Money Transfer Agreement - Travelers Express Co. Inc., MoneyGram Payment Systems and Ace Cash Express Inc.
MONEY TRANSFER AGREEMENT
This Money Transfer Agreement ("Agreement") is between Travelers Express
Company, Inc. and MoneyGram Payment Systems, Inc. (collectively, "Company") and
Ace Cash Express, Inc. ("Ace").
1. PURPOSE AND EFFECTIVENESS.
a. The purpose of this Agreement is to authorize Ace (and to the
extent Ace so elects, Ace's subsidiaries) to sell and provide
Money Transfer Services at the Locations (as defined below).
"Money Transfer Services" are the electronic Transfer Send,
Transfer Receive and Express Payment transactional services
offered by Company under the trade or service mark
MoneyGram(R)or any other name, tradename or service mark
Company may designate. A "Location" is a location owned and
operated by Ace (and to the extent Ace so elects, Ace's
subsidiaries) at which it offers check-cashing and other
retail financial services (whether through Ace personnel or
unmanned machine or equipment); "Location" does not include
any location owned and operated by a franchisee of Ace or a
franchisee of any of Ace's subsidiaries.
b. This Agreement is signed by Company and Ace (collectively,
"Parties") on the Signature Date (as defined in Section 28).
Except for paragraph 1 of Exhibit A attached to this Agreement
("Exhibit A"), however, this Agreement is effective at 12:01
a.m. on January 1, 2001 (the "Effective Date"); paragraph 1 of
Exhibit A is effective on the Signature Date.
2. APPOINTMENT AND RELATIONSHIP.
a. Company appoints Ace to sell and provide Money Transfer
Services only as provided in this Agreement. Ace accepts the
appointment only under the terms of this Agreement and agrees
not to offer any other competitive money transfer services in
any of its Locations while this Agreement is in effect (except
that Ace may perform existing contracts at Locations acquired
by Ace, though Ace shall terminate any such contract, and
offer Money Transfer Services, as soon as is reasonably
practicable if there is no economic penalty in the contract
and such termination would not be a breach of the contract).
Ace also agrees, for itself and its subsidiaries, that it will
not permit any other Person (as defined in Section 25) to
offer any other competitive money transfer services in space
leased or provided by Ace in the Locations. Ace may not create
a subagency to offer Money Transfer Services. This Agreement
does not include or relate to any franchisee of Ace or any
franchisee of any of Ace's subsidiaries or any location of any
such franchisee.
b. "Sales Proceeds" are the amounts of money to be transferred in
all Transfer Send transactions (the "Transfer Amounts"), all
Consumer Fees (as defined in Section 3.b), and all other cash
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proceeds from Ace's sale of the Money Transfer Services in
Transfer Send transactions. To the extent required by
applicable law, (i) Ace shall hold all Sales Proceeds as
"trust funds" and blank Money Transfer Checks (as defined in
Section 3.c) in trust for Company and (ii) if Ace commingles
the Sales Proceeds with any funds of Ace, the commingled funds
are impressed with a trust in favor of Company to the extent
of the Sales Proceeds due Company. Except as provided in this
Agreement and except for liens and security interests granted
to Ace's secured creditors, (A) Ace does not acquire any
right, title, or interest in the Sales Proceeds or the blank
Money Transfer Checks, and (B) all such Sales Proceeds and
blank Money Transfer Checks remain the property of Company.
c. The Parties are independent. This Agreement does not create or
evidence a partnership or joint venture between the Parties.
Each Party is solely responsible for its own employees,
including the actions or omissions and the compensation of
those employees, and neither Party has any authority with
respect to the other Party's employees.
3. MONEY TRANSFER PROCEDURES.
a. Numbers.
(i) The Numbers (as defined below) must be provided by
Ace to Company each time a Transfer Send or Transfer
Receive request is made. The "Numbers" are the
Identification Number and the PIN assigned to Ace by
Company; "Identification Number" means the unique and
confidential identification number provided or
assigned by Company to each of its authorized agents
or trustees conducting Transfer Send and Transfer
Receive transactions; "PIN" means a second
confidential identification number provided by
Company to each of its authorized agents or trustees
conducting Transfer Send and Transfer Receive
transactions. The PIN can be changed if the security
of either Number has been compromised.
(ii) Ace agrees to take reasonable precautions to prevent
disclosure of the Numbers to, and corresponding
access to the Money Transfer Services by,
unauthorized Persons and will notify Company promptly
if Ace knows or reasonably suspects that the Numbers
have been disclosed to any unauthorized Persons.
Company will, as soon as practicable thereafter,
issue new Numbers to Ace. Ace shall be liable for all
use or misuse of the Numbers by any unauthorized
Person other than a Person who or which obtained
access through any act or omission of Company or
under its control. Ace shall assist Company, as
reasonably requested, in investigating the
circumstances of any use or misuse of the Numbers by
any unauthorized Person.
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(iii) Ace hereby acknowledges that Company will refuse to
authorize transactions if the correct Numbers are not
provided. Ace agrees that Company shall have the sole
and exclusive right, at any time, to refuse any
Transfer Send or Transfer Receive request.
b. Transfer Send Transactions.
(i) For each Transfer Send transaction (which in this
Agreement includes an Express Payment transaction),
Ace shall collect from the consumer the Transfer
Amount and the applicable Consumer Fee(s). "Consumer
Fee" means a variable fee, as designated from time to
time by Company, that Ace or any other of Company's
agents or trustees for Money Transfer Services shall
charge each consumer making a Transfer Send
transaction. Subject to subsection (ii) of this
Section 3.b, Company shall provide Ace a Consumer Fee
schedule, which Company may from time to time amend
by providing at least 30 days' prior written notice
of the amendment to Ace. Ace shall not charge
consumers additional fees of any kind or nature for
any Transfer Send transaction.
(ii) Except for temporary Consumer Fees established only
for promotional pricing purposes, each Consumer Fee
included in the Consumer Fee schedule provided to Ace
for each of the Locations in a Market (as defined
below) shall be within * of the corresponding
Consumer Fee that each other agent or trustee of
Company for Money Transfer Services with retail
locations in that Market (a "Same-Market Agent") is
permitted to charge. For the purpose of this Section
3.b(ii), "Market" means a Designated Market Area (as
defined by Nielsen Media Research). But if any
Same-Market Agent is ever permitted to charge any
Consumer Fee that would be at least * greater or at
least * less than the corresponding Consumer Fee that
Ace may charge at the Locations in that Market (a
"Triggering Consumer Fee"), then Company shall offer
to amend Ace's Consumer Fee schedule by amending or
adjusting Ace's Consumer Fee to be the same as the
Same-Market Agent's Consumer Fee. Company shall make
such offer by giving written notice thereof to Ace
either (A) at least 30 days before the Triggering
Consumer Fee is implemented at any of the Same-Market
Agent's locations in the Market, or (B) promptly upon
learning that Ace proposes to open or acquire a
Location at which Money Transfer Services will be
offered in a Market in which a Same Market Agent is
permitted to charge a Triggering Consumer Fee (in
which case Ace shall have 30 days from receipt of
that offer to accept or reject the offer). If Ace
elects to accept the proposed amendment to its
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
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Consumer Fee (and Consumer Fee schedule), then (x)
Company must implement the adjusted or amended
Consumer Fee at each Location in the Market, in the
case of clause (A) above, no later than 14 days after
the Same-Market Agent first offers Money Transfer
Services for that Consumer Fee at its locations in
the Market or, in the case of clause (B) above, no
later than 14 days after Ace accepts the proposed
amendment to its Consumer Fee (and Consumer Fee
schedule), and (y) that adjusted or amended Consumer
Fee shall remain in effect (subject to the occurrence
of another Triggering Consumer Fee) for one year
after it is first implemented or for so long as the
same Consumer Fee is effective for the Same-Market
Agent, whichever is less; after that required period
of effectiveness, Company shall (if Ace so requests
in writing) restore the Consumer Fee to the level or
amount in effect before the adjustment or amendment.
