þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-0723270 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, $0.001 par value per share | New York Stock Exchange |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
|
||||||||
4 | ||||||||
|
||||||||
16 | ||||||||
|
||||||||
31 | ||||||||
|
||||||||
31 | ||||||||
|
||||||||
31 | ||||||||
|
||||||||
32 | ||||||||
|
||||||||
|
||||||||
32 | ||||||||
|
||||||||
35 | ||||||||
|
||||||||
36 | ||||||||
|
||||||||
53 | ||||||||
|
||||||||
54 | ||||||||
|
||||||||
101 | ||||||||
|
||||||||
101 | ||||||||
|
||||||||
103 | ||||||||
|
||||||||
|
||||||||
|
||||||||
105 | ||||||||
|
||||||||
112 | ||||||||
|
||||||||
|
||||||||
Exhibit 10.50 | ||||||||
Exhibit 10.51 | ||||||||
Exhibit 10.52 | ||||||||
Exhibit 10.53 | ||||||||
Exhibit 10.54 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 21.1 | ||||||||
Exhibit 23.1 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
FORWARD-LOOKING STATEMENTS
Table of Contents
ITEM 1.
Table of Contents
Table of Contents
Table of Contents
Cash Access Products and Services
Information Services
Cashless Gaming Products
Cash Access Equipment Sales and Services
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Gaming License Required (3)(4)
Status
Revenue Percentage (1)(2)
Western
Western
Location **
2010 *
2009 *
Money
GCA or Holdings
Money
GCA or Holdings
NM
NM
Yes
Yes
Pending
Granted
5%
5%
Yes
Yes
Granted
Granted
12%
14%
Yes
Yes
Pending
Pending
5%
5%
Yes
No
Pending
N/A
8%
7%
Yes
No
Granted
N/A
3%
3%
Yes
No
Granted
N/A
6%
5%
Yes
Yes
Pending
Granted
NM
NM
Yes
No
Pending
N/A
3%
3%
Yes
Yes
Pending
Granted
NM
NM
Yes
Yes
Pending
Pending
4%
4%
Yes
Yes
Pending
Granted
NM
NM
Yes
No
Granted
N/A
3%
3%
Yes
No
Granted
N/A
3%
3%
Yes
No
Granted
N/A
22%
22%
No
No
N/A
N/A
5%
5%
Yes
Yes
Pending
Pending
4%
4%
No
No
N/A
N/A
NM
NM
Yes
No
Granted
N/A
6%
4%
Yes
Yes
Granted
Pending
NM
NM
No
Yes
N/A
Granted
NM
NM
Yes
Yes
Pending
Granted
3%
3%
Yes
No
Granted
N/A
NM
NM
Yes
Yes
Granted
Granted
*
**
(1)
(2)
(3)
(4)
Table of Contents
Table of Contents
Table of Contents
ITEM 1A.
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
ITEM 1B.
ITEM 2.
ITEM 3.
Table of Contents
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
ITEM 4.
ITEM 5.
Price Range
High
Low
$
8.38
$
6.51
9.26
7.20
7.46
3.46
4.17
2.26
$
4.27
$
2.07
8.31
3.63
9.21
6.71
7.98
6.14
Table of Contents
Maximum
Approximate Dollar
Total Number of Shares
Value of Shares that
Total Number of
Average Price per
Purchased as Part of
May Yet Be Purchased
Shares Purchased or
Share Purchased or
Publicly Announced
Under the Plans or
Withheld
Withheld
Plans or Programs
Programs
66,659
(1)
$
4.01
(2)
66,659
(1)
$
17,324,976
(5)
(1)
(2)
(1)
$
17,324,976
(5)
(1)
(2)
(1)
$
17,324,976
(5)
66,659
(1)
4.01
(2)
66,659
(1)
5,155
(3)
3.99
(4)
5,155
(3)
$
(5)
5,061
(3)
2.98
(4)
5,061
(3)
$
(5)
5,055
(3)
2.79
(4)
5,055
(3)
$
(5)
15,271
(3)
3.26
(4)
15,271
(3)
81,930
$
3.87
81,930
(1)
(2)
(3)
(4)
(5)
Table of Contents
*
Table of Contents
ITEM 6.
For the Years Ended December 31,
2010
2009
2008
2007
2006
(amounts in thousands, except per share)
$
244,139
$
289,314
$
326,476
$
316,094
$
287,053
314,627
325,953
289,122
240,575
221,727
28,357
38,525
42,366
31,126
29,166
18,467
13,928
13,644
10,145
9,827
605,590
667,720
671,608
597,940
547,773
(463,045
)
(501,810
)
(492,974
)
(428,508
)
(384,718
)
(73,720
)
(76,005
)
(83,962
)
(79,614
)
(65,021
)
(16,195
)
(17,851
)
(16,026
)
(11,600
)
(9,794
)
52,630
72,054
78,646
78,218
88,240
(16,329
)
(17,960
)
(27,888
)
(34,515
)
(42,038
)
36,301
54,094
50,758
43,703
46,202
(18,751
)
(20,556
)
(23,349
)
(16,709
)
(17,832
)
17,550
33,538
27,409
26,994
28,370
44
(3,939
)
(3,526
)
(1,944
)
17,550
33,582
23,470
23,468
26,426
(56
)
56
86
236
183
$
17,494
$
33,638
$
23,556
$
23,704
$
26,609
$
0.27
$
0.45
$
0.36
$
0.34
$
0.35
$
$
$
(0.05
)
$
(0.05
)
$
(0.02
)
$
0.27
$
0.45
$
0.31
$
0.29
$
0.33
$
0.26
$
0.45
$
0.36
$
0.33
$
0.35
$
$
$
(0.05
)
$
(0.04
)
$
(0.03
)
$
0.26
$
0.45
$
0.31
$
0.29
$
0.32
65,903
74,232
76,787
81,108
81,641
67,272
75,356
76,796
81,377
81,921
17,494
33,638
23,556
23,704
26,609
18,751
19,029
19,029
16,709
17,832
$
36,245
$
52,667
$
42,584
$
40,413
$
44,441
$
0.54
$
0.70
$
0.55
$
0.50
$
0.54
Table of Contents
For the Years Ended December 31,
2010
2009
2008
2007
2006
$
60,636
$
84,768
$
77,148
$
71,063
$
42,269
458,394
501,767
559,150
538,302
587,474
208,750
249,750
265,750
263,480
274,480
143,478
145,409
160,878
138,296
132,157
$
68,898
$
90,963
$
71,324
$
91,874
$
70,079
(24,492
)
(7,235
)
(58,708
)
(10,960
)
(17,061
)
(68,845
)
(74,425
)
(7,217
)
(49,715
)
(46,761
)
$
5.0
$
5.7
$
6.5
$
6.4
$
5.7
$
13.6
$
14.5
$
15.2
$
13.6
$
12.3
$
1.1
$
1.5
$
1.8
$
1.4
$
1.3
10.1
11.7
12.2
11.3
10.4
78.3
83.4
84.7
73.5
69.2
4.9
6.3
6.5
5.3
5.1
(1)
(2)
(3)
ITEM 7.
Table of Contents
Table of Contents
Table of Contents
Table of Contents
December 31, 2010
December 31, 2009
$
%
$
%
$
244,139
40.3
%
$
289,314
43.3
%
314,627
52.0
325,953
48.8
28,357
4.7
38,525
5.8
18,467
3.0
13,928
2.1
605,590
100.0
667,720
100.0
(463,045
)
(76.5
)
(501,810
)
(75.2
)
(73,720
)
(12.2
)
(76,005
)
(11.4
)
(16,195
)
(2.7
)
(17,851
)
(2.7
)
52,630
8.7
72,054
10.8
(16,329
)
(2.7
)
(17,960
)
(2.7
)
36,301
6.0
54,094
8.1
(18,751
)
(3.1
)
(20,556
)
(3.1
)
17,550
2.9
33,538
5.0
44
17,550
2.9
33,582
5.0
(56
)
56
$
17,494
2.9
%
$
33,638
5.0
%
Table of Contents
Table of Contents
Table of Contents
December 31, 2009
December 31, 2008
$
%
$
%
$
289,314
43.3
%
$
326,476
48.6
%
325,953
48.8
289,122
43.0
38,525
5.8
42,366
6.3
13,928
2.1
13,644
2.0
667,720
100.0
671,608
100.0
(501,810
)
(75.2
)
(492,974
)
(73.4
)
(76,005
)
(11.4
)
(83,962
)
(12.5
)
(17,851
)
(2.7
)
(16,026
)
(2.4
)
72,054
10.8
78,646
11.7
(17,960
)
(2.7
)
(27,888
)
(4.2
)
54,094
8.1
50,758
7.6
(20,556
)
(3.1
)
(23,349
)
(3.5
)
33,538
5.0
27,409
4.1
44
0.0
(3,939
)
(0.6
)
33,582
5.0
23,470
3.5
56
0.0
86
0.0
$
33,638
5.0
%
$
23,556
3.5
%
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Years Ended December 31,
2010
2009
$
68,898
$
90,963
(24,492
)
(7,235
)
(68,845
)
(74,425
)
307
(1,683
)
(24,132
)
7,620
84,768
77,148
$
60,636
$
84,768
Table of Contents
2 - 3
4 - 5
After
Contractual Cash Obligations
Total
1 Year
Years
Years
5 Years
(amounts in thousands)
$
208,750
$
81,000
$
127,750
$
$
14,447
12,118
2,329
2,722
809
1,071
587
255
3,226
1,288
1,938
$
229,145
$
95,215
$
133,088
$
587
$
255
(1)
(2)
(3)
Table of Contents
Table of Contents
Fiscal Quarter Ended
Ratio
2.50:1.00
2.75:1.00
3.00:1.00
3.25:1.00
3.50:1.00
3.75:1.00
Anytime in Period Ended
Ratio
4.25:1.00
4.00:1.00
3.75:1.00
3.25:1.00
2.75:1.00
If Total Leverage:
Sweep percentage
50
%
25
%
0
%
(1)
Table of Contents
Table of Contents
Table of Contents
ITEM 7A.
Table of Contents
ITEM 8.
55
56
57
58
59
61
Table of Contents
Global Cash Access Holdings, Inc.
Las Vegas, NV
March 14, 2011
Table of Contents
Table of Contents
For the Years Ended December 31,
2010
2009
2008
$
244,139
$
289,314
$
326,476
314,627
325,953
289,122
28,357
38,525
42,366
18,467
13,928
13,644
605,590
667,720
671,608
(463,045
)
(501,810
)
(492,974
)
(73,720
)
(76,005
)
(83,962
)
(16,195
)
(17,851
)
(16,026
)
52,630
72,054
78,646
(16,329
)
(17,960
)
(27,888
)
36,301
54,094
50,758
(18,751
)
(20,556
)
(23,349
)
17,550
33,538
27,409
44
(3,939
)
17,550
33,582
23,470
(56
)
56
86
17,494
33,638
23,556
397
947
(1,465
)
$
17,891
$
34,585
$
22,091
$
0.27
$
0.45
$
0.36
$
$
$
(0.05
)
$
0.27
$
0.45
$
0.31
$
0.26
$
0.45
$
0.36
$
$
$
(0.05
)
$
0.26
$
0.45
$
0.31
65,903
74,232
76,787
67,272
75,356
76,796
Table of Contents
Accumulated
Equity
Equity
Common Stock - Series A
Additional
Other
Attributable
Attributable
Number of
Paid in
Retained
Comprehensive
to GCA
to Non Controlling
Total
Shares
Amount
Capital
Earnings
Income
Treasury Stock
Holdings, Inc.
Interest
Equity
82,981,712
$
83
$
163,070
$
14,103
$
2,708
$
(41,668
)
$
138,296
$
135
$
138,431
23,556
23,556
(86
)
23,470
(1,465
)
(1,465
)
(1,465
)
9,049
9,049
9,049
5,500
(26,083
)
(8,233
)
(8,233
)
(8,233
)
(325
)
(325
)
(325
)
(49
)
(49
)
82,961,129
$
83
$
172,119
$
37,659
$
1,243
$
(50,226
)
$
160,878
$
$
160,878
33,638
33,638
(56
)
33,582
947
947
947
8,454
8,454
8,454
432,116
2,913
2,913
2,913
(54,200
)
4,084
(61,159
)
(61,159
)
(61,159
)
(179
)
(179
)
(179
)
(32
)
(32
)
1,363
5
5
5
83,344,492
$
83
$
183,486
$
71,302
$
2,190
$
(111,564
)
$
145,497
$
(88
)
$
145,409
17,494
17,494
56
17,550
397
397
397
7,935
7,935
7,935
1,200,402
1
5,629
5,630
5,630
(32,675
)
(32,675
)
(32,675
)
(799
)
(799
)
(799
)
461,552
1
1
1
32
32
(2
)
(2
)
(2
)
85,006,446
$
85
$
197,048
$
88,796
$
2,587
$
(145,038
)
$
143,478
$
$
143,478
Table of Contents
Table of Contents
2010
2009
2008
$
15,922
$
17,634
$
29,459
$
689
$
3,795
$
617
$
$
$
929
$
1,500
$
$
Table of Contents
Table of Contents
Table of Contents
$
11,115
8,086
(10,606
)
$
8,595
8,803
(10,362
)
$
7,036
Table of Contents
Total
2011
2012
2013
2014
2015
Thereafter
$
6,584
$
1,551
$
1,344
$
1,112
$
939
$
798
$
840
Total
2011
2012
2013
2014
2015
Thereafter
$
6,278
$
1,638
$
1,365
$
910
$
728
$
455
$
1,182
Cash
Central Credit
Advance
ATM
Check Services
and Other
Total
$
107,254
$
35,563
$
23,985
$
17,127
$
183,929
(6,359
)
(2,512
)
(704
)
(9,575
)
$
100,895
$
33,051
$
23,281
$
17,127
$
174,354
10,756
10,756
$
100,895
$
33,051
$
23,281
$
27,883
$
185,110
Table of Contents
Table of Contents
2010
2009
$
21,008
$
17,343
10,357
10,214
35,759
35,406
400
400
67,524
63,363
(41,156
)
(35,209
)
$
26,368
$
28,154
$
6.3
5.9
4.8
3.1
2.1
4.2
$
26.4
Table of Contents
Fair Value
Carrying Value
Level (1)
$
81,000
$
81,000
2
$
128,229
$
127,750
1
$
97,000
$
97,000
2
$
153,132
$
152,750
1
(1)
Table of Contents
Table of Contents
2010
2009
2008
65,903
74,232
76,787
1,369
1,124
9
67,272
75,356
76,796
(1)
(2)
(3)
2010
2009
2008
2.5
%
2.0
%
2.9
%
6.3
6.3
6.3
60.1
%
57.5
%
46.3
%
0.0
%
0.0
%
0.0
%
Table of Contents
Table of Contents
Useful Life
2010
2009
5
$
66,200
$
62,546
3
6,528
6,657
3
6,253
5,305
lease term
2,747
2,678
81,728
77,186
(65,080
)
(57,767
)
$
16,648
$
19,419
Table of Contents
Weighted Average
Equity Awards
Exercise Price
Stock Options
Restricted Stock
Available for
(Per Share)
Granted
Granted
Grant
$
13.21
4,283,156
396,784
3,173,799
N/A
2,493,570
$
6.66
4,531,500
5,500
(4,537,000
)
$
16.34
(185,950
)
$
13.16
(1,819,164
)
(26,083
)
1,845,247
$
8.93
6,995,492
190,251
2,975,616
N/A
2,488,819
$
2.47
2,981,500
1,047,875
(4,029,375
)
$
6.75
(432,116
)
(142,170
)
$
6.52
(683,043
)
(54,200
)
737,243
$
6.98
8,861,833
1,041,756
2,172,303
N/A
2,500,334
$
7.24
1,790,690
(1,790,690
)
$
4.69
(1,200,402
)
(461,552
)
$
5.50
(696,011
)
(99,154
)
795,165
$
7.50
8,756,110
481,050
3,677,112
Table of Contents
Weighted Avg.
Weighted
Number of
Exercise Price
Average Life
Aggregate
Common Shares
(Per Share)
Remaining
Intrinsic Value
(in thousands)
6,833,325
$
8.90
8.5 years
$
2,981,500
(432,116
)
(520,876
)
8,861,833
$
6.98
8.0 years
$
15,763
1,790,690
(1,200,402
)
(696,011
)
8,756,110
$
7.50
7.3 years
$
2,336
4,683,145
$
9.02
6.5 years
$
818
4,355,062
$
8.93
6.5 years
$
769
Table of Contents
Options Outstanding
Options Exercisable
Weighted
Average
Weighted
Weighted
Range of
Remaining
Average
Average
Exercise
Number
Contract
Exercise
Number
Exercise
Prices
Outstanding
Life
Prices
Exercisable
Price
2,354,678
8.3 years
$
2.70
831,386
$
2.93
3,937,434
7.9 years
$
7.17
1,604,430
$
6.81
1,000,000
6.8 years
$
9.99
791,666
$
9.99
1,012,331
4.1 years
$
13.98
1,012,330
$
13.98
160,000
5.4 years
$
14.22
151,666
$
14.20
151,667
5.5 years
$
15.22
151,667
$
15.22
140,000
5.7 years
$
16.77
140,000
$
16.77
8,756,110
4,683,145
Table of Contents
Weighted
Shares
Average Grant
Aggregate Fair
Outstanding
Date Fair Value
Value
(in thousands)
190,251
$
15.68
$
2,983
1,047,875
2.20
$
2,305
(142,170
)
12.14
$
(1,726
)
(54,200
)
5.69
$
(308
)
1,041,756
$
3.12
$
3,254
$
(461,552
)
3.88
$
(1,793
)
(99,154
)
2.72
$
(269
)
481,050
$
2.55
$
1,227
$
809
634
437
407
180
255
$
2,722
Table of Contents
Table of Contents
Table of Contents
$
81,000
127,750
$
208,750
Table of Contents
Table of Contents
Total Number of
Average Price per
Cost of Shares
Shares Purchased
Share Purchased
Purchased
or Withheld
or Withheld
or Withheld
15,404
$
7.24
$
111,564
5,106
6.40
32,675
117
6.84
799
20,627
$
7.03
$
145,038
Table of Contents
Description of Transaction
2010
2009
2008
$
25,000
$
$
3,536
3,140
3,171
728
1,185
(20
)
710
Description of Transaction
2010
2009
2008
$
$
$
(1
)
$
$
$
(1
)
$
$
$
(212
)
(447
)
$
$
$
(659
)
Table of Contents
2010
2009
2008
$
18,751
$
20,556
$
23,349
25
(2,214
)
$
18,751
$
20,581
$
21,135
2010
2009
2008
$
35,838
$
53,717
$
49,043
463
377
1,715
$
36,301
$
54,094
$
50,758
$
17,680
$
20,616
$
22,978
1,040
(29
)
420
$
18,720
$
20,587
$
23,398
31
(31
)
(49
)
$
18,751
$
20,556
$
23,349
2010
2009
2008
$
1,283
$
1,001
$
437
17,468
19,555
22,912
$
18,751
$
20,556
$
23,349
Table of Contents
2010
2009
2008
35.0
%
35.0
%
35.0
%
(0.1
)
(0.3
)
(0.4
)
1.7
2.6
1.3
2.4
1.9
10.5
(4.1
)
1.0
(0.7
)
14.7
2.1
0.1
0.3
(2.3
)
51.7
%
38.0
%
46.0
%
2010
2009
2008
$
235
$
614
$
49
6,675
7,421
5,786
4,297
4,297
16,576
11,370
2,492
4,768
3,912
2,374
102,598
121,710
142,394
300
586
734
472
315
(1,475
)
(949
)
131,886
148,907
156,758
87
339
143
157
339
143
244
$
131,547
$
148,764
$
156,514
Table of Contents
Table of Contents
Table of Contents
Cash
Check
Advance
ATM
Services
Other
Corporate
Total
$
244,139
$
314,627
$
28,357
$
18,467
$
$
605,590
49,130
41,782
15,595
11,922
(65,798
)
52,631
$
289,314
$
325,953
$
38,525
$
13,928
$
$
667,720
63,323
43,854
21,564
11,406
(68,093
)
72,054
$
326,476
$
289,122
$
42,366
$
13,644
$
$
671,608
74,684
45,550
18,594
11,078
(71,260
)
78,646
December 31,
December 31,
Total Assets
2010
2009
$
138,631
$
134,439
52,424
89,100
33,816
47,136
38,003
35,575
195,520
195,517
$
458,394
$
501,767
Table of Contents
Fiscal Quarter Ended
Ratio
2.50:1.00
2.75:1.00
3.00:1.00
3.25:1.00
3.50:1.00
3.75:1.00
Anytime in Period Ended
Ratio
4.25:1.00
4.00:1.00
3.75:1.00
3.25:1.00
2.75:1.00
If Total Leverage:
Sweep percentage
50
%
25
%
0
%
(1)
Table of Contents
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Year
(amounts in thousands, except earnings per share)
$
158,512
$
157,150
$
152,121
$
137,807
$
605,590
15,523
13,729
13,323
10,055
52,630
6,945
5,945
4,919
(259
)
17,550
6,950
5,884
4,919
(259
)
17,494
$
0.10
$
0.09
$
0.08
$
$
0.27
$
0.10
$
0.09
$
0.08
$
$
0.27
$
0.10
$
0.09
$
0.07
$
$
0.26
$
0.10
$
0.09
$
0.07
$
$
0.26
$
181,674
$
172,971
$
164,319
$
148,756
$
667,720
19,271
19,289
17,469
16,025
72,054
9,062
9,127
8,103
7,246
33,538
9,108
9,158
8,115
7,257
33,638
$
0.12
$
0.12
$
0.11
$
0.10
$
0.45
$
0.12
$
0.12
$
0.11
$
0.10
$
0.45
$
0.12
$
0.12
$
0.11
$
0.10
$
0.45
$
0.12
$
0.12
$
0.11
$
0.10
$
0.45
68,268
65,836
65,384
64,002
65,903
70,513
67,926
66,240
64,002
67,272
77,368
76,934
72,182
69,801
74,232
77,368
79,020
73,845
71,353
75,356
Table of Contents
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE BALANCE SHEET INFORMATION
DECEMBER 31, 2010
(amounts in thousands)
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE BALANCE SHEET INFORMATION
DECEMBER 31, 2009
(amounts in thousands)
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE STATEMENT OF INCOME INFORMATION
YEAR ENDED DECEMBER 31, 2010
(amounts in thousands)
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE STATEMENT OF INCOME INFORMATION
YEAR ENDED DECEMBER 31, 2009
(amounts in thousands)
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE STATEMENT OF INCOME INFORMATION
YEAR ENDED DECEMBER 31, 2008
(amounts in thousands)
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2010
(amounts in thousands)
Table of Contents
CONDENSED CONSOLIDATED SCHEDULE STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2010
Combined
Combined Non-
Parent
Issuer
Guarantors
Guarantors
Eliminations *
Consolidated
$
$
$
$
$
$
(16,000
)
(16,000
)
(25,000
)
(25,000
)
5,629
5,629
(33,474
)
(33,474
)
7,935
(33,474
)
25,539
(19,910
)
(74,474
)
25,539
(68,845
)
(291
)
598
307
(23,119
)
644
(1,657
)
(24,132
)
74,416
157
10,195
84,768
$
$
51,297
$
801
$
8,538
$
$
60,636
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2009
(amounts in thousands)
Table of Contents
CONDENSED CONSOLIDATED SCHEDULE STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2009
(amounts in thousands)
Combined
Combined Non-
Parent
Issuer
Guarantors
Guarantors
Eliminations *
Consolidated
$
$
$
$
$
$
(16,000
)
(16,000
)
2,913
2,913
(61,338
)
(61,338
)
8,454
(61,339
)
52,885
(49,971
)
(77,339
)
52,885
(74,425
)
(2,597
)
914
(1,683
)
29,295
(17,399
)
(4,276
)
7,620
45,122
17,555
14,471
77,148
$
$
74,417
$
156
$
10,195
$
$
84,768
*
Table of Contents
CONDENSED CONSOLIDATING SCHEDULE STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2008
*
Table of Contents
CONDENSED CONSOLIDATED SCHEDULE STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2008
(amounts in thousands)
Combined
Combined Non-
Parent
Issuer
Guarantors
Guarantors
Eliminations *
Consolidated
$
$
121,000
$
$
$
$
121,000
(118,730
)
(118,730
)
(9,487
)
(9,487
)
(9,486
)
(11,311
)
20,797
(9,487
)
(7,216
)
(11,311
)
20,797
(7,217
)
1,586
(900
)
686
(9,293
)
(899
)
16,277
6,085
54,411
5,411
11,241
71,063
$
$
45,118
$
4,512
$
27,518
$
$
77,148
*
Table of Contents
ITEM 9.
ITEM 9A.
Table of Contents
Global Cash Access, Inc.
Las Vegas, NV
Las Vegas, NV
March 14, 2011
Table of Contents
ITEM 9B.
ITEM 10.
ITEM 11.
ITEM 12.
Table of Contents
ITEM 13.
ITEM 14.
Table of Contents
ITEM 15.
(a)
1.
2.
3.
(b)
Table of Contents
Exhibit
Number
Exhibit Description
2.1
(16)
2.2
(17)
3.1
(1)
3.2
(4)
3.3
(5)
4.2
(1)
4.3
(1)
4.4
(1)
4.5
(1)
4.6
(1)
4.7
(14)
10.1
(1)
10.4
(1)
10.5
(1)
10.6
(1)
10.7
(1)
Table of Contents
Exhibit
Number
Exhibit Description
10.8
(1)
10.9
(1)
10.10
(1)
10.11
(1)
10.12
(1)
10.13
(1)
10.14
(1)
10.15
(1)
10.16
(1)
10.17
(1)
10.18
(1)
10.19
(1)
10.20
(1)
10.21
(1)
*10.22
(1)
Table of Contents
Exhibit
Number
Exhibit Description
*10.23
(1)
10.24
(1)
10.25
(1)
10.26
(1)
*10.27
(1)
*10.28
(2)
+10.29
(20)
10.30
(3)
10.31
(5)
10.32
(6)
10.33
(7)
*10.34
(8)
*10.35
(9)
10.36
(10)
Table of Contents
Table of Contents
Exhibit
Number
Exhibit Description
+10.50
+10.51
+10.52
+10.53
+10.54
12.1
21.1
23.1
24.1
31.1
31.2
32.1
32.2
Table of Contents
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
*
+
Table of Contents
GLOBAL CASH ACCESS HOLDINGS, INC.
By:
/s/ Scott Betts
Scott Betts
President and Chief Executive Officer
(Principal Executive Officer)
Signature
Title
Date
President and Chief Executive Officer
March 14, 2011
(Principal
Executive Officer) and Director
Chief Financial Officer
March 14, 2011
(Principal
Financial Officer and
Principal Accounting Officer)
Director
March 14, 2011
Director
March 14, 2011
Director
March 14, 2011
Director
March 14, 2011
Director
March 14, 2011
Table of Contents
Exhibit
Number
Exhibit Description
+10.50
+10.51
+10.52
+10.53
+10.54
12.1
21.1
23.1
24.1
31.1
31.2
32.1
32.2
1. |
Definitions.
|
- 2 -
- 3 -
2. |
Amended and Restated Agreement; Transition Services
.
|
(a) |
Effective as of the Effective Date, this Agreement shall amend and restate the
Prior Agreement in its entirety, and such amended and restated agreement shall
thereafter govern the rights and obligations of the Parties with respect to the matters
subject to the Prior Agreement and this Agreement. Without limiting the foregoing, and
for avoidance of doubt, the Parties acknowledge and agree that the provisions of
Sections 3(b), 4(b), 4(d), 5(c), 8, 12(e), 12(f), 13 and 15 shall apply with respect to
acts, omissions or circumstances existing or occurring during the Prior Agreement or
this Agreement.
|
- 4 -
(b) |
The Parties acknowledge their mutual intent and agreement to end the on-going
relationship between the Parties, and that the Sponsorship Services provided by BofA
after the Effective Date are intended as an accommodation to Company for a limited
transition period. Company agrees that during the Term of this Agreement, Company will
attempt to enter into a relationship with a new provider for the Sponsorship Services
previously provided by BofA and to be provided under this Agreement by BofA. Company
shall require that any new provider assume the transfer of all
BINs / ICAs currently used by Company on terms and conditions reasonably acceptable
to BofA, and Company shall cooperate (and cause such new provider to cooperate) with
BofA with respect to the transfer of such BINS / ICAs to such new provider. The
Parties recognize the importance of Companys ability to transition to a new provider
of sponsorship services by the end of the Term, and shall cooperate in good faith to
achieve such transition by the end of the Term. If Company enters into an agreement
with a new provider of sponsorship services, the Parties will cooperate in good faith
with each other and with the new provider with respect to the transfer of the
BINS/ICAs currently used by Company to such new provider, and BofA will provide
Company and such new provider with other commercially reasonable transition
assistance services that are requested to allow Company to fully transition to such
new provider by the end of the Term.
|
(c) |
Company acknowledges and agrees that as of the expiration or termination of
this Agreement, BofA and its Affiliates shall have absolutely no obligation to provide
any Sponsorship Services to Company or with respect to any Customer businesses, whether
or not Company has entered into an agreement with a new provider to obtain new
sponsorship services, and that Company bears the entire risk of loss and business
disruption of Company is unable to obtain such sponsorship services from another
provider.
|
3. |
Sponsorship by BofA.
|
(a) |
General
. BofA agrees to provide the Sponsorship Services with respect
to Company and the operations of its Customers in the United States or any United
States territory (as defined by each applicable Network), including Terminals located
in the United States, on the terms and conditions set forth in this Agreement;
provided, however, that (1) BofA may perform such Sponsorship Services, in whole or in
part, by causing an Affiliate to perform such Sponsorship Services, (2) BofA shall
remain liable to Company for performance of Sponsorship Services by an Affiliate of
BofA, and (3) references to performance by BofA of Sponsorship Services in this
Agreement shall be deemed to include BofAs option to cause an Affiliate to provide
such Sponsorship Services. BofA acknowledges that Company in some instances provides
certain of its Payment Services through its Affiliate Cash Systems, Inc.
