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Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o


(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

Prior to this offering there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $ per share and $ per share. We expect to qualify our common stock for quotation on The Nasdaq National Market under the symbol “CATM.”

We are selling shares of common stock and the selling stockholders are selling shares of common stock. We will not receive any proceeds from the shares of common stock sold by the selling stockholders.

The underwriters have an option to purchase a maximum of additional shares from us to cover over-allotments of shares.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 7.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse First Boston


	Bear, Stearns & Co. Inc.


	Wachovia Securities


	William Blair & Company

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Cardtronics is our registered trademark. This prospectus contains trade names, trademarks and service marks of other companies. We do not intend our use or display of other parties’ trade names, trademarks or service marks to imply a relationship with, or the endorsement or sponsorship of, these other companies.

Until , 2004 (25 days after the commencement of the offering), all dealers that effect transactions in these securities, whether or not participating in the offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

This summary highlights information contained elsewhere in this prospectus. This summary sets forth the material terms of the offering, but does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully before making an investment decision, especially the risks of investing in our common stock discussed under “Risk Factors.” The terms “we,” “us,” “our” and “Cardtronics” refer to Cardtronics, Inc. and its subsidiaries, unless the context otherwise requires. We refer to automated teller machines as ATMs throughout this prospectus. Industry data is derived from publicly available sources that we have not independently verified, unless otherwise indicated.

We own and operate one of the largest and fastest growing networks of ATMs in the United States. On the date of this prospectus, our network included over 12,000 ATMs operating in all 50 states. For the three months ended December 31, 2003, our ATMs dispensed over $1.2 billion in cash and processed more than 20.5 million transactions. Our nationwide ATM network is strengthened by relationships with nationally known merchants in a variety of businesses, such as Amerada Hess, Circle K, Costco, Duane Reade, ExxonMobil, Mills Malls, Sunoco, Walgreens and Winn-Dixie. Our merchant customers operate high consumer traffic locations, such as convenience stores, supermarkets, membership warehouses, drug stores, shopping malls and in airports. Our merchant relationships are typically governed by multi-year contracts with initial terms of five years or more.

Our revenue is recurring in nature and is primarily derived from ATM surcharge fees paid by cardholders and interchange fees paid by their financial institutions. We generate additional revenue by allowing financial institutions to brand our ATMs, resulting in added convenience for their customers and increased usage of our ATMs. We provide our merchant customers with all of the services required to operate an ATM, which may include transaction processing, cash management, maintenance and monitoring. We believe that our nationwide network of ATMs provides significant scale advantages that lower our operating costs. Our focus on customer service, together with our experience and scale, has enabled us to develop and maintain relationships with leading national and regional merchants.

We are the largest non-bank owner of ATMs with the fourth largest network of owned and managed ATMs as of September 2003, according to industry sources. Our ATM network has grown and financial results have improved significantly as a result of strategic acquisitions and organic growth initiatives. During the three years ended December 31, 2003, our ATM network grew from approximately 3,300 to over 12,000 ATMs, representing a compound annual growth rate, or CAGR, of 53.3%. From 2001 to 2003, the total number of annual transactions processed within our network increased from approximately 19.9 million to approximately 64.6 million, representing a CAGR of 80.3%. Our revenue increased from $45.1 million in the year ended December 31, 2001 to $110.4 million in the year ended December 31, 2003, representing a CAGR of 56.5%.

The ATM industry has undergone significant expansion in recent years, largely from growth in the number of ATMs installed at non-bank locations, which are referred to as off-premise ATMs. Off-premise ATMs are found at locations such as convenience stores, supermarkets, membership warehouses, drug stores, shopping malls, hotels and airports, offering a convenient alternative to obtaining cash from bank tellers or drive-through facilities. According to industry sources, ATMs are the preferred method of obtaining cash among cardholders by a margin of eight to one over any other method. Both merchants and their customers benefit from the presence of an ATM in a store. Merchants benefit from increased consumer traffic, reduced check-writing and credit card processing fees, and merchant fees received from


	•	the number of off-premise ATMs operated in the United States grew from approximately 156,000 in March 2000 to approximately 238,000 in March 2003, representing a CAGR of 15.1%;

	•	the number of off-premise ATMs in the United States outnumbered banking branches by nearly three times as of June 2003; and

	•	more than 64% of the ATMs in the United States were off-premise ATMs as of March 2003.

We believe significant opportunities exist in our industry for both organic and acquisition-driven growth for the following reasons:


	•	Continued industry growth. We expect that the number of transactions at off-premise ATMs will continue to grow as cardholders take advantage of the convenience and added functionality of ATMs. According to industry sources, approximately 77% of all ATM transactions are cash withdrawals, with the remainder representing other basic banking functions, such as balance inquiries, transfers and deposits. We believe significant opportunities exist for ATM owners and operators to provide advanced functionality, such as check cashing, off-premise deposits and withdrawals of cash from payroll cards, which will result in increased ATM usage. We anticipate that we will participate in this growth as our key merchants permit us to deploy and operate ATMs in more of their existing stores and in new store locations.

	•	Financial institution opportunities. We believe that our large ATM network is attractive to financial institutions seeking to extend their brand and service offerings to their customers. By branding our ATMs with their logos, financial institutions can interact with their customers more frequently, increase brand awareness and provide their customers increased service. In addition, while financial institutions have historically owned and operated most of their ATMs, we believe that some financial institutions are considering outsourcing certain ATM management functions in order to simplify operations and lower costs. We believe that increased off-premise branding and the outsourcing of ATM management functions for financial institutions should provide us with substantial opportunities for additional long-term growth. In addition, we believe some financial institutions may seek to divest all or a portion of their off-premise ATMs, which could provide us with acquisition opportunities.

	•	Industry consolidation. The non-bank off-premise ATM industry remains fragmented, with the top ten operators accounting for only approximately 29% of the non-bank off-premise ATMs in the United States, according to industry sources. Some ATM operators may lack the operational scale and financial resources required to effectively compete with us and other operators of large ATM networks for business and growth opportunities, which may result in asset sales by ATM operators. We believe that the existing fragmented ownership and the potential for divestitures will lead to future consolidation and provide us with numerous acquisition opportunities.


	•	Nationwide network of leading merchants under multi-year contracts. Our focus on customer service, together with our experience and size, has enabled us to develop and expand relationships with national and regional merchants, such as Duane Reade, Rite Aid, Amerada Hess, Kroger, Costco and Mills Malls. Our merchant contracts typically have an initial term of at least five years.

	•	Scaleable and low-cost operating structure. Our operating structure is efficient and scaleable. We outsource some functions, such as on-site maintenance and cash management, and can take advantage of our large scale to obtain favorable pricing from our vendors.

	•	Recurring and predictable revenue and operating cash flow. Our large base of ATMs is generally operated under multi-year contracts that provide us with a recurring and predictable source of


		transaction-based revenue. For the year ended December 31, 2003, we derived 92.3% of our total revenues from recurring ATM transaction and branding fees.

	•	Proven ability to grow. We have grown through both organic growth initiatives and strategic acquisitions.


	•	Organic growth. Since the beginning of 2001, our number of operated ATMs has grown by 2,990. This growth has been achieved by deploying ATMs in our merchants’ existing locations that currently do not have an ATM, installing ATMs in new locations as these merchants expand, adding new merchants and entering into branding arrangements.

	•	Acquisitions and integration. Since May 2001, we have acquired eight networks of ATMs. We typically integrate these acquisitions rapidly with reasonable associated costs and little or no increase in our number of employees. As a result, we have often significantly improved the operating cash flow of our acquired networks of ATMs.


	•	Exclusive focus on ATM industry. We believe we are the largest company in the United States exclusively focused on the ATM industry. We believe our success to date is largely attributable to our focus on generating maximum profitability at every ATM and our high level of customer service.

	•	Industry leadership and experienced management team. We have a strong management team with over 50 years of financial services and payment processing-related experience. Our senior management team has developed extensive contacts and a leadership position in the industry. We believe this leadership role has helped us to attract new merchant customers and has provided us with increased acquisition opportunities.

Our strategy is to enhance our position as the leading non-bank owner and operator of ATMs in the United States. In order to execute this strategy we will endeavor to:


	•	Increase penetration of our existing merchant base;

	•	Target additional leading merchants;

	•	Capitalize on opportunities with financial institutions; and

	•	Pursue strategic acquisitions.

In June 2001, CapStreet II, L.P. and CapStreet Parallel II, L.P. acquired a majority of the stock of Cardpro, Inc. At the time of the investment by The CapStreet Group, Cardpro, Inc. was converted into a Delaware limited partnership named Cardtronics, LP. Also, in June 2001, we incorporated Cardtronics Group, Inc. under the laws of the state of Delaware to act as a holding company, with Cardtronics Group, Inc. indirectly owning 100% of the equity of Cardtronics, LP. In January 2004, we changed our name from Cardtronics Group, Inc. to Cardtronics, Inc.

Our principal executive offices are located at 3110 Hayes Road, Suite 300, Houston, Texas 77082 and our telephone number is (281) 596-9988. Our website address is www.cardtronics.com. Information contained on our website is not part of this prospectus.


	•	to repay all outstanding indebtedness under our credit facility, which was approximately $31.4 million as of December 31, 2003;

	•	to redeem all outstanding shares of our series A redeemable preferred stock plus accrued and unpaid dividends, the aggregate redemption price for which was approximately $22.2 million as of December 31, 2003; and

	•	for working capital and general corporate purposes, which may include acquisitions.

Unless specifically indicated otherwise or unless the context otherwise requires, the information in this prospectus (1) gives effect to a -for-one stock split of our common stock that will occur immediately prior to the closing of the offering; (2) assumes the redemption of all 17,500 shares of our preferred stock, which redemption will occur concurrently with the closing of the offering; and (3) assumes no exercise of the underwriters’ over-allotment option.

The number of shares of common stock that will be outstanding after the offering is based on the number of shares outstanding as of December 31, 2003. This number does not include:


	•	shares of common stock issuable upon exercise of stock options outstanding as of December 31, 2003 pursuant to the 2001 Stock Incentive Plan; and

	•	an aggregate of shares of common stock reserved for future issuance under our 2004 Stock Incentive Plan.

The following summary consolidated financial and operating data should be read together with Management’s Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and related notes included elsewhere in this prospectus. The summary consolidated balance sheet data as of December 31, 2002 and 2003 and the summary consolidated statements of operations data for each of the three years in the three year period ended December 31, 2003 have been derived from our audited consolidated financial statements included elsewhere in this prospectus.


(1)	Reflects a stock compensation charge of $1.5 million after taxes related to the vesting of all stock options in connection with changes in our ownership structure. See note 1(a) to our financial statements.

(2)	Reflects a stock compensation charge of $1.0 million after taxes related to variable accounting on a restricted stock grant. See note 4 to our financial statements.

(3)	Other revenues consist of revenues from the sale of equipment to our associate value added resellers, or VARs.

(4)	Other consists of losses on the sale or disposal of assets.

(5)	Reflects the effect of our adoption of SFAS 143. See “Managements Discussion and Analysis of Financial Condition and Results of Operations — New Accounting Standards” and note 1(p) to our consolidated financial statements.

(6)	Does not give effect to the stock split that is expected to be completed in connection with the offering.

(7)	Reflects the sale by us of the shares of common stock offered hereby, deduction of estimated underwriting discounts and commissions and offering expenses payable by us, the application of the estimated net proceeds from this offering to repay approximately $31.4 million of outstanding indebtedness and the redemption by us of all of our outstanding shares of preferred stock on the date of the closing of this offering.

(8)	The amount reflected on our balance sheet is net of issuance costs of $0.9 million. The aggregate redemption price for the preferred stock was $22.2 million as of December 31, 2003.

Investing in our common stock involves risks. Before making an investment in our common stock, you should carefully consider the following risks, as well as the other information contained in this prospectus, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The risks described below are those which we believe are the material risks we face. Any of the risk factors described below could significantly and adversely affect our business, prospects, financial condition and results of operations. As a result, the trading price of our common stock could decline and you may lose all or part of your investment.

We rely on agreements with Palm Desert National Bank and First Bank & Trust to provide us with all of the cash that we use in approximately 4,700 of our ATMs where cash is not provided by the merchant. This cash is referred to as “vault cash” under federal banking regulations, and throughout this prospectus we refer to our vault cash arrangement with these providers as our cash management program. As of December 31, 2003, the balance of cash from these providers held in our ATMs was $237.7 million, a substantial majority of which was from Palm Desert. We pay a fee for our usage of their cash based on the total amount of the cash that we are using at any given time. At all times during our use of this cash, it belongs to the cash providers, and the cash providers have the right to demand the return of all or any portion of their cash at any time upon the occurrence of certain events beyond our control. If these providers were to demand return of their cash or terminate their arrangement with us and remove their cash from our ATMs, or if they were to fail to provide us with cash as and when we need it for our ATM operations, our ability to operate these ATMs would be adversely affected, and we would need to locate alternative sources of cash in order to operate these ATMs. We can give no assurance that alternate sources would be available on reasonable terms or at all. Additionally, if our cash providers were to increase their fees to such an extent that our use of their services were no longer commercially feasible, we would need to seek alternate arrangements for cash provision and management. We are currently exploring supplemental and alternative arrangements for providing cash for use in our ATMs, but we have not entered into any such arrangements at this time. See “Business — Government Regulation.”

The ATM industry involves the electronic transfer of funds. The Federal Electronic Funds Transfer Act provides the basic framework establishing the rights, liabilities and responsibilities of participants in electronic funds transfer, or EFT, systems. Additionally, some states have varying obligations such as notification or bank sponsorship requirements for the operation of an ATM within the state. In the event that these regulations are made more restrictive or new regulations are enacted, the cost of complying with such regulations could increase significantly, which would reduce or eliminate our operating income. Additionally, there have been various state and local efforts to ban or limit surcharge fees, which make up a large portion of our revenues. We can offer no assurance that surcharge fees will not be banned or limited in the future in the cities and states where we operate. The passage of legislation banning or limiting surcharge fees could result in a substantial loss of revenues or a total loss of our business.

The Americans with Disabilities Act, or ADA, currently includes provisions regulating the amount of clear floor space required in front of each ATM, prescribing the maximum height and reach depth of each ATM, and mandating that instructions and all information for use of the ATM be made accessible to and independently usable by persons with vision impairments. The Department of Justice is currently in the process of issuing new accessibility guidelines under the ADA that will cover virtually all aspects of commercial activity vis-à-vis the disabled. We expect that these new guidelines will include provisions addressing ATMs and how to make them more accessible to the disabled. Under the current proposals, height and reach requirements would be shortened, keypads would be required to be laid out in the manner of telephone keypads, and ATMs would be required to possess speech capabilities. These new

guidelines would affect the manufacture of ATM equipment going forward, and could require us to retire or retrofit many of the ATMs in our network. We are unable at this time to determine whether, and to what extent, any new regulations will impact our business.

In recent years, advances in data encryption have made ATMs more tamper-resistant. One of the more recently developed advanced data encryption standards is commonly referred to as Triple DES. Triple DES encryption helps to ensure the security of data transmitted in connection with ATM transactions. As of December 31, 2003, most of our ATMs, like the vast majority of ATMs across the nation, were not equipped with Triple DES encryption. We have adopted a policy that any new ATMs that we acquire from a manufacturer must be Triple DES compliant. We have budgeted $15.0 million to accomplish the Triple DES conversion of all of our ATMs by the end of 2007. Currently, MasterCard International, which is an operator of one of the nation’s largest EFT networks, has advised all ATM operators that any ATM using its network must be Triple DES compliant by March 31, 2005. We have requested an extension of this deadline. If the extension is not granted, we will either have to accelerate our conversion plan to meet MasterCard’s deadline, or we will use alternate network providers. We are unable at this time to determine whether, and to what extent, a failure to obtain an extension from MasterCard or the use of alternate network providers will impact our business.

In addition, there have been reports in the press regarding the fraudulent use of ATMs. As a result, legislation currently is being considered that would require state or federal licensing and background checks of ATM operators. Some jurisdictions, including California, New York and New Jersey, have proposed requiring the licensing of non-financial institution ATM merchants, and other jurisdictions currently require such licensing. New license requirements could increase our cost of doing business in those markets. We cannot predict how we will be affected by the implementation of any such licensing requirements.

For the year ended December 31, 2003, we derived approximately 30.1% of our total revenues from ATMs placed at the locations of our five largest merchants. We expect to continue to depend upon a relatively small number of merchants for a significant percentage of our revenues. The loss of any of our largest merchants, or a decision by any one of them to reduce the number of our ATMs placed in their locations, would decrease our revenues. In addition, our contract with one of our five largest merchants expires in October 2004. These merchants may elect not to renew their contracts when they expire. Even if such contracts are renewed, the renewal terms may be less favorable to us than the current contracts. If any of our five largest merchants fail to renew their contracts upon expiration, or if the renewal terms with any of them are less favorable to us than under our current contracts, this could have a material adverse impact on our business, growth, financial condition and results of operations.

Furthermore, our third largest merchant, which accounted for 5.6% of our total revenues in 2003, has recently announced a restructuring of its operations in response to financial and operational difficulties. Though we are unable to predict what effect, if any, these difficulties will have on the revenues generated from our ATMs located in their stores, any negative effect could have a material adverse impact on our business, growth, financial condition and results of operations.

The ATM business is and can be expected to remain highly competitive. While our principal competition comes from national and regional financial institutions, we also compete with other independent ATM companies. Some of these competitors offer services similar to ours. Several of these competitors are larger, more established and have greater financial and other resources than we do. Such competition could prevent us from obtaining or maintaining desirable locations for our ATMs, cause us to

reduce the surcharge revenue generated by transactions at our ATMs or cause us to pay higher merchant fees, thereby reducing our profits. In addition to our current competitors, additional competitors may enter the market. We can offer no assurance that we will be able to compete effectively against these current and future competitors. Increased competition could result in transaction fee reductions, reduced gross margins and loss of market share.

The continued expansion and development of our business will depend on various factors, including the increases in demand for ATM services in the market, the ability to locate appropriate ATM sites and obtain necessary approvals for the installation and operation of ATMs, the ability to install ATMs in an efficient and timely manner, the expansion of our business into new markets as currently planned, the ability to obtain sufficient numbers of ATMs from manufacturers on a timely basis and the availability of financing for such expansion. In addition, such expansion may involve acquisitions which, if made, could involve other risks, including the following:


	•	the operations, technology and personnel of any acquired companies may be difficult to integrate;

	•	the allocation of management resources to consummate these transactions may disrupt our day-to-day business; and

	•	acquired networks may not achieve anticipated revenues, earnings or cash flow. Such a shortfall could require us to write down the carrying value of the intangible assets associated with any acquired company, which would adversely affect our reported earnings.

Since May 2001, we have acquired eight ATM networks. To date, we have acquired the assets of deployed ATM networks, rather than companies and their related infrastructure. Although we anticipate that future acquisitions will be of the same nature, it is possible that we may elect to acquire an existing company or the operations, technology and personnel of another ATM provider. If we do so, we may assume some or all of the liabilities associated with the acquired company and face new and added challenges integrating this acquisition into our operations.

In addition, our recent growth and any future growth may strain our management systems, information systems and resources. We will need to continue to invest in and improve our financial and managerial controls, reporting systems and procedures as we continue to grow and expand our business. As we grow, we must also continue to hire, train, supervise and manage new employees. We may not be able to hire, train, supervise and manage sufficient personnel or develop management and operating systems to manage our expansion effectively.

Any inability on our part to manage effectively our past or future growth or to successfully grow the revenue and profitability of our business could have a material adverse effect on our business, growth, financial condition and results of operations. See “Business — Strategy.”

Since May 2001, we have acquired eight ATM networks. These acquisitions contributed a substantial portion of our total revenues in the year ended December 31, 2003. The full impact of these acquisitions on our operating results is not fully reflected in our historical results of operations due to their recent nature and their varying degrees of integration during those periods. As a result, our historical results may not be indicative of results to be expected in future periods.

Our interest expense and our cash management costs are based in part on floating interest rates. Therefore, these expenses are sensitive to changes in interest rates. Any rise in interest rates could have an

Our ability to provide reliable service largely depends on the efficient and uninterrupted operations of our transaction processors, telecommunications network systems and other service providers. Any significant interruptions could severely harm our business and reputation and result in a loss of revenue. Additionally, if any such interruption is caused by us, such interruption could result in the loss of the affected merchants or damage our relationships with such merchants. Our systems and operations and those of our transaction processors and our EFT network and other service providers, could be exposed to damage or interruption from fire, natural disaster, unlawful acts, terrorist attacks, power loss, telecommunications failure, unauthorized entry and computer viruses. We cannot be certain that any measures we and our service providers have taken to prevent system failures will be successful or that we will not experience service interruptions. Further, our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur.

Transaction fees charged to cardholders and their financial institutions for transactions processed on our ATMs, including surcharge and interchange transaction fees, have historically accounted for most of our revenues. We expect that revenues from ATM transaction fees will continue to account for a substantial majority of our revenues for the foreseeable future. Consequently, our future operating results will depend on (1) the continued market acceptance of our services in our target markets, (2) maintaining the level of transaction fees we receive, (3) our ability to install, acquire and operate more ATMs and (4) continued usage of our ATMs by cardholders. For example, increased acceptance of credit and debit cards by merchants and service providers or any loss of confidence by the consuming public in the safety and security of ATM transactions could result in decreased usage of our ATMs. In addition, it is possible that alternative technologies to our ATM services will be developed and implemented. If such alternatives are successful, we will likely experience a decline in the usage of our ATMs. A decline in usage of our ATMs by ATM cardholders or in the levels of fees received by us in connection with such usage would have a material adverse impact on our business, growth, financial condition and results of operations.

Recently, there have been reports in the press regarding the use of ATMs to defraud cardholders and their financial institutions. We cannot assure you that we can prevent the unauthorized use of ATMs to defraud cardholders and financial institutions. Although the Electronic Funds Transfer Act and its implementing regulations generally place the risk of such fraud with regard to the consumer and the card issuer upon the card issuer, such fraudulent activity could nevertheless expose us to protracted and costly litigation.

As new technology that increases ATM functionality is developed, our existing ATMs could become obsolete. We expect new uses of ATMs to continue to be developed by manufacturers and others, that will compete with, and may reduce the demand for, our products and services. Our products’ life cycles are difficult to estimate. Our future success may depend on our ability to enhance our current products and to introduce new products or services that keep pace with technological developments and emerging industry standards. We can offer no assurance that we will be successful in developing new services and marketing,

licensing and selling new products, product enhancements or services that meet changing cardholder, merchant and EFT network demands. Nor can we offer any assurance that we will not experience delays in developing new services and introducing and marketing new products or services or that our new products, product enhancements or services will adequately meet the demands of the marketplace and achieve market acceptance.

We rely on agreements with several EFT network providers, transaction processors and maintenance providers to enable us to provide card authorization, data capture, settlement and maintenance services to the merchants we serve. Although typically these agreements are for periods of up to two or three years each, some expire this year. Any inability on our part to renew these agreements with these or similar service providers or our failure to perform services efficiently and effectively may adversely affect our relationships with our merchants and may permit those merchants to terminate their agreements with us.

Our success depends upon the continued services of our senior management and other key employees, including Jack Antonini, our President and Chief Executive Officer. In addition, our success depends in large part upon the reputation and influence within the industry of our senior management. The loss of the services of one or more of our key employees may have an adverse effect on our operations. Any damage to the reputation of our senior management may adversely affect our business. We do not maintain any key person life insurance on any of our employees.

We conduct substantially all of our operations through our indirectly wholly owned subsidiary, Cardtronics, LP, a Delaware limited partnership. Because of widespread state budget deficits, several states are evaluating ways to subject partnerships to taxation through the implementation of state income, franchise or other forms of taxation. If any state were to impose a tax upon our operating subsidiary as a stand-alone entity, our consolidated net income, if any, may decrease.

Volatility in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for your shares. The market price of our common stock could fluctuate significantly for various reasons which include:


	•	our quarterly or annual earnings or those of other companies in our industry;

	•	the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

	•	changes in earnings estimates or recommendations by research analysts who track our common stock or the stocks of other companies in our industry;

	•	new laws or regulations or new interpretations of laws or regulations applicable to our business;

	•	changes in accounting standards, policies, guidance, interpretations or principles;

	•	changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events; and

	•	sales of common stock by our directors and executive officers.

In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these fluctuations could materially reduce our share price.

In the past, following periods of market volatility in the price of a company’s securities, security holders have often instituted class action litigation. If the market value of our common stock experiences adverse fluctuations and we become involved in this type of litigation, regardless of the outcome, we could incur substantial legal costs and our management’s attention could be diverted from the operation of our business, causing our business to suffer.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, or Exchange Act, and the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls for financial reporting. We currently do not have an internal audit group. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight will be required. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge, and we cannot assure you that we will be able to do so in a timely or cost effective fashion.

We do not plan to declare dividends on shares of our common stock in the foreseeable future. Consequently, your only opportunity to achieve a return on your investment in us will be if the market price of our common stock appreciates and you sell your shares at a profit. There is no guarantee that the price of our common stock that will prevail in the market after this offering will ever exceed the price that you pay.

There has not been a public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market on The Nasdaq National Market or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the shares will be determined by negotiations between us and the representative of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price paid by you in this offering.

We may sell additional shares of common stock in subsequent public offerings. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions. After the completion of this offering, we will have outstanding shares of common stock. This number includes shares that we are selling in this offering, which may be resold immediately in the public market. The remaining shares, or % of our total outstanding shares, are restricted from immediate resale under the federal securities laws and the lock-up agreements between our current stockholders and the underwriters described in “Underwriting,” but may be sold into the market in the near future. These shares will become available for sale at various times following the expiration of the lock-up agreements which, without the prior consent of Credit Suisse First Boston LLC, is 180 days after the date of this prospectus, subject to volume limitations and manner-of-sale requirements under Rule 144 of the Securities Act of 1933, or the Securities Act.

All of our existing stockholders are parties to a registration rights agreement with us. Under that agreement, these stockholders will have the right, after the expiration of the lock-up period, to require us to effect the registration of their shares. In addition, if we propose to register, or are required to register following the exercise of registration rights, any of our shares of common stock under the Securities Act, all the stockholders who are parties to the registration rights agreement will be entitled to include their shares of common stock in that registration.

We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock.

Provisions in our certificate of incorporation and our bylaws and applicable provisions of the Delaware General Corporation Law may make it more difficult and expensive for a third party to acquire control of us even if a change of control would be beneficial to the interests of our stockholders. These provisions could discourage potential takeover attempts and could adversely affect the market price of our common stock. Our amended and restated certificate of incorporation and amended and restated bylaws, which will be in effect at the time this offering is consummated, and the Delaware General Corporation Law will:


	•	authorize the issuance of blank check preferred stock that could be issued by our board of directors to thwart a takeover attempt;

	•	classify the board of directors into staggered, three-year terms, which may lengthen the time required by a third party to gain control of our board of directors;

	•	discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of two years after the person becomes an interested stockholder, unless such a transaction has met certain fair market value requirements;

	•	prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors;

	•	require super-majority voting to effect amendments to certain provisions of our certificate of incorporation or bylaws, including those provisions concerning the composition of the board of directors and certain business combinations;

	•	limit who may call special meetings of both the board of directors and stockholders;


	•	prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders;

	•	establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholders’ meetings; and

	•	require that vacancies on the board of directors, including newly-created directorships, be filled only by a majority vote of directors then in office.

Immediately after this offering, our executive officers, directors and principal stockholders will, in the aggregate, directly or indirectly hold approximately % of our outstanding shares. Accordingly, in the event that all or some of these stockholders decided to act in concert, they could control us through their ability to determine the outcome of the election of our directors, to amend our certificate of incorporation and bylaws and to take other actions requiring the vote or consent of stockholders, including mergers, going private transactions and other extraordinary transactions, and the terms of any of these transactions. The CapStreet Group, LLC is the ultimate general partner of two of our stockholders, CapStreet II, L.P. and CapStreet Parallel II, L.P. We refer to The CapStreet Group, LLC, CapStreet II, L.P. and CapStreet Parallel II, L.P. collectively as The CapStreet Group in this prospectus. These two stockholders will, in the aggregate, hold approximately % of our outstanding shares after the offering. Two of our directors, Fred R. Lummis and Frederick W. Brazelton, are officers of The CapStreet Group, LLC. The ownership positions of these stockholders may have the effect of delaying, deterring or preventing a change in control or a change in the composition of our board of directors.

We have significant flexibility in applying the portion of the net proceeds we receive in the offering that will remain after the repayment of all outstanding indebtedness under our credit facility and the redemption of all of our preferred stock. As part of your investment decision, you will not be able to assess or direct how we apply that portion of the net proceeds. If we do not apply these funds effectively, we may lose significant business opportunities. Furthermore, our stock price could decline if the market does not view our use of the proceeds from the offering favorably.

The initial public offering price per share is substantially higher than the pro forma net tangible book value per share immediately after the offering. As a result, you will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. At the offering price of $ , you will incur immediate and substantial dilution in the amount of $ per share. We also have outstanding stock options to purchase shares of our common stock at a weighted average exercise price of $ per share. To the extent these options are exercised, there will be further dilution.

This prospectus contains “forward-looking statements,” which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include statements regarding: proposed new programs; expectations that regulatory developments or other matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar expressions, as well as statements in future tense, identify forward-looking statements.

You should not read forward-looking statements as a guarantee of future performance or results. They will not necessarily be accurate indications of the times at or by which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. They are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:


	•	reliance on third parties for cash management services;

	•	increased regulation and regulatory uncertainty;

	•	decreases in the number of ATMs we can place with our top merchants;

	•	increased industry competition;

	•	our ability to continue to execute our growth strategies;

	•	risks associated with the acquisition of other ATM networks;

	•	changes in interest rates;

	•	declines in, or system failures that interrupt or delay, ATM transactions;

	•	changes in the ATM transaction fees we receive;

	•	changes in ATM technology;

	•	general and economic conditions; and

	•	other factors discussed under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, you should draw no inference that we will make additional updates with respect to those or other forward-looking statements.

The net proceeds from the sale of the shares of common stock offered by us will be approximately $ million, based on an estimated initial public offering price of $ per share (the mid-point of the range set forth on the cover page of this prospectus) and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of the shares to be sold by the selling stockholders.

The primary purposes of the offering are to create a public market for our common stock, obtain additional equity capital and facilitate future access to public markets. We expect to use the net proceeds from this offering:


	•	to repay all outstanding indebtedness under our credit agreement, which was approximately $31.4 million as of December 31, 2003;

	•	to redeem all of our outstanding preferred stock plus accrued and unpaid dividends, the aggregate redemption price for which was approximately $22.2 million as of December 31, 2003; and

	•	the remainder of the net proceeds for working capital and general corporate purposes, which may include acquisitions.

Management will have broad discretion in the use of the net proceeds remaining after the allocation of net proceeds for the uses specified in the prior paragraph.

Our credit agreement provides for a revolving facility, a term loan and an acquisition facility. The revolving facility and the acquisition facility mature in August 2008 and the term loan matures in July 2008. Borrowings under our credit agreement bear interest at a variable rate based upon LIBOR or prime rate, at our option. At December 31, 2003, the weighted average interest rate on our borrowings was approximately 5.18%. We intend to repay borrowings under our credit agreement with the proceeds of the offering. Under a new revolving credit facility that will replace our existing credit agreement and that we expect to enter into concurrently with or shortly after the closing of this offering, we expect to have the ability to borrow up to $75.0 million for working capital and general corporate purposes, which may include acquisitions.

Depending on future events, we may determine at a later time to use the net proceeds for different purposes. Pending their use, the proceeds of the offering will be invested in short-term, investment grade, interest-bearing securities.

Historically we have not paid dividends on our common stock. Following consummation of this offering, we do not anticipate declaring or paying any dividends on our common stock in the foreseeable future. Instead, we currently anticipate that we will retain all of our future earnings, if any, to fund the operation and expansion of our business and to use as working capital and for other general corporate purposes. Our board of directors will determine whether to pay dividends in the future based on conditions then existing, including our earnings, financial condition and capital requirements and the availability of third-party financing, as well as any economic and other conditions that our board of directors may deem relevant. In addition, our ability to declare and pay any dividends may be restricted under the credit agreement for our expected new credit facility.

The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2003:


	•	on an actual basis;

	•	on an as adjusted basis, giving effect to (1) our sale of shares of our common stock in this offering (at an initial public offering price of $ per share); and (2) the application of the proceeds from that sale as discussed under “Use of Proceeds.”

You should read this table together with the “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Capital Stock” and our consolidated financial statements included elsewhere in this prospectus.


(1)	At December 31, 2003, we had $6.5 million available for borrowing under our revolving facility. It is a term of our credit agreement that the amount available for borrowing is reduced by the amount of outstanding letters of credit issued under the revolving facility. As of December 31, 2003, we had letters of credit in an aggregate amount of $1.0 million outstanding under our revolving facility. We intend to replace our existing credit agreement with a new revolving credit facility in connection with this offering. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

(2)	For further information regarding our stock and stock option plans, see “Management” and “Description of Capital Stock.”

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock after the offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the existing stockholders for the presently outstanding stock. Our net tangible book value at December 31, 2003 was $16.4 million, or $ per share of common stock. Pro forma net tangible book value per share represents the amount of total tangible assets less total liabilities, divided by the number of shares of common stock outstanding after giving effect to:


	•	a -for-one split of our common stock; and

	•	the redemption of all 17,500 outstanding shares of our preferred stock at the aggregate redemption price of $22.2 million.

After giving effect to our sale of shares of common stock in the offering at the initial public offering price of $ per share (the mid-point of the range set forth on the cover of this prospectus) and after deducting the underwriting discounts and commissions and estimated offering expenses, our pro forma net tangible book value after this offering would have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value of $ per share to existing stockholders and an immediate dilution of $ per share to investors purchasing common stock in the offering. The following table illustrates this per share dilution:

The following table summarizes, on a pro forma basis as of December 31, 2003, the differences between existing stockholders and the new investors with respect to the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid before deducting the underwriting discounts and commissions and our estimated offering expenses, assuming an initial public offering price of $ per share.

The discussion and tables above assume no exercise of stock options outstanding as of December 31, 2003. As of the consummation of this offering, we expect to have options outstanding to purchase a total of shares of common stock with a weighted average exercise price of $ per share. To the extent that any of these options are exercised, there will be further dilution to new investors. See “Description of Capital Stock” and “Management.”


	•	the percentage of our shares of common stock held by our existing holders of capital stock will decrease to approximately % of the total number of common shares outstanding after this offering; and

	•	the number of shares of common stock held by investors purchasing common stock in this offering will increase by shares, to approximately % of the total number of shares of common stock outstanding after this offering.

The following selected consolidated financial and operating data should be read together with Management’s Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and related notes included elsewhere in this prospectus. The selected consolidated balance sheet data as of December 31, 2002 and 2003 and the selected consolidated statements of operations data for each of the three years in the period ended December 31, 2003 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The balance sheet data as of December 31, 1999, 2000 and 2001 and the statements of operations data for the years ended December 31, 1999 and 2000 have been derived from our audited financial statements, which are not included in this prospectus. Historical results are not necessarily indicative of the results to be expected in the future.


(1)	Reflects a stock compensation charge of $1.5 million after taxes related to the vesting of all stock options in connection with changes in our ownership structure. See note 1(a) to our financial statements.

(2)	Reflects a stock compensation charge of $1.0 million after taxes related to variable accounting on a restricted stock grant. See note 4 to our financial statements.

(3)	Other revenues consist of revenues from the sale of equipment to our associate VARs.

(4)	Other consists of losses on the sale or disposal of assets.

(5)	Reflects the effect of our adoption of SFAS 143. See “Managements Discussion and Analysis of Financial Condition and Results of Operations — New Accounting Standards” and note 1(p) to our consolidated financial statements.

(6)	Does not give effect to the stock split that is expected to be completed in connection with the offering.

(7)	The amount reflected on our balance sheet is net of issuance costs of $0.9 million. The aggregate redemption price for the preferred stock was $22.2 million as of December 31, 2003.

You should read the following discussion together with the financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those we discuss under “Risk Factors” and elsewhere in this prospectus.

We own and operate a network of ATMs in the United States. On the date of this prospectus, our network included over 12,000 ATMs operating in all 50 states. For the three months ended December 31, 2003, our ATMs dispensed over $1.2 billion in cash and processed more than 20.5 million transactions. Our nationwide ATM network is strengthened by relationships with nationally known merchants in a variety of businesses, such as Amerada Hess Corporation, Circle K Stores, Inc., Costco Wholesale Corporation, Duane Reade, Inc., Exxon Mobil Corporation, The Mills Corporation (Mills Malls), Sunoco, Inc., Walgreen Co. and Winn-Dixie Stores, Inc. Our merchant customers operate in high consumer traffic locations, such as convenience stores, supermarkets, membership warehouses, drug stores and shopping malls. We typically enter into multi-year contractual relationships with our merchants.

Since May 2001, we have acquired eight ATM networks. In each acquisition, we acquired only assets consisting of ATMs and, in certain cases, contractual rights to place and operate ATMs in certain locations. We have not acquired any legal entities and generally do not assume employees, physical facilities, sales force or trade names. All supporting activities, including supply of cash, communications, network processing services, maintenance services, customer service, sales and administration, are changed to our operating platform and service providers. The migration of the purchased ATMs to our platform represents a fundamental shift in the way the ATMs operate. Once we purchase the ATMs and integrate them into our operating platform, operating expenses are typically significantly reduced, enhancing the profitability of the ATMs and allowing us to profitably operate ATMs where others cannot. In addition, the revenues produced by the ATMs typically change significantly as we alter the mix between surcharge, interchange and branding arrangements with our merchant clients and financial sponsors.

Our acquisitions have significantly increased the size of our operations over the periods discussed in “Results of Operations” below and, accordingly, fundamentally affect the comparability of our results of operations for the periods discussed in this discussion and analysis. For example, revenues increased from $26.0 million in 2000 to $110.4 million in 2003, while our gross profit increased from $3.9 million to $22.3 million over the same period. The full impact of the acquisitions we completed in 2003 are not fully reflected in our historical results of operations due to their recent completion. These and any future acquisitions will continue to affect our results of operations.

We have set forth below a summary of our acquisition activity since 2001. After acquiring a network of ATMs, we track its growth and operating performance on a stand-alone basis, as well as on a consolidated basis with our results as a whole. We believe this information is helpful in understanding the effect of these acquisitions on our growth, as well as the growth experienced through increased deployment of ATMs with the acquired merchant base in each of these ATM networks following its acquisition and integration.

We acquired ATM networks from Financial Services Plus, Inc., a subsidiary of McLane Company, Inc., in two separate transactions.

McLane I. In June 2001, we closed the first McLane transaction, pursuant to which we acquired 264 ATMs. Prior to this transaction, McLane had been a leading ATM service provider to large convenience store chains. This network of ATMs consisted of corporate accounts with Amerada Hess, ConocoPhillips and Tetco, Incorporated.

McLane II. We acquired another network of ATMs from Financial Services Plus in September 2001. This acquisition included 614 ATMs, the majority of which were placed in locations operated by Sunoco.

We believe the existing relationships we acquired through the McLane transactions have been instrumental in helping us to build other relationships with national convenience store chains, such as Circle K and ExxonMobil.

ATM Plus. In 2002, we acquired a network of ATMs from ATM Plus, Inc., consisting of 25 ATMs principally located in northern California.

Diebold. In September 2002, we acquired a network of approximately 1,100 ATMs from Diebold, Incorporated consisting of arrangements with ExxonMobil, Marc Glassman, Inc., Barnes & Noble College Bookstores, Inc., Uni-Marts, Inc. and Rite Aid Corporation. Diebold is one of the largest manufacturers of ATM equipment in the world and is a leading ATM service provider to both bank and non-bank owners of ATMs.

CenterCourt Cash. In 2003, we purchased a network of 26 ATMs from CenterCourt Cash, Inc. These ATMs are located primarily in large shopping centers in California.

XtraCash. In February 2003, we acquired a network of ATMs in 938 Winn-Dixie stores from XtraCash ATM Inc., a division of the Canadian Imperial Bank of Commerce. These ATMs are located in Winn-Dixie stores throughout the Southeastern United States.

National Bank Equipment. In May 2003, we acquired a network of 1,025 ATMs, primarily located in the Northeast United States, from National Bank Equipment Corporation. This network consists primarily of independently-owned merchant locations.

American Express. In August 2003, we purchased a network of 1,700 ATMs from American Express Company. This network includes relationships with substantial national and regional accounts, such as Duane Reade, Giant Food Inc., The Great Atlantic and Pacific Tea Company, Inc. (A&P), Costco, Mills Malls and Walgreens.

We have prepared the consolidated financial statements included in this prospectus in accordance with accounting principles generally accepted in the United States, which require that management make numerous estimates and assumptions. Actual results could differ from those estimates and assumptions, impacting our reported results of operations and financial position. We describe our significant accounting policies more fully in note 1 to our consolidated financial statements included elsewhere in this prospectus. The significant accounting policies described here are those that are most important to the depiction of our financial condition and results of operations and the application of which requires management’s most subjective judgments in making estimates about the effect of matters that are inherently uncertain.

Revenue recognition. Transaction-based revenue, which includes surcharge fees, interchange fees, branding fees and other fees from our membership in ATM alliances, is recorded as services are performed. We recognize revenue related to the sale of an ATM when the machine is delivered to a customer and we have completed all required installation and set-up procedures. These sales were 22.1% of our total revenues in 2001, 3.7% in 2002 and 1.1% in 2003. We offer maintenance services to certain customers who purchase ATMs. We recognize service agreement revenue monthly as earned, and we recognize expenses relating to repairs under service agreements as incurred. We recognize and invoice other revenues related to the sale of equipment to associate VARs when the equipment is shipped from the manufacturer to the VAR. We extend thirty day terms and receive payment directly from the associate VAR irrespective of ultimate sale to a third party.

Cash management. We have cash management arrangements with two banks under which they place their vault cash into our ATMs and insure such cash for a fee. We do not take title to this cash and it is not reflected on our balance sheet. The cost of this service is reflected in our statement of operations under costs of ATM revenue. The balance of cash from our cash providers in use in our ATMs was $237.7 million as of December 31, 2003 and $65.9 million as of December 31, 2002.

Income taxes. Income tax provisions are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and income before income taxes and between the tax basis of assets and liabilities and their reported amounts in our financial statements. We include deferred tax assets and liabilities in our financial statements at currently enacted income tax rates. As changes in tax laws or rates are enacted, we adjust our deferred tax assets and liabilities through income tax provisions.

Property and equipment, net. Property and equipment, net is stated at cost, less accumulated depreciation calculated using the straight-line method. We depreciate equipment over three to seven years. We amortize leasehold improvements and property acquired under capital leases over the useful life of the asset or the lease term, whichever is shorter. The cost of property and equipment held under capital leases, primarily ATMs, is equal to the lower of the net present value of the minimum lease payments or the estimated fair value of the leased property at the inception of the lease. We also include in property and equipment new ATMs we have acquired for future installation. These ATMs are held as “deployments in process” and are not depreciated. In 2003, we began recognizing deferred costs associated with expected deinstallation of ATMs owned by us. SFAS 143 requires us to capitalize the expected cost of deinstallation of ATMs upon expiration of merchant contracts by increasing the carrying amount of the related equipment asset. These amounts are depreciated over the life of the related assets.

Intangible assets, net. Intangible assets, net includes merchant contracts/relationships acquired in connection with acquisitions of ATM assets (i.e., the right to receive future cash flows related to transactions of these applicable merchant customers) and exclusive license agreements (i.e., the right to be the exclusive ATM service provider, at specific locations, for the time period under contract with a

merchant customer) and deferred financing costs relating to credit agreements. Intangible assets, net totaled $23.4 million at December 31, 2003. We amortize all intangibles on a straight-line basis over their estimated useful life ranging from four to eight years. We determine estimated useful lives for merchant contracts/relationships based on a review of the weighted average life of the expected after-tax cash flows from the underlying merchant contracts and the terms of the contracts themselves, as well as our expectations of renewals based on industry experience. Amortized financing costs are recognized as interest expense.


	•	Turnkey. Under a turnkey arrangement, we own or lease the ATM and are responsible for controlling substantially all aspects of its operation. These responsibilities include what we refer to as first line maintenance, such as replacing paper, clearing paper or bill jams, resetting the ATM and any telecommunications and power issues or other maintenance that does not require a trained service technician. Under our turnkey operations, we are also responsible for what we refer to as second line maintenance, or more complex maintenance procedures that require trained service technicians and often involve replacing component parts. In addition to first and second line maintenance, under turnkey agreements we are responsible for arranging for cash, cash loading, supplies, telecommunications service and all other services required for the operation of the ATM, other than electricity. Under a turnkey arrangement, we pay a fee, either periodically, on a per-transaction basis or a combination of both, to the merchant on whose premises the ATM is physically located. Under turnkey arrangements, we are responsible for purchasing the ATM, as well as almost all of the expenses related to its operation. Typically, we deploy ATMs under turnkey arrangements for our national and regional merchant customers, such as Amerada Hess, Circle K, Duane Reade, ExxonMobil and Sunoco. A majority of the ATMs we have acquired since May 2001 are operated under turnkey arrangements. Because turnkey ATMs are owned or leased by us and usually located in major national chains, we have the opportunity to generate additional revenues from branding. In recent years, we have been successful in increasing the number and percentage of our ATMs operated under turnkey arrangements.

	•	Merchant-owned. Under a merchant-owned arrangement, the merchant owns the ATM and is responsible for its maintenance and most of the operating costs. We typically operate ATMs with our independent merchant customers under merchant-owned arrangements. A merchant who purchases an ATM from us is responsible for providing cash for the ATM and all maintenance. The merchant is also responsible for cash loading, supplies, telecommunication and electrical services. Under these arrangements, we sometimes retain responsibility for second line maintenance for an additional fee, and we provide all transaction processing services. Because the merchant bears more of the costs associated with operating ATMs under this arrangement, the merchant typically receives a higher fee on a per-transaction basis than is the case under a turnkey arrangement. In a limited number of our merchant-owned arrangements, we have assumed responsibility for providing and loading cash. Accordingly, under these arrangements, the merchant receives a smaller fee on a per-transaction basis than in the typical merchant-owned arrangement.

	•	Merchant-assisted. Merchant-assisted arrangements are a hybrid between turnkey and merchant-owned arrangements. In these arrangements, we own or lease the ATM and provide all transaction processing services, but the merchant generally is responsible for providing and loading cash for the ATM and first line maintenance. Under these arrangements, the merchant is sometimes responsible for supplies, telecommunication and electrical services. As a result, the merchant typically receives a higher fee on a per-transaction basis than it would be under a turnkey arrangement, but receives less than it would under a merchant-owned arrangement.

Revenues. We derive our revenues primarily from providing ATM services and, to a lesser extent, from our branding arrangements and our sales of ATM equipment. Our revenues from ATM services have increased rapidly in recent years due to the acquisitions we completed since 2001, as well as through internal expansion of our existing and acquired ATM networks. In our consolidated statement of operations, we present our revenues from ATM services, the sale of ATMs in connection therewith and branding arrangements as “ATM revenues” and our revenues from sales of equipment to persons that do not purchase ATM services from us as “Other revenues.” Our ATM revenues consist of the revenues we receive under our turnkey, merchant-assisted and merchant-owned arrangements with our customers. These revenues include the fees we earn per transaction completed on our network and fees we generate from branding arrangements, as well as the amounts we receive from the sale of ATMs to merchants operating ATMs under merchant-owned arrangements. Because the majority of our ATM revenues are generated from machines owned by us and operated under turnkey arrangements rather than our merchant customers (merchant-assisted and merchant-owned), sales of ATMs represent a small and declining percentage of our ATM revenues.

Our “Other revenues” consist of sales of ATM equipment to associate VARs. We do not expect to generate ATM service revenues from ATMs sold under VAR arrangements, and, accordingly, segregate the presentation of these revenues from our ATM revenues.


	•	Surcharge revenue. A surcharge fee represents a convenience fee paid by the cardholder for making a cash withdrawal from an ATM. Surcharge fees are most typically associated with cash withdrawal transactions and generally are not generated by balance inquiries, fund transfers and, in some cases, cash withdrawals from ATMs from which we earn branding revenues. Surcharge fees often vary by the type of arrangement under which we place our ATMs. Our transaction surcharges averaged approximately $1.42 per surcharge-bearing transaction during the year ended December 31, 2003. Surcharge fees can vary widely based on the location of the ATM and the nature of the contracts negotiated with our merchants.

	•	Interchange revenue. An interchange fee is a fee paid by the cardholder’s financial institution for the use of the applicable electronic funds transfer, or EFT, network that transmits data between the ATM and the cardholder’s financial institution in connection with any ATM transaction, including balance inquiries, transfers and surcharge-free transactions. We receive a portion of the interchange fee paid to the EFT network. Unlike surcharge fees, interchange fees are earned not only on cash withdrawal transactions, but also on other ATM transactions such as balance inquiries and fund transfers. Interchange fees are set by the EFT networks and vary according to EFT network arrangements with financial institutions, as well as the type of transaction. Interchange fees are typically lower for balance inquiries and fund transfers and higher for withdrawals. For the year ended December 31, 2003, we received $29.1 million in interchange fees, or an average of approximately $0.60 per surcharge-bearing transaction and approximately $0.45 per transaction.

	•	Branding revenue. We generate branding revenue in a variety of ways. We allow financial institutions to place signage on, or brand, our ATMs. Under this arrangement, we allow the branding financial institution’s customers to use branded ATMs without paying a surcharge fee. In exchange, the branding financial institution pays us a fixed monthly fee per branded ATM. This type of branding arrangement typically results in an increase in transaction levels at the branded ATMs. We also generate branding revenue from the ATMs we include in the Allpoint Network, a surcharge-free ATM alliance of which we are a member. Under this arrangement, cardholders of the institutions that are members of Allpoint use our ATMs included in the alliance free of surcharge fees in exchange for Allpoint’s payment to us of a share of the fixed monthly fee per cardholder included in the network. We also derive branding revenue from an EFT network that places signage on our ATMs. Fees paid for branding an ATM vary widely within our industry, as well as within our own operations.