Ace's election to accept a proposed amendment to its
Consumer Fee must be made by written notice to
Company within the applicable 30-day election period
described in clause (A) or clause (B) above; if Ace
does not give that notice within that 30-day period,
Ace shall be deemed to have refused the proposed
amendment. In the event of any Triggering Consumer
Fee, whether or not Ace elects to accept a proposed
amendment to its Consumer Fee, Company agrees that it
will not advertise or promote, or cause the
Same-Market Agent to advertise or promote, the
discrepancy between the Same-Market Agent's Consumer
Fee and Ace's corresponding Consumer Fee (though Ace
acknowledges that Company shall have no obligation to
prohibit or stop any such advertising or promotion
solely on the part of the Same-Market Agent). Ace
understands that any decrease in Consumer Fees that
it charges may result in reduced commissions (unless
the Parties otherwise agree).
(iii) Ace agrees to sell Money Transfer Services for cash,
though Ace may accept another form of payment;
however, if Ace sells a Money Transfer Service for
other than cash, Ace will nevertheless be liable to
Company for an amount of cash equal to the Sales
Proceeds.
(iv) Ace is fully responsible and unconditionally liable
to Company under this Agreement for all Transfer Send
transactions initiated by giving the Numbers to
Company's transaction center.
(v) Ace shall remit to Company, by deposit in the Trust
Account so that Company may initiate an ACH debit
against the Trust Account, all Sales Proceeds, or an
amount equal to all Sales Proceeds, associated with
all Transfer Send transactions and Consumer Fees no
later than the first business day after the Transfer
Send transaction is initiated.
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c. Transfer Receive Transactions.
(i) Ace shall follow the computerized or telephonic
authorization procedures specified by Company, which
are applicable generally to all of Company's
authorized agents or trustees for Money Transfer
Services, prior to disbursement of the Transfer
Amount.
(ii) Ace shall maintain the ability to disburse at least
$500 in cash for each Transfer Receive. If a Transfer
Receive involves a Transfer Amount which exceeds $500
or if the recipient requests disbursement in a form
other than cash, Ace will disburse the Transfer
Receive amount by issuing a Money Transfer Check to
the recipient, or in such other form as approved by
Company. A "Money Transfer Check" is a special draft,
in a form provided to Ace by Company, evidencing
Company's obligation to pay cash. Ace shall deposit
in the Trust Account Money Transfer Checks in the
amount of each Transfer Receive transaction paid out
in cash in order to itself receive reimbursement for
cash disbursed. Ace shall not charge a fee of any
kind for cashing a Money Transfer Check issued by Ace
in connection with a Transfer Receive transaction.
Money Transfer Checks are not to be used by Ace for
any purpose other than in connection with the Money
Transfer Services.
(iii) Ace is fully responsible and unconditionally liable
to Company under this Agreement for all amounts which
Ace, pursuant to a Transfer Receive transaction,
wrongfully disburses either to a Person other than
the intended recipient or as a result of paying out
an incorrect amount. Ace shall pay all such wrongful
disbursement amounts to Company within 30 days after
written demand therefor from the Company.
4. SUPPLIES AND SOFTWARE.
a. On or for the Effective Date and thereafter from time to time
as reasonably requested by Ace, Company shall (at no charge to
Ace) distribute Money Transfer Checks to the Locations in such
quantities as Ace may reasonably request.
b. On or for the Effective Date and thereafter from time to time
as reasonably requested by Ace, Company shall (at no charge to
Ace) distribute to the Locations such forms and supplies as
may be necessary for Ace to conduct the Money Transfer
Services at those Locations.
c. Company shall provide Ace various interior signs and display
materials prepared by Company at its expense to advertise and
promote the Money Transfer Services ("Promotional Materials").
Company shall provide to Ace for review, before shipment to
any Location, each type or form of the Promotional Materials
that Company proposes for use or display at any Location. Upon
Ace's approval thereof (which may not be unreasonably withheld
or delayed), Company shall (at its own expense) ship the
Promotional Materials directly to the Locations in such
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quantities as Ace may reasonably request; that shipment may be
by whatever means Company deems appropriate. Ace shall display
the approved Promotional Materials at the Locations at which
the Money Transfer Services are offered. Company shall afford
Ace an opportunity to receive, and if Ace so elects shall
provide Ace, each type of Promotional Material that Company
prepares for use by its agents or trustees for Money Transfer
Services. The Promotional Materials in Ace's possession or
control may be used by Ace only for the purposes of this
Agreement, and shall remain the property of Company. Ace's
right to use the Promotional Materials shall cease upon
expiration or termination of this Agreement. Ace shall destroy
any Promotional Materials in Ace's possession or control upon
expiration or termination of this Agreement.
d. Company hereby grants Ace a nonexclusive license to use, and
shall provide Ace the necessary copies (in object code) of,
Company's transaction software that permits its agents or
trustees to sell and provide Money Transfer Services
("Software"), for use with Ace's point-of-sale system. Company
shall also provide Ace the necessary copies of each update or
revision to the Software provided to any of Company's agents
or trustees for Money Transfer Services during the
effectiveness of this Agreement (and each such provided update
or revision shall be included in "Software"); before providing
any update or revision to the Software, however, Company shall
give Ace at least 90 days' prior written notice thereof and
shall afford Ace's chief information officer an opportunity to
review and test that update or revision. The Software may be
used by Ace only as permitted by this Agreement, and shall
remain the property of Company. Ace agrees to maintain a
telephone line to communicate transaction data to Company's
transaction center through Company's toll-free number; this
may be a shared line. The Software will be programmed to call
daily to Company's toll-free number. The Software contains
technology protected by patents and trade secrets. Ace may not
reverse engineer or decompile the Software. Ace's right and
license to use the Software under this Agreement shall cease
upon expiration or termination of this Agreement. Ace shall
destroy all copies of the Software in Ace's possession or
control upon expiration or termination of this Agreement.
5. PERSONNEL AND SPACE; LIMITATION OR SUSPENSION.
a. Ace agrees to furnish all personnel, space, and utilities
necessary and appropriate, in Ace's good-faith judgment, for
offering, selling, and providing Money Transfer Services at
the Locations at which Money Transfer Services are offered,
sold, and provided.
b. To the extent that Company may, upon advice of counsel,
reasonably deem it necessary in order to avoid any violation
of law or of any order, judgment, or decree of any court or
request of any other governmental authority or agency having
authority over Company, Company may, by prior oral notice
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(confirmed promptly by written notice) to Ace, (i) limit the
number of Money Transfer Services transactions or the dollar
amount of Money Transfer Services that Ace may sell or provide
or (ii) suspend Ace's right under this Agreement to sell or
provide any Money Transfer Services. If Company takes action
under the preceding sentence due to Company's receipt of any
written notice or communication from any agency or other
governmental authority, Company shall provide Ace with a copy
of such notice or communication within one business day after
Company's receipt of it, unless prohibited from doing so. In
addition, Company will give Ace prompt written notice (unless
prohibited) if Company learns of any pending or overtly
threatened action or proceeding or investigation that is
reasonably likely to result in such a notice or communication.
Ace will immediately stop selling or providing Money Transfer
Services if a governmental agency or authority specifically
orders that Ace stop selling or providing Money Transfer
Services.
c. To the extent that Company may reasonably deem it necessary to
investigate or respond to any fraudulent or other illegal
activity, or any reasonably suspected fraudulent or illegal
activity, involving the use of Money Transfer Services at any
Location, Company may suspend Ace's right to offer, sell, and
provide Money Transfer Services at a Location; this
suspension, however, shall be limited to only such time and
scope as are necessary to permit Company to so diligently
investigate or respond. Any such suspension or investigation
or response by Company shall be performed or conducted in such
a manner as to interfere as little as possible with Ace's
other business and operations at the Location.
6. CARE OF COMPANY'S PROPERTY.
Ace agrees to safeguard Sales Proceeds and blank Money Transfer Checks
with the same degree of care that a normally prudent person would give
to his own property. Ace will remain liable to Company for the Sales
Proceeds to be remitted until Company has received collected funds in
the full amount of the Sales Proceeds.
7. RESPONSIBILITIES -- ACE.
a. Ace is responsible for, and agrees to indemnify Company
against, any and all losses, damages, and expenses (including
attorneys' fees) which Company may sustain or incur resulting
from any act or failure to act (whether negligent, dishonest,
or otherwise) by Ace or any of Ace's employees or other
representatives (not including any franchisees) (whether or
not acting within the scope of employment) relating to this
Agreement.
b. Ace agrees to indemnify Company against any loss of blank
Money Transfer Checks that may occur by crime or mysterious
disappearance, except as stated in Section 8.a.