(
CSI
), and that the Sponsorship Services shall extend to CSI; provided that
Company shall remain liable for CSIs compliance with the terms and conditions of this
Agreement.
|
(b) |
Performance by Customers
. Company hereby unconditionally guarantees
performance of, and agrees that it is jointly and severally liable with each Customer,
for each Customers obligations and liabilities under each Customer Agreement,
including, without limitation, for any Claims which in any way directly or indirectly
relate to, result from or arise out of, any Customers violation of, or failure to
comply with, the Operating Rules or Applicable Law. For the avoidance of doubt, the
Sponsorship Services shall not include providing vault cash to Company or any Customer,
and the Parties acknowledge that the provision of vault cash by BofA or its Affiliate
to Company and Customers is subject to a separate agreement between BofA or its
Affiliate and Company, and that this Agreement shall in no way affect the obligations
or the parties to that agreement, including the termination date thereof, unless and to
the extent expressly provided herein.
|
(c) |
Existing Sponsorships
. Subject to the terms and conditions of this
Agreement, BofA agrees to continue to provide the Sponsorship Services with respect to
each Customer with respect to which BofA was providing such Sponsorship Services on the
Effective Date, provided that (1) Company provides BofA with information mutually
agreed between the Parties from time to time to evaluate such Customer, and (2) each
such Customer has entered into a written Customer Agreement in form and substance
acceptable to BofA. Notwithstanding the foregoing, BofA may cease providing
Sponsorship Services with respect to an existing Customer to the extent that BofA
determines in its reasonable judgment, that (A) such action is required by a Network,
the Operating
Rules or Applicable Law, or (B) continuing to provide such Sponsorship Services would
present a significant financial or reputational risk to BofA.
|
- 5 -
(d) |
Requests for New Sponsorships
. As a condition of BofA providing
Sponsorship Services with respect to any new Customer on or after the Effective Date,
except as otherwise agreed between the Parties, Company will (1) provide BofA with
information mutually agreed between the Parties from time to time to evaluate such
Customer, and (2) ensure that each such Customer enters into a written Customer
Agreement in form and substance acceptable to BofA. Notwithstanding the foregoing,
BofA has sole and absolute discretion to determine whether to provide or cause its
Affiliate to provide Sponsorship Services with respect to any new Customer; provided
that, to the extent reasonably practicable, BofA will attempt to (A) discuss with
Company its decision not to provide Sponsorship Services to a specific Customer in
advance and (B) work in good faith with Company to determine if there are any remedial
measures that can be implemented to address the underlying basis for BofAs intent to
deny Sponsorship Services.
|
(e) |
Underwriting Standards
. BofA reserves the right, at all times, to
establish the underwriting standards and eligibility criteria for Customers with
respect to which it will provide Sponsorship Services. BofA may refuse to provide
Sponsorship Services with respect to the operations of any Customer or at any Customer
location that BofA determines in its sole and absolute discretion does not meet BofAs
underwriting standards or eligibility criteria; provided that, to the extent reasonably
practicable, BofA will attempt to (1) discuss with Company its decision not to provide
Sponsorship Services to a specific Customer and (2) work in good faith with Company to
determine if there are any remedial measures that can be implemented to address the
underlying basis for BofAs intent to deny Sponsorship Services. If BofA makes such a
determination with respect to an existing Customer, BofA and its Affiliates shall have
no liability with respect to any failure by Company to perform its obligations under
any Customer Agreement with such Customer, and Company expressly assumes all such risk.
|
(f) |
Customer Agreements
. All Customer Agreements shall be in form and
substance reasonably acceptable to BofA, and shall meet any requirements set forth in
the applicable Operating Rules and Applicable Law, including any substantive provisions
required by the applicable Operating Rules, and shall obligate the Customer to abide by
the Operating Rules and Applicable Law. Customer Agreements may contain such other
terms and conditions as may be mutually agreed between any Customer and Company,
provided that such additional terms and conditions do not conflict with any provisions
of this Agreement, the Operating Rules or Applicable Law. Notwithstanding the
foregoing, BofA may require modifications to the Customer Agreement of an existing
Customer as of the Effective Date to the extent that BofA determines, in its reasonable
judgment, that (1) such modifications are required by a Network, the Operating Rules or
Applicable Law, or (2) such modifications are required to avoid a significant financial
or reputational risk to BofA.
|
(g) |
Network Registration and Requirements
. BofA will complete and maintain
records with respect to all registration forms, applications and/or other documents
(
Network Forms
) that are required by the Networks from time to time in
connection with this Agreement and/or the Sponsorship Services provided by BofA to
Company and/or with respect to Customers. Company will be solely responsible for all
Network fees and charges associated with such registration or application. Company
will be solely responsible for timely preparing and providing to BofA any reports or
certifications required under any Operating Rules for filing with the Networks in
connection with the Sponsorship Services (including, without limitation, the
sponsorship of Customers and/or their Terminals) and the provision of Payment Services
for which Sponsorship Services are provided, including, without limitation, reports
relating to transaction activity, fee billing, adjustments and enhanced network
management reports, and such other reports as are specified in
Exhibit B
, which
reports will be distributed by Company in the formats and using communications circuits
and files designated by the Networks. BofA shall review and file such reports or
certifications with the
Network promptly after receipt from Company. Company shall promptly provide such
other reports, in hard copy or in view access, as BofA may require from
time-to-time. Without limiting the foregoing, Company acknowledges and agrees that,
for purposes of this Agreement, it is responsible for any and all obligations related
to the Payment Services arising under the Operating Rules (including connection to
each of the Networks) and for Customers compliance with the Operating Rules.
|
- 6 -
(h) |
Terminal Ownership
.
|
(1) |
No later than the Effective Date, Company shall provide BofA with
a list of all current Terminals that are owned, established, operated or
maintained by a Person other than Company. Company shall comply with, and shall
cause each Customer to comply with, all applicable Operating Rules and any
Applicable Law that requires Company or Customer to obtain a License or
otherwise regulates or restricts the ability of Company or a Customer to own,
establish, operate or maintain a Terminal. If any applicable Operating Rules or
Applicable Law requires that a Customer or any Person which owns or operates a
Terminal at a Customer location enter into an agreement with BofA or its
Affiliate, Company shall ensure that, prior to BofAs provision of any
Sponsorship Services with respect to such Terminal, such Person enters into such
an agreement that is in compliance with such Operating Rules or Applicable Law
and acceptable in form and substance to BofA in BofAs reasonable discretion.
Notwithstanding the foregoing, BofA may cease providing Sponsorship Services
with respect to a Terminal, or require modifications to any agreement of an
owner or operator of a Terminal, to the extent that BofA determines in its
reasonable judgment that such action (A) is required by a Network, the Operating
Rules or Applicable Law, or (B) is required to avoid a significant financial or
reputational risk to BofA.
|
(2) |
With respect to new Terminals that become owned, established,
operated or maintained by a Person other than Company after the Effective Date,
Company shall obtain BofAs prior consent to obtain Sponsorship Services, which
consent shall not be unreasonably withheld or delayed; provided, however, that
such Terminals otherwise meet all of the requirements of Section 3(h)(1).
|
4. |
Certain Other Obligations of BofA.
|
(a) |
Network Membership
. Subject to the terms and conditions of this
Agreement, BofA will use commercially reasonable efforts to obtain and maintain the
categories of membership or licenses in the Networks required to provide Sponsorship
Services pursuant to this Agreement and shall use reasonable efforts to notify Company
as soon as practicable if it is no longer able to maintain such memberships or
licenses.
|
(b) |
Regulatory Compliance
. Notwithstanding anything in this Agreement, BofA
shall have no obligation to undertake to perform or continue to perform any function or
service relating to the Sponsorship Services or this Agreement with respect to any
Customer or Terminal in the event that: (1) such performance would contravene any
Applicable Law or Operating Rule, or any directive from a Governmental Authority or a
Network; or (2) BofA reasonably suspects fraud or suspicious activity in connection
with such Customer or Terminal.
|
(c) |
Dissemination of Operating Rules and Updates
. To the extent permitted
by the applicable Network, Operating Rules or Applicable Law, BofA shall undertake good
faith efforts to provide Company with copies of applicable Operating Rules and/or
amendments thereto that BofA reasonably determines may be of interest or relevance to
Company.
|
- 7 -
(d) |
Other Limitations
. Notwithstanding anything in this Agreement, BofA
will be responsible only for performing the services expressly provided for in this
Agreement and BofA undertakes no duties
other than those expressly provided herein. Without limiting the generality of the
foregoing, BofA will not be responsible for: (1) the acts or omissions of Company,
any Processor or any Customer or any of their respective representatives, employees
or agents or any other Person, including, without limitation, any Network Party, and
no such person or entity will be deemed BofAs agent for any purpose whatsoever; or
(2) breach of its duties hereunder, to the extent such breach was caused by legal
constraint, interruption in transmission or communication facilities, equipment
failure, war, terrorist act, riot, fire, flood, earthquake or other natural disaster,
strike, emergency or other circumstance beyond BofAs control.
|
5. |
Certain Obligations of Company.
|
(a) |
Terminal Operation
. As between BofA and Company, Company will be
solely responsible for (1) the cost, installation, operation, maintenance and repair of
each Terminal including, but not limited to, electrical and communications connections
in compliance with the equipment manufacturer specifications and the applicable graphic
standards and technical specifications established by Networks from time to time; (2)
the cost and provision of all signage to comply with requirements of any Network or
Regulatory Authority, including disclosures approved by BofA agreed between the Parties
from time to time, which includes the resigning of all Terminals for a change in
Sponsorship Services. Company shall ensure that all Terminals meet all lighting,
security and accessibility requirements.
|
(b) |
Terminal Reports
. Company shall: (1) complete a Customer Agreement and
associated due diligence prior to activating any Terminal as required by the Network(s)
and agreed between the Parties from time to time; (2) provide quarterly reports to BofA
which for each Customer with respect to which BofA provides Sponsorship Services
includes a listing of all Networks that Company is acquiring Transactions for such
Customer; and (3) providing all processing services and settlement for each Terminal
sponsored under or in connection with this Agreement; and (4) provide written notice to
BofA of each new Terminal location on a daily basis and will properly register and
continue to register each Terminal as may be required by each of the Networks and/or
Applicable Law. BofA may identify additional data files or reports to be generated by
Company and delivered to BofA on an ad hoc or periodic basis. Nothing in this
Agreement shall limit BofAs ability to communicate with any Customer to the extent
that BofA reasonably determines that such communication is necessary to comply with a
Network, Operating Rules or Applicable Law, or to avoid significant financial or
reputational risk to BofA.
|
(c) |
Compliance
. Company will comply, and will ensure that each Customer
complies, with the Operating Rules and all Applicable Laws related to the Terminals,
the performance of Companys obligations hereunder and the obligations of each Customer
under a Customer Agreement. Company acknowledges and agrees that (1) only a Network
has authority to interpret its Operating Rules, and (2) BofA shall not make any
representation or warranty, and Company shall not rely on BofA or its Affiliates in any
way, including any oral or written statement, regarding the requirements imposed by the
Operating Rules or Applicable Law on Company or Companys Customers or operations.
BofA. BofA and Company shall negotiate in good faith to amend this Agreement to the
extent an amendment is necessary to comply with any Operating Rules or Applicable Law.
|
(d) |
Use of BofAs Name and GCAs Name
. Company agrees that it will not,
and will ensure that each Processor does not, use the name, marks or logos of BofA or
any of its Affiliates (the
Bank Marks
) for any reason, or use or refer to
BofA or its Affiliate (orally or in writing) in any advertisements, sales,
presentations or marketing materials without the express prior written consent of BofA,
which consent shall not be unreasonably withheld. Company may accurately describe its
relationship with BofA in response to questions and in its dealings with Customers.
BofA agrees that it will not, and will ensure that it and its Affiliates do not, use
the name, marks or logos of GCA or any of its Affiliates (the
GCA Marks
) for
any reason, or use or refer to GCA or
its Affiliate (orally or in writing) in any advertisements, sales, presentations or
marketing materials without the express prior written consent of GCA, which consent
shall not be unreasonably withheld.
|
- 8 -
(e) |
Processor Agreement
. Prior to the sponsorship into any Network by BofA
or an Affiliate with respect to a Customer or a Terminal or the provision by Company of
any Payment Services for which the BofA provides Sponsorship Services under this
Agreement (1)Company will have become a Certified Processor or have obtained a
Certified Processor for such Network acceptable to BofA; and (2)such Certified
Processor shall have entered into a Processor Agreement with such Network as required
by the applicable Networks Operating Rules. Company shall ensure that such Certified
Processor shall comply with the terms thereof and otherwise maintain itself in good
standing with the Network. The Parties acknowledge and agree that TSYS Acquiring
Solutions, L.L.C. is acting as a Certified Processor of Company.
|
(f) |
Indirect Processors
. Company shall obtain BofAs prior written
consent, which BofA may grant or deny in its sole discretion, before using any Indirect
Processor to provide processing services on Companys behalf. Notwithstanding that
BofA consents to Companys use of an Indirect Processor, Company will cause such
Indirect Processor to comply with the applicable Networks Operating Rules (including,
but not limited to, any requirement to enter into an agreement with the applicable
Network(s)) and all Applicable Law, and otherwise maintain itself in good standing with
the Network.
|
(g) |
Access to Processor Systems
. To the extent that Company uses any
Processor in connection with Card Transactions, Company shall use commercially
reasonable efforts to cause such Processor to provide BofA with view access to such
Processors systems to enable BofA to access and view information concerning
transactions processed by such Processor on behalf of Company.
|
(h) |
Service Providers
. Company agrees that it shall cause any Service
Provider or provider of vault cash services to promptly furnish BofA with any relevant
information requested by BofA relating to BofAs Sponsorship Services, the Networks, or
the Terminals or Customers with respect to which BofA provides Sponsorship Services
hereunder and to otherwise use commercially reasonable efforts to cooperate with BofA
in connection therewith. Company will timely pay all obligations that have not been
otherwise disputed in good faith by Company to any Person as they become due, whether
arising under the Operating Rules or otherwise, in connection with the Payment Services
or the Sponsorship Services.
|
(i) |
Card Transactions
.
|
(1) |
Company shall ensure that Card Transactions are limited to (A)
cash withdrawals or disbursements or balance inquiries at Terminals, (B) the
issuance of Negotiable Instruments in a manner that conforms to the Operating
Rules and Applicable Law, and (C) transactions involving the merchant category
codes (
MCCs
) specified in
Exhibit C
.
|
(2) |
Except to the extent approved by BofA in writing, in no event
shall Company (A) allow, or permit any Customer to allow, a Cardholder to use a
Card for any Internet transaction or electronic commerce transaction, other than
a transaction in which a Cardholder uses a Card at a Terminal located at a
Customer location open to the public, (B) allow, or permit any Customer to
allow, a Cardholder to use a Card for any type of Card Transaction that BofA or
its Affiliates have not expressly approved in writing as of the Effective Date,
or (C) develop, introduce or announce any new product or service that involves
the use of Cards without the prior written approval of BofA or its Affiliates.
|
- 9 -
(j) |
Negotiable Instruments
. Company shall ensure that each Negotiable
Instrument that is issued in a Card Transaction complies with all Applicable Law and
all applicable Operating Rules, including
Network requirements relating to proper transaction identifiers to enable Company and
the Network(s) to properly charge interchange fees due from each location. Any
attempt on the part of a Customer or Company to receive improper or inappropriate
fees may result in (1) full repayment of all fees collected with respect to such
Negotiable Instrument, and (2) immediate termination of this Agreement or the
provision of Sponsorship Services with respect to such Customer.
|
(k) |
Implementation of First Annapolis Recommendations
. Company
acknowledges that the consulting firm First Annapolis performed a review of Companys
practices and procedures and made certain recommendations, which are summarized in
Exhibit D
. Company shall implement the remediation steps set forth in the
column entitled GCA Comments in the table set forth in
Exhibit D
. Company
hereby (1)represents and warrants to BofA that it has fully and independently evaluated
the merits of each such recommendation and determined that taking the remediation steps
set forth in the column entitled GCA Comments in the table set forth in
Exhibit
D
is in the Companys best interests, and (2)acknowledges and agrees that BofA
makes no representation or warranty with respect to the merits of such recommendations,
and shall have no liability to Company or any other Person as a result of Company
following such recommendations.
|
6. |
Security; Disaster Recovery.
|
(a) |
Security Procedures
. Company agrees to establish and maintain, and to
ensure that each Customer establishes and maintains, operations, policies and
procedures in place for the protection of Cardholder Data and comply with the Payment
Card Industry (
PCI
) Data Security Standard, and meet the objectives of the
Interagency Guidelines Establishing Standards for Safeguarding Customer Information;
provided, however, that Company shall be required to cause a Customer to comply with
the foregoing only to the extent that such Customer is subject to such requirements
under the Operating Rules or Applicable Law. Company further agrees to monitor and
ensure that it and its Customers: (1) have, maintain, and use at all times, proper
controls as specified in the Operating Rules for secure storage and transmission of,
and limited access to, and shall render unreadable prior to discarding, all records
containing Cardholder Data, Card imprints and Cardholder signatures; (2) do not retain
or store magnetic stripe or PIN data after a transaction has been authorized; and (3)
if Company or a Customer stores any electronically captured Cardholder signature, that
Company or a Customer can reproduce such signature upon the request of BofA.
|
(b) |
Network PIN Security
. Key management and PIN security systems will at
all times be in compliance with each Network of which BofA or its Affiliate is a
member. Company will, at its sole expense complete within the required time frame or
upon BofAs demand, but at least annually, a PIN security review required by each
Network (including, but not limited to, the Visa PIN review and the ANSI//X9 TR-39-2009
TG-3 review) and provide BofA a copy of each such review upon completion.
|
(c) |
Background Checks; Employee Responsibility
. Company shall establish,
implement and maintain reasonable policies and procedures with respect to the conduct
of background checks on (1) each of its officers and directors, and (2) each of its
employees and sales representatives engaged in providing the Payment Services. Company
understands and acknowledges that Company is solely responsible for the actions and
representations of all of its sales representatives and other employees.
|
(d) |
Security Breach
. Company agrees that if it becomes aware or suspects
that there has been a breach of security that may result in unauthorized disclosure of
Cardholder Data or any other proprietary information relating to Card Transactions or
Cards, including with respect to any information obtained from a Terminal or in
connection with processing Card Transactions, Company shall notify BofA in writing of
such situation promptly, but in no event later than twenty four (24) hours after such
a situation occurs. Company agrees to use commercially reasonable efforts to
cooperate with BofA and take corrective action to respond to the situation.
|
- 10 -
(e) |
Disaster Recovery
. Company agrees to maintain reasonable disaster
recovery plans designed to allow Company to recover and perform the basic obligations
under this Agreement in the event of a disaster or other failure of Companys
operations and systems. Company agrees to perform reasonable tests of such disaster
recovery plans on a regular basis. At the request of BofA, Company shall provide BofA
with a summary of the results of any such test performed by Company.
|
7. |
Financial Statements and Audits.
|
(a) |
Financial Statements
. Company agrees to provide BofA with the
consolidated financial statements of Global Cash Access Holdings, Inc.
(
GCAH
), which may include quarterly or audited annual financial statements,
within thirty (30) days of request by BofA. Such financial statements shall be
certified in writing by a duly authorized officer or principal owner of GCAH as to the
accuracy of the data contained therein and the preparation of such statements in
accordance with generally accepted accounting principles, and Company shall provide an
unqualified opinion of an independent certified accountant retained by Company or GCAH
with respect to such financial statements. Company also shall provide such other
information concerning Companys business and compliance with this Agreement as BofA
may reasonably request, including, but not limited to, information describing the
differences between the financial condition of Company and GCAH. Company and the
undersigned official of Company authorize BofA to obtain financial and credit
information relating to Company and the undersigned official of Company from credit
bureaus and other Persons.
|
(b) |
BofA Audits
. During the Term, and for a period of two (2) years
thereafter, BofA and its Affiliates (or their respective contractors) may conduct
procedural audits of Company as reasonably necessary to confirm compliance with this
Agreement, the Operating Rules and Applicable Law, including a review of Companys
facilities, books and records related to this Agreement upon reasonable advance
written notice by BofA. Company will promptly supply auditors with reasonable access
to Companys facilities and requested information. Company will provide BofA with a
copy of any audits performed by a Network, Governmental Authority or other Person, to
the extent (1) such Network, Governmental Authority or other Person does not prohibit
the provision of such audits to BofA and (2) that such audit relates to this Agreement,
the Sponsorship Services, or any Operating Rules or Applicable Law relating to this
Agreement or the Sponsorship Services. If Company is examined by a Governmental
Authority pursuant to the federal Bank Service Corporation Act, Company will notify
BofA when any report of examination is available, and will provide such report to BofA
unless prohibited by Applicable Law or the applicable Governmental Authority from doing
so. Company agrees to request permission from each Governmental Authority to provide
such reports to BofA.
|
(c) |
Regulatory Audits
. Company acknowledges that it will be subject to
regulation or examination by Governmental Authorities (including the Office of the
Comptroller of the Currency) and the Networks by virtue of this Agreement and the
arrangements contemplated hereby. Company shall, promptly upon request, submit and
furnish to BofA any reports (including transaction reports) or other data requested by
BofA (1)in order to comply with applicable regulatory or supervisory requirements;
(2)to respond to requests by regulatory or supervisory authorities; or (3)as otherwise
requested by BofA to demonstrate that Company is in compliance with its obligations
hereunder.
|
- 11 -
(d) |
Notice to BofA
. Company will provide BofA with written notice,
together with all supporting documentation, within two (2) days whenever: (1) Company
or, to Companys knowledge, a Customer, receives notice from a Network or a
Governmental Authority relating to this Agreement, the Sponsorship Services, any
Terminal, ATM or Card with respect to which BofA provides Sponsorship Services, the
modification or revocation of any License, or the compliance of Company or any Customer
with the Operating Rules or Applicable Law; (2) any suit, litigation or other
proceeding is brought against Company or, to Companys knowledge, its Customers, which
alleges any violation of any Operating Rules or Applicable Law; (3) Company
reasonably believes that any event of default has occurred or that any other
representations or warranty made by Company in this Agreement has ceased to be true
and complete in all material respects; (4) any Material Adverse Event occurs; (5)
Companys relationship with any Customer has been discontinued, whether at Companys
request or at such Customers request, provided that any such notice shall identify
the portion of Companys revenues represented by such Customer; or (6) Company learns
of any criminal investigation of Company or its Customers, or of their respective
officers or directors.
|
8. |
Letter of Credit; Reserve Account.
|
(a) |
Reserve Amount
. (1) Beginning no later than five (5) Business Days
after the date of this Agreement, and until BofA releases Company from the obligation
pursuant to Section 8(d), Company shall maintain a letter of credit and/or a balance in
a Reserve Account in an amount equal to the Reserve Amount, as established by BofA in
accordance with this Agreement. The initial Reserve Amount shall be two million,
five-hundred thousand dollars ($2,500,000). In the event that Company experiences any
security breach of the type described in Section 6(d), BofA may increase the Reserve
Amount in its reasonable discretion by providing written notice to Company.
|
(b) |
Letter of Credit
. The letter of credit required from Company under
this Section 8 shall be irrevocable, and issued by a depository institution acceptable
to BofA and in a form and content satisfactory to BofA, both in BofAs sole and
absolute discretion. BofA shall be entitled to make multiple draws on such letter to
obtain funds in satisfaction of Companys obligations to BofA under this Agreement
(including, but not limited to, paying any fees or penalties imposed by Networks on
BofA or its Affiliates with respect to Card Transactions involving Companys Customers)
without prior demand or notice. The letter of credit shall have a term that extends no
more than nine (9) months beyond the end of the Term of this Agreement.
|
(c) |
Reserve Account
. The Reserve Account in which all or a portion of the
Reserve Amount shall be maintained will be a deposit account with an Affiliate of BofA
or other depository institution acceptable to BofA in its sole discretion. Companys
funds held in the Reserve Account may be commingled with other BofA customer funds
without involvement of an independent escrow agent. To secure Companys obligations
under this Agreement (including, but not limited to, paying any fees or penalties
imposed by Networks on BofA or its Affiliates with respect to Card Transactions
involving Companys Customers), Company irrevocably grants BofA and its Affiliates a
first priority lien and security interest in any funds in the Reserve Account and all
proceeds of such funds. Company agrees to execute and deliver to BofA, upon request,
any instruments and documents necessary to perfect its first priority lien and security
interest in and to such funds. If Company fails to perform such obligations under this
Agreement, BofA shall have the right, in its sole discretion, to exercise its lien and
security interests in the monies in the Reserve Account, without prior demand or notice
to Company.
|
(d) |
Release of Credit Support
. After expiration or termination of this
Agreement for any reason, BofA shall promptly, but in no event later than nine (9)
months following such expiration or termination, return to Company any funds held in
the Reserve Account or surrender the letter of credit to Company upon BofAs
determination in its sole and absolute discretion that Company has performed all of its
obligations under this Agreement and there is no material risk of liability of Company
under this Agreement, including for any indemnity, chargebacks or Network fines or
assessments or other contingent obligation.
|
- 12 -
9. |
Use of Network Marks
.
|
10. |
Fees and Expenses.
|
(a) |
Network Fees and Charges
. Company will pay (or immediately upon
demand, reimburse BofA and its Affiliates) for any and all applicable fees and charges
which may be imposed from time to time by Networks on BofA or its Affiliates, Company,
any Customer, or any Processor used by Company, which in any way relate to this
Agreement, the Customers, the Sponsorship Services or relevant payment transactions,
including, without limitation, (1) all applicable Network fees relating to registration
and licensing of independent sales organizations and merchant service providers, (2)
all fees associated with the sponsorship by BofA and its Affiliates of Company or
Terminals or the provision Sponsorship Services with respect to any Customer and (3)
all fees associated with the provision of Payment Services by Company. For the
avoidance of doubt, as of the Effective Date neither BofA nor its Affiliates shall be
obligated to provide any assessment credit to Company.
|
(b) |
Network Settlement
. All settlement, funding and adjustments for all
payment transactions generated by Company or its Customers for a particular Network
will be handled by a Certified Processor in accordance with the applicable Operating
Rules. BofA or its Affiliate will instruct Networks to settle all payment transactions
in a manner consistent with the provisions of this Agreement; provided, however, that
Company will use best efforts change or alter its method of settlement in a manner
designated by BofA if BofA and its Affiliates reasonably determine that such changes or
alterations are necessary or appropriate to reduce or manage risk of settlement
failure.
|
(c) |
Expenses
. Company will reimburse BofA and its Affiliates upon demand
for (1) all reasonable costs and expenses, including all out-of-pocket costs (including
attorneys fees) paid or incurred by BofA or its Affiliates in connection with the
preparation, negotiation, execution, delivery and review of this Agreement and any
enforcement, amendment or modification thereof; and (2) all reasonable costs and
expenses incurred as a result of changes in Companys business and operations,
including without limitation Companys use of a new Processors or Service Providers or
the transfer of the Sponsorship Services and/or BINs and ICAs to a new service provider
upon termination of this Agreement.
|
11. |
Representations and Warranties by Company
. Company represents and warrants to
BofA as of the date of this Agreement, and on each day on which a Card Transaction occurs, that:
|
(a) |
Good Standing
. Company is a corporation organized, validly existing
and in good standing under the laws of the State of Delaware, and has its principal
office in Las Vegas, Nevada. Company is duly licensed or qualified to do business and
is in good standing in all jurisdictions in which the nature of the activities
conducted or proposed to be conducted by it, or the character of the assets owned or
leased by it, makes such licensing or qualification necessary to perform its
obligations required hereunder, except where the failure to be so licensed or qualified
would not have a material adverse effect on its ability to fulfill its obligations
under this Agreement. Company shall provide BofA with copies of all such licenses,
from time to time, promptly upon demand.
|
(b) |
Capacity; Authority; Validity
. Company has all necessary corporate
power and authority to enter into this Agreement and to perform all of the obligations
to be performed by it under this Agreement. This Agreement has been duly authorized by
all necessary corporate action and has been duly executed and delivered by Company, and
upon execution by the Parties, shall constitute the valid and binding obligation of
Company, enforceable against Company in accordance with its terms, subject to
applicable bankruptcy laws and general principles of equity.
|
- 13 -
(c) |
Conflicts; Defaults
. Neither the execution and delivery of this
Agreement by Company, nor the consummation of the transactions contemplated herein by
Company, shall (1) conflict with, result in the breach of, constitute a default under
or accelerate, terminate, modify or cancel or require any
notice or consent under any agreement, contract, lease, license, instrument or other
arrangement to which Company is a party or by which it is bound or to which any of
its assets is subject, except for such violations, conflicts, breaches, defaults,
accelerations, terminations or modifications that would not have a material adverse
effect on its ability to fulfill its obligations under this Agreement; (2) violate
the certificate of incorporation, bylaws, or any other equivalent organizational
document of Company; or (3) require any consent or approval under any judgment,
order, writ, decree, permit or license to which Company is a party or by which it is
bound. Except as disclosed in writing to BofA, Company is not subject to any
agreement (A) requiring fundamental changes in the operation of the Program; or (B)
with any Governmental Authority that would prevent the consummation of the
transactions contemplated by, or its ongoing performance of, the Agreement.
|
(d) |
No Consents, Etc
. No consent of any Person (including any stockholder
or creditor of Company) and no consent, license, permit, approval, authorization or
exemption by notice of, report to or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution or delivery of this
Agreement by Company, the validity of this Agreement with respect to Company, the
enforceability of this Agreement against Company, the consummation by Company of the
transactions contemplated hereby or the performance by Company of its obligations
hereunder.
|
(e) |
No Defaults
. Company is not in default with respect to any material
contract, agreement, lease or other instrument, including with respect to debt or
securitization arrangements, except for defaults which would not result in a material
adverse affect on its ability to perform its obligations hereunder.
|
(f) |
Card Information
. Company will not (1) disclose, sell, purchase,
provide or exchange Card account number information, Card Transaction Data or any other
Confidential Information of BofA or any Affiliate of BofA to any Affiliate of Company
or other Person, or (2) use any such information or data, for any purpose other than
performance of its obligations under this Agreement, including for marketing purposes,
in violation of any Operating Rules or Applicable Law.
|
(g) |
Performance
. Companys performance of this Agreement will not violate
any Applicable Law or any material agreement to which Company may now or hereafter be
bound.
|
(h) |
Compliance with Law
. Company will comply with the terms of this
Agreement, the Operating Rules, and with Applicable Law as related to the performance
by Company of its obligations hereunder.
|
(i) |
Insurance
. Company has and agrees to maintain policies of workers
compensation, employees liability, and general liability insurance with such limits as
required by law. Promptly upon the written request of BofA, Company will furnish BofA
with the written certificate(s) from its insurers or their agents, addressed to Company
as certificate holder, indicating the existence of Companys insurance coverage, the
amount and nature of such coverage, the expiration date or dates of each policy, and a
thirty (30) day written notice of cancellation. In the alternative, Company may be a
self-insurer upon meeting those requirements of the applicable regulatory authorities
for any or all of the areas set forth above for which Company customarily self-insures.