The profitability of any particular ATM location, and of our entire ATM services operation, is driven by a combination of surcharge, interchange and branding revenues, as well as the level of our related costs. Accordingly, material changes in our average surcharge fee or average interchange fee may be offset by branding or other ancillary revenues, or by changes in our cost structure. Because a variance in our average surcharge fee or our average interchange fee is not necessarily indicative of a commensurate change in our profitability, you should consider these measures only in the context of our overall financial results.

Our other revenues are comprised of revenue from the sale of equipment to associate VARs. These other revenues have been enhanced by our master VAR designation with NCR Corporation. This designation allows us to purchase equipment from NCR at preferential prices. We expect to continue to derive a portion of our revenues from direct sales of ATMs in the future; however, we expect this source of revenue to continue to decrease as a percentage of total revenues in future periods.

Cost of revenues. Our cost of revenues associated with ATM transactions completed on our ATM network includes:


	•	Merchant fees. We pay our merchants a fee that depends on a variety of factors, including the type of arrangement under which the ATM is placed and the number of transactions at that ATM. In recent years, we have been successful in increasing the percentage of our ATMs operated under turnkey arrangements, which typically have lower associated merchant fees on a per-transaction basis than other deployment arrangements.

	•	Processing fees. We pay fees to third-party vendors for processing transactions originated at our ATMs. These vendors, which include Star Systems, Fiserv, Inc. and Genpass Inc., communicate with the cardholder’s financial institution through EFT networks to gain transaction authorization and to settle transactions.

	•	Cost of cash. Cost of cash includes all costs associated with the provision of cash to our turnkey and certain merchant-owned ATMs, including fees for the use of cash, armored courier services, insurance, cash reconciliation and associated wire fees. As our mix of placements has moved more toward turnkey arrangements, our cost of cash has increased in absolute terms. Changes in interest rates could affect our cost of cash.

	•	Communications. Under our turnkey and certain merchant-assisted arrangements, we are responsible for expenses associated with providing telecommunications capabilities to the ATMs, allowing the ATMs to connect with the applicable EFT network.

	•	Repairs and maintenance. Depending on the type of arrangement with the merchant, we may be responsible for first and/or second line maintenance for the ATM. We typically manage the provision of these services by third parties with national operations. Our primary maintenance vendors are Diebold, NCR, EFMARK Service Company of Illinois, Inc. and Genpass.

	•	Direct operations. These expenses consist of costs associated with managing our ATM network, including expenses for program managers, technicians and customer service representatives.

	•	Cost of equipment revenue. In connection with the sale of equipment to merchants and VARs, we incur costs associated with purchasing equipment from manufacturers, as well as delivery and installation expenses.

Any significant decrease in transaction volumes would lead to a decrease in the profitability of our transaction-based operations, as a significant portion of our costs of transaction-based revenues is fixed in nature.

Our indirect operating expenses include general and administrative expenses related to administration, salaries, benefits, advertising and marketing, depreciation of the ATMs we own, amortization of our acquired merchant contracts, and interest expense related to borrowings under our credit agreement. We depreciate our capital equipment on a straight-line basis over the estimated life of such equipment and amortize the value of acquired merchant contracts over the estimated lives of such assets. Because we

intend to repay borrowings under our credit agreement with the proceeds of the offering, our interest expense in the near-term should decline. Under a new revolving credit facility that we expect to enter into concurrently or shortly after closing this offering, we expect to have the ability to borrow up to $75.0 million for working capital and general corporate purposes, which may include acquisitions. See “— Liquidity and Capital Resources.”

The following table sets forth our statement of operations information as a percentage of total revenues for the period indicated.

Revenues. Total revenues increased $41.7 million, or 60.6%, to $110.4 million for 2003, from $68.8 million for 2002. We generate revenues primarily from our ATM services, including ATM transaction fees and sales of ATMs in connection with our merchant-assisted and merchant-owned arrangements, and, to a lesser extent, through sales of equipment in connection with our master VAR

ATM revenues increased $42.4 million, or 68.2%, to $104.7 million for 2003, from $62.2 million for 2002. The portion of our ATM revenues derived from sales of ATMs in connection with merchant-assisted and merchant-owned arrangements was less than 2.0% in 2003, compared to 4.1% in 2002. The growth in ATM revenues resulted primarily from increased ATM transaction volume and the transaction revenue associated with the acquisition of several ATM networks, including Diebold (September 2002), XtraCash (February 2003), National Bank Equipment (May 2003), American Express (August 2003), and the award of a new contract by ExxonMobil (May 2003). Transactions on which we charged a surcharge fee increased 68.3% in number to 48.8 million transactions in 2003, from 29.0 million transactions in 2002. The number of ATMs that we owned or operated at year-end increased 44.9% to 12,021 ATMs for 2003, from 8,298 ATMs for 2002. In 2003, surcharge revenue and interchange revenue remained relatively unchanged on a per transaction basis. ATMs added through acquisitions and organic growth included 2,993 under turnkey and merchant-assisted arrangements and 730 under merchant-owned arrangements.

Other revenues decreased $770,000, or 11.8%, to $5.8 million for 2003, from $6.5 million for 2002. This decrease resulted primarily from a decrease in the amount of equipment sold by us to our associate VARs.

Cost of revenues. Total cost of revenues increased $30.1 million, or 51.7%, to $88.2 million for 2003, from $58.1 million for 2002.

Cost of ATM revenues increased $30.9 million, or 59.0%, to $83.2 million for 2003, from $52.4 million for 2002. The largest component of this increase, merchant fees, increased $9.7 million, or 34.2%, to $38.0 million for 2003, from $28.3 million for 2002. This was the result of the merchant fees payable with respect to the 3,723 additional ATMs we operated in 2003 over 2002. On a per surcharge-bearing transaction basis, however, merchant fees decreased to $0.78, or 20.2%, in 2003, from $0.98 in 2002. This was primarily a result of a shift in our mix of transaction-based services to more turnkey and merchant-assisted arrangements and less merchant-owned arrangements. Two other primary components of the cost of ATM revenues, cost of cash and armored courier fees, increased $6.2 million, or 89.6%, to $13.1 million for 2003, from $6.9 million for 2002. This increase also resulted from the increase in the proportion of our ATMs operated under turnkey arrangements as compared to merchant-owned arrangements and was partially offset by more favorable pricing from our vendors resulting from our increased size. As discussed above, we incur higher operating costs in connection with turnkey arrangements but typically these costs are offset by lower merchant fees on a per-transaction basis with respect to such ATMs.

Cost of other revenues decreased $802,000, or 13.9%, to $5.0 million for 2003, from $5.8 million for 2002. This decrease resulted primarily from the decrease in equipment sales in the period as we placed less emphasis on these sales.

Gross profit. Gross profit represented 20.1% of total revenues for 2003, compared to 15.5% for 2002. Gross profit as a percentage of total revenues increased primarily due to higher margins from acquired turnkey ATMs and negotiated reductions in operating costs due to our increased size and scope.

Selling, general and administrative expenses. Selling, general and administrative expenses increased $1.1 million or 17.7%, to $7.2 million for 2003, from $6.1 million for 2002. These expenses increased primarily due to the addition of employees and related expenses necessary to support our growth. In the future, we expect to add additional personnel to manage our incremental growth and to perform the administrative activities required of a public company. We also expect to incur increased accounting and legal costs as a result of being a public company.

Depreciation and accretion expense. Depreciation of property and equipment increased $2.0 million, or 120.1%, to $3.6 million for 2003, from $1.6 million for 2002. Depreciation of property and equipment increased due to capital expenditures associated with our acquisition of several ATM networks, increases in ATMs deployed through organic growth initiatives, the replacement of ATMs under expired operating

leases and the increase in the proportion of our ATMs operated under turnkey arrangements as compared to merchant-owned arrangements. In the future, we expect that our depreciation expense will grow in proportion to the increase in the number of ATMs we own. In 2003, we began recognizing an accretion expense to offset the increasing value of liability associated with expected future cash outflows for expected equipment deinstallation, as required by SFAS 143.

Amortization expense. Amortization of intangible assets (primarily merchant contracts acquired in acquisitions) increased $2.2 million, or 134.1%, to $3.8 million for 2003, from $1.6 million for 2002. Amortization of intangible assets represented 3.5% of total revenues for 2003, compared to 2.4% for 2002. Amortization of intangible assets increased due to an increase in overall intangible assets as a result of our acquisitions.

Interest expense. Interest expense increased $2.5 million, or 279.7%, to $3.3 million for 2003, from $881,000 for 2002. The increase was attributable to additional outstanding amounts under our credit agreement. In addition, a significant portion of the increase was related to our write-off of prior loan origination costs in conjunction with negotiated increases in our borrowing base in 2003. We expect our interest expense to decline after this offering due to our planned repayment of amounts outstanding under our existing credit agreement. However, we intend to replace our existing credit agreement with a new revolving credit facility concurrently with, or shortly after the consummation of this offering, and borrowings, if any, under such facility could cause our interest expense in future periods to match or exceed historical levels.

Income tax provision (benefit). For 2003, our income tax provision was $1.5 million compared to $154,000 for 2002. This increase resulted from an increase in taxable income in 2003, partially offset by a decrease in our effective tax rate.

Cumulative effect of change in accounting principle, net of tax. For 2003, our cumulative effect of change in accounting principle was $134,000, compared to $0 in 2002. This increase resulted from the adoption of FAS 143 as of January 1, 2003.

Revenues. Total revenues increased $23.7 million, or 52.6%, to $68.8 million for 2002, from $45.1 million for 2001.

ATM revenues increased $18.8 million, or 43.2%, to $62.2 million for 2002, from $43.5 million for 2001. The portion of our ATM revenues derived from sales of ATMs in connection with merchant-assisted and merchant-owned arrangements was less than 5.0% in 2002, compared to 23.0% in 2001. The growth in ATM revenues resulted primarily from increased transaction volume and the revenue associated with the acquisition of several ATM networks from Diebold (September 2002), McLane FSP (June and September 2001), and the award of a new contract by Circle K (mid 2002). Transactions on which we charged a surcharge increased 80.8% in number to 29.0 million transactions in 2002, from 16.0 million transactions in 2001. The number of ATMs that we owned or operated at year-end increased 23.7% to 8,298 ATMs for 2002, from 6,707 ATMs for 2001. In 2002, surcharge revenue and interchange revenue declined slightly on a per transaction basis as a result of the acquisition of ATMs with lower than average surcharges per transaction. ATMs added through acquisitions and organic growth included 1,630 under turnkey arrangements, with a decrease of 39 in the number of ATMs operated under merchant-owned arrangements.

Other revenues increased $4.9 million, or 306.3%, to $6.5 million for 2002, from $1.6 million for 2001. This increase resulted primarily from an increase in the amount of equipment sold by us to our associate VARs.

Cost of revenues. Total cost of revenues increased $16.9 million, or 41.0%, to $58.1 million for 2002, from $41.2 million for 2001.

Cost of ATM revenues increased $12.6 million, or 31.5%, to $52.4 million for 2002, from $39.8 million for 2001. The largest component of this increase, merchant fees, increased $9.0 million, or 46.8%, to $28.3 million for 2002, from $19.3 million for 2001. This was the result of the merchant fees payable with respect to the 1,591 additional ATMs we operated in 2002 over 2001. On a per surcharge-bearing transaction basis, however, merchant fees decreased to $0.98, a decrease of 18.3%, in 2002, from $1.20 in 2001. This was primarily a result of a shift in our mix of transaction-based services to more turnkey arrangements and less merchant-owned arrangements. Two other primary components of the cost of ATM revenues, cost of cash and armored courier fees, increased $3.1 million, or 81.7%, to $6.9 million for 2002, from $3.8 million for 2001. This increase also resulted from the increase in ATMs operated under turnkey and merchant-assisted arrangements as compared to merchant-owned arrangements. As discussed above, we incur higher operating costs in connection with turnkey arrangements but typically these costs are offset by lower merchant fees with respect to such ATMs.

Cost of other revenues increased $4.4 million, or 309.2%, to $5.8 million for 2002, from $1.4 million for 2001. This increase resulted primarily from the increase in equipment sales in the period.

Gross profit. Gross profit represented 15.5% of total revenues for 2002, compared to 8.6% for 2001. Gross profit as a percentage of total revenues increased primarily due to higher margins from acquired turnkey ATMs and negotiated reductions in operating costs due to our increased size and scope.

Selling, general and administrative expenses. Selling, general and administrative expenses increased $1.2 million, or 24.7%, to $6.1 million for 2002, from $4.9 million for 2001. These expenses increased primarily due to the addition of employees and related expenses necessary to increase our infrastructure to support our growth.

Depreciation and accretion expense. Depreciation of property and equipment increased $692,000, or 72.3%, to $1.6 million for 2002, from $957,000 for 2001. Depreciation of property and equipment increased due to capital expenditures associated with our acquisition of several ATM networks, increases in ATMs deployed through organic growth initiatives and the replacement of ATMs under expired operating leases.

Amortization expense. Amortization of intangible assets increased $1.1 million, or 196.0%, to $1.6 million for 2002, from $554,000 for 2001. Amortization of intangible assets represented 2.4% of total revenues for 2002, compared to 1.2% for 2001. Amortization of intangible assets increased due to an increase in overall intangible assets as a result of our acquisitions.

Interest expense. Interest expense increased $403,000, or 84.4%, to $881,000 for 2002, from $478,000 for 2001. The increase was attributable to additional amounts outstanding under our credit agreement.

Income tax provision (benefit). For 2002, our income tax provision was $154,000 compared to an income tax benefit of $1.0 million for 2001 because of the increase in net income over the period.

The following table sets forth information from our statement of cash flow for the each of the three years ended December 31, 2003.

We have historically funded our operations through cash flow from operations and private placements of equity securities, as well as through borrowings under our credit facilities. We have historically used cash to invest in additional operating ATMs, either through the acquisition of ATM networks or through

At December 31, 2003 and 2002, we had cash and cash equivalents totaling $5.6 million and $3.2 million, respectively.

Net cash provided by operating activities was $21.6 million for the year ended December 31, 2003. Accounts payable and accrued and other liabilities increased $8.6 million in the period largely as a result of the increase in the number of ATMs we own. Net cash provided by operating activities was $4.5 million for the year ended December 31, 2002 and net cash used in operating activities was $1.9 million for the year ended December 31, 2001. During the year ended December 31, 2002, net cash provided by operating activities was primarily used for the payment of accounts payable and funding our organic growth. During the year ended December 31, 2001, net cash used in operating activities was primarily used to fund our organic growth.

Net cash used in investing activities was $29.7 million for the year ended December 31, 2003. We used net cash of $15.0 million for the year ended December 31, 2002 and $7.5 million for the year ended December 31, 2001. During each of these periods, substantially all cash used in investing activities was used to acquire eight ATM networks, to make capital expenditures related to such acquisitions and to install additional ATMs in connection with acquired merchant relationships. Total capital expenditures were $30.0 million for the year ended December 31, 2003, $15.0 million for 2002 and $7.5 million for 2001. We currently have no material purchase commitments, but we continually evaluate opportunities to acquire additional ATM networks.

In future periods, we expect to make capital expenditures to convert our ATMs to Triple DES compliant. We have budgeted $15.0 million to accomplish the Triple DES conversion on all of our ATMs by the end of 2007. Of this total, we anticipate spending $5.0 million in 2004. In addition, we may be required to make additional capital expenditures in future periods to comply with anticipated new ADA regulations concerning the accessibility of ATMs by disabled persons. See “Risk Factors — We operate in a changing and unpredictable regulatory environment” and “Business — Government and Industry Regulation.”

Net cash provided by financing activities was $10.4 million for the year ended December 31, 2003, $10.7 million for 2002 and $12.1 million for 2001. During the year ended December 31, 2001, substantially all cash provided by financing activities resulted from our issuances of long-term debt and preferred stock. The amounts raised from these activities were offset by our repurchase of common stock in connection with The CapStreet Group’s initial investment in us. During the years ended December 31, 2002 and 2003, substantially all cash provided by financing activities resulted from our issuances of additional long-term debt, offset, in each period, by our repayments of other long-term debt and capital leases.

As of December 31, 2003, we owed to third parties approximately $31.4 million aggregate principal amount under capital lease obligations and our credit agreement.

We believe that our cash on hand and our current credit agreement would be sufficient to meet our working capital requirements and contractual commitments until at least December 31, 2004. We expect to fund our working capital needs from revenues generated from our operations. We may need additional financing if we expand faster than planned, need to respond to competitive pressures or acquire additional ATM networks.

If we raise additional funds through the sale of equity or convertible debt securities, these transactions may dilute the value of our outstanding common stock. We may also decide to issue securities, including debt securities, that have rights, preferences and privileges senior to our common stock. We cannot assure you that we will be able to raise additional funds on terms favorable to us or at all. If future financing is not available or is not available on acceptable terms, we may not be able to fund our future needs. This may prevent us from increasing our market share, capitalizing on new business opportunities or remaining competitive in our industry.

As of December 31, 2003, we had a credit agreement with a syndicate of banks led by BNP Paribas that allows us to borrow up to an aggregate of $65.0 million. This credit agreement consists of a $7.5 million revolving facility, a $42.5 million term loan and a $15.0 million acquisition facility. The revolving facility and the acquisition facility mature in August 2008 and the term loan matures in July 2008. Borrowings under this credit agreement bear interest at a variable rate based upon LIBOR or prime rate, at our option. At December 31, 2003, the weighted average interest rate on our borrowings was approximately 5.18%. Borrowings are secured by a lien on substantially all of our assets and contain customary covenants and events of default. As of December 31, 2003, we had $31.4 million of outstanding indebtedness under our credit agreement.

We intend to repay $31.4 million of our outstanding indebtedness with the estimated net proceeds of this offering. Please see “Use of Proceeds.” Concurrent with the completion of this offering we expect to replace our existing credit agreement with a new revolving credit facility which will provide aggregate credit of up to $75.0 million to be used for working capital and general corporate purposes, which may include acquisitions. Borrowing under this credit facility will bear interest at a variable rate based upon LIBOR or prime rate, at our option.

The following table and discussion reflect our significant contractual obligations and other commercial commitments as of December 31, 2003:

We intend to use approximately $31.4 million of the estimated net proceeds from this offering to repay outstanding indebtedness and $22.2 million to redeem our outstanding redeemable preferred securities. We expect that we will be able to fund our remaining obligations and commitments with cash flow from operations. To the extent we are unable to fund these obligations and commitments with cash flow from operations, we intend to fund these obligations and commitments with proceeds from borrowings under our new revolving credit facility or future debt or equity financings.

Our monetary assets, consisting primarily of cash and receivables, are not significantly affected by inflation. Our non-monetary assets, consisting primarily of tangible and intangible assets, are not affected by inflation. We believe that replacement costs of equipment, furniture and leasehold improvements will not materially affect our operations. However, the rate of inflation affects our expenses, such as those for employee compensation and telecommunications, which may not be readily recoverable in the price of services offered by us.

We transact business with merchants exclusively in the United States and receive payment for our services exclusively in U.S. dollars. As a result, our financial results are unlikely to be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets.

Our interest expense and our cost of cash are sensitive to changes in the general level of interest rates in the United States, particularly because a substantial majority of our indebtedness earns interest at

We do not hold derivative financial or commodity instruments, nor engage in any foreign currency denominated transactions, and all of our cash and cash equivalents are held in money market and checking funds.

In June 2001, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, or SFAS 143. SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the related asset retirement costs. The fair value of a liability for an asset retirement obligation is to be recognized in the period in which it is incurred and can be reasonably estimated. Companies are to capitalize such asset retirement costs as part of the carrying amount of the related long-lived asset and depreciated over the asset’s estimated useful life. Fair value estimates of liabilities for asset retirement obligations will generally involve discounted future cash flows. Periodic accretion of such liabilities due to the passage of time is to be recorded as an operating expense. The provisions of SFAS 143 are effective for fiscal years beginning after June 15, 2002, with initial application as of the beginning of the fiscal year. In our case, we adopted SFAS 143 for our 2003 fiscal year. The adoption of SFAS 143 resulted in the recognition of liabilities amounting to $1.6 million for contingent retirement obligations under certain merchant agreements (included in other long-term liabilities on our consolidated balance sheet), the recognition of asset retirement costs amounting to $1.6 million (included in property and equipment on our consolidated balance sheet), and the recognition of a charge for the cumulative effect of the change in accounting principle amounting to $134,000 (net of related income tax benefit of $80,000). Accretion expense related to liabilities for contingent retirement obligations (included in depreciation, amortization and accretion on our consolidated statement of operations) amounted to $162,000 for the twelve months ended December 31, 2003. At December 31, 2003, liabilities for contingent retirement obligations amounted to $3.0 million.

In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, or SFAS 148. SFAS 148 amends Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, or SFAS 123, to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the provisions of SFAS 123 to require more prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results of operations. Certain of the disclosure modifications are required for interim and annual periods ending after December 15, 2002 and are included in the notes to our consolidated financial statements.

In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, or SFAS 150. SFAS 150 requires that mandatorily redeemable financial instruments issued in the form of shares be classified as liabilities, and specifies certain measurement and disclosure requirements for such instruments. The provisions of SFAS 150 were effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS 150 did not have an impact on our financial statements.

The first ATMs in the United States were installed in the early 1970s and by 1980 approximately 18,500 ATMs were in use throughout the nation. These ATMs initially were located at financial institution branches. According to industry sources, as of March 2003, there were estimated to be approximately 371,000 ATMs in the United States, the majority of which are located at non-bank locations.

Early in the development of the ATM industry, regional and national electronic authorization data networks, or EFT networks, connected ATMs to financial institutions that were members of a particular EFT network. Regional EFT networks in different parts of the United States were not electronically connected to each other. For example, customers of a bank in New York could not travel to Los Angeles and access their cash at an ATM because the networks serving New York and Los Angeles were not connected. During the 1990s, many regional EFT networks merged or entered into reciprocal processing agreements with other networks, which helped to increase ATM usage and spur consumer demand for ATM services.

Although ATMs were originally located only at financial institution branches, they soon began to appear in a variety of off-premise locations, such as convenience stores, supermarkets, drug stores, shopping malls, hotels and airports. Deployment of off-premise ATMs, however, was impeded by the prevailing strategy among financial institutions not to charge their cardholders surcharge fees for the convenience of accessing their financial institution accounts at non-financial institution locations. Until 1996, most EFT networks did not allow surcharge fees for ATM transactions that were routed over their networks. However, beginning in that year, the two largest EFT networks, Cirrus and Plus, began to allow surcharge fees and other networks followed. Surcharging revenue made the deployment of off-premise ATMs economically feasible and attractive for non-financial institutions. Following this shift, the number of off-premise ATMs in the United States grew at a rapid pace.

A typical ATM transaction involves the withdrawal of cash from an ATM. The cardholder presents an ATM card, issued by his or her financial institution, at an ATM that may or may not be owned by the same financial institution. The cardholder then enters a personal identification number, or PIN, to verify identity, the cardholder’s account is checked for adequate funds and, if everything is satisfactory, cash is dispensed. All of these communications are routed across one or more EFT networks that electronically connect ATMs and financial institutions and allow transactions to appear seamless and nearly instantaneous.

When a cardholder withdraws cash from an ATM that is not owned by the cardholder’s financial institution, there are two charges applied. The first charge is the surcharge fee paid by the cardholder for using the ATM. The second charge is an interchange fee that the EFT network charges the cardholder’s financial institution for routing a transaction over its network. This fee is divided between the EFT network routing the transaction and the ATM operator. Often, the cardholder’s financial institution also charges the cardholder a fee called a foreign fee for using an ATM not owned by that financial institution. This charge helps the financial institution defray the cost of the interchange fee it pays.

Financial Institution Outsourcing Opportunity. Our industry experience, vendor relationships and economy of scale advantages provide us with the opportunity to offer ATM services to financial institutions. Today, many financial institutions own significant networks of ATMs that serve as extensions of their branch networks and increase the level of service offered to their customers. Large ATM networks, however, are costly to operate and typically do not provide significant revenue for financial institutions. According to an industry source, large financial institutions typically incur a monthly operating expense of approximately $1,500 per off-premise ATM. On average, large non-bank ATM operators are able to

operate off-premise ATMs at an approximate cost of $1,000 per month. We believe there is an opportunity for large non-bank ATM operators, such as us, to contract with financial institutions to manage their ATM networks. Such an outsourcing arrangement could reduce a financial institution’s operational costs while extending their customer service.

Check 21 Opportunity. Recent legislation enacted by Congress, the “Check Clearing for the 21st Century Act,” provides a legal framework to facilitate the conversion of a deposited check into an electronic transaction, with electronic transmission of the image to the depository bank. When this image is received, a substitute check can be printed for traditional processing. Prior to this legislation, the acceptance of deposits at ATMs typically was limited to ATMs owned and operated by a given financial institution and required the daily retrieval and manual processing of the deposited items. The process of accepting deposits at ATMs was costly, subjected financial institutions to risk of fraud, and was not fully embraced by cardholders as an alternative to making deposits at financial institutions’ branch offices. We believe that the ability to convert checks deposited at ATMs into electronic transactions will further increase the use by cardholders of envelope-free, image-enabled, deposit-accepting ATMs that should be easier and more convenient for cardholders than depositing paper checks in envelopes. In addition, it should be less costly for financial institutions to provide this service to their customers. We expect financial institutions to begin to expand their ATM coverage to take advantage of this development, and that this may lead to increased branding by financial institutions of ATMs capable of converting deposits into electronic transactions.

We own and operate one of the largest and fastest growing networks of ATMs in the United States. On the date of this prospectus, our network included over 12,000 ATMs operating in all 50 states. For the three months ended December 31, 2003, our ATMs dispensed over $1.2 billion in cash and processed more than 20.5 million transactions. Our nationwide ATM network is strengthened by relationships with nationally known merchants in a variety of businesses, such as Amerada Hess, Circle K, Costco, Duane Reade, ExxonMobil, Mills Malls, Rite Aid Corporation, Sunoco, Walgreens and Winn-Dixie. Our merchant customers operate high consumer traffic locations, such as convenience stores, supermarkets, membership warehouses, drug stores, shopping malls and in airports. Our merchant relationships are typically governed by multi-year contracts with initial terms of five years or more.

We are the largest non-bank owner of ATMs with the fourth largest network of owned and managed ATMs as of September 2003, according to industry sources. Our ATM network has grown and financial results have improved significantly as a result of strategic acquisitions and organic growth initiatives. During the three years ended December 31, 2003, our ATM network grew from approximately 3,300 to over 12,000 ATMs, representing a CAGR of 53.3%. From 2001 to 2003, the total number of annual transactions processed within our network increased from approximately 19.9 million to approximately 64.6 million, representing a CAGR of 80.3%. Our revenue increased from $45.1 million in the year ended December 31, 2001 to $110.4 million in the year ended December 31, 2003, representing a CAGR of 56.5%.

The ATM industry has undergone significant expansion in recent years, largely from growth in the number of off-premise ATMs. Off-premise ATMs are found at locations such as convenience stores, supermarkets, membership warehouses, drug stores, shopping malls, hotels and airports, offering a convenient alternative to obtaining cash from bank tellers or drive-through facilities. According to industry sources, ATMs are the preferred method of obtaining cash among cardholders by a margin of eight to one over any other method. Both merchants and their customers benefit from the presence of an ATM in a store. Merchants benefit from increased consumer traffic, reduced check writing and credit card processing fees, and merchant fees received from us, while cardholders benefit from increased access to their cash. As a result of the increasing recognition of the convenience and value of ATMs:


	•	the number of off-premise ATMs operated in the United States grew from approximately 156,000 in March 2000 to approximately 238,000 in March 2003, representing a CAGR of 15.1%;

	•	the number of off-premise ATMs in the United States outnumbered banking branches by nearly three times as of June 2003; and

	•	more than 64% of the ATMs in the United States were off-premise ATMs as of March 2003.

We believe significant opportunities exist in our industry for both organic and acquisition-driven growth for the following reasons:


	•	Continued Industry Growth. We expect that the number of transactions at off-premise ATMs will continue to grow as cardholders take advantage of the convenience and added functionality of ATMs. According to industry sources, approximately 77% of all ATM transactions are cash withdrawals, with the remainder representing other basic banking functions, such as balance inquiries, transfers and deposits. We believe significant opportunities exist for ATM owners and operators to provide advanced functionality, such as check cashing, off-premise deposits and withdrawals of cash from payroll cards, which will result in increased ATM usage. We anticipate that we will participate in this growth as our key merchants permit us to deploy and operate ATMs in more of their existing stores and in new store locations.

	•	Financial Institution Opportunities. We believe that our large ATM network is attractive to financial institutions seeking to extend their brand and their service offerings to their customers. By branding our ATMs with their logos, financial institutions can interact with their customers more frequently, increase awareness of their brand and provide their customers increased service. In addition, while financial institutions have historically owned and operated most of their ATMs, we believe that some financial institutions are considering outsourcing certain ATM management functions. One industry source estimates that ATM operating costs exceeded $15.0 billion in North America in 2002, of which 14% was outsourced. Outsourced services include transaction processing, maintenance, currency management and various other services required to operate ATMs. Owners of ATMs can contract with multiple providers of these different services or a single provider who can provide multiple services on a bundled basis, either directly or through other providers. As financial institutions increasingly recognize the cost advantages of outsourcing and become more comfortable with third party service providers, we expect ATM outsourcing to increase. In addition, we believe ATM owners will increasingly opt for bundled outsourcing services, such as those offered by us, in order to simplify operations and lower costs. We believe that increased off-premise branding and the outsourcing of ATM management functions for financial institutions should provide us with substantial opportunities for additional long-term growth. In addition, we believe some financial institutions may seek to divest all or a portion of their off-premise ATMs, which could provide us with acquisition opportunities.

	•	Industry Consolidation. The non-bank off-premise ATM industry remains fragmented, with the top ten operators accounting for only approximately 29% of the non-bank off-premise ATMs in the United States, according to industry sources. Some ATM operators may lack the operational scale and financial resources required to effectively compete with us and other operators of large ATM networks for business and growth opportunities, which may result in asset sales by ATM operators. We believe that the existing fragmented ownership and the potential for divestitures will lead to future consolidation and provide us with numerous acquisition opportunities.


	•	Nationwide network of leading merchants under multi-year contracts. Our focus on customer service, together with our acquisitions, experience and size, has enabled us to develop and expand relationships with national and regional merchants. We have established relationships with major merchants, including drug stores, such as Duane Reade and Walgreens; convenience stores, such as Circle K, ExxonMobil, Sunoco and Amerada Hess; supermarkets, such as The Kroger Co. and Winn-Dixie; membership warehouses, such as Costco; and shopping mall operators, such as Mills Malls. Our merchant contracts typically have an initial term of at least five years.

	•	Scaleable and low-cost operating structure. Our operating structure is efficient and scaleable. We outsource some functions, such as on-site maintenance and cash management, and can take advantage of our large scale to obtain favorable pricing from our vendors. We believe our size and low-cost operating structure give us an advantage over our competitors.


	•	Recurring and predictable revenue and operating cash flow. Our large base of ATMs is generally operated under multi-year contracts that provide us with a recurring and predictable source of transaction-based revenue. For the year ended December 31, 2003, we derived 92.3% of our total revenues from recurring ATM transaction and branding fees. Historically, we have experienced high renewal rates within our merchant customer base, which we believe are a result of our strong operating performance, our focus on customer service and our emphasis on building relationships with our merchant customers.

	•	Proven ability to grow. We have grown through both organic growth initiatives and strategic acquisitions.


	•	Organic growth. Since the beginning of 2001, our number of operated ATMs has grown by 2,990. This growth has been achieved by deploying ATMs in our merchants’ existing locations that currently do not have an ATM, installing ATMs in new locations as these merchants expand, adding new merchants and entering into branding arrangements.

	•	Acquisitions and integration. Since May 2001, we have acquired eight networks of ATMs. We typically integrate these acquisitions rapidly with reasonable associated costs and little or no increase in our number of employees. We can often reduce operating costs for acquired ATMs by taking advantage of our existing vendor contracts. As a result, we have often significantly improved the operating cash flow of our acquired networks of ATMs.


	•	Exclusive focus on ATM industry. We believe we are the largest company in the United States exclusively focused on the ATM industry. Many of our competitors entered the ATM industry as a way to support or extend other lines of business, such as consumer banking. Financial institutions, ATM manufacturers, retailers and others have entered the ATM business with varying degrees of success. We believe our success to date is largely attributable to our focus on generating maximum profitability at every ATM and our high level of customer service.

	•	Industry leadership and experienced management team. We have a strong management team with over 50 years of financial services and payment processing-related experience. Our senior management team has developed extensive contacts and a leadership position in the industry. We believe this leadership role has helped us to attract new merchant customers and has provided us with increased acquisition opportunities.

Our strategy is to enhance our position as the leading non-bank owner and operator of ATMs in the United States. In order to execute this strategy we will endeavor to:


	•	Increase penetration of our existing merchant base. We have three principal opportunities to increase the number of ATM sites with our existing merchants: first, by deploying ATMs in our merchants’ existing locations that currently do not have an ATM; second, by displacing existing ATM operators in our merchants’ other locations; and third, as our merchants open new locations, by installing ATMs in those locations.

	•	Target additional leading merchants. We believe our expertise, national footprint and strong record of customer service, combined with our successful track record of working with leading merchants, positions us to successfully market to, and enter into long-term contracts with, other leading national and regional merchants.

	•	Capitalize on opportunities with financial institutions. We believe we are strongly positioned to work with financial institutions to fulfill their ATM requirements. Our ATM services offered to financial institutions include branding our ATMs with their logos, managing their off-premise ATM networks or buying their off- premise networks in combination with branding arrangements.

	•	Pursue strategic acquisitions. We will continue to pursue strategic acquisitions that complement our existing ATM network using our proven, disciplined acquisition and integration methodology.


		We pursue strategic acquisitions that we believe will expand our network and increase our profitability.

We own and operate our own ATMs and provide merchant customers with all of the services they require to operate their own ATMs. In connection with the operations of our or our customers’ ATMs, we generate revenue on a per-transaction basis from the surcharge fees charged to cardholders for the convenience of using ATMs and from interchange fees charged to such cardholders’ financial institutions for processing the ATM transactions. We also take advantage of the preferential pricing we receive from NCR due to our Master VAR status and resell equipment to our merchant customers and others. During 2003, we processed approximately 48.8 million surcharge bearing ATM transactions, and we received interchange fees in connection with approximately 58.6 million transactions.

We deploy and operate ATMs primarily under three types of arrangements: turnkey, merchant-owned and merchant-assisted. Differences in these arrangements include which party owns the ATM and the level of responsibility the merchant undertakes in operating the ATM. Under all of these types of arrangements, we typically enter into multi-year contractual relationships with a merchant. We pay the merchant a fee that depends on a variety of factors, including the type of arrangement for the ATM (i.e., turnkey, merchant-owned or merchant-assisted) and the number of transactions. In general, the greater the merchant’s responsibilities in owning and operating the ATM, the higher its fee will be on a per-transaction basis.

The following table provides detail relating to the number of ATMs we owned and operated under our various arrangements as of December 31, 2003.


	•	Turnkey. Under a turnkey arrangement, we own or lease the ATM and are responsible for controlling substantially all aspects of its operation. These responsibilities include what we refer to as first line maintenance, such as replacing paper, clearing paper or bill jams, resetting the ATM and any telecommunications and power issues or other maintenance that does not require a trained service technician. Under our turnkey operations, we are also responsible for what we refer to as second line maintenance, or more complex maintenance procedures that require trained service technicians and often involve replacing component parts. In addition to first and second line maintenance, under turnkey agreements we are responsible for arranging for cash, cash loading, supplies, telecommunications service and all other services required for the operation of the ATM other than electricity. Under a turnkey arrangement, we pay a fee, either periodically, on a per-transaction basis or a combination of both, to the merchant on whose premises the ATM is physically located. Under turnkey arrangements, we are responsible for purchasing the ATM, as well as almost all of the expenses related to its operation. Typically, we deploy ATMs under turnkey arrangements for our national and regional merchant customers, such as Amerada Hess, Circle K, Duane Reade, ExxonMobil and Sunoco. A majority of the ATMs we have acquired since May 2001 are operated under turnkey arrangements. Because turnkey ATMs are owned or leased by us and usually located in major national chains, we have the opportunity to generate additional revenues from branding. In recent years, we have been successful in increasing the number and percentage of our ATMs operated under turnkey arrangements.

	•	Merchant-owned. Under a merchant-owned arrangement, the merchant owns the ATM and is responsible for its maintenance and most of the operating costs. We typically operate ATMs with our independent merchant customers under merchant-owned arrangements. A merchant who


		purchases an ATM from us is responsible for providing cash for the ATM and all maintenance. The merchant is also responsible for cash loading, supplies, telecommunication and electrical services. Under these arrangements, we sometimes retain responsibility for second line maintenance for an additional fee, and we provide all transaction processing services. Because the merchant bears more of the costs associated with operating ATMs under this arrangement, the merchant typically receives a higher fee on a per-transaction basis than is the case under a turnkey arrangement. In a limited number of our merchant-owned arrangements, we have assumed responsibility for providing and loading cash. Accordingly, under these arrangements, the merchant receives a smaller fee on a per-transaction basis than in the typical merchant-owned arrangement.

	•	Merchant-assisted. Merchant-assisted arrangements are a hybrid between turnkey and merchant-owned arrangements. In these arrangements, we own or lease the ATM and provide all transaction processing services, but the merchant generally is responsible for providing and loading cash for the ATM and first line maintenance. In these arrangements, the merchant is sometimes responsible for supplies, telecommunication and electrical services. As a result, the merchant is typically paid a higher fee on a per-transaction basis than it would be under a turnkey arrangement, but receives less than it would under a merchant-owned arrangement.

Recently, we have entered into arrangements with financial institutions to brand certain of our turnkey ATMs. A branding arrangement allows a bank to expand its geographic presence for a fraction of the cost of building a branch location, and typically for less than the cost of placing one of its own ATMs at that location, allowing a bank to rapidly increase its number of branded ATM sites and, defensively, prevent other financial institutions from entering into these locations. Under these arrangements, the branding bank’s customers are typically allowed to use the branded ATM without paying a surcharge fee to us. In return, we receive monthly fees on a per-ATM basis from the branding bank, while retaining our standard fee schedule for other cardholders using the branded ATM. In addition, we typically receive increased interchange revenue as a result of increased usage of our ATMs by the branding bank’s customers. We intend to pursue additional opportunities to enter into bank branding arrangements as part of our growth strategy. We currently have branding arrangements in place with three financial institutions. Another branding arrangement is our participation in Allpoint, a surcharge-free alliance. Cardholders of the financial institutions that are members of Allpoint can use our ATMs free of surcharges in exchange for Allpoint’s payment to us of a fixed monthly fee per cardholder included in the alliance. We have also allowed EFT networks to place signage on our ATMs for which we receive a fixed fee per ATM.

We offer outsourcing services to financial institutions where we manage ATMs on their behalf. We currently provide outsourced ATM management services for one large financial institution on a limited basis and will seek to expand this relationship and pursue additional outsourcing opportunities with other financial institutions in the future.

We have found that the primary factor affecting transaction volume at a given ATM is its location. Our strategy in deploying our ATMs, particularly those placed under turnkey arrangements, is to identify and deploy ATMs at locations that provide high visibility and high transaction volume. Our experience has demonstrated that the following locations often meet these criteria: convenience stores and combination convenience stores and gas stations, grocery stores, airports and major regional and national retail outlets. We have entered into multi-year agreements with a number of merchants with these types of locations, including A&P, Amerada Hess, Bloomingdale’s, Circle K, Costco, Duane Reade, ExxonMobil, Giant, Kroger, R.H. Macy and Company, Inc. (Macy’s), Mills Malls, Rite Aid, Sears, Roebuck & Co. (Sears), Sunoco, Walgreens and Winn-Dixie. We believe that once a cardholder establishes a pattern of using a particular ATM, the cardholder will generally continue to use that ATM.

Our sales and marketing team focuses on developing new relationships with national and regional merchants and on building and maintaining relationships with our existing merchants. The team is organized into groups that specialize in marketing to specific merchant industry segments, which allows us

to tailor our offering to the specific requirements of each merchant customer. Our sales and marketing team is composed of 12 employees, who receive a combination of incentive-based compensation and a base salary.

In addition to targeting new business opportunities, our sales and marketing team supports our acquisition initiatives by building and maintaining relationships with newly acquired merchants. We seek to identify growth opportunities within each merchant account by analyzing the merchant’s sales at each of its locations, foot traffic and various demographic data to determine the best opportunities for new ATM placements. We also pursue branding and outsourcing opportunities with financial institutions to manage and operate their ATM networks.

To maintain an efficient and flexible operating structure, we outsource certain aspects of our operations, including transaction processing, cash management and maintenance. Due to the number of ATMs we operate, we believe we have obtained favorable pricing terms from most of our major vendors. We contract for the provision of the services described below in connection with our operations.

Transaction processing. We contract with and pay fees to third parties who process transactions originating from our ATMs. These processors communicate with the cardholder’s financial institution through an EFT network to obtain transaction authorization and settle transactions. These transaction processors include Star Systems, Fiserv and Genpass.

EFT network services. Our transactions are routed over various EFT networks, such as Star, Pulse, NYCE, Cirrus and Plus, to obtain authorization for a cash disbursement and provide account balances. EFT networks set the interchange fees that they charge to the financial institutions, as well as the amount paid to us. We attempt to maximize the utility of our ATMs to cardholders by participating in as many EFT networks as practical.

ATM equipment. We purchase substantially all of our ATMs from national manufacturers, including NCR, Diebold, Tidel Technologies Inc., and Triton Systems, Inc. The large quantity of ATMs that we purchase from these manufacturers enables us to receive favorable pricing and payment terms. In addition, we maintain close working relationships with these manufacturers in the course of our business, allowing us to stay informed regarding product updates and to minimize technical problems with purchased equipment. Under our turnkey arrangements, we deploy high quality, multi-function ATMs, typically purchased from NCR and Diebold. Under our merchant-assisted or merchant-owned arrangements, we deploy ATMs that are cost-effective and appropriate for the merchant. These are purchased from a variety of ATM vendors. Although we currently purchase a substantial majority of our ATMs from NCR, we believe our relationships with our other ATM suppliers are good and that we would be able to purchase the ATMs we require for our turnkey and merchant-assisted operations from other ATM manufacturers if we were no longer able to purchase ATMs from NCR.

ATM maintenance. We typically contract with third-party service providers for the provision of on-site maintenance services. We have multi-year maintenance agreements with Diebold, NCR, Genpass and EFMARK.

Cash management. We obtain cash to fill our turnkey, and in some cases merchant-owned, ATMs under arrangements with our cash providers, Palm Desert and First Bank & Trust. We pay a prime rate-based fee on the daily outstanding cash balance. As of December 31, 2003, we had $237.7 million in cash in our ATMs under these arrangements.

Our cash providers also provide cash management services, which include reporting, armored courier coordination, cash ordering, cash insurance, reconciliation of ATM cash balances, ATM cash level monitoring and claims processing with armored couriers, financial institutions and processors.

Cash replenishment. We contract with armored courier services to transport and transfer cash to our ATMs. We use leading armored couriers such as Brink’s Incorporated, Loomis, Fargo & Co., EFMARK

Premium Armored Services, Inc. and Bantek West, Inc. Under these arrangements, the armored couriers pick up the cash in bulk and, using instructions received from our cash providers, prepare the cash for delivery to each ATM on the designated fill day. Following a predetermined schedule, the armored couriers visit each location on the designated fill day, load cash into each ATM by either adding additional cash into a cassette, or by swapping out the remaining cash for a new fully loaded cassette, and then balance the machine and provide cash reporting to the applicable cash provider.

Our technology and operations platform consists of ATM equipment, ATM and internal network infrastructure, cash management and customer service. This platform is designed to provide our merchant customers with what we believe is a high quality suite of services.

ATM equipment. We use ATMs from national manufacturers, including NCR, Diebold, Tidel Technologies and Triton Systems. The wide range of advanced technology available from these ATM manufacturers provides our merchant customers with advanced features and reliability through sophisticated diagnostics and self-testing routines. The different machine types can perform basic functions, such as dispensing cash and displaying account information. Some of our ATMs are modular and upgradeable so they can be adapted to provide additional services in response to changing technology and consumer demand. For example, a portion of our ATMs can be upgraded to accept deposits through the installation of additional hardware and software components.

ATM network. We place significant emphasis on providing quality service with a high level of security and minimal interruption. We have carefully selected support vendors who are leaders in their industries to optimize the performance of our ATM network. In addition, our transaction processors provide sophisticated security analysis and monitoring 24 hours a day.

Internal systems. Our internal systems include multiple layers of security to help protect our systems from unauthorized access. These systems are protected by detailed security rules to limit access to all critical systems. Our systems components are directly accessible by a limited number of employees on a need-only basis. Our gateway connections to our EFT network service providers provide us with real-time access to transaction details, such as cardholder verification, authorization and funds transfer. We have installed these communications circuits with backup connectivity to help protect us from telecommunications problems in any particular circuit.

We use custom software that continuously monitors the performance of the ATMs in our network, including details of transactions at each ATM and expenses relating to that ATM, including fees payable to the merchant. This software permits us to generate detailed financial information for each ATM location, allowing us to monitor each location’s profitability. We analyze transaction volume and profitability data to determine whether to continue operating at a given site, how to price various operating arrangements with merchants and branding arrangements, and to create a profile of successful ATM locations so as to assist us in deciding the best locations for additional ATM deployments.

Cash management. We have our own internal cash management department that utilizes data generated by our cash providers, internally generated data and a proprietary methodology to confirm daily orders, audit delivery of cash to armored couriers and ATMs, monitor cash balances for cash shortages, coordinate and manage emergency cash orders and audit costs from both armored couriers and cash providers.

Our cash management department uses proprietary analytical models to determine the necessary fill frequency and load amount for each ATM. Based on location, day of the week, upcoming holidays and events and other factors, we project cash requirements for each ATM on a daily basis. After receiving a cash order from us, the cash provider transfers the requested amount of cash to a bank near the ATM where the designated armored courier can access the cash and subsequently transport it to the ATM.

Customer service. We believe one of the factors that differentiates us from our competitors is our customer service responsiveness and proactive approach to managing any ATM downtime. We use

We also offer our merchant customers customized ATM activity reporting that includes daily, weekly or monthly transaction and uptime reporting. Our standard reporting to our merchants includes summary transaction reports that are made available in the first week of every month. In addition, we are developing an interactive website that will allow our merchant customers to access real-time information.

We maintain a proprietary database of transactions made on and performance metrics for all of our ATM locations. This data is aggregated into individual merchant customer profiles that are readily accessible by our customer service representatives and managers. We believe our proprietary database enables us to provide superior quality and accessible and reliable customer support.

We have contracts with approximately 40 major national and regional merchants, including convenience stores, supermarkets, drug stores and other high traffic retail chains, and approximately 6,000 independent merchants. For the year ended December 31, 2003, no single merchant customer accounted for 10% or more of our revenues.

The terms of our merchant contracts vary as a result of negotiations at the time of execution. In the case of turnkey arrangements, which are typically employed with our major national and regional merchants, the contact terms vary, but typically include the following:


	•	an initial term of at least five years;

	•	ATM exclusivity at locations where we install an ATM;

	•	protection for us against underperforming locations by permitting us to increase the surcharge fee or remove ATMs;

	•	provisions permitting us to terminate or remove ATMs or renegotiate the fees paid to the merchant if surcharge fees are generally reduced or eliminated by law; and

	•	provisions making the merchant’s fee dependent on the number of ATM transactions.

Our contracts under merchant-owned or merchant-assisted arrangements typically include similar terms, as well as the following additional terms:


	•	provisions prohibiting in-store check cashing by the merchant or the operation of any other cash-back devices;

	•	provisions imposing an obligation on the merchant to operate the ATM at any time his or her store is open to the public;

	•	provisions permitting us to raise ATM surcharge fees; and

	•	provisions that require a merchant to have a purchaser of the merchant’s store assume our contract.

We compete with financial institutions and other independent ATM companies for additional ATM placements, new merchant accounts and acquisitions. Several of our competitors are larger, more established and have greater financial and other resources than us. However, many of our competitors do not have a singular focus on ATM management, and we believe this focus gives us a significant competitive advantage. In addition, we believe the scale of our extensive ATM network and our focus on customer service also provide significant competitive advantages.

Our principal business, ATM network ownership and operation, is not subject to significant government regulation. However, various aspects of our business are subject to state regulation. Our failure to comply with applicable laws and regulations could result in restrictions on our ability to provide our products and services in such states, as well as the imposition of civil fines.

Americans with Disabilities Act. The ADA currently includes provisions regulating the amount of clear floor space required in front of each ATM, prescribing the maximum height and reach depth of each ATM, and mandating that instructions and all information for use of the ATM be made accessible to and independently usable by persons with vision impairments. The Department of Justice is currently in the process of issuing new accessibility guidelines under the ADA that will cover virtually all aspects of commercial activity vis-à-vis the disabled. We expect that these new guidelines will include provisions addressing ATMs and how to make them more accessible to the disabled. Under the current proposals, height and reach requirements would be shortened, keypads would be required to be laid out in the manner of telephone keypads, and ATMs would be required to possess speech capabilities. These new guidelines would affect the manufacture of ATM equipment going forward, and could require us to retire or retrofit certain ATMs in our network.

Triple DES. In recent years, advances in data encryption have made ATMs more tamper-resistant. One of the more recently developed advanced data encryption standards is commonly referred to as Triple DES. As of December 31, 2003, most of our ATMs, like the vast majority of ATMs across the nation, were not equipped with Triple DES encryption. We have adopted a policy that any new ATMs that we acquire from a manufacturer must be Triple DES compliant. We have budgeted $15.0 million to accomplish the Triple DES conversion on all of our ATMs by the end of 2007. Currently, MasterCard International, which is an operator of one of the nation’s largest EFT networks, has advised all ATM operators that any ATM using its network must be Triple DES compliant by March 31, 2005. We have requested an extension of this deadline. If the extension is not granted, we will either have to accelerate our conversion plan to meet MasterCard’s deadline, or we will use alternate network providers.

