First Amendment to Loan and Servicing Agreement among ACE Funding LLC, ACE Cash Express, Autobahn Funding Company LLC, DZ Bank, and U.S. Bank National Association (Dec. 22, 2003)
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This amendment updates the terms of a loan and servicing agreement originally made between ACE Funding LLC, ACE Cash Express, Autobahn Funding Company LLC, DZ Bank, and U.S. Bank National Association. The changes clarify definitions, update procedures for handling accounts and checks, and allow for a letter of credit to substitute for certain insurance requirements. The amendment also adds new representations and compliance obligations for the parties. These changes are effective once specified conditions are met.
EX-10.2 4 d11768exv10w2.txt EX-10.2 FIRST AMENDMENT DATED AS OF DEC. 22, 2003 EXHIBIT 10.2 FIRST AMENDMENT DATED AS OF DECEMBER 22, 2003 LOAN AND SERVICING AGREEMENT DATED AS OF DECEMBER 18, 2002 This FIRST AMENDMENT (this "Amendment") dated as of December 22, 2003 is entered into among ACE FUNDING LLC, a Delaware limited liability company (the "Borrower"), ACE CASH EXPRESS, INC., a Texas corporation, individually ("ACE") and as Check-Casher (in such capacity, the "Check-Casher"), AUTOBAHN FUNDING COMPANY LLC, a Delaware limited liability company (the "Lender"), DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK FRANKFURT AM MAIN ("DZ Bank"), as administrative agent for Lender (in such capacity, the "Administrative Agent") and as liquidity agent for Liquidity Providers (in such capacity, the "Liquidity Agent"), and U.S. BANK NATIONAL ASSOCIATION, as collateral agent for the Secured Parties (in such capacity, the "Collateral Agent"). RECITALS WHEREAS, the parties hereto have entered into a certain Loan and Servicing Agreement dated as of December 18, 2002 (as amended, supplemented or otherwise modified from time to time, the "Loan and Servicing Agreement"); WHEREAS, the parties hereto wish to make certain amendments to the Loan and Servicing Agreement as herein provided; NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and the Loan and Servicing Agreement, the parties hereto agree as follows: SECTION 1. Definitions. All capitalized terms used but not defined herein are used as defined in the Loan and Servicing Agreement. SECTION 2. Amendments to Loan and Servicing Agreement. Effective as of the date that the conditions set forth in Section 3 hereof are satisfied, the Loan and Servicing Agreement is hereby amended as follows: 2.1. The definition of "Usage Period" in Appendix A to the Loan and Servicing Agreement is hereby amended to replace the phrase "BBB" therein with the phrase "Baa3". 2.2. Clause (e) of the definition of "Eligible Assets" in Appendix A to the Loan and Servicing Agreement is hereby amended to read as follows: "Was automatically endorsed by the SSM to read (i) if an Electronic Presentment Agreement is in effect, "Void ACE Cash Express Void" or (ii) otherwise, "Ace Cash Express Pay to US Bank A/C #_____________." 2.3. Section 3.01(a) is hereby amended to add the following after the end of the first paragraph thereof: "Notwithstanding anything in this Agreement to the contrary, if an Electronic Presentment Agreement is not in effect, each of the Borrower and the Check-Casher covenant and agree that (i) each Vault Collection Account at an Approved Vault Bank shall consist of two deposit accounts, one of which will be used to receive deposits (the "Deposit Account") of Checks from the Approved Couriers for presentment and cashing and a second deposit account (the "Release Account") for disbursing funds to Approved Couriers for deposit into the SSMs, (ii) the Deposit Account will be established such that none of the Check-Casher, ACE or the Borrower may give directions as to the removal of funds therefrom, (iii) all proceeds from the presentment and cashing of Checks shall be swept on a daily basis from the Deposit Account to the Release Account and (iv) on a daily basis, excess funds in each Release Account not distributed to Approved Couriers on such day or to be distributed on the following day will be swept to the Trust Collection Account." 2.4. Section 5.01(v) of the Loan and Servicing Agreement is hereby replaced in its entirety as follows: "(v) [Reserved].". 