Company will provide proof of such self-insurance upon BofAs request.
|
(j) |
Pending Litigation and
Claims. Except as disclosed in writing to BofA,
neither Company nor any of its officers or directors are a party to any pending
litigation brought by a Customer, Network or Network Member alleging a violation of any
Operating Rules, or have ever been fined or penalized by any Network or Network Member.
|
- 14 -
(k) |
Accuracy of Information
. All information provided to BofA and its
Affiliates with respect to existing Customers and prospective Customers shall be true
and correct in all material respects.
|
(l) |
No Reliance
. Company acknowledges and agrees that BofA and its
Affiliates have not made, and Company is not relying on, any representation or
warranty, express or implied, with respect to the subject matter hereof, except as
expressly set forth in this Agreement.
|
12. |
Representations and Warranties of BofA
. BofA represents and warrants to Company
that:
|
(a) |
Good Standing
. BofA is a national banking association organized,
validly existing and in good standing under the laws of the United States, and has its
principal office in Charlotte, N.C. BofA is duly licensed or qualified to do business
and is in good standing in all jurisdictions in which the nature of the activities
conducted or proposed to be conducted by it, or the character of the assets owned or
leased by it, makes such licensing or qualification necessary to perform its
obligations required hereunder, except where the failure to be so licensed or qualified
would not have a material adverse effect on its ability to fulfill its obligations
under this Agreement.
|
(b) |
Capacity; Authority; Validity
. BofA has all necessary corporate power
and authority to enter into this Agreement and to perform all of the obligations to be
performed by it under this Agreement. This Agreement has been duly authorized by all
necessary corporate action and has been duly executed and delivered by BofA, and upon
execution by the Parties, shall constitute the valid and binding obligation of BofA,
enforceable against Company in accordance with its terms, subject to applicable
bankruptcy laws and general principles of equity.
|
(c) |
Conflicts; Defaults
. Neither the execution and delivery of this
Agreement by BofA, nor the consummation of the transactions contemplated herein by
BofA, shall (1) conflict with, result in the breach of, constitute a default under or
accelerate, terminate, modify or cancel or require any notice or consent under any
agreement, contract, lease, license, instrument or other arrangement to which BofA is a
party or by which it is bound or to which any of its assets is subject, except for such
violations, conflicts, breaches, defaults, accelerations, terminations or modifications
that would not have a material adverse effect on its ability to fulfill its obligations
under this Agreement; (2) violate the certificate of incorporation, bylaws, or any
other equivalent organizational document of BofA; or (3) require any consent or
approval under any judgment, order, writ, decree, permit or license to which BofA is a
party or by which it is bound.
|
(d) |
Standard of Performance
. BofA shall perform all services hereunder
consistent with the standards of performance utilized by BofA in performing such
services for its other similarly situated customers. However, BofA does not represent
or warrant that its services will be uninterrupted or error free nor will it be liable
for damages resulting therefrom. BofA will not be liable for loss of data in transit
between BofA or its Affiliates and Company, or a Customer, or between BofA or its
Affiliates or Company and the authorizing or settling institutions.
|
(e) |
No Reliance
. BofA acknowledges and agrees that Company has not made,
and BofA is not relying on, any representation or warranty, express or implied, with
respect to the subject matter hereof, except as expressly set forth in this Agreement.
|
(f) |
THE WARRANTIES SET FORTH IN THIS SECTION 12 CONSTITUTE THE ONLY WARRANTIES BY
BOFA OR ITS AFFILIATES TO COMPANY AND ARE IN LIEU OF ANY OTHER WARRANTIES WRITTEN OR
ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
|
- 15 -
13. |
Indemnification and Liability Limitation.
|
(a) |
Indemnification
.
|
(1) |
Company agrees to indemnify, defend and hold harmless each BofA
Indemnitee from and against any and all Claims, imposed on, incurred by or
asserted against any BofA Indemnitee which in any way directly or indirectly
relate to, result from or arise out of: (A) any breach of any representation,
warranty or covenant of Company contained in this Agreement; (B) any act or
omission of Company, any Customer, any Processor, any Indirect Processor, any
Service Provider or any other Person arising out of or relating to the
Sponsorship Services, the Payment Services, the Customer Agreements, and/or the
Provider Agreements; (C) violation of, or failure to comply with, Applicable
Law, the Operating Rules, the Customer Agreements, the Provider Agreements or
any agreement in connection with which Payment Services are provided or received
by (i) Company, (ii) any Customer, (iii) any Processor or any Service Provider
or (D) any Claim of any Person directly or indirectly relating to, resulting
from or arising out of this Agreement, BofAs sponsorship of any Customer or
Terminal, the provision of Payment Services by Company, any Processor or any
Service Provider or BofAs termination of this Agreement or refusal to extend
the Term hereof (including, without limitation, any Claim for indemnification by
any Network Party), except to the extent that any such Claim arises from the
gross negligence or willful misconduct of BofA or its Affiliates.
|
(2) |
If any Claim is asserted against any BofA Indemnitee (an
Indemnified Party
) by any person who is not a Party to this Agreement
in respect of which the Indemnified Party may be entitled to indemnification
under the provisions of this Section 13, the Indemnifying Party shall have the
right, by notifying the Indemnified Party within ten (10) calendar days of its
receipt of the notice of the Claim, to assume the entire control of the defense,
including, at the Indemnifying Partys expense, employment of counsel. The
Indemnified Party may participate in such defense at the Indemnified Partys
expense and with counsel of the Indemnified Partys choice. In any third party
claim, suit or proceeding the defense of which the Indemnifying Party shall have
assumed, the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the matter without the consent of the
Indemnifying Party and the Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement affecting the Indemnified Party to the
extent that the judgment or settlement involves more than the payment of money
without the written consent of the Indemnified Party.
|
(b) |
Limitation of Liability
. EXCEPT WITH RESPECT TO CLAIMS RELATING TO
BOFAS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, BOFAS CUMULATIVE AGGREGATE LIABILITY
FOR ANY CLAIMS ARISING OUT OF OR RELATED TO THE PRIOR AGREEMENT OR THIS AGREEMENT WILL
BE LIMITED TO TEN THOUSAND DOLLARS ($10,000) DURING THE TERM.
|
(c) |
Exclusion Of Damages
. IN NO EVENT WILL EITHER PARTY OR ITS AFFILIATES
BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT (WHETHER RELATING TO THE PRIOR AGREEMENT
OR THIS AGREEMENT), STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES,
EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER OR
NOT EITHER PARTY OR ITS AFFILIATE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
|
- 16 -
14. |
Term and Termination
|
(a) |
Term
.
|
(1) |
This Agreement shall become effective on the Effective Date and
shall continue in full force and effect until November 12, 2010 (the
Term
). This Agreement shall automatically terminate upon the end the
Term, without notice or other action by a Party, and shall not be renewed or
otherwise extended beyond the end of the Term except pursuant to a writing
signed by both Parties in their sole and absolute discretion.
|
(2) |
If, prior to the end of the Term, Company has entered into an
agreement with a new provider of sponsorship services as required under Section
2(b) and such new provider has agreed to assume liability with respect to the
BINs / ICAs on terms acceptable to BofA, but despite the Parties and such new
providers good faith efforts, the transfer of the BINs / ICAs to such new
Provider cannot reasonably be completed before the end of the Term, BofA will
engage in good faith negotiations with Company regarding the terms and
conditions under which BofA might agree to an extension of the term of this
Agreement for a limited period in order to complete such transfer, provided that
(A) the terms of any such extension may include revisions to any of the
provisions of this Agreement, including, but not limited to, an increase in the
Reserve Amount, and (B) any extension must be in writing and signed by both
Parties.
|
(b) |
Termination Rights
.
|
(1) |
Either Party (the
Terminating Party
) may terminate this
Agreement immediately if the other Party (the
Non-Terminating Party
)
materially breaches this Agreement and fails to remedy such breach within ten
(10) days (or 5 business days in the event of a payment default) after receipt
of written notice from the Terminating Party thereof specifying the nature of
such failure.
|
(2) |
Notwithstanding the provisions of Section 14(b)(1), BofA may
terminate or suspend this Agreement, or cease providing Sponsorship Services
with respect to a Customer, by providing written notice to Company in the event
that: (A) a Network or Governmental Authority directs BofA or an Affiliate to
terminate this Agreement in whole or with respect to a Customer; (B) BofA
reasonably determines that such termination or suspension is required to prevent
significant financial or reputational risk to BofA; or (C) a Material Adverse
Event occurs.
|
(3) |
Company may terminate this Agreement without cause and without
penalty by providing BofA with ten (10) days advance notice of termination,
provided that (A) Company has entered into a relationship with a new provider
for the Sponsorship Services previously provided by BofA and its Affiliates; (B)
such new provider agrees to assume the transfer of all BINs / ICAs currently
used by Company on terms and conditions acceptable to BofA; and (C) Company
cooperates (and causes such new provider to cooperate) with BofA and its
Affiliates with respect to the transfer of such BINS / ICAs to such provider.
In the event the transfer of such BINS / ICAs to the new provider is completed
prior to the end of such ten (10) day period, this Agreement shall terminate on
the date that the BINS / ICAs are transferred to such new provider.
|
- 17 -
15. |
Confidentiality.
|
(a) |
Confidential Information
. Except as required by law or as expressly
permitted under this Agreement, the Parties shall keep confidential and shall not
disclose, and shall cause their employers, independent contractors and agents to keep
confidential and not to disclose, to any third
party any Confidential Information obtained from a Party to this Agreement. For
purposes of this Agreement,
Confidential Information
shall mean any of the
following:
|
(1) |
Information that is provided by or on behalf of any Party to
another Party or its agents in connection with this Agreement;
|
(2) |
Information not of a public nature concerning the business or
properties of any Party, including the terms and conditions of this Agreement
(as well as proposed terms and conditions of any amendments, renewals, or
extensions of this Agreement), sales volumes, test results, trade secrets,
business and financial information, source codes, business methods, procedures,
know-how and other information (including intellectual property) of every kind
that relates to the business of any Party; and
|
(3) |
Information about a Party or its affiliates, or its respective
businesses or employees, that is otherwise obtained by a Party in connection
with this Agreement, in each case including: (A) information concerning
marketing plans, marketing philosophies, objectives and financial results; (B)
information regarding business systems, methods, processes, financing data,
programs and products; (C) information unrelated to the Agreement obtained by a
Party in connection with this Agreement, including by accessing or being present
at the business location of a Party; (D) proprietary technical information,
including source codes; and (E) competitive advantages and disadvantages,
customer names and addresses, technological development, sales volume(s),
business relationships and methods of transacting business, customers and
dealers, operational and data processing capabilities, systems software and
hardware and the documentation thereof or other information of the business or
affairs of each of the Parties and their respective affiliates which a Party
reasonably considers confidential or proprietary and any other information
relating to the transactions contemplated by this Agreement, including any
copies, excerpts, summaries, analyses or notes of the foregoing.
|
(b) |
Exclusions
. Confidential Information shall not include information (1)
obtained from information already in the possession of the Receiving Party (other than
in connection with the structuring, negotiation and execution of this Agreement and the
other related documents and the transactions contemplated herein) and is not otherwise
subject to an agreement as to confidentiality; (2) that becomes generally available in
the public domain other than as a result of an unauthorized disclosure by a Party; (3)
that is lawfully received on a non-confidential basis from a third party authorized to
disclose such information without restriction and without breach of this Agreement;
(4) that is contained in, or is capable of being discovered through examination of
publicly available records or products; and (5) that is developed by a Party without
the use of any proprietary, non-public information provide by a Party under this
Agreement.
|
(c) |
Maintenance of Confidentiality
. If a Receiving Party receives
Confidential Information of the Disclosing Party, the Receiving Party shall do the
following with respect to such Confidential Information: (1) keep Confidential
Information of the Disclosing Party secure and confidential; (2) treat all Confidential
Information of the Disclosing Party with the same degree of care as it accords it own
Confidential Information, but in no event less than a reasonable degree of card: and
(3) implement and maintain commercially reasonable physical, electronic, administrative
and procedural security measures, including commercially reasonable authentication,
access controls, virus protection and intrusion detection practices and procedures.
|
(d) |
Permitted Uses
. Except as specifically set forth herein, each
Receiving Party shall not use or disclose Confidential Information of the Disclosing
Party except: (1) to perform its obligations or enforce its rights with respect to this
Agreement; (2) as expressly permitted by this Agreement; (3) with the prior written
consent of the Disclosing Party; or (4) pursuant to a summons, order or other judicial
or governmental process issued by a Governmental Authority, or in connection with any
regulatory report, audit, inquiry or other request for information from such a
Governmental Authority, or as required by Applicable Law. Notwithstanding the
foregoing, BofA and its Affiliates may provide Confidential Information to the
Networks as necessary to provide the Sponsorship Services or comply with the
Operating Rules.
|
- 18 -
(e) |
Limited Access
. Each Receiving Party shall: (1) limit access to the
Disclosing Partys Confidential Information to those employees, authorized agents,
vendors, consultants, service providers and contractors who have a reasonable need to
access such Confidential Information in connection with this Agreement; and (2) be
bound by obligations with respect to each such Person substantially similar to those
set forth in this Section 15.
|
(f) |
Requests for Disclosure
. In the event that a Receiving Party receives
a request of the type described in Section 15(d) to disclose any Confidential
Information, such Receiving Party shall: (1) notify the Disclosing Party thereof
promptly after receipt of such request; (2) consult with the Disclosing Party on the
advisability of taking steps to resist or vary such request; and (3) if disclosure is
required or deemed advisable, cooperate with the Disclosing Party in any attempt that
it may make to obtain a protective order or other reliable assurance that confidential
treatment will be accorded to the Confidential Information.
|
(g) |
Public Filings
. Each Party shall obtain the other Partys consent, not
to be unreasonably withheld or delayed, if such Party believes that it is required to
file this Agreement as an exhibit to one or more of its SEC filings.
|
(h) |
Compliance with Applicable Law
. Notwithstanding anything else
contained in this Agreement, no Party shall be obligated to take any action that such
Party believes in good faith would violate, or is reasonably likely to cause it to
violate, any Applicable Law.
|
16. |
Miscellaneous.
|
(a) |
Governing Law
. This Agreement will be governed by, interpreted and
construed in accordance with, the laws of the State of New York, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws thereof.
|
(b) |
Jurisdiction; Venue
. The Parties irrevocably consent to the exclusive
personal jurisdiction and exclusive venue of the federal and state courts in New York,
New York for any court action or proceeding relating to the Prior Agreement, this
Agreement, or the relationships contemplated thereby. THE PARTIES HEREBY EXPRESSLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
RELATING TO THE PRIOR AGREEMENT, THIS AGREEMENT OR THE RELATIONSHIPS CONTEMPLATED
THEREBY.
|
(c) |
Amendments; Waivers
. This Agreement may be amended only by a writing
signed by all of the Parties. Course of dealing, implication or failure or a delay in
exercising any Partys rights and remedies hereunder will not effect any amendment or
modification of this Agreement or the waiver of any such rights.
|
(d) |
Counterparts
. This Agreement may be executed in multiple counterparts,
each of which will constitute an original hereof, and all of which taken together will
constitute one and the same agreement.
|
(e) |
Entire Agreement
. This Agreement contains the entire agreement of the
Parties and supersede any prior or contemporaneous written or oral agreements between
the Parties with respect to the subject matter hereof. In the event that this
Agreement, or any portion hereof, conflicts with a Networks Operating Rules, the
applicable Operating Rules or relevant provision thereof will govern. There
are no representations, warranties, agreements, arrangements, or understandings, oral
or written between the Parties relating to the subject matter of this Agreement which
are not fully expressed herein, or in the Operating Rules.
|
- 19 -
(f) |
Notices
. All notices permitted or required by this Agreement shall be
in writing and shall be deemed to have been duly given (1) upon personal delivery
(whether by messenger, overnight delivery, telegram, or otherwise), (2) upon facsimile
transmission (receipt of which is orally confirmed by the recipient) or upon
transmission by tested telex, or (3) three (3) business days after deposit, postage
prepaid, in the United States mail, if sent by certified or registered mail, return
receipt requested, and addressed:
|
in the case of notice to BofA, to:
|
Bank of America, N.A. | |
|
Attention: Paul Mooney | |
|
MA5-100-08-12 | |
|
100 Federal Street | |
|
Boston, Massachusetts | |
|
(617) 434-4289 (Fax) | |
|
||
and in the case of notice to Company, to:
|
Global Cash Access, Inc. | |
|
Attention: General Counsel | |
|
3525 E. Post Road, Suite 125 | |
|
Las Vegas, Nevada 89120 | |
|
(702) 262-5039 (Fax) |
(g) |
Assignment
. A Party shall not assign this Agreement or any of its
rights hereunder without the prior written consent of the other Party;
provided,
however
, that BofA may, without the prior written consent of Company, assign this
Agreement or otherwise transfer any of its rights and obligations hereunder to any of
its Affiliates, any successor-in-interest of BofA, or any entity which acquires a
majority of BofAs assets or operations. For avoidance of doubt, a change of control
or ownership of a Party shall constitute an assignment of this Agreement. Subject to
the foregoing, this Agreement shall be binding on the parties hereto and their
respective successors and permitted assigns.
|
(h) |
No Third-Party Beneficiaries
. This Agreement will be binding upon and
inure to the benefit of the Parties and their respective legal representatives,
successors and assigns. This Agreement is not for the benefit of any other person,
and no other person will have any rights against Company or BofA hereunder.
|
(i) |
Construction
. Section headings in this Agreement are included for
convenience only and shall not affect the meaning or interpretation of any provision of
this Agreement. References in this Agreement to any Section are to such Section of
this Agreement. Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular include the
plural, and the term including or includes is not limiting. The schedules,
exhibits and attachments referred to herein shall be construed with and as an integral
part of this Agreement to the same effect as if it were set forth verbatim herein.
|
(j) |
Waiver
. None of the provisions of this Agreement will be deemed to
have been waived by any act or acquiescence on the part of either Party, their agents,
or employees and may be waived only by instruments in writing signed by the authorized
officer of the respective Party. No waiver of any provision or of the same provision
on any occasion will operate as a waiver on another occasion.
|
- 20 -
(k) |
Severability
. If any clause, sentence or other provision or portion of
this Agreement will for any reason become illegal, null or void, or be held by any
court of competent jurisdiction to be illegal, null or void, the remaining portions of
this Agreement will remain in full force and effect.
|
(l) |
Further Assurances
. The Parties from time to time after execution of
this Agreement, without further consideration, will execute and deliver, as
appropriate, such documents and take such actions as may be reasonably necessary or
proper to carry out and consummate the transactions contemplated by this Agreement.
|
BANK OF AMERICA, N.A. | GLOBAL CASH ACCESS, INC. | |||||||||||||
|
||||||||||||||
By: | /s/ Paul Mooney | By: | /s/ Scott Betts | |||||||||||
|
Name: | Paul Mooney | Name: | Scott Betts | ||||||||||
|
Title: | SVP | Title: | President and CEO |
- 21 -
- 1 -
|
Copy of executed agreement
|
|
Doing Business As (DBA) name
|
|
Merchant legal name
|
|
Merchant outlet location, including street address, city, state and nine-digit ZIP code
|
|
Federal Taxpayer Identification Number, and identification of the number as either a
Federal Employer Identification Number (FEIN) or Social Security Number (SSN)
|
|
Incorporation status (e.g., corporation, partnership, sole proprietor, non-profit, or
other)
|
|
Gaming Licensing
|
|
Telebet (non face to face) requires legal opinion merchant, legal opinion GCA,
Effective controls by 3
rd
party
|
|
Full first and last name, including middle initial, if merchant is a sole proprietor
|
|
MCC and, if applicable, any secondary MCCs
|
|
PCI DSS compliance
|
|
MATCH-clear
|
|
Physical site inspection
|
1. |
Add location for ATM and/or POS location
|
2. |
Ability to view the following data on a daily basis by client:
|
|
Gross sales volume
|
|
|
Average transaction amount
|
|
|
Number of transaction receipts
|
|
|
Number of chargebacks
|
|
|
Number of credits
|
|
Authorizations indicate controls established at the individual merchant
and/or MCC level and subsequent reporting of exceptions
|
|
Key entered High rates of key entered transactions
|
|
Deposits Large out-of-pattern deposits and large individual transactions
suspended and reviewed
|
|
Same card # Multiple sales with the same card number is reviewed
|
|
Average transaction size Large changes in the average transaction size.
|
|
New/inactive merchants Deposit activity for new/inactive merchants.
|
|
Reduction in sales volume.
|
|
Increasing or excessive draft retrieval request rates.
|
|
Increasing or excessive chargeback rates by merchant location.
|
|
Address changes
|
|
DDA changes
|
- 1 -
|
Key Management Reports 2009
include at minimum # and $ transactions by card type,
losses, chargeback, fraud, data compromise, chargeback by merchant location ID
|
|
Exception reports fraud/suspicious activity, settlement failure, interchange
monitoring/rejects, ATM outage, chargeback programs, significant fraud event or theft of a
device
|
|
Organization charts indicating material organization changes Executive Level
|
|
Location reporting/datafile provide monthly list of all current open and closed MIDS
(last 12 months) provide MID # and Corp name, DBA name, address, MCC, transaction $
and # by location, returns/credits $ & # by location, CB $&# by location, fraud by
location $ and # (CB reason code for fraud), date open, date closed, DBA name, SIC
MCC(s), Visa POS Condition code, Visa Processing code, MasterCard TCC
|
|
Merchants placed on MATCH
|
|
TC 50
|
|
MasterCard Data Integrity
|
|
Changes to surcharging validation in compliance with network rules and state rules
|
|
Customer PCI compliance monthly report PCI compliance status of customers
|
|
Any material changes to responsible gaming policy procedures and controls
|
1. |
PCI Quarterly Scan Annual ROC, Visa PIN & ANSI TR-39/TG3
|
||
2. |
Visa volume reporting
|
||
3. |
Visa PLUS reporting
|
||
4. |
MasterCard [***] & [***] location reporting
|
||
5. |
List of all third party vendors that have possession of CH data or perform ATM related
services, encrypted or non encrypted include full description of function performed by
third party
|
||
6. |
List by ATM location, who owns device, who loads cash, performs maintenance receipt
paper etc, performs hardware software maintenance and PIN encryption
|
- 2 -
- 1 -
- 1 -
1. |
Definitions.