Surcharge regulation. The imposition of surcharges is not currently subject to federal regulation. There have been, however, various state and local efforts to ban or limit surcharges, generally as a result of activities of consumer advocacy groups that believe that surcharges are unfair to cardholders. Generally, United States federal courts have ruled against these efforts. We are not aware of any existing surcharging bans or limits applicable to us in any of the jurisdictions in which we currently do business. Nevertheless, there can be no assurance that surcharges will not be banned or limited in the cities and states where we operate. Such a ban or limit would have a material adverse effect on us.

EFT network regulations. EFT regional networks have adopted extensive regulations that are applicable to various aspects of our operations and the operations of other ATM network operators. We believe that we are in material compliance with these regulations and, if any deficiencies were discovered, that we would be able to correct them before they had a material adverse impact on our business.

Regulation of our cash provider. We obtain the cash for approximately 4,700 of our ATMs from our cash providers, Palm Desert and First Bank & Trust. Our cash providers are subject to various regulations, which have an impact on our arrangements with them. Our cash providers classify the cash that we obtain from them as “vault cash” and, under federal banking laws, the cash providers must therefore have full rights of ownership to the cash and have the cash immediately available to them to satisfy their depositors’ needs, with the cash at all times being reasonably nearby to them. Accordingly, our arrangements with our cash providers generally allows them to demand the return of all or any portion of the cash that we are using for reasons that are not within our control, including if:


	•	the cash provider is directed to do so by state or federal regulatory agencies;

	•	the cash provider needs the cash to satisfy the claims of its depositors; or

	•	the cash is determined not to be “vault cash” for reserve purposes under federal banking laws.

If our cash providers were to require the return of their cash for any of these reasons, our ability to operate our ATMs that use this cash would be adversely affected, and we would need to locate alternative sources of cash in order to operate these ATMs. In order to mitigate this risk to some extent, we are exploring supplemental and alternative arrangements for obtaining cash for use in our ATMs.

In the ordinary course of our business, we are subject to periodic lawsuits, investigations and claims. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, we do not believe that any currently pending legal proceeding to which we are a party will have a material adverse effect on our business, results of operations, cash flows or financial condition.

As of December 31, 2003, we had 108 employees. None of our employees is represented by a union or covered by a collective bargaining agreement. We believe that our relations with our employees are good.

Our principal executive offices are located at 3110 Hayes Road, Suite 300, Houston, Texas 77082, and our telephone number is (281) 596-9988. We lease approximately 27,000 square feet of space under our Houston office lease and the lease for our satellite office in Temple, Texas. Our facilities are leased pursuant to operating leases for various terms. We believe that our leases are at competitive or market rates and do not anticipate any difficulty in leasing suitable additional space upon expiration of our current lease terms.

The following table sets forth the names, ages and positions of our executive officers and directors.

The following biographies describe the business experience of our executive officers and directors.

Jack Antonini has served as our President and Chief Executive Officer and as a director since January 2003. From November 2000 to December 2002, Mr. Antonini served as a consultant for JMA Consulting, providing consulting services to the financial industry. During 2000, Mr. Antonini served as chief executive officer and president of Globeset, Inc., an electronic payment products and services company. From August 1997 to February 2000, Mr. Antonini served as executive vice president of consumer banking at First Union Corporation of Charlotte, N.C. From September 1995 to July 1997, he served as vice chairman and chief financial officer of First USA Corporation, which was acquired by Bank One in June 1997. Mr. Antonini held various positions from March 1985 to August 1995 at San Antonio-based USAA Federal Savings Bank, serving as vice chairman, president and chief executive officer from August 1991 to August 1995. He is a certified public accountant and holds a bachelor of science degree in business and accounting from Ferris State University in Michigan. Mr. Antonini also serves as a director of the Electronic Funds Transfer Association, or EFTA.

J. Chris Brewster has served as our Chief Financial Officer and Treasurer since joining us in February 2004. From September 2002 until February 2004, Mr. Brewster provided consulting services to various businesses. From October 2001 until September 2002, Mr. Brewster served as executive vice president and chief financial officer of Imperial Sugar Company, a Nasdaq-quoted refiner and marketer of sugar and related products. From March 2000 to September 2001, Mr. Brewster served as chief executive officer and chief financial officer of WorldOil.com, a privately-held Internet, trade magazine, book and catalog publishing business. From January 1997 to February 2000, Mr. Brewster served as a partner of Bellmeade Capital Partners, LLC, a merchant banking firm specializing in the consolidation of fragmented industries. From March 1992 to September 1996, he served as Chief Financial Officer of Sanifill, Inc., an NYSE-listed environmental services company. From May 1984 to March 1992, he served as Chief Financial Officer of National Convenience Stores, Inc., an NYSE-listed operator of 1,100 convenience stores. He holds a bachelor of science degree in industrial management from the Massachusetts Institute of Technology and a master of business administration from Harvard Business School.

Michael H. Clinard has served as our Chief Operating Officer since he joined the company in August 1997. He holds a bachelor of science degree in business management from Howard Payne University. Mr. Clinard also serves as a director and treasurer of the ATM Industry Association, or ATMIA.

Thomas E. Upton has served as our Chief Administrative Officer since February 2004. From June 2001 to February 2004, Mr. Upton served as our Chief Financial Officer and Treasurer. From February 1998 to May 2001, Mr. Upton was the chief financial officer of Alegis Group LLC, a national collections firm. Prior to joining Alegis, Mr. Upton served as a financial executive for several companies. He is a

Fred R. Lummis has served as a director and our Chairman of the board since June 2001. Mr. Lummis is a co-founder and managing partner of The CapStreet Group, LLC, CapStreet II, L.P. and CapStreet Parallel II, L.P. From June 1998 to May 2000, Mr. Lummis served as chairman and chief executive officer of Advantage Outdoor Company, an outdoor advertising company. From September 1994 to June 1998, Mr. Lummis served as chairman and chief executive officer of American Tower Corporation, a nationwide communication tower owner and operator. Mr. Lummis now serves as a director of American Tower Corporation, Southwest Bancorporation of Texas, Inc. and several private companies. Mr. Lummis holds a bachelor of arts degree in economics from Vanderbilt University and a master of business administration degree from the University of Texas at Austin.

Robert P. Barone has served as a director since September 2001. Mr. Barone has more than 40 years of sales, marketing and executive leadership experience in various positions at Diebold, NCR, Xerox and the EFTA. Since December 1999, Mr. Barone has served as a consultant for SmartNet Associates, Inc., a private financing service. Additionally, from May 1997 to November 1999, Mr. Barone served as Chairman of the Board of PetsHealth Insurance, Inc., a pet health insurance provider. From September 1988 to September 1994, he served as board vice-chairman, president and chief operating officer at Diebold. He holds a bachelor of business administration degree from Western Michigan University and a master of business administration degree from Indiana University. A founder and past chairman of the EFTA, Mr. Barone is now chairman emeritus of the EFTA.

Frederick W. Brazelton has served as a director since June 2001. Mr. Brazelton is a partner of The CapStreet Group, which he joined in August 2000. From July 1996 to July 1998, Mr. Brazelton worked for Hicks, Muse, Tate & Furst, a private equity firm in Dallas, and from June 1994 to June 1995, he worked for Willis, Stein & Partners, a private equity firm in Chicago. He holds a bachelor of business administration from the Business Honors Program at the University of Texas at Austin and a master of business administration degree from Stanford Graduate School of Business. Mr. Brazelton also serves as the chairman of the board of directors of River Oaks Imaging and Diagnostic Group, Inc., a provider of diagnostic imaging services, and as a director of MessagePro, Inc., a call center company.

Ralph H. Clinard has served as a director since June 2001. Mr. Clinard founded the predecessor to our company in 1989 and was with us until he retired as president and chief executive officer in January 2003. Prior to founding our predecessor, Mr. Clinard served with Exxon Corporation, an integrated oil company, working in various positions for almost 30 years. Mr. Clinard holds a bachelor of science degree in mathematics from Muskingum College and a bachelor of science degree in mechanical engineering from Pennsylvania State University. Mr. Clinard is currently retired.

Ron Coben has served as a director since July 2002. Mr. Coben has also served as the President and CEO of MessagePro, Inc. since November 2001. From October 1989 to June 1996, Mr. Coben was senior vice president, and from June 1996 to November 2001, Mr. Coben was executive vice president of consumer and business banking for Bank United Corp., which was acquired by Washington Mutual, Inc. in February 2001. Mr. Coben also served as executive vice president at Washington Mutual, Inc. from February 2001 to November 2001. Mr. Coben holds a bachelor of business administration degree from the University of Texas at Austin.

Upon completion of this offering, our board will consist of eight persons, a majority of whom satisfy the independence requirements of The Nasdaq National Market and the Sarbanes-Oxley Act of 2002. Consequently, we are in the process of appointing two additional directors in connection with this offering.

Our executive officers are appointed by the board on an annual basis and serve until their successors have been duly elected. There are no family relationships among any of our directors or executive officers, except that Ralph H. Clinard, a director, is the father of Michael H. Clinard, our Chief Operating Officer.

Upon completion of the offering, our board of directors will be divided into three classes, with each class of directors having a three-year term. Messrs. Coben, Barone and Ralph Clinard will serve as Class I directors (whose terms expire in 2005), Messrs. Brazelton and one of our new directors will serve as Class II directors (whose terms expire in 2006), and Messrs. Lummis, Antonini and another of our new directors will serve as Class III directors (whose terms expire in 2007). At each annual meeting of stockholders, the successors to directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors. The classification of our board of directors may have the effect of delaying or preventing changes in control or management of Cardtronics.

Each executive officer is appointed by, and serves at the discretion of, our board of directors.

Upon completion of this offering, our board of directors intends to appoint an audit committee and a compensation committee. It is currently contemplated that Mr. Coben and our two new directors will serve on the audit committee and that Messrs. Barone, Brazelton and Lummis shall serve on the compensation committee. The composition of the board committees will comply with the requirements of The Nasdaq National Market and the Sarbanes-Oxley Act of 2002, including that at least one member of the audit committee will meet the definition of an “audit committee financial expert” as such term is defined in Item 401(h) of Regulation S-K.

On an annual basis, the audit committee will select, on behalf of our board of directors, an independent public accounting firm to be engaged to audit our financial statements, discuss with the independent auditors their independence, review and discuss the audited financial statements with the independent auditors and management and recommend to our board of directors whether the audited financials should be included in our Annual Reports on Form 10-K to be filed with the SEC. The audit committee will be comprised of three independent directors.

The compensation committee will review and either approve, on behalf of our board of directors, or recommend to the board of directors for approval (1) the annual salaries and other compensation of our executive officers and (2) individual stock and stock option grants. The compensation committee also will provide assistance and recommendations with respect to our compensation policies and practices and assist with the administration of our compensation plans. We expect that the compensation committee will be comprised of at least two independent directors.

We will not have a nominating and corporate governance committee. The independent directors of our board will fulfill the responsibilities of a nominating and corporate governance committee and will assist our board of directors in fulfilling its responsibilities by identifying and approving individuals qualified to serve as members of our board of directors, selecting director nominees for our annual meetings of stockholders, evaluating the performance of our board of directors, and developing and recommending to our board of directors corporate governance guidelines and oversight with respect to corporate governance and ethical conduct.

We are planning to adopt a code of business conduct and ethics that complies with the requirements of the Sarbanes-Oxley Act of 2002 and The Nasdaq National Market.

Following our initial public offering we anticipate that we will pay each of our non-employee directors $10,000 annually, as well as $3,000 per board meeting attended. In addition, the chairman of our audit committee, the chairman of our compensation committee and the Chairman of our board will receive $20,000 as an annual retainer. Finally, the members of our audit committee and our compensation

committee will receive $3,000 per meeting. Directors who are also are employed by us will not receive fees for attending board or committee meetings. All of our directors will be reimbursed for their reasonable expenses in attending board and committee meetings. In addition, we are in the process of establishing a plan which would permit each director to receive compensation for board service in the form of common shares and to defer receipt of this compensation for a period of time selected by the director that terminates no later than the date he ceases to be a director.

The table below sets forth summary information concerning the compensation awarded to our chief executive officer and our three other executive officers in the year ended December 31, 2003. The individuals listed below are referred to in this prospectus as our named executive officers.


(1)	Mr. Brewster joined us in February 2004 and did not receive any compensation prior to that time.

None of our named executive officers was granted options to purchase our common stock during the year ended December 31, 2003.

The following table presents information concerning the stock options exercised during the last fiscal year by each of our named executive officers and the fiscal year-end value of unexercised options held by each of our named officers as of December 31, 2003.


(1)	There was no public market for our common stock on December 31, 2003. Accordingly, we calculated these values in accordance with the rules of the SEC, on the basis of the estimated initial public offering price per share of $ , less the applicable exercise price.

(2)	Mr. Brewster joined us in February 2004.

Employment Agreement with Jack Antonini. In January 2003, we entered into an employment agreement with Jack Antonini. This agreement provides for an initial term ending January 20, 2006. Under the employment agreement, Mr. Antonini is entitled to receive a current monthly base salary of $26,250.

Employment Agreement with Michael H. Clinard. In June 2001, we entered into an employment agreement with Michael H. Clinard. This agreement provides for an initial term ending June 4, 2004. Under the employment agreement, Mr. Clinard is entitled to receive a current monthly base salary of $17,500, subject, on each anniversary of the agreement, to increases as determined by the compensation committee of our board of directors in its sole discretion, with such increases being targeted to be 5% of the previous year’s base salary. In addition, (a) if he terminates his employment for good reason, as defined in the employment agreement, then he is entitled to continue to receive payments of base salary from us for a period of time following his termination, and (b) if he dies or becomes totally disabled, as defined in the employment agreement, then he is entitled to receive the difference between his base salary and any disability benefits received by him under our disability benefit plans for a period of time following his death or disability, as applicable.

Employment Agreement with Thomas E. Upton. In June 2001, we entered into an employment agreement with Thomas E. Upton. This agreement provides for an initial term ending June 1, 2005. Under the employment agreement, Mr. Upton is entitled to receive a current monthly base salary of $16,667.

Common Provisions of Employment-Related Agreements of Named Executive Officers. Several provisions are common to the employment agreements of our named executive officers. For example:


	•	Each employment agreement requires the employee to protect the confidentiality of our proprietary and confidential information.

	•	Each employment agreement requires that the employee not compete with us or solicit our employees or customers for a period of 24 months following the term of his employment.

	•	Each employment agreement provides that the employee may be paid an annual bonus based on certain factors and objectives set by our compensation committee, with the ultimate amount of any bonus paid determined at the direction of our compensation committee.

In February 2004, our board of directors and the stockholders adopted and approved our 2004 Stock Incentive Plan. The purpose of the 2004 Stock Incentive Plan is to provide directors, employees, advisors and consultants of the company and its affiliates additional incentive and reward opportunities designed to enhance the profitable growth of the company and its affiliates. The plan provides for the granting of incentive stock options intended to qualify under Section 422 of the Code, options that do not constitute incentive stock options, restricted stock awards, performance awards, and phantom stock awards. The plan will be administered by the compensation committee of our board of directors. In general, the compensation committee is authorized to select the recipients of awards and to establish the terms and conditions of those awards. In connection with the adoption of the plan, the board amended our 2001 Stock Incentive Plan so that no further awards will be granted under that plan.

The number of shares of common stock that may be issued under the plan may not exceed shares (subject to adjustment to reflect stock dividends, stock splits, recapitalizations and similar changes in the company’s capital structure). Shares of common stock that are attributable to awards that have expired, terminated or been canceled or forfeited are available for issuance or use in connection with future awards. The maximum number of shares of common stock that may be subject to options, restricted stock awards and performance awards denominated in shares of common stock granted under the plan to any one individual during the term of the plan may not exceed 50% of the aggregate number of shares of common stock that may be issued under the plan (as adjusted from time to time in accordance with the

provisions of the plan). The maximum amount of compensation that may be paid under all performance awards under the plan denominated in cash (including the fair market value of any shares of common stock paid in satisfaction of such performance awards) granted to any one individual during any calendar year may not exceed $ , and any payment due with respect to a performance award shall be paid no later than 10 years after the date of grant of such performance award.

The price at which a share of common stock may be purchased upon exercise of an option granted under the plan will be determined by the compensation committee, but (a) in the case of an incentive stock option, such purchase price will not be less than the fair market value of a share of common stock on the date such option is granted, and (b) in the case of an option that does not constitute an incentive stock option, such purchase price will not be less than 50% of the fair market value of a share of common stock on the date such option is granted. Additionally, a stock appreciation right may be granted in connection with the grant of an option. A stock appreciation right allows the holder to surrender the right to purchase shares under the related option in return for a payment in cash, shares of common stock, or a combination thereof, in an amount equal to the difference between the fair market value of the shares of common stock on the date such right is exercised over the purchase price for such shares under the related option.

Shares of common stock that are the subject of a restricted stock award under the plan will be subject to restrictions on disposition by the holder of such award and an obligation of such holder to forfeit and surrender the shares to the Company pursuant to certain forfeiture restrictions. The forfeiture restrictions will be determined by the compensation committee in its sole discretion, and the compensation committee may provide that the forfeiture restrictions will lapse upon (a) the attainment of one or more performance targets established by the compensation committee that are based on (1) the price of a share of common stock, (2) Cardtronics’ earnings per share, (3) Cardtronics’ market share, (4) the market share of a business unit of Cardtronics designated by the compensation committee, (5) Cardtronics’s sales, (6) the sales of a business unit of Cardtronics designated by the compensation committee, (7) the net income (before or after taxes) of Cardtronics or any business unit of Cardtronics designated by the compensation committee, (8) the cash flow return on investment of Cardtronics or any business unit of Cardtronics designated by the compensation committee, (9) the earnings before or after interest, taxes, depreciation, and/or amortization of Cardtronics or any business unit of Cardtronics designated by the compensation committee, (10) the economic value added, (11) the return on stockholders’ equity achieved by Cardtronics, or (12) the total stockholders’ return achieved by Cardtronics (the goals described in items (1) through (12) are referred to as the enumerated performance goals), (b) the award holder’s continued employment with Cardtronics or continued service as a consultant or director for a specified period of time, (c) the occurrence of any event or the satisfaction of any other condition specified by the compensation committee in its sole discretion, or (d) a combination of any of the foregoing.

A performance award under the 2004 Stock Incentive Plan is an award of shares of common stock, cash payments, or a combination thereof that may be earned based on the satisfaction of various performance targets established by the compensation committee that are based upon one or more of the enumerated performance goals. At the time of the grant of a performance award, the compensation committee will establish the maximum number of shares of common stock subject to, or the maximum value of, such award and the period over which the performance applicable to the award will be measured.

Phantom stock awards under the plan are awards of common stock (or the fair market value thereof), or rights to receive amounts equal to share appreciation over a specific period of time. Such awards vest over a period of time established by the compensation committee, without satisfaction of any performance criteria or objectives. Payment of a phantom stock award may be made in cash, common stock, or a combination thereof.

No awards under the plan may be granted after 10 years from the date the plan was adopted by the board of directors. The plan will remain in effect until all options granted under the plan have been satisfied or expired, all shares of restricted stock granted under the plan have vested or been forfeited, and

all performance awards and phantom stock awards have been satisfied or expired. The board of directors in its discretion may terminate the plan at any time with respect to any shares of common stock for which awards have not been granted. The plan may be amended, other than to increase the maximum aggregate number of shares that may be issued under the plan or to change the class of individuals eligible to receive awards under the plan, by the board of directors without the consent of the stockholders of the company. No change in any award previously granted under the plan may be made which would impair the rights of the holder of such award without the approval of the holder.

Our 2001 Stock Incentive Plan provides for the granting of stock options to eligible employees and directors, including non-employee directors and consultants of the company. Stock options granted under the 2001 Stock Incentive Plan consist of nonstatutory stock options, which are options not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code.

A maximum of shares of our common stock are authorized for issuance under the 2001 Stock Incentive Plan. As of December 31, 2003, shares of common stock were issuable upon the exercise of outstanding options granted under the 2001 Stock Incentive Plan at a weighted average exercise price of $6.62, shares of common stock have been issued upon exercise of options at exercise prices ranging between $0.04 and $11.76, and shares of common stock remained available for future issuance under the 2001 Stock Incentive Plan. The 2001 Stock Incentive Plan was adopted by our board of directors in June 2001 and was approved by our stockholders in June 2001. Unless terminated earlier by our board of directors, the 2001 Stock Incentive Plan will terminate in June 2011. In connection with our initial public offering, we are adopting the 2004 Stock Incentive Plan as described above. Accordingly, we do not anticipate making any additional awards under the 2001 Stock Incentive Plan. Awards previously made under this plan will remain outstanding and vest in accordance with their terms.

The 2001 Stock Incentive Plan may be administered by the board of directors or a committee appointed by the board of directors to administer the 2001 Stock Incentive Plan. The administrator of the 2001 Stock Incentive Plan has the authority to grant options and to determine the terms of these awards, provided these grants are not inconsistent with the terms of the 2001 Stock Incentive Plan. Stock options granted under the 2001 Stock Incentive Plan are generally not transferable, although the administrator has the discretion to allow transferability.

We maintain a plan qualified under Section 401(k) of the Internal Revenue Code. Under our 401(k) plan, a participant may contribute a maximum of 15% of his or her pre-tax salary, commissions and bonuses through payroll deductions, up to the statutorily prescribed annual limit ($12,000 in calendar year 2003). The plan allows us to make matching contributions. To date, no matching contributions have been made. The percentage elected by more highly compensated participants may be required to be lower.

None of our executive officers has served as a director or member of the compensation committee of any other entity whose executive officers served as a director or member of our compensation committee.

On June 4, 2001, we entered into an investors agreement with CapStreet II, L.P., our majority stockholder, CapStreet Parallel II, L.P., an affiliate of CapStreet II, L.P., Ralph H. Clinard, a current director and our then president and chief executive officer, Michael H. Clinard, our chief operating officer, Brian R. Archer, our executive vice president of marketing, and the other stockholders of the company. All of our stockholders are parties to the investors agreement.

Registration Rights. The investors agreement grants CapStreet II, L.P. (on behalf of itself, CapStreet Parallel II, L.P. and any permitted transferee thereof) the right to demand that we file a registration statement with the SEC to register the sale of all or a portion of their shares of common stock. Subject to certain limitations, we will be obligated to register these shares upon the demand of The CapStreet Group, for which we will be required to pay the registration expenses. In connection with any such demand registration, the other stockholders who are parties to the investors agreement may be entitled to include their shares in that registration under certain piggyback registration rights granted under the investors agreement to these other stockholders. In addition, if we propose to register securities for our own account, the stockholders who are parties to the investors agreement may be entitled to include their shares in that registration as well. In connection with any registration, we will indemnify each holder of registrable securities covered by a registration statement against liabilities arising out of or related to such registration statement or the preliminary prospectus or prospectus included as part of such registration statement.

Waiver. All holders of registrable securities have agreed not to exercise their registration rights until 180 days following the date of this prospectus without the prior written consent of Credit Suisse First Boston LLC as described under “Underwriting” below.

Fred R. Lummis, the chairman of our board of directors, is also a managing director of The CapStreet Group, LLC, the ultimate general partner of CapStreet II, L.P., our majority shareholder, and CapStreet Parallel II, L.P., another one of our shareholders. Frederick W. Brazelton, one of our directors, is also a partner of The CapStreet Group, LLC. Ron Coben, one of our directors, is also the president and chief executive officer of MessagePro, Inc. CapStreet II, L.P. and CapStreet Parallel II, L.P. together own a majority interest in MessagePro, Inc., and Fred R. Lummis and Frederick W. Brazelton are each members of the board of directors of MessagePro, Inc.

Prior to the completion of this offering, we had loans outstanding to the following individuals: Mr. Antonini, who borrowed $940,800 from us during 2003 to purchase of our restricted shares, of which $940,800 is currently outstanding; Mr. Michael Clinard, who borrowed $292,342 from us during 2003 to exercise stock options and purchase shares of our common stock, of which $292,342 is currently outstanding; Mr. Keller, who borrowed $123,787 from us during 2003 to exercise stock options and purchase shares of our common stock, of which $123,787 is currently outstanding; and Mr. Upton, who borrowed $131,205 from us during 2003 to exercise stock options and purchase shares of our common stock, of which $131,205 is currently outstanding. Additionally, Mr. Ralph Clinard borrowed $442,319 from us during 2003 to exercise stock options and purchase shares of our common stock. Mr. Ralph Clinard repaid his loan in full on January 15, 2004. The rate of interest on each of these loans is 5% per annum. Concurrent with the closing of this offering, the outstanding loans will be refinanced through unaffiliated third-party commercial loan arrangements.

We have issued and outstanding shares of series A redeemable preferred stock, which are held by CapStreet II, L.P. and CapStreet Parallel II, L.P. The preferred stock is not convertible by its terms into common stock. We plan to redeem all shares of our preferred stock and pay all the accrued and unpaid amounts on the preferred stock with a portion of the proceeds of the offering.

In 2003, our board of directors approved the issuance of restricted stock to Jack Antonini. The terms of his restricted stock award are set forth in a restricted stock agreement between us and Mr. Antonini. Beginning on the date of grant, Mr. Antonini, as the owner of the shares, has the right to vote his shares. Mr. Antonini is a signatory to our investors agreement.

In accordance with the requirements of The Nasdaq National Market, all future related party transactions will be approved by our independent directors.

The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2003, and as adjusted to reflect the sale of shares in the offering by:


	•	each person known to us to beneficially own more than 5% of the outstanding shares of our common stock;

	•	each of the executive officers identified in the summary compensation table;

	•	each of our directors;

	•	all directors and named executive officers as a group; and

	•	each selling stockholder.

To our knowledge, each selling stockholder purchased the shares of our stock in the ordinary course of business and, at the time of purchase of the securities to be resold, the selling stockholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities.

Footnote 1 below provides a brief explanation of what is meant by the term “beneficial ownership.” For the purpose of calculating the percentage of shares beneficially owned by any stockholder, the number of shares of common stock deemed outstanding “Before Offering” includes shares of common stock subject to options held by beneficial owners that are currently exercisable. This table assumes the over-allotment option granted to the underwriters is not exercised.

The number of shares of common stock outstanding “After Offering” includes an additional shares of common stock offered by us in the offering. Except as indicated in the footnotes to this table and subject to applicable community property laws, the persons named in this table have the sole voting power with respect to all shares of common stock listed as beneficially owned by them. The address for each executive officer and director set forth below, unless otherwise indicated, is c/o Cardtronics, Inc., 3110 Hayes Road, Suite 300, Houston, Texas 77082. The address of each of CapStreet II, L.P., CapStreet Parallel II, L.P., and Messrs. Lummis and Brazelton is c/o The CapStreet Group, LLC, 600 Travis Street, Suite 6110, Houston, Texas 77002.


(1)	“Beneficial ownership” is a term broadly defined by the SEC in Rule 13d-3 under the Exchange Act, and includes more than the typical forms of stock ownership, that is, stock held in the person’s name. The term also includes what is referred to as “indirect ownership,” meaning ownership of shares as to which a person has or shares investment or voting power. For the purpose of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares as of December 31, 2003 that such person or group has the right to acquire within 60 days after such date.

(2)	CapStreet II, L.P. owns 15,661 shares of our preferred stock, and CapStreet Parallel II, L.P. owns 1,839 shares of our preferred stock. We intend to use a portion of the net proceeds of the offering to redeem all of our preferred stock for cash.

(3)	Mr. Clinard is a member of our board of directors. Includes options to purchase shares of common stock exercisable by Ralph H. Clinard.

(4)	The shares indicated as being beneficially owned by Mr. Lummis are owned directly by CapStreet II, L.P. and CapStreet Parallel II, L.P. Mr. Lummis serves as a Managing Director of The CapStreet Group, the ultimate general partner of both CapStreet II, L.P. and CapStreet Parallel II, L.P. As such, Mr. Lummis may be deemed to have voting and dispositive power over the shares owned by CapStreet II, L.P. and CapStreet Parallel II, L.P. Mr. Lummis disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein.

(5)	Includes options to purchase shares of common stock exercisable by Michael H. Clinard.

(6)	Includes options to purchase shares of common stock exercisable by Thomas E. Upton.

(7)	Represents options to purchase shares of common stock exercisable by Robert P. Barone.

(8)	Represents options to purchase shares of common stock exercisable by Ron Coben.

Our amended and restated certificate of incorporation, which will be filed immediately prior to the closing of this offering, authorizes the issuance of up to shares of common stock, par value $0.0001 per share, and shares of preferred stock, par value $0.0001 per share.

The following description of the material terms of our capital stock and our amended and restated certificate of incorporation and amended and restated bylaws is only a summary. You should refer to our amended and restated certificate of incorporation and amended and restated bylaws as in effect upon the closing of this offering, which are included as exhibits to the registration statement of which this prospectus is a part.

As of December 31, 2003, there were 2,373,398 shares of common stock outstanding, which were held of record by 17 stockholders. Prior to or concurrently with the completion of this offering (1) we will effect a -for-one common stock split and (2) we will redeem in accordance with their terms all shares of our preferred stock. Consequently, upon completion of this offering, there will be shares of common stock outstanding (assuming no exercise of the underwriters’ over-allotment option and no outstanding preferred shares).

Voting rights. The holders of our common stock are entitled to one vote per share for each share held of record on any matter to be voted upon by stockholders. Our amended and restated certificate of incorporation does not provide for cumulative voting in connection with the election of directors and, accordingly, holders of more than 50% of the shares voting will be able to elect all of the directors standing for election.

Dividend rights. All shares of our common stock are entitled to share equally in any dividends our board of directors may declare from legally available sources. Our credit agreement currently imposes restrictions on our ability to declare dividends with respect to our capital stock.

Liquidation rights. Upon liquidation or dissolution of our company, whether voluntary or involuntary, all shares of our common stock would be entitled to share equally in the assets available for distribution to stockholders after payment of all of our prior obligations, including the liquidation preference and unpaid dividends, if any, on our preferred stock.

Other matters. The holders of our common stock have no preemptive or conversion rights and our common stock is not subject to further calls or assessments by us. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of our common stock, including the common stock offered in this offering, are fully paid and non-assessable.

Our amended and restated certificate of incorporation provides for the authorization of shares of preferred stock. Concurrently with the completion of this offering, all outstanding shares of our preferred stock will be redeemed. Consequently, no shares of preferred stock will be outstanding immediately following completion of this offering.

The shares of preferred stock may be issued from time to time at the discretion of our board of directors without stockholder approval. The board of directors is authorized to issue these shares in different classes and series and, with respect to each class or series, to determine the dividend rate, the redemption provisions, conversion provisions, liquidation preference and other rights and privileges not in conflict with our amended and restated certificate of incorporation. No shares of our preferred stock will be outstanding immediately following completion of this offering, and we have no immediate plans to issue any preferred stock. The issuance of any of our preferred stock could provide needed flexibility in

connection with possible acquisitions and other corporate purposes. However, any issuance could also make it more difficult for a third party to acquire a majority of our outstanding voting stock or discourage an attempt by a third party to gain control of us. In addition, our board of directors, without stockholder approval, can issue shares of preferred stock with voting and conversion rights that could adversely affect the voting power and other rights of the holders of common stock. The listing requirements of The Nasdaq National Market, which would apply so long as the common stock is listed on The Nasdaq National Market, require stockholder approval of certain issuances of capital stock or securities exchangeable or convertible into 20% or more of the then outstanding voting power of then outstanding number of shares of common stock. Any such additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

Our amended and restated certificate of incorporation provides that none of our directors will be liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, except to the extent otherwise required by the Delaware General Corporation Law, or the DGCL. The effect of this provision is to eliminate our rights, and our stockholders’ rights, to recover monetary damages against a director for breach of a fiduciary duty of care as a director, except to the extent otherwise required by the DGCL. This provision does not limit or eliminate our right, or the right of any stockholder, to seek non-monetary relief, such as an injunction or rescission in the event of a breach of a director’s duty of care. In addition, our amended and restated certificate of incorporation provides that, if the DGCL is amended to authorize the further elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. These provisions will not alter the liability of directors under federal or state securities laws.

We expect to enter into indemnification agreements with each of our directors and key officers. These indemnification agreements will provide that we will indemnify our directors and officers to the fullest extent permitted by law for liabilities they may incur because of their status as directors and officers. These agreements also will provide that we will advance expenses to our directors and officers relating to claims for which they may be entitled to indemnification. These indemnification agreements also will provide that we will maintain directors’ and officers’ liability insurance.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us under the provisions described above, we have been informed that, in the opinion of the SEC, this indemnification is against public policy, as expressed in the Securities Act and is therefore unenforceable.

Our investors agreement dated June 4, 2001 grants CapStreet II, L.P. (on behalf of itself, CapStreet Parallel II, L.P. and permitted transferees thereof) the right to demand that we file a registration statement with the SEC to register the sale of all or part of their shares of common stock. Subject to certain limitations, we will be obligated to register these shares upon CapStreet II, L.P.’s demand, for which we will be required to pay the registration expenses. In connection with any such demand registration, the stockholders who are parties to the investors agreement may be entitled to include their shares in that registration. In addition, if we propose to register securities for our own account, the stockholders who are parties to the investors agreement may be entitled to include their shares in that registration.

All of these registration rights are subject to conditions and limitations, which include certain rights to limit the number of shares included in a registration under some circumstances.

Business combinations under Delaware law. We are a Delaware corporation and are subject to Section 203 of the Delaware General Corporation Law. Section 203 prevents an interested stockholder,

defined as a person who owns 15% or more of our outstanding voting stock, from engaging in business combinations with us for three years following the time that such person becomes an interested stockholder. These restrictions do not apply if:


	•	before the person becomes an interested stockholder, our board of directors approves the business combination or the transaction in which the person becomes an interested stockholder;

	•	upon completion of the transaction that results in such person becoming an interested stockholder, the interested stockholder owns at least 85% of our outstanding voting stock at the time the transaction commenced, excluding for the purposes of determining the number of shares outstanding, those shares owned by persons who are directors and officers, as well as shares held by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held by such plan will be tendered in a tender or exchange offer; or

	•	at or following the time of the transaction in which the person became an interested stockholder, the business combination is approved by our board of directors and authorized at an annual or special meeting of our stockholders, and not by written consent, by the affirmative vote of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.

In addition, the law does not apply to interested stockholders such as The CapStreet Group or Mr. Ralph Clinard, who became an interested stockholder before our common stock was quoted on The Nasdaq National Market.

The law defines the term “business combination” to encompass a wide variety of transactions with or caused by an interested stockholder, including mergers, asset sales and other transactions in which the interested stockholder receives or could receive a benefit on other than a pro rata basis with other stockholders. This law could have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging takeover attempts that might result in a premium over the market price for shares of our common stock.

Election and removal of directors. Our amended and restated certificate of incorporation and amended and restated bylaws provide for the division of our board of directors into three classes as nearly equal in size as possible and with staggered three-year terms. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by the vote of a majority of the directors then in office. The classification of our board of directors and the limitation on filling of vacancies could make it more difficult for a third party to acquire, or discourage a third party from attempting to acquire, control of our company.

Board meetings. Our amended and restated bylaws provide that special meetings of the board of directors may be called only by the chairman of our board of directors, our chief executive officer or a majority of the directors in office.

Stockholder meetings. Our amended and restated bylaws provide that any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our bylaws further provide that special meetings of the stockholders may only be called by the chairman of our board of directors, by a committee that is duly designated by the board or by resolution adopted by the affirmative vote of the majority of the board of directors.

Requirements for advance notification of stockholder nominations and proposals. Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of the board of directors. In order for any matter to be considered “properly brought” before a meeting, a stockholder must comply with requirements regarding advance notice and provide certain information to us. These provisions could have the effect of delaying until the next stockholders’ meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities. These provisions could also discourage a third party from making a tender

offer for our common stock, because even if it acquired a majority of our outstanding voting securities, it would be able to take action as a stockholder (such as electing new directors or approving a merger) only at a duly called stockholders’ meeting and not by written consent.

Stockholder action by written consent. Our amended and restated certificate of incorporation and amended and restated bylaws provide that stockholder action may be taken only at a duly called annual or special meeting of stockholders of our common stock.

Cumulative voting. Our amended and restated certificate of incorporation provides that our stockholders will have no cumulative voting rights.

Amendment of certificate of incorporation and bylaws. Amendment of the provisions described above in our amended and restated certificate of incorporation generally will require the affirmative vote of a majority of our directors, as well as the affirmative vote of the holders of at least 66 2/3% of our then outstanding voting stock. Our amended and restated bylaws may be amended (1) by the affirmative vote of the majority of our board of directors, (2) in the case of certain provisions concerning takeovers or changes of control, by the affirmative vote of three-fourths of the directors in office or (3) on the recommendation of our board of directors, by the affirmative vote of holders of a majority of our then outstanding voting stock.

We expect to qualify our common stock for quotation on The Nasdaq National Market under the symbol “CATM.”

The transfer agent and registrar issues stock certificates and keeps track of the registered holders of our stock. Our transfer agent and registrar is .

Prior to this offering, there has not been a public market for our common stock. Future sales of substantial amounts of our common stock in the public market, or the possibility of these sales, could adversely affect the trading price of our common stock and could impair our future ability to raise capital through the sale of our equity at a time and price we deem appropriate.

Upon completion of this offering, we will have outstanding shares of common stock. Of these shares, the shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by our “affiliates,” as defined in Rule 144 under the Securities Act, which would be subject to the limitations and restrictions described below.

Assuming the underwriters’ over-allotment option is not exercised, the remaining shares of common stock that will be held by existing stockholders will be “restricted securities,” as defined in Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 and 144(k) promulgated under the Securities Act, which rules are summarized below. Included among these restricted securities will be shares of common stock owned by a limited number of our stockholders that are parties to a registration rights agreement with us. That agreement provides certain of the stockholders that are parties to it with the right, after the expiration of the lock-up agreements described in “Underwriting,” to require us to register their shares. In addition, if we propose to register, or are required to register following the exercise of a “demand” registration right as described in the previous sentence, any of our shares of common stock under the Securities Act, all of our stockholders that are parties to the registration rights agreement will be entitled to include their shares of common stock in that registration. For a description of the registration rights agreement, see “Certain Relationships and Related Transactions — Investors Agreement.”

Taking into account the lock-up agreements described in “Underwriting” and the provisions of Rules 144 and 144(k), the restricted securities will be available for sale in the public market as follows:

All of these restricted securities will be eligible for sale in the public market, subject in some cases to the volume limitations and other restrictions of Rule 144, beginning upon expiration of the lock-up agreements described in “Underwriting.” The numbers of shares of common stock listed above do not include shares of common stock issuable upon exercise of stock options granted under our stock plans that were unexercised as of December 31, 2003. Upon completion of the offering, we intend to file a registration statement on Form S-8 with the SEC to register shares of our common stock reserved for issuance or sale under our incentive stock plans. As of December 31, 2003, there were outstanding options to purchase a total of shares of common stock of of which were vested. Shares of common stock issuable upon the exercise of options granted or to be granted under our stock option plans will be freely tradable without restriction under the Securities Act, unless such shares are held by an affiliate of ours.

In general, under Rule 144 as currently in effect, beginning 90 days after this offering, a person (or persons whose shares are required to be aggregated), including an affiliate, who has beneficially owned shares of our common stock for at least one year is entitled to sell in any three-month period a number of shares that does not exceed the greater of:


	•	1% of then outstanding shares of common stock, or shares; and

	•	the average weekly trading volume in the common stock on The Nasdaq National Market during the four calendar weeks preceding the date on which notice of sale is filed, subject to restrictions.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

In addition, a person who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years, would be entitled to sell those shares under Rule 144(k) without regard to the manner of sale, public information, volume limitation or notice requirements of Rule 144. To the extent that our affiliates sell their shares, other than pursuant to Rule 144 or a registration statement, the purchaser’s holding period for the purpose of effecting a sale under Rule 144 commences on the date of transfer from the affiliate.

The following is a general discussion of certain U.S. federal income and estate tax consequences of the ownership and taxable disposition of common stock by Non-U.S. Holders. A “Non-U.S. Holder” is a beneficial owner of common stock that holds the common stock as a capital asset (i.e., generally, for investment) and who is:


	•	an individual who is not a citizen or resident of the United States for U.S. federal income tax purposes;

	•	a corporation (or entity treated as a corporation for U.S. federal income tax purposes) that is not created or organized in the United States or under the laws of the United States or of any political subdivision thereof;

	•	an estate whose income is not includible in gross income for U.S. federal income tax purposes regardless of source; or

	•	a trust that is not subject to the primary supervision of a court within the United States and the control of one or more U.S. persons and that has not elected to be treated as a U.S. domestic trust.

The following discussion does not consider specific facts and circumstances that may be relevant to a particular Non-U.S. Holder’s tax position and does not consider U.S. state and local or non-U.S. tax consequences. Further, it does not consider Non-U.S. Holders subject to special tax treatment under the federal income tax laws (including partnerships or other pass-through entities, banks and insurance companies, dealers in securities, holders of securities held as part of a “straddle,” “hedge,” “conversion transaction” or other risk-reduction transaction, controlled foreign corporations, passive foreign investment companies, foreign personal holding companies, companies that accumulate earnings to avoid U.S. federal income tax, foreign tax-exempt organizations, former U.S. citizens or residents, and persons who hold or receive common stock as compensation). The following discussion is based on provisions of the U.S. Internal Revenue Code of 1986, as amended, or the Code, applicable Treasury regulations, and administrative and judicial interpretations as of the date of this prospectus, all of which are subject to change, possibly on a retroactive basis, and any change could affect the continuing validity of this discussion.

The following summary is included herein for general information only. Accordingly, each prospective Non-U.S. Holder is urged to consult its own tax advisor with respect to the federal, state, local or non-U.S. tax consequences of holding and disposing of the common stock.

For purposes of the following discussion, dividends (as determined for U.S. federal income tax purposes) and gains on the sale, exchange or other disposition of the common stock will be considered to be “U.S. trade or business income” if such income or gain is (i) effectively connected with the conduct of a U.S. trade or business and (ii) in the case of a treaty resident, attributable to a permanent establishment (or, in the case of an individual, a fixed base) in the United States. Generally, U.S. trade or business income is not subject to U.S. federal withholding tax (provided the Non-U.S. Holder complies with applicable certification and disclosure requirements); instead, such income generally is subject to U.S. federal income tax on a net income basis at regular graduated tax rates. Any U.S. trade or business income received by a Non-U.S. Holder that is a corporation may, under specific circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate that an applicable income tax treaty may specify.

Except as discussed above with respect to U.S. trade or business income, dividends paid to a Non-U.S. Holder of common stock generally will be subject to withholding of U.S. federal income tax at a

30% rate. However, we or our paying agent generally may elect not to withhold on a dividend to the extend that such dividend is not paid out of our current or accumulated earnings and profits (based on a reasonable estimate made by us under applicable Treasury regulations). The 30% withholding rate may be reduced if the Non-U.S. Holder is eligible for the benefits of an income tax treaty that provides for a lower rate. Generally, to claim the benefits of an income tax treaty, a Non-U.S. Holder of common stock will be required to provide a properly executed IRS Form W-8BEN and satisfy applicable certification and other requirements. A Non-U.S. Holder of common stock that is eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for a refund with the Internal Revenue Service, or the IRS. A Non-U.S. Holder should consult its own tax advisor on its entitlement to benefits under a relevant income tax treaty.

A Non-U.S. Holder generally will not be subject to U.S. federal income tax in respect of any gain on a disposition of common stock unless:


	•	the gain is U.S. trade or business income, as defined above;

	•	the Non-U.S. Holder is an individual who is present in the United States for 183 or more days in the taxable year of the disposition and meets other requirements;

	•	the Non-U.S. Holder is subject to U.S. federal income tax under provisions of U.S. federal income tax law applicable to certain U.S. expatriates (including certain former citizens or residents of the U.S.); or

	•	we are or have been a “U.S. real property holding corporation,” or USRPHC, for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition and the Non-U.S. Holder’s holding period for the common stock.

The tax relating to stock in a USRPHC does not apply to a Non-U.S. Holder whose holdings, actual and constructive, at all times during the applicable period, amount to 5% or less of the common stock, provided that the common stock is regularly traded on an established securities market. Generally, a corporation is a USRPHC if the fair market value of its “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business. We believe that we have not been and are not currently a USRPHC for U.S. federal income tax purposes, nor do we anticipate becoming a USRPHC in the future. However, no assurance can be given that we will not be a USRPHC, or that our common stock will be considered “regularly traded” for this purpose, when a Non-U.S. Holder sells its shares of common stock.

Common stock owned or treated as owned by an individual who is a Non-U.S. Holder at the time of death will be included in the individual’s gross estate for U.S. federal estate tax purposes and may be subject to U.S. federal estate tax, unless an applicable estate tax treaty provides otherwise.

We must report annually to the IRS and to each Non-U.S. Holder any dividend income that is subject to withholding or that is exempt from U.S. federal withholding tax pursuant to an income tax treaty. Copies of these information returns also may be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides. Under certain circumstances, the Code imposes a backup withholding obligation at a current rate of 28%. Dividends paid to a Non-U.S. Holder of common stock generally will be exempt from backup withholding

The payment of the proceeds from the disposition of common stock to or through the U.S. office of any broker, U.S. or foreign, will be subject to information reporting and possible backup withholding unless the owner certifies as to its non-U.S. status under penalties of perjury or otherwise establishes an exemption, provided that the broker does not have actual knowledge that the holder is a U.S. person or that the conditions of any other exemption are not, in fact, satisfied. The payment of the proceeds from the disposition of common stock to or through a non-U.S. office of a non-U.S. broker will not be subject to information reporting or backup withholding unless the non-U.S. broker has certain types of relationships with the United States. (a “U.S. related person”). In the case of the payment of the proceeds from the disposition of common stock to or through a non-U.S. office of a broker that is either a U.S. person or a U.S. related person, the Treasury regulations require information reporting (but not backup withholding) on the payment unless the broker has documentary evidence in its files that the owner is a Non-U.S. Holder and the broker has no knowledge to the contrary. Non-U.S. Holders should consult their own tax advisors on the application of information reporting and backup withholding to them in their particular circumstances (including upon their disposition of common stock).

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a Non-U.S. Holder will be refunded or credited against the holder’s U.S. federal income tax liability, if any, if the holder provides the required information to the IRS.

Under the terms and subject to the conditions contained in an underwriting agreement dated , we and the selling stockholders have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston LLC is acting as the representative, the following respective numbers of shares of common stock:

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

We have granted to the underwriters a 30-day option to purchase on a pro rata basis up to additional outstanding shares from us at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.

The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. The underwriters and selling group members may allow a discount of $ per share on sales to other broker/ dealers. After the initial public offering, the representative may change the public offering price and concession and discount to broker/ dealers.

The following table summarizes the compensation and estimated expenses we and the selling stockholders will pay:

The representative has informed us that the underwriters do not expect discretionary sales to exceed 5% of the shares of common stock being offered.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act, relating to any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus, except that we may issue shares of common stock pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options, in each case

outstanding on the date of this prospectus, or grant employee stock options or purchases by employees pursuant to the terms of a plan in effect on the date of this prospectus and described in this prospectus.

Our officers, directors, stockholders and optionholders have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus. The exercise of options granted to these persons will not be subject to or prohibited by these lock-up agreements. In addition, the lock-up agreements will not prohibit (1) pledges existing on this offering’s closing date by specified officers to secure specified personal loans and (2) the disposition of the pledged securities by a lender exercising its remedies as a secured party upon a default under the specified personal loans.

The underwriters have reserved for sale at the initial public offering price up to shares of the common stock for employees, directors and other persons associated with us who have expressed an interest in purchasing common stock in the offering. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares.

We and the selling stockholders have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We expect to qualify our common stock for quotation on The Nasdaq National Market.

Certain of the underwriters and their respective affiliates have from time to time performed, and may in the future perform, various financial advisory, commercial banking and investment banking services for us and our affiliates in the ordinary course of business, for which they received, or will receive, customary fees and expenses. An affiliate of Credit Suisse First Boston LLC manages a group of investment funds that hold limited partnership interests in CapStreet II, L.P., our largest stockholder and one of the selling stockholders in this offering. These funds collectively own approximately 7.6% of the limited partnership interests in CapStreet II, L.P.

Prior to the offering, there has been no market for our common stock. The initial public offering price will be determined by negotiation between us and the underwriters and will not necessarily reflect the market price of the common stock following the offering. The principal factors that will be considered in determining the public offering price will include:


	•	the information presented in this prospectus and otherwise available to the underwriters;

	•	the history of and the prospects for the industry in which we will compete;

	•	the ability of our management;

	•	the prospects for our future earnings, if any;

	•	the present state of our development and our current financial condition;

	•	the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies; and

	•	the general condition of the securities markets at the time of the offering.

We offer no assurances that the initial public offering price will correspond to the price at which the common stock will trade in the public market subsequent to this offering or that an active trading market for the common stock will develop and continue after the offering.

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.


	•	Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

	•	Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters may not be greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved will be greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.

	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over- allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase shares in the offering.

	•	Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in the offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representative may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we and the selling stockholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are made. Any resale of the common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock.

By purchasing common stock in Canada and accepting a purchase confirmation a purchaser is representing to us, the selling stockholders and the dealer from whom the purchase confirmation is received that


	•	the purchaser is entitled under applicable provincial securities laws to purchase the common stock without the benefit of a prospectus qualified under those securities laws,

	•	where required by law, that the purchaser is purchasing as principal and not as agent, and

	•	the purchaser has reviewed the text above under Resale Restrictions.

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares, for rescission against us and the selling shareholders in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us or the selling stockholders. In no case will the amount recoverable in any action exceed the price at which the shares were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we and the selling stockholders will have no liability. In the case of an action for damages, we and the selling stockholders will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

All of our directors and officers as well as the experts named in this prospectus and the selling stockholders may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and about the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation.

The validity of the shares of common stock offered by this prospectus will be passed upon for us by Vinson & Elkins L.L.P., Houston, Texas. The underwriters have been represented by Shearman & Sterling LLP, New York, New York.

The consolidated financial statements and schedule of Cardtronics, Inc. as of December 31, 2002 and 2003, and for each of the years in the three-year period ended December 31, 2003, have been included herein and in the registration statement in reliance upon the reports of KPMG LLP, independent accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2003 financial statements refers to the adoption of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations on January 1, 2003.