2.5. A new Section 6.03 is added to the Loan and Servicing Agreement as follows: Section 6.03 Annual Usage Period Representations: Each of the Borrower, the Check-Casher and ACE represent and warrant as of the date of the start of each Usage Period that: (i) updated Schedules I, II, III, IV and V have been delivered to the Collateral Agent and the Liquidity Agent reflecting the existing Vault Collection Accounts, SSMs and Locations, Excluded SSMs and Locations, Insurance Schedule, and Check Cashing Fees, respectively, (ii) all required insurance hereunder is in full force and effect and identical to the policies provided for the prior Usage Period (or has been otherwise consented to by the Liquidity Agent) and (iii) there have been no changes to the form of Approved Cashier's Check, the form of Approved RAL Agreement, any Approved Courier Agreement, any Approved Vault Bank Agreement, any SSM Acknowledgment, any Agent Bank Acknowledgment, any Approved Tax Provider Acknowledgment, any agreements with Approved Tax Providers, any agreements with the Approved Bank 2 or any other agreement relating to the SSMs or the transportation of Cash or Checks (including any agreements referred to in Section 5.01(l), (n), (p), (q) or (w)) or the parties thereto since the prior Usage Period, or any such changes have been otherwise consented to by the Liquidity Agent. 2.6. Section 7.01(g) of the Loan and Servicing Agreement is hereby replaced in its entirety as follows: "(g) Compliance with Agreements. Comply with the terms of each of the Approved Courier Agreements, Approved Vault Bank Agreements, all agreements with Approved Tax Providers, the Electronic Presentment Agreement (if then in effect), and all agreements with Approved Banks, entered into in connection with the transactions contemplated by the Transaction Documents." 2.7. Section 7.04(n) of the Loan and Servicing Agreement is hereby replaced in its entirety as follows: "(n) Check Endorsement. Ensure that the check cashing program related to the SSMs at all times is established and operating such that each Check deposited into an SSM will be automatically endorsed: "Ace Cash Express Pay to US Bank A/C #_____________." 2.8. Section 7.04(p) of the Loan and Servicing Agreement is hereby replaced in its entirety as follows: "(p) Compliance with Agreements. Comply with the terms of each of the Approved Courier Agreements, Approved Vault Bank Agreements, all agreements with each SSM Lender, all agreements with Approved Tax Providers, the Electronic Presentment Agreement (if then in effect) and all agreements with Approved Banks entered into in connection with the transactions contemplated by the Transaction Documents.". 2.9. Section 8.01(l) of the Loan and Servicing Agreement is hereby amended by inserting, at the beginning of the section, the words, "for so long as the Electronic Presentment Agreement is in effect,". 2.10. Section 8.02 of the Loan and Servicing Agreement is hereby amended to (i) add "(a)" prior to the existing provisions and (ii) add the following new clauses to the end of such Section 8.02: (b) Letter of Credit Matters. Notwithstanding the foregoing Section 8.02(a), the Check-Casher shall have the ability to substitute a Letter of Credit for the required errors and omissions insurance referenced in such Section 8.02(a). (c) Drawings on Letter of Credit. If the Liquidity Agent determines (A) that any amount payable by the Check-Casher or ACE (but excluding amounts payable by Borrower) hereunder (including any indemnity payment) has not been paid 3 when due or the Borrower has suffered any loss related to the failure of the Check-Casher to perform any of its obligations hereunder or (B) the Borrower has suffered any loss of a nature that the Liquidity Agent has determined in its reasonable discretion would otherwise have been covered by an errors and omissions policy, the Liquidity Agent may deliver notice thereof to the Collateral Agent, which notice shall specify the aggregate unpaid amount then due and payable by the Check-Casher or ACE and/or the amount of such loss. Following receipt of such notice, the Collateral Agent shall make a drawing on the Letter of Credit for the amount