Except as otherwise stated herein, all terms used in this First
Amendment shall have the meanings set forth in the Agreement. In addition, the following
terms shall have the following meanings when used herein:
|
2. |
Relationship Between First Amendment and Agreement
.
|
(a) |
Effective as of the First Amendment Effective Date, this First Amendment amends
the Agreement as set forth herein. In the event of any conflict between the First
Amendment and the Agreement, the First Amendment shall govern.
|
(b) |
All references in the Agreement or this First Amendment to the Agreement
shall be deemed to refer to the Agreement as amended by this First Amendment.
|
(c) |
Except as expressly amended by this First Amendment, all terms of the Agreement
shall remain unchanged.
|
3. |
Transfer of BINS and ICAs
.
|
4. |
Reports
.
|
5. |
Reserve Amount.
|
6. |
Sponsorship Fees.
|
(a) |
Beginning as of the First Amendment Effective Date,
Company shall pay BofA a
fee (the
Sponsorship Fee
) equal to [***] basis points of the dollar
volume
of credit and signature debit transactions processed through the BINs and ICAs
currently used by Company, which are the subject of the Sponsorship Services. BofA
shall invoice Company for Sponsorship Fees on a monthly basis, and Company shall pay
each invoice within fifteen (15) days.
|
(b) |
The Sponsorship Fees is in addition to any other fees, fines, assessments and
expenses that may be imposed by a Network, for which Company is responsible under the
Agreement, notwithstanding that such fees, fines, assessments or expenses may be
imposed on BofA or other third-party service providers rather than directly imposed on
Company.
|
7. |
Term and Termination
|
(a) |
Basis of Extension
. Company hereby represents to BofA that: (1) at the
time the Parties entered into the Agreement, Company had reached tentative agreement
with MetaBank to replace BofA as the provider of BIN / ICA sponsorship services; (2) at
the time the Parties entered into the Agreement, Company reasonably believed that such
replacement could be completed by the date the Agreement is scheduled to expire; (3)
uncertainty has arisen over whether MetaBank will enter into such agreement to provide
BIN / ICA sponsorship services, in part because MetaBank may need to obtain regulatory
approval to enter into such agreement with Company and Company does not know whether
such approval will be provided to MetaBank; and (4) Company believes that Company will
be able to (A) complete its tentative agreement with MetaBank, or enter into an
agreement with another provider of BIN / ICA sponsorship services, and (B) cause such
new provider to enter into an assignment and assumption agreement relating to BofAs
BINs and ICAs sponsored for Company, no later than April 1, 2011, and on that basis has
requested BofA to extend the Term of the Agreement until such date.
|
- 2 -
(b) |
Conditions of Extension
. Company acknowledges and agrees that (1) BofA
is agreeing to the extension to the Term of the Agreement under this Section 7 on the
basis that, among other things, the representations of Company to BofA under Section
7(a) are true and correct in all respects; (2)
Company will use its best efforts to enter into a new agreement with another provider
of BIN / ICA sponsorship services, and to cause such new provider to enter into an
assignment and assumption agreement with BofA in the form attached hereto as
Exhibit A
, no later than April 1, 2011; and (3) BofA shall have not
obligation to provide any additional or other extension of the Term of the Agreement
beyond April 1, 2011, and Company assumes all risks and liabilities if, for any
reason whatsoever, Company is not able to enter into such an agreement or cause such
new provider to enter into such agreement with BofA and BofA ceases to provide
Sponsorship Services under the Agreement after the extension provided pursuant to
this Amendment.
|
(c) |
Term
. Section 14(a)(1) of the Agreement is amended by replacing such
Section in its entirety with the following:
|
(d) |
Additional BofA Termination Rights
. In addition to any other
termination rights under the Agreement, and notwithstanding any other provision of the
Agreement, BofA may terminate or suspend this Agreement, or cease providing Sponsorship
Services with respect to a Customer:
|
(1) |
by providing written notice to Company in the event that: (A)
Company fails to maintain compliance with the PCI Data Security Standards; (B)
Company fails to maintain compliance with applicable Network personal
identification number security requirements; (C) Company engages in any
fraudulent activity; (D) Company engages in any activity which presents a
security or financial risk to BofA or any of its Affiliates or would, in BofAs
reasonable belief, have an adverse impact on the reputation of BofA or any of
its Affiliates; or (E) Company submits Card Transactions on behalf of any
Customer that is not licensed to operate as a gaming establishment or otherwise
approved in writing by BofA; or
|
(2) |
by providing written notice to Company in the event that any
Company License that is material to Companys performance of its obligations
under this Agreement is revoked, and (A) Company has failed to initiate a cure
of such revocation within the greater of three (3) business days or any period
provided by such Governmental Authority, if any; or (B) such Governmental
Authority confirms or upholds its decision to revoke such License after Company
has attempted to cure such revocation; or (C) such License is required in order
for Company to operate the business of providing Payment Services in compliance
with Applicable Law and this Agreement, and Company is not permitted under
Applicable Law to operate such business under such License during the period in
which Company is seeking to cure such revocation.
|
- 3 -
BANK OF AMERICA, N.A. | GLOBAL CASH ACCESS, INC. | |||||||||||||
|
||||||||||||||
By: | /s/ Paul Mooney | By: | /s/ Scott Betts | |||||||||||
|
Name: | Paul Mooney | Name: | Scott Betts | ||||||||||
|
Title: | S.V.P. | Title: | President and CEO |
- 4 -
1. |
Assignor hereby assigns and transfers to Assignee, and Assignee hereby accepts and assumes
from Assignor, all of Assignors right, title and interest with respect to the Sponsored
BINs/ICAs in accordance with the provisions of this Agreement. The transfer of a Sponsored
BIN/ICA from Assignor to Assignee shall become effective as of the date on which such BIN or
ICA is transferred from Assignor to Assignee on the records of MasterCard Worldwide
Incorporated or Visa USA, Inc. (the Card Organization), or such other date as the Parties
may agree upon in writing (the Conversion Date). Each Party shall cooperate with the other
Party and engage in good faith efforts to obtain the consent of the applicable Card
Organization to assignment and assumption of the Sponsored BINs/ICAs and to accomplish such
assignment and assumption.
|
2. |
The Parties expressly acknowledge and agree that, as between Assignor and Assignee: (a)
Assignor shall have all rights and obligations with respect to transactions occurring under a
Sponsored BIN/ICA before the Conversion Date, and Assignee shall have no such rights or
obligations with respect to such transactions; and (b) Assignee shall have all rights and
obligations with respect to transactions relating to or occurring under a Sponsored BIN/ICA on
or after the Conversion Date, and Assignor shall have no such rights or obligations with
respect to such transactions. The allocation of rights and obligations under this Section 2
shall apply with respect to a transaction occurring under a Sponsored BIN/ICA on the basis of
when such transaction is processed under such Sponsored BIN/ICA, regardless of whether or not
such transaction relates to an earlier transaction under the Sponsored BIN/ICA. Assignor and
Assignee agree to promptly reimburse each other to accomplish the foregoing allocation of
rights and obligations upon presentation of appropriate documentation if such allocation is
not carried
out through settlement with the Card Associations.
|
- 5 -
3. |
Each Party hereby represents and warrants to the other Party that this Agreement has been
duly authorized, executed and delivered by such Party pursuant to its corporate powers and
constitutes the legal, valid and binding obligation of Assignor enforceable in accordance with
its terms, except as such enforcement may be limited by insolvency, equitable considerations
or similar matters. Assignee represents and warrants to Assignor that Assignee is a member in
good standing of each of the Card Organizations and meets all operational and financial
requirements of such Card Organizations to accept the assignment of the Sponsored BINS/ICAs
and to provide sponsorship services to Company with respect to such Sponsored BINS/ICAs.
|
4. |
Assignor hereby indemnifies, saves, defends and holds Assignee harmless from and against any
and all liability, loss, damage, claim, suit, action, cost or expense (including judicial and
administrative proceedings, settlements, court costs and reasonable fees and expenses of
attorneys and consultants) (Losses) arising out of or directly or indirectly relating to:
(a) the breach by Assignor of any of Assignors covenants, representations, warranties or
agreements contained herein; (b) any act or omission of Assignor prior to the Conversion Date
with respect to any Sponsored BINs/ICAs; or (c) any fine, assessment or penalty imposed prior
to the Conversion by a Card Association with respect to any Sponsored BINs/ICAs; provided that
Assignor shall not be obligated to indemnify Assignee for the gross negligence or willful
misconduct or Assignee.
|
5. |
Assignee hereby indemnifies, saves, defends and holds Assignor harmless from and against any
and all Losses arising out of or directly or indirectly relating to: (a) the breach by
Assignee of any of Assignees representations, warranties, covenants or agreements contained
herein; (b) any act or omission of the Assignee on and after the Conversion Date with respect
to any Sponsored BINs/ICAs; or (c) any fine, assessment or penalty imposed on or after the
Conversion Date by a Card Association with respect to any Sponsored BINs/ICAs; provided that
Assignee shall not be obligated to indemnify Assignor for the gross negligence or willful
misconduct or Assignor.
|
6. |
Each Party shall give such further assurances to the other Party as are reasonable, and shall
execute, acknowledge and deliver such documents, instruments and take such further actions as
are reasonable, to carry out the transactions contemplated by this Agreement in accordance
with the terms hereof.
|
7. |
There are no third-party beneficiaries of this Agreement, including Company, and this
Agreement does not create any rights in any other person.
|
8. |
No Party shall be responsible to the other Party (via indemnification or otherwise) for any
consequential, punitive, special or similar damages.
|
9. |
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.
|
10. |
This Agreement may not be amended, modified or waived except in a writing executed by the
authorized officers of the Parties.
|
11. |
This Agreement contains the entire agreement of the Parties and supersede any prior or
contemporaneous written or oral agreements between the Parties with respect to the subject
matter hereof.
|
12. |
This Agreement may be executed in counterparts, each of which shall be an original, but all
of
which shall constitute one and the same instrument.
|
- 6 -
BANK OF AMERICA, N.A. | ||||||
|
||||||
|
Signature: | |||||
|
|
|||||
|
Print Name: | |||||
|
|
|||||
|
Title: | |||||
|
|
|||||
|
||||||
|
[Assignee] | |||||
|
||||||
|
Signature: | |||||
|
|
|||||
|
Print Name: | |||||
|
|
|||||
|
Title: | |||||
|
|
Global Cash Access, Inc. | ||||||
|
||||||
|
Signature: | |||||
|
|
|||||
|
Print Name: | |||||
|
|
|||||
|
Title: | |||||
|
|
- 7 -
1
I. |
General
.
|
A. |
Inconsistencies; Incorporation of Recitals
. In the case of
inconsistencies between this Agreement and any other agreements between Wells Fargo and
Client that deal with the subject matter of this Agreement (including Wells Fargo
account agreements), the terms of this Agreement shall prevail. The Recitals set forth
above are incorporated herein by reference as part of this Agreement.
|
B. |
Effect of non-Business Days on deadlines
. If any deadline specified in
this Agreement falls upon a non-Business Day, such deadline shall be extended to the
next day that is a Business Day.
|
C. |
Recovery Plan
. The provisions of the current cash retrieval and
disaster recovery plans attached hereto as
Exhibit F
(
Recovery Plan
)
are incorporated in and supplement the terms of this Agreement. The locations and
delivery times of Wells Fargo Network Locations and other information in the cash
recovery plan attached as
Exhibit F
will be supplemented or otherwise restated
monthly based upon updated information from Client and upon Clients addition or
deletion of a Covered Machine. Any other supplements or restatements of the Recovery
Plan shall become effective only upon the prior written consent of Client.
|
2
D. |
Covered Machines
. The current list of Covered Machines is set forth in
Exhibit A
. Subject to
Section I.F.
below, Client may (i) upon five
Business Days prior written notice to Wells Fargo, delete Machines listed as Covered
Machines (such deletion to be effective only after all Cash is removed from the Covered
Machines by the Armored Carrier) or (ii) add new Covered Machines to
Exhibit A
from time to time upon written notice to Wells Fargo according to the procedure set
forth in this Paragraph. If the new Covered Machines can be serviced by an existing
Wells Fargo Network Location and the aggregate number of Covered Machines being added
does not exceed 10, Client will provide Wells Fargo fourteen calendar days prior
written notice of the change. If the new Covered Machines will require a new Wells
Fargo Network Location or if the aggregate number of Covered Machines being added
exceeds 10 but is less than 50, Client will provide Wells Fargo 30 calendar days prior
written notice of the change. If the aggregate number of new Covered Machines equals
or exceeds 50, Client will provide notice to Wells Fargo and the parties will work
together to establish a reasonable time frame within which the new Covered Machines
will be added. Wells Fargo agrees to supply the Cash to the new Covered Machines in
the continental United States from the nearest Wells Fargo Network Location. Wells
Fargo will respond to Clients request for a new Wells Fargo Network Location in
writing within 10 Business Days of Clients request to add new Covered Machine(s), and
such response will indicate the proposed Wells Fargo Network Location that Wells Fargo
intends to use to supply the Cash to the new Covered Machine(s). Client will respond
in writing to Wells Fargo within 10 Business Days, either approving or rejecting the
proposed Wells Fargo Network Location for the proposed Covered Machine(s) and
describing the reasons for a rejection. If Client rejects the proposed Wells Fargo
Network Location(s) for a proposed Covered Machine(s), Client may supply the new
Machine(s) with currency and coin from another source, and such new Machine(s) shall
not be added to
Exhibit A
as a Covered Machine(s). Notwithstanding any other
provision to the contrary, any Covered Machines being added during the first or last
week of a month (the Freeze Period) will be done solely on a best efforts basis. In
no event will Work be performed for Covered Machines except by Wells Fargo.
|
E. |
Exceptions
. For avoidance of doubt and in addition to any exclusions
set forth in this Agreement, the Parties agree that nothing herein shall be deemed to
prohibit Client from procuring currency and coin for the Covered Machines from any
source other than Wells Fargo if Wells Fargo is unable to provide Cash (on account of a
Force Majeure Event or otherwise) so long as (i) any Cash is first removed from the
applicable Covered Machine (at which time the Machine will be deleted from
Exhibit
A
), and (ii) Cash is never commingled with currency or coin of Client or any other
person or source.
|
F. |
Annual Covered Machines Count
. On the Effective Date and on each May 1
during the term hereof, Client will provide to Wells Fargo a forecast of the number of
Machines that will be Covered Machines during the following calendar year.
|
3
II. |
Contract Cash Services; Work
.
|
A. |
Wells Fargos General Obligation to Supply Cash
. Subject to the terms
of this Agreement, Wells Fargo agrees to furnish or cause to be furnished all United
States currency in denominations and that either is new or is in a physical condition
suitable for dispensing from a Machine in the amounts to be ordered by Client, on
behalf of Client or any of its affiliates (such new or ATM fit United States currency
as provided or arranged by Wells Fargo, the
Cash
).
|
B. |
Orders
. Subject to Section II.C below, Wells Fargo agrees to supply
(or cause to be supplied) all of the Covered Machines with adequate Cash to meet
Clients Cash order requests for each of the Covered Machines. Prior to the date that
Wells Fargo begins supplying Cash under this Agreement, Client will provide Wells Fargo
with a forecast of Cash needed per Wells Fargo Network Location and denomination to
meet operating activities and Wells Fargo and Client acknowledge and agree that Client
has provided an initial forecast of Cash needed prior to the Effective Date. Client
will also provide at least ten calendar days prior written notice of the forecasted
amount and denomination of Cash needed per Wells Fargo Network Location to accommodate
holiday spikes, new locations and increased activities. Client shall give Wells Fargo
an order for Cash by the time(s) designated for each Wells Fargo, Cash Supplier,
Federal Reserve or other vault location (each a
Wells Fargo Network
Location
). Client shall specify the amount and denomination of Cash to be
supplied in the manner required under Wells Fargos cash vault ordering requirements.
In the event that any applicable Wells Fargo Network Location cannot supply a Client
with the volume of adequate Cash required to meet each Cash order for the Covered
Machines, Wells Fargo shall use commercially reasonable efforts to obtain from other
sources as much of such Cash as is practicable to fill Clients order.
|
C. |
Maximum Amount of Cash to be Supplied
. The aggregate total of Cash to
be provided by Wells Fargo under this Agreement shall at no time exceed $400 Million
Dollars including (i) all Cash with Armored Carriers, (ii) all Cash in Covered
Machines, and (iii) all payments owed by Servicers, including any amount to be
reimbursed by way of credit to the Settlement Account in immediately available funds,
net of all adjustments, chargebacks, representations and other corrections to all
transactions under the Servicing Agreements (the
Maximum Available Amount
);
provided, however, Wells Fargo acknowledges that Client may require Cash not to exceed
$50 Million Dollars in excess of the Maximum Available Amount (the Additional
Requested Amount) for a particular calendar day (e.g. New Years Eve), on an
occasional basis but in no event more than four times in any calendar year, and in such
a situation, Client shall use best efforts to notify Wells Fargo with reasonable
advance notice of the anticipated calendar day and the anticipated amount of the
Additional Requested Amount) and Wells Fargo shall provide the Maximum Available
Amount and shall use best efforts to provide Cash in an amount equal to the Additional
Requested Amount.
|
4
D. |
No Commingling of Cash
. Client agrees that during the term of this
Agreement
the only currency to be placed in any of the cash cassettes used for dispensing
currency from a Covered Machine shall be Wells Fargos Cash. This restriction on
commingling applies irrespective of whether Client intends to supply currency to a
particular Covered Machine from another cash provider and regardless of whether
Wells Fargo failed to supply the Covered Machine or otherwise.
|
E. |
Cash May Only be Used in Covered Machines
. Client agrees that at no
time will Cash (i) be used or placed in Machines other than the Covered Machines, or
(ii) be used for a purpose other than dispensing currency needs at the Covered
Machines.
|
F. |
Work
. Subject to the terms and conditions hereof, Wells Fargo will
provide Work for the Covered Machines during the term of this Agreement in a manner
consistent with the terms of this Agreement.
|
G. |
Third-Party Premises
. Except as otherwise provided below, all
agreements between Client and its affiliates and their respective customers
(Customer(s)) for the placement of a Machine on such Customers premises (each a
Machine Placement Agreement
) shall comply with the following requirements
before such Machine shall be deemed a Covered Machine:
|
1. |
Ownership of Cash
. The Machine Placement Agreement, or
equivalent agreement, shall not grant any ownership interest or other right to
Customer in and to the Cash contained in the Covered Machines.
|
2. |
Wells Fargo Access to Covered Machines
. At least
between the hours of 8:00 a.m. and 5:00 p.m. local time and such additional
time periods that a Customer may deem to be its normal business hours (and
upon reasonable request during non-business hours), Wells Fargo, and its
authorized agents, shall be permitted by a Customer to enter on the premises on
which the Covered Machines are located to inspect the Covered Machines, deliver
Cash to and retrieve Cash from the Covered Machines, supervise and/or inspect
the servicing and repair of Covered Machines and otherwise protect Wells
Fargos interest in the Cash contained in the Covered Machines; subject to a
Customers licensing and security policies and procedures regarding vendors
performing services on a Customers premises.
|
3. |
Third-Party Access to Cash Prohibited
. The Machine
Placement Agreement shall not allow or grant Customer any right to access the
Cash in any Covered Machine without the express written consent of Client.
|
5
III. |
Plan and Procedures
. To ensure repayment of the Cash dispensed from the Covered
Machines (the
Dispensed Cash
) and to enable Wells Fargo to perform the Work, the
Parties agree to the settlement, and balancing and processing procedures set forth below:
|
A. |
Pilot Period and Pilot Machines
. Before the Work begins under this
Agreement, Wells Fargo and Client agree that Wells Fargo will conduct a test pilot of
Contract Cash Services (the Pilot) at one or more mutually agreed upon locations
covering a mutually agreed upon number of Machines. The Pilot will commence as soon
as possible after the execution of this Agreement by the Parties and will terminate
on November 29, 2010, unless an extension is separately agreed to in writing by the
Parties. The aggregate total of Cash to be provided during the Pilot shall at no
time exceed $4 million including (i) all Cash with Armored Carriers, (ii) all Cash
in Pilot Machines, and (iii) all payments owed by Client in accordance with Exhibit
G hereto. Client agrees to use commercially reasonable efforts to cause any
required third parties to fully cooperate with Well Fargo in connection with the
Pilot. With respect to any Cash dispensed from any Machine during the Pilot, the
Parties agree to the settlements and reconciliation procedures set forth on Exhibit
G attached hereto. The Pilot may be terminated (i) by either Party for convenience
upon notice to the other Party; or, (ii) immediately upon notice by Wells Fargo to
Client in the event Client fails to pay the settlement for the Pilot Cash as set
forth in Exhibit G. The Parties agree that the Pilot Machines shall be Covered
Machines for the purposes of this Agreement and the rights and responsibilities of
the Parties during the Pilot shall be governed by the terms of this Agreement except
as such terms are modified specifically for the Pilot in this Section or in Exhibit
G.
|
B. |
Commencement
. The settlement procedures for Covered Machines shall
become effective on a date to be agreed upon in writing by the Parties (the
Settlement Start Date
). The Settlement Start Date shall be the date the
Wells Fargo currency is placed in the cash cassette at one or more of the initial
Covered Machines, or is in the Armored Carriers vault or is in transit with the
Armored Carrier, in each case intended for use in such Covered Machines (the
Starting Cash
). The Starting Cash shall be effected as orders are placed and
Cash is dispensed from each Covered Machine, and as Cash is in the Armored Carriers
vault or is in transit with the Armored Carrier, in each case intended for use in
Covered Machines.
|
C. |
Daily Reports
.
|
1. |
By 7:00 a.m., Central Time, on each Business Day, Client shall
deliver to Wells Fargo daily reports (
Daily Reports
) as follows:
|
a. |
File 1
. A report (a
File 1
Report
) that provides the amount of Cash dispensed from each
Covered Machine between 3 p.m. Pacific Time (the Beginning Measurement
Time) through settlement, which is 3:00 p.m. Pacific Time of the
immediately preceding Business Day (
Daily Dispensed Cash
);
and
|
b. |
File 2
. A report (a
File 2
Report
) that provides the amount of Cash dispensed from each
Covered Machine serviced since the preceding Business Day from the
Beginning Measurement Time until such Covered Machine was serviced and
cash cassettes swapped by the Armored Carrier on the immediately
preceding Business Day.
|
6
2. |
Armored Carrier Service Report
. Utilizing the iCom
Reporting System selected by Wells Fargo, by 12:00 p.m. local time (unless an
exception is granted in writing by Wells Fargo) on each Business Day, the
Armored Carriers shall deliver to Wells Fargo a report reflecting each Covered
Machine serviced and the Cash balance in each Covered Machine at the time of
service (together with corrections and adjustments input in such system, the
Service Report
). Service Reports shall be used by Wells Fargo as
part of the reconciliation process contemplated hereby. Wells Fargo will
provide, without additional cost to Client, training for agreed upon systems
changes.
|
3. |
Daily Report by Wells Fargo
. By 4:00 p.m. Pacific Time
on each Business Day (provided Wells Fargo has timely received all reports and
information provided for hereunder from third-parties), Wells Fargo shall
deliver to Client daily reports (each a
Bank Report
) in substantially
the form attached hereto as
Exhibit H
which provides daily information
for the Covered Machines. Reports will be for the activity occurring two
Business Days prior to the current date.
|
4. |
Daily Report of Transfer Activity. By 11:00 a.m. Pacific Time
on each Business Day, Wells Fargo shall deliver to Client a report detailing
funds transfers between the Settlement Account and the Operating Account (the
Funds Transfer Report
).
|
5. |
Other Reports. Client shall provide access and passwords to
Wells Fargo, when and as needed by Wells Fargo to satisfy its agreement to
provide Work hereunder, so that Wells Fargo can determine load amounts (as well
as expected return) by Machine. All information will be in an electronic file
format readily usable by Wells Fargo.
|
D. |
Settlement Accounts
. The Wells Fargo account designated by WF to
Client separately in writing shall be used as the settlement account (the
Settlement Account
). Wells Fargo may from time to time designate a different
account to be used as the Settlement Account by giving 30 Business Days prior written
notice to Client.
|
E. |
Settlements
. All settlements with Servicers or Client for Dispensed
Cash shall be effected by wire transfer directly into the Settlement Account. By 9:00
a.m., Pacific Time, on each Business Day, Client shall wire transfer into the
Settlement Account an amount equal to the difference, if any, between the Daily
Dispensed Cash and the amounts received from Servicers on such Business Day. At or
after 1:00 p.m. Pacific Time each Business Day, Wells Fargo shall debit the Settlement
Account for an amount not to exceed the Daily Dispensed Cash for the previous day and
thereafter shall either (i) credit the Operating Account by the amount, if any, by
which the balance in the Settlement Account prior to debit exceeds the Daily Dispensed
Cash or (ii) debit the Operating Account by the amount, if any, by which the balance in
the Settlement Account is negative. For the avoidance of doubt, the Parties agree that
the provisions of this Section shall be suspended in the event and during the period of a temporary system failure that may not rise to
the level of a Force Majeure Event, but nonetheless prevents Client from making
payments of Cash Settlement, provided that Client notifies Wells Fargo of the reason
for such failure and provides Wells Fargo with supporting documentation
substantiating the reason for such failure.
|
7
F. |
Viewing of Settlement Accounts
. Client shall have viewing access to
the Settlement Account until Final Settlement occurs.
Final Settlement
means, with regards to the Parties, Servicers, Armored Carriers, the Maintenance
Providers, and each and every other related party, the closing settlement of the
Settlement Account and the Operating Account, including all fees and expenses, all Cash
and other funds, and all obligations and duties owed which are subject to this
Agreement, at the time of the expiration or termination of this Agreement.
|
G. |
Reconciliation
.
|
1. |
Ongoing Reconciliation
. Following receipt of the Daily
Reports each Business Day, Wells Fargo shall endeavor to reconcile all
out-of-balance amounts of Cash from the amounts reported in the Daily Reports
and the Service Reports. If at any time Wells Fargo learns that Cash is
out-of-balance (by use of the Bank Reports or otherwise), Wells Fargo shall
notify Client of the imbalance within five days of such discovery, and within
60 days of the Business Day on which the Machine was out-of-balance, Wells
Fargo shall credit or debit, as applicable, the Operating Account for any
remaining overage or shortage.
|
2. |
Final Reconciliation.
The Parties will use
commercially reasonable efforts to complete a final reconciliation of Cash
amounts upon termination or expiration of this Agreement within 10 Business
Days after the effective date of such termination or expiration.
|
H. |
Client Operating Account
. Client shall designate a Wells Fargo deposit
account as their operating account (the
Operating Account
). The Operating
Account shall be used for (i) all credits and debits of imbalances, and (ii) for debit
by Wells Fargo of fees owing pursuant to this Agreement. Client may designate a
different account at Wells Fargo to be used as the Operating Account from time to time
upon 30 Business Days prior written notice to Wells Fargo.
|
I. |
Business Day
.
Business Day
shall mean any day other than
weekends or holidays observed by the Federal Reserve Banks or Wells Fargo, and with
respect to each Covered Machine, the Cash Supplier that is making Cash available to
such Covered Machine.
|
8
IV. |
Risk of Loss
.
|
A. |
Risk of Loss Cash in Covered Machines
. As between Wells Fargo and
Client, Client shall bear all risk of loss and all liability with respect to the Cash
during the time the Cash is located in the Covered Machines, including, but not limited
to, loss due to theft or destruction of any of the Cash (whether or not such theft or
destruction is due to an event beyond Clients reasonable control), malfunction of
equipment, or misfeasance or malfeasance of Client, Maintenance Provider, and their
agents or employees. Notwithstanding the foregoing, Client shall not be liable or
responsible for any loss of Cash:
|
1. |
to the extent due to the intentional acts or omissions of Wells
Fargo, its agents, or employees;
|
||
2. |
where specifically provided otherwise herein;
|
3. |
before Cash ordered under this Agreement has been picked up by
an Armored Carrier.
|
B. |
Risk of Loss Cash In Possession of Wells Fargo or a Wells Fargo Network
Location
. As between Wells Fargo and Client, Wells Fargo shall bear all risk of
loss with respect to Cash both (1) after such Cash has been returned to a Wells Fargo
Network Location, and (2) before such Cash has been picked up by an Armored Carrier
pursuant to Clients order for the ultimate purpose of supplying a Covered Machine.
The foregoing risk of loss includes without limitation, loss due to theft or
destruction of any of the Cash (whether or not such theft or destruction is due to an
event beyond Wells Fargos reasonable control), malfunction of Wells Fargo equipment,
or misfeasance or malfeasance of Wells Fargo, its agents or employees.
|
C. |
Risk of Loss Cash in Possession of Armored Carrier
. Except as
otherwise provided herein, as between Wells Fargo and Client, Client expressly assumes
and agrees to indemnify Wells Fargo for any and all liability with respect to a Cash
shortage, or loss, theft, disappearance, robbery, or destruction of any of the Cash
during the time the same is (or should be) in the possession of an Armored Carrier
until it is returned to a Wells Fargo Network Location.
|
1. |
Notwithstanding the foregoing, Client shall not be liable to
Wells Fargo for any loss, theft, or destruction of the Cash to the extent due
to the gross negligence or intentional misconduct of Wells Fargo, any Cash
Supplier or their respective agents or employees. Nothing herein shall be
deemed to relieve an Armored Carrier of its responsibilities with regard to the
Cash.
|
9
2. |
Wells Fargo shall assign to Client all of Wells Fargos rights
to collect any Cash losses, theft or destruction from the Armored Carrier upon
collection by Wells Fargo from Client for such losses, theft or destruction.
Wells Fargo shall use commercially reasonable efforts to cooperate with, and
assist, Client in collecting such unpaid amounts after such assignment,
including providing Client with any evidence of the claimed shortage, loss,
theft or destruction. All such efforts by Wells Fargo shall be at Clients
expense.
|
3. |
Notwithstanding anything to the contrary herein, any risk of
loss during redelivery upon a Wells Fargo Event of Default of the Cash shall be
borne by Wells Fargo, provided that Client shall remain liable for Cash
shortages in the Covered Machines prior to pick-up. Nothing herein shall be
deemed to relieve an Armored Carrier of its responsibilities with regard to the
Cash.
|
D. |
Risk of Loss Nonpayment by Servicer
. Client agrees to indemnify and
hold Wells Fargo harmless from, for, and against non-payment or any losses from
nonpayment by any Servicer.
|
V. |
Ownership of Cash
.
|
A. |
Cash Remains the Property of Wells Fargo
. Wells Fargo shall have
absolute ownership, title and control of all of the Cash used in the Covered Machines
at all times. No ownership of the Cash or payments owing from Servicers for Dispensed
Cash shall accrue, transfer, or otherwise inure to Client or any other person. Client
and Wells Fargo agree that:
|
1. |
all of the Cash shall remain the property of Wells Fargo, and
Wells Fargo shall have all right, title, and interest in and to the Cash and
may treat the Cash as its asset until such time as it is dispensed from any of
the Covered Machines in a cash dispensing transaction; and
|
2. |
none of the Cash shall at any time become the property of
Client, or any other person until such time as it is dispensed from any of the
Covered Machines in a cash dispensing transaction.
|
10
B. |
No Client or Third-Party Interest in Cash
. It is expressly agreed
between the Parties that neither Client nor any other person or entity has any
possessory or ownership rights to the Cash or Receivables (as defined in the Servicer
Letters) under Section 362 of the Bankruptcy Code or otherwise. It is expressly
understood that no other financial institution, including without limitation, any Cash
Supplier, can utilize the Cash to satisfy its own reserve requirements. Neither
Client, nor any other person (other than an Armored Carrier and the Maintenance
Providers for purposes of maintenance of the Covered Machines pursuant to the
Maintenance Contracts) shall have any access to, or use of, any of
the Cash after delivery of the same to Armored Carrier, whether during
transportation or storage by Armored Carrier or while it is stored in the vaults of
the Covered Machines, except as such use relates to the dispensing of any of the
Cash in a cash dispensing transaction from one of the Covered Machines. Once any of
the Cash is delivered to Armored Carrier, it shall only be transported or stored by
Armored Carrier and finally placed in one of the Covered Machines or handled by the
Maintenance Providers in a way that is consistent with the terms of the Maintenance
Contracts. Under no circumstances shall Client hold itself out as the owner of the
Cash or in any way represent to any person or entity that it owns the Cash.
|
C. |
Redelivery
. Client can initiate a redelivery of Cash upon a Wells
Fargo Event of Default or a Termination Trigger Event invoked by Client, and Wells
Fargo can initiate redelivery of Cash upon a Client Event of Default or a Termination
Trigger Event invoked by it.
|
VI. |
Armored Carrier Service
.
|
A. |
Armored Carrier General
. Each Armored Carrier selected to handle the
Cash, including all loading of any of the Cash into any of the Covered Machines, shall
be a duly qualified armored car operator, selected by Client (and reasonably acceptable
to Wells Fargo) and contracted for by Client. Client may replace any Armored Carrier
only upon prior written notice and with Wells Fargos express written consent which may
not be unreasonably withheld, conditioned or delayed, Client will provide at least 30
days prior written notice to Wells Fargo prior to such replacement, but in no event
later than is reasonably necessary to ensure that the replacement Armored Carrier is a
duly qualified armored car operator. For avoidance of doubt, a duly qualified armored
carrier operator is one that is properly licensed, has provided to the Wells Fargo
Network Locations a signature list of those authorized to pick up Cash and the photos
of whom are on file, for whom an authorization letter is on file from Client indicating
what actions Wells Fargo is to take with respect to a particular Armored Carrier, whose
trucks, uniforms and other identifications match and who otherwise meets the security
and operational standards of such Wells Fargo Network Locations. Wells Fargo will use
commercially reasonable efforts to assist Client to transition from any Armored Carrier
who Wells Fargo determines is no longer a duly qualified armored car operator to
another Armored Carrier.
|
B. |
Cash Held by Armored Carrier
. Client shall contractually obligate
Armored Carrier to segregate Cash held by Armored Carrier from all other currency and
coin until such time as the Cash is required to be placed in specific Covered Machines
or until it is requested to be returned to Wells Fargo and to meet the standards set
forth in Section VI.A above.
|
11
C. |
Covered Machine Access
. No employee of Armored Carrier shall have the
authority to access the Cash stored in any Covered Machine, except as provided below.