Our consolidated financial statements as of and for the year ended December 31, 1999 referred to in this prospectus were audited by Arthur Andersen LLP, independent certified public accountants. In 2002, Arthur Andersen ceased operations following its conviction on charges arising from the U.S. federal government’s investigation of Enron Corporation. Accordingly, Arthur Andersen has not performed any procedures in connection with this offering. Events arising out of its indictment and conviction will likely preclude Arthur Andersen from satisfying any claims arising from their provision of auditing services to us, including claims that may arise out of Arthur Andersen’s audit of financial statements referred to in this prospectus. We intend to rely on the relief provided by Rule 437(a) of the Securities Act because we will not be able to file a written consent of Arthur Andersen with respect to inclusion of information from the financial statements for the fiscal year ended December 31, 1999 in the prospectus.

We have filed with the SEC a registration statement on Form S-1 under the Securities Act relating to the common stock we are offering. This prospectus, which constitutes a part of the registration statement, does not contain all the information that is included in the registration statement and its exhibits and schedules. Certain portions of the registration statement have been omitted as allowed by the rules and regulations of the SEC. Statements in this prospectus which summarize documents are not necessarily complete, and in each case you should refer to the copy of the document filed as an exhibit to the registration statement. You may read and copy the registration statement, including exhibits and schedules filed with it, and reports or other information we may file with the SEC at the public reference facilities of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further information regarding the operation of the public reference rooms. In addition, the registration statement and other public filings can be obtained from the SEC’s internet site at http://www.sec.gov.

Upon completion of this offering, we will become subject to information and periodic reporting requirements of the Exchange Act, and we will file annual, quarterly and current reports, proxy statements and other information with the SEC. We intend to furnish our stockholders written annual reports containing financial statements audited by our independent auditors, and make available to our stockholders quarterly reports for the first three quarters of each year containing unaudited interim financial statements.

We have audited the accompanying consolidated balance sheets of Cardtronics, Inc. and subsidiaries as of December 31, 2002 and 2003, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the years in the three-year period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Cardtronics, Inc. and subsidiaries as of December 31, 2002 and 2003, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the Consolidated Financial Statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations on January 1, 2003.

Cardtronics, Inc. (the Company) owns and operates over 12,000 automated teller machines (ATMs) in all 50 states. The Company is the largest non-bank owner of ATMs in the United States and provides ATM management and equipment-related services to both nationally known, as well as small business, merchant customers. The Company typically enters into multi-year contractual relationships with its merchant customers.

In June 2001, CapStreet II, L.P. and CapStreet Parallel II, L.P. (together with The CapStreet Group, LLC, The CapStreet Group) acquired a majority of the stock of Cardpro, Inc. At the time of The CapStreet Group investment, Cardpro, Inc. was converted into a Delaware limited partnership named Cardtronics, LP. Also, in June 2001, Cardtronics Group, Inc. was incorporated under the laws of the state of Delaware to act as a holding company, with Cardtronics Group, Inc. indirectly owning 100% of the equity of Cardtronics, LP. In January 2004, the Company changed its name from Cardtronics Group, Inc. to Cardtronics, Inc.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Cardtronics GP, Inc., the general partner, and Cardtronics LP, Inc., the limited partner, of Cardtronics, LP, a limited partnership and the principal operating entity that holds all of the Company’s operating assets. All significant accounts, transactions and profits between the consolidated companies have been eliminated in consolidation. Significant accounts and transactions between the Company, including its subsidiaries, and its directors and officers are disclosed as related party transactions (note 4).

For purposes of reporting financial condition and cash flows, cash and cash equivalents include cash in bank and short-term deposit sweep accounts.

The Company had a restricted cash balance in the amount of $281,009 and $31,660 at December 31, 2002 and 2003, respectively. The balance in 2002 consists primarily of $250,000 invested in a time deposit account related to an obligation due to a broker who provided services related to one of the Company’s acquisitions. In addition, the Company is required to maintain a $25,000 certificate of deposit at one of the banks that the Company utilizes to provide vault cash for the ATMs.

The Company relies on agreements with Palm Desert National Bank and First Bank & Trust to provide it with all of the cash that it uses in its ATMs for which cash is not provided by the merchant. This cash is referred to as “vault cash” under federal banking regulations, and the Company refers to its vault cash arrangement with these providers as its cash management program. The Company pays a fee for its usage of this cash based on the total amount of the cash that it is using at any given time. At all times during the use of this cash, it belongs to the cash providers, and the cash providers have the right to demand the return of all or any portion of their cash at any time upon the occurrence of certain events beyond our control.

The amount of vault cash in the Company’s ATMs was approximately $65,900,000 and $237,700,000 at December 31, 2002 and 2003, respectively.

Accounts receivable are primarily comprised of amounts due from the Company’s clearing and settlement banks for ATM transaction revenues earned on transactions processed during the month ending on the balance sheet date. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company reviews its allowance for doubtful accounts monthly and determines the allowance based on an analysis of its past due accounts. All past due balances over 90 days are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Notes receivable relate to ATM financing arrangements with terms that exceed one year. At the beginning of 2002, the Company discontinued the financing of the sale of ATMs through the notes receivable program. These notes typically bear interest at an implicit rate ranging from 8% to 10% that is recognized over the life of the note. The ATMs that are financed pursuant to these arrangements serve as collateral for the notes receivable.

The allowance for doubtful notes is the Company’s best estimate of the amount of probable credit losses in the Company’s existing notes portfolio. The allowance is determined by using historical rates of default and extrapolating that data over the notes portfolio. Notes are written off against the allowance when all possible means of collection have been exhausted, and the potential for recovery is considered remote.

Inventory consists principally of ATMs, ATM spare parts and ATM supplies and is stated at the lower of cost or market. Cost is determined using the average cost method.

Property and equipment are stated at cost and depreciation is calculated using the straight-line method. Equipment is depreciated over three to seven years. Leasehold improvements and property acquired under capital leases are amortized over the useful life of the asset or the lease term, whichever is shorter. The cost of property and equipment held under capital leases, primarily ATMs, is equal to the lower of the net present value of the minimum lease payments or the fair value of the leased property at the inception of the lease. Also included in property and equipment are new ATMs the Company has acquired for future installation and these ATMs are held as “deployments in process” (DIPs) and are not depreciated. Depreciation expenses for property and equipment for 2002 and 2003 was $1,649,753 and $3,469,054, respectively. See note 1(p) regarding asset retirement obligations associated with the Company’s ATMs.

Intangible assets include merchant contracts/relationships acquired in connection with acquisitions of ATM assets (i.e., the right to receive future cash flows related to ATM transactions occurring at these merchant locations), exclusive license agreements (i.e., the right to be the exclusive ATM service provider, at specific locations, for the time period under contract with a merchant customer) and deferred financing costs relating to credit agreements (note 11). All intangibles are amortized on a straight-line basis over their estimated useful life ranging from 4 to 8 years. Amortized financing costs are recognized as interest expense.

Estimated useful lives are determined by management of the Company for merchant contracts/ relationships based on a review of the weighted average life of the expected after-tax cash flows from the underlying merchant contracts and the terms of the contracts themselves, as well as the Company’s expectations based on industry experience.

During 2001, 2002 and 2003, the Company amortized intangible assets of $554,409, $1,641,234 and $3,842,429, respectively. As of December 31, 2003, estimated amortization expense for each of the five succeeding years is expected as follows:

Estimated future amortization expense is based on intangible amounts recorded as of December 31, 2003.

The Company accounts for income taxes pursuant to the provisions of SFAS No. 109, Accounting for Income Taxes. Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and income before provision for income taxes and between the tax basis of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the consolidated financial statements at current income tax rates. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

The Company places significant value on the installed ATMs that it owns and manages in merchant locations and the underlying merchant contracts/relationships. The recoverability of the carrying value of long-lived assets is reviewed whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To assess recoverability, the Company evaluates the carrying value of long-lived assets and compares them to the respective projected future undiscounted cash flows. An impairment loss is recognized if the sum of the expected net cash flows is less than the carrying amount of the long-lived assets being evaluated. The Company does not believe that any impairment of its intangibles or other long-lived assets has occurred.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the carrying amount of intangibles and valuation allowances for receivables, inventories and deferred income tax assets. Actual results could differ from those assumed in the Company’s estimates.

Substantially all of the Company’s revenues are generated from ATM transaction-based fees and services, which include surcharge fees, interchange fees, branding fees and monthly fees. Transaction-based fees are recognized at the time the ATM transactions are processed and service fees are recognized at the time the service is performed. The Company offers a maintenance service agreement to certain customers purchasing ATMs. The Company recognizes service agreement revenue monthly as earned, and expenses relating to repairs under service agreements as incurred. The Company recognizes revenue related to the sale of ATMs when the equipment is delivered to the merchant customer and the Company has completed all required installation and set-up procedures.

The Company’s other revenues are derived from sales of equipment to associate value-added resellers (VARs). The Company does not expect to generate future ATM service revenues from these transactions, and, accordingly, segregates the presentation of these revenues from the Company’s ATM transaction-based revenues. The Company recognizes and invoices revenue related to the sale of equipment to VARs when the equipment is shipped from the manufacturer to the VAR. We extend thirty day terms and receive payment directly from the VAR irrespective of ultimate sale to a third party.

The Company reports net income or loss per share in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share (EPS). Under SFAS No. 128, basic EPS, which excludes dilution, is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Net income or loss available to common stockholders represents reported net income or loss less dividends on the series A redeemable preferred stock (preferred stock).

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Dilutive EPS includes in-the-money stock options using the treasury stock method. During a net loss period, the assumed exercise of in-the-money stock options has an anti-dilutive effect, and therefore are excluded from the computation of dilutive EPS.

Per share information is based on the weighted-average number of common shares outstanding during each period for the basic computation and, if dilutive, the weighted-average number of potential common shares resulting from the assumed conversion of outstanding stock options, warrants, convertible preferred stock and convertible senior notes for the diluted computation.

A reconciliation of the numerators and denominators of the basic and diluted per share computations is as follows:

The Company accounts for stock based compensation plans in accordance with the intrinsic value based method of Accounting Principles Board Opinion No. 25 as permitted by SFAS No. 123 and SFAS No. 148. Compensation cost related to stock options issued to employees is calculated on the date of grant only if the current market price of the underlying stock exceeds the exercise price. Compensation expense is then recognized on a straight-line basis over the vesting period, generally four years. The Company also recognized compensation expense relating to accelerated vesting of options and variable plan accounting related to a restricted stock grant. The Company recognized $2,167,305, $0 and $1,584,795 of compensation expense during the years ended December 31, 2001, 2002 and 2003, respectively. Had compensation cost for the plans been determined based on the fair value method at the grant dates as specified in SFAS No. 123, the Company’s net earnings would have been reduced to the following pro forma amounts:

In June 2001, the Financial Accounting Standards Board (the FASB) issued Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (SFAS 143). SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the related asset retirement costs. SFAS 143 requires the Company to estimate the fair value of future retirement costs associated with its ATMs. The fair value of a liability for an asset retirement obligation is to be recognized in the period in which it is incurred and can be reasonably estimated. Such asset retirement costs are to be capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s estimated useful life. Fair value estimates of liabilities for asset retirement obligations will generally involve discounted future cash flows. Periodic accretion of such liabilities due to the passage of time is to be recorded as an operating expense. The provisions of SFAS 143 are effective for fiscal years beginning after June 15, 2002, with initial application as of the beginning of the fiscal year. The adoption of SFAS 143 resulted in the recognition of: (i) liabilities amounting to $1,641,870 for contingent retirement obligations under certain merchant contracts (included in other long-term liabilities on the Company’s consolidated balance sheet); (ii) asset retirement costs amounting to $1,561,407 (included in property and equipment on the Company’s consolidated balance sheet); and (iii) a charge for the cumulative effect of the change in accounting principle amounting to $133,663 (net of related income tax benefit of $80,026). Accretion expense related to liabilities for contingent retirement obligations (included in depreciation and accretion on the Company’s consolidated statement of operations) amounted to $162,317 for the year ended December 31, 2003. At December 31, 2003, liabilities for contingent retirement obligations amounted to $3,004,957.

In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure (SFAS 148). SFAS 148 amends Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123), to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the provisions of SFAS 123 to require more prominent disclosures in both annual and interim financial statements about the

method of accounting for stock-based employee compensation and the effect of the method used on reported results of operations. Certain of the disclosure modifications are required for interim and annual periods ending after December 15, 2002 and are included in the notes to these consolidated financial statements (see note 3).

In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150). SFAS 150 requires that mandatorily redeemable financial instruments issued in the form of shares be classified as liabilities, and specifies certain measurement and disclosure requirements for such instruments. The provisions of SFAS 150 were effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS 150 did not have an impact on the Company’s financial statements.

During 2001, the Company acquired a total of 23 merchant contracts/relationships representing approximately 878 ATMs through two separate ATM asset acquisitions. The cost of the acquisitions totaled $5,750,000 and the purchase price was allocated $1,780,000 to ATM equipment (recorded as property and equipment in the accompanying consolidated balance sheet), $40,000 to inventory and $3,930,000 to merchant contracts/relationship (recorded as an intangible asset in the accompanying consolidated balance sheet). Total consideration paid represented the fair value of the ATM assets as of the acquisition dates.

During 2002, the Company acquired a total of 30 merchant contracts/relationships representing approximately 1,125 ATMs through two separate ATM asset acquisitions. The cost of the acquisitions totaled $13,130,000 and the purchase price was allocated $5,920,000 to ATM equipment, $370,000 to inventory and $6,840,000 to merchant contracts/relationships. Total consideration paid represented the fair value of the ATM assets as of the acquisition dates.

During 2003, the Company acquired more than 1,200 merchant contracts/relationships representing approximately 3,690 ATMs through four separate ATM asset acquisitions. The cost of the acquisitions totaled $23,480,000 and the purchase price was allocated $6,330,000 to ATM equipment, $660,000 to inventory and $16,490,000 to merchant contracts/relationships. Total consideration paid represented the fair value of the ATM assets as of the acquisition dates.

In June 2001, the board of directors of the Company approved a stock option plan that permits the Company to grant stock options to employees. Stock options generally vest over a four-year period and expire ten years after the grant date. The Company has reserved 476,114 shares for issuance under the 2001 Stock Incentive Plan. A summary of the 2001 Stock Incentive Plan as of December 31, 2003 is presented below:

Additional information regarding options outstanding as of December 31, 2003, is as follows:

The weighted-average fair value at date of grant of options granted during 2001 and 2002 were $0.00 and $0.00, respectively. See note 1 for a tabular presentation of the pro forma effect of the Company’s net income (loss) and income (loss) per share as if compensation had been recognized for stock options issued at their fair value on the date of the grant. Fair values were estimated using the Black-Scholes option-pricing model with the weighted-average assumptions of total fair value/ total shares outstanding presented above.

The CapStreet Group owns a minority interest in Susser Holdings, LLC; a majority interest in MessagePro, Inc.; and, indirectly, a majority interest in Talent Tree Employhr Services, Inc. (TTHR).

The Company engages in business activities in the normal course of business with each of these entities. Payments to MessagePro, a call center company, and to TTHR, a human resource and payroll service company, each represented significantly less than one percent of our total operating expenses for the year ended December 31, 2003. Susser Holdings, for whom the Company provides ATM management services, accounted for less than 5% of our total revenues for the year ended December 31, 2003.

Fred R. Lummis, the chairman of the Company’s board of directors, is also a managing director of The CapStreet Group, LLC, the ultimate general partner of CapStreet II and CapStreet Parallel II. Frederick W. Brazelton, one of the Company’s directors, is also a partner of The CapStreet Group, LLC. Ron Coben, one of the Company’s directors, is also the president and chief executive officer of MessagePro, Inc. The CapStreet Group owns a majority interest in MessagePro, Inc., and Fred R. Lummis and Frederick W. Brazelton are each members of the board of directors of MessagePro, Inc. Our board members are reimbursed for customary travel expenses and meals.

On June 4, 2001, the Company entered into an investors agreement with CapStreet II, CapStreet Parallel II, Ralph H. Clinard, a current director and the Company’s then president and chief executive officer, Michael H. Clinard, the Company’s chief operating officer, Brian R. Archer, the Company’s executive vice president of marketing, and the other stockholders of the company. All of the Company’s stockholders are parties to the investors agreement. It is currently anticipated that this agreement will be terminated in connection with the Company’s proposed initial public offering (see note 20).

Registration Rights. The investors agreement grants CapStreet II (on behalf of itself, CapStreet Parallel II and any permitted transferee thereof) the right to demand that the Company file a registration statement with the SEC to register the sale of all or a portion of their shares of common stock. Subject to certain limitations, the Company will be obligated to register these shares upon the demand of The CapStreet Group, for which the Company will be required to pay the registration expenses. In connection with any registration, the Company will indemnify each holder of registrable securities covered by a registration statement against liabilities arising out of or related to such registration statement or the preliminary prospectus or prospectus included as part of such registration statement.

Prior to the completion of this offering, the Company had loans outstanding to the following individuals: Mr. Antonini, who borrowed $940,800 from us during 2003 to purchase 80,000 of the Company’s restricted shares, of which $940,800 is currently outstanding; Mr. Michael Clinard, who borrowed $292,530 from us during 2003 to exercise stock options and purchase 43,484 shares of the Company’s common stock, of which $292,530 is currently outstanding; Mr. Keller, who borrowed $123,787 from us during 2003 to exercise stock options and purchase 10,553 shares of the Company’s common stock, of which $123,787 is currently outstanding; and Mr. Upton, who borrowed $131,205 from us during 2003 to exercise stock options and purchase 21,104 shares of the Company’s common stock, of which $131,205 is currently outstanding. Additionally, Mr. Ralph Clinard borrowed $442,319 from us during 2003 to exercise stock options and purchase 64,938 shares of the Company’s common stock. Mr. Ralph Clinard repaid his loan in full on January 15, 2004. The rate of interest on each of these loans is 5% per annum. Concurrent with the closing of this offering, the outstanding loans will be refinanced through unaffiliated third-party commercial loan arrangements. In addition to the loans described above, the Company has extended loans to other non-executive officers in an aggregate amount of $373,603 in connection with the exercise of options.

The Company has issued and outstanding shares of preferred stock, which are held by CapStreet II and CapStreet Parallel II. The preferred stock is not convertible by its terms into common stock. The

Company plans to redeem all shares of its preferred stock and pay all the accrued and unpaid amounts on the preferred stock with a portion of the proceeds of the offering (see note 20).

Pursuant to a restricted stock agreement dated January 20, 2003, the Company sold Jack Antonini, the president and chief executive officer of the Company, 80,000 shares of common stock in exchange for a promissory note in the amount of $940,800. The agreement permits the Company to repurchase a portion Mr. Antonini’s shares prior to January 20, 2007 in certain circumstances. The agreement also contained a provision allowing Mr. Antonini to “put” to the Company an amount of his shares sufficient to retire the entire unpaid principal balance of the promissory note plus accrued interest. On February 4, 2004, the Company and Mr. Antonini amended the restricted stock agreement to remove Mr. Antonini’s “put” right. The Company anticipates that Mr. Antonini will repay in full his promissory note in connection with the Company’s initial public offering. The compensation expense the Company recognized as a result of the sale of the common stock to Mr. Antonini has been reflected in the Company’s financial statements using variable accounting treatment for the period from January 20, 2003 to the date of the amendment of the agreement.

A summary of prepaid, deferred costs, and other current assets expense is as follows:

On June 4, 2001, the Company issued 12,500 shares of preferred stock in exchange for $12,500,000 in cash. On December 10, 2001, the Company issued 500 shares of preferred stock in exchange for $500,000 in cash. On December 21, 2001, the Company issued 2,500 shares of preferred stock in exchange for $2,500,000 in cash. On January 23, 2002, the Company issued 2,000 shares of preferred stock in exchange for $2,000,000 in cash.

The preferred stock has a provision requiring the Company to redeem the preferred stock upon the occurrence of certain events, including an initial public offering by the Company that results in the Company receiving gross proceeds of at least $40 million. The preferred stock also has a liquidation provision. Upon the occurrence of a Liquidating Event, as defined in the Certificate of designations, preferences and rights, the holders of preferred stock are entitled to a preference in an amount equal to their original investment plus an accreted amount equal to the issue price of the preferred stock multiplied by 10% per annum, compounded quarterly, from the date of issuance. No other dividends accumulate or are paid on the preferred stock.

The Company has 17,500 shares of preferred stock outstanding at December 31, 2003, in an amount of $16,612,928, net of issuance costs of $887,072. All of the preferred stock is owned by CapStreet II and CapStreet Parallel II.

The Company plans to redeem all shares of preferred stock and pay all the accrued and unpaid amounts on the preferred stock with a portion of the proceeds of the offering (see note 20).

The Company’s accrued liabilities include accrued vault cash fees, maintenance obligations, and fees owed to merchants. Other accrued expenses include processing, sales tax, compensation, armored fees and other miscellaneous charges. A summary of the Company’s accrued liabilities as of December 31 for each of the periods presented below is as follows:

At December 31, 2002 and 2003, the Company was committed under capital leases which expire on various dates through 2004. Minimum lease rentals have been capitalized and the related asset and obligation recorded using the interest rate implicit in the lease (ranging from 8.77% to 13%). At December 31, 2002 and 2003, the gross amount of ATM equipment and related accumulated amortization recorded under capital leases were as follows:

The Company also has several operating leases, primarily for ATMs, that expire at various times during the next three years. Rental expense under these leases for the periods ended December 31, 2002 and 2003 was approximately $2,991,931 and $4,827,857, respectively.

Future minimum capital lease payments and future minimum lease payments under operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2003 are as follows:

Borrowings under the Company’s line of credit and long-term notes payable at December 31, 2002 and 2003 consist of the following:

The Company has prepaid $11,129,300 of the amount due under its credit facility, $5,564,650 of which represented prepayment of amounts due in quarters immediately prior to March 31, 2005 and $5,564,650 of which represented prepayment of amounts due in quarters immediately prior to March 31, 2008.

In September 2002, the Company amended its Credit Agreement with BNP Paribas. The amendment added Southwest Bank of Texas, NA and General Electric Capital Corporation, as lenders, and increased the maximum principal amount available under the Acquisition Loan Facility from $10,000,000 to $25,000,000. In addition, certain financial covenants and payment terms were amended.

In May 2003, the Credit Agreement was amended again and the existing borrowed amount in the Acquisition Loan Facility was rolled into a Term Loan in the amount of $25,000,000. In addition, an Acquisition Loan Facility was reestablished in the amount of $10,000,000 and the Revolving Credit Loan was brought forward in the amount of $5,000,000. In addition, certain financial covenants and payment terms were amended.

In August 2003, the Company amended the credit agreement to add Compass Bank, Bank of America, N.A. and Wells Fargo Bank Texas, N.A., as lenders. The existing outstanding loans including money borrowed for an acquisition was rolled into a new Term Loan in the amount of $42,500,000. A new Acquisition Facility Loan was established in the amount of $15,000,000, which allows for permitted acquisition advances provided the Company meets the conditions required under the terms of the Credit Agreement, and the Revolving Credit Loan was increased to $7,500,000, which permits the Company to make draws and repayments in accordance with the terms of the Credit Agreement. The borrowing spread on LIBOR loans was increased from 3.5% to 4.0% and the unused loan commitment fee is 0.5% on the average daily unused amount of the Acquisition Facility Loan and the Revolving Credit Loan. In addition, certain financial covenants and payment terms were amended.

At December 31, 2002 and 2003, the Company had $300,000 and no amounts, respectively, outstanding under the Revolving Credit Loan Facility and $1,000,000 in an outstanding letter of credit at December 31, 2002 and 2003. Interest on the Revolving Credit Loan is calculated at LIBOR plus 3.5% or 4% depending on the agreement in force at the time of the draw or rollover of the draw (no advance outstanding at December 31, 2003). The Revolving Credit Loan Facility matures in August 2008.

At December 31, 2003, the Company had no amounts outstanding under the Acquisition Loan Facility. Principal on the Acquisition Loan Facility is payable in quarterly installments beginning September 30, 2004 in annual amounts of 10% of the principal balance in 2004, 21.25% of the principal balance in 2005, 23.75% of the principal balance in 2006, 28.75% of the principal balance in 2007, and 16.25% of the principal balance in 2008. Interest on the line of credit is calculated at LIBOR plus 4.0%. The Acquisition Loan Facility matures in August 2008.

At December 31, 2003, the Company had $31,370,701 outstanding under the Term Loan. Principal on the Term Loan is payable in quarterly installments beginning March 31, 2004 in annual amounts that increase over the life of the loan starting at 12.5% of the balance in 2004, 15% of the principal balance in 2005, 17.5% of the principal balance in 2006, 32.5% of the principal balance in 2006, and 22.5% of the principal balance in 2007. The company has prepaid all payments that are due in 2004 and has prepaid

$5,564,650 of the amounts due in 2008. Interest on the line of credit is calculated at LIBOR plus 4%, bearing an interest rate of 5.18% at December 31, 2003. The Term Loan matures in July 2008.

Borrowings are secured by a lien on substantially all of our assets and contain customary covenants and events of default. The Credit Agreement requires the Company to meet, among other factors, certain financial covenants and ratios. As of December 31, 2002 and 2003, the Company was in compliance with these covenants.

The Company offers a 401(k) plan to the employees but does not make matching contributions.

In conjunction with the change in ownership described in note 1(a), all options to purchase common stock of Cardpro, Inc. outstanding on June 4, 2001 vested immediately. In addition, all remaining outstanding options for the stock of the Company, formerly Cardpro, Inc., were converted into options to purchase common stock of the Company. As a result, the Company recognized as compensation expense the remaining unearned portion of deferred compensation related to these options. Compensation expense recognized in 2001 totaled $2,167,305.

At December 31, 2002 and 2003, the Company had a letter of credit in the amount of $1,000,000 outstanding in connection with the Revolving Credit Loan Facility (see note 11).

The following table and discussion reflect the Company’s significant contractual obligations and other commercial commitments as of December 31, 2003:

We changed our method of accounting for asset retirement obligations in accordance with SFAS No. 143 effective January 1, 2003. Under SFAS No. 143, we recognize asset retirement obligations in the period in which they are incurred if a reasonable estimate of the fair value can be made. When the liability is initially recorded, we capitalize the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, we will recognize a gain or loss for any difference between the settlement amount and the liability recorded.

The cumulative effect of the change on prior years resulted in an after-tax charge to income of $133,663 (net of income taxes of $80,026), or $0.06 diluted earnings per share for the year ended December 31, 2003. The effect of the change in 2003 was to decrease income before the cumulative effect of the accounting changes by approximately $213,689 related to depreciation and accretion expense

recorded during the period. The pro forma effects of the application of SFAS No. 143 as if the statement had been adopted on January 1, 2001 (instead of January 1, 2003) are presented below (pro forma amounts assuming the accounting change is applied retroactively, net of tax):

Asset retirement obligations consist primarily of deinstallation costs of the ATM and the costs to restore the ATM site to its original condition. We are legally required to perform this deinstall and restoration work. In accordance with SFAS No. 143, for each group of ATMs we recognized the fair value of a liability for an asset retirement obligation and capitalized that cost as part of the cost basis of the related asset. The related assets are being depreciated on a straight-line basis over 7 years.

The following table describes changes to our asset retirement obligation liability:

The actual and pro forma asset retirement obligation liability balances as if SFAS No. 143 had been adopted on January 1, 2001 (instead of January 1, 2003) were as follows:

The Company is not engaged in or aware of any current litigation, and it is the opinion of management, after consultation with legal counsel, that there are no legal matters which will have a material affect on the results of operations or consolidated financial condition of the Company.

Income tax expense (benefit) based on income (loss) before income taxes and cumulative effect of accounting change consists of:

Income tax expense (benefit) differs from amounts computed by applying the statutory rate to income (loss) before taxes as follows for the years ended December 31, 2001, 2002 and 2003:

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2002 and 2003:

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences.

The Company purchased inventory from two suppliers that accounted for 33% and 65% of total ATM purchases for the year ended December 31, 2002, respectively. These suppliers accounted for 11% and 82% of total ATM purchases for the year ended December 31, 2003, respectively. Accounts payable to these suppliers represent 11% and 18%, respectively, of the accounts payable balance at December 31, 2002. Accounts payable to suppliers represent 31.3% of the accounts payable balance at December 31, 2003.

The Company considers its business activities a single reporting segment as it derives at least 90% of its revenue and results of operations from one business segment representing ATM Management Services. During 2002, the Company had one merchant customer that represented 14% of its revenue. During 2003, the Company had no single merchant customer that represented 10% or more of revenues. All revenues are generated in the United States of America.

The Company relies on agreements with Palm Desert National Bank and First Bank & Trust to provide the Company with all of the cash that the Company uses in approximately 4,700 of its ATMs. This cash is referred to as “vault cash” under federal banking regulations. As of December 31, 2003, the balance of cash from these providers held in the Company’s ATMs was $237.7 million. The Company pays a fee for its usage of the cash based on the total amount of the cash that the Company is using at any given time. At all times during the Company’s use of this cash, it belongs to the cash providers, and the cash providers have the right to demand the return of all or any portion of their cash at any time upon the occurrence of certain events beyond the Company’s control.

On February 17, 2004, the Board of Directors of the Company approved the filing of a registration statement on Form S-1 with respect to a proposed public offering of up to $150,000,000 of the Company’s common stock. In connection therewith, the Company anticipates effecting a stock split prior to the completion of the offering. All information related to common stock and options to purchase common stock and earnings per share included in the accompanying consolidated financial statements will be adjusted to give effect to the stock split.

In connection with its initial public offering, the Company anticipates redeeming all of its outstanding Preferred Stock with a portion of the proceeds of the offering (see note 8). The Company also expects to terminate the investors agreement with its stockholders in connection with its initial public offering.

Under date of March 3, 2004, we reported on the consolidated balance sheets of Cardtronics, Inc. and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the three-year period ended December 31, 2003, which are included in the prospectus. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule in the registration statement. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.


(1)	Deductions relate to notes and receivables written off in the normal course of business.

(2)	Charges relate to the reserve set up for all future potential writeoffs.

(3)	Deductions relate to writeoffs of trade receivables.

(4)	Deductions relate to notes written off in the normal course of business.

[Montage of photographs depicting placements of our ATMs in typical locations,

The expenses of this offering, other than underwriting discount, are estimated to be as follows:

Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) authorizes a corporation, under certain circumstances, to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was an officer or director of such corporation, or is or was serving at the request of that corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation. With respect to any criminal action or proceeding, such indemnification is available if he had no reasonable cause to believe his conduct was unlawful.

Article Eleventh of the registrant’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), together with Article VI of the registrant’s Restated Bylaws, as amended (the “Bylaws”), provide for indemnification of each person who is or was made a party to any actual or threatened civil, criminal, administrative or investigative action, suit or proceeding because such person is, was or has agreed to become an officer or director of the registrant or is a person who is or was serving or has agreed to serve at the request of the registrant as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another corporation or of a partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise to the fullest extent permitted by the DGCL as it existed at the time the indemnification provisions of the Certificate of Incorporation and Bylaws were adopted or as may be thereafter amended. Article Eleventh of the Certificate of Incorporation and Article VI of the Bylaws expressly provide that it is not the exclusive method of indemnification.

Section 145 of the DGCL also empowers a corporation to purchase and maintain insurance on behalf of any person who is or was an officer or director of such corporation against liability asserted against or incurred by him in any such capacity, whether or not such corporation would have the power to indemnify such officer or director against such liability under the provisions of Section 145.

Article Eleventh of the Certificate of Incorporation and Article VI of the Bylaws also provide that the registrant may maintain insurance, at the registrant’s expense, to protect the registrant and any director, officer, employee or agent of the registrant or of another entity against any expense, liability, or loss, regardless of whether the registrant would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 102(b)(7) of the DGCL provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (a) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL (relating to liability for unauthorized acquisitions or redemptions of, or dividends on, capital stock) or (d) for any transaction from which the director derived improper personal benefit. Article Twelfth of the Certificate of Incorporation contains such a provision.

The underwriting agreement to be entered into in connection with this offering will provide that the Underwriters shall indemnify the Company, its directors and certain officers of the Company against liabilities resulting from information furnished by or on behalf of the Underwriters specifically for use in the Registration Statement. See “Item 17. Undertakings” for a description of the Securities and Exchange Commission’s position regarding such indemnification provisions.

During the past three years, we have issued unregistered securities to the persons described below. None of these transactions involved any underwriters or any public offerings, and we believe that each of these transactions was exempt from registration requirements pursuant to Section 3(a)(9) or Section 4(2) of the Securities Act of 1933, as amended, Regulation D promulgated thereunder or Rule 701 of the Securities Act of 1933 pursuant to compensatory benefit plans and contracts related to compensation as provided under Rule 701. The recipients of the securities in these transactions represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates and instruments issued in these transactions. The share numbers presented below do not give effect to the stock split described in the prospectus.

During the fiscal year ending December 31, 2001, we issued (1) 1,182,250 shares of our common stock to CapStreet II, L.P. for an aggregate amount of $118.23, (2) 138,648 shares of our common stock to CapStreet Parallel II, L.P. for an aggregate amount of $13.86, (3) 482,578 shares of our common stock to Ralph H. Clinard for an aggregate amount of $5,220,907.99, (4) 36,668 shares of our common stock to Michael H. Clinard for an aggregate amount of $1,036,523.63, (5) 13,873 shares of our series A redeemable preferred stock to CapStreet II, L.P. for an aggregate amount of $13,872,917.88, and (vi) 1,627 shares of our series A redeemable preferred stock to CapStreet Parallel II, L.P. for an aggregate amount of $1,626,950.03. In addition, during the fiscal year ending December 31, 2001, we granted options to our employees to purchase 272,999 shares of common stock at a weighted average exercise price of $7.05.

During the fiscal year ending December 31, 2002, we issued (1) 152,408 shares of our common stock to CapStreet II, L.P. for an aggregate amount of $15.24, (2) 18,031 shares of our common stock to CapStreet Parallel II, L.P. for an aggregate amount of $1.80, (3) 1,788 shares of our series A redeemable preferred stock to CapStreet II, L.P. for an aggregate amount of $1,784,994.99, (4) 212 shares of our series A redeemable preferred stock to CapStreet Parallel II, L.P. for an aggregate amount of $214,987.97, and (5) 30,834 shares of common stock to Robert L. Burrell upon the exercise of options held by Mr. Burrell for an aggregate price of $6,167. In addition, during the fiscal year ending December 31, 2002, we granted options to our employees to purchase 70,839 shares of common stock at a weighted average exercise price of $11.73.

During the fiscal year ending December 31, 2003, we issued (1) 80,000 shares of restricted common stock to Jack Antonini for an aggregate amount of $940,800, and (2) 181,820 shares of common stock upon the exercise of options held by our employees for an aggregate price of $1,363,444.

Reference is made to the Index to Exhibits following the signature pages hereto, which Index to Exhibits is hereby incorporated into this Item.

All schedules are omitted because the required information is inapplicable or the information is presented in the Consolidated Financial Statements and the related notes.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(1) For the purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2) For the purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names and required by the underwriter to permit prompt delivery to each purchaser.

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 10th day of March, 2004.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jack Antonini and Fred R. Lummis, or either of them, his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Form S-1 Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on the 10th day of March, 2004.


†	Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions of these exhibits. Omitted material for which confidential treatment has been requested has been filed separately with the Securities and Exchange Commission.

EX-10.1 3 h12528exv10w1.txt PALM DESERT NATIONAL BANK ATM CASH AGREEMENT EXHIBIT 10.1 PALM DESERT NATIONAL BANK ATM CASH AGREEMENT This ATM Cash Agreement (this "Agreement") is made by and between PALM DESERT NATIONAL BANK ("Bank"), located at 73-745 El Paseo, Palm Desert, California 92260, and CARDTRONICS, LP ("Company"), located at 3110 Hayes Road, Suite 300, Houston, Texas 77082, with Bank and Company hereinafter sometimes referred to as "party" or "parties," with reference to the following: RECITALS WHEREAS, Company proposes to operate automated teller machines ("ATMs") at various locations ("ATM Sites"); and WHEREAS, Bank is willing to provide or arrange with third parties to provide funds ("ATM Cash") for certain ATM Sites under the terms outlined below; NOW, THEREFORE, for good and valuable consideration, Bank and Company agree as follows: AGREEMENT 1. DESIGNATED ATMS. Bank agrees to provide ATM Cash for the ATMs designated in EXHIBIT "A" of this Agreement. Bank and Company may amend EXHIBIT "A" from time to time in writing. Company is responsible for requesting from Bank the timing and amount of ATM Cash shipments. However, Bank will work closely with Company to insure adequate ATM Cash is maintained at the ATM Sites. 2. ATM CASH. Bank agrees to provide ATM Cash for the ATMs. Bank may, for certain designated ATMs, use the cash of a third party vault cash provider, in which case only cash provided by the third party vault cash provider shall be used in the designated ATMs. Company shall treat all such cash as ATM Cash and all provisions of this Agreement as applicable to Bank's ATM Cash shall apply equally with regards to such third party cash, including all provisions regarding Bank's access to and ownership of ATM Cash and Company's liability therefore; provided, however, that Bank's "ownership" of such third party cash is in the capacity of agent. 3. ARMORED CARRIER. Company and Bank shall enter into a Tri-party agreement (the "Tri-party Agreement") with an armored carrier to transport all ATM Cash. The Tri-party Agreement shall require the armored carrier to maintain insurance coverage for ATM Cash; as such coverage is described in Section 11 hereof. Transportation of ATM Cash between Bank (or a third party, such as the Federal Reserve Bank) and ATM Sites will be done only with armored carriers who have executed a Tri-party Agreement and are approved by the Bank. Company shall be solely responsible for the cost of such armored carrier services under any Tri-party Agreement and shall make payment arrangements as set forth on EXHIBIT "C". Company will pay costs directly billed to Bank for Company's cash deliveries. Company will ensure, through its contracts with the armored carrier, that the armored carrier is instructed and acknowledges, in writing, that the ATM Cash delivered under any Tri-party Agreement is the sole property of Bank or the Third Party Provider and that the armored carrier disavows any claims to the ATM Cash for any reason whatsoever, that the ATM Cash must be segregated from all other cash held by the armored carrier in the armored carrier's vault or elsewhere, including segregation of Bank's ATM Cash from ATM Cash provided by a Third Party Provider, and that Bank can request the return of such cash at any time in the Bank's sole and absolute discretion. 4. ATM MAINTENANCE. The Company shall be solely responsible for first line maintenance and second line maintenance on all ATMs, including the cost of such maintenance, consistent with the provisions of Section 9. 5. ATM ELECTRONIC FUND TRANSACTIONS. Company's agreement (the "EFT Agreement") with any entity (the "ATM Network Driver") to provide the necessary communications and networking to settle ATM transactions involving ATM Cash must provide for the settlement for ATM Cash transactions in the manner outlined in EXHIBIT "D" of this Agreement. Company shall be solely responsible for all costs or fees charged by the ATM Network Driver under the EFT Agreement for the ATM transactions. 6. ATM SITE AGREEMENT. Company's agreement(s) with third parties that own on operate ATM Sites must acknowledge Bank's sole ownership of all ATM Cash and disavow any claims to the ATM Cash for any reason whatsoever. If requested, Company shall provide Bank with either (i) a copy of the ATM Site Agreement for any ATM covered under this Agreement, or (ii) a letter executed by the third party owner/operator acknowledging Bank's ownership of the ATM Cash and disavowing any claim or right to the ATM Cash for any reason whatsoever. If requested by Company, Bank will execute a nondisclosure or confidentiality agreement wherein Bank agrees to keep confidential any terms and conditions of such agreements; provided, however, Bank may provide copies of the ATM Site Agreement and any other agreements relating to the operation of the ATM to any Third Party Provider whose cash is used at the ATM, provided such provider agrees to the same confidentiality terms. 7. BANK'S OWNERSHIP OF ATM CASH. Company hereby acknowledges that Bank is at all times the sole owner of all ATM Cash prior to its withdrawal by cardholders from ATMs, and that the ATM Cash is treated as Bank's "vault cash." No other person, including Company, shall have any right, title, claim or interest in the ATM Cash prior to its withdrawal by cardholders as contemplated by this Agreement. Bank's ownership of and right to access ATM Cash shall not be subject to any claim, set off, arbitration or lien by Company or others under any circumstances. To the extent ATM Cash is provided by a third party vault cash provider, the parties hereto agree and acknowledge that Bank is acting as such third party's agent with respect to ownership of the ATM Cash. 2 8. BANK'S ACCESS TO ATM CASH. Company shall arrange with armored carriers, ATM maintenance personnel and ATM Site owners for Bank to have ready access to its ATM Cash (wherever located) upon its request. Company understands and agrees that such funds must be readily available to Bank for reserve purposes (Federal Reserve Board Regulation D, Section 204.2(k)) and to satisfy the demands of Bank's depositors. Bank shall have the right to demand the return of any portion or all of its ATM Cash at any time, with or without cause. Without limiting the generality of the foregoing, Bank shall be entitled to demand the return of its ATM Cash whenever: (a) it is directed to do so by state or federal regulatory agencies; (b) it needs the ATM Cash to satisfy the claims of its depositors; (c) Bank has reason to believe that its ATM Cash may be subject to loss through fraud or other means; (d) Bank has reason to believe its access to ATM Cash may be delayed (e.g., due to a threatened strike or labor dispute); (e) Company breaches any of its agreements with armored carriers, processors, maintenance companies or ATM Site owners who handle or have access to ATM Cash; (f) Company breaches this or any other Agreement with Bank; (g) Bank has reason to believe that ATM transactions will not be processed in a correct or timely fashion, or that Bank will not receive timely payment for ATM Cash disbursed to cardholders; (h) an ATM processor, maintenance company, armored carrier, or ATM Site owner/operator breaches its agreement with Company with respect to ATM Cash; (i) Bank is requested to do so by a Third Party Provider, to the extent the ATM Cash is provided by that Third Party Provider; or (j) ATM Cash is determined not to be vault cash for reserve purposes. Bank's access to any ATM for purposes of removing ATM Cash may be done only with the armored carrier designated in the Tri-Party Agreement between Bank, Company and said armored carrier. Although not a prerequisite or condition to its right to remove ATM Cash, Bank will endeavor to give Company three (3) days written notice of its decision (for whatever reason) to remove ATM Cash. Bank is required to notify Company in writing of its decision to remove ATM Cash at the same time Bank issues instructions/orders to the armored carrier for retrieval of the ATM Cash. 9. COMPANY ACCESS TO ATM CASH. Company agrees that it and its employees and agents will not take possession of or have access to ATM Cash at any time, either directly or through a third party, without Bank's prior written consent. Company's contracts with armored carriers for transportation and maintenance shall prohibit Company's access to ATM Cash. 10. BANK ACCESS TO COMPANY RECORDS. Company shall provide Bank, its agents, accountants, attorneys and regulatory examiners with reasonable access to Company's records and contracts involving the dispensing of any ATM Cash. 11. INSURANCE. 11.1. PROVIDED BY BANK. Bank, through its relationship with its insurance carrier (the "ATM Cash Insurer"), will provide insurance on the ATM Cash (regardless whether such cash is provided by Bank or a Third Party Provider) at Company's expense. The current pricing for insurance is set forth in EXHIBIT "E" of this 3 Agreement. The ATM Cash Insurer will issue Company a certificate of insurance evidencing the limits of coverage carried by the Bank. The limits of coverage are (i) $300,000.00 per ATM; and (ii) $5,000,000.00 aggregate, with policy retentions satisfactory to the Bank. Bank will use its best efforts to cause all insurance policies on the ATM Cash to expressly waive any right of subrogation, contribution or any other form of recovery against Company, its officers, directors or employees for any covered loss, save and except for losses resulting from the intentional or criminal acts of the Company, its officers, directors or employees. The Bank will provide the Company with thirty (30) days prior written notice of any material modification or termination of the policy. The insurance policy provided by the ATM Cash Insurer must insure both Bank and Company against any loss of ATM Cash that is caused by or results from: (a) any theft, vandalism, burglary or robbery of an ATM machine, except for such thefts or robberies that occur when the armored carrier is present at the ATM; (b) any fire; and (c) any Unexplained Disappearance of ATM Cash. For purposes of this section, "Unexplained Disappearance" shall mean that an identifiable specific amount of cash cannot be properly reconciled between the respective parties accounts, but shall not under any circumstance include any loss of cash resulting from the criminal or negligent conduct of any officer, director, employee or agent of the Bank or the Armored Carrier. With respect to any Unexplained Disappearance , if not covered by insurance, Bank will assume responsibility. 11.2. PROVIDED BY COMPANY. The Bank will require, without limiting Company's liability to Bank or third parties, that Company maintain comprehensive or ("commercial") general liability insurance, including coverage for products, completed operation, and blanket contractual liability for obligations undertaken by Company under this Agreement. Such comprehensive general liability insurance shall provide for minimum combined bodily injury and property damage coverage limits of $1,000,000.00 per occurrence or $2,000,000.00 aggregate and name the Bank as additional insured. In addition, the Company will obtain and maintain in force a comprehensive crime policy including employee dishonesty/fidelity coverage for all Company employees, officers and agents, with fidelity coverage limits of not less than $150,000.00 per employee. All policies (providing that such insurance is primary to any liability insurance carried by Bank) must be with insurance carriers that have an A.M. Best rating of A-VII or better or otherwise acceptable to Bank. 11.3. PROVIDED BY ARMORED CARRIER. Unless Bank and Company agree otherwise, which agreement must be reduced in writing and executed by both parties, every Tri-Party Agreement will require the armored carrier identified therein to procure an insurance policy(ies) with an insurance company (the "AC Insurer") reasonably acceptable to both Bank and Company that insures the ATM Cash against the losses described below. The coverage limits provided under the policy shall be at least equal to the amount of ATM Cash under the armored carrier's control at any time, including all ATMs serviced by that armored carrier. The single occurrence deductible will be no less than $2,500.00, unless approved by 4 both Bank and Company. The policy will include Bank as a loss payee and, if possible, will include Bank as an additional named insured. The policy will provide coverage for the below described events and any concomitant loss of ATM Cash: (i) kidnapping or robbery of the armored carrier's employees; (ii) the negligence, carelessness, willful misconduct and/or dishonesty of the armored carrier's officers, employees and agents; (iii) losses occurring due to damages caused to an ATM by the carelessness, neglect or willful misconduct of armored carrier's employees; (iv) any burglary or robbery of an ATM that occurs while the armored carrier's personal are present at the ATM; and (v) any casualty, regardless of fault or negligence of the armored carrier or its officers and employees, involving any of the Carrier's vehicles or facilities caused by or resulting from any vehicular incident, fire, flood, hurricane, earthquake or other natural calamity. A certificate of the above insurance (the "Certificate") must be provided to both Bank and Company before the armored carrier will have access to any ATM Cash. The Certificate will also provide that any such policy may not be terminated or materially modified without the AC Insurer given thirty (30) days prior written notice to both the Bank and Company. 12. RISK OF LOSS. To the extent not covered by one of the insurance policies identified in Section 11, Company assumes all risk of uninsured loss and agrees to reimburse Bank promptly for any theft, damage, loss, destruction, and/or incorrect dispensing of ATM Cash once it leaves Bank (or a third party such as the Federal Reserve) until properly withdrawn by a cardholder or returned to Bank (or a third party upon Bank's instructions, such as the Federal Reserve). Examples of such loss include, but are not limited to: (a) any loss by armored carriers, maintenance personnel or ATM Site owners or operators; (b) any loss or damage to ATM Cash resulting from acts of God, natural disasters, fires, fire suppression systems, war or civil unrest, burglary, or the tortuous or negligent actions or omissions of third parties; (c) any loss of ATM Cash caused by any mechanical malfunction of ATMs; (d) the disbursement or theft of ATM Cash by persons with counterfeit, lost or stolen cards; (e) any failure or inability of Company or any third party processor to process ATM transactions in a timely and correct manner; (f) any failure or refusal of any card issuer to settle for ATM Cash withdrawal transactions; and (g) any failure or inability of any third party (e.g., an automated clearinghouse or network sponsoring Bank) to settle ATM Cash transactions or make payment to Bank for any reason. Anything in the preceding paragraph to the contrary notwithstanding, if the ATM Cash Insurer (i) defaults on its obligation to cover any loss that would come within the scope of the insurance coverage to be placed by Bank pursuant to Section 11.1; or (ii) cancels the Bank's policy and Bank or ATM Cash Insurer fails to give Company thirty (30) days advance notice of such cancellation, except for losses caused by the acts on omissions of Company's officers, employees or agents, Company's obligation to reimburse Bank shall be limited to Two Thousand Five Hundred Dollars ($2,500.00) per occurrence. Furthermore, with respect to any loss that would have been a covered loss, but for deductible or self-insured policy retention under any insurance policy issued pursuant to Section 11.1, Company's sole obligation to Bank shall be limited to $2,500.00. 5 Upon initial discovery, Company shall provide Bank with prompt telephonic notice (followed by prompt written notice) regarding: (a) any loss, damage, theft or destruction of ATM Cash; (b) any anticipated delay in the processing of ATM Cash transactions; and (c) any failure or delay in the settlement of ATM Cash transactions. 13. INDEMNIFICATION. Company agrees to indemnify, defend and hold Bank and/or any third party cash provider and their officers, directors, and employees harmless from and against every loss, damage, claim, cost, proceeding or action, including any attorney's fees and costs incurred by Bank and/or any third party cash provider, related directly or indirectly to: (a) any claim by third parties (e.g., cardholders, processors, card issuers, card systems, ATM Site owners and armored carriers) that Company breached any agreement with them; (c) any claims of error by cardholders; (d) any damage or injury to cardholders, maintenance or armored carrier personnel, or ATM Site personnel in connection with an ATM or an ATM transaction (e.g., assault, theft, incorrect dispensing of ATM Cash, or incorrect processing of ATM transactions); (e) the design, accessibility and/or placement of ATMs; or (f) Company's breach of this Agreement. 14. REPORTS. Bank will provide Company with the periodic settlement, reconcilement and other reports. 15. FEES. Company shall pay Bank fees based on current pricing as shown on EXHIBIT "E." Payment shall be within five (5) business days following receipt of invoice. Fees are subject to change upon written agreement by both parties. With respect to all payments or reimbursements called for under this Agreement, including expenses and costs for which Bank is entitled to reimbursement under Section 13, Bank may, at its option, offset any account standing in the name of the Company, or offset any funds held for the benefit of the Company at Bank. 16. TERM AND TERMINATION. 16.1. TERM. The term of this Agreement shall be for a period of eighteen (18) calendar months, commencing on the Effective Date (defined below), which will automatically renew for additional one (1) year periods unless either party gives notice to the other party of intent to cancel this Agreement at least ninety (90) days prior to expiration of the term. 16.2. TERMINATION BY NOTICE. Following the anniversary date of this Agreement, either party may terminate this Agreement at any time, upon ninety (90) days' prior written notice to the other party. 16.3. TERMINATION FOR BREACH. Either party may terminate this Agreement in its entirety or as to any ATM Site(s) effective thirty (30) days after giving notice upon the occurrence of a material breach of the other party's obligations hereunder, so long as the breach is not due to the actions of the terminating party, and provided that the breach is not remedied within twenty (20) days (or such other time which is 6 specified for a particular breach elsewhere in this Agreement) after notice is given. In the event the same breach occurs twice within a three (3) consecutive calendar month period, the breaching party will not be entitled to remedy the breach to avoid termination. 16.4. TERMINATION BY BANK WITHOUT NOTICE. Notwithstanding Section 16.3, Bank may terminate this Agreement without advance notice in the event: (a) Company breaches this Agreement by failing to protect Bank's absolute, unconditional ownership in, or access to, ATM Cash; (b) Bank is not permitted to treat ATM Cash as vault cash for reserve purposes; (c) a third party which handles or facilitates ATM Cash transactions (e.g., EDS or any other processor) is in breach of its agreement with Company and the breach may adversely affect Bank's rights in, or access to, ATM Cash or the settlement of ATM Cash transactions; (d) Company fails to maintain the insurance required by this Agreement; (e) normal settlement of ATM Cash transactions is delayed by more than two (2) days for any reason; (f) Company is no longer sponsored or permitted to participate in any national or regional network; or (g) the arrangements involving ATM Cash transactions do not comply with a national or regional network's Operating Rules. 16.5. TERMINATION BY BANK WITH NOTICE. The Bank will give ninety (90) days' notice if it determines, in its sole discretion, that it no longer wishes to provide the ATM Cash or the services outlined herein to Company. 16.6. TERMINATION FOR REGULATORY CIRCUMSTANCES. Bank may terminate this Agreement in the event that the Office of the Comptroller of the Currency or other federal, state or local regulatory agency, which has jurisdiction over Bank's operations and activities, requires discontinuance of this Agreement. Bank shall give Company ninety (90) days' prior written notice of termination or, if less, the maximum time permitted by the regulatory agency. 16.7. TERMINATION FOR OTHER CONDITIONS. Either party may terminate this Agreement immediately upon giving notice in the event the other party: (a) makes a general assignment for the benefit of creditors, (b) applies for the appointment of a trustee, liquidator or receiver for its business or property, or one is assigned involuntarily, (c) is subject to a proceeding for bankruptcy, receivership, insolvency, dissolution or liquidation, (d) is adjudicated insolvent or bankrupt, or (e) is unable to perform its obligations under this Agreement as a direct result of a force majeure cause for a period of seven (7) or more consecutive days. 16.8. TRANSITION. Upon termination, Bank shall have the right to immediately remove all ATM Cash from the ATM Sites. Company shall assist Bank in returning all ATM Cash. 16.9. CONTINUING OBLIGATIONS. The termination of this Agreement shall not affect Company's obligations to Bank for actions and omissions occurring prior to the date of termination or for fees, costs or reimbursements incurred prior to such termination. In addition, the terms and conditions set forth in this Agreement, which 7 by their nature would continue beyond termination of this Agreement, shall survive the termination of this Agreement. Without limiting the generality of the foregoing, Company shall continue to indemnify, defend and hold Bank harmless, and to assume responsibility for risk of loss, in connection with ATM Cash and ATM transactions occurring on or prior to the date of termination and until Bank has completed the removal of its ATM Cash from all ATMs. If this Agreement is terminated (or earlier upon Bank's request), Company will cooperate with Bank in arranging for ATM Cash to be promptly returned to Bank. 17. DISPUTES; ARBITRATION. 17.1. DISPUTE RESOLUTION. In the event a controversy, claim or dispute arising out of or relating to this Agreement or the transactions contemplated hereby ("Dispute") arises between Bank (and/or any third party vault cash provider) and Company relating to this Agreement and the performance or scope of obligations hereunder, either party may request by notice that the dispute be escalated to respective senior management personnel for consideration. Upon request, senior management personnel will conference by telephone or (if convenient) in person within a reasonable period of time not to exceed fifteen (15) days to determine if the Dispute can be resolved. 17.2. BINDING ARBITRATION. Any Dispute not resolved pursuant to the provisions of Section 17.l, shall be referred to arbitration for determination. The arbitration shall be conducted in accordance with such rules as may be agreed upon by the parties, or failing agreement within twenty (20) days after arbitration is demanded, in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), subject to any modifications contained in this Agreement. The Dispute shall be determined by one (1) arbitrator, except that if the Dispute involves an amount in excess of $1,000,000.00 (exclusive of interest and costs), three (3) arbitrators shall be appointed to decide by majority vote unless the parties agree otherwise. The arbitrator(s) shall be selected from panels maintained by the AAA unless the parties agree otherwise. The determination of the arbitrator shall be binding upon the parties and judgment upon the award rendered may be entered in any court having jurisdiction thereof. The arbitrator(s) shall base the award on the applicable law judicial precedent, which would apply if the Dispute were decided by a United States District Court Judge sitting in California. The award shall be in writing and include the findings of fact and conclusions of law upon which it is based unless the parties agree otherwise. Notwithstanding the foregoing, no party shall be prevented from seeking injunctive relief from a court of competent jurisdiction in order to enforce this Agreement. Depositions may be taken and other discovery may be obtained during such arbitration proceedings to the same extent authorized in civil judicial proceedings. The arbitrator(s) will resolve any discovery disputes. The arbitrator(s) and counsel of record will have the power of subpoena process as provided by law. Arbitration fees payable to the arbitrator in advance of an award shall be paid equally by the parties to the dispute. The arbitrator(s) shall award recovery of all costs and fees (including reasonable attorneys' fees, administrative fees, arbitrator fees, costs and expenses) to the prevailing party. The 8 arbitrator(s) may also grant provisional or ancillary remedies including, without limitation, injunctive relief, attachment or the appointment of a receiver, either during the pendency of the arbitration proceeding or as part of the arbitration award. The arbitration shall be governed by the substantive laws of the State of California without regard to conflicts of law rules. The arbitration proceedings shall be conducted in Palm Desert, California, unless the parties agree otherwise. 18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all previous agreements between them with respect to its subject matter. 19. GOVERNING LAW. This Agreement will be governed by, and construed in accordance with California law. 20. SUCCESSORS. This Agreement shall be binding upon the parties and their successors and assigns. Company shall not assign its rights or delegate its obligations under this Agreement to others without Bank's prior written consent, which consent will not be unreasonably withheld. A change-in-control event shall not be deemed to be an assignment requiring notice hereunder. 21. AMENDMENTS. This Agreement may only be amended in writing signed by both parties. 22. ATTORNEYS' FEES. In the event either party sues or engages in arbitration to enforce this Agreement; the prevailing party shall be entitled to recover its reasonable costs and attorneys' fees. 23. WAIVERS. Bank may waive its rights under this Agreement without losing them. A waiver of any right by Bank shall not be deemed to be a waiver of other rights or of the same right at another time. 24. THIRD PARTY BENEFICIARIES. There are no third party beneficiaries to this Agreement, except third party vault cash providers, who it is intended may benefit from the terms and provisions hereof; provided, however, such third party provider shall have no liability to Company whatsoever. 25. NOTICES. All notices in connection with this Agreement shall be mailed or delivered to the other party at the address set forth below or at such other address as the party may designate in writing. To Bank: Palm Desert National Bank 73-745 El Paseo Palm Desert, California 92260 Attention: Sandra K. Hartfield Email Address: shartfie@pdnb.com Telephone Number: 760-340-1145 Facsimile Number: 760-779-8576 9 To Company: Cardtronics, LP 3110 Hayes Road, Suite 300 Houston, Texas 77082 Attention: Michael Clinard Telephone Number: 281-596-9988 Facsimile Number: 281-596-9984 26. INDEPENDENT CONTRACTOR. The relationship of Bank and Company is that of an independent contractor. Nothing in this Agreement shall be construed as constituting a partnership, joint venture or agency between the parties. Neither party shall make any representation or take any action, which is inconsistent with this Section. 27. COMPANY INFORMATION; FINANCIAL STATEMENTS. Company shall provide Bank with a completed Client Information Sheet in the form attached hereto as EXHIBIT "F" to this Agreement. Company shall provide Bank, initially, at least annually thereafter, and upon Bank's request, with current audited financial statements prepared by a qualified independent certified public accountant. The financial statements shall contain such information as Bank may reasonably request in order to confirm Company's financial responsibility and its ability to perform in accordance with this Agreement. 28. EFFECTIVE DATE. The Effective Date of this Agreement is November 1, 2002. CARDTRONICS, LP By: /s/ Ralph H. Clinard Date: 11/12/02 -------------------------- Ralph H. Clinard Its: President/Chief Executive Officer PALM DESERT NATIONAL BANK By: /s/ Sandra K. Hartfield Date: 11/26/02 ----------------------------- Sandra K. Hartfield Its: President/CEO, Electronic Banking Division 10 EXHIBIT "A" ATM Site Locations. This Agreement applies to all ATM Sites currently in Palm Desert National Bank's Trakker software system, a listing of which is attached hereto. New ATM Sites may be added or deleted by submitting New Terminal Set Up Form as directed by Palm Desert National Bank. A-1 EXHIBIT A LIST OF ATM LOCATIONS FOR ATM CASH AGREEMENT BY AND BETWEEN PDNB AND CARDTRONICS, LP * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. A-2 EXHIBIT "B" Intentionally left blank B-1 EXHIBIT "C" At Company's option, either of the two following procedures may be used to pay the cost of armored carrier services and maintenance as specified in Sections 3 and 4 of the ACM Cash Agreement: 1. Carrier, Company and Bank enter into a tri-party agreement: A. Carrier will bill the Company directly for their service. B. Company will pay Carrier bill directly. 2. If Carrier and Bank enter into an agreement: A. Carrier and Bank will enter into an agreement with the approval of Company. B. Carrier will forward a copy of each invoice to Bank and original to Company. C. Company will approve and pay invoice. D. Company is responsible for all dispute resolution and will be resolve issues within thirty (30) days. Company will maintain sufficient funds at Bank to settle unresolved disputes. C-1 EXHIBIT "D" SETTLEMENT PROCEDURES FOR ATM CASH PROVIDED TO ATMS FOR COMPANY: 1. All ATM Cash withdrawn and any convenience fees or surcharges assessed at the ATM against the customer (the "ATM Revenue"), will be credited directly through processor to account(s) as directed by Palm Desert National Bank. 2. The total ATM Cash dispensed will be deposited back to the Bank. All Surcharge Income must be settled with Bank. BANK MUST BE SOLELY RESPONSIBLE FOR APPROVING THE ISSUING AND CHANGING ATM CASH SETTLEMENT ACCOUNT INFORMATION WITH PROCESSOR. IF PROCESSOR IS NOT CAPABLE OF HAVING BANK ENTER INFORMATION, A TRI-PARTY AGREEMENT BETWEEN COMPANY, BANK AND PROCESSOR MUST BE IN PLACE IN WHICH BANK IS RECOGNIZED AS THE ONLY PARTY ALLOWED TO APPROVE CHANGES TO THE SETTLEMENT ACCOUNT INFORMATION. D-1 EXHIBIT "E" All other approved fees and expenses shall be billed to Company along with the monthly Cash Availability Fee. Such fees shall be automatically debited out of Company's account on the 15th business day of the following month. CASH SERVICE: COMPANY REQUIREMENTS - Full analysis and approval of two (2) years corporate financial statements and two (2) years tax returns by PDNB. A D&B will be run on the company or corporation, along with a credit report on the principals. - Articles of Incorporation and other pertinent corporate documentation. - All funds, including Surcharge Income must settle with PDNB. - The Processor must be approved and instructed by PDNB only to direct account information/transactions for crediting ATM Cash and Surcharge. - Either a copy of Company's ATMs Site agreement(s) to be used with merchants or ATM owners or a letter from the merchant/owner disavowing any ownership, claim or interest in the ATM Cash as discussed in Section 6. - Insurance certificate adding Bank as additional insured as specified in Section 11. SET-UP FEES - ONE TIME FEE - New ATM - $ * Fee per ATM; Conversion ATM(s) - $ * per ATM MONTHLY FEES Cost of ATM Cash is calculated by multiplying the daily outstanding EFT cash balance in the ATM by the applicable cost of cash rate, multiplying by one and then dividing by 360. (Example: $10,000.00 x 10.50% x 1/360). The total daily calculations are added together for the number of days in the month to arrive at the total monthly cost of ATM Cash. Prime rate will be the prime rate in effect the first day of each month. LEVEL 1 - * LEVEL 2 - * LEVEL 3 - * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. E-1 - Insurance: PDNB maintains insurance on outstanding cash in each ATM. The cost is calculated on the monthly average outstanding balance as described below:, with a per occurrence deductible of $ * :