specified and apply the amounts received as directed by the Liquidity Agent. (d) Letter of Credit Rating Downgrade. In the event that the Letter of Credit Bank fails to maintain a short-term unsecured debt rating of at least "Prime-1" by Moody's and "F1" by Fitch, then within two (2) Business Days after Check-Casher shall have received notice or shall have obtained actual knowledge of such event, Check-Casher shall notify the Lender, the Collateral Agent and the Liquidity Agent, and Check-Casher shall, within twenty-one (21) Business Days after giving such notice, use all reasonable efforts to obtain a replacement letter of credit for such Letter of Credit issued by a Qualified Letter of Credit Bank in an amount equal to the Letter of Credit Available Amount. If Check-Casher does not replace such Letter of Credit as aforesaid, the Collateral Agent shall make a drawing on the Letter of Credit in an amount equal to the Letter of Credit Available Amount and deposit such amount into a segregate trust account with such amounts to be held and applied in accordance with Section 8.02(c). (e) Letter of Credit Release. Upon the written instruction of the Liquidity Agent, following the earliest to occur of (i) the Usage Period Maturity Date, (ii) delivery of an errors and omissions policy in form and substance acceptable to the Liquidity Agent and (iii) the payment in full of all obligations of the Borrower, ACE and the Check-Casher under the Transaction Documents, the Collateral Agent shall release the Letter of Credit to the Check-Casher for cancellation. 2.11. Appendix A to the Loan and Servicing Agreement is hereby amended by inserting the following definitions in appropriate alphabetical sequence as follows: "Letter of Credit" means an irrevocable letter of credit issued by a Letter of Credit Bank for the benefit of the Collateral Agent with an initial stated amount of $1,000,000, as the same may be reduced or reinstated from time to time in accordance with its terms, and any letters of credit issued in substitution therefor or replacement thereof in accordance with Section 8.02. "Letter of Credit Available Amount" shall equal at any time the amount available to be drawn under the Letter of Credit at such time. "Letter of Credit Bank" means any Qualified Letter of Credit Bank. "Qualified Letter of Credit Bank" means a bank which (i) has been approved by the Liquidity Agent and (ii) has a short-term unsecured debt rating of at least "Prime-1" by Moody's and "F1" by Fitch. 4 2.12. Appendix A to the Loan and Servicing Agreement is hereby amended by replacing the following definition in its entirety as follows: ""Related Rights" means (i) all of Borrower's right, title and interest in and to all insurance claims related to the Cash or Checks, (ii) the Letter of Credit and all amounts in respect of draws made under the Letter of Credit and (iii) all of Borrower's right, title and interest in and to all Tax Filer Accounts, Refunds and RAL Agreements.". 2.13. Schedules II, III, and IV to the Loan and Servicing Agreement are hereby replaced with Schedules II, III, and IV hereto. SECTION 3. Conditions Precedent. This Amendment shall become effective on the date when: 3.1. the Administrative Agent shall have received an original counterpart (or counterparts) of this Amendment, executed and delivered by each of the parties hereto, or other evidence satisfactory to the Administrative Agent of the execution and delivery of this Amendment by such parties; 3.2. the Collateral Agent shall have received either a fully-executed copy of the Letter of Credit or a copy of an errors and omissions policy; 3.3. the Administrative Agent shall have received proof of insurance reasonably acceptable to the Administrative Agent covering any theft, destruction, or other loss of Cash while such Cash is located in an SSM naming the Collateral Agent as loss payee; 3.4. the Administrative Agent shall have received a pro forma Borrowing Base Report and a pro forma Servicing Report, prepared in respect of the proposed initial Borrowing for the 2004 Usage Period; 3.5. the Administrative Agent shall have received good standing certificate for Borrower issued by the Secretary of State of Delaware and a good standing certificate