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8. RESPONSIBILITIES -- COMPANY.
a. Company (and not Ace) will be responsible for loss of a blank
Money Transfer Check only when all of the following conditions
occur:
(i) The loss is not the result of Ace's intentional
misconduct or breach of this Agreement;
(ii) Ace has given the same protection to the blank Money
Transfer Check that a prudent person would give to
his own cash;
(iii) Company receives a report of the loss, including the
serial number of the missing blank Money Transfer
Check, by telephone at least 24 hours before the
Money Transfer Check is presented to Company for
payment; and
(iv) Ace promptly submits to Company, by notice in
accordance with Section 23, a report describing the
loss and listing the serial number of the lost blank
Money Transfer Check.
b. Ace is not responsible to Company for counterfeited items
resembling Money Transfer Checks except to the extent that
Ace's act or failure to act contributed to or permitted the
counterfeiting.
c. Company will provide assistance to Ace, upon reasonable
request, in tracing lost, stolen, or missing Money Transfer
Checks. Company will act as quickly as possible on any report
from Ace made pursuant to Section 8.a(iii).
d. Company is responsible for, and agrees to indemnify Ace
against, any and all losses, damages, and expenses (including
attorneys' fees) which Ace may sustain or incur resulting from
any act or failure to act (whether negligent, dishonest, or
otherwise) by Company or any of Company's employees or other
representatives (whether or not acting within the scope of
employment) relating to this Agreement.
e. Company will, at its expense, provide training of Ace's
personnel from time to time (upon Ace's reasonable request)
regarding Money Transfer Services procedures in connection
with the establishment of the Money Transfer Services at an
Acquired Competitive Location (as defined in paragraph 3 of
Exhibit A) or regarding operational changes in the Software.
That training will be provided at the Acquired Competitive
Locations at which the Money Transfer Services are being
established or (if related to changes in the Software) at
Ace's regional locations and corporate office, as agreed by
the Parties.
9. NO PUNITIVE OR CONSEQUENTIAL DAMAGES. Under no circumstances shall a
Party be liable under this Agreement for any punitive or exemplary
damages (however described) or for any consequential, indirect, special,
or incidental damages (however described), even if the possibility of
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those damages was disclosed or otherwise known to that Party. This
exclusion, however, does not affect a Party's liability for lost profits
as part of actual damages for any breach of its obligations under this
Agreement.
10. FINANCIAL RESPONSIBILITY. Each Party agrees to maintain a sound
financial condition. In this Agreement, Ace's "sound financial
condition" means that Ace meets both of the following credit criteria:
a. Each day Ace shall maintain Liquid Assets (as defined
below) at least equal to Ace Working Indebtedness (as
defined below). For this purpose, "Liquid Assets"
means the sum (without duplication) of (i) the ledger
balances of all bank accounts of Ace, (ii) the
balances of all investment accounts of Ace, (iii)
checks and other liquid instruments held by Ace
pending deposit, (iv) cash in each of Ace's
locations, (v) cash, checks, and other instruments in
transit to bank accounts or to Ace's locations, and
(vi) cash, instruments, or other liquid assets of Ace
held by Company. For this purpose "Ace Working
Indebtedness" means the sum (without duplication) of
(A) the outstanding principal balance of Ace's
indebtedness to lenders under its revolving (working
capital) credit facilities and (B) the aggregate
amount of Sales Proceeds pending remittance to
Company under this Agreement.
b. The most recent quarterly or annual financial
statements of Ace reflect a positive amount after
deducting from EBITDA (as defined below) the sum of
Ace's taxes and interest expense. For this purpose,
"EBITDA" means Ace's earnings before interest, taxes,
depreciation and amortization.
c. Ace agrees that its reports on Forms 10-K and 10-Q
filed with the Securities and Exchange Commission
will support its compliance with the credit criteria
set forth in Sections 10.a and 10.b. In addition, if
the existing Money Order Agreement between Ace and
Travelers Express Company, Inc. dated as of April 6,
1998 (the "Money Order Agreement") expires or is
terminated in accordance with its terms and is not
replaced by an agreement between Ace and Travelers
Express Company, Inc. that requires Ace to provide
reports, at least as frequently as monthly, of
compliance with credit criteria comparable to those
set forth in Section 10.a, then Ace agrees to provide
to Company a report showing Ace's compliance with the
credit criteria set forth in Section 10.a as of the
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last business day of each calendar month during the
effectiveness of this Agreement; that report will be
provided to Company within five business days after
the last business day of that calendar month. Ace
further agrees that its annual audited financial
statements will include an "unqualified" opinion by
its outside auditors. As a publicly held company, Ace
is required by applicable securities laws to make
publicly available its annual and quarterly financial
statements and related information; if Company is
unable to obtain those financial statements and
information through other sources, Ace will provide
Company copies of those publicly available financial
statements and information promptly upon Company's
written request.
11. PAYMENTS AND COMMISSIONS TO ACE. The various payments to Ace and
commission schedules for Ace's service as Company's agent for Money
Transfer Services at Locations are set forth on Exhibit A.
12. REMITTANCES AND REPORTS.
a. Ace shall establish and maintain an account at a bank selected
by Ace into which it will deposit all Sales Proceeds, or an
amount of cash equal to all Sales Proceeds ("Trust Account"),
and shall notify Company of that Trust Account. Ace will
provide at least 15 days' written notice to Company before
changing a Trust Account and will not terminate or close an
existing Trust Account until a new Trust Account is open.
b. Ace shall authorize Company to initiate ACH debit and credit
entries on or to the Trust Account by executing and delivering
to Company an authorization agreement substantially in the
form of Exhibit B to this Agreement.
c. If a day on which any amount is to be paid or remitted by one
Party to the other in any manner (including by ACH debit or
credit entry) under this Agreement is not a business day, that
amount shall be due on the next business day.
d. Reports to Company of Money Transfer Services transactions at
Locations shall be made by Company's electronic transaction
information transmitted by the Software.
13. INTEREST.
a. Any amount of the Incentive Bonus (as defined in paragraph 2
of Exhibit A) not paid by Company when due to Ace under this
Agreement will bear interest (unless waived by Ace) until paid
at an annual rate equal to the Prime Rate (as defined below)
as that Prime Rate may be established from day to day. "Prime
Rate" means the prime commercial rate of interest published by
The Wall Street Journal for corporate loans by large U.S.
money-center commercial banks. No interest will accrue on any
adjustments.
b. Interest will not exceed the amount or rate that may lawfully
be charged under applicable Texas law, and any amount
contracted for, charged, or taken in excess of the amount or
rate allowed by law will be credited or refunded to Company.
This Section 13.b overrides any other provision in this
Agreement or in any document between the Parties related to
this Agreement.
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14. LOCATIONS. Ace is authorized to sell and provide Money Transfer
Services only at the Locations. Ace agrees to give Company a list,
before the Effective Date, of the Locations at which Money Transfer
Services will be offered, sold, and provided under this Agreement
beginning on or as of the Effective Date and to keep Company informed
of the Locations where Ace offers, sells, and provides Money Transfer
Services. Ace will give Company oral or written notice of Ace's intent
to open or acquire any new Location at which Money Transfer Services
will be offered, sold, and provided under this Agreement; Ace will give
that notice at least 30 days, or as soon as reasonably practicable,
before opening or acquiring the Location.
15. ADVERTISING AND SIGNAGE.
a. Company shall, at its expense, advertise and promote the Money
Transfer Services, at the Locations and otherwise, on a
national basis in the United States of America.
b. Ace agrees to include Company's name or logo for Money
Transfer Services on each permanent exterior sign for each
Location at which Money Transfer Services are offered
("Sign"), subject to Company's payment or reimbursement as set
forth in Section 15.c and to the Parties' agreement on the
design or appearance of such Sign. The Parties agree to
cooperate in good faith in determining the design or
appearance of such Signs.
c. Company agrees to pay or reimburse Ace the following for each
Sign: (i) $ * for each "can" or "pole" Sign and (ii) $ * for
each "channel-letter" Sign. Such payment shall be made to Ace,
by wire transfer to an account designated by Ace, by the tenth
day of each calendar month for all Signs delivered to the
applicable Locations in the preceding calendar month during
which this Agreement is effective. Company's payment or
reimbursement obligations regarding Signs that are
replacements of permanent exterior signs at Effective Date
Locations (as defined in paragraph 2.b of Exhibit A) shall not
exceed a total of $ * during any calendar year, unless Company
otherwise agrees. All costs or expenses of each Sign, other
than the costs or expenses described above in this Section
15.c, shall be Ace's responsibility.
d. Ace may not use Company's name or logo on any signage without
Company's consent or approval.
e. Each Party may, only with the other Party's written consent or
approval, use the other Party's name, logos, trademarks,
service marks, or other intellectual property in advertising
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
<PAGE>
or promotional materials prepared (directly or indirectly) by
the first Party regarding the offering of Money Transfer
Services during the effectiveness of this Agreement.
f. Company may use or refer to Ace's name and Locations in any
listing by or on behalf of Company of Money Transfer Services
network locations.