PER SERVICE FEES - Cash Delivery Fee - $ * per Cash Delivery/Visit for PDNB Cash Balancing Operations. - Cash Management Fee - $ * per terminal per month as requested by customer. REGULATION E AND PROCESSOR CLAIMS PROCESSING PLEASE INDICATE CLAIMS PROCESSING METHOD BY CHECKING THE APPROPRIATE BOX BELOW. PLEASE CHOOSE ONE METHOD FOR PROCESSING REG E CLAIMS AND ONE METHOD FOR PROCESSING PROCESSOR CLAIMS. CUSTOMER ACCEPTS THE PER SERVICE FEE ASSOCIATED WITH EACH METHOD OF CLAIMS PROCESSING. PROCEDURE FOR PROCESSING A REG E CLAIM: [ ] Customer will research claims and process adjustments. Customer will forward outcome to PDNB. Armored carrier will send journal records directly to customer. Customer will pay processor and network fees only - no fee to be charged to customer by Bank for this method of claims processing. Or [ ] $ * fee per claim - Customer will research claims and forward any required information to Bank for processing of adjustment. Armored carrier will send journal records directly to Customer. Customer will pay processor and network fees. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. E-2 [ ] $ * fee per claim - Bank will research claim and forward necessary information to customer for processing. Armored carrier will send journal records to Bank. Customer will pay processor and network fees. Or [ ] $ * fee per claim - Bank will research claims and process adjustments on behalf of customer. Armored carrier will send journal records to Bank. Bank will forward outcome to customer. Customer will pay processor and network fees. PROCEDURE FOR PROCESSOR CLAIMS: [ ] $ * - Customer will research own processor claim and submit adjustments to their processor for their own claims. PDNB will provide transaction credit report, copy of journal records (MAILED AT CUSTOMER'S EXPENSE) and notification letter to customer. Or [ ] $ * fee per claim - Customer will research their own claims to process adjustments. PDNB will provide transaction credit report, and notification letter to customer. Or [ ] $ * fee per claim - Bank will research processor claims and customer will submit adjustments to their processor. PDNB will provide transaction credit report, copy of journal records (mailed at customer's expense) and letter to customer. Or [ ] $ * fee per claim - Bank will research processor claims and submit adjustments to the processor. NOTE: If PDNB does not receive journal records from armored carrier, PDNB will send claim letter and transaction credit reports to customer and bill the customer for the shortage. - All other fees as agreed to in advance that are the result of this service. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. E-3 EXHIBIT "F" Client Information Sheet Intentionally omitted F-1 EX-10.2 4 h12528exv10w2.txt REVISED EXHIBIT "E", 2ND REG. TO EXHIBIT 10.1 EXHIBIT 10.2 REVISED EXHIBIT "E" 2ND REVISION TO PALM DESERT NATIONAL BANK ATM CASH AGREEMENT BETWEEN PALM DESERT NATIONAL BANK AND CARDTRONICS, LP (CUSTOMER), EFFECTIVE NOVEMBER 1, 2002 REVISION EFFECTIVE SEPTEMBER 1, 2003 All other approved fees and expenses shall be billed to Customer along with the monthly Cash Availability Fee. Such fees shall be automatically debited on the 15th business day of the following month out of the following Customer operating account: Southwest Bank of Texas Account # 5728185 Routing/transit #113011258 CASH SERVICE: CUSTOMER REQUIREMENTS - Full analysis and approval of two (2) years' corporate financial statements and two (2) years tax returns by PDNB. - Articles of incorporation and other pertinent corporate documentation - $ * Certificate of Deposit with PDNB. - All funds, including Surcharge Income (but excluding Interchange) must settle with PDNB. - The Processor must be approved and instructed by PDNB only to direct account information/transactions for crediting ACM Cash and Surcharge. - Either a copy of Customer's ATMs Site Agreement(s) to be used with merchants or ATM owners or a letter from the merchant/owner disavowing any ownership, claim or interest in the ATM Cash as discussed in Section 6. - Insurance certificate adding Bank as additional insured as specified in Section 11. SET-UP FEES - One time Fee - New ATM - $ * Fee per ATM; Conversion ATM(s) - $5.00 per ATM PER SERVICE FEES - Cash Delivery Fee - $ * per Cash Delivery/Visit for PDNB Cash Balancing Operations. - Cash Management fee - $ * per terminal per month as requested by Customer. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. MONTHLY FEES Cost of Cash is calculated by multiplying the daily outstanding EFT cash balance in the ACM by the applicable cost of cash rate, multiplying by one and then dividing by 360. (Example: $10,000.00 x 5.50% x 1/360). The total daily calculations are added together for the number of days in the month to arrive at the total monthly cost of cash. Prime rate will be the prime rate in effect the first day of each month. TIER 1 - * TIER 2 - * TIER 3 - * TIER 4 - * - - Insurance: PDNB maintains insurance on outstanding cash for each ATM. The cost is calculated on the monthly average outstanding balance as described below with a per occurrence deductible of $2,500.00. Insurance cost for multiple ATMs in one location with an Aggregate Average Outstanding Balance in excess of $500,000 will be quoted separately; provided, however, the below quoted rates are not affected by the outstanding balance of ATM Cash in the possession of any Armored Carrier at its sorting facility or in any of its vehicles.

Such insurance costs may be increased to meet increasing insurance rates, which are adjusted annually as of August. Bank will notify Customer in writing thirty (30) days in advance of such increase. - Actual Cost for Armored Carrier. - - REGULATION E AND PROCESSOR CLAIMS PROCESSING PLEASE INDICATE CLAIMS PROCESSING METHOD BY CHECKING THE APPROPRIATE BOX BELOW. PLEASE CHOOSE ONE METHOD FOR PROCESSING REG E CLAIMS AND ONE METHOD FOR PROCESSING PROCESSOR CLAIMS. CUSTOMER ACCEPTS THE PER SERVICE FEE ASSOCIATED WITH EACH METHOD OF CLAIMS PROCESSING. PROCEDURE FOR PROCESSING A REG E CLAIM: [ ] Customer will research claims and process adjustments. Customer will forward outcome to PDNB. Armored carrier will send Journal records directly to customer. Customer will pay processor and network fees only - No fee to be charged to Customer by Bank for this method of claims processing. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 2 Or [ ] $2.50 fee per claim - Customer will research claims and forward any required information to Bank for processing of adjustment. Armored carrier will send Journal records directly to Customer. Customer will pay processor and network fees. Or [ ] $5.00 fee per claim - Bank will research claim and forward necessary information to Customer for processing. Armored carrier will send journal records to Bank. Customer will pay processor and network fees. Or [X] $ * fee per claim - Bank will research claims and process adjustments on behalf of Customer. Armored carrier will send journal records to Bank. Bank will forward outcome to customer. Customer will pay processor and network fees. PROCEDURE FOR PROCESSOR CLAIMS: [ ] $ * - Customer will research own processor claim and submit adjustments to their processor for their own claims. PDNB will provide transaction credit report, copy of Journal records (mailed at customer's expense) and notification letter to customer. Or [ ] $ * fee per claim - Customer will research their own claims to process adjustments. PDNB will provide transaction credit report, and notification letter to customer. Or [X] $ * fee per claim - Bank will research processor claims and customer will submit adjustments to their processor. PDNB will provide transaction credit report, copy of Journal records (mailed at customer's expense) and letter to customer. Or [ ] $ * fee per claim - Bank will research processor claims and submit adjustments to the processor. NOTE: If PDNB does not receive journal records from armored carrier, PDNB will send claim letter and transaction credit report to customer and bill the customer for the shortage. All other fees as agreed to in advance that are the result of this service. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 3 CARDTRONICS, LP PALM DESERT NATIONAL BANK By: /s/ Michael H. Clinard By: /s/ Mark J. Holland ----------------------------- --------------------------- Name: Michael H. Clinard Name: Mark J. Holland Title: Chief Operating Officer Title: Senior Vice President Date: 9/16/03 Date: 9/19/03 4 EX-10.3 5 h12528exv10w3.txt ATM VAULT CASH AGREEMENT EXHIBIT 10.3 ATM VAULT CASH AGREEMENT THIS ATM VAULT CASH AGREEMENT ("Agreement") is entered into as of February 1, 2001 between First Bank and Trust ("FBT"), a Louisiana financial institution and Cardpro, Inc. d/b/a Cardtronics, a Texas Corporation ("ATM Owner"). RECITALS: A. ATM Owner leases, owns or otherwise controls various automated teller machines. B. FBT is a contractual party to agreements with regional and national organizations that establish rules for the placement, settlement and transmission of automatic teller machines and their data (the "Networks"). C. ATM Owner desires to enter into a cash arrangement with FBT pursuant to which FBT will place vault cash of FBT in certain automated teller machines of ATM Owner (the "ATMs"). D. Columbus Data Services, LLC. ("CDS") may act from time to time as an independent contractor on behalf of FBT with respect to FBT's agreements hereunder. THEREFORE, in consideration of the premises, ATM Owner and FBT agree as follows: 1. Vault Cash. (1) ATM Owner agrees to allow FBT to place FBT's vault cash ("Vault Cash") in the ATMs from time to time in such amounts as FBT may desire. FBT shall arrange for Vault Cash to be delivered by FBT's designated carriers to specific ATMs at specific locations as agreed to from time to time by FBT and ATM Owner. FBT shall approve all designated carriers, and such approval will not be unreasonably withheld, that will handle FBT's Vault Cash and will approve the location of any ATMs subject to this Agreement. (2) ATM Owner agrees that at all times the Vault Cash shall be the property of FBT, and ATM Owner agrees to indemnify and hold harmless FBT for any damage to, or loss of, Vault Cash delivered to any ATMs until the Vault Cash has been successfully returned to FBT or its designated carrier. (3) At all times FBT shall have the full ownership, title, use, rights and benefits to all Vault Cash located in any ATM. (4) ATM Owner agrees that all Vault Cash can be retrieved from any ATMs by FBT at FBT's sole discretion and option and without consent from, or notice to, ATM Owner. (5) All Vault Cash placed in any ATM shall at all times be the sole property of FBT and shall not be subject to any manner of set off rights, lien, security interest, attachment, seizure or other process or agreement by or relating to the property of ATM Owner. ATM Owner shall take all necessary steps to identify and protect FBT's ownership rights in the Vault Cash. (6) All Vault Cash placed in an ATM pursuant to this Agreement will be considered "vault cash" of FBT for the purposes of reporting pursuant to Regulation D of the Federal Reserve Board (12 CFR 204) until such time that the currency may be dispensed from an ATM. ATM Owner shall not report, treat or consider such currency as "vault cash" for any reporting purposes or otherwise. (7) ATM Owner shall furnish such assistance as FBT may reasonably request in order for FBT to comply with any regulatory, record keeping or reporting requirements applicable to FBT with respect to the ATMs or the Vault Cash. 2. Delivery of Vault Cash. (1) FBT shall arrange for FBT's designated carriers to load and unload Vault Cash from the ATMs at ATM Owner's cost and expense. The Vault Cash shall be delivered in denominations acceptable to FBT as set forth on Schedule 1 hereof or pursuant to amendments to such schedule agreed to from time to time between FBT and ATM Owner. The designated carriers shall be retained by, considered the independent contractors of, and be directed solely by FBT at all times and for all purposes under this Agreement. At FBT's request, ATM Owner shall provide each of FBT's designated carriers with irrevocable written instructions acknowledging that ATM Owner has no rights in the Vault Cash and granting such carrier access to all ATMs to allow the carrier to add or retrieve any Vault Cash from any ATM at any time without consent from, or notice to, ATM Owner. (2) The initial ATMs to be subject to this Agreement are described on Schedule 1 hereto. To add a new ATM to this Agreement, ATM Owner shall notify FBT in writing, which notice shall specify the location, projected opening date, anticipated quantity and denomination of Vault Cash needed, hours of operation, and such other information as FBT may require with respect to the new ATM. FBT will notify ATM Owner following receipt of such notice if FBT will consent to adding the new ATM to this Agreement. FBT shall be under no obligation to consent to the adding of any additional ATMs to this Agreement. If the consent is given, ATM Owner and FBT will at ATM Owner's cost establish a mutually agreeable initial cash limit for the new ATM pursuant to an amendment to Schedule 1. Upon approval and establishment of the new cash limit, the ATM will be considered subject in all respects to the provisions of this Agreement. (3) ATM Owner may not remove, relocate or terminate any ATM from this Agreement unless FBT gives its prior written approval. ATM Owner shall provide a written request for removal of an ATM at least 48 to 72 hours prior to anticipated date for removal. Prior to the removal or termination of any ATM 2 from this Agreement pursuant to this Section 2(c), ATM Owner shall pay FBT the full amount reflected on FBT's records as being in an ATM less the amount actually recovered by FBT or its authorized carrier upon the removal or termination of an ATM from this Agreement together with the full amount of any accrued but unpaid fees, charges, and costs related to the ATM, and subject to any insurance benefit due owner to the extent any loss is subject to insurance coverage. 3. ATM Transactions. (1) Vault Cash placed in an ATM shall be dispensed only to customers of participants in the Networks by means of an access device approved by, and subject to an acceptable contractual arrangement with, FBT and pursuant to agreements between FBT and the institutions participating in the Networks. All computer access, processing, and transmissions at the ATMs will be done at ATM Owner's cost. (2) ATM Owner shall at all times abide by, and operate in accordance with, all applicable laws, rules and regulations with respect to the ATMs, including rules and regulations requiring consumer disclosures and warnings, rules relating to the ownership and operation of ATMs including the by-laws and operating regulations of the Networks, Regulation E of the Federal Reserve Board (12 CFR 205 et seq.), ATM safety laws, and all other applicable federal and state laws. (3) FBT shall establish from time to time cash limits for each ATM covered by this Agreement. The cash limit shall be determined on estimated cash needs for each ATM with restocking of approximately two (2) times per month or upon a schedule mutually agreed to by FBT and ATM Owner. FBT may, from time to time, in its sole discretion, which discretion may be unreasonably withheld, agree to allow Vault Cash in excess of the cash limit for any particular ATM upon the request of ATM Owner based upon seasonal use and needs of a particular ATM. Notwithstanding the foregoing, FBT shall have no liability if inadequate Vault Cash is in an ATM at any time. The owner may use insurance benefits due owner to the extent any loss is subject to insurance coverage. (4) ATM Owner shall also obtain and maintain at ATM Owner's expense all permits and licenses required to operate each ATM. 4. Settlement for Disbursements of Vault Cash. (1) ATM Owner shall be responsible for, and indemnify and hold harmless FBT with respect to, any Vault Cash dispensed or removed from an ATM other than by FBT or FBT's authorized carrier. The ATM Owner shall be fully liable hereunder for all Vault Cash placed in an ATM regardless if the amount of Vault Cash exceeds any established cash limit. The owner may use insurance benefits due owner, to the extent any loss is subject to insurance coverage. 3 (2) FBT shall establish one or more accounts or subaccounts (each an "Account") at FBT (or in FBT's name if at another financial institution) for the purpose of depositing the gross amount of all settlement proceeds, Network interchange receipts, ATM surcharges, and credit and debit adjustments, and any other amounts due to FBT by ATM Owner hereunder, including any amounts of Vault Cash dispensed or removed from an ATM. Unless otherwise agreed, all settlement charges will go into a settlement account while network interchange receipts, ATM surcharges and credit and debit adjustments go into other accounts. All Accounts shall be non-interest bearing unless otherwise agreed to in writing by FBT. ATM Owner shall arrange for sufficient funds to be in the Accounts at all times to satisfy all of ATM Owner's anticipated daily cash obligations and other obligations hereunder to FBT. ATM Owner shall have no legal or contractual rights to any of the funds in the Accounts other than the net difference between all such balances and the total amounts due FBT. (3) ATM Owner agrees to establish an escrow account (the "Escrow Account") with FBT as additional security for all of ATM Owner's obligations to FBT hereunder. ATM Owner grants to FBT a first priority security interest and contractual right of setoff in the Escrow Account. The amount of funds required to be in the Escrow Account (or related compensating balances) and the extent to which interest will be paid thereon, if any, is set forth on Schedule 2 hereto. In the event the Accounts do not contain sufficient funds to cover any obligation of ATM Owner to FBT, FBT shall be entitled to deduct funds from the Escrow Account. Any deductions shall be replenished by ATM Owner within five (5) days of notice from FBT. FBT will settle accounts with the ATM Owner on a monthly basis. (4) FBT shall provide the following reports to ATM Owner, on a periodic basis: (i) the amount of currency dispensed from each ATM, the amount of currency loaded into canisters in each ATM, and the amount of currency held for stocking each ATM and in transhipment by the designated carriers; and (ii) a settlement statement reflecting interchange fees, costs, expenses, and fees due FBT (or its contractors) and amounts due the ATM Owner. 5. Data Processing. All data processing with respect to the ATMs will be at ATM Owner's sole cost and expense through CDS or another third party settlement processor arranged by FBT. ATM Owner shall not have any authority to change any settlement accounts without the express written consent of FBT. ATM Owner shall be liable for any costs or damages incurred by any delays in transmitting data if the delay causes a loss in receiving any credits or debits with respect to any settlements. 4 6. Insurance. Prior to any Vault Cash being placed in any ATM, ATM Owner shall obtain through FBT and maintain throughout the term of this Agreement the following insurance coverages (including deductibles and self-retention as FBT may approve) at ATM Owner's sole cost and expense with insurance companies having an A.M. Best Rating of A-VII or better or otherwise acceptable to FBT, with coverages, at least, as follows (subject to ATM Owner's desire for higher amounts communicated in writing and at ATM Owner's cost): (1) Comprehensive or commercial general liability insurance, including coverage for products, completed operations, and blanket contractual liability for all obligations of ATM Owner under this Agreement. The comprehensive general liability shall provide minimum combined bodily injury and property damage coverage limits of $1,000,000 per occurrence and $4,000,000 in the aggregate. (2) Comprehensive Crime Coverage, including employee dishonesty/fidelity coverage for all ATM Owner's employees, officers and agents, and on-premise (loss inside the premises) and in-transit (loss outside the premises) with a limit of at least $90,000 (but in no event less than the highest amount of vault cash placed in the ATM) for each ATM covered by this Agreement and aggregate coverage of at least $2,000,000. FBT will arrange for these insurance coverages at ATM Owner's expense, including a handling fee in accordance with Schedule 3. All insurance policies shall name FBT as loss payee and additional insured thereunder and shall provide that FBT will receive 30 days prior notice before the cancellation or termination thereof. ATM Owner shall strictly adhere to all risk management policies as FBT may determine and communicate to Owner are reasonably necessary and prudent for the Vault Cash Services under this Agreement. FBT shall provide at ATM Owner's sole cost and expense an annual review of ATM Owner's insurance coverages and policies. FBT is entitled to coordinate this annual review and be paid a handling fee in accordance with Schedule 3. 7. Fees, Expenses and Network Interchange Fees. (1) ATM Owner agrees to pay the costs, fees and other charges set forth in Schedule 3 to this Agreement as compensation to FBT for all services provided herein. (2) ATM Owner further agrees to be responsible for all costs and expenses incurred by FBT related to any contract with any armored car carriers, security or alarm providers, insurance carriers, computer service processors and providers, telecommunications providers, CDS or other independent contractors retained by FBT to provide services under this Agreement. (3) ATM Owner shall be responsible for all reasonable out-of pocket expenses, including travel costs, incurred by FBT in connection with the services provided by any and all FBT employees and contractors engaged for balancing and 5 reconciling the ATM accounts to the Network remittances and for the audit of the ATMs. (4) ATM Owner shall be responsible for all fees, charges, and amounts assessed by CDS, any Network or any other computer telecommunications or other system provider, including any fees for charge backs, insurance shortages, loss of cash and transfer fees. (5) ATM Owner authorizes FBT to deduct all costs, fees and charges (including any charges or amounts due under Section 4 hereof and/or Schedule 3) due under this Agreement from the Accounts on a daily basis. FBT shall furnish ATM Owner on a monthly basis with a summary of all fees and settlements in accordance with Section 4(d) hereof. Expenses for services will be deducted from Customer monthly. (6) FBT may from time to time increase any fees or charges hereunder upon 30 days prior written notice to ATM Owner; provided, however, that if ATM Owner shall find such changes to be unacceptable, ATM Owner may give notice within the 30-day period that it intends to terminate the Agreement within 60 days without penalty. 8. Risk of Loss. ATM Owner shall bear all risk of loss, theft, damage, destruction, fraud or incorrect dispensing of any Vault Cash placed in any ATM pursuant to this Agreement, and ATM Owner shall indemnify and hold harmless FBT pursuant to Section 8 hereof with respect to any cost, damage or loss FBT may occasion as a result thereof, subject to any insurance benefits due owner. 9. Indemnity. ATM Owner agrees to indemnify and hold harmless FBT from and against any and all losses, liabilities, claims by third parties (including any carriers, the Networks, any computer or telecommunications provider, or any other party engaged by FBT to provide services or support hereunder), damages, costs and expenses of any and every kind (including attorney's fees and expenses) to which FBT may incur or be subjected to and arising out of or attributed, directly or indirectly, to the provision of Vault Cash to any ATM or to the performance or non-performance of any other services or of any obligations under this Agreement, provided, however, that ATM Owner shall not be obligated to indemnify FBT against any loss resulting from FBT's gross negligence or willful misconduct. 10. Audits. ATM Owner shall allow FBT and its designees, including any regulatory or supervisory body to which FBT may be subject, at ATM Owner's cost and expense to examine any books, records and ATM facilities that FBT or its designees may deem appropriate in order to determine compliance with the terms of this Agreement and applicable laws and regulations. ATM Owner shall allow FBT or its designees access to any audit reports conducted by ATM Owner or its agents with respect to the ATMs. FBT shall have the right to perform such inspections and 6 audits as FBT, in its sole discretion, deems necessary, and ATM Owner shall bear any and all expenses associated with the audits. In the event of any financial discrepancies, FBT's records of amounts of Vault Cash placed in an ATM or disbursed to a designated carrier, amounts received by FBT and amounts owed by ATM Owner to FBT shall be conclusive and binding, absent manifest error in computation. 11. Term and Termination. This Agreement shall be effective for four (4) years from the date set forth on page one hereof and shall be automatically extended for successive annual renewal terms, unless either party shall deliver written notice to the other party of cancellation at least sixty (60) days prior to the end of any term; provided that FBT may cancel this Agreement for cause or regulatory need upon twenty-four (24) hours notice. This Agreement shall be automatically terminated immediately if its continuation would result in a violation of any law or regulation, or if a regulatory authority determines, through staff opinion or otherwise, that currency placed in an ATM or with a designated carrier(s) pursuant to Section 1 of this Agreement is not "vault cash" as defined in 12 CFR 204.2(k) of Federal Reserve Regulation D. 12. Reporting. ATM Owner shall submit annual audited financial statements no later than May 31 each year for the year then ended, quarterly management-prepared financial statements within thirty days of the close of each calendar quarter for the quarter then ended, income tax returns no later than May 31 each year for the year then ended, personal financial statements and tax returns of ATM Owner's owners no later than May 31 each year for the year then ended, and other such financial reporting and information as FBT may require. 13. Security Interests. In order to secure ATM Owner's contractual obligations to FBT hereunder, including all indemnity obligations with respect to the Vault Cash placed in an ATM, ATM Owner grants to FBT a continuing first priority security interest in the ATMs, subject to the security interest of any third party providing the direct financing of any ATM equipment, all funds maintained in any of the Accounts and the Escrow Account, all funds maintained in any other account of the ATM Owner located at FBT or in an account controlled by FBT, all funds and other proceeds due ATM Owner with respect to any of the ATMs, including settlement charges due from any users of an ATM, and all proceeds of the foregoing. The ATM Owner's obligations hereunder shall be personally guaranteed by the joint and several (solidary) guarantees of the owners of ATM Owner. ATM Owner shall also execute and deliver at ATM Owner's expense such financing statements and other documents as FBT may require in order to perfect the foregoing security interests. 14. FBT Performance by Independent Contractors. FBT shall be authorized to delegate some, or all, of its obligations under this Agreement to one or more independent contractors for the performance of FBT's duties hereunder. ATM Owner is 7 hereby authorized to deal with CDS, or any other contractor as to whom ATM Owner is notified in writing by FBT as being a contractor for matters under this Agreement. All acts of CDS or any other such independent contractor under this Agreement shall constitute acts of FBT for all purposes hereof. 15. Default. If ATM Owner fails to maintain sufficient funds in the Accounts or the Escrow Account as required herein, if ATM owner shall fail to pay any amounts otherwise due FBT on a timely basis (without any demand or notice, both of which are hereby expressly waived), if FBT is unable to access any ATM for any reason, if any attachment, garnishment, levy or action is filed against ATM Owner or any of its property, or if there is filed by or against ATM Owner any bankruptcy or insolvency proceedings, then FBT may, at its option, do any one or more of the following, any combination thereof, or pursue any other remedy provided at law or equity: (1) Immediately set off any and all accounts, funds or property of ATM Owner that may be held by FBT or any account controlled by or in the name of FBT, including the Accounts and the Escrow Accounts; (2) Remove all Vault Cash from any or all of the ATMs without consent from, or notice to, ATM Owner; (3) Bring suit against ATM Owner for any and all losses sustained by FBT; (4) Seek any injunctive and other equitable relief that may be necessary in order to protect the Vault Cash and FBT's rights hereunder, ATM Owner expressly recognizing that an adequate remedy at law will not exist for FBT in the event ATM Owner breaches its obligations hereunder, and ATM Owner expressly consents to the issuance of a temporary restraining order or injunction without notice to ATM Owner; (5) Bring a suit for specific performance against ATM Owner to compel ATM Owner to perform its obligations hereunder, including the right to obtain a mandatory injunction compelling the ATM Owner's performance; and (6) Any and all other relief afforded by applicable law. ATM Owner shall be liable for, and agrees to pay, any and all legal fees and costs that FBT may incur in connection with any remedy sought by FBT hereunder. ATM Owner further recognizes that the Vault Cash constitutes an asset of FBT and that any wrongful appropriation, control or taking of the Vault Cash by ATM Owner or anyone within its control shall constitute a criminal offense under both state and federal law and subject ATM Owner to all applicable civil and criminal actions and penalties, including incarceration. 16. Landlords Waivers. ATM Owner shall furnish FBT with a landlord's waiver in the form of Schedule 4 hereto for each ATM located on property not owned by ATM Owner. 8 17. General. (1) Governing Law. This Agreement shall be governed by the laws of the State of Louisiana. (2) Integration of Agreements. This Agreement, including its Schedules, represents the entire agreement of the parties relating to its subject matter and may be amended only in writing executed by both parties. (3) Successors/Assigns. This Agreement shall be binding upon each party's successors but may be assigned only with the prior written consent of the other party. (4) Force Majeure. Neither party to this Agreement shall be considered in breach of its obligations hereunder due to any failure to perform arising solely out of causes beyond the control and without fault or negligence of such party, including act of God; acts of any federal, state or local governmental authority; fires, floods, or other natural disasters; strikes or labor unrest; or interruption of telecommunications services. (5) No Waiver. No waiver by either party of any breach or default under this Agreement shall be construed as a waiver of any succeeding breach. (6) Relationship of Parties. This Agreement shall not create a relationship between the parties as agents, lender/borrower, partners, fiduciaries, or joint venturers. (7) WAIVER OF JURY TRIAL: ALL PARTIES TO THIS AGREEMENT, HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, AFTER CAREFUL CONSIDERATION AND AN OPPORTUNITY TO SEEK LEGAL ADVICE, WAIVE THEIR RIGHTS TO HAVE A TRIAL BY JURY IN RESPECT TO ANY LITIGATION ARISING OUT OF OR IN ANY WAY CONNECTED WITH ANY OF THE PROVISIONS OF THIS AGREEMENT, OR ANY MODIFICATIONS OR EXTENSIONS THEREOF. 9 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. FIRST BANK AND TRUST By: /s/ Ashton J. Ryan, Jr. ------------------------------- Name: Title: ATM OWNER By: /s/ Michael H. Clinard ------------------------------- Name: Title: 10 SCHEDULE 1 ATMs Subject to Agreement Locations Cash Limit and Denominations Schedule 1 SCHEDULE 2 Escrow Account Minimum Amount of Funds required Interchange paid at month end and to offset to be in the Escrow Account expenses due Minimum Amount of Compensating N/A Balances Escrow Account Interest Bearing N/A Schedule 2 SCHEDULE 3 List of Fees and Expenses Cost of Cash * Cash Replenishments * FLM Services * Cash Management Fees * Insurance * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Schedule 3 SCHEDULE 4 Landlord's Waiver And Agreement To: First Bank and Trust 909 Poydras Street, LL&E Tower New Orleans, Louisiana 70112 The undersigned is the owner of certain property located at ___________ (the "Premises"), which Premises are or are to be occupied by ____________ (the "ATM Owner") under a lease dated ______________ between the undersigned and ATM Owner. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce you to enter into an ATM Vault Cash Agreement with ATM Owner pursuant to which you may place your vault cash ("Vault Cash") in one or more automated teller machines ("ATMs") of ATM Owner, the undersigned hereby acknowledges and agrees that any ATM now or hereafter located on the Premises or which may hereafter be located thereon shall be and remain personal property and not fixtures nor part of the realty nor an appurtenance thereto; and the undersigned hereby waives and relinquishes in your favor any and all liens on the ATMs, however these liens may arise, whether through a levy for rent or otherwise, and agrees that your ownership rights, liens, or security interests, now existing or hereafter arising, shall have priority over any and all such liens of the undersigned. The undersigned acknowledges that neither the undersigned nor the ATM Owner has or will ever have any ownership of, security interest in, or control over any of the Vault Cash. You and your contractors (including any armored carrier) are expressly authorized without notice to, or consent from, the undersigned at any time to enter the Premises and remove the Vault Cash from any ATM, whether or not such removal requires a physical detachment of the ATM from the realty or causes injury thereto; provided, however, that you will repair, or pay the reasonable cost to repair, any such injury to the realty. If the undersigned's lease with the ATM Owner is terminated by the undersigned or if the ATM Owner defaults under such lease, or if the ATM Owner defaults under any of its agreements with you and you desire to exercise your rights as a secured party holding a security interest in any of the ATM Owner's property, then, you may thereafter at your option occupy the Premises for up to six (6) months and may keep thereon such property as you determine appropriate and you shall pay rent (pro-rated on a daily basis and computed on the basis of a thirty (30) day month) at the rate provided in the undersigned's lease with the ATM Owner based on the rate in effect just prior to such termination or default. All of your rights and privileges hereunder shall inure to the benefit of your successors and assigns, and shall bind the undersigned's successors or assigns. Schedule 4 IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed on this ____ day of ____________, 20___ at ___________________________. OWNERS: ____________________________ Schedule 4-2 SCHEDULE 1-A LIST OF LOCATIONS* * Denotes Confidential Portion Omitted and Filed Separately with the Commission. SCHEDULE 3 ADDENDUM This addendum of the ATM Vault Cash Agreement dated February 1, 2001 between Cardpro, Inc. dba Cardtronics and First Bank and Trust is effective October 1, 2002 and is applicable to the following Services described in Schedule 3 of the Vault Cash Agreement: Cash Management fees $ * per terminal And the following Service is added to Schedule 3 of Vault Cash Agreement: Cash Load fee $ * per cash load Agreed to by: Agreed to by: CARDTRONICS, LP FIRST BANK and TRUST (successor in interest to Cardpro, Inc.) By: /s/ Ralph H. Clinard By: /s/ Ashton J. Ryan Jr. ------------------------------------ --------------------------------- Ralph H. Clinard, President and CEO Date: 10/16/02 Date: 10/29/02 * Denotes Confidential Portion Omitted and Filed Separately with the Commission. SCHEDULE 3 - A Addendum to Vault Cash Agreement Dated 02/01/01 List of Fees and Expenses Cash Management Services through First Bank and Trust (Processor : Concord) Cost of Cash * Armored Car * FLM Services * Cash Management $ * per ATM per month Insurance Cash only* $ * per ATM per month for balances $40,000.00 or less $ * per ATM per month for balances of $40,000.00 Cardtronics, LP(1) DBA Cardtronics First Bank and Trust By: /s/ Ralph H. Clinard By: /s/ Ashton J. Ryan Jr. ----------------------------------------- ------------------------------ Name: Ralph H. Clinard Name: Ashton J. Ryan Jr. Title: President and Chief Executive Officer Title: President and CEO Date: 11/26/01 Date: 11/26/01 - -------- (1) Cardtronics, LP is the successor in interest to Card Pro, Inc. by conversion pursuant to Article 5.17 of the Texas Business and Corporation Act. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Addendum 24 The following location(s) are added to Exhibit B of the original Agreement as provided for in paragraph 4. to wit: "Exhibit B" may be amended from time to time by Client to add to or delete ATM's; provided that the Settlement/Replenishment Frequency applicable to additional ATM's shall be determined by the mutual agreement of both parties." Addition(s):

