EXHIBIT 10.3
SERVICES AGREEMENT
This SERVICES AGREEMENT (this "Agreement") entered into on , ,
1997, is made effective as of the effective date of the initial public offering
of Common Stock on Registration Statement Form S-1 (the "Effective Date") of
Franchise Mortgage Acceptance Company, a Delaware corporation ("FMAC"), by and
between IMPERIAL CREDIT INDUSTRIES, INC., a California corporation ("ICII") and
FMAC.
For good and valuable consideration, the adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Services. From the Effective Date, up to and including ___________,
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1997, (the "Initial Term"), ICII will perform those services (the "Services")
requested by FMAC including general administrative services, data processing,
accounts payable, all as enumerated on Exhibit "A" attached hereto. This
Agreement is renewable annually, at the option of the parties, after the
completion of the Initial Term. Either FMAC or ICII may terminate audit, tax
planning or insurance services if ICII should cease to own at least any of the
outstanding voting stock of FMAC. ICII will continue to perform the Services
until the last day of the month (the "Termination Date") following the month in
which FMAC provides ICII with a written notice of its election to terminate any
aspect of the Services. ICII will have no further duty to perform the Services
after the Termination Date.
As part of the services to be provided under this Agreement, ICII will
continue to provide FMAC with insurance coverages and self insurance programs
(collectively "Insurance Coverage Programs") including health insurance, public
liability, workers' compensation, property damage, business interruption,
fiduciary liability and surety bonds. The charge to FMAC for coverage will be
based upon a pro rata portion of the costs to ICII for such coverage under the
various policies. The charge for the insurance will be renegotiated annually
based upon ICII's costs for the insurance and FMAC's loss experience.
2. Compensation. FMAC will pay ICII's fees for enumerated Services
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pursuant to the schedule of charges set forth on Exhibit "B" attached hereto,
and for any other Services, FMAC will pay ICII fees which will be determined by
the parties and will vary depending on the Services utilized. ICII will provide
FMAC with an invoice for the Services not later than thirty (30) days following
the close of any fiscal period in which such Services are rendered. ICII and
FMAC will renegotiate the fees annually in order to have the fees reflect the
direct and allocated costs of providing the Services.
3. Documentation and Disputes. In the event that any of ICII's charges
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are based upon hourly rates or upon allocation of a combined cost, FMAC will be
provided upon request with documentation supporting the amount charged and will
be entitled to contest any charge, provided that FMAC timely pays all contested
amounts.
4. Confidential Information. (a) The parties agree: (i) to hold in
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trust and maintain confidential, (ii) not to disclose to others without prior
written approval from the disclosing party, (iii) not to sue for any purpose,
other than such purpose as may be authorized in writing by the
disclosing party, and (iv) to prevent duplication of and disclosure to any other
party, any Information received from the disclosing party or developed,
presently held or continued to be held, or otherwise obtained, by the receiving
party under this Agreement.
(b) "Information" shall mean all results of the Services, Information
disclosed by either party orally, visually, in writing, or in other tangible
form, and includes, but is not limited to, technical, economic plans, computer
Information data bases, and the like in connection with this Agreement.
(c) The foregoing obligations of confidentiality, non-disclosure and
non-use shall not apply to any Information to the extent that the obligated
party can show that: (i) such Information is or becomes knowledge generally
available to the public other than through the acts or omissions of the
obligated party; (ii) such Information is subsequently received by the obligated
party on a non-confidential basis from a third party who did not receive it
directly or indirectly from the disclosing party; (iii) such Information is
developed independently by the obligated party without reference to the
Information; or (iv) disclosure of such Information is required under applicable
law or regulations.
Specific elements of Information shall not be deemed to come under the
above exceptions merely because they are embraced by more general Information
which is or becomes public knowledge.
5. Standard of Care. ICII shall perform the Services for FMAC with the
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same degree of care, skill and prudence customarily exercised by it for its own
operations.
6. Indemnification. ICII shall indemnify, defend and hold FMAC, its
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directors, officers and employees harmless from and against all direct damages,
losses and out-of-pocket expenses (including reasonable legal fees) caused by or
arising out of any failure in the performance of any obligation or agreement of
ICII hereunder.
7. Assignment or Transfer. Neither party shall assign or transfer any of
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its rights under this Agreement without the prior written approval of the other
party, except no such approval shall be required for an assignment to an
affiliate or a successor to all or a substantial portion of the assets or the
business of either party, provided that such affiliate or successor assumes such
party's obligations hereunder with respect to the rights assigned or
transferred.