16. CONFIDENTIALITY. The Parties shall perform the Confidentiality
Agreement that is set forth in the attached Exhibit C to this Agreement
(the "Confidentiality Agreement").
17. DISPUTE RESOLUTION. Without limiting a Party's right to terminate this
Agreement pursuant to any of subsections (i) through (x) of Section
18.b (including the other provisions of this Agreement referred to
therein), the Parties will resolve any dispute, disagreement, claim, or
controversy between them arising in connection with or relating to this
Agreement, or the validity, interpretation, performance, breach,
default, or termination of this Agreement ("Dispute"), in accordance
with the attached Exhibit D to this Agreement ("Dispute Resolution").
18. TERM AND TERMINATION.
a. The effective term of this Agreement expires or ends at
11:59:59 p.m., Central Time, on December 31, 2007 (the "Stated
Expiration Date"), subject, however, to extension of the term
as described below in this Section 18.a and to the right of
either Party to terminate this Agreement in accordance with
Section 18.b. The stated seven-year term shall be extended by
Company's payment of New Location Bonuses (as defined in
paragraph 3 of Exhibit A) for De Novo Locations (as defined in
paragraph 3 of Exhibit A) and Acquired Competitive Locations
(as defined in paragraph 3 of Exhibit A) as follows:
(i) This Agreement shall be effective as to each Acquired
Competitive Location and each De Novo Location for
which a New Location Bonus is paid (collectively, a
"Bonus Location") before the Stated Expiration Date
for seven years from the date at which the sale of
Money Transfer Services is begun at that Bonus
Location, and the term of this Agreement as to each
such Bonus Location shall be considered so extended
without any further action of either Party.
Nevertheless, if at the Stated Expiration Date such
seven-year term of this Agreement as to any Bonus
Location does not expire, then, in lieu of the
continuation of a separate term for each such Bonus
Location, the term of this Agreement as to all
Locations offering or (in accordance with paragraph
3.e of Exhibit A, if applicable) deemed to be
offering Money Transfer Services at the Stated
Expiration Date shall be extended, without any
further action of either Party, as set forth below in
this Section 18.a.
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(ii) As of the Stated Expiration Date, the number of full
calendar months (or partial months treated as full
calendar months as provided below) remaining in the
individual seven-year term ("Bonus Location Remaining
Months") as to each of such Bonus Locations shall be
determined. For purpose of this Section 18.a(ii), a
partial month, if the number of days then remaining
therein is 50% or more of the days in such month,
shall be counted as a full month, but if less than
50%, shall not be counted as a full month. Then the
aggregate number of Bonus Location Remaining Months
shall be divided by the number of such Bonus
Locations plus the number of other Locations at which
Money Transfer Services are then being offered, and
the product thereof in terms of whole months
(calculated to hundredths and then rounded down to
the next smaller whole number if .50 or less, or
rounded up to the next higher whole number is more
than .50) shall be the period by which the term of
the Agreement shall be extended from the Stated
Expiration Date. For example, if, at the --- -------
Stated Expiration Date, there are 1,000 non-Bonus
Locations and 100 Bonus Locations with the following
Bonus Location Remaining Months:
Bonus Locations Remaining Term
-----------------------------------------
20 72
20 60
20 42
15 30
15 12
10 6
The aggregate number of Bonus Location Remaining
Months would be 4,290 (i.e., 1,440 + 1,200 + 840 +
450 + 300 + 60), which, when divided by 1,100 (i.e.,
1,000 + 100), would result in 3.90 months. Thus,
under this example, the term of this Agreement would
be extended for four months, which would result in an
extension of the term of this Agreement to April 30,
2008.
b. A Party may terminate this Agreement as follows:
(i) Company may declare Ace to be in default and
terminate this Agreement immediately upon notice if
Ace shall fail to remit any Sales Proceeds due to
Company under this Agreement and that failure
continues for one business day after notice of
nonremittance to Ace.
(ii) Either Party may declare the other Party to be in
default and terminate this Agreement immediately upon
notice if the other Party shall fail to maintain a
sound financial position; provided, however, that the
nondefaulting Party shall have five business days to
declare the default and terminate this Agreement by
<PAGE>
written notice to the defaulting Party, and if the
nondefaulting Party does not so declare the default
and terminate within five business days, the
particular default shall be deemed waived.
(iii) Ace may declare Company to be in default and
terminate this Agreement immediately upon notice if
Company shall fail to pay any installment of the
Incentive Bonus due to Ace and that failure continues
for five days after notice of nonpayment to Company.
(iv) Either Party may declare the other Party to be in
default and terminate this Agreement on five days'
notice upon the occurrence of a payment-related
breach or default (other than as provided in
subsection (i) of this Section 18.b) that is not
cured within such five-day period.
(v) Either Party may declare the other Party to be in
default and terminate this Agreement immediately upon
notice if: (A) the other Party makes a general
assignment of all or substantially all of its assets
for the benefit of creditors; (B) the other Party
applies for, consents to, or acquiesces in the
appointment of a receiver, trustee, custodian, or
liquidator for its business or all or substantially
all of its assets; (C) the other Party files a
voluntary or petition for relief under the United
States Bankruptcy Code or other bankruptcy or
insolvency laws; or (D) an involuntary bankruptcy or
insolvency petition filed against the other Party is
not dismissed within 90 days.
(vi) Ace may declare Company to be in default and
terminate this Agreement upon notice as follows: If
(A) Company exercises its right under Section 5.b to
limit the number of Money Transfer Services
transactions or the dollar amount of Money Transfer
Services that Ace may sell or provide, or to suspend
Ace's right to sell or provide Money Transfer
Services, (B) the limitation or suspension is longer
than 30 consecutive days, and (C) the number or
dollar amount of Money Transfer Services transactions
that Ace is permitted to sell or provide during the
limitation or suspension period is less than 90% of
the number or dollar amount that Ace sold or provided
before the limitation or suspension was imposed, or
the effect of the limitation or suspension is to
reduce the number or dollar amount of Money Transfer
Services transactions that Ace sells or provides
during the limitation or suspension period to 90% of
the highest number or dollar amount that Ace sold or
provided during any 30-consecutive-day period before
the limitation or suspension, then Ace may terminate
this Agreement immediately by giving written notice
to Company within 90 days after the 30th day of the
limitation or suspension or after the ten percent or
more decrease occurs, whichever is later.
(vii) Ace may declare Company to be in default and
terminate this Agreement in accordance with the
<PAGE>
following: If a Commission Material Adverse Change
(as defined below) is determined to have occurred,
then (unless that determination is made by
arbitration in accordance with Exhibit D) Ace may
give Company at least 30 days' prior written notice
of termination; if that determination is made by
arbitration in accordance with Exhibit D, however,
Ace's notice of termination may be given ten days in
advance. A "Commission Material Adverse Change" for
purposes of this Section 18.b(vii) shall have
occurred if:
(A) Ace's total commissions earned or received
at all Locations from Money Transfer
Services under this Agreement during either
(x) any * shall have declined by an
aggregate of at least * as compared to the
total of such commissions earned or received
during the same period in the immediately
preceding * (which may include * preceding
the Effective Date), or (y) any * shall have
declined by an aggregate of at least * from
the total of such commissions earned or
received during the immediately preceding *
period (which may include * preceding the
Effective Date); and
(B) Such decline shall be solely a result of any
action or actions by Company (which shall
include any deliberate omission by Company
to act on any matter within its reasonable
control) regarding or affecting the Money
Transfer Services (including the pricing
therefor), whether or not related to this
Agreement, including, for example, Company's
failure to respond to changes in technology,
service capabilities, or products of
competitors of Company in the money transfer
business or Company's actions that
materially change the manner in which Money
Transfer Services are offered, sold, or
provided by its agents or trustees for Money
Transfer Services and Ace shall be unable to
adapt to such changes within a reasonable
time thereafter without a material adverse
change in its financial condition in order
to reasonably and materially adapt to such
changes;
provided,that if Company does not agree that a
Commission Material Adverse Change has occurred, then
it will not be deemed to have occurred until so
determined by agreement of the Parties or by
arbitration in accordance with Exhibit D. Ace shall
give written notice to Company of Ace's intent to
---------------
* 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.