CARDTRONICS MT. VERNON MONEY CENTER /s/ Jim Bettinger - ----------------------------- ---------------------------- Accepted By - Signature Accepted By - Signature Jim Bettinger - ----------------------------- ---------------------------- Print Name Print Name VP of US ATM Programs - ----------------------------- ---------------------------- Title Title July 15, 2002 - ----------------------------- ---------------------------- Date Date FIRST BANK & TRUST /s/ Rhonda Miller ---------------------------------------- Accepted By - Signature AVP - ATM OPS. ---------------------------------------- Title Rhonda Miller ---------------------------------------- Print Name July 15, 2002 ---------------------------------------- Date 2 EX-10.4 6 h12528exv10w4.txt NCR CORPORATION "ATM" SERVICES ADDENDUM EXHIBIT 10.4 NCR CORPORATION AUTOMATED TELLER MACHINE ("ATM") SERVICES ADDENDUM This ATM Services Addendum between Cardtronics, LP, a Delaware limited partnership, whose principal offices are at 3000 Hayes Road, Suite 101, Houston, Texas 77082 ("You") and NCR Corporation ("NCR") is agreed to on July 26, 2001 (the "Effective Date"). 1.0 THIS ADDENDUM 1.1 Our Contract with respect to ATM Services you acquire from NCR consists of the ("Master Agreement #66073, this Addendum, and any Appendices attached to this Addendum. Unless otherwise agreed in writing, all ATM Services will be governed by this Addendum. 1.2 If a conflict exists between the terms and conditions of any of the documents referenced above, the order of precedence will be (a) Appendices to this Addendum; (b) this Addendum; and (c) the Master Agreement. Any pre-printed language on your or NCR's Order Forms will not apply. 2.0 TERM 2.1 The initial term of this Addendum ("Initial Term") will begin on the Effective Date indicated above and will continue for a period of three years. Thereafter, this Addendum will automatically renew for one year periods, until terminated by either party by written notice to the other no less than 90 days prior to the end of the Initial Term or renewal period, unless terminated according to Section 10. 2.2 NCR will commence providing the services described herein upon the execution hereof to all of the equipment listed on Appendix C. Upon 30 days written notice to NCR, Cardtronics may remove from service or relocate the equipment covered by this Addendum without any penalty or liquidated damages being assessed against it. Further, upon 30 days written notice and subject only to Section 4.2.7, Cardtronics may add equipment to be covered hereunder. NCR shall adjust its quarterly invoicing to Cardtronics to reflect the addition or deletion of equipment as the case may be. This information will include the information described in Appendix A, as well as the new location (with complete street address, city, state and zip/postal code, and new location number) and the effective date of the change. If you do not provide the required notice, NCR will invoice you at T&M rates for extra work caused as a result. 2.3 If NCR has installed Mas-Hamilton CenCon 2000 or equivalent ("Cencon") locks on ATMs as part of the Services, and you terminate Services with respect to any ATM, you will reimburse NCR $ * minus $ * for each full year the lock was in service on that ATM, and you will pay NCR at T&M rates, not to exceed $ * per ATM, to deactivate the lock. 2.4 Immediately upon termination of this Addendum, NCR will delete all Cencon locks assigned to your ATMs from its systems. This action will permanently prevent issuance of * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 1 keys or combinations by NCR to access the locks; NCR will not be able to provide administrative support after that time, and will not be responsible for any cost resulting from your failure to Super-Shelve the locks or take other actions necessary to effect the transition of service. 3.0 DEFINITIONS 3.1 As used in this Addendum, the following terms will have the following meanings. Capitalized terms not defined in this Addendum will have the meanings assigned in the Master Agreement. (a) "ATM Loss" means a single occurrence of the loss of Valuables from a single ATM. ATM Losses only include stolen or destroyed negotiable instruments to the extent you take all commercially reasonable efforts to reconstruct lost or destroyed items and take other action as may reasonably be necessary to assure the maximum amount of reconstruction of such items, including without limitation, requesting depositors of any negotiable instrument, including checks, to issue duplicates thereof. (b) "ATM Loss Liability Limit" means the maximum amount of NCR's liability for an ATM Loss. The ATM Loss Liability Limit will be $ * . (c) "Customer Preventable Call" is a Service call which could have been avoided had you properly undertaken your obligations hereunder. Customer Preventable Calls include, but are not limited to, calls for First Line Maintenance to replenish supplies because you (or your cash replenisher) neglected to do so during normal business hours. (d) "Days" means calendar days unless specified otherwise. (e) "Good Operating Condition" means conformance to the manufacturer's then-current customer-level documentation. (f) "Principal Period of Maintenance" ("PPM") is the time period (in hours per day and days per week) during which NCR will provide Services. (g) "Response Time" is the interval between your call to NCR and NCR's arrival at the ATM. Response Time intervals are measured during the PPM only. For example, if the PPM is 8:00 a.m. through 5:00 p.m. and NCR receives a request of service at 4:00 p.m. and responds at 9:00 a.m. the following day, the Response Time is 2 hours. (h) "Valuables" includes but is not limited to (i) bills, coins, and stamps (collectively, "Currency"); and (ii) checks and other negotiable instruments. 3.2 Reference to the conduct of a party includes the conduct of employees, subcontractors or agents of that party. NCR may provide Services either directly or through subcontractors. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 2 4.0 SCOPE 4.1 In return for payment of services in accordance with the rates set forth in Appendix "A", NCR will provide First Line Maintenance Services (defined in Appendix B) and Second Line Maintenance Services (defined in Section 4.2) to the equipment specified in Appendix C, which may be updated from time to time in accordance with Section 2.2.4.2 Second Line Maintenance consists of Remedial Hardware Maintenance, Replacement Parts, Preventive Maintenance, and Engineering Changes to NCR manufactured ATMs, as described below, necessary to keep the ATM in Good Operating Condition. Generally, NCR will attempt problem diagnosis and resolution on a remote basis first. 4.2.1 Remedial Hardware Maintenance - Remedial Hardware Maintenance consists of those functions required to repair a malfunctioning ATM and return it to Good Operating Condition. Remedial Maintenance includes software support as required to repair failed or malfunctioning hardware including software reloads and log and tally audits. (For non-NCR ATMs, NCR will restore the operating system software to the internal drive provided the backup operating system software is available on site). NCR's response to a service request will be consistent with the nature of the problem, and may include remote support in the form of on-line diagnosis and telephone assistance, and if necessary, on-site presence. 4.2.2 Replacement Parts - NCR will install parts on an exchange basis. Installed parts may be new or reconditioned used parts. Replacement parts become your property (if you own the equipment). Replaced parts become the property of NCR. As used in this Addendum, the term "parts" does not include consumable items such as batteries, paper, printheads, and storage media. 4.2.3 Preventive Maintenance - Preventive Maintenance consists of any functions performed on a proactive basis designed to keep the ATM in Good Operating Condition. Any applicable Preventive Maintenance will be performed one time during the year as part of a regular service call. Preventive Maintenance may include system monitoring as applicable. 4.2.4 Engineering Changes - Engineering Changes include any safety changes to NCR ATMs required of NCR by a governmental or regulatory entity. Such safety changes will be made at no additional charge. Other engineering changes, e.g., changes intended to enhance reliability or serviceability of NCR equipment, that are generally adopted by NCR and provided to NCR's maintenance customers at no charge, if any, will also be made by NCR at no additional charge and will be installed at NCR's convenience. When NCR provides Second Line Maintenance for non-NCR ATMs, NCR will not accept responsibility for the tracking, procurement or installation of Engineering Changes to such equipment. If you agree to furnish NCR with such Engineering Changes NCR may agree to install the Engineering Change at NCR's standard labor rate. Page 3 4.2.5 NCR's target Response Time to your requests for Remedial Maintenance during the PPM for ATMs within Zone 1, is 4 hours, with one hour added for each zone beyond Zone 1. (Service "Zones" are defined in Section 7.0) NCR will respond to requests for Remedial Maintenance outside the PPM on a commercially reasonable "best efforts" basis at the T&M Rate of $ * for Second Line services. 4.2.6 Unless otherwise agreed in writing, new NCR ATMs will receive the level of support specified by their warranty. If you upgrade the warranty to receive a higher level of support, the warranty upgrade charge will commence on installation. At the expiration of the warranty period, NCR ATMs will automatically be placed under this Addendum for the remainder of the term at the rates specified in Appendix A, or if not specified, at rates agreed by the parties. NCR does not assume the manufacturer's warranty obligations on non-NCR equipment. 4.2.7 Save and except for the ATMs identified in Appendix C, prior to accepting any ATM's for inclusion in the service program defined herein, NCR may inspect and if necessary repair, ATMs which have not been subject to NCR warranty or maintenance for 90 days or longer. Although the ATMs identified in Appendix C shall be included in the service program upon the execution hereof, upon its first call or visit to each ATM site NCR will advise Cardtronics if any of these ATMs need repair. If so, that ATM will be excluded from the program on a retroactive basis until such repairs are made. Inspection and any necessary repairs will be at Cardtronics expense. 4.2.8 NCR will determine in its discretion if it will provide maintenance for ATMs which have been subject to Alterations or Attachments. NCR will not maintain ATMs if an Alteration or Attachment creates a safety hazard or renders maintenance or repair impractical. An "Alteration" is a change made to the physical, mechanical, or electrical arrangement of hardware, whether or not additional devices or parts are required, and an "Attachment" is a mechanical, electrical, or electronic interconnection to NCR hardware of non-NCR hardware marketed by others. If an Alteration, Attachment, use of supplies not meeting the ATM manufacturer's specifications, use of unsupported software, use of software not furnished by NCR, or modifications to NCR-supported software not performed by NCR result in an increase in maintenance costs, NCR may increase maintenance charges to reflect that increased cost. 4.2.9 Second Line Maintenance does not include clearing of paper, card, envelope and currency jams, the replenishment of media and supplies (paper, ribbons, ink cartridges, and print heads), software version level upgrades (maintenance releases or software code corrections for NCR ATMs are included for the current shipping software version and the last release of the prior software version), or Administrative Maintenance including retrieval of mutilated cash from the divert cassette, retrieval of captured cards, or the general cleaning of ATM and the immediate surrounding area. (Note: ATM software support is available for NCR * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 4 ATMs under a separate ATM Enhanced Software Support Addendum. NCR will not accept responsibility for application software support for non-NCR equipment). 4.2.10 Excess currency (commonly called "side cash") stored in the ATM is not authorized, and NCR will not be responsible for any loss of side cash. If side cash is found by NCR while at the ATM site, NCR reserves the right to re-schedule service at a later time and will not be obligated to continue service until the side cash has been removed. 4.3 Services will be performed only during the PPM. If a service request received by NCR within the PPM cannot be completed by the end of that day's PPM, it will be continued during the next occurring hours of the PPM. Except as otherwise agreed in writing, the PPM does not include New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and any other day recognized locally as a legal holiday (collectively, "Holidays"). 4.4 The following services are not covered by this Addendum and are billable to you on a "Per Call" basis at the T&M Rate. Per Call services are billed upon performance and are subject to personnel and material availability. (a) Any service which, at your request, is provided outside the PPM, or which is beyond the scope of the service as described in this Addendum. (b) Any service for ATM equipment or locations not specified in Appendix C or not currently on maintenance with NCR. (c) Services relating to installation, deinstallation, upgrades, and movement of ATMs, communications line work external to an ATM or electrical work external to an ATM. (d) At NCR's discretion, services requested for equipment which upon the second repeat arrival no fault is found and the equipment is determined by NCR to be in Good Operating Condition. (e) Service resulting from the following causes: your or any third party's negligence, misuse, or abuse, including the failure to operate the ATM in accordance with NCR's power, environmental, and other specifications; movement of the ATM by anyone other than NCR; failure of equipment not maintained by NCR; improper use of or failure to use supplies; use of supplies not meeting the manufacturer's specifications; acts of third parties; fire originating outside of NCR-furnished equipment; water; acts of God; damage ordinarily covered by insurance. (f) The second repeat Customer Preventable call to a site within two days, such as, but not limited to, communications line failures, electrical failures, failure of third parties. (g) Emergency Cash Replenishment and Unscheduled Cash Services Replenishment. Page 5 4.5 In the event service is required on ATMs under circumstances which could jeopardize the safety of NCR employees (including any call to an ATM housed in a manner requiring work in the open), NCR reserves the right, but is not obligated to, reschedule service to other times, require a security escort at your expense, or refuse to perform the service. Security escorts will be subject to NCR's approval, will be bonded, and where feasible and lawful, will be armed. NCR may recommend changes you can make to the ATM site, such as additional lighting, designed to improve safety and enable NCR to service the ATM without limitation. NCR agrees to use its best efforts to immediately notify Cardtronics' Help Desk of its decision and will provide the Help Desk sufficient information so that Cardtronics may, if applicable, remedy the situation or provide the necessary escort. 5.0 SHORTAGES AND NOTICE THEREOF 5.1 You and NCR agree to assist and cooperate fully with each other relative to any claim, dispute or issue arising hereunder. You agree at all times to exercise due care in order to discover and investigate any losses of your property. Immediately upon discovering a loss, you agree to furnish to NCR reasonably satisfactory proof of such loss. The accepting of such information will not be an admission of liability on behalf of NCR. Upon NCR's request, you will make available during regular business hours your books, records, and accounts which relate to the alleged loss, and will cooperate with and assist in the investigation of such loss including sharing with NCR all information that any person may have concerning the loss and the circumstances surrounding the same. Supporting documentation is necessary for NCR to process and investigate loss claims. Reasonably satisfactory proof of a claim for loss is required, and includes but is not limited to: - ATM settlement documentation and ATM settlement receipts (network and ATM counters) for the time period the loss was discovered and the settlement report(s) for the previous and post settlement periods. - Copies of your ATM Network reports indicating the ATM's beginning, ending and dispensed totals for the time period the loss was discovered. - Copies of the ATM event history, indicating any ATM status messages and suspect transactions. - Copies of the ATM journal record. - Detailed documentation to support your calculation of the claimed loss. 5.2 Given the necessity for the prompt investigation of any claim relating to an alleged loss of Valuables, you agree that you must present any Loss claim to NCR in writing as soon as reasonably possible, and in no event later than 5 business days after receipt of documentation leading to the discovery of the Loss. Such claim (including copies) must be delivered by express mail, same-day or overnight courier, to the following addresses. Such notices will be deemed given on the day received, and must be addressed to: NCR Corporation Operations Support Center EMD-2 Page 6 1529 Brown Street Dayton, OH 45479 Attn: ATM Operations Support Center With copies to: NCR Corporation Attn: General Counsel/Notices WHQ-5 1700 S. Patterson Blvd. Dayton, OH 45479 Fax: (937) 445-7214 Email: law.notices@daytonOH.ncr.com 6.0 YOUR RESPONSIBILITIES 6.1 You will not permit anyone other than NCR to perform Second Line Maintenance on any ATM covered by this Addendum. 6.2 You are responsible for initially determining that the ATM requires service and will follow the service request procedures provided by NCR. 6.3 You are responsible for preparing the ATM site prior to delivery, and maintaining it thereafter in accordance with the ATM manufacturer's specifications and NCR's site safety specifications (which will be provided upon request), and for providing safe and adequate working conditions for NCR's service personnel, including appropriate utility service and, if required, local telephone extensions. Subject only to reasonable and necessary security regulations, you agree to permit NCR access to all ATMs to be maintained by NCR. 6.4 You are responsible for: (a) Installation, testing, and operation of all software Updates. (b) Provide all necessary consumables for service of the ATM (cash, paper, ribbons, etc.). 6.5 You represent that you have the owner's authority to permit NCR to service any ATM which you do not own. 6.6 You are responsible for all products and services provided by parties other than NCR, whether or not NCR recommended them or assisted in their evaluation, selection, or supervision. The failure of those products, services or suppliers to meet your requirements will not affect your obligations to NCR under this Addendum. 6.7 If equipment is removed from its location, or moved to another location, you are responsible to notify NCR, in writing, of the changes and for securing all Valuables prior to the move. If NCR has undertaken responsibility for Valuables under an Appendix to Page 7 this Addendum, NCR will not be liable for any loss if your actions prevent NCR from securing the Valuables prior to the move. 6.8 You will use all commercially reasonable efforts to recover Valuables, including correcting the transaction (debiting the account) of any customer, for an ATM Loss due to improperly dispensed Valuables as a result of misloaded denominations, misconfigured cassettes or misloaded cassettes. 7.0 RATES 7.1 The rates for First and Second Line Maintenance are based, in part, on the ATM's distance from the nearest NCR service location. The base rates cover service within 25 miles of the nearest NCR service location ("Zone 1"). Rates for ATMs outside of Zone 1 are calculated by increasing the Zone 1 rate by the percentage rate for the corresponding Service Zone as follows:

7.2 The rates specified in this Addendum are fixed for a one-year period following the Effective Date. Thereafter, NCR may increase the rates for any succeeding one-year period commencing on the anniversary of the Effective Date in an amount not to exceed the greater of 5%, or the increase in the Consumer Price Index (All Groups) for the corresponding period (the "Annual Limit"). In addition, if NCR is providing Cash Replenishment Services and incurs an increase of ten percent or more in the cost of its subcontracted Cash Replenishment Services, including but not limited to fuel cost increases, the parties will meet promptly to determine an equitable adjustment to the rates, and if they are not able to do so, either party may cancel Cash Replenishment Service to the affected ATM's without penalty upon 90 days written notice. 7.3 You acknowledge and agree that NCR's ATM service rates are based upon quantity of ATMs under service and the length of the term, and that a decrease in either will result in increased costs to NCR which are difficult to accurately ascertain. If, during the Initial Term of this Addendum, you terminate support with respect to this contract other than those reasons specified in 10.l or the removal of an ATM due to low transaction volume, you agree to pay to NCR an amount equal to 10% of the prorated service rates for that ATM from the effective date of termination through the last day of the Initial Term. You agree that this fee is a reasonable estimate of NCR's damages resulting from such early termination. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 8 7.4 All Services which are not specifically priced in Appendix A or otherwise agreed in writing will be charged at NCR's then-current time and materials rate of $ * for First Line Maintenance Services and $ * for Second Line Maintenance Services, including a * for services performed outside of normal business hours (the "T&M Rate"). 7.5 Rates do not include any Federal, state, county, or local sales, use, or other taxes however designated, whether levied on seller or buyer and whether based on price, charge, product, service, use, or this Addendum. Any such taxes and interest (if not due to NCR's delay) required to be paid by NCR will be added to the invoices. You will reimburse NCR for any taxes to be paid by you but in fact paid by NCR (whether that fact is discovered through audit or otherwise) upon receipt of NCR's invoice. 8.0 INVOICING AND PAYMENT You will pay NCR for First and Second Line Maintenance services * beginning on the Effective Date of this Addendum, or for ATMs not installed on the Effective Date, on the date the ATM is installed and certified ready for use. NCR will invoice you for Per Call services as those services are rendered. Invoices for Per Call services are due and payable upon receipt. You will pay NCR for scheduled Cash Replenishment Services monthly in advance, and for unscheduled and emergency Cash Replenishment services monthly upon completion of the service. NCR will provide appropriate invoices 30 days prior to each payment due date. Your failure to pay any invoice when due will entitle NCR to late payment fees or interest, or both, and to applicable collection costs (if any). 9.0 WARRANTY AND LIMITATION OF LIABILITY 9.1 NCR warrants that it will perform its obligations under this Addendum, in a professional and workmanlike manner. NCR, at its expense, will promptly re-execute any Services that fail to conform to the requirements of this Addendum. If NCR is unable reasonably to do so, the fees you paid for that portion of the Service will be refunded. 9.2 In the event NCR is required to perform maintenance services on an ATM as a result of damage or inoperability caused by your negligence or that of a third party, failure to comply with the terms of this Addendum, or failure to comply with agreed operational procedures, NCR reserves the right to bill you for such services at its then-current time and materials rate. 9.3 In the event an employee or agent of NCR is determined, by criminal conviction or clear and convincing evidence, to have taken any Valuables, then NCR will be responsible for the amount of the Valuables proven to have been taken by such employee, not to exceed the ATM Loss Liability Limit per incident with respect to each ATM that is (a) involved in the incident and (b) covered by Appendix C, as such appendix is updated from time to time. Upon payment of any loss hereunder, NCR will be subrogated to all of your rights and remedies therefor. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 9 9.4 NCR will not be liable for claims, actions, damages, liabilities, losses and expenses, including reasonable attorneys' fees, arising out of or in connection with any ATM Loss, to the extent such claim is the result of (a) Currency dispensed due to ATM malfunction; (b) Currency dispensed due to mistake or fraudulent instruction manually or electronically transmitted to the ATM; (c) ATM equipment hardware malfunction; (d) excess currency (commonly called "side cash") stored at the ATM location; (e) discrepancies between network reports and ATM bill counter totals; (f) your mistakes in verification; (g) access by third persons, whether authorized or unauthorized, unless such access was made possible by the act or omission of NCR; or (h) the use of magnetic debit and credit cards. OTHER THAN AS SPECIFIED IN SECTIONS 9.3 AND 9.4. IN NO EVENT WILL NCR BE LIABLE FOR ANY LOSS OF VALUABLES FROM BURGLARY, ROBBERY, FIRE, FLOOD, OR OTHER EXTERNAL CAUSE. 9.5 THE PROVISIONS OF THIS SECTION 9 GOVERN NCR'S LIABILITY FOR ANY CLAIM OF LOST, MISSING, OR STOLEN VALUABLES AND, WITH RESPECT TO SUCH LOSSES, SUPERSEDE ANY INCONSISTENT PROVISION IN THE MASTER AGREEMENT. APPENDICES ATTACHED TO THIS ADDENDUM MAY CONTAIN DIFFERENT LIABILITY LIMITATIONS WHICH SUPERSEDE SECTIONS 9.3 AND 9.4 WITH RESPECT TO THE SERVICES OFFERED UNDER THOSE APPENDICES. 10.0 TERMINATION 10.1 This Addendum may be terminated as set forth below: (a) By either party upon a material default by the other party in the performance of any of its obligations under this Addendum if it is not cured within 60 days after written notice by the non-defaulting party. (b) NCR may terminate in the event you fail to pay after 10 days prior written notice by NCR of a payment being past due and if in that notice NCR indicates that this Addendum is terminated if not paid. This right to terminate is in addition to NCR's rights under Section 8.0. (c) At the option and upon at least ninety (90) days written notice to NCR, Cardtronics may terminate this Addendum as to that equipment that is affected or covered by any of the following: (i) cancellation or termination, regardless of the reason, of any of the ATM provider agreements between Cardtronics and any third-party (an "ATM Program") wherein Cardtronics either owns, operates or manages one or more ATMs for the benefit of that third-party; (ii) the sale of all or any ATM program (or any portion threreof) to any third party; (iii) change in the ownership of Cardtronics; or (iv) the sale of substantially all of the assets of Cardtronics to any third party. Such termination will be without the payment of any penalty or liquidated damages. 10.2 If NCR is not reasonably able to secure parts, documentation, training, or support necessary to fully perform its obligations under this Addendum for a particular class of Page 10 non-NCR ATM, NCR may cancel this Addendum for that non-NCR ATM on 90 days written notice. 11.0 LIABILITY INSURANCE NCR will maintain at its expense such insurance as will fully protect it from any claims for damage for bodily injury, including death, or for property damage that may arise from operations under this Addendum, whether such operations are performed by NCR or by any subcontractors or anyone directly or indirectly employed by either of them. Upon request, NCR will provide certificates of insurance or self-insurance for your inspection. 12.0 APPENDICES Appendix A - Annual 1st and 2nd Line Maintenance Pricing Appendix B - First Line Maintenance Description Appendix C - ATM Site Locations Appendix D - Fixed Fee Pricing Appendix E - DES Key Document Page 11 13.0 NOTIFICATION Any notice required by this Addendum or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or by certified mail, postage prepaid, or recognized overnight delivery services. If to NCR: NCR Corporation Operations Support Center EMD-2 1529 Brown Street Dayton, OH 45479 Attn: ATM Operations Support Center If to Cardtronics: Cardtronics, LP 3000 Hayes, Suite 101 Houston, TX 77082 Attn: Michael H. Clinard, Chief Operating Officer Agreed and Accepted Cardtronics, LP NCR Corporation By: /s/ Ralph H. Clinard By: /s/ James R. Kent, Jr. ----------------------------- ---------------------- Ralph H. Clinard James R. Kent, Jr. President & CEO VP/Area General Mgr. Date: 11/14/01 Date: 11/19/01 Page 12 APPENDIX A ATM SERVICES ADDENDUM ANNUAL MAINTENANCE PRICING

Service Level: Monday Through Sunday: 8am to 8pm Response Time: 1st Line 2 hour 2nd Line 4 hour * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 13 APPENDIX B ATM SERVICES ADDENDUM FIRST LINE MAINTENANCE This Appendix describes the First Line Maintenance Services ("FLM") that NCR will provide you. Where indicated by the context, the term "you" as used in this Appendix includes both you and any third party providing other services for the ATM on your behalf. 1.0 SCOPE OF SERVICES 1.1 Clearing of receipt, journal, DPM and statement paper jams. 1.2 Check media transports to determine if they are functioning properly and clear them of any foreign objects. 1.3 Check supply of receipt, journal and statement printers. Load paper if necessary. Verify legibility of print. Replenish, but not furnish all necessary media and supplies (paper, ribbons, ink cartridges and printheads). In the event of electronic journal full conditions, copy the journal to a floppy disk. 1.4 Retrieval of jammed cards with placement of jammed cards into card tray - if applicable. 1.5 Clean ATM DIP, SWIPE, or motorized Card Readers (whichever appropriate when a Card Reader malfunction is indicated on terminal). 1.6 Check placement of captured card tray and reposition if necessary. 1.7 Clearing of currency jams, whatever the reason. 1.8 Check supply of envelopes in the envelope dispenser and replenish as required. 1.9 Clear jams in the Envelope Depository. 1.10 Check depository for proper operation. 1.11 Replace the Depository Print Head as needed. 1.12 Visually check the ATM (as a part of a normal first line maintenance call) to verify the following: - Existing lighting functioning properly. - Proper operation of the card access device. - Environment (air conditioning, heating, A/C, Communications Connections) - General cleanliness of ATM and surrounding area. - Ensure customer notification of deposit pick-up is posted, where applicable. - ATM screen is clean. Page 14 1.13 If observable within 2 minutes after service completion; observe transaction on the ATM and verify that all aspects of the ATM, including the display, keyboard, shutter door operations and dispenser are operational. Verify that ATM customer receipt prints proper date, time and ATM I.D. number. 1.14 Provide operational reviews and notify FSP of any issues including other vendor services. 1.15 * HOWEVER, ANY REPEAT SERVICE CALL TO THE SAME SITE, FOR THE SAME PROBLEM, WITHIN A TWO DAYS PERIOD WILL BE CONSIDERED A CHARGEABLE CALL AND CARDTRONICS WILL BE INVOICED ACCORDINGLY. 1.2 First Line Maintenance Service rates do not include the cost of, and you will furnish and distribute to the ATMs or your designated agent, all media and supplies or, upon request (and with sufficient notice), NCR will furnish media and supplies at NCR's then-current prices. You will ensure that Administrative Maintenance is performed in conjunction with every cash replenishment service. CIT primary Administrative Maintenance duties includes: (a) retrieval of mutilated cash from the divert cassette; (b) retrieval of all captured cards; removal & replacement of Electronic Journal diskette (if applicable); (c) replenishment of receipt tapes and ribbons; (d) cleaning the ATM interior and exterior fascias, with the exception of the annual NCR PM activity. (e) replacing internal receipt paper or cards, and performing other minor corrective actions. 1.6 ATMs serviced pursuant to this Appendix must be equipped with the Mas-Hamilton CenCon 2000 or an equivalent lock system. You agree to cooperate with NCR in the implementation and management of the Mas-Hamilton system. 1.7 The hours of coverage for Second Line Maintenance must at least equal the coverage hours for First Line Maintenance. 2.0 RESPONSE TIME NCR's target Response Time to your requests for First Line Maintenance during the PPM, for ATMs within Zone 1, is * with one hour added for each zone beyond Zone 1. NCR will respond to service requests OUTSIDE THE PPM on a commercially reasonable "best efforts" basis at the T&M rate of $ * for First Line Services. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 15 3.0 ACCESS AND SECURITY 3.1 You wish NCR to perform service without one of your employees or agents being present to provide security for such Valuables. NCR agrees to perform service under such unaccompanied and unsecured conditions, but NCR IS NOT PROVIDING A SECURITY SERVICE. 3.2 You have a duty to secure all Valuables that may be present in or about the ATM being serviced by NCR. It is not NCR's duty to provide security for your property, whether or not NCR has the keys, combinations or other means to access the location. In the event that other persons you authorized are present at the site of the ATM, they will at all times be deemed to have care, custody and control of the ATM, its contents and the premises. Page 16 APPENDIX C SITE LISTING * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 17 APPENDIX D CARDTRONICS INSTALLATION AND FIXED FEE PRICING TYPE A RESELLER: $ * Cardtronics pre-stages equipment and completes installation. NCR performs Pre-warranty/maintenance certification. If installation does not meet standards notice will be given to Cardtronics. Steps: - - Cardtronics submits Electronic Equipment certification to IC. This form will describe service level agreement needed. - - IC schedules NCR Customer Engineer to certify ATM installation and sends appropriate documentation to CE. - - Per the Electronic Certification, this unit will be placed on maintenance based on service level agreement. TYPE B RESELLER: PERSONA LITE $ * NCR installs ATM on site. NCR loads software and certifies install. Customer Engineer will train end user at time of install. Additional trips for training will be billed at $ * an hour with a 2-hour minimum. Steps: - - Cardtronics submits Electronic Equipment Certification to IC. This form will describe service level agreement needed and installation and or training requirements. - - IC schedules NCR Customer Engineer to perform installation and sends appropriate documentation to CE describing installation requirements. Per the Electronic Certification, this unit will be placed on maintenance based on service level agreement. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 18 TYPE C RESELLER: MCD UNIT $ * Cardtronics sells to distributor or owner an NCR pre-staged ATM. NCR installs and certifies ATM. Customer Engineer trains end user on operation of ATM at the time of install. Additional trips for training will be billed at $ * an hour with a 2-hour minimum. Steps: - - Cardtronics submits Electronic Equipment Certification to IC. This form will describe service level agreement and installation and training requirements. - - IC schedules NCR Customer Engineer to perform installation and training and sends appropriate documentation to CE describing installation requirements. Per the Electronic Certification, this unit will be placed on maintenance based on service level agreements. TYPE D RESELLER: COMMUNITY BANK UNIT $ * Cardtronics sells ATM in the Community Bank environment. NCR installs ATM on site. If needed NCR loads software and certifies install. Customer Engineer trains end user at time of install. Additional trips for training will be billed at $ * an hour with a two-hour minimum. Steps: - - Cardtronics submits Electronic Equipment Certification to IC. This form will describe service level agreement needed and installation requirements. - - IC schedules NCR Customer Engineer to perform installation and sends appropriate documentation to CE describing installation requirements. Per the Electronic Certification, this unit will be placed on maintenance based on the service level agreement. TYPE E: STAGING UNITS IN DESIGNATED WAREHOUSE **$ * Cardtronics requests NCR to prestage ATM's (regardless of model) * Denotes Confidential Portion Omitted and Filed Separately with the Commission. **Prestaging assumptions apply. Page 19 TYPE A DIRECT: $ * Cardtronics places ATM into a Cardtronics managed program. NCR installs unit on site. If needed NCR loads software and certifies install. Steps: - - Cardtronics submits Electronic Equipment Certification to IC. IC schedules NCR Customer Engineer to perform installation and sends appropriate documentation to CE describing installation requirements. Per Electronic Certification, this unit will be placed on maintenance based on the service level agreement. OPTIONAL FIXED PRICING SERVICES (DIRECT): TRAVEL CHARGE $ * MINIMUM SITE T&M CHARGE - FIRST LINE $ * SECOND LINE $ * 2-hour minimum has been waived in lieu of $75.00 travel charge plus one hour on site. INSTALLATION - SITE NOT READY CHARGE $ * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Page 20 APPENDIX E DES KEY APPROVAL You have requested NCR to load your customer encryption keys (DES Keys) in your NCR ATMs. The purpose of this communication is to define the required conditions under which NCR will load DES Keys. For situations where an NCR technician is on-site as part of an installation or a repair, and is asked to load generic DES keys (0-9 A-F), NCR will load CARDTRONICS's generic encryption keys at no additional charge. For service calls placed solely for the loading of encryption keys or for those situations where additional travel time is required or specialized handling/management of keys is involved, NCR's standard maintenance time and materials hourly pricing will apply. Specialized handling/management includes time spent developing schedules for trips to ATMs, distribution of specialized keys to the field, and project management/coordination of calls with either you or your designated agent in the case of split DES keys. If you implement Split DES, NCR will not carry more than one key. You or your designated third party agent is responsible for entering the second key. NCR shall treat all data supplied by you with the highest level of confidentiality that is reasonable under the circumstances. However, NCR will not be liable for claims, actions, damages, liabilities, losses and expenses, including reasonable attorneys' fees, arising out of or in connection with any claimed ATM loss due to lost, stolen or compromised encryption keys. You acknowledge that the security of your ATM network is your responsibility, and that you will change generic DES keys installed by NCR as soon as practicable. In addition to the terms of this letter, NCR's performance of these DES key services is subject to all terms and conditions of any Universal, Master, or Maintenance agreement that may be in place between us. By signing this agreement, you acknowledge your understanding of these conditions and limitations on NCR's service for the loading of encryption keys. Page 21 EX-10.5 7 h12528exv10w5.txt QUALITY CARE MAINTENANCE AGREEMENT EXHIBIT 10.5 MAINTENANCE AGREEMENT QSF 9.43-4 SERVICE SALES PROCESS QUALITY CARE DIEBOLD(R) Agreement No: Commencement Date: October 1, 2002 Initial Term: Year(s) Two Years MAINTENANCE AGREEMENT 818 Mulberry Road S.E. Canton, Ohio 44707-3256 NAME OF SUBSCRIBER: CARDTRONICS LP ADDRESS: 3110 Hayes Road, Suite 300 CITY: Houston STATE: Texas ZIP: 77082 This Agreement is made and entered effective as of the date shown above, by and between Diebold, Incorporated of 818 Mulberry Road S.E., Canton Ohio 44707, an Ohio corporation (hereinafter `Diebold") and the Subscriber, whose name and address is set forth above. 1. Equipment Schedules No maintenance or other services are ordered by execution of this Agreement alone. For equipment to be covered hereby or services ordered, an Equipment Schedule or similar document shall be completed by Diebold and provided to subscriber. Such Equipment Schedule shall further define the service plan or services being provided. Each such Schedule is deemed a part of this Agreement. In the event of conflict between an Equipment Schedule and the provisions hereof, the provisions of the Equipment Schedule shall control, except with respect to paragraphs 6 and 7 hereof, which shall govern in the event of any conflict with any other provision. 2. Service For the fee set forth in a given Equipment Schedule, Diebold will, by its authorized representatives, inspect and maintain in operating condition, the equipment itemized on such Equipment Schedule, or provide such other services as described on the Equipment Schedule. If the service plan described on an Equipment Schedule includes preventive maintenance, such preventive maintenance which Diebold deems necessary will be provided. Diebold may provide any preventive maintenance at the same time as Diebold is providing other service on the covered equipment. Subscriber shall request service by contacting Diebold. 3. Fees The fee for services to be performed hereunder shall be as set forth on the Equipment Schedule, or, with respect to the price for service performed on a "time and material" basis, at Diebold's then current rates therefor. 4. Taxes So long as the following described taxes are separately listed on each Diebold invoice submitted hereunder, or the supporting schedule attached thereto, Subscriber shall additionally pay any and all sales, use, excise, gross receipts, value added or other taxes imposed by any federal, state or local governmental authority, associated with Diebold's performance, excluding only taxes based on Diebold's net income or the employment of Diebold's employees. 5. Terms of Payment Unless an Equipment Schedule provides otherwise, Subscriber will be invoiced quarterly in advance. All invoices for periodic fees are due prior to the commencement date for the applicable fee period. For Equipment Schedules added subsequent to the date hereof. Diebold may prorate its invoice to provide for a common invoice date for all equipment covered. All invoices for work performed on a time and material basis will be due on a `Net 30 days' basis. All invoices not paid within thirty (30) days of the date due shall bear interest at the rate of one and one-half percent (1-1/2%) per month on the unpaid balance or the highest rate permitted by law, whichever is less. In the event Subscriber fails to pay any invoice when due and Diebold has provided Subscriber three (3) days written notice of such failure, Diebold may, in addition to any other rights and remedies available to Diebold, suspend service under this Agreement and any or all Equipment Schedules until Subscriber's account has no amounts more than thirty (30) days past due. 6. Limited/Warranty a. With respect to services provided for the quarterly fee, Diebold warrants that it will re-perform such services during the hours of coverage set forth in the Equipment Schedule, that prove defective during the term hereof, provided Subscriber notifies Diebold during the term in the same manner as Subscriber otherwise notifies Diebold of the need for service on the covered equipment. 2 b. With respect to parts and services provided on a time and material basis, Diebold warrants the same to be free of defects in materials or workmanship for a period of thirty (30) days from the date service was performed or from installation in the case of parts. Subscriber shall notify Diebold within such thirty (30) day period of any claim pursuant hereto. c. In the event of a breach of the foregoing warranty, the sole liability of Diebold and the sole remedy of Subscriber shall be the repair or replacement of the part, or re-performance of the service, which proved to be defective. d. EXCEPT FOR THIRD PARTY INJURIES COVERED BY DIEBOLD'S INDEMNITY OBLIGATION SET FORTH IN SECTION 14 BELOW, THE FOREGOING WARRANTY CONSTITUTES THE SOLE LIABILITY OF DIEBOLD AND THE SOLE REMEDY OF SUBSCRIBER FOR DEFECTIVE MATERIALS OR WORKMANSHIP, WHETHER ARISING UNDER CONTRACT, TORT, STRICT LIABILITY OR OTHER FORM OF ACTION. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXCLUDED HEREFROM. 7. LIMITATION OF LIABILITY a. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE PARTIES ACKNOWLEDGE AND AGREE: i. DIEBOLD IS NOT AN INSURER; ii. THE PAYMENTS PROVIDED FOR HEREIN ARE BASED SOLELY ON THE VALUE OF THE GOODS AND SERVICES PROVIDED AND ARE UNRELATED TO THE VALUE OF SUBSCRIBER'S PROPERTY OR THE PROPERTY OF OTHERS LOCATED ON SUBSCRIBERS PREMISES OR WITHIN THE EQUIPMENT; iii. THE PROVIDING OF SERVICE AND/OR PREVENTIVE MAINTENANCE DOES NOT GUARANTEE THE CONTINUED OR UNINTERRUPTED OPERATION OF THE EQUIPMENT; AND iv. IN NO EVENT SHALL DIEBOLD BE LIABLE FOR LOSS, DAMAGE, OR DESTRUCTION OF SUBSCRIBER'S PROPERTY CAUSED BY BURGLARY, ROBBERY, FIRE, FLOOD, (UNLESS SUCH BURGLARY OR ROBBERY WAS PERPETRATED BY A DIEBOLD EMPLOYEE WHILE PERFORMING SERVICES HEREUNDER OR THE FIRE 3 WAS DIRECTLY CAUSED BY DIEBOLD'S ACTIONS AT THE ATM SITE WHILE PERFORMING SERVICES HEREUNDER), LOSS OF OR MISDISPENSING OF FUNDS OR OTHER DOCUMENTS OR ITEMS OF VALUE. NOR SHALL DIEBOLD BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE, WHETHER ARISING UNDER CONTRACT, TORT, STRICT LIABILITY, OR OTHER FORM OF ACTION, WHETHER OR NOT DIEBOLD HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. b. AS A MATERIAL CONSIDERATION FOR DIEBOLD ENTERING INTO THIS AGREEMENT THE PARTIES AGREE THAT IF, NOTHWITHSTANDING THE FOREGOING LIMITATIONS DIEBOLD HAS ANY LIABILITY TO SUBSCRIBER, SUCH LIABILITY SHALL IN NO EVENT EXCEED THE QUARTERLY FEE SPECIFIED IN THE EQUIPMENT SCHEDULE FOR THE EQUIPMENT OR SERVICE RELATED TO THE EVENT OR FIFTEEN THOUSAND DOLLARS ($15,000.00), WHICHEVER IS GREATER. SUBSCRIBER MAY OBTAIN A GREATER LIMITATION OF LIABILITY, IF DESIRED, BY THE PAYMENT OF AN INCREASED ANNUAL FEE, WHICH SHALL BE NEGOTIATED BY THE PARTIES SUBSEQUENT TO DIEBOLD'S RECEIPT OF SUBSCRIBER'S WRITTEN REQUEST THEREFOR. THIS SUBSECTION (b) SHALL NOT APPLY TO EVENTS COVERED BY SECTION 14. c. THE PROVISIONS OF THIS SECTION 7 CONSTITUTE AN ALLOCATION OF RISK BETWEEN THE PARTIES AND THE PRICE CHARGED SUBSCRIBER IS BASED ON SUCH ALLOCATION OF RISK. 8. Term The term of this Agreement shall be for the initial term set forth above starting on the Commencement Date. This Agreement shall automatically renew for additional terms of one (1) year each unless either Subscriber or Diebold gives notice of cancellation in writing to the other at least sixty (60) days prior to the expiration of the then current term. In the event of any such renewal period, the maintenance fees to be paid by Subscriber during such period shall be as set forth in the Equipment Schedule that is attached hereto and made a part hereof. The provisions of paragraphs 6, 7, 13, and 18 shall survive termination. 4 9. Exclusions Except as otherwise set forth in the Equipment Schedule, the services to be provided for a quarterly service fee do not include: a. service required as a result of abuse, misuse, electrical storms, power failures or fluctuations, glass breakage or damage, failure to follow user maintenance and operating instructions, or the failure or results of failure of interconnected equipment not specified on an Equipment Schedule, including, but not limited to, wiring, conduit, or voice or data transmission equipment or facilities; b. consumable items including, but not limited to, film, audit tapes, ribbons, carrier bodies, light bulbs, customer account cards, envelopes or video cassettes; c. lockouts or damages caused by war, terrorism, public disorder, fire, water or other liquids, burglary, blasting, mining, settling of foundations, expansion of doors or walls, loss of combinations or by imperfect changing of combinations or time locks; d. services required because of service, inspection, or tampering with equipment by non-Diebold designated personnel, relocation of equipment, changes to configuration, installation of additional features, options or functions; major overhauls, or refurbishing the equipment; e. automatic teller machine cassettes or pneumatic tube carriers, unless specified on an Equipment Schedule; f. the changing of any locks or combinations, or the replacement of keys unless specified on an Equipment Schedule; g. requested service outside the hours of coverage set forth on the Equipment Schedule, or waiting time in excess of fifteen (15) minutes. If no hours are set forth, coverage shall be from 8:00 a.m. to 5:00 p.m. prevailing local time at the site of the equipment, exclusive of Saturdays, Sundays, or holidays generally observed by state or local governments in the area where the equipment is located; or h. malfunctions resulting from the use of media, supplies, and/or consumables which are not furnished by Diebold or which do not meet standards set by the manufacturer. If Diebold determines that the service requested by Subscriber is excluded pursuant to the above, and Subscriber requests Diebold to perform such service, the service will be provided pursuant to Section 12 hereof. 5 10. Parts Unless an Equipment Schedule indicates that parts are included, Subscriber will pay Diebold's then current list price for any replacement parts necessary for the performance of service on equipment. The parts used by Diebold to perform maintenance and repair service hereunder will either be new or equivalent to new. Title to parts shall pass to Subscriber when the same are installed by Diebold. Title to parts that are removed and replaced by Diebold shall vest in Diebold at the time of removal. No title to any computer programs included in parts shall ever pass to Subscriber. With respect to such parts that include computer programs, Diebold grants to Subscriber a personal, nonexclusive right to use such computer programs in conjunction with the equipment while Subscriber is the rightful possessor of the equipment. Such license extends only to the use of the computer programs in conjunction with specific equipment on which the same are installed. Such computer programs are protected by the copyright laws of the United States. Subscriber agrees not to copy, decompose, reverse assemble, reverse engineer, or otherwise modify such computer programs. Computer programs for which a separate charge is normally required by Diebold are licensed only pursuant to a separate license agreement. 11. Duties of Subscriber During the term of this Agreement, Subscriber shall at all times provide a suitable operating environment as specified by the manufacturer of the equipment and operate the equipment in accordance with the manufacturer's recommendations. If any equipment covered by an Equipment Schedule has been furnished by other than Diebold or InterBold, Subscriber shall have the ultimate responsibility for obtaining and providing to Diebold any necessary schematic drawings, wiring diagrams, or replacement parts that may be necessary. Subscriber shall provide free, clear and safe access to the equipment. 12. Other Services Subscriber may from time to time request that Diebold provide other services not included in the service plan for equipment described on a specific Equipment Schedule, or for which no Equipment Schedule has been completed. Diebold will use reasonable efforts to provide such service at 90% of its then current and standard "time and material" rates or without discount at such other specific time and material rates that the parties may agree upon in writing for the type of service to be performed by Diebold. Any such service shall be subject to the provisions of this Agreement. Subscriber may request service pursuant to this provision by contacting Diebold. In addition, during the initial two year Term of this Agreement, Diebold agrees that at Subscriber's request and for the Triple DES Conversion Fee set forth on Equipment Schedule Number 1, Diebold will make the ATMs covered hereby Triple DES compliant, as the same is required by the Visa, MasterCard and/or Plus Networks. After the expiration of the initial two year Term hereof, the Triple DES Conversion Fee will be subject to adjustment 6 by Diebold. The Conversion Fee shall only apply to the ATMs listed on Equipment Schedule Number 1. However, the above referenced agreement to make ATMs Triple DES compliant will not apply to (i) any CSP 100 model ATM and/or (ii) any model 1063 ATMs that were not originally manufactured and equipped to support Triple DES. 13. Termination a. This Agreement may be terminated by a party without liability as follows: i. upon a material breach hereof by the other party if such other party has failed to correct, or commence to correct, such breach within ten (10) days after notice with respect to any breach caused by the non-payment of any invoice and within thirty (30) days after notice with respect to all other breaches to such breaching party; or ii. if the other party makes a general assignment for the benefit of creditors, commences voluntarily a petition under bankruptcy or similar laws or allows an involuntary petition to continue more than forty-five (45) days after filling. b. In addition to the provisions of (a) above and upon at least thirty (30) days notice to Diebold, Subscriber may without the payment of a cancellation fee elect to remove up to but not more than 120 of the ATMs identified on Equipment Schedule No. 1 as a result of any of the following occurrences: (i) cancellation or termination of any agreement between Subscriber and a third party merchant permitting Subscriber to own, operate or manage one or more ATMs at a merchant location (a "Merchant Agreement"); (ii) the assignment, sale or transfer of any Merchant Agreement to any third party; or (iii) the sale of substantially all of the assets of Subscriber to any disinterested and unrelated third party. In all other cases, Subscriber's removal of ATMs from the coverage of this Agreement or the partial or total termination thereof shall result in Subscriber's payment of a cancellation fee equal to three percent (3%) of the annual fee associated with the equipment being removed therefrom for each month or part thereof from the effective date of the removal of such equipment or the cancellation thereof, to the expiration of the then current term of the Agreement, but in no event less than fifteen percent (15%) of such annual fee. Additionally, Diebold may adjust the fee for any equipment remaining based on Diebold's then current standard volume price adjustments. Any special provisions of any Equipment Schedule remaining shall be equitably adjusted. Notwithstanding the above however, Subscriber shall not be required to pay the above referenced cancellation fee if Subscriber does not remove an ATM hereunder solely for the purpose of replacing Diebold as the party providing maintenance services therefore, and provided that at all times during the two year period following the commencement of the term of this Agreement, 7 Subscriber shall keep not less than 90% of the ATMs covered by this Agreement at the date of the commencement thereof subject to the terms of this Agreement. 14. Diebold's Responsibility Diebold will indemnify and hold harmless the Subscriber from any claims made by third parties based on bodily injury to such third persons, or direct damage to their tangible property to the extent caused by the wrongful or negligent acts of Diebold, its officers, directors, agents or employees, which acts occur while Diebold employees are performing service hereunder at the site of the ATM being serviced hereunder. Diebold will be responsible for the theft of Subscriber's funds or property by Diebold employees while they are performing service to a maximum of Seventy-Five Thousand Dollars ($75,000.00); provided, however, as to those locations that are identified at least 30 days prior to any event giving rise to a claim by Subscriber as routinely having more than $ * of cash in the ATM, this limit will be increased to $200,000. 15. Service by Others With respect to any Equipment Schedule covering equipment that is installed, deinstalled, relocated, altered, or serviced by other than Diebold representatives, Diebold may require, as a condition to accepting or continuing the equipment for service coverage, that the Subscriber have Diebold inspect the equipment (pursuant to Section 12) for damage and to assure that all manufacturer-recommended changes have been made and that the equipment is otherwise in good working order. Subscriber shall have Diebold perform any required servicing or repairs recommended by Diebold prior to the acceptance of the equipment for service coverage. Diebold may also require that service be performed pursuant to Section 12 for a specified period of time to assure that the equipment is, in fact, in good working order. 16. Delay in Performance Diebold will not be liable for any delay in providing service that is caused by fire or flood, strikes, labor disturbances, riots, war, insurrection, acts of any governmental entity or the public enemy, delays in nonDiebold transportation, delays in procuring materials from third parties, unavailability of fuel or other supplies, or any other cause beyond the reasonable control of Diebold. In the event of such occurrence, Diebold's time for performance shall be equitably adjusted. Currently, the East Coast average cost for a gallon of gasoline is $ * as measured by the Energy Information Agency at its web page: "http://tonto.eia.doe.gove/oog/inof/gud/gasdiesel.asp". Should the cost for a gallon of gasoline in the "East Coast" category increase more than * percent from the price set forth above, the service price shall be equitably increased; provided, however, should at anytime following such an adjustment the cost of fuel decrease to the current $ * average price or lower and stays at such * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 8 level for more than 30 days, the service price will be readjusted downward, but in no event to a rate that is less than that originally set forth in this Agreement. Diebold represents that the cost of diesel fuel is not applicable to this Agreement. 17. Modification of Agreement Except as provided herein, this Agreement may be modified only by a writing executed by the parties. In the event of the addition or deletion of Equipment from coverage under this Agreement, or other modifications of Equipment Schedule(s) contemplated by this Agreement, Diebold shall provide a new Equipment Schedule or other appropriate notice to subscriber. The provisions of such Equipment Schedule or notice shall be deemed a part of this Agreement unless Subscriber objects to Diebold in writing within thirty (30) days of the issuance of the same. 18. General a. This Agreement and Equipment Schedule(s) constitute the entire agreement between the parties concerning any service provided by Diebold to Subscriber, and no representation, inducement, promises or agreements not embodied herein shall be of any force or effect. Any purchase order or similar document issued by Subscriber shall be deemed issued only for Subscriber's internal administrative convenience and shall not become a part of this Agreement. This Agreement shall be binding in accordance with its terms upon the parties hereto and their respective transferees, assigns and successors in interest. Diebold may NOT assign this Agreement to any third party that is not affiliated with Diebold without first obtaining the express written consent of Subscriber, which consent may be withheld for any reason. However, Diebold may assign this Agreement to a wholly owned corporate subsidiary of Diebold without obtaining Subscriber's prior written consent thereto. Further, Diebold may utilize subcontractors to perform services under the terms of this Agreement, provided Diebold follows its standard subcontractor qualification and evaluation policies and requirements. Diebold shall advise Subscriber of any subcontractors to be used by Diebold in connection with services to be performed hereunder and at Subscriber's reasonable request shall not use any subcontractor that Subscriber has good reason to object to. Subscriber further agrees that it will not assign its rights under this Agreement to any unaffiliated third party without first obtaining Diebold's prior written consent thereto. However, Subscriber may assign this Agreement to a wholly owned corporate subsidiary of Subscriber without obtaining Diebold's prior written consent thereto. This Agreement shall be binding upon Subscriber when accepted by an authorized representative of Subscriber, or Subscriber requests service or pays the invoice for such service. Subscriber represents that the person executing this Agreement on behalf of Subscriber has all requisite authority to do so. 9 b. No waiver of any right of any party shall be or constitute a waiver of any other right of such party, nor a waiver of any future breach by the other party. c. Notices to be provided from one party to another shall be deemed sufficient if given in writing and sent by certified mail, postage prepaid, with return receipt requested to the address of such party as reflected herein, or such other address as a party may identify by formal notice to the other party. Any notice so given shall be deemed effective five (5) days after mailing as specified herein. d. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Ohio, applicable to contract to be performed wholly within such state by residents thereof. Any action arising or resulting, directly or indirectly, from the performance or nonperformance of Diebold shall be brought within four (4) years after the cause of action occurs or be forever barred. e. If for any reason any provision of this Agreement shall be deemed unenforceable or invalid by a court of competent jurisdiction, such provision shall be deemed modified so as to most closely effectuate the intent thereof in a valid and enforceable manner. The headings and titles contained in this Agreement are included solely for the convenience of the parties and shall not be used in construing the intent of the text hereof. f. The parties hereto acknowledge that each party has had the opportunity to have this Agreement reviewed by legal counsel and that no presumption shall be applied in favor of or against any party hereto by virtue of the fact that this Agreement may have initially been prepared one of the parties hereto. SUBSCRIBER ACKNOWLEDGES HAVING READ AND UNDERSTOOD ALL PAGES OF THIS AGREEMENT. DIEBOLD, INCORPORATED (SUBSCRIBER) By: /s/ Ralph H. Clinard By: /s/ Gregory T. Geswein ------------------------------------- --------------------------- (AUTHORIZED SIGNATURE) (AUTHORIZED SIGNATURE) Printed Name: Ralph H. Clinard Printed Name: Greg T. Geswein Title: President/Chief Executive Officer Title: Senior Vice President and CFO Date: October 8, 2002 Date: September 27, 2002 10 MAINTENANCE AGREEMENT - EQUIPMENT SCHEDULE 1 * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. EX-10.6 8 h12528exv10w6.txt SERVICE AGREEMENT ADDENDUM NO. 2 EXHIBIT 10.6 SERVICE AGREEMENT ADDENDUM NO. 2 (DATED SEPTEMBER 1, 2003) This Service Agreement Addendum No. 2 is attached to and made a part of Equipment Schedule Number 2 ("Equipment Schedule No. 2"), which is hereby added to and incorporated in that certain Quality Care Maintenance Agreement between Diebold, Incorporated ("Diebold") and Cardtronics, LP ("Cardtronics"), dated effective as October 1, 2002 (the "Maintenance Agreement"). This Addendum sets forth the services to be provided by Diebold pursuant to the Maintenance Agreement and pricing to be charged and paid by Cardtronics thereunder, with respect to the ATMs identified on Equipment Schedule No. 2, which Cardtronics has acquired from American Express Travel Related Services Co., Inc. ("American Express"). FIRST LINE MAINTENANCE ("FLM"): Requires no tools or service parts and consists of onsite diagnosis of ATM problems. 1. Clearing of receipt/journal paper jams. 2. Clearing of jammed cards and leaving such cards on site in ATM safe. 3. Clearing of all currency jams (including fanning money when necessary while on site for existing service call). 4. Check supply of receipt/journal printers and replenish with customer-supplied consumables while one site for existing service call. 5. In the event of an "electronics journal full" condition, copy the journal to a floppy disk and leave disk on site. If condition was caused by the action or lack of action of cash handler, service will be billable at $90 per call. 6. Respond to media transports that are not functioning properly and clear them of any foreign objects (e.g. jams). 7. Clean ATM DIP, SWIPE, or motorized card readers (when Card Reader malfunction is indicated). 8. Check placement of captured card tray and reposition if necessary. 9. Visually check ATM during routine FLM call to verify the following: - Lights functioning properly. - Proper operation of the card access device. - General cleanliness of ATM and surrounding area. - ATM screen is clean. 10. If observable within 2 minutes after service completion, observe transaction and verify all aspects of the ATM are operational. 11. Extended First Line Maintenance services are onsite visits to verify operation and notify Cardtronics of any service issues regarding non-ATM or third party related service issues. It is not Diebold's responsibility to repair these issues (except ATM resets and modem resets), but to only report them to Cardtronics. Examples of non - ATM or third-party related service issues are, but not limited to: - Phone line issues. - Power issues. - Network and general non-ATM communication issues. - Modem resets. - ATM resets. - No fault found situations. * 12. For identified vandalism, Diebold will provide an estimate at no cost and receive approval prior to performing repair. If another provider is selected to perform repair, then the inspection call will be billable at $ * per hour (second line technician required). 13. Cash replenishment issues (i.e. left in supervisory mode, cassettes not seated, wrong type of consumables, banded money, ATM settled incorrectly, and wrong denominations) will be billed at $ * per call. 14. Service hours from 8AM to 8PM, seven days per week with an average target response time of * hours per call. 15. Cardtronics agrees to work with Diebold on setting Actmon levels and acceptable "I'm Alive" notification frequencies to minimize unnecessary calls. 16. If the aggregate First Line Maintenance call rate for the total number of Cardtronics' ATMs covered by the Agreement and serviced by Diebold exceeds * calls per month for two consecutive months then, both parties agree to diligently and cooperatively investigate the situation and meet to discuss their findings. Additionally, the parties may agree upon an adjustment to the then current monthly contract rate for First Line Maintenance service or Diebold will be allowed to cancel First Line Maintenance service on such ATMs by sending a ninety (90)-day written notice to Cardtronics of its intent to do so. 17. Diebold agrees to perform preventative maintenance on each Cardtronics ATM pursuant to Diebold's Performance Driven Preventative Maintenance Program. Periodically, Diebold shall inform Cardtronics of its findings in order for Cardtronics to identify possible trends in hardware failures. 18. Provide operational reviews and notify Cardtronics of any issues including other vendor services. 19. The First Line Maintenance fee will be $ * per month, per ATM and shall commence with respect to each ATM on the date that Diebold initializes the Mas-Hamilton lock on the ATM (herein called the "ATM Conversion"). Customer and Diebold will develop a * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 2 mutually acceptable schedule to accomplish all ATM Conversions within a reasonable tune period, but in any event to be completed on or before December 1, 2003. In the event that an ATM Conversion occurs on any day other than the first day of the month, the first month's First Line Maintenance fee will be pro-rated by multiplying $ * by (i) the number of days from the ATM Conversion until the last day of the month: (ii) divided by the total number of days in said month. SECOND LINE MAINTENANCE: 1. The hours of coverage ("HOC") for Second Line Maintenance will be 8AM to 8PM, seven days per week with an average target response time of 4 hours per call. 2. Second Line Maintenance consists of Remedial Maintenance. Replacement Parts, and Engineering Changes, as described below. necessary to keep the ATM in Good Operating Condition. - Remedial Maintenance -- Remedial Maintenance consists of those functions required to repair a malfunctioning ATM and return it to Good Operating Condition. - Replacement Parts -- Diebold will install parts on an exchange basis. Installed parts may be new or reconditioned used parts. Replacement parts become Cardtronics' property (if Cardtronics owns the equipment). Replaced parts become the property of Diebold. - Engineering Changes -- Engineering Changes include any safety changes to Diebold ATMs required of Diebold by a governmental or regulatory entity. Safety changes will be made at no additional charge. Other engineering changes (including Diebold developed and supported software), e.g. changes intended to enhance or simplify the performance, reliability or serviceability of Diebold equipment, that are generally adopted by Diebold and provided to Diebold's maintenance customers at no charge will also be provided at no extra expense, but will be installed at Diebold's convenience. 3. The following services are not covered by this Agreement and are billable to Cardtronics on a "Per Call" basis at $ * per hour: - Any out of scope work requiring a second line technician - Vandalism - Acts of God - All services requested outside of contract hours will be invoiced at $153/hr. - All services referenced in Section 9 of the Maintenance Agreement. The Second Line Maintenance fee will be as follows: - Model 1063, 1062ix, 1064i, 1064ix, & 1072 units -$ * per month. per ATM and shall commence retroactively to August 1, 2003 with respect to all ATMs listed on Equipment Schedule 2. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 3 - Model CSP 100, 200 & 200P units - $ * per month, per ATM. TRIPLE DES CONVERSION FEES: The Triple DES Conversion fee for the equipment included on Equipment Schedule Number 2 to be charged Cardtronics (if Cardtronics elects to proceed with such conversion and makes such election on or before March 31, 2004) will be as set forth in the table below. Furthermore, if Cardtronics elects to implement the Triple DES Conversion of the ATMs, Diebold agrees to complete up to 1000 of such conversions prior to August 30, 2004, with any in excess of 1000 to be completed no later than November 30. 2004.