The only parties having authorized access to the Cash stored in the Covered Machines
shall be (i) Armored Carriers for the purposes of loading Cash
in, or removing Cash from, the Covered Machines, as provided in the Armored Carrier
Contracts, (ii) Armored Carriers for purposes of redelivery of the Cash to Wells
Fargo Network Locations pursuant to this Agreement, and (iii) the Maintenance
Providers for purposes of Machine maintenance as set forth in the Maintenance
Contracts.
|
D. |
Responsibilities
. Wells Fargo and Client each agree that they shall
not conceal or misrepresent any material fact or circumstance concerning the Cash
delivered to Armored Carrier pursuant to this Agreement and the Armored Carrier
Contracts.
|
1. |
Wells Fargo agrees to supply all the Cash to Armored Carrier
directly through any of the applicable Wells Fargo Network Location(s) in a
sealed or locked bag, together with a shipping document verifying the value of
the Cash in the bag. The value of the Cash set forth in such shipping document
that accompanies the release by the applicable Wells Fargo Network Location of
any sealed or locked bag shall be conclusively deemed the amount of the Cash
invoiced. Clients contract with each Armored Carrier shall, in the event of
any reportable shortage claimed in the contents of a sealed or locked cash bag
received by Armored Carrier from the Wells Fargo Network Location, obligate
Armored Carrier to promptly notify Client and Wells Fargo of the shortage.
With respect to cash bags received from the Federal Reserve Bank or a Cash
Supplier, each such contract shall also obligate the Armored Carrier to (i)
provide reasonable assistance to Wells Fargo in presenting difference claims to
the relevant Federal Reserve Bank or Cash Supplier in accordance with Federal
Reserve Bank regulations or operating circular, if any; and (ii) comply with
any requirements imposed by the Federal Reserve Bank or the relevant Cash
Supplier in connection with the reporting of such shortages. In the event that
such difference cannot be resolved, Wells Fargo and Client will in good faith
attempt to resolve the difference between them. If such efforts are
unsuccessful (i) with respect to sums which Client claims in writing are owed
to it, within 60 days of receipt of the claim by Wells Fargo, or (ii) with
respect to sums which Wells Fargo claims in writing are owed to it, within 60
days of receipt of the claim by Client, the parties agree to resolve the issue
in accordance with the arbitration provisions of this Agreement. The parties
will from time to time mutually agree upon any minimal differences that need
not be reported and such threshold amounts that must be reported on a same-day
or next-Business-Day basis.
|
E. |
Armored Carrier Letter Agreements
. Prior to utilizing any Armored
Carrier, each Client, Wells Fargo and the Armored Carrier shall enter into an Armored
Carrier Letter Agreement substantially in the form set forth in
Exhibit D
.
|
12
F. |
Vault Security
. Wells Fargo shall inform Client in writing of any
regulatory requirements imposed upon Wells Fargo with respect to security measures that
are applicable to the maintenance of the Cash in each Armored Carriers vault
facilities. Client shall promptly but in no event more than two Business Days
communicate such information to each Armored Carrier. Client shall take
commercially reasonable steps to ensure that each Armored Carrier agrees to
comply with any such regulatory requirements.
|
VII. |
Fees
.
|
A. |
General
. Client agrees to pay Wells Fargo the fees for the Work
calculated in accordance with the terms of a separate fee letter between Wells Fargo
and Client (the
Fee Letter
), which is hereby incorporated into this
Agreement, and which may be amended after the initial term of this Agreement as
provided herein. Following the initial term of this Agreement, Well Fargo may change
the fees for the Work with respect to any renewal term by providing Client with written
notice of such fee changes at least 120 days prior to the commencement of such renewal
term and Client is free to accept such changes or terminate this Agreement; and
provided further that Wells Fargo may only change such fees once with respect to each
applicable renewal term. For the avoidance of doubt, it is understood and agreed that
the fees referenced in this Section are the fees for the Work only and do not include
any fees charged for other services provided by Wells Fargo to Client.
|
B. |
Taxes
. Client shall pay or reimburse Wells Fargo for any applicable
taxes levied, imposed or assessed upon Wells Fargo as a result of its provision of Cash
to Client under this Agreement, excluding personal property taxes assessed against or
payable by Wells Fargo (except for taxes relating to personal property owned by
Client), taxes based upon Wells Fargos net income and Wells Fargos corporate
franchise taxes. Alternatively to such payment or reimbursement, Client may satisfy
its obligation in this paragraph by providing Wells Fargo with an exemption certificate
that establishes that no tax is due. Wells Fargo shall furnish Client with invoices
showing separately itemized amounts due under this paragraph with respect to applicable
taxes (if any). If Client pays or reimburses Wells Fargo for any taxes pursuant to
this paragraph, Wells Fargo hereby assigns and transfers to Client all of Wells Fargos
rights, title and interest in and to any refund for taxes paid. Any claim for refund
of taxes against the assessing authority may be made in the name of Client or Wells
Fargo, or both at Clients option. Client may initiate and manage litigation brought
in the name of Client or Wells Fargo, or both, to obtain refunds of amounts of taxes
paid under this paragraph. Wells Fargo shall cooperate fully with Client in pursuing
any refund claims, including any related litigation or administration procedures.
Wells Fargo and Client each acknowledge that it is not aware of any taxes owing
contemplated by this Section VII.B with respect to the Cash as of the Effective Date.
|
C. |
Costs and Expenses
. Client and Wells Fargo each shall be responsible
for any legal and other costs and expenses incurred by it in connection with the
preparation, negotiation and delivery of this Agreement and its Exhibits and any
amendments or waivers thereto.
|
13
D. |
Monthly Servicing Fees and Billing Statement
. All fees and charges
payable by Client pursuant to this Agreement will be detailed for Client in a monthly
billing
statement using Wells Fargos standard account analysis format which will be
provided to Client on the first Business Day after the 10
th
of each
calendar month. Such statement shall contain categories of information as set forth
in an Exhibit to the Fee Letter or as otherwise mutually agreed in writing by the
Parties from time to time. Wells Fargo shall debit the Operating Account for all
billed amounts on an agreed-upon day of the month that is no later than the
20
th
day after delivery of such monthly billing statement. To the extent
that the Operating Account contains insufficient funds to accommodate such debit,
the unpaid amount shall become immediately due and payable upon notice to Client and
Client shall immediately pay the unpaid amount to Wells Fargo.
|
E. |
Service Level Adjustments
. Adjustments to fees set forth herein may be
made under the following circumstances:
|
1. |
If Wells Fargo fails to either (i) provide Cash for any
particular Covered Machine pursuant to Section II.A (unless otherwise excused
pursuant to the terms of this Agreement), or (ii) provide Cash as required in
Section II.B. above, then Wells Fargo shall either pay those additional
expenses to Client which have been incurred by Client related solely to the
failure on the part of Wells Fargo to deliver Cash to the Armored Carrier, or
credit such amounts to Client against the above referenced billing statement,
at the election of Wells Fargo.
|
2. |
If at any time during the term of this Agreement, the number of
Covered Machines is less than 920 and the average outstanding daily balance of
Cash is less than $225 million during any 90 consecutive day period (the
Baseline), Wells Fargo shall be entitled to adjust the fees provided for
hereunder so that its expected fees, yields and returns are at least equal to
those that would have been achieved had the Baseline been maintained.
|
VIII. |
Insurance
.
|
A. |
Required Insurance
. During the initial and any renewal term of this
Agreement, Client, at its sole cost and expense shall, at a minimum, maintain insurance
through a third party insurance provider as described in this Section VIII, as follows:
|
1. |
Commercial Crime Policy including coverage for employee
theft/dishonesty/fidelity; Inside the Premises the theft of money including
disappearance, destruction and robbery; Outside the Premises the theft of
money, including disappearance, destruction and robbery; Computer Crime with
limits not less than $5,000,000 per loss. Wells Fargo will be included as
joint loss payable under the policy.
|
2. |
Errors and Omissions with limits not less than $1,000,000 per
occurrence.
|
14
3. |
Commercial General Liability/Umbrella insurance providing
coverage for premises-operations liability, products-completed operations
liability,
independent contractors liability, personal and advertising and contractual
liability with limits of at least $10,000,000.
|
4. |
Statutory workers compensation and employers liability
insurance with limits no less than $1,000,000 each accident for bodily injury;
$1,000,000 each accident for disease per employee and $1,000,000 bodily injury
for disease in the aggregate.
|
5. |
Comprehensive Automobile Liability Insurance/Umbrella in the
minimum amount of $10,000,000 combined single limits for bodily injury and
property damage covering owned and non-owned hired vehicles.
|
B. |
Additional Requirements
. In addition, Client agrees that:
|
1. |
Client, at the request of Wells Fargo, shall furnish
certificates of insurance to Wells Fargo at the time of the signing of this
Agreement and upon renewal thereafter. Client will ensure that the insurance
carrier and/or Client will provide 10 days advance written notice to Wells
Fargo before termination, change or cancellation takes effect of any coverage
under such policies evident on such certificate, regardless of whether
cancelled by Client or the insurance company.
|
2. |
The insurance required hereunder will be primary and
noncontributory to any insurance maintained by Wells Fargo.
|
3. |
All of the insurance policies required hereunder will be
maintained with companies licensed to do business in the state where the
services will be performed and rated no less than A- as to policy holders
rating in the then current edition of Bests Insurance Guide (or with an
association of companies each of the members of which are so rated).
|
4. |
Client will add Wells Fargo as an additional insured to
Clients commercial general/umbrella liability and automobile/umbrella
policies.
|
C. |
No Relief From Liability
. The foregoing requirements as to the types
and limits of insurance coverage to be maintained by Client and any approval or waiver
of said insurance by Wells Fargo are not intended to and shall not in any manner limit
or qualify the liabilities and obligations otherwise assumed by Client pursuant to this
Agreement, including but not limited to the provisions concerning the indemnification
obligations of Client; provided that any amounts paid to Wells Fargo pursuant to
Clients indemnification obligations shall be reduced dollar for dollar by the amount
of any insurance proceeds that are paid to Wells Fargo pursuant to Section VIII of this
Agreement.
|
15
IX. |
Default; Termination Trigger Events
.
|
A. |
Termination Upon Default
. Wells Fargo shall have the right to
immediately terminate this Agreement upon written notice to Client in the event of a
Client Event of Default. Client shall have the right to immediately terminate this
Agreement upon written notice to Wells Fargo in the event of a Wells Fargo Event of
Default.
|
B. |
Client Events of Default
.
Client Event of Default
shall mean
the occurrence and continuance of any of the following events, acts, occurrences or
conditions described in Paragraphs 1 through 8 below, for whatever reason:
|
1. |
Any of the following occur: (i) Client shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled
Bankruptcy
, as amended from time to time, and any successor
statute or statutes (
Bankruptcy Code
); or (ii) an involuntary case is
commenced against Client under the Bankruptcy Code and the petition is not
controverted within 10 days, or is not dismissed within 90 days after
commencement of the case; or (iii) a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of Client, or Client commences any other proceedings under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Client or there is commenced
against Client any such proceeding which remains undismissed for a period of 90
days; or (iv) any order for relief or other order approving any such case or
proceeding is entered; or (v) Client is adjudicated insolvent or bankrupt; or
(vi) Client suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 90 days; or (vii) Client makes a general assignment for the benefit
of creditors; or (viii) Client fails to pay, or states that it is unable to
pay, or is unable to pay its debts generally as they become due; or (ix) Client
calls a meeting of its creditors generally with a view of arranging a
composition or adjustment of its debts; or (x) Client by any act or failure to
act consents to, approves of or acquiesces in any of the foregoing; or (xi)
Client takes any corporate action for the purpose of effecting any of the
foregoing.
|
2. |
Any creditor or group of creditors of Client shall attempt for
any reason to levy upon, seize under color of law, attach or make a
bona
fide
claim against any Cash.
|
3. |
Client takes any action or makes any material representation
that is inconsistent with Wells Fargos sole and exclusive ownership, title and
control of the Cash.
|
16
4. |
Client defaults in (a) the payment under the terms of any
contract, instrument or document extending a credit facility of $25 Million or
more
pursuant to which Client has incurred any debt or other liability to any
person or entity, including Wells Fargo (each, a Credit Facility), or (b)
the performance of any other obligation, or any defined event of default
unrelated to payment, (each, a Non-payment Default) under a Credit
Facility, provided that Client shall have 60 days following notice to it by
Wells Fargo to cure a Non-payment Default.
|
5. |
Client either (a) breaches any representation, warranty or
covenant in this Agreement (other than failure to make any payments or other
monetary obligations or as otherwise provided herein) and such failure
continues for a period of more than 30 days after Clients receipt of written
notice from Wells Fargo of such breach, or (b) fails to make timely payments
for Fees upon 15 days notice and opportunity to cure, or (c) fails to make
payments for Cash Settlement for any reason other than a temporary system
failure, or fails to meet any other undisputed monetary obligations (other than
Fees) under this Agreement, and the same continues, not more than once in any
12-month period, for a period of two Business Days if Client notifies Wells
Fargo of the reason for such failure and has provided Wells Fargo with
supporting documentation substantiating the reason for such failure.
Notwithstanding the foregoing, Wells Fargo may terminate the Agreement if at
the conclusion of the applicable cure periods described above Client fails to
pay the Wells Fargo determined estimated settlement amounts into the Settlement
Account for the day(s) of such failure.
|
6. |
Inability or failure by Client to deliver the Daily Reports or
to satisfy any reporting, certification, notification or documentation
requirements under this Agreement, in each case where such inability or failure
continues, not more than once in any 12 month period, for a period of two
Business Days if Client notifies Wells Fargo of the reason for such inability
or failure and has provided Wells Fargo with supporting documentation
substantiating the reason for such inability or failure.
|
7. |
If any Armored Carrier is unable, for any reason (except as the
result of a Force Majeure Event or due to the malfunction of a Covered
Machine), to obtain independent access to any Covered Machine pursuant to this
Agreement subject to Customers licensing and security policies and procedures
regarding vendors performing services on or at a Customers premises.
|
8. |
Client sells or otherwise transfers all or a substantial
portion of its Covered Machines and the Baseline of Covered Machines is not met
after giving effect to such sale or transfer.
|
17
C. |
Wells Fargo Event of Default
.
Wells Fargo Event of Default
shall mean the occurrence of any of the following events, acts, occurrences or
conditions described in Paragraphs 1 and 2 below, for whatever reason:
|
1. |
Any of the following occur: (i) the Office of the Comptroller
of the
Currency (
OCC
), the Federal Deposit Insurance Corporation
(
FDIC
) or any successor regulatory agencies thereto determines
that Wells Fargo is insolvent; or (ii) the OCC or the FDIC appoints a
receiver, custodian or the like or initiates proceedings for relief or other
order for all or any substantial part of its property; or (iii) Wells Fargo
fails to pay, or states that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or (iv) Wells Fargo calls a meeting
of its creditors generally with a view of arranging a composition or
adjustment of its debts; or (v) Wells Fargo by any act or failure to act
consents to, approves of or acquiesces in any of the foregoing; or (vi)
Wells Fargo takes any corporate action for the purpose of effecting any of
the foregoing.
|
2. |
Wells Fargo breaches any representation, warranty or covenant
or fails to perform under this Agreement or any related agreements, and such
breach remains uncured 30 days after Client provides notice to Wells Fargo
describing the alleged breach in reasonable detail. The Parties agree that
Wells Fargo shall be in breach of this Agreement without further right to cure
if it is unable to furnish sufficient Cash to comply with this Agreement at any
time and such failure continues for three or more consecutive Business Days
after written notice from Client, unless applicable regulations specifically
prohibit the furnishing of such Cash or because of Force Majeure Event.
|
D. |
Termination Trigger Events
.
Termination Trigger Event
shall
mean the occurrence and continuance of any of the following events, acts, occurrences
or conditions described in Paragraphs 1 through 9 below, for whatever reason. This
Agreement may be terminated without penalty upon the occurrence of any of the following
Termination Trigger Events:
|
1. |
Immediately upon a Party giving written notice to the other
Parties:
|
a. |
in the event that (i) any federal or state
regulatory authority takes any action, including, but not limited to,
the issuance of a ruling, formal or informal opinion, or interpretation
of any kind whatsoever that makes the continued performance of this
Agreement illegal or exposes Wells Fargo to civil penalties, (ii) any
law is adopted or regulation promulgated that makes the continued
performance of this Agreement illegal or exposes Wells Fargo to civil
penalties, or (iii) any law or regulation is interpreted by a court of
competent jurisdiction, any of which, in the opinion of Wells Fargos
legal counsel, would prohibit Wells Fargo from providing the Cash to
Client as described in this Agreement, then in such event, Wells Fargo
shall have the right to cancel this Agreement immediately by notifying
Client in writing of its intent to do so;
|
b. |
upon cancellation, reduction, or non-renewal of
insurance required to be carried by Client, Armored Carrier, or any
Servicer pursuant
to this Agreement, unless such insurance is replaced by a similar or
better carrier, or unless such new carrier is otherwise reasonably
acceptable to Wells Fargo;
|
18
c. |
upon termination of a Servicer Letter with
respect to the Covered Machines serviced by that Servicer under which
Cash would be dispensed, unless the outgoing Servicer is promptly
(i.e., within 30 days) replaced by a successor service provider (and
the termination of the Servicer is not effective until such successor
service provider is in place) or such service is discontinued by
Client;
|
d. |
subject to Force Majeure Event provisions
herein, if a Servicer fails to (i) make payments pursuant to the
applicable Servicer Letter when due on three or more consecutive
Business Days; (ii) satisfy any material regulatory reporting,
certification, notification, or documentation requirements; (iii)
observe or perform any material covenant outlined in its Servicer
Letter, or (iv) meet any agreed-upon performance and financial tests
unless replaced within 90 days by a Servicer reasonably acceptable to
Wells Fargo.
|
2. |
With respect to both Client and Wells Fargo, an event or series
of events (a
Change of Control
) by which any person or group (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act
of 1934, except that a person or group shall be deemed to have beneficial
ownership of all securities that such person or group has the right to acquire
(such right, an
option right
), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the equity securities of such Party entitled to vote for members of
the board of directors or equivalent governing body of such Party on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right) and 90
days elapses without Wells Fargo or Client, as applicable, consenting in
writing to such Change of Control or ratifying in writing that an Actual
Termination Date has not occurred and Client has accepted in writing any
changes in pricing proposed by Wells Fargo as a result of such Change of
Control.
|
3. |
Subject to the Force Majeure Event provisions hereof,
immediately upon written notice by Client in the event Wells Fargo at any time
does not have the availability of sufficient vault cash to furnish Client with
sufficient Cash as specified by Client or if Wells Fargo has exercised its
right to demand redelivery according to this Agreement.
|
19
4. |
Immediately by Wells Fargo in the event the following
conditions have
not been satisfied by Client prior to the commencement of the Work:
|
a. |
No Client Event of Default shall then be existing;
|
||
b. |
All Agreement requirements have been satisfied;
|
c. |
Satisfactory review of the material contracts
to the extent not already in Wells Fargos possession;
|
d. |
Satisfactory review of bonding and insurance
requirements specified herein (which review the Parties agree has been
accomplished and the insurances tendered in writing accepted by Wells
Fargo);
|
e. |
Satisfactory regulatory and compliance review; and
|
f. |
Such other due diligence and investigation as
Wells Fargo deems necessary.
|
5. |
In the event any agreements with a Servicer are terminated by
Client due to a material default of an obligation to process accurate and
timely transmissions under such agreement, Wells Fargo may immediately
terminate the service with respect to the affected Machines and Client shall
immediately reimburse Wells Fargo for any outstanding Cash relating to the
terminated Machines.
|
6. |
In the event Client fails to implement, not later than March
31, 2011 (or as may otherwise be agreed to by the Parties in writing before
March 31, 2011), the corrective actions required and as are separately
documented by the Parties, as a result of the November 2010 MSB audit conducted
on Clients operations by Wells Fargo.
|
7. |
In the event Client fails to pass a satisfactory MSB audit
conducted by Wells Fargo of its operations at any time, provided that Client
shall have 45 days following the conclusion of such unsatisfactory audit to
respond and comment and seek a mutually agreeable resolution thereof with Wells
Fargo.
|
8. |
Immediately upon notice to Client in the event Client fails to
make payments for Cash Settlement and such failure is a result of a temporary
system failure that may not rise to the level of a Force Majeure Event, but
nonetheless prevents Client from making payment(s), and such failure continues
for a period of three Business Days, if Client notifies Wells Fargo of the
reason for such failure and has provided Wells Fargo with supporting
documentation substantiating the reason for such failure. In addition, in the
event there are excessive temporary system failures resulting in Clients
failure to make payments for Cash Settlement, Wells Fargo may terminate this
Agreement regardless of whether or not such
failures have continued for a period of three Business Days.
|
20
9. |
In the event of the inability or failure of any Armored Carrier
to deliver required Daily Reports or other documentation requirements under the
Armored Carrier Agreements, and the same continues, not more than once in any
12 month period, for a period of two Business Days, and such failure is not
cured within such two day period, Wells Fargo may immediately terminate the
service with respect to the affected Machines and Client shall immediately
reimburse Wells Fargo for any outstanding Cash relating to the terminated
Machines.
|
X. |
Indemnification; Limitations on Liability
.
|
A. |
Covered Machines
. Subject to the risk of loss provisions set forth in
Section IV and the limitations of liability set forth in Section X.D., Client shall
indemnify, defend and hold Wells Fargo harmless from, for, and against any loss of any
of the Cash, and all adjustments, chargebacks, representments, and other corrections to
all Cash dispensing transactions under the Servicing Agreements or otherwise, however
caused, including, but not limited to, any loss resulting from the operation of the
Covered Machines, including any malfunctions thereof, or losses resulting from actions
of each Armored Carrier, Servicer or Maintenance Provider while performing services on
behalf of Client. Wells Fargo shall promptly notify Client of any regulations or
changes of applicable laws which might affect the terms of this Agreement or a Partys
obligations hereunder, and if Wells Fargo and Client determine that it is necessary to
amend this Agreement as a result thereof, the parties agree to negotiate in good faith
and execute such an amendment. Notwithstanding the foregoing, but subject to the risk
of loss provisions set forth in Section IV, Client shall have no indemnity liability
hereunder for any claim or loss resulting to the extent that such claim or loss results
from the act or omission of Wells Fargo or its employees, agents, or representatives.
|
B. |
Actions of a Party and its Representatives
. In addition to the
indemnification set forth in Section X.A. above, each Party agrees to indemnify, defend
and hold harmless the other Party, its officers, directors, and employees from, for,
and against any and all losses, damages, claims, liabilities, penalties (including, but
not limited to, any penalties imposed by any governmental entity or agency), and
expenses (including, but not limited to, to the extent permitted by law, reasonable
attorneys fees) suffered or incurred by such other Party as a result of or arising out
of, or attributed, directly or indirectly, to the breach of any obligation under this
Agreement by the indemnifying party, its agents or representatives.
|
C. |
Taxes
. Client agrees to indemnify, defend and hold Wells Fargo
harmless from, for and against any loss of the Cash or Receivables (as defined in the
Servicer Letters) caused by any loss from Clients failure to pay taxes, including
local and special assessments and governmental and other charges, as well as all public
and/or private utility charges, of any type or description, that may from time to time
be imposed, assessed and levied against the Covered Machines, against
transactions resulting in dispensed Cash, or against Client.
|
21
D. |
No Consequential Damages
. IN NO EVENT WILL ANY PARTY BE LIABLE UNDER
ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) FOR ANY INDIRECT, INCIDENTAL, SPECIAL,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER, SUFFERED
BY ANOTHER PARTY OR ITS AFFILIATES, EMPLOYEES OR AGENTS, INCLUDING, WITHOUT LIMITATION,
LOST PROFITS, BUSINESS INTERRUPTIONS OR OTHER ECONOMIC LOSS ARISING OUT OF THE
PERFORMANCE OR NON-PERFORMANCE HEREUNDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF
ANY LIMITED REMEDY. For the avoidance of doubt, the Parties agree that the
foregoing limitation does not apply to limit a Partys obligation to indemnify or
defend the other Party as provided in this Agreement.
|
E. |
Acknowledgement
. EACH OF THE PARTIES UNDERSTANDS THE LEGAL AND
ECONOMIC RAMIFICATIONS OF THIS SECTION, AND ACKNOWLEDGES THAT THE PROVISIONS OF THIS
SECTION WERE NEGOTIATED BETWEEN THE PARTIES AND THAT SUCH PROVISIONS WERE CONSIDERED BY
EACH PARTY IN DETERMINING THE SPECIFIC RISKS THAT IT ASSUMED IN AGREEING TO ITS
OBLIGATIONS SET FORTH IN THE AGREEMENT, AND THE AMOUNTS OF THE PAYMENTS TO BE MADE
UNDER THE AGREEMENT.
|
F. |
Acts or Omissions
. It is the understanding and agreement of the
Parties to this Agreement that (i) Wells Fargo shall not be liable for any acts or
omissions on the part of Client or any third party whether with respect to any
transactions generated through Covered Machines or otherwise, and (ii) Client shall not
be liable for any acts or omissions on the part of Wells Fargo or any third party
whether with respect to any transactions under this Agreement or otherwise.
|
G. |
Force Majeure
. No Party shall be deemed to be in default of any
provision herein or to be liable to another Party for any delay, failure of
performance, or interruption of service arising due to acts or events beyond such
Partys control including by way of illustration, but not limitation, acts of God,
civil and military authority, terrorism, civil disturbance, war, fires, delay of
Armored Carrier suppliers, interruptions in telecommunications or networking
facilities, or those of its subcontractors for like causes (each a
Force Majeure
Event
). The Parties agree that the provisions of this paragraph do not relieve
them of their respective risks of loss with respect to Cash as set forth in Section IV
of this Agreement.
|
22
XI. |
Term; Survival; Early Termination Fee
.
|
A. |
General
. The initial term of this Agreement shall begin on the
Effective Date and continue through November 30, 2013 and shall be renewed for
additional one-year periods unless a Party gives at least 90 days prior written notice
of its intent
not to renew, provided, however, that each such renewal shall be subject to a
written agreement about pricing and such other terms and conditions to be mutually
agreed upon among the Parties (the
Stated Termination Date
), unless
earlier terminated by a Party as provided in this Agreement (the
Actual
Termination Date
).
|
B. |
Redelivery
. Upon redelivery as provided in this Agreement, Client
shall be responsible and liable for: (i) collecting and delivering to Wells Fargo all
payments due from Servicers for Dispensed Cash; and (ii) using its best commercially
reasonable efforts to ensure that the Armored Carriers effect redelivery of the Cash in
accordance with the terms of this Agreement. In the event Client terminates the
Agreement as provided herein, Wells Fargo shall use its best commercially reasonable
efforts to effect redelivery and shall not delay or otherwise obstruct the efforts of
Client to transition currency and coin services to another provider and shall provide
commercially reasonable transition assistance to Client if Client has elected to engage
another provider of Cash Services.
|
C. |
Survival
. Notwithstanding the termination of this Agreement as
provided herein, the obligations of the Parties hereto under (i) Sections II.D, II.E,
III (until Final Settlement), IV, V, VI, VII, VIII, IX, XI and XII shall survive and
continue in full force and effect until such time as all Cash then outstanding has been
returned to Wells Fargo (or reimbursed to Client for any corrective payments of
shortfall or overpayment by Client), all payments due from Servicers for Dispensed Cash
then outstanding have been paid to Wells Fargo, and all fees owing pursuant to the
terms of this Agreement have been paid and (ii) Section X shall survive and continue in
full force and effect until the expiration of the applicable period of limitations.
|
D. |
Failure to Furnish Cash
. If Client terminates this Agreement because
Wells Fargo is unable to furnish sufficient Cash to comply with this Agreement, the
Cash shall either be redelivered within the timeframe and in the manner mutually
agreed-to between Client and Wells Fargo or transferred via Fedwire to Wells Fargo in
an amount equal to the then outstanding Cash within such timeframe. Wells Fargo shall
be liable for any actual costs incurred by Client in connection with such redelivery.