<PAGE>
terminate under this Section 18.b(vii) within 30 days
following its receipt of the data related to the
commissions from Money Transfer Services conducted at
the Locations for the preceding calendar quarter; if
Ace does not give that notice within that 30-day
period, it shall not thereafter be entitled to
terminate this Agreement under this Section 18.b(vii)
based on any Commission Material Adverse Change that
may be asserted with respect to the two consecutive
calendar quarter period ended with that preceding
calendar quarter or the four consecutive calendar
quarter period ended with that preceding calendar
quarter.
(viii) Company may declare Ace to be in default and
terminate this Agreement in accordance with the
following: If a Commission Material Adverse Change
(as defined below) is determined to have occurred,
then (unless that determination is made by
arbitration in accordance with Exhibit D) Company may
give Ace at least 30 days' prior written notice of
termination; if that determination is made by
arbitration in accordance with Exhibit D, however,
Company's notice of termination may be given ten days
in advance. A "Commission Material Adverse Change"
for purposes of this Section 18.b(viii) shall have
occurred if:
(A) Ace's total commissions earned or received
at all Locations from Money Transfer
Services under this Agreement during either
(x) any * all have declined by an aggregate
of at least * as compared to the total of
such commissions earned or received during
the same period in the immediately preceding
* which may include calendar quarters
preceding the Effective Date) or (y) any *
shall have declined by an aggregate of at
least * from the total of such commissions
earned or received during the immediately
preceding * period (which may include *
preceding the Effective Date); and
(B) Such decline shall be solely a result of
any action or actions by Ace (which shall
include any deliberate omission by Ace to
act on any matter within its reasonable
control) regarding or affecting the offer,
sale, or provision of Money Transfer
Services at the Locations, whether or not
related to this Agreement, including, for
example, Ace's failure to respond to changes
in technology, service capabilities or
products and services made by Company and
its other agents or trustees for Money
Transfer Services unless such a response
would result in a material adverse change in
Ace's financial condition; or Ace's actions
that materially change the manner in which
Money Transfer Services are offered, sold,
or provided to its customers; or Ace's
material refusal or failure to promote the
Money Transfer Services at the Locations; or
Ace's changes in its store operations that
materially affect customer traffic at the
Locations and Company shall be unable to
adapt to such changes within a reasonable
time thereafter without a material adverse
change in its financial condition in order
---------------
* 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.
<PAGE>
to reasonably and materially adapt to such
changes; except that Ace's exercise of any
of its rights granted in this Agreement,
including any election to amend (or not
amend) any Consumer Fee under Section
3.b(ii) or any election not to participate
in any price promotion for Money Transfer
Services, shall not be deemed to be or to
cause a Commission Material Adverse Change;
provided,that if Ace does not agree that a
Commission Material Adverse Change has
occurred, then it will not be deemed to have
occurred until so determined by agreement of
the Parties or by arbitration in accordance
with Exhibit D. Company shall give written
notice to Ace of Company's intent to
terminate under this Section 18.b(viii)
within 30 days following its receipt of data
related to the commissions from Money
Transfer Services conducted at the Locations
for the preceding calendar quarter; if
Company does not give that notice within
that 30-day period, it shall not thereafter
be entitled to terminate this Agreement
under this Section 18.b(viii) based on any
Commission Material Adverse Change that may
be asserted with respect to the two
consecutive calendar quarter period ended
with that preceding calendar quarter or the
four consecutive calendar quarter period
ended with that preceding calendar quarter.
(ix) Either Party may declare the other Party in default
and terminate this Agreement upon 30 days' written
notice upon the occurrence of any material breach or
default by the other Party not covered by subsections
(i) through (viii) of this Section 18.b. which is not
cured within such 30-day period.
(x) Either Party may declare the other Party to be in
default and terminate this Agreement immediately upon
notice if the nondefaulting Party has terminated the
Money Order Agreement in accordance with its terms,
before the expiration of the Money Order Agreement,
because of a payment-related default by the
defaulting Party under the terms of the Money Order
Agreement.
c. A Party may not terminate this Agreement if the event or the
circumstance described in Section 18.b., upon which that Party
would rely in so terminating, was caused by that Party's
breach of or default under this Agreement. The termination
rights of a Party under Section 18.b. are not exclusive of any
other right or remedy available to or granted to a
nonbreaching or nondefaulting Party under this Agreement.
d. Upon the expiration or termination of this Agreement, Ace will
remit to Company, in accordance with Sections 3.b and 12, all
Sales Proceeds and will pay to Company any other amounts it
then owes to Company, and Company will pay to Ace all amounts
it then owes to Ace. Each Party will also remain liable until
it has fulfilled all of its obligations to the other Party
that arose or accrued before the expiration or termination.
Ace will pay the reasonable cost to return the blank Money
<PAGE>
Transfer Checks to Company if Company has terminated this
Agreement because of any breach or default by Ace; otherwise,
Company will pay that cost.
e. The Parties' respective rights and obligations under this
Agreement will survive the expiration or termination of this
Agreement to the extent necessary to give full effect to this
Agreement. Without limiting the preceding sentence, the
Parties' respective rights and obligations under Sections 4,
6, 7, 8, 12, 16, 17, 18, 19, 24, and 26 and under the
Confidentiality Agreement and Exhibit D will survive the
expiration or termination of this Agreement.
19. REMEDIES AND WAIVERS. All remedies for any breach or default of this
Agreement are cumulative. Except as provided in this Agreement, Party's
delay or failure to enforce a right or pursue a remedy is not a waiver.
A Party's waiver (not otherwise set forth in this Agreement) must be in
writing and signed by it. A waiver of a Party's rights or remedies
regarding a particular breach of or default under this Agreement is not
a waiver of those rights or remedies, or any other rights or remedies,
regarding any other breach of or default under this Agreement.
20. COMPLIANCE WITH LAW. Each Party agrees to comply in all material
respects with all laws and regulations applicable to its activities
under this Agreement, including laws and regulations that relate to
money laundering. Ace agrees that it will sell and provide Money
Transfer Services only at Locations where such Money Transfer Services
may legally be sold and provided.
21. CHANGE OF OWNERSHIP OR CONTROL. Each Party agrees to notify the other
Party if the first Party's board of directors votes or consents to
change, or to recommend to that Party's shareholders that they vote or
consent to change, the ownership or control of that Party or its
business. Regardless of any change and any notice thereof in accordance
with the preceding sentence, the Parties will remain obligated under
this Agreement until this Agreement expires or is terminated according
to its terms.
22. INSPECTIONS. Each Party has the right, once per calendar year,
exercisable by reasonable prior notice to the other Party, to examine or
inspect the books and records of the other Party relating to the
performance of this Agreement. Such inspections shall be conducted at
the office of the Party being audited. Each Party shall bear the
expenses of conducting an inspection of the other Party's books and
records. A Party's examination of the other Party's books and records
may be conducted only during the other Party's normal business hours or
at any other reasonable time to which the other Party may consent. An
inspection shall be performed in a manner that does not unreasonably
disrupt the other Party's normal business operations. The Party
conducting an inspection may make and take away copies of any or all of
the other Party's books and records being examined.
<PAGE>
23. NOTICES. Except as otherwise provided in this Agreement, all notices,
requests, and other communications from one Party to the other under
this Agreement must be in writing and sent by facsimile, certified mail,
overnight mail, or courier or delivered in person, in any case prepaid
by the notifying Party, and must be addressed as follows:
IF TO ACE: IF TO COMPANY:
Ace Cash Express, Inc. Travelers Express Company, Inc.