CONTRACT TERM & RATE INCREASE: Notwithstanding a possible earlier termination of the Maintenance Agreement with respect to the ATMs covered by Equipment Schedule 1, the initial term of the Maintenance Agreement with respect to the ATMs identified on Equipment Schedule 2 shall run from September 1, 2003 until August 31, 2005 with the above fees fixed during that initial term. A third year option is available if agreed to by both parties at an increase not to exceed 5%. Subsequent annual renewals will be handled as outlined in the Maintenance Agreement. [Signatures on following page] * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 4 In witness whereof, the parties do hereby execute this Addendum No. 2 to the Quality Care Maintenance Agreement dated effective as of September 1. 2003. DIEBOLD, INCORPORATED By: /s/ David Bucci ----------------------------- Name: David Bucci Title: Sr. Vice President CARDTRONICS, LP By: /s/ Michael H. Clinard ---------------------------- Michael H. Clinard, Chief Operating Officer APPROVED BY LEGAL: MK 10-14-02 5 SCHEDULE 2 ATM LOCATIONS * * Denotes Confidential Portion Omitted and Filed Separately with the Commission. SERVICE AGREEMENT ADDENDUM CARDTRONICS FIRST LINE & SECOND LINE This Service Agreement Addendum is attached to and made a part of Equipment Schedule Number 1, to that certain Quality Care Maintenance Agreement between Diebold, Incorporated ("Diebold") and Cardtronics, LP ("Cardtronics"), dated ___________, 2002 (the "Maintenance Agreement"). This Addendum sets forth the services to be provided by Diebold pursuant to the Maintenance Agreement and pricing to be charged and paid by Cardtronics thereunder, as set forth therein. FIRST LINE MAINTENANCE: Requires no tools or service parts. Onsite diagnosis of ATM problems 1. Clearing of receipt/journal paper jams. 2. Clearing of jammed cards and leaving such cards on site in ATM safe. 3. Clearing of all currency jams (including fanning money when necessary while on site for existing service call). 4. Check supply of receipt/journal printers and replenish with customer-supplied consumables while one site for existing service call. 5. In the event of an "electronics journal full" condition, copy the journal to a floppy disk and leave disk on site. If condition was caused by the action or lack of action of cash handler, service will be billable at $90/call. 6. Respond to media transports that are not functioning properly and clear them of any foreign objects (e.g. jams). 7. Clean ATM DIP, SWIPE, or motorized card readers (when Card Reader malfunction is indicated). 8. Check placement of captured card tray and reposition if necessary. 9. Visually check ATM during routine FLM call to verify the following: - Lights functioning properly. - Proper operation of the card access device. - General cleanliness of ATM and surrounding area. - ATM screen is clean. 10. If observable within 2 minutes after service completion, observe transaction and verify all aspects of the ATM are operational. 11. Extended First Line Services. Onsite visits to verify operation and notify Cardtronics of any service issues regarding non-ATM or third party related service issues. It is not service provider's responsibility to repair these issues (except ATM resets and modem resets), but to only report them to Cardtronics. Examples of non - ATM or third-party related service issues are such as but not limited to: - Phone line issues. - Power issues. - Network and general non-ATM communication issues. - Modem resets. - ATM resets. - No fault found situations. (However, any repeat call to the same site, for the same Extended First Line Service, within a 2-day period will be considered a chargeable call and Cardtronics will be invoiced accordingly at $90 per call.) 12. For identified vandalism, Diebold will provide an estimate at no cost and receive approval prior to performing repair. If another provider is selected to perform repair, then the inspection call will be billable at $123 per hour (second line technician required). 13. Cash replenishment issues (i.e. left in supervisory mode, cassettes not seated, wrong type of consumables, banded money, ATM settled incorrectly, and wrong denominations) will be billed at $ * per call. 14. Service hours from 8AM to 8PM, seven days per week with an average target response time of hours per call. 15. Cardtronics agrees to work with Diebold on setting Actmon levels and acceptable "I'm Alive" notification frequencies to minimize unnecessary calls. 16. If the aggregate First Line call rate for the total number of Cardtronics' ATMs covered by the Agreement and serviced by Diebold exceeds * calls per month for two consecutive months then, both parties agree to diligently and cooperatively investigate the situation and meet to discuss their findings. Additionally, the parties may agree upon an adjustment to the then current monthly contract rate for First Line Service or Diebold will be allowed to cancel First Line Service on such ATMs by sending a ninety (90)-day written notice to Cardtronics of its intent to do so. 17. Diebold agrees to perform preventative maintenance on each Cardtronics ATM pursuant to Diebold's Performance Driven Preventative Maintenance Program. Periodically, Diebold shall inform Cardtronics of its findings in order for Cardtronics to identify possible trends in hardware failures. 18. Provide operational reviews and notify Cardtronics of any issues including other vendor services. 19. The annual First Line contract amount will be $ * or $ * per month, per ATM. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 2 SECOND LINE MAINTENANCE: 1. The hours of coverage ("HOC") for Second Line Maintenance will be * seven days per week with an average target response time of * hours per call. 2. Second Line Maintenance consists of Remedial Maintenance, Replacement Parts, and Engineering Changes, as described below, necessary to keep the ATM in good operating condition. - Remedial Maintenance -- Remedial Maintenance consists of those functions required to repair a malfunctioning ATM and return it to good operating condition. - Replacement Parts -- Diebold will install parts on an exchange basis. Installed parts may be new or reconditioned used parts. Replacement parts become Cardtronics' property (if Cardtronics owns the equipment). Replaced parts become the property of Diebold. - Engineering Changes -- Engineering Changes include any safety changes to Diebold ATMs required of Diebold by a governmental or regulatory entity. Safety changes will be made at no additional charge. Other engineering changes (including Diebold developed and supported software), e.g. changes intended to enhance or simplify the performance, reliability or serviceability of Diebold equipment, that are generally adopted by Diebold and provided to Diebold's maintenance customers at no charge and will be installed at Diebold's convenience. 3. The following services are not covered by this Agreement and are billable to Cardtronics on a "Per Call" basis at $ * per hour: - Any out of scope work requiring a second line technician - Vandalism - Acts of God - All services requested outside of contract hours will be invoiced at $153/hr - All services referenced in Section 9 of the Maintenance Agreement. 4. The annual Second Line contract will be as follows: - Model, CSP 100, 200 & 200P units - $ * annually or $ * per month, per ATM - Model 1063, 1O62ix, 1064i, 1064ix & 1072 units - $ * annually or $ * per month, per ATM TRIPLE DES CONVERSION FEES During the initial two year Term of the Agreement, the Triple DES Conversion Fee to be charged Cardtronics hereunder will be as set forth below: * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 3

* Note: price is based on remote installation of software and additional costs may be applicable should field labor/service call be necessary. CONTRACT TERM & RATE INCREASE The length of the initial service agreement will be 2 years at the current rate. A third year option is available if agreed to by both parties at an increase not to exceed 5%. Renewals will be handled as outlined in the Quality Care Maintenance Agreement. Notwithstanding the expiration or earlier termination of this Agreement, the Triple DES Conversion Fee set forth above shall remain in effect for a period of one year following the initial two year Term of the Agreement. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 4 EX-10.7 9 h12528exv10w7.txt ATM MAINTENANCE AGREEMENT EXHIBIT 10.7 ATM MAINTENANCE AGREEMENT This ATM Maintenance Agreement ("Agreement") is made this 28th day of February, 2003 by and between EFMARK Service Company of Illinois, Inc., an Illinois corporation headquartered in Westmont, Illinois ("ESC") and Cardtronics, LP, a Delaware limited partnership headquartered in Houston, Texas ("Cardtronics"). 1. Agreement. 1.1. This Agreement establishes the terms and conditions under which Cardtronics will purchase both first and second line maintenance services for automated teller machines that are either owned, leased, operated, or managed by Cardtronics and are further identified on Schedule A, as may be amended by agreement of the parties from time to time (the "ATMs" or the "ATM Locations"). ESC will provide each ATM Location designated on Schedule A, both First Line Maintenance ("FLM") and Second Line Maintenance ("SLM") as such services are collectively referred to as the "Maintenance Services" and are described on Schedule B -- Scope of Services. During the term of this Agreement, ESC will have the exclusive right to provide the Maintenance Services designated for each such ATM Location; provided, however, Cardtronics may add or remove ATMs from Schedule A without any penalty or increase in Pricing (as defined below) so long as the aggregate number of ATMs listed on Schedule A exceeds * . 1.1.1. Throughout the term of this Agreement, ESC will utilize Cardtronics as its primary source for all repair parts and components ("Replacement Parts") used in the performance of ESC's duties hereunder. To facilitate an efficient supply of parts to ESC, on a monthly basis Cardtronics will provide ESC a print out of all available Replacement Parts and the per item cost for each. ESC must purchase all Replacement Parts on an `as needed' basis solely from Cardtronics so long as such Replacement Parts are available through Cardtronics; provided, further, however that Cardtronics must provide such Replacement Parts at a price that is not higher than other supply sources. 1.1.2. Cardtronics warrants to ESC that should a Replacement Part prove defective by reason of improper workmanship or materials, Cardtronics will repair or replace the defective Replacement Part with new or factory reconditioned parts without charge for parts or labor for a period of ninety (90) days after the original installation of the Replacement Part. This remedy shall be the exclusive remedy for breach of this warranty. EXCEPT AS OTHERWISE STATED IN THIS AGREEMENT, CARDTRONICS EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO THE REPLACEMENT PARTS, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF * Denotes Confidential Portion Omitted and Filed Separately with the Commission. MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. All Replacement Parts will shipped to ESC's facility in Evansville, Wisconsin. 1.2. If designated on Schedule A with respect to an individual ATM Location, all requests for Maintenance Service at that ATM Location must in the first instance be directed to a "Help Desk" maintained by Cardtronics at its sole cost and expense. Cardtronics' obligations and the procedures with respect to the operation of the Help Desk are described in Schedule C. 1.2.1. Cardtronics will use its best efforts to resolve service requests at the Help Desk level. It is anticipated that certain FLM requests can be resolved at the Help Desk level without ESC's intervention. 1.2.2. For any service requests that cannot be resolved, Cardtronics will initiate a service request to ESC according to the procedures specified in Schedule C. ESC will have no obligation to respond to requests for service that are not initiated according to those procedures. 1.2.3. Cardtronics will notify ESC within twenty-four (24) hours of any discontinuance of Help Desk operations, whether such discontinuance is expected to be temporary or permanent in nature. Absent ESC's advance written consent, it will be a material breach of this Agreement for Cardtronics to discontinue its Help Desk operations, in which case ESC may at its option immediately terminate this Agreement with respect to some or all of the ATMs in the event that Cardtronics fails to reconstitute the Help Desk within three (3) business days of its discontinuance. 2. Term and Renewal. The term of this Agreement will be for a period of forty-two months, commencing on February 1, 2003 and expiring on July 31, 2006 (the "Initial Term"). 2.1. THIS AGREEMENT WILL AUTOMATICALLY RENEW FOR ADDITIONAL ONE (1) YEAR PERIODS, UNLESS A PARTY GIVES THE OTHER WRITTEN NOTICE THAT THIS AGREEMENT IS TO BE TERMINATED AT THE END OF THE CURRENT TERM. SUCH WRITTEN NOTICE MUST BE GIVEN AT LEAST NINETY (90) DAYS PRIOR TO THE END OF THE INITIAL TERM OR ANY RENEWAL TERM. 2.2. If any party gives notice of non-renewal, all services provided pursuant to, and all rights and obligations of the parties described in, this Agreement will continue until either the expiration date of the then current term or renewal term or a date mutually agreed upon by the parties. Any Maintenance Services provided after any such expiration date will be provided at the then-current contract rates. 2 3. Pricing and Payment. 3.1. For each ATM listed on Schedule A, Cardtronics shall pay ESC the sum reflected on Schedule A, exclusive of any sales, excise or use taxes, each month during the Initial Term or any renewal term of this Agreement. In the event that two hundred or more ATMs are added or removed during the course of any month, the monthly charges for those ATMs will be prorated by multiplying the number of days of that month each ATM was installed at the identified location and dividing that sum by the number of days in said month. Except as provided for in the immediate preceding sentence, no monthly charge or credit shall be allowed for ATMs that may be added or dropped during any month, and such changes to Schedule A shall not take effect until the start of the next month. Furthermore, except as may be explicitly provided in this Agreement or in Schedule A, there will be no adjustment to any Pricing, no surcharge or additional cost, nor any add-on fees or extra work charges imposed upon Cardtronics unless it has specifically authorized such in writing. 3.2. Consistent with the Pricing set forth in, and the scope of service described in Schedule B, Cardtronics will pay ESC for selected FLM and SLM Services monthly in advance; provided, however, that until ESC has paid the Deferred Payment as defined in the Inventory Purchase Agreement executed by the parties on this same date, Cardtronics shall make its payments in arrears. ESC will invoice Cardtronics for such services thirty (30) days prior to each payment due date. ESC will invoice Cardtronics for Billable Call Maintenance (as defined on Schedule B) as those services are rendered. 3.3. All invoices must be paid in full by Cardtronics within thirty (30) days of receipt unless the invoice (or a portion of the invoice) is disputed by Cardtronics. Should an invoice (or portion of the invoice) be disputed by Cardtronics, Cardtronics must notify ESC within thirty (30) days of receipt and make a reasonable effort to resolve the alleged discrepancy. 3.4. Any undisputed portion of an invoice must otherwise be paid in full. Notwithstanding the provisions of Section 9 below ("Termination"), ESC may terminate this Agreement upon twenty (20) days written notice for a failure to pay any undisputed invoice, or any undisputed portion of an invoice if Cardtronics fails to pay such undisputed amount prior to the expiration of such twenty (20) day period. 4. Insurance. ESC will maintain basic comprehensive general liability insurance coverage in the minimum amount of $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate, automobile liability coverage in the minimum amount of $1,000,000.00 combined single limit, and umbrella/excess liability coverage in the minimum amount of $5,000,000.00. ESC will also maintain in force worker's compensation in accordance with the various states in which ESC's employees perform the services under this Agreement. Upon Cardtronics' request, ESC will provide certificates evidencing such insurance coverages, plus evidence of its workers' compensation insurance as required by 3 law. All such policies must name Cardtronics as an additional insured, and prohibit any cancellation or modification thereof unless Cardtronics is provided at least thirty (30) days written notice of such intended cancellation or modifications. Each party and each party's insurer will waive rights of subrogation against the other party and its insurer. Each party agrees to promptly notify the other in writing of any claim or loss after any potentially insurable loss is discovered. All parties agree to furnish satisfactory and reasonable proof of such loss, and to assist (to the extent possible) any insurance carrier in recovery of such loss. 5. Indemnification. Each party will indemnify and defend the other party, their officers, employees and agents against and hold them harmless from, without limitation, any and all liabilities, injury, death, penalties, losses, costs, damages, claims, expenses, attorneys' fees, expenses of litigation, suits, judgments, liens and encumbrances brought, suffered or incurred by the other party or third parties (collectively, "Claims") attributable to the respective acts or omissions of such party, their employees, officers, agents or subcontractors, while engaged in the performance of their duties under this Agreement; excluding however, Claims to the extent that they arise directly from the gross negligence or willful misconduct of the other party, its officers, employees, or agents. Each party will give prompt notice of any such Claim and will reasonably cooperate in the defense of such Claim(s). 6. Losses and Liability. 6.1. Except as provided elsewhere in this Agreement, ESC will not be liable for any loss caused by or resulting from: 6.1.1. Any damage or loss caused to an ATM or its contents when due to theft or damage by others who are not a party to this Agreement, except where the loss or damage is the result of the negligent, reckless or intentional acts of ESC, its agents, or its employees. 6.1.2. Any damage or loss to an ATM or its contents where there is evidence of forced entry, except where the loss or damage is the result of the intentional act of ESC, its agents, or its employees. 6.2. With regard to any ATM covered hereunder, Cardtronics will immediately furnish ESC a copy of any ATM activity record, including network and alarm records, whenever so requested. 6.3. Should an ESC employee, subcontractor or agent take currency from an ATM using keys, combinations or other means of access (including specialized training for the performance of duties under this Agreement), ESC will be liable to Cardtronics for such loss to a maximum dollar value of one hundred thousand dollars ($100,000.00) for each incident at any given ATM; unless Cardtronics has given notice to ESC of a particular ATM identified on Schedule A that routinely contains more than $100,000.00 in cash and said notice has specified the amount of cash routinely loaded in that ATM, whereupon ESC's limit of liability for any 4 such ATM shall be the lesser of (i) $200,000.00, or (ii) the actual cash load. ESC will pay such loss to Cardtronics within thirty (30) days of the date Cardtronics gives ESC written notice of such loss. 6.4. Should an ESC employee, subcontractor or agent while performing duties under this Agreement fail to secure any ATM and as a result of such failure the contents of the ATM are removed and taken by a third party, then ESC will be liable to Cardtronics for such lost contents to a maximum dollar amount of one hundred thousand dollars ($100,000.00) for each incident at any ATM; unless Cardtronics has given notice to ESC of a particular ATM identified on Schedule A that routinely contains more than $100,000.00 in cash and said notice has specified the amount of cash routinely loaded in that ATM, whereupon ESC's limit of liability for any such ATM shall be the lesser of (i) $200,000.00, or (ii) the actual cash load. ESC will pay such loss to Cardtronics within thirty (30) days of the date Cardtronics gives ESC written notice of such loss. 6.5. ESC will use good faith, commercially reasonable efforts to recover the amounts taken as a result of a third party perpetrating any theft, burglary, or other wrongful removal for which ESC may bear responsibility. Upon payment by ESC of any amounts to Cardtronics under this Section 6, ESC will be subrogated to Cardtronics' rights to the extent of such payment. Should Cardtronics subsequently recover amounts associated with that loss that have been previously reimbursed to Cardtronics by ESC, then Cardtronics must promptly pay such subsequently recovered amounts to ESC. 6.6. Each party will cooperate and assist the other with any reasonable requests in the pursuit, investigation, and recovery of losses, and will assign any rights of recovery as may be required. 6.7. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF USE, LOSS OF DATA, LOSS OF PROFIT, OR LIABILITY TO THIRD PARTIES, HOWEVER CAUSED, WHETHER BY THE NEGLIGENCE OF SAID PARTY OR OTHERWISE. 6.8. Each of the parties hereto recognized that in the event of a breach by one of the parties, the calculation of damages, if any, that may result as a consequence of such breach would be difficult and impractical to determine. Accordingly, the parties hereby stipulate and agree that, save and except for the recovery of attorneys' fees and interest as provided in Section 10.7 below, in the event either party's breach of this Agreement results in the termination hereof, the sole and exclusive remedy, whether in contract, tort or equity, for the non-breaching party shall be the recovery of Liquidated Damages. Liquidated Damages are hereby defined as that sum of money that is equal to: (i) $7.00; (ii) multiplied by the number of ATMs covered hereunder at the time of said breach, (iii) with such product furthered multiplied by the lesser of (a) the number of months remaining in the then current term or (b) 12 months. This Liquidated Damage clause does 5 not release or relieve ESC of any liability that may accrue to it under Sections 6.3 and 6.4 above. 7. Confidentiality. 7.1. The parties acknowledge that by reason of their relationship under this Agreement, they may have access to Confidential Information of the other. As used in this Agreement, "Confidential Information" means the information and materials relating to the other's business, plans, customers, software technology, and marketing strategies that are confidential and of substantial value to the other, which value would be impaired if such information were disclosed to third parties. 7.2. Each party agrees that it will not use or disclose Confidential Information other than for the purpose for which it was disclosed by the other. Each party further agrees that (a) it will not use in any way for its own account nor for the account of any third party, nor disclose to any third party, any Confidential Information revealed by the other, and (b) it will take every reasonable precaution to protect the confidentiality of the Confidential Information. Subject to these restrictions, a party may disclose Confidential Information to its employees, agents and subcontractors so long as such information is necessary for those employees, agents and subcontractors to perform their respective jobs or tasks called for in this Agreement. Each party is responsible for ensuring that all of its employees, agents or subcontractors comply with the provisions set forth in this Section 7. 7.3. In the event of cancellation, expiration or termination of this Agreement, there will be no use or disclosure by a party of any Confidential Information in its possession, and all confidential materials will be returned to the other or destroyed. Upon any breach or threatened breach of this section, a party will be entitled to injunctive relief, in addition to any other available remedies. 8. Subcontracting. 8.1. ESC cannot assign this Agreement for the purpose of subcontracting its duties and responsibilities without the prior written consent of Cardtronics, which will not be unreasonably withheld, provided however, that Cardtronics may withhold its consent to subcontract duties and responsibilities to a subcontractor who is a competitor of Cardtronics. 8.2. Following Cardtronics' approval of any subcontractor and prior to the performance of any work by said subcontractor, Schedule 8.2 (list of Approved Subcontractors) shall be amended by the parties hereto. Furthermore, each subcontractor must provide proof of insurance in accordance with the requirements of Section 4 above. 8.3. ESC retains full responsibility for the performance of Maintenance Services under this Agreement. The approval of any subcontractor by Cardtronics does not in any way relieve ESC from full responsibility for all acts and negligence of its 6 subcontractors, or of any person, group or organization directly or indirectly employed by such sub-contractor; provided, however, that to the extent Cardtronics has separately contracted with any of those subcontractors for the provision of services other than Maintenance Services, ESC will not be responsible for any failure to provide those other services. 9. Termination. 9.1. In the event a party materially defaults in the performance of any of its duties or obligations, and the default is not substantially cured within thirty (30) days after notice is given to the defaulting party specifying the default, then the party not in default may, by giving notice to the defaulting party, terminate this Agreement for cause. 9.2. Any party, in its sole discretion, may immediately terminate this Agreement upon written notice to the other if the other (a) files or there is filed against any of them any bankruptcy, reorganization or other proceeding under any bankruptcy or insolvency law; (b) is unable to pay its debts as they mature; or (c) makes an assignment for the benefit of its creditors. 10. Miscellaneous. 10.1. Entire Agreement. This Agreement, including all schedules and exhibits and other writings referred to herein constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior understandings or agreements, written or oral, on this subject. This Agreement may only be altered, amended or superseded by a writing agreed to and signed by the parties. 10.2. Interpretation. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and any rule that a contract is to be constructed against the drafter will not apply to this Agreement. The section headings of this Agreement are solely for convenience and will not be considered in its interpretation. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law. However, in the event that any term or provision of this Agreement is deemed or held to be invalid, illegal or unenforceable, the remaining terms and provisions of this Agreement will nevertheless continue and be deemed to be in full force and effect. 10.3. Survival. Upon the cancellation, expiration or termination of this Agreement, all of the following Sections will survive: 3 ("Payment and Pricing"); 5 ("Indemnification"); 6 ("Losses & Liability"); 7 ("Confidentiality"); and 10.5 ("Dispute Resolution"). In addition, any provisions relating to the enforcement of any of the surviving provisions and any remedies available under this Agreement also will survive. 10.4. Relationship of the Parties. The relationship of the parties under this Agreement is one of independent contractors, and not one of fiduciaries. Under no 7 circumstances will the relationship between the parties be construed to be that of a joint venture or partners, nor is it intended that the relationship be subject to subchapter K of the Internal Revenue Code. No party will hold itself out as, or be deemed to be, an employee, agent, partner or joint venturer of the other, and each party's authority will be limited to the matters expressly set forth in this Agreement. There are no third-party beneficiaries who are intended to benefit in any way from the terms and provisions of this Agreement. 10.5. Dispute Resolution. All disputes arising out of or relating to this Agreement will be settled by arbitration before a sole arbitrator under the then current Commercial Arbitration Rules and, if necessary, the Rules for Emergency Orders of Protection, of the American Arbitration Association. The duty and right to arbitrate will extend to any employee, officer, shareholder, agent or affiliate of the parties. 10.5.1. The choice of law provisions in Section 10.6 will govern the interpretation and enforcement of this Agreement; however, the Federal Arbitration Act will govern issues of arbitrability. 10.5.2. Any arbitration proceeding must be instituted: (a) with respect to any dispute arising out of the collection of any debt owed by a party, within two years after the date of the last payment made or received by the instituting party; and (b) with respect to any other dispute, within two years after the event giving rise the dispute occurred, regardless of whether a party knew of such event. Failure to institute an arbitration proceeding within such a period will constitute an absolute bar and waiver of the institution of any proceedings. 10.5.3. All rights and remedies provided for in this Agreement will be cumulative and in addition to any other rights or remedies the parties may have at law or in equity. Nonetheless, the arbitrator will have no authority to award damages in excess of the limitations and exclusions set forth in this Agreement, or to otherwise grant relief inconsistent with the terms of this Agreement. The decision and award of the arbitrator will be final and binding, and the award so rendered may be entered in any court having appropriate jurisdiction. 10.6. Governing Law; Venue. This Agreement will be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made and to be performed entirely within that State, without regard to that State's conflict of law provisions. The exclusive venue for any arbitration or legal proceeding arising out of or relating to this Agreement will be in the county of the party who is not initiating the arbitration, unless otherwise agreed in wilting by the parties. Each party irrevocably waives any objection that it may have at any time to those venues. 8 10.7. Attorneys' Fees; Interest. In the event of any arbitration or litigation between the parties arising out of this Agreement, the arbitrator and/or court will award the prevailing party its costs and reasonable expenses and attorneys' fees resulting from such proceedings in addition to any other relief awarded. The unpaid balance on any undisputed invoice, or any undisputed portion of an invoice, will accrue interest at a rate of one and one-half percent (1.5%) per month. Additionally, should either party present a liquidated Claim to the other party and said party fails to pay said Claim within thirty (30) days of the date presented, the Claim shall accrue interest at a rate of one and one-half percent (1.5%) per month. Notwithstanding any provision in this section or any other section of this Agreement, neither party shall charge nor receive interest at any rate that it higher than the highest rate allowed by applicable state or federal law. 10.8. Force Majeure. Unless specifically provided for elsewhere in this Agreement, no party will be liable to the other party for any loss, damage, delay or failure of performance that is attributable to acts of God, armed conflicts, war, insurrection, acts of terrorism or acts committed in furtherance of terrorism, riots, earthquakes, hurricanes, floods, unusually severe weather, conditions or events of nature that cannot be predicted, civil disturbances, power failure, strikes, fire, the acts of any governmental authority, or other causes beyond its reasonable control. A party's performance, together with the other party's reciprocal performance or obligations, will be excused during the pendency of any such event, but that party will take all steps reasonable, practical and necessary to effect prompt resumption of its obligations under this Agreement in full or in part. 10.9. Waiver. No failure or delay on the part of either party in exercising any power or right under this Agreement will operate as a waiver, nor will any single or partial exercise of any such power or right preclude any other further exercise thereof or the exercise of the other power or right. No waiver by either party of any provision of this Agreement, or of any breach or default will be effective unless in writing and signed by the party against whom such waiver is to be enforced. 10.10. Notices. Any notice that a party wishes or is obligated to give under this Agreement must be in writing and delivered to the intended recipient by (a) hand, (b) United States certified mail, return receipt requested, or (c) a nationally-recognized overnight courier (such as Fed Ex), addressed to each party as follows or to such other address as a party may subsequently designate by notice: IF TO CARDTRONICS: IF TO ESC: Cardtronics, LP Mark E. Hoppe 3110 Hayes Road, Suite 300 President Houston, Texas 77082-2622 EFMARK Service Company of Illinois, Inc. Attention: Michael H. Clinard, 777 Oakmont Lane, Suite 100 Chief Operating Officer Westmont, Illinois 60559

9 WITH A COPY TO: WITH A COPY TO: Cardtronics, LP Frederick W. Stein 3110 Hayes Road, Suite 300 Vice President and General Counsel Houston, Texas 77082-2622 EFMARK Service Company of Illinois, Inc. Attention: Michael E. Keller, 777 Oakmont Lane, Suite 100 General Counsel Westmont, Illinois 60559