Subject to Section IV (Risk of Loss) and Section VII.E. (Service Level Adjustments),
Wells Fargo shall not otherwise be liable for any damages incurred by Client on account
of redelivery instituted by Client due to Wells Fargos inability to furnish the Cash,
nor shall Wells Fargo be liable for any damages resulting from the inability of
cardholders to use the Covered Machines because they then contain no currency.
|
E. |
Certain Costs
. Client shall not be liable for the cost of redelivery
as a result of a Wells Fargo Event of Default.
|
23
F. |
Early Termination Fee. In the event this Agreement is, for any reason other
than a Wells Fargo Default or because of Wells Fargos election to terminate the
Agreement before the Stated Termination Date when no Client Event of Default exists,
terminated prior to the Stated Termination Date, Client shall pay to Wells
Fargo a termination fee of (i) [***] if such termination occurs during the
first year of the Agreement; or (ii) [***] if such termination occurs during
the second or third year of the Agreement.
|
G. |
Purchase Option
. Wells Fargo hereby grants Client an option to
purchase the Cash under the following circumstances and subject to the following
conditions: (i) this Agreement is terminated for any reason, (ii) the purchase is
evidenced by a Currency Bill of Sale in form and substance mutually satisfactory to
Client and Wells Fargo and (iii) the purchase is exercised and purchase price paid
immediately at termination.
|
XII. |
Representations Warranties and Covenants.
|
A. |
Representations and Warranties of Client
. Client represents and
warrants to, and covenants with Wells Fargo as follows (such representations and
warranties being deemed to be made and renewed on each day during the term of this
Agreement):
|
1. |
Organization
: Client (i) is a duly organized and
validly existing corporation or partnership in good standing under the laws of
the jurisdiction of its formation, (ii) has the corporate or partnership power
and authority to own its property and assets and to transact the business in
which it is engaged or presently proposes to engage and (iii) has duly
qualified and is authorized to do business and is in good standing in every
jurisdiction in which it owns or leases real property or in which the nature of
its business requires it to be so qualified, except to the extent that any
failure to be so qualified, authorized or in good standing does not have a
reasonable likelihood of materially affecting the operations, properties, or
business of Client.
|
2. |
Authorization
: Client has the corporate or partnership
power and authority to execute, deliver and carry out the terms and provisions
of this Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement. Client has duly
executed and delivered this Agreement, and this Agreement constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms
except as such enforceability may be affected by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors rights generally and (ii) by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
|
3. |
No Conflicts
: Neither the execution, delivery or
performance by Client of this Agreement, nor compliance by it with the terms
and provisions hereof, (i) will contravene any applicable provision of any
material law, statute, rule, regulation, order, writ, injunction or decree of
any court or governmental instrumentality, or (ii) will conflict or be
inconsistent with or result in any material breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
result in the creation or
imposition of (or the obligation to create or impose) any lien (except
pursuant to this Agreement) upon any of the property or assets of Client
pursuant to the terms of any indenture, mortgage, deed of trust, agreement
or other instrument to which Client is a party or by which it or any of its
property or assets is bound or to which it may be subject.
|
24
4. |
No Actions
: Client represents and warrants that there
are no actions, suits or proceedings pending, to the best of its knowledge, or
threatened with respect to this Agreement or the transactions contemplated
hereby or that adversely affect the ability or capacity of Client, any Servicer
or any Maintenance Provider to perform as agreed-upon hereunder, in its
Servicer Letter or Maintenance Provider Letter.
|
5. |
Servicer Contracts
: Client represents and warrants
that following notice of any such regulatory requirements from Wells Fargo,
Client shall notify Wells Fargo if Client becomes aware that a Servicer has
failed to conform to any regulatory requirement imposed upon Wells Fargo with
respect to the Cash, the Covered Machines, and any related record keeping or
reporting requirements imposed on Wells Fargo, including, without limiting the
generality of the foregoing, the provisions of the regulations of the OCC, if
any, regarding minimum security devices and procedures and the provisions of
the Bank Protection Act of 1968, as amended, 12 USC § 1881 et seq., as such
provisions relate to automated teller or cash dispensing machines in
off-premises locations.
|
6. |
Access to Covered Machines
: No employee of Client or
any retail establishment where a Covered Machine is located has access to the
Cash stored in any Covered Machine, except through a cash dispensing
transaction.
|
7. |
No Liens
: To the best of its knowledge, Client
represents and warrants that the ownership interest of Wells Fargo in the Cash
is and at all times will be free and clear of any and all liens, rights or
claims of all other persons. Client shall defend the Cash against all claims
and demands of a Servicer claiming the same or any interest therein adverse to
Wells Fargo. To the knowledge of Client, no financing statement or other
evidence of lien covering or purporting to cover any of the Cash is on file in
any public office.
|
8. |
No Defaults
: Client is not currently in default under
or with respect to any contractual obligation that would, either individually
or in the aggregate, reasonably be expected to have a material adverse effect
on Clients operation of the Machines or its performance under this Agreement.
To the best of Clients knowledge, no default under or with respect to any
contractual obligation would result from the consummation of the transactions
contemplated by this Agreement or any other document related to this Agreement.
|
9. |
Location of Covered Machines
: All Covered Machines
owned, leased, operated or managed by Client are and at all times will be at
the business establishments listed on
Exhibit A
, as modified from time
to time in accordance with this Agreement.
|
25
B. |
Representations and Warranties of Wells Fargo
. Wells Fargo represents
and warrants to, and covenants with, Client as follows:
|
1. |
Organization
: Wells Fargo (i) is a duly organized and
validly existing national bank in good standing under the laws of the United
States of America, (ii) has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged or
presently proposes to engage and (iii) has duly qualified and is authorized to
do business as a bank in every jurisdiction in which it owns or leases real
property or in which the nature of its business requires it to be so qualified,
except to the extent that any failure to be so qualified, authorized or in good
standing does not have a reasonable likelihood of materially affecting the
operations, properties, or business of Wells Fargo.
|
2. |
Authorization
: Wells Fargo has the corporate power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement. Wells Fargo has duly
executed and delivered this Agreement, and this Agreement constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms
except that such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors rights generally and (ii) by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
|
3. |
No Conflicts
: Neither the execution, delivery or
performance by Wells Fargo of this Agreement, nor compliance by it with the
terms and provisions hereof, (i) will contravene any applicable provision of
any material law, statute, rule, regulation, order, writ, injunction or decree
of any court or governmental instrumentality or (ii) will conflict or be
inconsistent with or result in any material breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any lien upon any of the property or assets of Wells Fargo pursuant to the
terms of any indenture, mortgage, deed of trust, agreement or other instrument
to which Wells Fargo is a party or by which it or any of its property or assets
is bound or to which it may be subject.
|
4. |
No Actions
: There are no actions, suits or proceedings
pending or, to its knowledge, threatened with respect to this Agreement or the
transactions contemplated hereby.
|
26
5. |
No Defaults
: Wells Fargo is not currently in default
under or with respect to any contractual obligation that could, either
individually or in the aggregate, reasonably be expected to have a material
adverse effect on Wells Fargos ability to perform under this Agreement. To
Wells Fargos best knowledge, no default under or with respect to any
contractual obligation would result from the consummation of the transactions
contemplated by this Agreement or any other document related to this Agreement.
|
C. |
Covenants of Client
. Client covenants and agrees with Wells Fargo that
from and after the Effective Date of this Agreement:
|
1. |
Further Assurances
: Upon the request of Wells Fargo,
and at the expense of Wells Fargo (unless such cooperation is related to a
breach by Client), Client will cooperate with Wells Fargo to the extent Wells
Fargo may reasonably deem necessary in protecting its ownership interest in the
Cash and in the payments from Servicers for Dispensed Cash, and in complying
with applicable laws and regulations.
|
2. |
Change of Name or Entity Structure
: Client shall
notify Wells Fargo within 30 days of changing its name, jurisdiction of
incorporation, or entity structure or moving its principal executive office
outside of the metropolitan Las Vegas, Nevada area.
|
3. |
Right of Inspection
: If a discrepancy arises in
connection with the Cash settlement, Client will provide Wells Fargo with
access, during normal business hours and upon reasonable prior notice to Client
to all books, correspondence and records of Client directly relating to the
discrepancy. Wells Fargo and its representatives may examine the same, take
extracts therefrom and make photocopies thereof, at the cost and expense of
Client. Client agrees to render to Wells Fargo, without cost or expense, such
clerical and other assistance as may be reasonably requested with regard
thereto.
|
4. |
Compliance with Laws Affecting Cash
: Client will
comply in all material respects with all requirements of law applicable to the
Cash or any part thereof; provided however, that Client may contest any
requirement of law in any reasonable manner which shall not adversely affect
Wells Fargos rights in the Cash.
|
5. |
Electronic Reports; Access
: Client will provide any
data deliverable in connection with this Agreement to Wells Fargo in the
agreed-to format and will provide access as required in Section III.C.5 hereof.
|
6. |
Negative Pledge
: Client will not create, incur or
permit to exist, will defend the Cash against, and will take such other action
as is necessary to remove, any lien or claim on or to the Cash against the
claims and demands of a Servicer or an Armored Carrier (except arising through
or on
account of Wells Fargo).
|
27
7. |
Notice
: Upon becoming aware thereof, Client will
promptly advise Wells Fargo, in reasonable detail, in accordance with the
provisions hereof, (i) of any breach under this Agreement, (ii) of any lien on,
or claim asserted against, any of the Cash, and (iii) of the occurrence of any
other event which could reasonably be expected to have a material adverse
effect on the aggregate value of the Cash or on the liens created hereunder.
|
8. |
Compliance with Rules and Regulations
: Client will
abide by and operate in accordance with all applicable network rules and
regulations and all applicable banking laws and regulations following notice by
Wells Fargo of such rules or regulations. Client will comply with the
applicable regulations of any network processor and all state and federal
regulations, including Regulation E.
|
9. |
Notice to Wells Fargo
: Client shall deliver to Wells
Fargo, within three Business Days of receipt, a copy of all notices or
correspondence it receives from any third-party relating to the operation of
the Covered Machines or the provisioning of Cash for the Covered Machines that
may materially affect another Partys performance of its obligations under this
Agreement. Client shall promptly inform Wells Fargo of the location of all
Covered Machines and will advise in advance of any proposed relocation, in each
case in accordance with the terms of this Agreement.
|
10. |
Financial Statements
: To the extent that Global Cash
Access Holdings, Inc. (Holdings), Clients parent entity, is no longer a
public reporting company under the securities laws of the United States, Client
will, from time to time, deliver to Wells Fargo copies of its quarterly and
annual financial statements and reports as reasonably requested by Wells Fargo,
together with any financial information supporting such financial statements
and reports. Quarterly financial statements will be due within 45 days of the
end of each quarter and annual financial statements within 90 days of the end
of each fiscal year.
|
11. |
Maintenance of Records
. Client agrees to maintain
sufficient records to permit an audit by Wells Fargo as is necessary for the
settlement of all Cash transactions; provided, however, that neither Client nor
their agents shall be required to maintain records beyond six months unless a
dispute exists or other circumstances reasonably warrant a longer period of
time. Client shall maintain its records as mutually agreed by the Parties in
order to permit Wells Fargo additional information to confirm the contents of
the Daily Reports and to confirm information on a transaction-by-transaction
basis.
|
28
D. |
Covenants of Wells Fargo
. Wells Fargo covenants and agrees with Client
that from and after the date of this Agreement:
|
1. |
Compliance with Laws Affecting Cash
: Wells Fargo will
comply in all material respects with all requirements of law applicable to the
Cash or any part thereof; provided however, that Wells Fargo may contest any
requirement of law in any reasonable manner.
|
2. |
Notice
: Upon becoming aware thereof, Wells Fargo will
advise Client promptly, in reasonable detail, in accordance with the provisions
hereof, (i) of any breach under this Agreement, (ii) of any lien on, or claim
asserted against, any of the Cash, and (iii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect on
the aggregate value of the Cash or its agreements hereunder.
|
3. |
Compliance with Rules and Regulations
: Wells Fargo
will abide by and operate in accordance with all applicable network rules and
regulations and all applicable banking laws and regulations. Wells Fargo will
comply with the applicable regulations of any network processor and all state
and federal regulations, including Regulation E.
|
XIII. |
General Provisions
.
|
A. |
Counterparts
. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same agreement.
|
B. |
Relationship of the Parties
. Wells Fargo and Client shall at all times
be deemed to be independent contractors. Except as expressly provided herein to the
contrary, neither Wells Fargo nor Client will have authority to enter into contracts on
each others behalf, to hire or fire employees of one another, nor in any way to
obligate each other to any third party.
|
C. |
Entire Agreement; Modification
. This Agreement, along with the
appendices, exhibits, the Fee Letter, and the addenda referenced herein, constitutes
the entire agreement between Wells Fargo and Client relating to the subject matter
herein and may not be changed orally but only by a written instrument signed by both
Parties. There are no restrictions, promises, warranties, covenants, or undertakings
relating to the subject matter of this Agreement, other than those expressly set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
|
D. |
Assignment
. No Party may assign this Agreement to any other person or
business entity without the other Partys prior written consent; provided, however,
that either Party may assign this Agreement, in whole or in part, with written notice
to the other Party, to its parent company, a wholly owned direct or indirect subsidiary
of the parent company, its affiliate, or subsidiary corporation, provided that such
assignment shall be contingent upon the assigning Party agreeing to continue to
guarantee any and all obligations owed hereunder by such assignee under this Agreement
and the Servicer Letters and shall document such
continuing guaranty in a form acceptable to the non-assigning Parties.
|
29
E. |
Notices
. All notices, requests and approvals required by this
Agreement shall: (a) be in writing; (b) be addressed to the Parties as indicated below
unless notice is given in writing of a change in address; (c) be deemed to have been
given when received; and (d) unless otherwise provided in this Agreement, be sent by
certified first class mail, return receipt requested, postage prepaid, or other
receipted express delivery service, or telecopy with written acknowledgment of receipt:
|
F. |
Governing Law and Venue
. This Agreement shall be governed by and
interpreted under the laws of the State of Delaware (
Governing Law
), without
regard to conflicts of laws principles. Subject to the arbitration provisions in
Section XIII.H below, the Parties hereby irrevocably submit to the jurisdiction of any
state or federal court in Las Vegas, Nevada with respect to any action or proceeding
arising out of or relating to this Agreement. Subject to the arbitration provisions in
Section XIII.H below, the Parties hereby consent to and grant to any such court
jurisdiction over the persons of such Parties and over the subject matter of any such
dispute and agree that delivery or mailing of any process or other papers in the manner
provided herein, or in such other manner as may be permitted by law,
shall be valid and sufficient service thereof.
|
30
G. |
Section Headings
. The section headings in the Agreement are for
purposes of reference only and shall not limit or affect any of the terms herein.
|
H. |
Arbitration
.
|
1. |
Arbitral Process
: Upon the demand of either Party, any
Dispute shall be resolved by binding arbitration (except as set forth below
in Judicial Review of Awards) in accordance with the terms of this Agreement.
A
Dispute
shall mean any action, dispute, claim, or controversy of
any kind, whether in contract or tort, statutory or common law, legal or
equitable, now existing or hereafter arising under or in connection with, or in
any way pertaining to, the subject matter of this Agreement, or any past,
present, or future activities, transactions, or obligations of any kind related
directly or indirectly to the subject matter of this Agreement, including,
without limitation, any of the foregoing arising in connection with the
exercise of any self-help or any ancillary or other remedies or actions taken
relating to the subject matter of this Agreement. Any Party may by summary
proceedings bring an action in court to compel arbitration of a Dispute. Any
Party who fails or refuses to submit to arbitration following a lawful demand
by any other Party shall bear all costs and expenses incurred by such other
Party in compelling arbitration of any Dispute.
|
2. |
Rules Governing Arbitration
: Arbitration proceedings
shall be administered by the American Arbitration Association (
AAA
)
or such other administrator as the parties shall mutually agree upon in
accordance with the AAA Commercial Arbitration Rules. All Disputes submitted
to arbitration shall be resolved in accordance with the Federal Arbitration Act
(Title 9 of the United States Code), notwithstanding any conflicting choice of
law provision in this Agreement. The arbitration shall be conducted at a
location in Las Vegas, Nevada selected by the AAA or other administrator. If
there is any inconsistency between the terms hereof and any such rules, the
terms and procedures set forth herein shall control. All statutes of
limitation applicable to any Dispute shall apply to any arbitration proceeding.
All discovery activities shall be expressly limited to matters directly
relevant to the Dispute being arbitrated. Judgment upon any award rendered in
an arbitration may be entered in any court having jurisdiction; provided,
however, that nothing contained herein shall be deemed to be a waiver by either
Party which is a bank of the protections afforded to it under 12 USC § 91 or
any similar applicable state law.
|
3. |
Arbitration; Provisional Remedies
: Except as otherwise
provided in this Agreement, no provision hereof shall limit the right of either
Party to exercise self-help remedies such as setoff, or to obtain provisional
or ancillary remedies, including, without limitation, injunctive relief,
sequestration, attachment, garnishment, or the appointment of a receiver,
from a court of competent jurisdiction before, after, or during the pendency
of any arbitration or other proceeding. The exercise of any such remedy
shall not waive the right of either Party to compel arbitration hereunder.
|
31
4. |
Arbitrator Qualifications and Awards; Powers
: All
Arbitrators shall be selected in accordance with the AAA Commercial Arbitration
Rules. Arbitrators must (a) be active members of the State Bar of Nevada with
expertise in the substantive laws applicable to the subject matter of the
Dispute, (b) not be affiliated with either of the Parties and (c) have at least
five years experience in arbitrating sophisticated commercial contract
disputes. Arbitrators are empowered to resolve Disputes by summary rulings in
response to motions filed prior to the final arbitration hearing. Arbitrators
(i) shall resolve all Disputes in accordance with the Governing Law, (ii) may
grant any remedy or relief that a federal or state court of Nevada could order
or grant within the scope hereof and such ancillary relief as is necessary to
make effective any award, and (iii) shall have the power to award recovery of
all costs and fees, to impose sanctions and to take such other actions as they
deem necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Rules of Civil Procedure of the State of Nevada, or
other applicable law. Disputes less than $5,000,000 shall be decided by a
single arbitrator mutually agreed by the Parties. If the Parties cannot
mutually agree on a single arbitrator within five Business Days of initiation
of arbitration, then the AAA shall select an arbitrator on behalf of the
Parties. Disputes of $5,000,000 or more shall be decided by majority vote of a
panel of three arbitrators; provided, however, that all three arbitrators must
actively participate in all hearings and deliberations. The panel of
arbitrators will be comprised of three arbitrators, with one arbitrator
selected by each of Wells Fargo and Client and the third arbitrator selected by
the two arbitrators chosen by the Parties. If an arbitrator is unable to
serve, his or her replacement will be selected in the same manner as the
arbitrator to be replaced.
|
5. |
Judicial Review of Awards
: Notwithstanding anything
herein to the contrary, in any arbitration in which the amount in controversy
exceeds $25,000,000, the arbitrators shall be required to make specific,
written findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported
by substantial evidence or which is based on legal error, (ii) an award shall
not be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
Governing Law, and (iii) the parties shall have, in addition to the grounds
referred to in the Federal Arbitration Act for vacating, modifying or
correcting an award, the right to judicial review of (a) whether the findings
of fact rendered by the arbitrators are supported by substantial evidence, and
(b) whether the conclusions of law are erroneous under the Governing Law.
Judgment confirming an award in
such a proceeding may be entered only if a court determines the award is
supported by substantial evidence and not based on legal error under the
Governing Law.
|
32
6. |
Arbitration; Other Matters
: To the maximum extent
practicable, the AAA, the arbitrators and the Parties shall take all action
required to conclude any arbitration proceeding within 180 days of the filing
of the Dispute with the AAA. No arbitrator or other Party to an arbitration
proceeding may disclose the existence, content or results thereof, except for
disclosures of information by a Party required in the ordinary course of its
business, by applicable law or regulation, or to the extent necessary to
exercise any judicial review rights set forth herein. If more than one
agreement for arbitration by or between the Parties potentially applies to a
Dispute, the arbitration provision most directly related to the subject matter
of the Dispute shall control. This arbitration provision shall survive the
termination of this Agreement.
|
I. |
Attorneys Fees
. In the event either Party to this Agreement shall be
required to initiate legal or arbitration proceedings (a) to interpret or enforce
performance of any term or condition of this Agreement, (b) to enjoin any action
prohibited hereunder, or (c) to gain any other form of relief whatsoever, the
prevailing Party shall be entitled to recover, to the extent permitted by law, in
addition to any other damages or compensation received, reasonable attorneys fees and
court costs incurred by it on account thereof notwithstanding the nature of the claim
or cause of action asserted by the prevailing Party. Attorneys fees includes the
reasonable expense to any corporation of the service of its in-house counsel.
|
J. |
Waiver
. If a Party waives any of its rights on any one or more
occasions it will not be deemed to be a waiver of that Partys rights on any other
occasion. No delay on the part of any Party hereto in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof, and no single or partial
exercise of any right, power, or privilege hereunder shall preclude other or further
exercise thereof, or be deemed to establish a custom or course of dealing or
performance between the Parties hereto, or preclude the exercise of any other right,
power, or privilege.
|
K. |
No Third Party Beneficiaries
. Nothing in this Agreement is intended or
shall be construed to give any person, other than the Parties to or Parties indemnified
under this Agreement, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained in this Agreement.
|
L. |
Remedies Cumulative
. The rights and remedies herein expressly provided
are cumulative and may be exercised singly or concurrently and as often and in such
order as the Party entitled to such right or remedy deems expedient and are not
exclusive of any rights or remedies which such Party would otherwise have whether by
agreement or now or hereafter existing under applicable law.
|
33
M. |
Severability
. In case any provision in or obligation under this
Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired
thereby.
|
N. |
Examinations and Audits
.
|
1. |
Of Armored Carrier
: Client shall take all steps
reasonably necessary to ensure to the satisfaction of Wells Fargo that each
Armored Carrier shall allow Wells Fargo, Client, their respective designees,
and any regulatory or supervisory body to which Wells Fargo or its affiliates
is subject (
Auditors
), access to its facilities that maintain
inventories of the Cash, subject to the terms and conditions of this Section.
Such access shall be for the purpose of allowing the Auditors to perform a
physical audit of the Cash, and shall be permitted on regular Business Days
during the Armored Carriers regular business hours at any time without prior
notice, but subject to the Armored Carriers regular security policies. The
Auditors must present proper credentials to the manager of the Armored
Carriers facilities prior to gaining admission. The Party on whose behalf the
audit is to be conducted (which, in the case of an audit by any regulatory or
supervisory body, shall be the Party subject to the regulation or supervision
of such body) shall indemnify, defend and hold harmless the other Party and the
Armored Carrier from any liability, loss, damage, cost, or expense, including
reasonable attorneys fees, arising out of any bodily injury, death, or damage
to property sustained by an Auditor as a result of being on the Armored
Carriers premises or entering or leaving therefrom, to the extent that such
bodily injury, death, or damage to property does not arise from the negligence
or intentional misconduct of the Armored Carrier or any of its officers,
agents, or employees. In addition, Client (provided the audit is to be
conducted by or on behalf of Wells Fargo) and Armored Carrier shall furnish to
the Auditors their respective records relating to the Cash and the performance
of Clients obligations under this Agreement. Client (provided the audit is to
be conducted by or on behalf of Wells Fargo) and Armored Carrier shall have the
right to have an employee or agent present at all times during any examination
or audit of their respective records. Armored Carrier shall have the right to
have an employee present at all times during any audit conducted pursuant to
this section.
|
34
2. |
Of Wells Fargo
: Wells Fargo shall allow Client or its
designees (
Clients Auditors
), reasonable access to Wells Fargos
records relating to the Cash and the performance of its obligations under this
Agreement for the purpose of allowing the Clients Auditors to perform a review
of the services provided by Wells Fargo under this Agreement. Such access
shall be permitted on regular Business Days during Wells Fargos regular
business hours at times mutually agreed upon by Wells Fargo and the Clients
Auditor. If Wells Fargo elects to give Clients Auditors access to
its records on Wells Fargos premises, Clients Auditors may be required to
present proper credentials to the manager of such premises prior to gaining
admission. Client shall indemnify, defend and hold harmless Wells Fargo
from any liability, loss, damage, cost, or expense, including reasonable
attorneys fees, arising out of any bodily injury, death, or damage to
property sustained by Clients Auditor as a result of gaining access to
Wells Fargos premises or entering or leaving therefrom, to the extent that
such bodily injury, death, or damage to property does not arise from the
negligence or intentional misconduct of Wells Fargo or any of its officers,
agents, or employees. Wells Fargo shall have the right to have an employee
or agent present at all times during any examination or audit of its
records.
|
3. |
Of Amounts in Covered Machines
: At least monthly,
Armored Carrier shall swap the cash cassettes in and balance each Covered
Machine and report the balances to Wells Fargo using iCom Reporting Systems.
In the event there is a discrepancy between the balances in any Covered Machine
reported by Armored Carrier and the balances reported to Client by Wells Fargo
for those Covered Machines, Wells Fargo shall promptly, and in any event within
5 days following discovery of such discrepancy, report such discrepancy to
Client.
|
4. |
MSB Audit of Client
: At least annually, and more
frequently if required in Wells Fargos sole discretion, Wells Fargo will
conduct an MSB audit of Clients operations. Wells Fargo will provide
reasonable notice to Client of any such audit. Client agrees to fully
cooperate in any such audit and to make available to Wells Fargo all records
and other information that are requested by Wells Fargo and are necessary for
the Bank to perform such audit.
|
O. |
SEC Reporting Requirements
. Wells Fargo hereby acknowledges that
Holdings may be required by law to file this Agreement as an exhibit to one or more of
its public filings or reports with the Securities and Exchange Commission and Wells
Fargo consents to the filing of this Agreement as an exhibit to any such report or
filing; provided that Client shall seek confidential treatment with respect to the
amount of fees set forth in Section VII.A of this Agreement for purposes of redacting
such fee information from any public filings or reports filed by Holdings with the
Securities and Exchange Commission.
|
P. |
Wells Fargos Records Presumed Correct
. Except as otherwise expressly
set forth in this Agreement, if at any time during the term of this Agreement there is
a discrepancy between the records of Wells Fargo and the records of Client or any third
party, the records of Wells Fargo shall be rebuttably presumed to be correct.
|
Q. |
Construction
. The Parties acknowledge that this Agreement was jointly
drafted and the provisions herein shall not be construed against any Party.
|
35
R. |
Wholesaling Prohibited
. The services provided under this Agreement to
Client
are intended for the direct benefit of Client and no other person. If at any time
Wells Fargo, in its sole determination, concludes that Cash supplied to a Covered
Machine is in furtherance of a transaction in which the services provided by Wells
Fargo to Client under this Agreement are being directly or indirectly resold to a
third party, Wells Fargo may immediately terminate its obligations under this
Agreement with respect to such Covered Machine.
|
S. |
Patriot Act Notice; OFAC and Bank Secrecy Act
. Wells Fargo hereby
notifies Client that pursuant to the requirements of the Patriot Act, it is required to
obtain, verify and record information that identifies Client, which information
includes the name and address of Client in accordance with the Patriot Act. Client
will provide such information and take such actions as are reasonably requested by
Wells Fargo in order to assist Wells Fargo in maintaining compliance with the Patriot
Act.