Attention: President Attention: General Mana
1231 Greenway Drive, Suite 800 1550 Utica Avenue South
Irving, Texas 75038 Minneapolis, Minnesota 55416
Facsimile: (972) 582-1430 Facsimile: (612) 591-3325
Copy to: Richard A. Tulli, Esq. Copies to:
Gardere & Wynne, L.L.P Contracts Administration
1601 Elm Street, Suite 3000 Facsimile: (612) 591-3399
Dallas, TX 75201 and
Facsimile: (214) 999-4667 Chief Legal Counsel
Facsimile: (612) 591-3859
A Party may change its address for this purpose by giving written
notice of that change to the other Party in accordance with this
Section 23. Each notice, request, or other communication sent or
delivered as provided above in this Section 23 will be deemed given,
received, and effective on the date of actual receipt (or refusal) by
the addressee.
24. ASSIGNMENT. This Agreement shall be binding on each of the Parties and
their respective permitted successors and permitted assigns. Neither
Party may assign its rights or obligations hereunder without the prior
written consent of the other Party, except that (i) the consent may not
be unreasonably withheld or delayed if the proposed assignment is to a
Person that is capable of performing the assigning Party's obligations
under this Agreement and is not a competitor of the nonassigning Party,
and (ii) this restriction on assignment will not apply to a merger,
consolidation, or share exchange by a Party or the transfer of the
capital stock of a Party unless such transaction will render the
assigning Party incapable of performing its obligations under this
Agreement or result in ownership or control by a competitor of the
non-assigning Party. Notwithstanding the foregoing, nothing in this
Agreement prohibits the assignment of a Party's right to receive Sales
Proceeds or other amounts due under this Agreement or Ace's grant of a
security interest or lien in its rights as permitted by this Agreement
to its secured creditors. Any purported assignment in violation of this
Section 24 is void and ineffective.
25. INTERPRETATION AND DEFINITIONS. This Agreement is the result of the
Parties' negotiations, and no provision of this Agreement is to be
construed for or against either Party because of the authorship of that
provision. In the interpretation of this Agreement, except where
otherwise stated or the context otherwise requires:
<PAGE>
a. "business day" or "banking day" means any Monday through
Friday, excluding any such day on which the Federal Reserve
Bank of Minneapolis is authorized to be closed;
b. "including" or "include" does not denote or imply any
limitation;
c. "Person" means any individual; any corporation, partnership,
limited liability company, association, or other entity of any
kind; or any government or governmental agency or authority;
d. "Section" refers to a Section of this Agreement; and
e. each Exhibit is an integral part of this Agreement.
26. MISCELLANEOUS. This Agreement, together with its Exhibits, is the entire
agreement between the Parties relating to the subject matter of this
Agreement. This Agreement can be amended or changed only by a writing
signed by the Parties. Section headings are not part of this Agreement.
If any part of this Agreement is or becomes invalid, it is or will be
severed from the rest of this Agreement, and the rest of this Agreement
remains or will remain in effect so long as (i) the continued
effectiveness of the rest of this Agreement will not impose or result in
any substantial economic detriment to either Party or (ii) the Parties
amend this Agreement as necessary to preserve their underlying economic
or financial arrangements. This Agreement may be signed in counterparts,
with the same effect as if both Parties had signed the same paper; all
counterparts are to be construed together to be one, and the same,
document.
27. GOVERNING LAW. TEXAS LAW GOVERNS THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, INCLUDING THE VALIDITY
OR ENFORCEMENT AND THE CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT.
28. SIGNATURE DATE. This Agreement is signed by the Parties on June 30, 2000
(the "Signature Date").
<PAGE>
SIGNATURES
ACE: COMPANY:
ACE CASH EXPRESS, INC. TRAVELERS EXPRESS COMPANY, INC.
By:/s/ Jay B. Shipowitz By: /s/ Michael Berry
------------------------------------ ------------------------------------
Name: Jay B. Shipowitz Name: Michael Berry
------------------------------------ ------------------------------------
Title: President Title: VP-GM
------------------------------------ ------------------------------------
MONEYGRAM PAYMENT SYSTEMS, INC.
By: /s/ Michael Berry
-------------------------------------
Name: Michael Berry
-------------------------------------
Title: VP-GM
-------------------------------------
<PAGE>
EXHIBIT A TO MONEY TRANSFER AGREEMENT
Payments and Commissions
1. PAYMENT. Company is paying Ace the amount of $989,400 on the Signature
Date by wire transfer of funds to an account designated by Ace.
2. INCENTIVE BONUS.
a. Amount and Payment. Company shall pay Ace during the
effectiveness of this Agreement until the Stated Expiration
Date (but not during the term of any extension in accordance
with Section 18.a) a total of $12,446,772.24 ("Incentive
Bonus"). The Incentive Bonus shall be paid in equal
installments of $148,175.86 (without any interest) monthly, on
the first day of each calendar month beginning on the
Effective Date, by wire transfer of funds to an account
designated by Ace. The amounts of the Incentive Bonus paid to
Ace shall not be refundable (in whole or in part), but the
Incentive Bonus, and the corresponding installments thereof,
will be subject to reduction in accordance with paragraph 2.b
of this Exhibit A. The Incentive Bonus relates only to the
Locations, and not to any location owned and operated by any
franchisee of Ace or any franchisee of any of Ace's
subsidiaries.
b. Incentive Bonus Reduction. If the Incentive Bonus Reduction
Event (as defined below) occurs before the Stated Expiration
Date, the amount of each subsequent monthly installment of the
Incentive Bonus shall be reduced to the Prorata Installment
Amount. After the Incentive Bonus Reduction Event occurs, upon
each occurrence of a Subsequent Reduction Event (as defined
below), the amount of each subsequent monthly installment of
the Incentive Bonus shall be reduced to the Prorata
Installment Amount. In this Agreement, the following terms
shall have the respective meanings indicated:
(i) "Incentive Bonus Reduction Event": The initial
occurrence of a Net Location Reduction in excess of *
% of the total number of the Effective Date
Locations.
(ii) "Effective Date Locations": The Locations opened and
operating on the Effective Date.
(iii) "Net Location Reduction": The excess of (A) the total
number of the Effective Date Locations closed or sold
by Ace after the Effective Date, over (B) the total
---------------
* 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.
<PAGE>
number of the Acquired MoneyGram Locations (as
defined in paragraph 3.a of this Exhibit A) acquired
by Ace after the Effective Date.
(iv) "Subsequent Reduction Event": A Net Location
Reduction, after (and after giving effect to) the
occurrence of the Incentive Bonus Reduction Event,
equal to at least * percent of the total number of
the Effective Date Locations.
(v) "Prorata Installment Amount": That portion of
$148,175.86 which is equal to the ratio of (A) the
number of Locations at which the Money Transfer
Services are then offered at the conclusion of the
Incentive Bonus Reduction Event or a Subsequent
Reduction Event, to (B) the total number of the
Effective Date Locations.
3. NEW LOCATION BONUS.
a. Definitions. In this Agreement, the following terms shall
have the respective meanings indicated:
(i) "De Novo Location": Any Location constructed and
furnished by Ace on or after the Effective Date at or
from which no money transfer services (including the
Money Transfer Services) were offered by the previous
occupant (if any) of that Location.
(ii) "Acquired Competitive Location": A Location that Ace
has purchased or otherwise acquired directly, or
indirectly through the purchase or acquisition of
securities in any manner (including by merger,
consolidation, or share exchange), at or from which a
money transfer service competitive with the Money
Transfer Services was offered immediately before
Ace's acquisition.
(iii) "Acquired MoneyGram Location": Any Location that Ace
has purchased or otherwise acquired directly, or
indirectly by the purchase or acquisition of
securities in any manner (including by merger,
consolidation, or share exchange), at or from which
Money Transfer Services were offered immediately
before Ace's acquisition.
(iv) "Acquired Location": Collectively, an Acquired
Competitive Location or an Acquired MoneyGram
Location.
(v) "Grandfathered Location": Any Acquired Competitive
Location at which Ace begins to offer the Money
Transfer Services at any time from (and including)
January 1, 2000 through December 31, 2000.
------------------
* 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.