8. Notices. All notices, requests, demands and other communications
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provided for hereunder shall be in writing (including telegraphic or facsimile
communications) and shall be mailed (return receipt requested), telegraphed,
sent by facsimile or delivered to each party at the address set forth as
follows, or at such other address as either party may designate by notice to the
other, and any such notice, request, demand or other communication shall be
effective upon receipt. All payments required in this Agreement shall be paid to
and delivered to the party as provided herein for notice.
If to FMAC: Franchise Mortgage Acceptance Company
2049 Century Park East, Suite 350
Los Angeles, California 90067
Telephone: (310) 229-2600
Facsimile: (310) 277-1674
Attention: Wayne L. Knyal
Chief Executive Officer and President
If to ICII: Imperial Credit Industries, Inc.
23550 Hawthorne Boulevard
Building 1, Suite 210
Torrance, California 90505
Telephone: (310) 791-8040
Facsimile: (310) 791-8230
Attention: Irwin L. Gubman
General Counsel
9. Severability. In the event any provision of this Agreement is held
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invalid or unenforceable, such holding shall not invalidate nor render
unenforceable any other provision hereof.
10. Governing Law. This Agreement shall be construed in accordance with
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the laws of the State of California.
11. Reference Provision.
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(a) Each controversy, dispute or claim between the parties arising out
of or relating to this Agreement, which controversy, dispute or claim is not
settled in writing within thirty (30) days after the "Claim Date" (defined as
the date on which a party subject to the Agreement gives written notice to all
other parties that a controversy, dispute or claim exists) , will be settled by
a reference proceeding in Orange County, California, in accordance with the
provisions of Section 638 et seq. of the California Code of Civil Procedure, or
their successor section ("CCP") , which shall constitute the exclusive remedy
for the settlement of any controversy, dispute or claim concerning this
Agreement, including whether such controversy, dispute or claim is subject to
the reference proceeding and the parties waive their rights to initiate any
legal proceedings against each other in any court or jurisdiction other than the
Superior Court of Orange County (the "Court"). The referee shall be a retired
Judge of the Court selected by mutual agreement of the parties, and if they
cannot so agree within forty-five (45) days after the Claim Date, the referee
shall be promptly selected by the Presiding Judge of the Orange County Superior
Court (or his representative). The referee shall be appointed to sit as a
temporary judge, with all of the powers for a temporary judge, as authorized by
law, and upon selection should take and subscribe to the oath of office as
provided for in Rule 244 of the California Rules of Court (or any subsequently
enacted Rule). Each party shall have one preemptory challenge pursuant to CCP
170.6. The referee shall (a) be requested to set the matter for hearing within
sixty (60) days after the Claim Date and (b) try any and all issues of law or
fact and report a statement of decision upon them, if possible, within ninety
(90) days of the Claim Date. Any decision rendered by the referee will be
final, binding and conclusive and judgment shall be entered pursuant to CCP 644
in any court in the State of California having jurisdiction. Any party may
apply for a reference at any time after thirty (30) days following notice to any
other party of the nature of the controversy, dispute or claim, by filing a
petition for a hearing and/or trial. All
discovery permitted by this Agreement shall be completed no later than fifteen
(15) days before the first hearing date established by the referee. The referee
may extend such period in the event of a party's refusal to provide requested
discovery for any reason whatsoever, including, without limitation, legal
objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and, request for production or inspection of documents shall be
responded to within ten (10) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding upon the parties.
(b) Except as expressly set forth in this Agreement, the referee shall
determine the manner in which the reference proceeding is conducted including
the time and place of all hearings, the order of presentation of evidence, and
all other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the
close of the reference proceeding which shall dispose of all of the claims of
the parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of law, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
(d) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Orange County Superior
Court, in accordance with the California Arbitration Act, Sections 1280 through
1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery as set forth hereinabove shall apply to any such arbitration
proceeding.
12. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Services Agreement is made as of the day and year
first above written.
FRANCHISE MORTGAGE ACCEPTANCE COMPANY
By:_______________________________
Name: Wayne L. Knyal
Title: Chief Executive Officer and President
IMPERIAL CREDIT INDUSTRIES, INC.
By:_______________________________
Name: H. Wayne Snavely
Title: Chairman
EXHIBIT A
SCHEDULE OF SERVICES
EXHIBIT B
SCHEDULE OF FEES
Human Resources
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All human resources services, including payroll, 401K profit sharing, ESOP,
employment services, industrial relation services, compensation consulting,
grievance resolution, and organization, development and training
$100 per month per employee employed at the end of each month
Operations and Accounting
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General ledger accounts - $0.50 per general ledger account per month
Check processing - $0.50 per item
Accounts payable - $1.00 per invoice
Data processing - Salary and overhead for personnel providing services
Accounting - Salary and overhead for personnel providing services