Patriot Act
means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
107-56, signed into law October 26, 2001. In addition, Client shall (a) ensure that no
person, firm or entity who owns a controlling interest in or otherwise controls Client
or any subsidiary of Client is or shall be listed on the Specially Designated National
and Blocked Persons List or similar lists maintained by the Office of Foreign Assets
Control (
OFAC
), the Department of Treasury or included in any Executive
Orders, (b) not use or permit to use any
funds to violate any of the foreign
asset control regulations of OFAC or any enabling statute or Executive Order relating
thereto, the Bank Secrecy Act, the Money Laundering Act of 1986, or any other law or
legal requirement relating to money laundering, all as amended from time to time, and
(c) comply, and cause its subsidiaries to comply, with all such laws and other legal
requirements.
|
36
GLOBAL CASH ACCESS, INC. | WELLS FARGO BANK, N. A. | |||||||||||||
|
||||||||||||||
By: | /s/ Scott Betts | By: | /s/ Olga E. Wisinicky | |||||||||||
|
Name: | Scott Betts | Name: | Olga E. Wisinicky | ||||||||||
|
Title: | CEO | Title: | Vice President |
37
Servicer Names | Settlement Account Number | |||
|
||||
*
|
* | |||
|
||||
*
|
* |
* |
Identified in separate writing between Wells Fargo and Client.
|
|
||||
|
||||
Attention:
|
||||
|
|
1. |
Definitions
. For purposes of this letter agreement the following words shall have
the corresponding meanings below:
|
(a) |
Cash
shall mean the U.S. currency provided by Wells Fargo for the
operation of the Covered Machines pursuant to the Contract Cash Solutions Agreement.
|
(b) |
Receivables
shall mean, for any period, an amount equal to the total
amount of Cash dispensed from the Covered Machines for any given period for which
Servicer is required to reimburse Wells Fargo pursuant to Section 4 of this Agreement.
|
2. |
Ownership of Cash and Receivables
. Notwithstanding that the Cash or the Receivables
may be in the physical possession or custody of a party other than Wells Fargo, Servicer and
Client agree that Wells Fargo shall have absolute control of all of the Cash at all times,
that the Cash and the Receivables are the sole and exclusive property of Wells Fargo and that
Servicer shall not at any time have any interest (including any security interest) in such
Cash or Receivables.
|
3. |
Access to Cash; Regulatory Requirements
. Servicer acknowledges that it has no access
to or control of the Cash and that Servicer shall not, and shall not instruct its agents and
subcontractors (if any) to, physically remove the Cash from Covered Machines or hinder
Wells Fargos physical access to the Cash. Servicer shall cooperate with Wells Fargo by
furnishing all information in the possession of Servicer and reasonably required by Wells
Fargo to meet regulatory requirements that Wells Fargo notifies Servicer of in writing.
|
4. |
Settlement of Cash
. Wells Fargo maintains depository accounts (each a
Settlement Account
) which shall be used to settle transactions, including electronic
transfer of funds, that are consummated at the Covered Machines when Cash is dispensed from a
Covered Machine. Servicers settlement of transactions with respect to Cash dispensed from a
Covered Machine pursuant to the terms of the Servicing Agreement shall be made by wire
transfer of the required amount of funds in immediately available funds into the appropriate
Settlement Account. Client and Servicer each acknowledges that all Cash dispensing
transactions with respect to the Covered Machines, including all charges with respect thereto,
and all adjustments, chargebacks, representments and other corrections thereto will be settled
to the appropriate Settlement Account. The Settlement Account shall be Wells Fargo account
no. _____. The designation of a Settlement Account may be changed only in writing by
Client and Wells Fargo and Servicer shall not make payment of any settlement amounts
attributable to the Covered Machines to any other account unless so instructed jointly by
Client and Wells Fargo.
|
5. |
No Obligation
. Servicer shall have no rights or obligations under the Contract Cash
Solutions Agreement. Wells Fargo shall have no rights or obligations under the Servicing
Agreement. The sole rights or obligations between Servicer and Wells Fargo are set forth
herein.
|
6. |
Term and Termination
.
|
(a) |
Client shall promptly provide Wells Fargo with notice of any notice of
termination of the Servicing Agreement. This letter agreement shall automatically
terminate upon the termination of the Servicing Agreement or the Contract Cash
Solutions Agreement.
|
(b) |
Wells Fargo and Client shall each promptly provide Servicer with notice of any
notice of termination of the Contract Cash Solutions Agreement.
|
(c) |
No party shall have liability to the other party for any delay beyond the
control of such party in the provision of notice pursuant to subsections (a) or (b)
above.
|
(d) |
Nothing contained herein is intended to alter the provisions for termination of
the Servicing Agreement and the Contract Cash Solutions Agreement found therein, which
termination shall be permissible solely to the extent permitted under the relevant
agreements and pursuant to the terms thereof.
|
7. |
Representations and Warranties
.
|
(a) |
Representations of Client
. Client represents and warrants to, and
covenants with,
Wells Fargo as follows:
|
1. |
Organization
. Client is a corporation, validly
existing and in good standing under the laws of the jurisdiction of its
formation and has all necessary power and authority to own or lease its
properties and to carry on its business as now being conducted.
|
2. |
Authorization
. Client has the power to enter into this
letter agreement, and the execution, delivery and performance of this letter
agreement has been duly authorized by all requisite action. This letter
agreement when executed and delivered shall constitute the valid and binding
obligation of Client.
|
(b) |
Representations of Servicer
. Servicer represents and warrants to, and
covenants with, Wells Fargo as follows:
|
1. |
Organization
. Servicer is duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
formation and has all necessary corporate power and authority to own or lease
its properties and to carry on its business.
|
2. |
Authorization
. Servicer has the corporate power to
enter into this letter agreement, and the execution, deliver and performance of
this letter agreement has been duly authorized by all requisite corporate
action. This letter agreement when executed and delivered shall constitute the
valid and binding obligation of Servicer.
|
(c) |
Representations of Wells Fargo
. Wells Fargo represents and warrants
to, and covenants with, Client and Servicer as follows:
|
1. |
Organization
. Wells Fargo is duly organized, validly
existing and in good standing under the laws of the United States and has all
necessary corporate power and authority to own or lease its properties and to
carry on its business as now being conducted, and possesses all licenses,
franchises, rights and privileges material to the conduct of its business,
taken as a whole.
|
2. |
Authorization
. Wells Fargo has the corporate power to
enter into this letter agreement, and the execution, delivery and performance
of this letter agreement has been duly authorized by all requisite corporate
action. This letter agreement when executed and delivered shall constitute the
valid and binding obligation of Wells Fargo.
|
8. |
Conflicts
. In the event of a conflict between the terms set forth in Section 2 of
this letter agreement and the Servicing Agreement, the terms set forth in Section 2 of this
letter
agreement shall prevail.
|
9. |
Governing Law
. This letter agreement shall be governed by [INSERT STATE] law.
|
10. |
Notices
. All notices under this letter agreement shall be sent by certified first
class mail, return receipt requested, postage prepaid, or other receipted express delivery
services, or by facsimile with written acknowledgment of receipt, and shall be effective upon
receipt:
|
11. |
Amendments
. The terms of this letter agreement may not be amended without the prior
written consent of each party hereto.
|
12. |
Counterparts
. This letter agreement may be executed in one or more counterparts,
each of which shall be deemed an original. All counterparts executed shall constitute one
agreement binding all of the parties.
|
13. |
Waiver.
If a party waives any of its rights on any one or more occasions it will not
be deemed to be a waiver of that partys rights on any other occasion.
|
14. |
Severability
. Any provision of this letter agreement held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of
this letter agreement and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.
|
Sincerely, | ||||||
|
||||||
[CLIENT] | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: |
By:
|
||||
|
|
|||
|
Title: |
By:
|
||||
|
|
|||
|
Title: |
1. |
Definition
. For purposes of this letter agreement, Cash shall mean the U.S.
currency provided by Wells Fargo for the cash dispensing operations of the Covered Machines
pursuant to the Contract Cash Solutions Agreement.
|
2. |
Ownership of Cash
. Armored Carrier agrees that the Cash is the sole and exclusive
property of Wells Fargo and that Armored Carrier shall not at any time have any interest
(including any security interest or right of setoff) in such Cash and shall not setoff against
the Cash any claims it may now have or claims that may accrue to it in the future against
Client, Wells Fargo or any other person. Armored Carrier agrees that Wells Fargo shall have
all right, title, and interest in and to the Cash, regardless of physical location, and may
treat the Cash as its asset until it is dispensed from the Covered Machines. Upon demand by
Wells Fargo, all Cash shall be surrendered by Armored Carrier to Wells Fargo. At no time
shall Armored Carrier assert or otherwise claim any interest in the Cash that would under any
circumstances be contrary to Wells Fargos treatment of the Cash as vault cash as defined in
section 204.2(k) of Regulation D.
|
3. |
Commingling of Cash
. Armored Carrier acknowledges that it will not at any time
commingle the Cash with any other funds it is holding or transporting; provided, that the
holding of Cash in an armored vehicle or vault with other funds shall not constitute
commingling of the Cash with other funds so long as the Cash shall remain segregated and
separately identified from such other funds at all times.
|
4. |
Armored Carrier Services
.
|
(a) |
Redelivery of Cash
. Notwithstanding any provision of any Armored
Carrier Agreement to the contrary, Wells Fargo may demand at any time, without prior
notice or qualification, that all or any part of the Cash stored in the Covered
Machines or otherwise in possession of Armored Carrier be redelivered to Wells
Fargo. In response to any such demand, Armored Carrier shall use its best efforts
to redeliver the Cash to Wells Fargo as fast as is reasonably practicable. Unless
otherwise agreed to in advance, such redelivery shall be made at Wells Fargos
expense at such reasonable service charge as shall then be determined in good faith
by Armored Carrier. Such Cash shall be returned to Wells Fargo at the address that
corresponds to each Covered Machine that is specified in Exhibit A.
|
(b) |
Cash Held by Armored Carrier
. When Cash is held by Armored
Carrier in the Armored Carriers vault, all such Cash shall be kept in separate
inventory until such time as the Cash is required to be placed in a specific Covered
Machine or until it is requested to be returned to Wells Fargo pursuant to this
letter. The Cash shall not be commingled with any other cash in the possession,
custody or control of Armored Carrier.
|
(c) |
Cash Control
. At no time shall Client be given access to the
Cash held by Armored Carrier, nor shall Armored Carrier give Client access to the
Cash held in any Covered Machine.
|
(d) |
Covered Machine Access
. Except as may be necessary to perform
the services under any Armored Carrier Agreement, including, but not limited to,
loading and removing Cash to and from the Covered Machines or redelivery of Cash to
Wells Fargo provided for in this letter agreement, no employee of Armored Carrier
shall have the authority to access the Cash stored in any Covered Machine. Armored
Carrier shall not give access to the Cash stored in any of the Covered Machines to
any third party without first obtaining the agreement of Wells Fargo. Clients
maintenance providers may have access to the Covered Machines independent of Armored
Carrier.
|
5. |
Cash Discrepancy
. The amount set forth in the shipping document released by a
Federal Reserve Bank in connection with the release by such Federal Reserve Bank to Armored
Carrier of any sealed or locked bag shall be deemed the amount of the Cash received. In the
event of any discrepancy between such shipping document and the contents of a sealed or locked
cash bag received by Armored Carrier from a Federal Reserve Bank, Armored Carrier shall notify
Client and Wells Fargo in writing immediately of the discrepancy, and Armored Carrier shall
provide reasonable assistance to Wells Fargo in presenting difference claims to the Federal
Reserve Bank in accordance with Federal Reserve Bank regulations. With respect to any Cash
made available to Armored Carrier from any one of the Cash Suppliers listed on Exhibit B (each
a
Cash Supplier
) or a Wells Fargo
|
- 2 -
6. |
Reporting Requirement
. Each Business Day, Armored Carrier shall use commercially
reasonable efforts to provide a report to Wells Fargo by 12:00 p.m. local time, which shall
contain: (i) the amount of Cash placed in each Covered Machine by Armored Carrier the
immediately preceding Business Day, (ii) the amount of Cash returned to the Armored Carriers
vault from the Covered Machines the immediately preceding Business Day, (iii) the total amount
of all Cash shipments from Wells Fargos vault to Armored Carriers vault the immediately
proceeding Business Day, (iv) the total amount of all Cash shipments from Armored Carriers
vault to Wells Fargo the immediately proceeding Business Day, (v) the closing vault balance of
Armored Carriers vault the immediately preceding Business Day, and (vi) such other additional
information as Wells Fargo may reasonably request. All reports delivered by Armored Carrier
shall be completed by the reporting systems selected by Wells Fargo.
Business Day
shall mean any day other than weekends or holidays observed by the Federal Reserve Banks or
Wells Fargo, and with respect to each Covered Machine, the Cash Supplier that is making Cash
available to such Covered Machine.
Recovery Plan
. Armored Carrier agrees to comply
with the terms of the Recovery Plan attached hereto as Exhibit C, as the same may be
supplemented from time to time by joint written notice from Wells Fargo and Client to Armored
Carrier.
|
7. |
Insurance
. Armored Carrier, at its own expense, shall provide and maintain insurance
coverage during the complete term of the Agreement, that conforms in all material respects
with the following requirements:
|
(a) |
Workers Compensation Insurance
. Statutory Workers Compensation
coverage for all of its employees, including occupational disease coverage, as
required by applicable law, and employers liability with limits of at least
$1,000,000 bodily injury each accident, $1,000,000 bodily injury by disease per
employee, and $1,000,000 bodily injury by disease in the aggregate. If any class of
employees providing any services under the Agreement is not protected by the
Workers Compensation statute, Armored Carrier shall provide special insurance for
the protection of such employees not otherwise protected that is similar to the
coverage required above. The policy shall be endorsed to include all states
coverage (if applicable). If any Services are to be performed by Armored Carrier in
North Dakota, Ohio, Washington, West Virginia or Wyoming, Armored Carrier shall
purchase, in each of the aforementioned states in which Armored Carrier will be
performing Services, (i) Workers Compensation in the State Fund established by each
such state, and (ii) Stop Gap coverage providing Employers liability coverage in
each such state.
|
- 3 -
(b) |
Commercial General Liability Insurance
. Commercial General
Liability
Insurance written on an occurrence basis with a combined single limit of at
least $2,000,000 per occurrence, and a general aggregate of $5,000,000, in forms
providing coverage not less than the standard commercial general liability policy
including hazards of operation, broad form property damage liability coverage,
products/completed operations coverage, independent contractor coverage and broad
form contractual coverage for liability assumed under this Agreement, to the
extent insurable under the policy. The policy shall insure against claims for
personal injury, bodily injury (including death), and property damage occurring
on or about the site of any Services following the date of the Agreement by
reason of, or as a result of, the negligent acts or omissions of Armored Carrier
or any of its employees, agents or contractors. Coverage shall include (a)
liability arising out of acts of agents or contractors of Armored Carrier and (b)
provisions that the insurance company has a duty to defend all insureds under the
policy and that defense costs are paid in addition to and do not deplete the
policy limits.
|
(c) |
Automobile Liability Insurance
. Coverage for all motor vehicles
operated by or for Armored Carrier, including protection for automobiles and trucks
used by Armored Carrier either on or away from Clients and Wells Fargos facilities
or other sites at which Armored Carriers services are provided, with a combined
single limit of at least $1,000,000 per occurrence for bodily injury and property
damage. The policy shall include coverage for all hired, owned and non-owned
vehicles.
|
(d) |
Commercial Umbrella/Follow Form Excess Policy
. Excess liability
policy with limits of not less than $10,000,000 per occurrence in excess of the
primary underlying policy limits. The policy must provide coverage at least as
broad as the underlying policies.
|
(e) |
All-Risk Property Insurance
. Replacement cost coverage on all
buildings, equipment and other property used in the performance of the Services, and
Armored Carrier hereby waives any right of subrogation against Client and Wells
Fargo (including, their respective officers, directors and employees) for any loss
or damage to same. Armored Carrier shall have the option to self-insure for such
coverage, but if Armored Carrier elects to self-insure, Armored Carrier shall
protect Client and Wells Fargo (including their respective officers, directors and
employees) to the same extent as it would if it had obtained an all risk property
coverage policy covering such property.
|
- 4 -
(f) |
Comprehensive
. Comprehensive Crime/Money and Securities
insurance with a limit of not less than the greater of (i) $50,000,000 for any
Armored Carrier facility ($50,000,000 for an Armored Carrier facility without a
Class II vault), (ii) $50,000,000 for property in transit, or (iii) an amount equal
to the maximum amount of cash, currency and valuables held for all Clients at each
Armored Carrier facility (determined on a facility by facility basis) covering all
loss, damage or destruction of Property (as defined in this Agreement) while same
is in the care, custody and control of Armored Carrier, its employees,
agents or contractors or as may otherwise be the responsibility of Armored
Carrier under this Agreement. The insurance shall include, but not be limited
to, the following coverages:
|
(i) |
Employee Theft/Dishonesty Coverage (including Client and Wells
Fargo Property endorsement)
|
(ii) |
In transit coverage
|
||
(iii) |
On premises coverage
|
||
(iv) |
Computer theft and funds transfer coverage
|
(v) |
Joint loss payable endorsement in favor of Client and Wells
Fargo
|
(vi) |
Legal Liability coverage for loss of and/or damage or
destruction of Property
|
(g) |
General Requirements
. The following general requirements shall
apply to all insurance policies required to be obtained by Armored Carrier
hereunder:
|
(i) |
Armored Carrier shall maintain the foregoing insurance coverage
in force at all times during the performance of any Services under the
Agreement.
|
(ii) |
Armored Carrier shall furnish Client and Wells Fargo with
certificates of insurance evidencing the insurance required by this Agreement
prior to the commencement of any services and at least annually from the date
of the Agreement and as policies are renewed, replaced, or modified. Failure
to provide the certificates will constitute a material breach and entitle
Client and Wells Fargo to terminate the Agreement.
|
(iii) |
All policies shall be written by insurance companies that are
(a) lawfully authorized to do business in the jurisdiction(s) where work is
being performed or services are provided and (b) carry an A.M. Best rating of
A or better and financial category of X or higher. Should any policy be
written on a surplus lines and non-admitted basis, Client and Wells Fargo
reserve the right to approve the insurance company.
|
(iv) |
Each policy shall include a provision requiring that at least
30 days prior written notice be given to Client and Wells Fargo in the event of
cancellation, non-renewal, lowering of policy limits or exhaustion of
aggregates. Armored Carrier shall provide Client and Wells Fargo with 30 days
prior written notice of any material change in any policy.
|
- 5 -
(v) |
Armored Carrier shall pay the premiums on all required
insurance policies and the cost for such premiums shall be deemed included in
the compensation payable to Armored Carrier for its services pursuant to the
terms of the Armored Carrier Agreement.
|
||
(vi) |
All required insurance policies, except for Workers
Compensation and All Risk Property Insurance, to the extent permitted by
applicable law, shall name Client and Wells Fargo and their respective
officers, directors and employees as additional insureds. Any General
Liability and Umbrella policy must utilize ISO endorsement form CG2010 (11/85)
Additional Insured Owners, Lessees, or Contractors (Form B) or equivalent
endorsement that names Client and Wells Fargo and their respective officers,
directors and employees as additional insureds for both ongoing operations of
Armored Carrier and completed operations of Armored Carrier.
|
(vii) |
Except where prohibited by law, all insurance policies
required by this Agreement shall include a Waiver of Subrogation in favor of
Client and Wells Fargo and their respective officers, directors and employees.
|
(viii) |
Each of Armored Carriers insurance policies shall be written so as to
provide primary coverage and to be non-contributing with respect to any other
insurance or self insurance which may be maintained by Client and Wells Fargo.
|
(ix) |
The insurance requirements set forth herein shall in no way
limit the liability of Armored Carrier or its contractors arising under the
Armored Carrier Agreement, this letter or any other agreement or as a result of
any related activities.
|
(x) |
Armored Carrier shall be responsible for the payment of any and
all deductibles or SIR (Self Insurance Retention) applicable under its
insurance policies. Armored Carriers deductible and/or SIR shall not exceed
Armored Carriers current limits on any given policy, unless approved in
writing by Client and Wells Fargo. Client and Wells Fargo acknowledge that
Armored Carriers deductibles on Armored Carriers policies in existence at the
inception of this letter agreement are acceptable and Armored Carrier agrees to
notify Client and Wells Fargo in writing at least thirty (30) days in advance
of any future proposed changes in such deductible and to obtain Clients and
Wells Fargos written approval prior to increasing any deductibles.
|
(xi) |
Client and Wells Fargo shall have the right to request from
time to time that Armored Carrier obtain additional insurance in connection
with Armored Carriers performance of any of its services.
|
- 6 -
8. |
Examinations and Audits Of Armored Carrier
. Armored Carrier shall allow Wells Fargo,
Client, their respective designees, and any regulatory or supervisory body to which Wells
Fargo is subject (Auditors), access to its facilities that maintain inventories of the Cash.
Such access shall be for the purpose of allowing the Auditors to perform a physical audit of
the Cash, and shall be permitted on regular business days during the Armored Carriers regular
business hours at times to be determined by the
Party on whose behalf the audit is being conducted. The Auditors must present proper
credentials to the manager of the Armored Carriers facilities prior to gaining admission
and Armored Carrier shall have the right to independently verify with Wells Fargo that such
auditors are authorized prior to having access to such facilities. The Party on whose
behalf the audit is being conducted shall indemnify, defend and hold harmless the Armored
Carrier from any liability, loss, damage, cost, or expense, including reasonable attorneys
fees, arising out of any bodily injury, death or damage to property sustained by an Auditor
as a result of being on the Armored Carriers premises or entering or leaving therefrom, to
the extent that such bodily injury, death or damage to property does not arise from the
negligence or intentional misconduct of the Armored Carrier or any of its officers, agents,
or employees. In addition, Client (provided the audit is being conducted by or on behalf of
Wells Fargo) and Armored Carrier shall furnish to the Auditors their respective records
relating to any discrepancy in Cash settlement. Client (provided the audit is being
conducted by or on behalf of Wells Fargo) and Armored Carrier shall have the right to have
an employee or agent present at all times during any examination or audit of their
respective records. Armored Carrier shall have the right to have an employee present at
all times during any such audit.
|
9. |
Representations, Warranties and Covenants of Armored Carrier
. Armored Carrier
represents, warrants, and covenants to Client and Wells Fargo as follows:
|
(a) |
Organization
. Armored Carrier is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its formation
and has all necessary corporate power and authority to own or lease its properties
and to carry on its business as now being conducted, and possesses all licenses,
franchises, rights and privileges material to the conduct of its business, taken as
a whole.
|
(b) |
Authorization
. Armored Carrier has the corporate power to enter
into this letter agreement, and the execution, delivery and performance of this
letter agreement has been duly authorized by all requisite corporate action. This
letter agreement when executed and delivered shall constitute the valid and binding
obligation of Armored Carrier.
|
(c) |
Amendment of Armored Carrier Agreement
. Armored Carrier agrees
to provide Wells Fargo with at least 60 days prior written notice of any amendment
to any Armored Carrier Agreement that may have a material adverse effect on Wells
Fargo.
|
(d) |
Compliance with Insurance Requirements
. Armored Carrier
represents and warrants that at no time shall the amount of Cash contained in any
delivery vehicle of Armored Carrier exceed the truck load limit set for that vehicle
by Armored Carriers insurance carrier.
|
(e) |
Vault Security
. Armored Carrier agrees that it shall conform to
any regulatory requirements imposed upon Wells Fargo with respect to security
measures that are applicable to the maintenance of the Cash in Armored Carriers
vaults.
|
- 7 -
10. |
Indemnification
. As between Wells Fargo and Armored Carrier, Armored Carrier shall
bear all risk of loss with respect to Cash in its possession or control, including, without
limitation, loss due to theft or destruction of any of the Cash, or misfeasance of malfeasance
of Armored Carrier, its agents or employees; provided that the foregoing sentence shall not
supersede any limitations on liability as agreed by Client and Armored Carrier and set forth
in the Armored Carrier Agreement. Armored Carrier agrees to indemnify, defend and hold
harmless Wells Fargo for loss, theft or destruction of the Cash to the same extent it is
required to indemnify Client under the Armored Carrier Agreement. Armored Carrier shall not
be liable or responsible for any loss of Cash: (i) due solely to the intentional act or
omission of Wells Fargo, its agents, or employees, (ii) that occurs after such Cash has been
returned to a Cash Supplier, a Federal Reserve Bank or Wells Fargo, or (iii) that occurs
before such Cash has been delivered to Armored Carrier.
|
11. |
No Obligation
. Armored Carrier shall have no rights or obligations under the
Contract Cash Solutions Agreement. Wells Fargo shall have no rights or obligations under the
Armored Carrier Agreement. The sole rights or obligations between Armored Carrier and Wells
Fargo are set forth herein.
|
12. |
Term and Termination
.
|
(a) |
Client shall promptly provide Wells Fargo and Armored Carrier with any
notice of termination of the Armored Carrier Agreement. This letter agreement shall
automatically terminate upon the termination of the Armored Carrier Agreement or the
Contract Cash Solutions Agreement.
|
(b) |
Wells Fargo and Client shall each promptly provide Armored Carrier with
notice of any notice of termination of the Contract Cash Solutions Agreement.
|
(c) |
In the event of any regulatory requirements imposed on Wells Fargo with
regards to security measures in which Wells Fargo has notified Client in writing and
which Client is unable to or unwilling to comply, Client may terminate this letter
agreement without any liability on 30 days written notice to Wells Fargo.
|
(d) |
No Party shall have liability to any other Party for any delay beyond the
control of such Party in the provision of notice pursuant to subsections (a) or (b)
above.
|
13. |
Settlement of Disputes
.
|
(a) |
Conflicts
. To the extent any dispute resolution terms in this
letter are inconsistent with any such terms in the Contract Cash Solutions
Agreement, the terms of this letter shall prevail.
|
- 8 -
(b) |
Arbitration
. Upon the demand of any Party, any Dispute shall
be resolved by binding arbitration (except as set forth below in Judicial Review of
Arbitration Awards) in accordance with the terms of this letter agreement. A
Dispute
shall mean any action, dispute, claim or controversy of any kind, whether in
contract or tort, statutory or common law, legal or equitable, now existing or
hereafter arising under or in connection with, or in any way pertaining to, the
subject matter of this letter agreement, or any past, present or future
activities, transactions or obligations of any kind related directly or
indirectly to the subject matter of this letter agreement, including, without
limitation, any of the foregoing arising in connection with the exercise of any
self-help or any ancillary or other remedies or actions taken relating to the
subject matter of this letter agreement. Notwithstanding the foregoing, a
Dispute shall not include any claim arising out of the bodily injury to, or
death of, any person. Any Party may by summary proceedings bring an action in
court to compel arbitration of a Dispute. Any Party who fails or refuses to
submit to arbitration following a lawful demand by any other Party shall bear all
costs and expenses incurred by such other Party in compelling arbitration of any
Dispute.
|
(c) |
Rules Governing Arbitration
. Arbitration proceedings shall be
administered by the American Arbitration Association (
AAA
) or such other
administrator as the Parties shall mutually agree upon in accordance with the AAA
Commercial Arbitration Rules. All Disputes submitted to arbitration shall be
resolved in accordance with the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in this letter
agreement. The arbitration shall be conducted at a location in [INSERT STATE]
selected by the AAA or other administrator. If there is any inconsistency between
the terms hereof and any such rules, the terms and procedures set forth herein shall
control. All statutes of limitation applicable to any Dispute shall apply to any
arbitration proceeding. All discovery activities shall be expressly limited to
matters directly relevant to the Dispute being arbitrated. Judgment upon any award
rendered in an arbitration may be entered in any court having jurisdiction.
|
(d) |
Arbitration; Provisional Remedies
. Except as otherwise provided
in this letter agreement, no provision hereof shall limit the right of any Party to
exercise self-help remedies such as setoff, or to obtain provisional or ancillary
remedies, including, without limitation, injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any Party
to compel arbitration hereunder.
|
- 9 -
(e) |
Arbitrator Qualifications and Awards; Powers
. Arbitrators must
be active members of the Bar in [INSERT STATE] or retired judges of the state or
federal judiciary of [INSERT STATE] with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the final
arbitration hearing. Arbitrators (i) shall resolve all Disputes in accordance with
the Governing Law, (ii) may grant any remedy or relief that a federal or
state court of [INSERT STATE] could order or grant within the scope hereof and
such ancillary relief as is necessary to make effective any award, and (iii)
shall have the power to award recovery of all costs and fees, to impose sanctions
and to take such other actions as they deem necessary to the same extent a judge
could pursuant to the Federal Rules of Civil Procedure, the Rules of Civil
Procedure of the State of [INSERT STATE] or other applicable law. Disputes shall
be decided by majority vote of a panel of three arbitrators; provided, however,
that all three arbitrators must actively participate in all hearings and
deliberations.
|
(f) |
Judicial Review of Awards
. Notwithstanding anything herein to
the contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written findings of
fact and conclusions of law. In such arbitrations (i) the arbitrators shall not
have the power to make any award which is not supported by substantial evidence or
which is based on legal error, (ii) an award shall not be binding upon the Parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the Governing Law, and (iii) the Parties
shall have, in addition to the grounds referred to in the Federal Arbitration Act
for vacating, modifying or correcting an award, the right to judicial review of (a)
whether the findings of fact rendered by the arbitrators are supported by
substantial evidence, and (b) whether the conclusions of law are erroneous under the
Governing Law. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and not
based on legal error under the Governing Law.
|
(g) |
Arbitration; Other Matters
. To the maximum extent practicable,
the AAA, the arbitrators and the Parties shall take all action required to conclude
any arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other Party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by a
Party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights set
forth herein. If more than one agreement for arbitration by or between the Parties
potentially applies to a Dispute, the arbitration provision most directly related to
the subject matter of the Dispute shall control. This arbitration provision shall
survive the termination of this letter agreement.
|
- 10 -
14. |
Notices
. All notices under this letter agreement shall be sent by certified first
class mail, return receipt requested, postage prepaid, or other receipted express delivery
services, or by facsimile with written acknowledgment of receipt, and shall be effective upon
receipt:
|
15. |
Governing Law
. This letter agreement shall be governed by [INSERT STATE] law.
|
16. |
Amendments
. The terms of this letter agreement may not be amended without the prior
written consent of each Party hereto.
|
17. |
Counterparts
. This letter agreement may be executed in one or more counterparts,
each of which shall be deemed an original. All counterparts executed shall constitute one
agreement binding all of the Parties.
|
18. |
Waiver
. If a Party waives any of its rights on any one or more occasions it will not
be deemed to be a waiver of that Partys rights on any other occasion. Please acknowledge
your receipt and agreement to the representations, covenants, warranties, and provisions of
this letter agreement by having your authorized officer execute the copy included herewith and
returning it to the undersigned.
|
- 11 -
Sincerely, | ||||||
|
||||||
[CLIENT] | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: |
By:
|
||||
|
|
|||
|
Title: |
By:
|
||||
|
|
|||
|
Title: |
- 12 -
|
||||
|
||||
Attention:
|
||||
|
|
Sincerely, | ||||||
|
||||||
[CLIENT] | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: |
By:
|
||||
|
|
|||
|
Title: |
By:
|
||||
|
|
|||
|
Title: |
- 2 -
- 3 -
- 1 -
1. |
Commencement
. The settlement procedures for Pilot Machines (as defined below) shall
become effective at 12:00 a.m. Pacific Time on a date mutually agreed upon by Wells Fargo
and Client (the Pilot Start Date). For purposes of the Pilot, the Pilot Machines shall
include only those ATMs separately agreed to in writing. One week prior to the Pilot Start
Date, Client shall provide a detailed written description of the currency and coin balances
required for the initial cash orders to Wells Fargo intended for use in the Pilot Machines
(the Starting Pilot Cash). Upon Clients receipt of the Starting Pilot Cash (which will
be deemed to be the time when the Armored Carrier receives the Cash from the Wells Fargo
Network Location), the U.S. currency and coin for the dispensing from the Pilot Machines as
of the Pilot Start Date shall be the property of Wells Fargo and shall be referred to as
the Pilot Cash. Client shall remove any Cash that is not Starting Pilot Cash from the
Pilot Machines before the Starting Pilot Cash is loaded into the Pilot Machines and the
only Cash in the Pilot Machines shall be Wells Fargo owned Cash.
|
2. |
Reports
.
|
A. |
Daily Reports
. By 9:00 a.m., Central Time, on each
Business Day after the Pilot Start Date, Client shall deliver to Wells Fargo
two daily reports (Daily Reports) as follows:
|
(i) |
File 1
. A report (the File 1
Report) that provides the amount of Cash dispensed from each Pilot
Machine between 3:00 p.m. Pacific Time on the day immediately
preceding the day on which the immediately preceding File 1 Report
was delivered and 3 p.m. Pacific Time of the immediately preceding
Business Day (Daily Dispensed Cash); and
|
(ii) |
File 2
. A report (the File 2
Report) that provides the amount of Pilot Cash dispensed from each
Pilot Machine serviced since the preceding Business Day from 3:00
p.m. Pacific Time until such Pilot Machine was serviced and cash
cassettes swapped by the applicable armored carrier on the
immediately preceding Business Day.
|
B. |
Armored Carrier Service Report
. Utilizing iCom
Reporting Systems, on each Business Day, the applicable Armored Carrier shall
deliver to Wells Fargo a report reflecting each Pilot Machine serviced and cash
cassettes swapped since the preceding report and the Pilot Cash balance in each
Pilot Machine at the time of service (together with corrections and adjustments
input in the iCom Reporting System, the Service Report(s)). Service Reports
shall be used by Wells Fargo as part of the reconciliation process contemplated
hereby.
|
C. |
Daily Report by Wells Fargo
. Although the Bank Report
will not be supplied to Customer, Wells Fargo will supply Customer similar
information for each Pilot Machine daily.
|
3. |
Settlements
. All settlements with Client of Pilot Cash shall be effected by wire
transfer directly into the Settlement Account by 9 a.m. Pacific Time on the same day Client
receives the funds from its current provider.
|
4. |
Viewing of Settlement Account
. Client shall have viewing access to the Settlement
Account during the Pilot if such access is available. If such access is not available
during the Pilot, Wells Fargo shall use commercially reasonable efforts to provide
information about the Settlement Account requested by Client.
|
5. |
Reconciliation
. Following receipt of the Daily Reports each Business Day, Wells Fargo
shall endeavor to reconcile all out-of-balance amounts of Pilot Cash from the amounts
reported in the Daily Reports and the Service Reports. If at any time Wells Fargo learns
that the Pilot Cash is out-of-balance (by use of the bank reports or otherwise), Wells
Fargo shall notify Client of the imbalance within three (3) days of such discovery, and
within sixty (60) days of providing such notice to Client, Wells Fargo shall credit or
debit, as applicable, the Operating Account (as defined below) for such overage or
shortage. Variances will be settled as of the last Business Day of the month when the
difference reaches sixty (60) days.
|
6. |
Receivables.