<PAGE>
(vi) "Unmanned Location": Any De Novo Location which is
not operated on a regular basis by on-site personnel
of Ace and at which the Money Transfer Services are
offered solely through a check-cashing machine or
other automated or customer-operated equipment.
b. New Location Bonus. For each De Novo Location (other than an
Unmanned Location) opened by Ace and each Acquired
Competitive Location acquired by Ace on or after the
Effective Date at which the Money Transfer Services are
offered, Company shall pay Ace the amount of $10,000 ("New
Location Bonus"). The New Location Bonus shall be paid within
30 days after Ace first offers the Money Transfer Services at
that De Novo Location (other than an Unmanned Location) or
the Acquired Competitive Location, as the case may be, in
accordance with the standard operating procedures established
by the Parties for beginning to offer Money Transfer Services
at a De Novo Location or an Acquired Location. For each De
Novo Location that is an Unmanned Location, Company shall pay
Ace a New Location Bonus only if the number of Money Transfer
Service transactions conducted at that Unmanned Location
equals or exceeds 120 in a calendar month for any three
calendar months during any six consecutive calendar month
period (the "Threshold"). In this circumstance, the New
Location Bonus shall be paid within 30 days after the
Threshold is met. A New Location Bonus shall only be payable
regarding a Bonus Location, and not regarding any Acquired
MoneyGram Location or any Location (including any
Grandfathered Location) that was open and operating before
the Effective Date. A New Location Bonus shall be payable on
a pro rata basis for any Bonus Location opened or acquired by
Ace after the Stated Expiration Date; for this purpose, the
pro rata amount of the New Location Bonus shall be as
follows:
($10,000/84) times the number of full or partial
calendar months remaining from the date on which the
Bonus Location is opened or acquired through the
expiration of the extended term of this Agreement
under Section 18.a after the Stated Expiration Date.
c. Unmanned Location Bonus. For each Unmanned Location opened by
Ace on or after the Effective Date at which the Money Transfer
Services are offered, Company shall pay Ace the amount of
$1,000 ("Unmanned Location Bonus"). The Unmanned Location
Bonus shall be paid within 30 days after Ace first offers the
Money Transfer Services at the Unmanned Location. The Unmanned
Location Bonus paid to Ace for an Unmanned Location shall be
credited against any New Location Bonus that becomes payable
to Ace for that Unmanned Location.
d. Bonus Payments. Each New Location Bonus and each Unmanned
Location Bonus shall be paid by ACH credit to an account
designated by Ace. No Unmanned Location Bonus or, except as
described in paragraph 3.e of this Exhibit A, New Location
Bonus shall be refundable (in whole or in part).
---------------
* 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.
<PAGE>
e. Closed Bonus Locations. As of the Stated Expiration Date, the
Parties will determine the number of Bonus Locations that Ace
has closed or sold before the Stated Expiration Date. If the
number of closed or sold Bonus Locations exceeds a number
equal to * % of the total number of Bonus Locations, the
following provisions of this paragraph 3.e shall apply: For
each Bonus Location that is closed or sold by Ace before the
Stated Expiration Date, either:
(i) Ace shall repay to Company that portion of the New
Location Bonus which is equal to the ratio of (A) 84
less the number of full or partial months that the
Money Transfer Services were offered at that Bonus
Location to (B) 84; or
(ii) that Bonus Location shall be deemed to be open and
offering Money Transfer Services at the Stated
Expiration Date for the purpose of calculating the
extension of the term of this Agreement after the
Stated Expiration Date under Section 18.a, with the
remaining term for that Bonus Location being deemed
equal to 84 less the number of full and partial
months that the Money Transfer Services were offered
at that Bonus Location.
Ace's repayment of a portion of the New Location Bonus for a
closed or sold Bonus Location under clause (i) of this
paragraph 3.e, if it so chooses, shall be made within 30 days
after the Stated Expiration Date by ACH credit or wire
transfer to an account designated by Company.
f. Relocated Locations. Ace may from time to time relocate one or
more existing or previously existing Locations, including any
Bonus Location. Any such relocation will not constitute or be
considered the opening of a De Novo Location, the acquisition
of an Acquired Location, or the closing or sale of a Bonus
Location under this Agreement. For this purpose, a
"relocation" of a Location is Ace's closing of an existing
Location followed by the opening of a Location constructed and
furnished by Ace (at or from which no money transfer services
were offered by the previous occupant, if any) within a
two-mile radius of the closed Location and within six months
after the closing of the Location.
4. COMMISSIONS TO ACE.
a. Locations other than De Novo Locations. Upon and after the
Effective Date, Company shall pay Ace the following
commissions for Money Transfer Services transactions at all of
the Locations (other than De Novo Locations) at which the
Money Transfer Services are offered:
---------------
* 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.
<PAGE>
(i) An amount equal to * % of the applicable Consumer Fee
for each Transfer Send transaction; and
(ii) an amount equal to * % of the applicable Consumer Fee
for each Transfer Receive transaction.
b. De Novo Locations. Upon and after the Effective Date, Company
shall pay Ace commissions for Money Transfer Services
transactions at all of the De Novo Locations at which the
Money Transfer Services are offered, depending upon the time
during which the Money Transfer Services are offered at that
De Novo Location, as follows:
(i) During the first year in which the Money Transfer
Services are offered at the De Novo Location, an
amount equal to * of the applicable Consumer Fee for
each Transfer Send and each Transfer Receive
transaction.
(ii) During the second year in which the Money Transfer
Services are offered at the De Novo Location, an
amount equal to * of the applicable Consumer Fee for
each Transfer Send and each Transfer Receive
transaction.
(iii) Thereafter, an amount equal to * of the applicable
Consumer Fee for each Transfer Send and each Transfer
Receive transaction.
For the purpose of this paragraph 4.b, the "first year" shall
be (A) the 12-consecutive-calendar-month period beginning on
the first day of the calendar month in which the Money
Transfer Services are first offered at a De Novo Location, if
the Money Transfer Services are first offered at the De Novo
Location on or before the 15th day of the calendar month, or
(B) the 12-consecutive-calendar-month period beginning on the
first day of the calendar month immediately following the
calendar month in which the Money Transfer Services are first
offered at a De Novo Location, if the Money Transfer Services
are first offered at the De Novo Location after the 15th day
of the calendar month; and the "second year" shall be the
12-consecutive-calendar-month period immediately following the
expiration of the first year.
c. Promotional Pricing. Ace may (but is not required to) cause
the Locations within the market area(s) in which Company is
conducting a price promotion for Money Transfer Services to
participate in such price promotion. Ace understands that, if
the Locations do participate, price promotions may result in
reduced commissions (unless the Parties otherwise agree). If
Ace elects not to have any Locations participate in a price
promotion, the commissions payable to Ace under this Agreement
shall not be affected.
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
<PAGE>
d. *
e. *
f. *
g. *
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
<PAGE>
EXHIBIT B TO MONEY TRANSFER AGREEMENT
ACH Authorization Agreement
1. Ace hereby authorizes Company to initiate Automatic Clearing House
("ACH") debit and credit entries to the account specified below, which
is the Trust Account under the Agreement. Such ACH debit and credit
entries shall be in accordance with the Agreement, this Authorization,
and the applicable rules relating to corporate trade payments entries
of the National Automated Clearing House Association and its related
member associations.
2. Ace warrants that the signatures below are all of the signatures
necessary to make this Authorization effective as to debit or credit
entries to the Trust Account. Ace will continue to maintain the account
as the Trust Account while this Authorization is in effect, except to
the extent permitted by Section 12. Neither Ace nor Company will be
liable for any act or omission of any automated clearing house,
depository, or other financial institution initiating or otherwise
having or conducting transactions with the account.
3. Ace may terminate this Authorization by notice to Company in accordance
with the Agreement. This Authorization shall remain in effect, however,
as to all ACH debit or credit entries which occurred before the
effective date of termination.
*
--------------------------------------------------------------------------------
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DEPOSITORY NAME AND ADDRESS
* *
------------------------------ ------------------------------
TRANSIT/ABA NUMBER ACCOUNT NUMBER
Ace Cash Express, Inc.