for the Check-Casher issued by the Secretary of State of Texas; 3.6. the Administrative Agent shall have received letters from the rating agencies then rating the Commercial Paper Notes confirming that the existing ratings of the Commercial Paper Notes will remain in effect after giving effect to this Amendment and otherwise affirming the existing ratings of the Commercial Paper Notes; 3.7. the Liquidity Provider shall have extended its liquidity funding commitment pursuant to Section 2.10(a) of the Liquidity Agreement to May 31, 2004 by notice in writing to the Lender of its consent to such extension; and 3.8. the Administrative Agent has confirmed receipt in immediately available funds of the Annual Commitment Fee and all other amounts payable under the Fee Letter on or prior to the date of the initial Borrowing for the 2004 Usage Period. 5 SECTION 4. Miscellaneous. 4.1. Reaffirmation of Covenants, Representations and Warranties. Upon the effectiveness of this Amendment, each of the Borrower, the Check-Casher and ACE hereby reaffirms all covenants, representations and warranties made in the Loan and Servicing Agreement to the extent the same are not amended or waived hereby and agrees that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment. 4.2. Representations and Warranties. Each of the Borrower, the Check-Casher and ACE hereby represents and warrants that (i) this Amendment constitutes a legal, valid and binding obligation of such Person, enforceable against it in accordance with its terms and (ii) upon the effectiveness of this Amendment, no Termination Event or Event of Default shall exist. 4.3. References to Loan and Servicing Agreement. Upon the effectiveness of this Amendment, each reference in the Loan and Servicing Agreement to "this Agreement", "hereunder", "hereof", "herein", or words of like import shall mean and be a reference to the Loan and Servicing Agreement as amended hereby, and each reference to the Loan and Servicing Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Loan and Servicing Agreement shall mean and be a reference to the Loan and Servicing Agreement as amended hereby. 4.4. Effect on Loan and Servicing Agreement. Except as specifically amended above, the Loan and Servicing Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 4.5. No Waiver. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lender, the Collateral Agent or Administrative Agent under the Loan and Servicing Agreement or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, except as specifically set forth herein. 4.6. Governing Law. This Amendment, including the rights and duties of the parties hereto, shall be governed by, and construed in accordance with, the internal laws of the State of New York. 4.7. Successors and Assigns. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 4.8. Headings. The Section headings in this Amendment are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Amendment or any provision hereof. 4.9. Counterparts. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. 6 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. ACE FUNDING LLC By /s/ Mike Briskey Title: Vice President ACE CASH EXPRESS, INC. individually and as Check-Casher By /s/ Mike Briskey Title: VP Finance & Asst. Treasurer 7 AUTOBAHN FUNDING COMPANY LLC as Lender By: DZ BANK AG DEUTSCHE ZENTRAL- GENOSSENSCHAFTSBANK FRANKFURT AM MAIN By /s/ Patrick Preece Title: VP By /s/ Richard Wisniewski Title: VP DZ BANK AG DEUTSCHE ZENTRAL- GENOSSENSCHAFTSBANK FRANKFURT AM MAIN, as Administrator and as Liquidity Agent By /s/ Patrick Preece Title: VP By /s/ Richard Wisniewski Title: VP 8 U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent By /s/ Toby Robillard Title: Asst. Vice President 9 SCHEDULE II
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14 SCHEDULE III None. SCHEDULE IV INSURANCE REQUIREMENTS 1. Required Theft/Loss Insurance Protection
* Minimum acceptable Theft/Loss coverage 2. Required Errors and Omissions Insurance Minimum Coverage, unless Letter of Credit substituted pursuant to Section 8.02(n): $2,000,000 3. Required Fidelity Insurance Minimum Coverage: $2,000,000 4. Letter of Credit Minimum initial stated amount, pending release pursuant to Section 8.02(e): $1,000,000