Notwithstanding anything in this letter agreement to the contrary, Wells
Fargo and Client agree that during the Pilot, Wells Fargo owns the Pilot Cash and any
receivables arising from such Pilot Cash being dispensed.
|
7. |
Fees.
Client agrees to pay Wells Faro the Fees for the Pilot calculated in accordance
with the terms of the Fee Letter.
|
Yours very truly,
WELLS FARGO BANK, N. A. |
||||
By: | /s/ Olga Wisinicky | |||
Name: | Olga Wisinicky | |||
Title: | Vice President |
GLOBAL CASH ACCESS, INC.
|
||||
By: | /s/ Scott Betts | |||
Name: | Scott Betts | |||
Title: | President and CEO |
1. |
Monthly Fee
. Client shall pay a monthly fee as calculated in accordance with the
following formula:
|
2. |
Definitions
. The following terms when used in this Exhibit A shall have the
following meanings:
|
(a) |
Daily Three Month LIBOR
means, for each day, LIBOR then in effect for
delivery for a three month period on such day or if such day is not a Business Day on
the immediately preceding Business Day.
|
(b) |
LIBOR
means the rate per annum determined pursuant to the following
formula:
|
|
LIBOR = | Base LIBOR | ||||
|
|
(1) |
Base LIBOR means the rate per annum for United States
dollar deposits quoted by Wells Fargo for the purpose of calculating the
effective rate for loans that reference Daily Three Month LIBOR as the
Inter-Bank Market Offered Rate in effect from time to time for three month
delivery of funds in amounts approximately equal to the Average Daily LIBOR
Tranche Dollars Outstanding. Client understands and agrees that Wells Fargo
may base its quotation of the Inter-Bank Market Offered Rate upon such offers
or other market indicators of the Inter-Bank Market as Wells Fargo in its
discretion deems appropriate, including but not limited to the rate offered
for U.S. dollar deposits on the London Inter-Bank Market.
|
(2) |
LIBOR Reserve Percentage means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for Eurocurrency Liabilities (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Wells Fargo for expected
changes in such reserve percentage during the applicable term of the Agreement.
|
(c) |
Wells Fargo
LIBOR Margin
means [***].
|
3. |
Ancillary Services and Charges
. Client shall also pay the customary charges and fees
of Wells Fargo for the ancillary services set forth on Exhibit B to the Fee Letter, which
Exhibit reflects the current charges on the date of this Agreement. Wells Fargos standard
treasury and cash management agreements will apply to all ancillary services such as wire
transfers, ACH services and the like.
|
1. |
Cash Processing Fees:
|
Depository Services | Unit Price | |||
Vault Deposit
|
$ | [***] | ||
Cash Vault Cash Order per request (touchtone/CEO), per vault
|
$ | [***] | ||
Cash Vault Currency Supplied per $1 supplied (bundle)
|
$ | [***] | ||
Cash Vault Currency Supplied per $1 supplied (non-standard)
|
$ | [***] | ||
Cash Vault Currency Supplied per $1 supplied (standard)
|
$ | [***] | ||
Expanded Network Currency Supplied per $1 supplied (non-standard)
|
$ | [***] | ||
Expanded Network Currency Supplied per $1 supplied (bundle)
|
$ | [***] | ||
Expanded Network Currency Supplied per $1 supplied (standard)
|
$ | [***] | ||
Cash Vault Currency Deposited per $1 deposited (standard)
|
$ | [***] | ||
Expanded Network Currency Deposited per $1 deposited (standard)
|
$ | [***] | ||
Cash Vault Deposit Adjustment per corrected deposit
|
$ | [***] | ||
Expanded Network Deposit Adjustment per corrected deposit
|
$ | [***] | ||
Cash Vault Monthly Base
|
$ | [***] |
2. |
Reconcilement Fee:
|
Reconcilement Services | Unit Price | |||
ATM Contract Cash Balance/Location
|
$ | [***] | ||
Contract Cash Balance/Settlement
|
$ | [***] |
1.1 | Acquirer means a Member who accepts Transactions and sends them to a Network for processing. |
1.2 | ACH means an automated clearinghouse system operated by a Federal Reserve Bank. |
1.3 | Affiliate means, with respect to either Party, a Person which directly or indirectly owns or controls, is owned or controlled by, or is under common ownership with Company or the Bank, as applicable. |
1.4 | Agent means any contractor, including an ISO, TPS, ESO or Processor engaged by the Bank to provide services or to act on its behalf in connection with a Terminal operated under this Agreement. |
1.5 | Application means the written application to sponsor Company and its Affiliates as an ISO in a format as required by Bank which is submitted by Company to Bank and which, among other topics, provides names, addresses, telephone numbers, financial information and other information regarding the Company and its executive officers, directors any other necessary Persons affiliated with Company. |
1.6 | ATM Operator means a Person other than the Bank that owns an ATM or the cash placed in the ATM and that is provided Network access by an Independent Sales Organization (ISO) that is registered as an Agent by the Bank and more fully defined by Plus System, Inc. Bylaws and Operating Regulations, Appendix A: Definitions. Dated January 15, 2010. |
1.7 | ATM Operator Agreement means the written agreement between the ATM Operator and the Bank which among other things addresses the functions to be performed by the ATM Operator and which must require that the ATM Operator comply at all times with the Rules and Regulations. |
1.8 | ATM Services means transaction acquiring technology and processing services provided through contractual agreements held by the Company. |
1.9 | Automated Teller Machine or ATM means any electronic device that meets Network requirements and when activated by a Card, is capable of initiating and performing an ATM Transaction. |
1.10 | ATM Transactions means any of the following functions attempted by a Cardholder at a Terminal: |
(a) | Withdrawal means the dispensing of cash or cash equivalent by a Terminal to a Cardholder from a Cardholders depository account; |
(b) | Inquiry means an inquiry by a Cardholder as to the balance of the Cardholders account; |
(c) | Decline means the attempted transaction was declined due to a variety of reasons including but not limited to; incorrect account or PIN number, Card not valid, insufficient funds, or the machine or Processor is down; |
(d) | Transfer means a Cardholder transfers funds from one of the Cardholders accounts to another account of that Cardholder; |
(e) | Any Transaction that has been approved by a Network and Bank that is a modification, enhancement or substantially similar to any of the transactions set forth in subsections (a)-(d) of this Section 1.9, including, without limitation, dispensing of cash equivalents such as any ticket or other similar disbursement that has been approved by a Network as part of Companys QuikTicket service; or |
(f) | Quasi Cash as defined in 1.48. |
1.11 | Authorization means the electronic confirmation from the financial institution that issued the Card. |
1.12 | Bank Group has the meaning given that term in Section 6.1(c). |
1.13 | By-Laws and Operating Rules mean the By-Laws, Operating Rules and Operating Regulations of the Networks, as amended from time to time. |
1.14 | Card means a credit card, debit card, bank card or other card issued by an Issuer who is a Member of a Network and which provides access through the use of a Terminal to one or more accounts with the Issuer. |
1.15 | Cardholder means (i) the Person who maintains or is authorized to access an account by the use of a Card (and if such account is maintained in the name, or may be accessed by, more than one Person, all of such persons), and (ii) uses a Card to originate a Transaction with the account. |
Page 2 of 23
1.16 | Chargeback means an electronic debit to a Settlement initiated by a Cardholder dispute. |
1.17 | Company Group has the meaning given that term in Section 6.1(e). |
1.18 | Customer means a Person to which the Company or its Affiliates provides Payment Services (other than ATM Services) and that may have one or more Terminals located on its premises which participate in the Networks and with respect to which the Bank provides sponsorship services pursuant to this Agreement. |
1.19 | Designated Processor means a Processor that is certified by a Network and has direct connectivity to the Network and the Parties acknowledge that TSYS Acquiring Solutions, LLC is a Designated Processor as of the Effective Date. The Designated Processor under this Agreement for all Processing Services may vary and may not be changed without the prior written consent of both Bank and Company, and Banks consent shall not be unreasonably be withheld. |
1.20 | Encryption and Support Organization or ESO means an entity that is (i) loading software into a Terminal, (ii) loading or injecting encryption keys into Terminals, or (iii) help desk support which includes re-programming of Terminal software. |
1.21 | Fees mean the Switch Fee and Interchange Fee as established from time to time by the Networks and the Surcharge Fee allowed by the Networks. |
1.22 | Gaming Activity means the placing of a bet or wager in accordance with applicable federal, state, tribal or local laws or regulations, either on the gaming floor of a Gaming Establishment, via the Internet or any other legally permissible communications medium. |
1.23 | Gaming Establishment means traditional land-based casinos or gaming establishments that operate on Native American land, riverboats and cruise ships, or at restaurants or bars, pari-mutuel wagering facilities and card rooms and any future gaming venues. |
1.24 | Independent Sales Organizations or ISO means a Person or entity that is registered/sponsored with respect to a Network by a member of such Network to deploy and/or service Terminals which are used to conduct Transactions across such Network. |
1.25 | Information is defined in Section 6.2. |
1.26 | Issuer means a member of a Network, including Bank, who issues a Card to a Cardholder for use in performing Transactions. |
1.27 | Item means the electronic messages that communicate and effects a Transaction between an Issuer and its Cardholder through the use of a Terminal. |
1.28 | Interchange means the exchange of clearing records between Members of the Networks. |
1.29 | Interchange Fee means the fees paid between the Acquirer and the Issuer for Transactions as established by the Networks from time to time. |
1.30 | Mark means the service marks and trademarks of Networks and Bank, including, but not limited to, the name and any other distinctive marks or logos which identify the Network or Bank. |
1.31 | Membership or Member means the membership in Networks and licensing rights thereto, obtained by financial institutions. |
1.32 | Merchant Casino means a Customer that advances the cash and initiates the Settlement of the Quasi Cash Transaction pursuant to the Authorization. |
Page 3 of 23
1.33 | Merchant Casino Fraud means the wrongful act or omission of the Merchant Casino including wrongful acts and omissions of anyone acting for and on behalf of the Merchant Casino which results in a loss, claim or expense by Bank related to or arising out of the Quasi Cash Transactions authorized by this Agreement. The term Merchant Casino Fraud specifically includes a violation of Rules or Regulations such as violations of Reg E or of the USA Patriot Act and any illegal activity, unauthorized transactions, or misuse or abuse of the Quasi Cash Transaction, including fraud. |
1.34 | Negotiable Instrument means a receipt, document or instrument (whether in written or electronic form) such as a check or money order, which is used for purposes of completing a Quasi Cash Transactions in accordance with the Rules. |
1.35 | Network means MasterCard, Visa, Cirrus, Plus, Pulse, NYCE, STAR and other electronic fund transfer systems for transmitting Items and other electronic messages and settling Transactions between Participants and includes, but is not limited to, a Switch, Terminals, Cards, related computer hardware and software, telecommunications facilities and equipment, Rules, technical specifications, logos, and Marks. |
1.36 | Participant means the parties involved in transmitting the Items and settling the Transactions, including the Issuer, Acquirer, Processor and Network. |
1.37 | Payment Services means (i) deployment, operating and/or ownership of Terminals, and/or (ii) acquiring, processing, and/or authorizing Transactions on behalf of Customers, and/or (iii) providing similar or related electronic payment services that requires sponsorship into one or more Networks. |
1.38 | PCI-DSS means Payment Card Industry Data Security Standards endorsed by MasterCard and Visa as audit criteria for SDP (Site Data Protection) and CISP (Cardholder Information Security Program). |
1.39 | Person means any individual, partnership, corporation, limited liability company, trust or other entity. |
1.40 | Personal Information means information of or about a Person that is non-public personal information under 15 U.S.C. Section 6809(4) and in the Regulations which correspond thereto that have been adopted by the relevant regulatory authorities. |
1.41 | PIN means the confidential personal identification number used by a Cardholder to authenticate the use of a Card to initiate certain types of Transactions. |
1.42 | PIN Security and Encryption Keys Review means a review which is conducted from time to time to determine if the Company is following the policies and procedures established by the Bank and by the Networks to ensure security and control is maintained in any access device that manages cardholder PINs and encryption keys. |
1.43 | POS Device POS Kiosk means a Network compliant Card Authorization device capable of transmitting encrypted Cardholder information to the Card-issuing bank for the purpose of obtaining approval for a requested amount to be distributed to the Cardholder by a Customer. |
1.44 | Privacy Regulations mean Title V of the Graham-Leach-Bliley Act 15 USC Section 6801 et seq and the Privacy Regulations adopted by the relevant Regulatory Authorities. |
1.45 | Processor means an entity that provides Processing Services for Transactions covered under this Agreement as a Designated Processor or as a Third Party Processor. |
1.46 | Processing Services means those services which are necessary and required to accept or originate a Transaction to or from a Network in accordance with the Rules, including without limitation, Transaction processing, Settlement, Network access, and support. |
1.47 | Quasi Cash Processor means the entity designated by Company and acceptable to Bank, to perform the withdrawal or deposit of funds from the accounts of the Cardholders at Visa, and MasterCard member financial institutions in conjunction with Quasi Cash Transactions and the transmission of such funds to the person or entities entitled thereto. |
Page 4 of 23
1.48 | Quasi Cash Transaction means a Transaction whereby the Cardholder uses a Card at a Terminal, POS Kiosk or directly with the cashier at the Merchant Casino to obtain an Authorization and then uses the Authorization to permit a Merchant Casino to generate a Negotiable Instrument that may be cashed, followed by Settlement of the Transaction per the Rules of MasterCard, Visa or any Network where the Bank is a Member and allows such Quasi Cash Transactions. |
1.49 | Regulations mean the federal and state statutes and regulations, including Regulation E and Regulation Z, and the policies and pronouncements of any Regulatory Authority, as the same may be amended or supplemented from time to time which are applicable to this Agreement and the Transactions and/or other activities under this Agreement. |
1.50 | Regulatory Authority means, as the context requires, the Office of the Comptroller of Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, Texas State Banking Department and any other federal or state agency having jurisdiction over Bank. |
1.51 | Rules means the Operating Rules, Regulations, By-Laws and other written documents which are adopted and amended from time to time by the Networks and which set forth the rights and obligations of Members and other Participants and which otherwise govern the processing of the Items and settling of the Transactions by the Networks. |
1.52 | Settlement means the movement and reconciliation of funds between the Participants that result in the withdrawal or deposit of funds from the account of the Cardholder with the Issuer. |
1.53 | Surcharge Fee means a fee deducted from a Cardholders account by an Acquirer or Acquirer Processor for a Transaction initiated at a Terminal. |
1.54 | Switch means the routing of the electronic information generated by a Transaction through the Network systems. |
1.55 | Terminal means an ATM, POS Device or other machine with the capability to accept Cards for the purpose of dispensing cash, or engaging in other types of transactions agreed to in writing by the Parties and in compliance with all applicable Rules. |
1.56 | TG-3 (reclassified as a Technical Report, TR-39) means Technical Guideline, 3 rd version of the ANSI.X9 Financial Industry Standards PIN and Security Review to manage key components. |
1.57 | Third Party means a Third Party Sales Representative, Encryption Service Organization (ESO), Third Party Processor, Third Party Servicer, merchant, investor, or any other Person or entity (other than Company) who places, sells, invests in, provides locations, provides maintenance services, encryption services and/or cash services, audits or otherwise receives income by reason of any Terminal operated under this Agreement. |
1.58 | Third Party Processor or TPP means an entity other than Company who provides Processing Services for Transactions under this Agreement and does not have direct connection to Networks that require such TPP Agreements. |
1.59 | Third Party Servicer or TPS means an entity that is not a Member of a Network but provides services related to the deployment of Terminals under this Agreement such as: transaction processing, data capture, other administrative functions such as chargeback processing, risk security reporting and customer service. |
Page 5 of 23
1.60 | Third Party Sales Representative (TPSR) means each Person or entity not directly employed by the Company that acts as a sales representative for and on behalf of the Company in the marketing, sale and placement of Terminals for the conduct of Terminal Transactions under this Agreement. |
1.61 | Transaction(s) means one or more transactions that are initiated by a Cardholder through the use of a Card at a Terminal, or such other transaction types approved by the Parties in writing, including but not limited to, cash withdrawals or disbursements, balance inquiries, or transactions involving the sale of a Negotiable Instrument in accordance with applicable Rules and Regulations. |
| Company shall monitor ATM Operators and ensure each are in compliance with all of the terms and provisions of the ATM Operator Agreement; |
| Company shall notify Bank promptly upon acquiring knowledge of (i) each potential or threatened claim or liability against Bank by any Person whatsoever based upon or arising out of an ATM Operator Agreement; and (ii) each suspected, threatened or possible violation of any Rule or Regulation by an ATM Operator. |
Page 6 of 23
Page 7 of 23
i. | Financial Information - As soon as possible or in any event within ninety (90) days after each December 31 (or at the end of the Companys calendar year) during the term of the Agreement, Company will provide Bank, at Banks request, with a copy of the consolidated quarterly and/or annual financial statements of Global Cash Access Holdings, Inc. ( Holdings ), as applicable. Notwithstanding the above, should the Bank request additional financial information concerning the Company, the Company will comply with such a request within thirty (30) business days of receipt of such request or such other time period as agreed upon by the Parties. |
ii. | Insurance Company will obtain and maintain insurance coverage covering; errors and omissions, commercial liability and employee dishonesty, fidelity and crime coverage for all Company employees, officers, and agents, with a minimum of $1,000,000 each and every claim and in the aggregate. Companys insurer must have a Bests rating of A or better. Any adverse material change in the policy or cancellation must be promptly reported to Bank. Upon request of the Bank, Company shall provide a Certificate of Insurance, evidencing the foregoing insurance coverage requirements. |
iii. | Annual Review Bank may annually conduct a review of Company information in this Section 2.6(c) and Company will cooperate with Bank in performing such annual review. Company will be charged an annual review due diligence fee of $250.00 each year. |
iv. | MCC Codes Company will be aware of and utilize correct merchant MCC for Quasi Cash and other terminal transactions and all Network rules concerning Quasi Cash processing and settlement of Interchange. |
Page 8 of 23
i. | Criminal felony conviction; |
ii. | Bankruptcy filing or petition; |
iii. | Federal or state tax lien; |
iv. | Administrative or enforcement proceedings commenced by the Securities and Exchange Commission, any state securities Regulatory Authority, Federal Trade Commission, or any other state or federal Regulatory Authority; or |
v. | Pleading, restraining order, decree, injunction, or judgment in any proceeding or lawsuit, alleging fraud, deceptive practice or criminal felony action on the part of the Company. |
Page 9 of 23
Page 10 of 23
Page 11 of 23
Page 12 of 23
Page 13 of 23
Page 14 of 23
Page 15 of 23
i. | Failure of either party to observe or perform that partys obligations to the other hereunder, as long as the failure or nonperformance is not due to the actions of the terminating party and such failure remains uncured for a period of sixty days after written receipt of written notice from the other Party; or |
ii. | The breach of any material warranty or representation herein that is not capable of being cured. |
i. | Its membership in a Network is terminated but only with respect to the sponsorship services as it relates to the affected Network; or |
ii. | Any Regulatory or Network Authority over Bank that requires, requests or recommends discontinuance of this Agreement (provided that Bank and Company shall discuss in good faith if there are any remedial measures or steps that can be taken to address the issues or concerns that are the basis for any order, request or recommendation for discontinuance of this Agreement); or |
iii. | Bank determines that Banks continued performance under the terms of this Agreement would constitute an unsafe or unsound banking practice, and Bank so certifies to Company in writing. |
Page 16 of 23
Page 17 of 23
Page 18 of 23
Page 19 of 23
If to Bank to:
|
American State Bank | If to Company to: | ||
|
1401 Avenue Q | Global Cash Access, Inc. | ||
|
Lubbock, TX 79408 | 3525 E. Post Road, Suite 120 | ||
|
Facsimile: (806) 472-3555 | Las Vegas, NV 89120 | ||
|
Attn: Michael Epps | Facsimile: (702) 262-5039 | ||
|
Attn: General Counsel | |||
|
||||
Copy to:
|
McWhorter Cobb and Johnson | |||
|
1722 Broadway | |||
|
Lubbock, Texas 79401 | |||
|
Facsimile: (806) 762-8014 | |||
|
Attn: Jack P. Driskill |
Page 20 of 23
Page 21 of 23
AMERICAN STATE BANK
|
||||
By: | /s/ Jamie Bigley | |||
Name and Title: Jamie Bigley, VP | ||||
Date: 2-11-11 |
||||
GLOBAL CASH ACCESS, INC.
|
||||
By: | /s/ Scott Betts | |||
Name and Title: Scott Betts, CEO/President | ||||
Date: 2-8-11 |
Page 22 of 23
A. | Application Fee, Due Diligence, On-site Inspection, Pin Security Review, Implementation [***] |
B. | Minimum Monthly Fee [***] |
C. | Transaction Fees [***] times all transactions |
D. | Network Fees for ISO Registration (required with application) |
i. | __STAR [***] Registration Fee*, [***] Annual Fee |
ii. | __PULSE [***] Registration Fee, [***] Annual Fee |
iii. | __Visa/Interlink/Plus [***] Registration Fee*, [***] each bank |
iv. | __MasterCard/Maestro/Cirrus [***] Registration Fee, [***] Annual Fee each bank |
v. | __NYCE Registration fee waved [***] monthly fee |
vi. | __Shazam No registration fee |
vii. | __AFFN No registration fee Check with your processor for any other fees and charges. |
viii. | __ACCEL/Exchange Registration Fee Various |
* | Mandatory Class Requirement | ||
Note: | It is the ISOs responsibility to check with their appropriate processor(s) for any processor registration cost that may exist. |
E. | Any State or City ATM Fees |
F. | Annual Due Diligence Fee [***], and on site inspection expenses |
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Interest expense per financial
statements (1)
|
$ | 16,489 | $ | 18,263 | $ | 30,117 | $ | 38,146 | $ | 42,098 | ||||||||||
Interest expense related to rent (2)
|
363 | 206 | 221 | 193 | 164 | |||||||||||||||
|
||||||||||||||||||||
Total fixed charges
|
$ | 16,852 | $ | 18,469 | $ | 30,338 | $ | 38,339 | $ | 42,262 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Net income per financial statements
|
$ | 17,550 | $ | 33,582 | $ | 25,556 | $ | 23,704 | $ | 26,609 | ||||||||||
Interest expense
|
16,489 | 18,263 | 30,117 | 38,146 | 42,098 | |||||||||||||||
Minority loss
|
(56 | ) | 56 | 86 | 236 | 183 | ||||||||||||||
|
||||||||||||||||||||
Total earnings
|
$ | 33,983 | $ | 51,901 | $ | 55,759 | $ | 62,086 | $ | 68,890 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges
|
2.0 x | 2.8 x | 1.8 x | 1.6 x | 1.6 x |
(1) |
Interest expense includes interest expense on ATM funding arrangements, borrowings and the
amortization of capitalized debt issuance.
|
|
(2) |
One-third of all rental expense is deemed to be interest.
|
Name | Jurisdiction of Incorporation or Organization | |
|
||
Global Cash Access, Inc.
|
Delaware | |
Cash Systems, Inc.
|
Delaware | |
Global Cash Access (Canada) Inc.
|
Ontario, Canada | |
Global Cash Access (Panama), Inc.
|
Panama | |
Game Financial Caribbean, N.V.
|
Netherlands, Antilles | |
Global Cash Access (Belize), Limited
|
Belize | |
Central Credit, LLC
|
Delaware | |
Global Cash Access (BVI) Inc.
|
British Virgin Islands | |
Arriva Card, Inc.
|
Delaware | |
Global Cash Access Switzerland A.G.
|
Switzerland | |
Global Cash Access (HK) Ltd.
|
Hong Kong | |
GCA (Macau) S.A.
|
Macau SAR | |
Global Cash Access (Belgium) S.A.
|
Belgium | |
Global Cash Access (UK) Limited
|
United Kingdom | |
Global Cash Access (SA) (Pty) Ltd.
|
South Africa | |
G.C.A., Inc.
|
St. Christopher, Nevis | |
Western Money Systems
|
Nevada |
1. |
I have reviewed this annual report on Form 10-K of Global Cash Access Holdings, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;
|
4. |
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is
being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles;
|
c) |
evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
|
d) |
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and
|
5. |
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and
|
b) |
any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting.
|
Dated: March 14, 2011
|
By: | /s/ Scott Betts | ||||
|
|
|||||
|
Chief Executive Officer |
1. |
I have reviewed this annual report on Form 10-K of Global Cash Access Holdings, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;
|
4. |
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is
being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles;
|
c) |
evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
|
d) |
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and
|
5. |
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and
|
b) |
any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting.
|
Dated: March 14, 2011
|
By: | /s/ Mary E. Higgins | ||||
|
|
|||||
|
Chief Financial Officer |
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934, and
|
(2) |
the information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company at the dates and for the
periods indicated.
|
Dated: March 14, 2011
|
By: | /s/ Scott Betts | ||||
|
|
|||||
|
Chief Executive Officer |
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934, and
|
(2) |
the information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company at the dates and for the
periods indicated.
|
Dated: March 14, 2011
|
By: | /s/ Mary E. Higgins | ||||
|
|
|||||
|
Chief Financial Officer |