------------------------------ ------------------------------
* *
------------------------------ ------------------------------
EXACT NAME OF THE ACCOUNT AGENT'S TELEPHONE
/s/ Jay Shipowitz, President /s/ Debra A. Bradford, CFO
------------------------------ ------------------------------
SIGNATURE SIGNATURE
Jay Shipowitz, President Debra A. Bradford, CFO
------------------------------ ------------------------------
PRINTED NAME AND TITLE PRINTED NAME AND TITLE
June 30, 2000
------------------------------
DATE
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
<PAGE>
EXHIBIT C TO MONEY TRANSFER AGREEMENT
Confidentiality Agreement
1. CONFIDENTIAL INFORMATION. During the effectiveness of this Agreement, a
Party may disclose trade secrets and confidential and proprietary
information and materials, including information about its customers,
businesses, third-party relationships, and intellectual property, to the
other Party; that disclosure may be made in part by granting the other
Party access to books and records in accordance with Section 22. All of
this information is "Confidential Information" of the disclosing Party,
except as specifically excluded below.
2. RESTRICTIONS ON USE OR DISCLOSURE. A Party shall not use or disclose any
Confidential Information of the other Party except as necessary or
appropriate to perform, implement, or exercise (or defend) rights or
remedies under this Agreement.
3. INFORMATION EXCLUDED. A Party need not treat any of the following as
Confidential Information of the other Party under this Agreement:
a. Information which is or becomes publicly available or
available in the industry or is in the possession of a third
party without any violation of this Agreement.
b. Information which the Party can show was in its possession
prior to receipt from the other Party.
c. Information which is received by the Party from a third party
without (to the knowledge of that Party) any obligation of
confidentiality to the other Party.
4. COURT ORDERS, SUBPOENAS AND OTHER LEGAL REQUIREMENTS. A Party may
disclose the other Party's Confidential Information to the extent
required by court order or subpoena, without violating this Agreement;
in this circumstance, the Party required to disclose must notify the
other Party immediately and, at the reasonable request of the other
Party, cooperate in any lawful effort to contest the subpoena or other
legal process or to limit the scope of the disclosure. In addition, if a
---------------
* 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.
<PAGE>
Party reasonably believes that (based on advice of counsel) it has any
other legal obligation to disclose Confidential Information of the other
Party, then the disclosure may be made, to the extent required, without
the consent of the other Party.
5. PRESS RELEASE. The Parties may, on or promptly after the Signature Date,
jointly prepare and make a press release or public announcement about
their entering into this Agreement. Neither Party may (unless legally
required) make any other press release or public announcement about this
Agreement without the prior consent of the other Party (which may not be
unreasonably withheld or delayed).
6. MATERIALS. Materials in any medium containing Confidential Information,
whether furnished to a Party by the other Party or prepared by a Party,
are the sole property of the Party whose Confidential Information is
contained in the materials and must be kept confidential in accordance
with this Agreement, and must be delivered to the owning Party upon its
request and, in any event, upon the expiration or termination of this
Agreement.
7. REMEDIES. A Party's breach of the provisions of this Confidentiality
Agreement may cause irreparable harm to the other Party. Each Party
agrees that in the event of a breach or a threatened breach by it, the
other Party may seek injunctive relief in addition to other remedies
available to it.
<PAGE>
EXHIBIT D TO MONEY TRANSFER AGREEMENT
Dispute Resolution
1. NOTICE AND CURE. Except as otherwise specified in this Agreement, in the
event of an actual or alleged non-payment-related breach of or default
under this Agreement, the nonbreaching or nondefaulting Party shall give
the breaching or defaulting Party written notice of the breach or
default. The breaching or defaulting Party shall then have 30 days after
that notice in which to cure the specified non-payment-related breach or
default (unless that breach or default is not capable of being cured, in
which case there will be no cure period).
2. NEGOTIATION. If a Dispute (including any Dispute about any remittance or
payment to or by a Party under this Agreement) arises or if a
non-payment-related breach or default has not been cured within the
30-day cure period set forth in paragraph 1 of this Exhibit D (if
applicable), a Party may submit the Dispute (which, for the purpose of
this and the following provisions of Exhibit D, shall include an uncured
actual or alleged non-payment-related breach or default) in writing to
the other Party in accordance with Section 23. Upon the other Party's
receipt of that notice, the Parties agree to use their reasonable best
efforts to negotiate a resolution of the Dispute. If the Parties are
unable to resolve the Dispute by agreement within 30 days after receipt
of that notice, each Party will promptly designate in writing one
executive representative to, and they will use their respective
reasonable best efforts to, negotiate a resolution of the Dispute within
ten days after the expiration of that 30-day period.
3. MEDIATION.
a. If the Parties' representatives are unable to resolve the
Dispute as provided above, either Party may, by notice to the
other Party, require the Dispute to be submitted to nonbinding
mediation.
b. The Parties will attempt to agree upon and appoint a neutral
mediator promptly after notice of mediation is given. If the
Parties are unable to agree upon a mediator within five days
after that notice, either Party may request the American
Arbitration Association ("AAA") to appoint a neutral mediator,
who will conduct the mediation. The mediation will be
conducted, within 15 days after the mediator is appointed, in
St. Louis, Missouri.
c. Each Party will pay its own expenses, and the Parties will
share equally the fees and expenses of the mediator, in
connection with the mediation.
<PAGE>
4. ARBITRATION.
a. If mediation fails to resolve the Dispute within 30 days after
the date of submission, either Party may, by notice to the
other Party, require the Dispute to be submitted to binding
arbitration. When filing the demand for arbitration with AAA,
the filing Party shall request the AAA to appoint a panel or
board of three neutral arbitrators who are experienced in or
knowledgeable about the money-order or check-cashing business.
b. The board of arbitrators shall conduct the arbitration in
accordance with the Commercial Arbitration Rules of the AAA
then in effect, except as such rules may be modified for the
purpose of the arbitration proceeding by all or a majority of
the arbitrators or by written agreement of the Parties. The
arbitration shall be conducted in St. Louis, Missouri. The
arbitrators may, however, call and conduct hearings or
meetings at such other places as the Parties may agree or as
the arbitrators may, on the motion of a Party, determine to be
necessary to obtain significant testimony or evidence.
c. All statutes of limitations that would otherwise be applicable
shall apply to any arbitration hereunder. The Federal Rules of
Evidence and Procedure shall apply to the arbitration. The
arbitrators may authorize all forms of discovery, including
depositions, interrogatories and document production, on a
showing of particularized need that the requested discovery is
likely to lead to material evidence needed to resolve the
Dispute and is not excessive in scope, timing or cost.
d. The arbitration hearing shall be held within 30 days after the
appointment of the arbitrators, unless the Parties otherwise
agree. The final decision or award of the arbitrators shall be
rendered within 15 days after the hearing. That final decision
or award shall be made by unanimous or majority vote or
consent of the arbitrators and shall be deemed issued at the
place of arbitration. The arbitrators' decision shall be based
upon this Agreement and applicable law.
e. The final decision or award of the arbitrators shall be
binding upon the Parties, and judgment thereon may be entered
in any court having jurisdiction over one or both of the
Parties or any of their respective assets. The Parties waive
any right they may have to apply or appeal to any court for
relief from the preceding sentence or from any decision of the
board of arbitrators made, or any question of law arising,
before the final decision or award. The final decision or
award may include injunctive relief (other than temporary or
provisional relief in response to any actual or threatened
breach of this Agreement.
<PAGE>
f. The arbitrators shall award reasonable attorneys' fees and
costs to the prevailing Party in the arbitration. Otherwise,
each Party shall bear its own expenses, and one-half of the
fees and expenses of the arbitrators, in connection with the
arbitration proceedings.
5. TERMINATION AND OTHER REMEDIES. Except as provided in Section 18.b(i)
through (x), neither Party may terminate this Agreement or exercise any
other remedy until the Parties have worked through this dispute
resolution procedure or one Party has failed to cooperate or perform its
obligations under this Exhibit D; however, nothing in this Exhibit D
prevents (i) a Party from applying to a court having jurisdiction to (A)
enforce the dispute resolution procedure in this Exhibit D, (B) seek
temporary or provisional injunctive relief, in response to an actual or
threatened breach of this Agreement or otherwise so as to avoid
irrevocable damage or maintain the status quo, until a final arbitration
decision or award is rendered or the Dispute is otherwise resolved, or
(C) challenge or vacate any final arbitration decision or award that
does not comply with this dispute resolution procedure, as may have been
modified by the Parties' agreement (if applicable), or (ii) the Parties
from resolving any Dispute by written agreement.