall provide that
Texas Capital may pay any unpaid premium under the
policy such that the policy
remains in effect.
12. Term;
Termination; Survival
This Agreement shall be effective from the date of execution and
shall
continue until the earlier to
occur of: (i) May 1, 2004; or (ii) termination by
either party as provided in
this PARAGRAPH 12. This Agreement may be terminated
upon the occurrence of any of
the following conditions:
(a) By either
party immediately:
(1) upon
written notice from the non-breaching party to the
breaching party, in the event
of material breach of any provision of this
Agreement (other than those
events described in PARAGRAPHS 12(b) and 12(c)
below), if such material
breach has not been cured within 24 hours of an earlier
written notice specifying the
nature of the breach;
(2) in the
event that either party to this Agreement shall: (i)
commence a voluntary case or
other proceeding seeking liquidation,
reorganization or other
relief with respect to itself or its debts under any
bankruptcy, insolvency or
other similar law now or in the future in effect, (ii)
seek the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any
substantial part of its property, (iii) make a
general assignment for the
benefit of creditors, (iv) fail generally to pay its
debts as they become due, or
(v) take any corporate action to authorize any of
the foregoing; or
(3) in the
event that an involuntary case or other proceeding
shall be commenced against
either party to this Agreement seeking liquidation,
reorganization or other
relief with res