Notices will be deemed to have been given or made three (3) Business Days after deposit in the United States mail or one (1) Business Day after delivery to the overnight courier service for next-day delivery. For the purpose of this Agreement, "Business Days" means Monday through Friday, excluding federal holidays. 10.11. Assignments. This Agreement will be binding in accordance with its terms upon the parties and their permitted transferees, assigns and successors in interest. No party will voluntarily or by operation of law assign or transfer this Agreement (or any rights or obligations thereunder) without the express prior written consent of the other, which consent will not be unreasonably withheld. Notwithstanding the foregoing, a party may assign its rights and obligations to an affiliate or a Purchasing Entity without the consent of the other. For the purpose of this Agreement, an "affiliate" means any other entity controlled by, controlling, or under common control of a party. Cardtronics recognizes that ESC will assign certain of its rights and obligations under this Agreement to its affiliate, Premium Armored Services, Inc. For purposes of this Section 10.11, a "Purchasing Entity" shall mean any individual or entity that purchases substantially all of the assets of a party. 10.12. Execution. This Agreement may be executed in one or more counterparts, each of which will constitute an original agreement, but will not be enforceable until delivery of the executed counterparts. The parties acknowledge that this agreement may be executed using electronic or facsimile signatures, and that each signature will be legally binding to the same extent as a written signature. Each party waives any legal requirement that this Agreement be embodied, stored or reproduced in tangible media, and agrees that an electronic reproduction will be given the same legal force and effect as a signed writing. Each of the undersigned declares and represents that he or she is competent to execute this instrument and that he or she is duly authorized, and has the full right and authority, to execute this Agreement on behalf of the party for whom he or she is signing. 10 IN WITNESS WHEREOF, the parties set their hands and seals as of the day and year first above written. CARDTRONICS, LP EFMARK SERVICE COMPANY OF ILLINOIS, INC. By: /s/ Jack M. Antonini By: /s/ Mark E. Hoppe ------------------------------ ------------------ Print Name: Jack M. Antonini Print Name: Mark E. Hoppe Its: President / Chief Executive Officer Its: President 11 SCHEDULE A SITE LOCATIONS/PRICING * Schedule A - Page 1 * Denotes Confidential Portion Omitted and Filed Separately with the Commission. SCHEDULE B SCOPE OF SERVICES "Maintenance Services" means the First Line Maintenance, Second Line Maintenance and other services described in this Schedule. 1. First Line Maintenance ("FLM"). ESC will provide FLM Services for those ATMs designated in Schedule A. FLM generally requires no tools or service parts, and includes the following: 1.1. Clearing of receipt/journal paper jams. 1.2. Retrieval and clearing of jammed cards. 1.3. Clearing of all currency jams (including fanning money when necessary). 1.4. Check supplies for receipt/journal printers and replenish with Cardtronics or merchant-supplied consumables. 1.5. In the event of an "electronics journal full" condition, copy the journal to a floppy disk and give same to the merchant. 1.6. Respond to media transports that are not functioning properly and clear them of any foreign objects (e.g. jams). 1.7. Clean ATM dip, swipe, or motorized card readers (when card reader malfunction is indicated). 1.8. Check placement of captured card tray and reposition if necessary. 1.9. Visually check ATM during routine ELM visits to verify and perform corrective measures as required on the following: - Lights functioning properly. - Proper operation of the card access device. - General cleanliness of ATM and surrounding area. - ATM screen is clean. 1.10. Perform an invalid pin transaction and if observable within two (2) minutes after service completion, observe a live transaction and verify that all aspects of the ATM are operational. 1.11. Extended First Line Services are defined as visits to verify operation and notify Cardtronics of any service issues regarding other third-party service providers. It Schedule B - Page 1 is not ESC's responsibility to repair these issues (except ATM resets and modem resets), but to only report them to Cardtronics. Examples of Extended First Line Service issues are as follows: - Phone line issues. - Power issues. - Network and general non-ATM communication issues. - Modem resets. - ATM resets. - No fault found situations. - Cash replenisher issues. However, any repeat call to the same site for the same Extended First Line Service within any two (2) day period will be considered a billable call, and Cardtronics will be invoiced accordingly at $90.00 per call to the extent that the on-site time does not exceed ninety (90) minutes. Thereafter, on-site time will be billed at $99.00 per hour. 1.12. When an ATM is vandalized, ESC will provide a repair estimate. If Cardtronics decides to utilize ESC for repairs or if the ATM is deemed "totaled" by Cardtronics, then ESC will not charge for the estimate. If another service provider is selected to make the repairs, then the estimate call will be billable at $99.00 per hour (second line technician required). 1.13. The service hours and response times for each ATM Location are designated on Schedule A. Response time for the purposes of this Agreement will mean the time taken by ESC to respond to a call, commencing from the time the call is placed to ESC and ending when ESC actually arrives at the ATM Location. For the purposes of determining whether ESC has met this obligation, response times are averaged on a calendar month basis over all of the ATMs listed on Schedule A with identical response times. Response times are measured within service contract hours only. For example, if a call or a given repair cannot be completed by five o'clock p.m. (5:00 p.m.), it will continue the next morning at eight o'clock am. (8:00 a.m.). Notwithstanding the fact that ESC may satisfy the response time based upon a monthly average, ESC will be deemed to be in default of this obligation if during any calendar month period it takes more than forty-eight (48) hours to respond to any ATM. 1.14. Cardtronics agrees to cooperate with ESC in good faith to establish mutually acceptable activity monitoring levels and mutually acceptable "I'm Alive" notification frequencies to minimize unnecessary calls. Schedule B - Page 2 1.15. In the event that Maintenance Service calls exceed the Aggregate Call Rate set forth on Schedule A for three (3) consecutive calendar months, both parties agree to cooperatively investigate the situation, and to (i) renegotiate the current monthly contract rate, or (ii) allow ESC to cancel service at individual ATM Locations upon ninety (90) days notice. Aggregate Call Rates for each ATM Location will be assigned by mutual agreement of the parties, and different ATM Locations may be assigned different Aggregate Call Rates. - To determine whether a given Aggregate Call Rate has been exceeded, calls for Maintenance Service during a calendar month will be grouped according to the assigned Aggregate Call Rate, and then divided by the number of ATMs with that same assigned Aggregate Call Rate. - By way of example, ATMs "A," "B," and "C" may be assigned Aggregate Call Rates of .6 calls per calendar month, while ATMs "D" and "E" may be assigned Aggregate Call Rates of .8 calls per calendar month. If there is a total of two (2) calls at ATMs "A," "B," and "C" during a given calendar month (resulting in an average of .67 calls per ATM for that month), then the Aggregate Call Rate for those ATMs will have been exceeded. On the other hand, if there is a total of only one Maintenance call at ATMs "D" and "E" during the same calendar month (resulting in an average of .5 calls per ATM for that month), then the Aggregate Call Rate for those ATMs will not have been exceeded. 1.16. With respect to any ATM for which ESC has not responded to a service call within any twelve (12) month period, on such ATMs within thirty (30) days of the end of each such twelve (12) month period, ESC will perform a preventative maintenance inspection. 1.17. ESC will meet with Cardtronics in Houston, Texas on no less than a quarterly basis to provide operational reviews. Notwithstanding these quarterly meetings, ESC will notify promptly Cardtronics of any ATM operational issues that is known to ESC, including those involving services provided by other vendors at the ATM Locations. 1.18. Any service, which at Cardtronics' request, is provided outside the hours of coverage will be billed at a flat rate of $90.00 per call; provided, however, if in the conduct of the service ESC's personnel are required to remain on site for longer than ninety (90) minutes, such call will be billed on an hourly basis at $99.00 per hour. 2. Second Line Maintenance ("SLM"). ESC will provide SLM Services for those ATMs designated in Schedule A. SLM includes remedial maintenance and parts replacement. 2.1. The service hours and response times for each ATM Location are designated on Schedule A Response time for the purposes of this Agreement will mean the time taken by ESC to respond to a call, commencing from the time the call is placed to Schedule B - Page 3 ESC and ending when ESC actually arrives at the ATM Location. For the purposes of determining whether ESC has met this obligation, response times are averaged on a calendar month basis over all of the ATMs listed on Schedule A with identical response times. Response times are measured within service contract hours only. For example, if a call or a given repair cannot be completed by five o'clock p.m. (5:00 p.m.), it will continue the next morning at eight o'clock a.m. (8:00 a.m.). Notwithstanding the fact that ESC may satisfy the response time based upon a monthly average, ESC will be deemed to be in default of this obligation if during any calendar month period it takes more than forty-eight (48) hours to respond to any ATM. 2.2. SLM consists of Remedial Maintenance and Replacement Parts, as described below, necessary to keep the ATM in Good Operating Condition. - Remedial Maintenance -- Remedial Maintenance consists of those functions required to repair a malfunctioning ATM and return it to Good Operating Condition. - Replacement Parts -- ESC will install parts on an exchange basis. Installed parts may be new or reconditioned used parts. Replacement parts become the property of the ATM owner. Replaced parts become the property of ESC. - For the purposes of this Agreement, the term "Good Operating Condition" means conformance to the manufacturer's then-current customer-level documentation. 2.3. LIMITED WARRANTY. Replacement Parts (except for supplies, consumables or expendable parts such as ink ribbons and disks) are warranted against defects for a period of ninety (90) days from the time the part is replaced. This warranty is limited exclusively to the part replaced. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE EXPRESSLY DISCLAIMED. 3. Excluded Services. The following items are not covered by this Agreement and are billable to Cardtronics on a "per call" basis at $99.00 per hour plus parts: - any service necessary because an ATM is not in Good Operating Condition on the date an ATM is added to Schedule A; provided, however, unless within thirty (30) days of the date an ATM is added to Schedule A, ESC provides written notification that such ATM is not in Good Operating Condition then said ATM will be deemed to be in Good Operating Condition; provided, further, that Cardtronics will not add an ATM to Schedule A unless the ATM has been brought "live" and until that ATM transacts a valid cash withdrawal; Schedule B - Page 4 - any service which, at Cardtronics' request, is provided outside the hours of coverage or upon arrival at the service location at the scheduled or agreed upon time, ESC's personnel have a waiting time in excess of thirty (30) minutes before either the armored carrier service or the merchant arrives to provide access to the ATM; - vandalism, or neglect or abuse that is in excess of $250.00 per ATM per occurrence; acts of God, but excepting up to $250.00 per ATM per occurrence in damage caused by lightening strikes; - damage ordinarily covered by insurance, or resulting from air conditioning or humidity control; - any service made necessary by the refurbishing, maintenance, or repair of the ATM equipment by non-ESC personnel after the date said ATM is covered by this Agreement; - any services with respect to software or firmware programming, or any damage to ATM equipment caused by software or firmware programming; provided, however, this exclusion shall not apply to the reloading of encryption keys by a single technician (to the extent allowed and if not allowed, ESC shall bill only for the second technician) or the current software package on any ATM by a single technician; and - any and all services arising out of legal or network requirements that would involve a change, modification or upgrade in hardware and/or software (e.g., Triple DES and ADA accessibility issues). Schedule B - Page 5 SCHEDULE C SERVICE REQUEST PROCEDURES 1. The Help Desk. At its sole expense, Cardtronics Will create and maintain a "Help Desk," which will serve as the initial point of contact with respect to any requests for Maintenance Services from, or with respect to, the ATM Locations for which "Help Desk" services have been designated on Schedule A. 1.1. The Help Desk will be proactive in problem resolution, will track and manage requests for service, and will determine whether a specific request should be referred to ESC for Maintenance Service. 1.2. Cardtronics will staff the Help Desk with an experienced staff of technicians who have the required level of expertise to quickly isolate and address service issues. 1.3. The Help Desk's hours of operation will be at least 7:00 a.m. to 7:00 p.m. Central Standard Time. 2. Procedures for Service Requests. The parties will employ the following procedures to address requests for Maintenance Services at the ATM Locations: 2.1. At its sole expense, Cardtronics will instruct (and/or institute a system such that) each ATM Location initially directs any requests for service to Cardtronics. 2.2. Upon receipt of a request for service, Cardtronics will use its best efforts to resolve the service issue. In so doing, Cardtronics will record and maintain a record as to (i) the nature of the reported problem, (ii) what corrective action was discussed, (iii) what corrective action was attempted, and (iv) the results of any attempt(s). 2.3. If the Help Desk is unable to resolve a service issue, Cardtronics will report the request for service to ESC via ESC's secure "e-ACCESS" website. ESC will provide Cardtronics with separate documentation, user names and passwords to access the e-ACCESS web site. 2.4. To initiate a service request via "e-ACCESS," Cardtronics must enter in the required information, including the following: - the Terminal Identifier; - the caller's name and phone number; - whether the ATM is down; - the nature of the problem (e.g., card reader problem); and Schedule C - Page 1 - additional details that may aid ESC in diagnosing and remedying the service issue. 2.5. ESC will respond to the service request consistent with Schedule B of this Agreement. Upon ESC's request, Cardtronics' will allow ESC to inspect the records created and maintained by Cardtronics' pursuant to these procedures. Schedule C - Page 2 EX-10.8 10 h12528exv10w8.txt CONCORD PROCESSING AGREEMENT EXHIBIT 10.8 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT This MONEY ACCESS SERVICE Processing Agreement ("Agreement") is dated September 6, 2001 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you"). BACKGROUND MAS provides Electronic Fund Transfer processing for automated teller machine, point of banking and point of sale Terminals and accessed by using certain plastic cards with magnetically encoded stripes issued by financial institutions to their account holders allowing such account holders to perform certain banking, financial and purchase Transactions. Additionally, MAS offers services for the authorization of Transactions and provides Gateway services to various EFT Networks, as well as certain other EFT services ("MAS Processing Services"). User desires to purchase and use MAS Processing Services. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Agreement as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth in Exhibit A attached hereto and made a part hereof. 2. MAS PROCESSING SERVICES. You hereby agree to use MAS as the processor of Transactions conducted by your Cardholders and/or at your Terminals. You understand and agree that MAS may provide the services hereunder through any of its affiliates. While you are a User of MAS Processing Services under this Agreement, you elect to interface with MAS in one of the following modes: [ ] Full Service [ ] Authorization Processor [ ] Cooperative Authorization Processor [ ] Intercept Processor [X] Independent Sales Organization (ISO) You understand and agree that the mode you elect now for your Interface to MAS will govern you for the duration of this Agreement. You may elect to use any or all of the following MAS Processing Services set forth below; however, you agree that during the term of this Agreement we shall be the exclusive provider to you of any of the services described below which you elect: (i) MAS Authorization Services. In accordance with your Cardholder information you will supply to us, we will authorize or decline Transaction requests received from any Terminals at which your Cardholders have access or any Networks in which you participate by 1 our comparison to your Cardholder information which can consist of any of the following: (a) real time account records, (b) daily account balances or (c) parameter instructions. (ii) MAS Terminal Driving Services. We will establish a direct electronic connection between the ATM and/or POB Terminals you operate and our switch in order to operate, supervise and monitor such Terminals for you. (iii) Gateway Services. We will provide electronic connections from the switch to other Network switches and other card issuers which will permit you to acquire ATM, POB and/or POS Transactions of other Networks' and/or issuers' Cardholders at Terminals we operate for you and to facilitate Transactions by your Cardholders, if any, at the ATM, POS or POB Terminals of other Networks. You may choose among the Gateway services we inform you we are able to provide. If you elect to purchase any of our Gateway services from us you will appropriately complete and execute applications, membership agreements, sponsorship agreements or other documents as may be necessary to offer such Gateway services as may be required by us or the relevant regional or national ATM Network or card issuer, and shall provide to us evidence of your authority to participate in such Networks or with such card issuers, as we may require from time to time. (iv) Additional Services. We also offer an array of additional MAS Processing Services from which you may select to complement your Electronic Fund Transfer products. These Processing Services include telephone banking, bill payment, self service banking and Cardholder service charge products. You shall indicate your selection of additional MAS Processing Services on the Specification Forms you complete, and execute an addendum to this Agreement for each such service you desire. From time to time we may introduce new Processing Services which you may select by executing a further addendum to this Agreement. 3. SUPPORT AND TERMINAL LOCATION. (a) Support Equipment and Terminals. You agree to purchase or lease and install such ATM and POB Terminals as you desire to operate and you agree to obtain and maintain in good working order at your expense the data processing and communications equipment which is necessary and appropriate to facilitate the provision of MAS Processing Services. You shall independently determine the locations of the Terminals you choose to operate in accordance with the rules of the Networks you join and subject to any necessary regulatory approvals. (b) Location of Terminals. (1) United States and its Territories. You agree that subject to Section 3b. (2) of this Agreement, the MAS Processing Services to be provided under this Agreement shall only occur at Terminals located in the United States of America or its territories. (2) Outside of the United States or its Territories. If you desire to receive MAS Processing Services at any Terminal located outside of the United States of America, you agree to first provide MAS with a written schedule of any country or countries in which you intend to receive MAS Processing Services. You may not obtain MAS Processing Services for Terminals located outside of the United States of America and its territories without MAS's prior written approval. If MAS agrees to provide such 2 services to you, that approval will be, subject to the following conditions and other conditions to which the parties agree at the time: (i) We can terminate the provision of MAS Processing Services in any country at any time and without being deemed to be in breach of the MAS Processing Agreement if we, in our sole discretion, determine that continued provision of service to Terminals located in such country could adversely impact MAS. If we terminate the provision of MAS Processing Services in a particular country, we will provide you with sixty (60) days' prior notice of such termination, unless exigent circumstances exist. (ii) If any provision of the Agreement is declared or found to be illegal, unenforceable or void under the laws of any country ("Voided Provision"), for purposes of the laws of the specific country in which the provision is void, the Agreement will be construed as if not containing the Voided Provision, and the rest of the Agreement will remain in full force and effect, and the rights and obligations of the parties hereto shall be construed and enforced accordingly under the laws of that country; provided, however, that the parties consent to the enforcement of the entire Agreement, including the Voided Provision, under the laws of the State of Delaware. (iii) The parties hereto affirmatively consent that interpretation, construction and performance of this Agreement, including the provision of MAS Processing Services in any country outside of the United States of America or its territories, shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to the principle of conflicts of laws. The parties also consent to the jurisdiction and venue in the Delaware courts with respect to the enforcement of any matter under this Agreement, regardless as to the location of any Terminal receiving MAS Processing Services. (iv) You have obtained all necessary authorizations required under the laws, regulations and code provisions of each country in which you seek to receive MAS Processing Services. (v) You are not aware of any provision of the law, regulation or code under the laws of each country in which you seek to receive MAS Processing Services that would prevent (a) the provision of the MAS Processing Services to you or (b) the enforcement of this Agreement in accordance with its terms. During the term of this Agreement, the parties also agree to promptly notify each other of the enactment or promulgation of any provision of the law, regulation or code under the laws of each country in which you seek to receive MAS Processing Services that would prevent (a) the provision of the MAS Processing Services or (b) the enforcement of this Agreement in accordance with its terms. 3 4. USER SPECIFICATIONS. We will perform our processing in accordance with your instructions and information provided to us on our Specification Forms and the rules of the Networks you join. 5. FEES. (a) Schedule of Fees. You agree to pay our fees and charges set forth on the Schedule of Fees attached hereto as Exhibit B and Exhibit C for our MAS Processing Services. Further, you agree to pay all third party charges (including, but not limited to, our charges related to telecommunications services and transportation expenses) incurred in connection with our provision of MAS Processing Services. You agree that if we add new MAS Processing Services or Transaction types during the term of this Agreement we may amend the Schedule of Fees to add charges for such new services or Transaction types at any time. Any service performed by us at your request or as necessitated by your act or failure to act which is beyond the scope of the MAS Processing Services you select on the Specification Forms shall be billed to you at our standard rates then in effect including charges for personnel and computer time, equipment, supplies, out-of-pocket costs and other expenses which you agree to pay us. Commencing upon execution of this Agreement, all applicable fees and charges shall be payable upon invoice to you. We will submit monthly statements for the fees, charges, supplies and offer costs payable by you pursuant to this Agreement. Payment will be made in accordance with Section 6 hereof. We may increase or decrease the Schedule of Fees effective January 1 of each year upon not less than one hundred twenty (120) days' prior written notice to you. (b) Taxes. In addition to the applicable standard fees and charges for MAS Processing Services and any other service we perform for you, you agree to pay all federal, state and local taxes assessed as well as all other expenses, fees and charges imposed by a governmental entity arising out of or incidental to your use of MAS Processing Services other than those taxes, expenses, fees or charges which are based on the net income or property of MAS. 6. CLEARING ACCOUNT. For payment of the fees, charges, expenses and taxes, if any, due and owing to MAS under this Agreement, you will establish and maintain for the term of this Agreement a clearing account at a financial institution designated or approved by us. If you have executed a STAR Member Institution Agreement or a MAC Network Participation Agreement and already have established a clearing account pursuant thereto, then for purposes of this Agreement you hereby grant MAS authorization to effect credits to and debits from such clearing account for payment of the fees, charges, expenses and taxes due and owing to MAS under this Agreement. You agree to execute any documentation required by us or by the designated settlement bank to grant authority to us to debit or credit such account. You agree to maintain at all times in the clearing account a balance sufficient to pay all amounts due and owing to MAS under this Agreement. 7. CONFIDENTIALITY OF INFORMATION. You acknowledge that we have, through the expenditure of a significant amount of time, effort, costs and research, developed and/or secured the right to use various computer programs, 4 forms, logos, manuals, and related materials, including our operating procedures and technical specifications, which constitute property of great value and/or trade secrets, and that disclosure to others of such materials may result in loss or irreparable damage to us. Accordingly, you in your use of our MAS Processing Services agree to hold and use any and all such property or information in confidence, and not to disclose, reveal, copy, sell, transfer, sub-license, assign or distribute any part or parts of it, in any form, to any individual, firm, corporation, or other entity, or permit any of your employees, agents or representatives to do so, except as expressly permitted in writing by us. You further agree that upon termination of your use of MAS Processing Services for any reason, you will immediately return all such property to us. We acknowledge that, in your use of our MAS Processing Services, you may disclose to us certain confidential information relating to your Cardholders (if applicable). Accordingly, we agree to hold and use any and all such Cardholder information in confidence, and not to disclose, reveal, copy, sell, transfer, assign or distribute any part or parts of it, in any form, to any person or entity, or permit any of our employees, agents, or representatives to do so, except as expressly permitted in writing by you or as required by applicable law. 8. MALFUNCTIONS. Each party shall notify the other party immediately upon discovery of any evidence which might indicate that any of the MAS Processing Services are not satisfactory. Upon such notification, both parties shall consult and test in a manner that MAS deems appropriate to solve the problem. If we determine that the problem arises from hardware, software, personnel or other items within our control, we shall correct within a reasonable time not to exceed thirty (30) days from the date on which any such errors are brought to our attention. If we determine that the problem arises from the equipment, software, personnel procedures, communication or site facilities or other items within your control, you at your own cost shall correct the problem within a reasonable time not to exceed thirty (30) days from the date on which any such errors are brought to your attention. 9. FORCE MAJEURE. Neither MAS nor User shall be liable for any loss resulting from a delay or failure in its provision of MAS Processing Services or in the operation of a Terminal due in whole or in part to any natural disaster, epidemic, fire, act of God, strike, war, riot, civil disturbance, court order, statute, governmental issuance, technological facility outage, shortage of or significant fluctuation in power or any other cause beyond its reasonable control. 10. LIMITATION OF LIABILITY. (a) Disclaimer of Certain Damages. The duties and responsibilities of MAS under this Agreement will be limited to those expressly set forth and undertaken herein. In no event shall MAS be liable to User for (i) any loss of use, revenue, profit or business opportunities or indirect, incidental, consequential, punitive, special or exemplary damages, even if MAS is informed or is otherwise aware or should be aware, of the possibility or likelihood of such damages and regardless of whether any limited remedy provided hereunder is determined to fail in its essential purpose, (ii) losses or damages attributable to or arising from overhead allocations 5 or general and administrative costs and expenses of User, (iii) losses or damages caused other than by MAS's own gross negligence or intentional misconduct, or (iv) losses or damages arising out of the fraudulent or criminal acts of third parties. (b) Damages Cap. Notwithstanding any provision contained in this Agreement to the contrary, the aggregate liability of MAS during each consecutive twelve (12) month period beginning on the Effective Date for any and all claims, demands, costs, losses, damages or other potential or actual expenses which are in any way related, directly or indirectly, to the execution, performance or subject matter of this Agreement shall not exceed the average monthly amount of fees paid by User to MAS during such period, exclusive of interchange and pass-through fees, multiplied by three (3), regardless of the form of action employed, whether in contract, warranty, tort (including negligence) or otherwise. (c) Risk Allocation. The parties agree that the limitation of liability set forth in this Section 10 is a reasonable allocation of risk and that such limitation shall apply to any remedy ordered by a court, regardless of whether such court determines that any remedy provided for hereunder fails in its essential purpose. 11. NO WARRANTIES. MAS HEREBY DISCLAIMS ALL WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY EXPRESS AND IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 12. INDEPENDENT ENTITY. We agree to provide MAS Processing Services to you as an independent contractor only. None of MAS's officers, employees, agents or representatives will be subject to your control. 13. INSURANCE. You agree to obtain all insurance coverage which is required by state and federal law and regulation and dictated by prudent business practices in connection with your use of MAS Processing Services. 14. RIGHT OF INSPECTION OF RECORDS. Upon reasonable notice to us and during normal business hours your representatives, auditors, and/or representatives of your regulatory agencies may inspect any file which we maintain regarding the provision of MAS Processing Services to you. 15. ASSIGNMENT AND MERGER. This Agreement may not be assigned by you without our prior written consent. If you are the subject of or a participant in a merger or acquisition by (i) statute, (ii) purchase of assets, (iii) sale or exchange of stock, (iv) consolidation or (v) any other means, such merger or acquisition shall not terminate this Agreement; rather, this Agreement shall remain in full force and effect after such merger or acquisition as the obligation of the surviving financial institution. 6 16. EFFECTIVE DATE AND TERM. This Agreement shall be effective as of the date indicated in the introductory paragraph hereof provided that it is fully executed by us in original form and the payments required hereunder have been delivered to us. The initial term of the Agreement shall be three (3) years from the date our services commence under this Agreement and, thereafter, for successive one (1) year renewal terms unless terminated in accordance with paragraph 17 herein. 17. TERMINATION. This Agreement may be terminated in its entirety by either party at the end of the initial term or any subsequent term upon one hundred eighty (180) days' prior written notice to the other party. In the event you breach this Agreement causing an early termination or terminate this Agreement prior to the expiration of its term, you agree to pay an early termination fee in an amount equal to the product of your average monthly fees times the number of months left in your current term. 18. AMENDMENTS. This Agreement may be amended only by a writing duly executed by both parties. 19. ENTIRE AGREEMENT. This Agreement, including all schedules, addenda and exhibits hereto, constitutes the entire understanding between the parties as to MAS Processing Services and supersedes all previous communications, commitments and writings. 20. SEVERABILITY. If any provision of this Agreement is held invalid, illegal, void or unenforceable by reason of any judicial decision, all other provisions of this Agreement shall nevertheless remain in full force and effect. 21. WAIVERS. No course of dealing or failure to enforce any provision or exercise any right under this Agreement by either party shall be construed as a waiver of such provision or right, affect the validity of this Agreement or curtail the ability of any party to enforce such provision or exercise such right in the future. 22. NOTICES. All notices by one party to the other under this Agreement shall be in writing and shall be considered delivered when actually received or three (3) days after placement in the U.S. Postal Service, whichever is sooner. Notice shall be sent to each party at the addresses set forth in the first paragraph of this Agreement. Either party may change the address for notices at any time by providing written notice of such change to the other party. 7 23. HEADINGS. The titles and headings which precede the text of this Agreement have been inserted solely for convenience of reference and contain no substantive meaning. 24. APPLICABLE LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized representatives on the date first written above. MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ------------------------------------------------ E. T. Haslam, CFO ------------------------------------------------ Name and Title (Printed) CARDTRONICS, LP By: /s/ Michael Clinard ------------------------------------------------- Michael Clinard, COO ------------------------------------------------ Name and Title (Printed) _________________________________________________ User Identification Number 9 EXHIBIT A DEFINED TERMS MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT "Automated Teller Machine" or "ATM"- An electronic device activated by a Cardholder which permits such Cardholder to access his or her account(s) for the purpose of conducting banking Transactions. An ATM includes a full function as well as a cash dispensing only machine. "Business Day" - That part of any day, Monday through Friday, on which substantially all business functions are conducted and which is not a legal holiday. "Cardholder" - A customer of a card issuer who has been issued a card which activates a Terminal and permits such customer to access his or her account(s) for the purpose of conducting Transactions. "Gateway" - A technical interface between a computer processing switch and a Network switch, a card issuing body or a provider of EFT or EBT services for the purpose of conducting Transactions. "Electronic Benefits Transfer" or "EBT" - The provision of government entitlement programs to those individuals who are entitled to receive such entitlements or benefits through the use of magnetically striped or other cards capable of storing information regarding the Cardholder and capable of accessing ATM, POB and POS Terminals to receive distribution of such entitlements or benefits. "Electronic Fund Transfer" or "EFT" - A transfer of funds that is initiated through a Terminal, telephone, computer or magnetic tape and results in a debit or credit to an account. "Interface" - The combination of the computer programs and communications links by which a Network switch can receive messages directly from and send messages directly to parties which have an agreement to use such Network's services. "MAC" - The service mark and logo which designates the electronic funds transfer system owned and operated by MAS. "MAS" - MONEY ACCESS SERVICE as operated by MONEY ACCESS SERVICE INC. or any successor corporations. "Network" - An organization of computer hardware, software, communications facilities, Terminals, documentation and service marks designed to support the interchange of Transactions among financial institutions and others. "Point of Banking" or "POB" - The utilization of EFT access cards for banking Transactions at clerk operated Terminals in merchant locations. Exhibit A - 1 "Point of Sale" or "POS" - The utilization of EFT access cards for Transactions at retail locations. "Processing Services" - The authorization of Transactions; the operation, control, supervision and monitoring of Terminals deployed by a participant; and/or the provision of electronic connections from MAS to STARJMAC or another Network switch or card issuer to others. "Specification Form" - A form provided by MAS on which a User documents its instructions and selections of the options offered by MAS in its Processing Services. "STAR" - The mark and logo which designates the electronic funds transfer system owned and operated by MAS' affiliate Star Networks, Inc. "Terminal" - An electronic communications device through which a Transaction is initiated. "Transaction" - An EFT request made at a Terminal by a Cardholder to his or her card issuer to debit or credit funds from his or her account(s) which is approved by such card issuer. "User" - A financial institution or other entity which has entered into an agreement with MAS to use MAS Processing Services. Exhibit A - 2 EXHIBIT B MONEY ACCESS SERVICE(R) PROCESSING SCHEDULE OF FEES User agrees to pay MAS. DIAL-UP ATM DEVICE FEES: 1. A telecommunications charge per transaction or status message from the ATM as shown below. Status messages include, but are not limited to, messages regarding card reader failures, dispenser failures, receipt printer failures, communication failures and "I'm Alive" messages. Telecommunication fees are based upon the deployment of dial-up ATM devices and software configurations that would not cause an average Transaction duration to exceed connection time of 18 seconds. If average connection exceeds 18 seconds, User will incur an additional telecommunications assessment at the rate of $ * per second over the first 18 seconds. 1 -- 3,000,000 $ * 3,000,0001 -- 5,000,000 $ * Over 5,000,000 $ * 2. A telecommunications charge of $ * for each downline load of ATM screens, messages and instructions to a dial-up ATM not to exceed $ * per month. DEDICATED LINE DEVICE FEES: 1. A Terminal fee for each Non Dial-up ATM or Other On-Line Terminal of $ * per month. 2. An ATM Modem lease fee of $ * per leased modem, per month. 3. A monthly telecommunications fee of $ * . MISCELLANEOUS FEES: 1. A monthly fee of $ * per VPN for Internet access to MAS automated workstation (AWS). 2. A monthly customized text fee of $ * per participant regardless of the number of terminals. A $ * fee per terminal per requested change for Terminal screen or receipt message changes (if used). * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit B - 1 EXHIBIT C MONEY ACCESS SERVICE(R) PROCESSING SCHEDULE OF FEES CLIENT-REQUESTED SUPPORT SERVICES FEES FOR CLIENT-REQUESTED SERVICES. - - A fee of $ * per hour per person for MAS support for standard testing and certification of client requested changes. The fee applies, but is not limited, to message format changes, processor/software conversions, deconversions, transmissions and other client-requested changes or additions. - - An additional fee of $ * per hour per person for support of client-requested special development efforts requiring software changes, special reports and other client specific changes. - - A fee of $ * per hour per person for MAS support of client requested testing of disaster recovery capabilities. These services include, but are not limited, to processing, transmissions, creating reports and transmitting files. The fee will be doubled for weekend support. - - A fee of $ * for the support of a host software conversion initiated by the client or their processor. The fee is inclusive of all work required to support the conversion except for certification times that will be billed separately at the rates stated above. - - A setup fee of $ * to add a unique identifier (pseudo ID) to the switch to designate a group of terminals or participant IDs for settlement, billing or other purposes. - - A fee of $ * per month per pseudo ID for settlement and reporting support. - - A $ * per report or file for the retransmission of a report or file more than 10 days old. FEES FOR CLIENT-REQUESTED CANCELLATION OF SUPPORT ACTIVITIES. - - A cancellation fee of $ * per day times (10 days less the number of days cancellation notice) for a client requested cancellation of any project where work has already been done and the notice of cancellation is received less than 10 business days prior to the scheduled implementation date. This fee is in addition to any fees for work completed by MAS up to such cancellation date. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit C - 1
Notice (days) Fee - ------------- --- 0 * 1 * 2 * 3 * 4 * 5 * 6 * 7 * 8 * 9 *
FEES FOR CLIENT-REQUESTED DATABASE CHANGES. - - A fee of $ * for support of client-requested message format change. The fee is inclusive of all work required to support the change except the testing, certification and development time that will be billed separately as stated above. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit C - 2 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR SCHEDULE OF USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES This Addendum is dated January 29, 2003 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3110 HAYES, SUITE 300, HOUSTON TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001 between MAS and User ("MAS Processing Agreement"). BACKGROUND In connection with the MAS Processing Services set forth in the MAS Processing Agreement, MAS offers other services which facilitate the processing of Transactions ("Additional Processing Services"). At the time of execution of the MAS Processing Agreement or at any later time, User may select Additional Processing Services. User's most recent selection of Additional Processing Services is itemized herein. Any previous selections by User of Additional Processing Services are reflected on earlier addenda. The features of and charges for the Additional Processing Services that User selects on this addenda are set forth in separate Addenda to the MAS Processing Agreement which are attached hereto and incorporated herein by reference. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. 2. USER'S SELECTION PROCESSING SERVICES. From the list below, User selects those Additional Processing Services by which it places its initials. ________ Advanced ATM Functionality ________ Cardholder Service Charging Service ________ Card Production Service ________ Dial-Up ATM ________ EBT Processing Service ________ Electronic Banking Service 1 ________ Gateway Service ________ Gateway Sponsorship ________ Telephone Banking Card Service ________ MasterCard Debit Card/Visa Check Card ________ Signature Debit Fraud Risk Identification Service /s/ JMA On-Line Services --------- ________ Self Service Banking ________ Other Special Terms 3. CONFIRMATION OF MAS PROCESSING AGREEMENT. Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 4. AGREEMENT TO SEPARATE ADDENDA. The execution by MAS and User of this Addendum for Schedule of User's Selection of Additional Processing Services shall evidence the parties' agreement to the terms, conditions and pricing set forth in the separate Addenda for each of the Additional Processing Services that User selects hereinabove. 5. NEWLY SELECTED ADDITIONAL PROCESSING SERVICES. This Addendum reflects User's newly selected Additional Processing Services and shall supplement any earlier addenda executed for such purpose. IN WITNESS WHEREOF, the parties hereto have executed this Addendum by their duly authorized representatives on the date first written above. MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ------------------------------------------------- E. T. Haslam, CFO ------------------------------------------------- Name and Title (Printed) 2 CARDTRONICS, LP By: /s/ Jack M. Antonini ------------------------------------------------ Jack M. Antonini, President/Chief Executive Officer ------------------------------------------------ Name and Title (Printed) ________________________________________________ User Identification Number 3 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES ON-LINE SERVICES This Addendum is dated January 29, 2003 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3110 HAYES, SUITE 300, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between MAS and User ("MAS Processing Agreement"). BACKGROUND In addition to the MAS Processing Services set forth in the MAS Processing Agreement, MAS offers other services which facilitate the processing of Transactions ("Additional Processing Services"). User elects the Additional Processing Services described herein. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in Exhibit A to the MAS Processing Agreement. 2. ON-LINE SERVICES. You hereby request and we hereby agree to provide you with the features of our Online services you elect below by which you can quickly notify and escalate ATM incidents and achieve timely resolution of outstanding incidents and/or which you can add, change and browse terminal and participant data and send it to MAS via an online connection: [X] Tracker. Provides User with real time access to the Tracker ATM monitoring system. Tracker is an automated ATM incident reporting and tracking application that electronically generates and escalates tickets for incidents that occur at ATMs that MAS drives and monitors. [ ] ATI. Provides user with real time access to the terminal and participant data they are authorized to view and/or update. ATI is an online system created to facilitate the rapid exchange of ATM and participant data between clients and MAS. It will substantially reduce lead times required for terminal and participant setup and changes and it will provide users with a terminal installation tracking system to monitor the status of ATM adds and changes. 3. FEES For the Additional Processing Services described in this Addendum, you agree to pay MAS the applicable fees in accordance with the Schedule of Fees set forth on Exhibit OLS-1 hereto. 1 4. EFFECTIVE DATE AND TERM This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the remaining initial term or current renewal term of the MAS Processing Agreement and shall, thereafter, be renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the MAS Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the MAS Processing Agreement. 5. CONFIRMATION OF MAS PROCESSING AGREEMENT Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 6. AGREEMENT TO ADDENDUM User has agreed to the terms of this Addendum by at the time of its execution of the MAS Processing Agreement or at any later time by execution of an Addendum for Schedule of User's Selection of Additional Processing Services to supplement the MAS Processing Agreement. The signatures of MAS and User set forth in the MAS Processing Agreement and the above referenced Addendum shall serve as evidence of the parties agreement to this Addendum. 2 SCHEDULE OF FEES FOR ADDITIONAL PROCESSING SERVICES ON-LINE SERVICES User agrees to pay MAS on invoice: 1. TRACKER ONLINE A. A one time set up/implementation fee of $ * for each User ID requested. B. A monthly application fee will be based upon the lowest fee tier achieved in a given month for aggregate number of ATM's supported by MAS:
Monthly Application # of ATMs Fee --------- ------------------- 1 - 10 * 11 - 20 * 21 - 50 * 51 - 100 * 101 - 500 * 501 - 1,000 * 1,001 and above *
C. A dial in access fee of $ * per minute, or Telecommunications costs, as applicable, for access via direct connection. D. A monthly user fee based upon the aggregate number of User IDs assigned by MAS. Fees are charged at each level, regardless of the tier reached:
# of User IDs Fee per User - ------------- ------------ 1 - 10 * 11 - 25 * Over 25 *
* Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit OLS-1- 1 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR SPECIAL TERMS This Addendum is dated January 29, 2003 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, DE 19809 ("MAS", "we" or "us") and CARDTRONICS with offices located at 3110 HAYES ROAD, SUITE 300, HOUSTON, TEXAS 77082 ("User", "you" or "your") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between MAS and User ("MAS Processing Agreement"). BACKGROUND In connection with the MAS Processing Services set forth in the MAS Processing Agreement, MAS is extending to User the special terms described herein to facilitate User's election of MAS as the Processor of Transactions by its Cardholders and/or at its Terminals. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. 2. SPECIAL TERMS FEES. Pursuant to Section 5 (a) of the MAS Processing Agreement ("Section 5"), MAS is authorized to amend the Schedule of Fees attached thereto as Exhibit B to add charges for new services or Transaction types at any time. In accordance with Section 5, the Schedule of Fees hereby is amended as of March 1, 2002 and for the remainder of the initial term as follows: Telecommunications Fee for TCP/IP Terminals - $.03/transaction 3. CONFIDENTIALITY The MAS Processing Agreement, this Addendum and the subject matter addressed herein shall be kept strictly confidential by MAS and User and shall be disclosed only to those employees and agents required to have access to such information in the performance of each parties obligations hereunder, except to the extent that such information is required to be disclosed in any regulatory examination. 4. EFFECTIVE DATE AND TERM This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the current term of the MAS Processing Agreement and shall, thereafter, be 1 renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the MAS Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the MAS Processing Agreement. 5. CONFIRMATION OF MAS PROCESSING AGREEMENT Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. The signatures of MAS and User set forth below shall serve as evidence of the parties' agreement to this Addendum. MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ------------------------------------------------- E. T. Haslam ------------------------------------------------- Name and Title (Printed) CARDTRONICS, LP By: /s/ Jack M. Antonini ------------------------------------------------- Jack M. Antonini, President/Chief Executive Officer ------------------------------------------------- Name and Title (Printed) 2 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR SCHEDULE OF USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES This Addendum is dated September 6, 2001 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001 between MAS and User ("MAS Processing Agreement"). BACKGROUND In connection with the MAS Processing Services set forth in the MAS Processing Agreement, MAS offers other services which facilitate the processing of Transactions ("Additional Processing Services"). At the time of execution of the MAS Processing Agreement or at any later time, User may select Additional Processing Services. User's most recent selection of Additional Processing Services is itemized herein. Any previous selections by User of Additional Processing Services are reflected on earlier addenda. The features of and charges for the Additional Processing Services that User selects on this addenda are set forth in separate Addenda to the MAS Processing Agreement which are attached hereto and incorporated herein by reference. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. 2. USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES. From the list below, User selects those Additional Processing Services by which it places its INITIALS. ___________ Advanced ATM Functionality ___________ Cardholder Service Charging Service ___________ Card Production Service /s/ MC Dial-Up ATM ----------- /s/ MC EBT Processing Service ----------- ___________ Electronic Banking Service 1 /s/ MC Gateway Service ----------- /s/ MC Gateway Sponsorship ----------- ___________ Telephone Banking Card Service ___________ MasterCard Debit Card/Visa Check Card ___________ Signature Debit Fraud Risk Identification Service /s/ MC On-Line Services ----------- ___________ Self Service Banking /s/ MC Other Special Terms ----------- 3. CONFIRMATION OF MAS PROCESSING AGREEMENT. Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 4. AGREEMENT TO SEPARATE ADDENDA. The execution by MAS and User of this Addendum for Schedule of User's Selection of Additional Processing Services shall evidence the parties' agreement to the terms, conditions and pricing set forth in the separate Addenda for each of the Additional Processing Services that User selects hereinabove. 5. NEWLY SELECTED ADDITIONAL PROCESSING SERVICES. This Addendum reflects User's newly selected Additional Processing Services and shall supplement any earlier addenda executed for such purpose. IN WITNESS WHEREOF, the parties hereto have executed this Addendum by their duly authorized representatives on the date first written above. MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ------------------------------------------------- E. T. Haslam, CFO ------------------------------------------------- Name and Title (Printed) CARDTRONICS, LP By: /s/ Michael Clinard ------------------------------------------------- Michael Clinard, COO 2 Name and Title (Printed) _________________________________________________ User Identification Number 3 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES GATEWAY SERVICE This Addendum is dated September 6, 2001 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between MAS and User ("MAS Processing Agreement"). BACKGROUND In addition to the MAS Processing Services set forth in the MAS Processing Agreement, MAS offers other services which facilitate the processing of Transactions ("Additional Processing Services"). User elects the Additional Processing Services described herein. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. 2. GATEWAY SERVICE You hereby request and we hereby agree to provide you with our Gateway service which will afford extended EFT access to your Cardholders (if any) and the Cardholders of other Networks and/or card issuing organizations you designate by your initials below: /s/ MC Cirrus/ MasterCard _______Cards _____ ATMs - ------ /s/ MC PLUS/VISA _______Cards _____ ATMs - ------ /s/ MC American Express Card - ------ /s/ MC Discover Card - ------ ______ Magic Line ______ NYCE ______ Internet ______ Maestro U.S.A. Inc. ______ Interlink /s/ MC Pulse - ------ /s/ MC Star - ------ ______ Other (Specify) ___________________________ You must establish and maintain appropriate (i) status as an active member of or participant in and/or (ii) arrangements to acquire Transactions of each of the other Networks 1 and/or card issuing organizations you designate for our Gateway service. You represent and warrant to us that at all times during which this Addendum is operative you will be an active member of or participant in and/or hold an arrangement to acquire Transactions of each Network and/or card issuing organization you designate for our Gateway service. Through our Gateway service, we will receive (i) Transaction requests of your Cardholders made at Terminals of other Networks for your authorization and/or (ii) Transaction requests by Cardholders of other Networks and/or card issuing organizations made at your Terminals for authorization by such other Networks or card issuing organizations. 3. OTHER USER RESPONSIBILITIES You are responsible to comply in all respects with the rules, regulations and standards of the other Networks to which we provide our Gateway service for you. You will be solely responsible for all other Networks' membership and other fees, fines, assessments, inquiries, adjustments, records, reconcilements, accountings and every other category of fees presently existing and hereafter imposed in connection with the Transaction requests for which we provide our Gateway service to you. 4. FEES For the Additional Processing Services described in this Addendum, you agree to pay MAS the applicable fees in accordance with the schedule of fees set forth on Exhibit GS-1 hereto. 5. EFFECTIVE DATE AND TERM. This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the remaining initial term or current renewal term of the MAS Processing Agreement and shall, thereafter, be renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the MAS Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the MAS Processing Agreement. 6. AMENDMENT OF MAS PROCESSING AGREEMENT Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 7. AGREEMENT TO ADDENDUM User has agreed to the terms of this Addendum by at the time of its execution of the MAS Processing Agreement or at any later time by execution of an Addendum for Schedule of User's Selection of Additional Processing Services to supplement the MAS Processing Agreement. The signatures of MAS and User set forth in the MAS Processing Agreement and the above referenced Addendum shall serve as evidence of the parties' agreement to this Addendum. 2 EXHIBIT GS-1 SCHEDULE OF FEES FOR ADDITIONAL PROCESSING SERVICES GATEWAY SERVICE The fees payable by User for Gateway Service shall be as follows: PROCESSING FEES 1. A per transaction processing fee including withdrawals, transfers, balance inquiries, declines, reversals and terminal balancing as follows: 1 - 3,000,000 transactions $ * 3,000,001 - 5,000,000 transactions $ * Over 5,000,000 transactions $ * 2. Network sponsorship fees for national and regional networks are included in the transaction processing fee. 3. All applicable regional and national network transaction fees including but not limited to: indirect processing, licensing, gateway processing, charge back, adjustment or other fees relating to participation in a particular network, will be passed through as incurred by MAS. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit GS-1 - 1 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES ON-LINE SERVICES This Addendum is dated September 6, 2001 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between MAS and User ("MAS Processing Agreement"). BACKGROUND In addition to the MAS Processing Services set forth in the MAS Processing Agreement, MAS offers other services which facilitate the processing of Transactions ("Additional Processing Services"). User elects the Additional Processing Services described herein. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in Exhibit A to the MAS Processing Agreement. 2. ON-LINE SERVICES. You hereby request and we hereby agree to provide you with the features of our Online services you elect below by which you can quickly notify and escalate ATM incidents and achieve timely resolution of outstanding incidents and/or which you can add, change and browse terminal and participant data and send it to MAS via an online connection: [ ] Tracker. Provides User with real-time access to the Tracker ATM monitoring system. Tracker is an automated ATM incident reporting and tracking application that electronically generates and escalates tickets for incidents that occur at ATMs that MAS drives and monitors. [X] ATI. Provides user with real time access to the terminal and participant data they are authorized to view and/or update. ATI is an online system created to facilitate the rapid exchange of ATM and participant data between clients and MAS. It will substantially reduce lead times required for terminal and participant setup and changes and it will provide users with a terminal installation tracking system to monitor the status of ATM adds and changes. 3. FEES For the Additional Processing Services described in this Addendum, you agree to pay MAS the applicable fees in accordance with the Schedule of Fees set forth on Exhibit OLS-1 hereto. 1 4. EFFECTIVE DATE AND TERM This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the remaining initial term or current renewal term of the MAS Processing Agreement and shall, thereafter, be renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the MAS Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the MAS Processing Agreement. 5. CONFIRMATION OF MAS PROCESSING AGREEMENT Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 6. AGREEMENT TO ADDENDUM User has agreed to the terms of this Addendum by at the time of its execution of the MAS Processing Agreement or at any later time by execution of an Addendum for Schedule of User's Selection of Additional Processing Services to supplement the MAS Processing Agreement. The signatures of MAS and User set forth in the MAS Processing Agreement and the above referenced Addendum shall serve as evidence of the parties' agreement to this Addendum. 2 EXHIBIT OLS-1 SCHEDULE OF FEES FOR ADDITIONAL PROCESSING SERVICES ON-LINE SERVICES User agrees to pay MAS on invoice: A monthly fee of $ * per VPN for Internet access to MAS automated workstation (AWS). * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit OLS-1 - 1 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR SPECIAL TERMS This Addendum is dated September 6, 2001 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, DE 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User", "you" or "your") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement of even date between MAS and User ("MAS Processing Agreement"). BACKGROUND In connection with the MAS Processing Services set forth in the MAS Processing Agreement, MAS is extending to User the special terms described herein to facilitate User's election of MAS as the Processor of Transactions by its Cardholders and/or at its Terminals. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. 2. SPECIAL TERMS (a) MAS PROCESSING SERVICES. The following paragraph shall be added to Section 2 of the MAS Processing Agreement. We agree that during the term of this Agreement we shall be a non-exclusive provider to you of the services described in paragraphs (i), (ii) (iii) and (iv) of this Section. You agree that although you are not obligated to utilize us as the exclusive provider of such services for all of your dial-up ATM locations, we shall be the exclusive provider of the services described in paragraph (i), (ii), (iii) and (iv) of this Section for the duration of the term of this Agreement with respect to any ATM connected and supported by us pursuant to this Agreement. (b) FEES. Section 5(a) of the MAS Processing Agreement is hereby amended by adding the following two paragraphs: Notwithstanding any terms herein to the contrary, the fees and charges set forth in the Schedule of Fees, any Appendix, and/or Addendum (other than for new services) shall be fixed and shall not be increased during the initial term of the MAS Processing Agreement, except that each increase in the fees, charges, and/or assessments levied by any regional or national network and any other third party charges incurred in connection with our provision of MAS Processing Services to User shall be automatically invoiced to and payable by User without further notice by MAS. 1 If, at any time following the first six (6) months of this Agreement, User's Transaction volume falls below 500,000 Transactions per month, then all of User's Transactions processed by MAS during such month shall be billed at $.07 per Transaction, which is a combined total of the telecommunications charge on Exhibit B and the processing fee on Exhibit GS-1. (c) MALFUNCTIONS. Section 8 of the MAS Processing Agreement is hereby amended by adding the following two paragraphs: Availability of System. MAS agrees that MAS's central transaction processing computer utilized in Transaction switching (the "System") shall be available to process Transactions ninety-nine percent (99%) of each calendar month, excluding time during which the system is unavailable due to Scheduled Maintenance. The System shall not be considered unavailable if any connection or function outside of MAS's control causes the System to be unable to process Transactions. MAS shall not be deemed in breach of this agreement unless it fails to meet the foregoing availability requirement three (3) consecutive months. Scheduled Maintenance. "Scheduled Maintenance" shall refer to the time during which the System is not available pursuant to scheduled system maintenance to software or hardware of which you have been provided advanced notice. Scheduled Maintenance generally will not exceed six (6) hours per month. We will provide you with annual and quarterly lists reflecting the planned dates and duration of Scheduled Maintenance. MAS will provide at least ten (10) Business Days advanced notice of any planned change in the frequency or duration of previously scheduled maintenance. If previously scheduled maintenance needs to be rescheduled, MAS will notify you at least forty-eight (48) hours prior to the new date. You understand and acknowledge that, due to extraordinary circumstances, MAS may need to take emergency outages with little or no forewarning. MAS will make commercially reasonable efforts to provide advance notice to you. If MAS does not provide advance notice accordance with the foregoing, however, the outage shall not be considered Scheduled Maintenance hereunder. (d) CONVERSION ASSISTANCE PROGRAM (CAP). The following CAP shall be added to the MAS Processing Agreement: MAS will pay up to $ * per ATM for * ATMs converted to the MAS Processing Platform during the first * months of the Agreement subject to the following conditions: (i) Notwithstanding the provisions of Section 16 of the MAS Processing Agreement, the parties agree that the initial term of the Agreement shall commence when the first * ATM is converted to the MAS Processing Platform. (ii) For purposes of calculating the CAP, User shall submit to MAS written notice of the completion of the conversion including the date of such completion and the number of ATMs converted to the MAS Processing Platform during the first * of the Agreement. (iii) In the event any CoreData ATMs are deconverted from the MAS Processing Platform during the initial term of this Agreement, or the * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 2 Agreement is terminated prior to the end of the initial term for any reason other than MAS' uncured breach of a material obligation hereunder, User shall pay MAS an amount equal to a pro rata portion of the CAP determined * . (e) DECONVERSION FEES PAYABLE BY MAS. MAS shall pay to User deconversion fees up to $100 per ATM upon early termination of the Agreement subject to the following: (i) such early termination is the result of an uncured material breach by MAS or: (ii) such early termination is the result of the System availability falling below 50% in any given month (iii) in any event, the total deconversion fees payable by MAS shall not exceed the total of the last three (3) months of fees payable and received by MAS from User 3. CONFIDENTIALITY The MAS Processing Agreement, this Addendum and the subject matter addressed herein shall be kept strictly confidential by MAS and User and shall be disclosed only to those employees and agents required to have access to such information in the performance of each parties obligations hereunder, except to the extent that such information is required to be disclosed in any regulatory examination. 4. EFFECTIVE DATE AND TERM This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the current term of the MAS Processing Agreement and shall, thereafter, be renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the MAS Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the MAS Processing Agreement. 5. CONFIRMATION OF MAS PROCESSING AGREEMENT Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. The signatures of MAS and User set forth below shall serve as evidence of the parties' agreement to this Addendum. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 3 MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ------------------------------------------------- E. T. Haslam, CFO ------------------------------------------------- Name and Title (Printed) CARDTRONICS, LP By: /s/ Michael Clinard ------------------------------------------------- Michael Clinard, COO ------------------------------------------------- Name and Title (Printed) 4 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES GATEWAY SERVICE This Addendum is dated November 22, 2002 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("MAS", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between MAS and User ("MAS Processing Agreement"). BACKGROUND In addition to the MAS Processing Services set forth in the MAS Processing Agreement, MAS offers other services which facilitate the processing of Transactions ("Additional Processing Services"). User elects the Additional Processing Services described herein. NOW, THEREFORE, in consideration of the mutual premises herein contained, MAS and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. 2. GATEWAY SERVICE You hereby select and we hereby agree to provide you with Gateway Services to the Networks designated by your initials below: _______ Cirrus/ MasterCard ________Cards _____ ATMs _______ PLUS/VISA ________Cards _____ ATMs _______ American Express Card _______ Discover Card /s/ RHC NYCE - ------- _______ Maestro U.S.A. Inc. _______ Interlink _______ Other (Specify) ___________________________ _______ Other (Specify) ___________________________ At all times during the provision of Gateway Services with respect to each Network and consistent with User's category of participation in each Network, User will remain an active member, participant, card issuer or acquirer of Transactions in good standing with each Network that User accesses through the Gateway Service. 1 3. OTHER USER RESPONSIBILITIES You are solely responsible for complying in all respects with the rules, regulations, bylaws and/or standards of the other Network(s) to which we provide Gateway Service pursuant to this Addendum and with applicable laws and regulations affecting User's cards, Terminals and Transactions. Notwithstanding any other provision of this Agreement, MAS shall have no responsibility for losses caused, in whole or in part, by the error or delay of User in complying with applicable laws or regulations or Network rules, regulations, bylaws or standards in initiating or responding to chargebacks, representments, adjustments, and every other category of fees presently existing and hereafter imposed in connection with inquiries or other Network error resolution processes. 4. FEES For the Additional Processing Services described in this Addendum, you agree to pay MAS the applicable fees in accordance with the schedule of fees set forth on Exhibit GS-1 hereto. You will be solely responsible for all other Networks' membership and other fees, charges, assessments, fines, penalties and every other category of fees presently existing and hereafter imposed in connection with your participation in, or processing or settlement of Transactions in such Network through the Gateway Service. We will pay you on a net basis, fees we receive from Networks for your benefit, subject to our rights hereunder and under applicable law or regulation. 5. SETTLEMENT PROCEDURES. MAS will calculate User's settlement obligation for each Business Day at such time as MAS shall set in its reasonable discretion. Settlement shall be on a net basis across all Networks selected by User, unless otherwise designated by MAS, and will be based on the Transaction records which MAS has processed between the cut-off time on that Business Day and the cut-off date time on the immediately preceding Business Day, and may include any fees and other charges payable by or due to User for that period. MAS also may include in net settlement User's settlement obligations in the STAR Network. User hereby grants and authorizes MAS to exercise a right of set-off against funds payable to User pursuant to this Agreement or any other agreement between MAS and User and other funds, including any pledge accounts, that User maintains with MAS or any Network. MAS may apply all such amounts as payment on User's obligations in a priority or order of payment determined by MAS in its sole discretion. 6. EFFECTIVE DATE AND TERM This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the remaining initial term or current renewal term of the MAS Processing Agreement and shall, thereafter, be renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the MAS Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the MAS Processing Agreement. 2 7. AMENDMENT OF MAS PROCESSING AGREEMENT Except as otherwise amended hereby, the MAS Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 8. AGREEMENT TO ADDENDUM User has agreed to the terms of this Addendum by at the time of its execution of the MAS Processing Agreement or at any later time by execution of an Addendum for Schedule of User's Selection of Additional Processing Services to supplement the MAS Processing Agreement. The signatures of MAS and User set forth in the MAS Processing Agreement and the above referenced Addendum shall serve as evidence of the parties' agreement to this Addendum. 3 EXHIBIT GS-1 SCHEDULE OF FEES FOR ADDITIONAL PROCESSING SERVICES GATEWAY SERVICE The fees payable by User for Gateway Service shall be as follows: PROCESSING FEES 1. A per transaction processing fee including withdrawals, transfers, balance inquiries, declines, reversals and terminal balancing as follows: 1 -- 3,000,000 transactions $ * 3,000,001 - 5,000,000 transactions $ * Over 5,000,000 transactions $ * 2. Network sponsorship fees for national and regional networks are included in the transaction processing fee. 3. All applicable regional and national network transaction fees including but not limited to: indirect processing, licensing, gateway processing, charge back, adjustment or other fees relating to participation in a particular network, will be passed through as incurred by MAS. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Exhibit GS-1 - 1 MONEY ACCESS SERVICES(R) PROCESSING AGREEMENT ADDENDUM FOR GATEWAY/STATE SPONSORSHIP This Addendum ("Sponsorship Addendum") is dated as of November 22, 2002, by and among CARDTRONICS, LP ("User"), EFS National Bank, a national banking association ("Bank") and MONEY ACCESS SERVICE INC. ("MAS") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between User and MAS (together with all exhibits, addenda and schedules thereto, the ("Agreement"). BACKGROUND MAS provides processing services for User's ATMs and Gateway access to certain Networks pursuant to the Agreement. In order to enable User's ATMs to participate in such Networks and to enable User to establish ATMs in certain states, User seeks the services of a sponsor. Bank is willing to provide sponsorship services with respect to the Networks and states selected on Schedule A hereto (the "Selected Networks" and "Selected States," respectively) in accordance with the terms and conditions of this Addendum, and MAS is willing to accept Bank as a sponsor. NOW, THEREFORE, in consideration of the promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINED TERMS Except as otherwise expressly indicated herein, all capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. For purposes of this Addendum, the term "Network" shall include programs for electronic, debit card-based distribution of government benefits in addition to Networks as defined in Exhibit A to the MAS Processing Agreement. 2. USER REPRESENTATIONS AND WARRANTIES User represents and warrants to Bank and MAS that: (a) The Agreement and this Addendum are valid, binding and enforceable against User in accordance with their terms. (b) User is duly organized, validly existing, and in good standing under the laws of the state of its organization and authorized to do business in each state in which the nature of User's activities make such authorization necessary or required. (c) User has the full power and authority to execute and deliver the Agreement and this Addendum and perform all of its obligations hereunder. 2 (d) The execution, delivery and performance of the Agreement and this Addendum by User are not in conflict with User's articles of incorporation and by-laws or other chartering documents, or any agreement, contract, lease or obligation to which User is a party or by which it is bound. (e) Neither User, nor any principal of User, nor any company owned or controlled by, or under common control with, User or any principal of User is or has been the subject of any of the following: (i) Criminal conviction (except minor traffic offenses and other petty offenses); Bankruptcy filing or petition; (ii) Bankruptcy filing or petition; (iii) Federal or state tax lien; (iv) Administrative or enforcement proceeding commenced by any state or federal regulatory agency, including any banking or securities agency, or entity operating an EBT Network; (v) Restraining order, decree, injunction, or judgment in any proceeding or lawsuit alleging fraud or deceptive practice on the part of User or any principal thereof; or (vi) Any action of any Network to prohibit or terminate User's direct or indirect activities with respect to such Network. For purposes of this Addendum the word "principal" shall include any person directly or indirectly owning ten percent (10%) or more of User, any officer or director of User, any person actively participating in the control of User's business, and any spouse of any of the foregoing. (f) There is not now pending or threatened against User, any litigation or proceeding, judicial, tax or administrative, the outcome of which might adversely affect the continuing operations of the User. Attached as part of Schedule B is a list and brief description of all pending lawsuits to which User is a party. (g) User's financial statements, subject to any limitations stated therein, which have been or which hereafter shall be furnished to Bank or MAS to induce them to enter into this Addendum do or will, respectively, fairly represent the financial condition of User, and all other information, reports and other papers furnished to Bank or MAS will be, at the time the same are furnished, accurate and complete in all material respects. 3. BANK REPRESENTATIONS AND WARRANTIES Bank represents and warrants to User that, as of the date of this Addendum, Bank is a member or participant in good standing with respect to each Selected Network, with full right, power and authority to act as sponsor for otherwise eligible ATM owners in such Selected Networks. 3 4. COVENANTS OF USER (a) User will execute and deliver any application, participation or membership agreement or other document necessary to enable Bank to act as sponsor for User in each Selected Network and Selected State. (b) User will comply with all federal, state and local laws, rules, regulations and ordinances ("Applicable Laws"), including those specifically identified in Schedule A with respect to any Selected State, and with all bylaws, regulations, rules and operating guidelines of the Selected Network ("Network Rules") related to User's ownership, control or operation of the ATMs serviced by MAS pursuant to the Agreement (the "Covered ATMs") and shall obtain all consents, approvals, authorizations or orders of any governmental agency or body required for the execution, delivery and performance of the Agreement and this Addendum. (c) User will provide prompt written notice to Bank of: (i) any material adverse change in the assets, operations or condition, financial or otherwise, of User; (ii) the threat or filing of any litigation against User; (iii) any investigation of User or any principal of User by any federal, state or local governmental agency; (iv) any disciplinary action taken by any Network against User or any principal of User; or (v) the occurrence of any other item set forth at Subsection 2(e). (d) As soon as possible and in any event within sixty (60) days after the end of each quarter, commencing with the calendar quarter in which the date of this Addendum falls, User will provide Bank with a copy of the User's balance sheet as of the end of such period and related profit, loss and surplus statements. (e) User agrees that this Addendum applies only to the Covered ATMs and that Bank shall be the exclusive sponsor of such Covered ATMs for the purposes of any Network to which MAS provides Gateway services, other than Networks to which Bank does not have the right or authority to provide sponsorship services. (f) Except as required to comply with Applicable Laws related to sponsorship of ATMs in any Selected State, User shall not in any way indicate that Bank or MAS endorse User's activities, products or services. The parties hereto are and shall remain independent contractors, and neither they, nor their respective individual employees shall have or hold themselves out as having, any power to bind the other to any third party. Nothing contained in this Addendum shall be construed to create or constitute a partnership, joint venture, employer-employee or agency relationship among the parties. 4 (g) If Bank is to act as sponsor with respect to Covered ATMs in any Selected State, User shall (i) provide Bank advance written notice of the proposed locations of each Covered ATM in any such Selected State, including the identity of operators of the premises where such Covered ATMs are located, and of any other information related to such Covered ATM or location as Bank shall reasonably require; (ii) provide Bank advance written notice of any Applicable Laws related to the establishment and operation of ATMs at each such location, other than federal laws and regulations; (iii) assist Bank in preparing any and all filings or applications required by Applicable Law with respect to the establishment and operation of ATMs in each Selected State; (iv) notify Bank of any communication, whether oral or written (including electronic communication), from any representative of federal, state, or local government related to any Covered ATM; and (v) engage in no act or omission related to any Covered ATM which would cause Bank to be in violation of any Applicable Law, 5. SECURITY DEPOSIT Within three (3) business days of notice from MAS, User shall establish and maintain with Bank a segregated, restricted interest-bearing deposit account as to which User shall not have withdrawal privileges, dominion or control (the "Cash Collateral Account"), and deposit into such Cash Collateral Account collected funds in such amount requested by Bank in its sole discretion, but not in excess of one (1) days settlement or $10,000, whichever is greater. User hereby pledges and grants to Bank and MAS a security interest in the Cash Collateral Account and all money in the Cash Collateral Account and proceeds thereof as security for prompt payment in full of all User's obligations under the Agreement and this Addendum, including its obligations to any Network for fees, fines or assessments, and authorizes Bank and MAS to exercise a right of set-off against funds in the Cash Collateral Account or any other funds or payment due and owing to User under the Agreement, including interchange payments. User agrees to take any steps necessary to ensure the attachment, perfection or protection of Bank's and MAS's security interest in the Cash Collateral Account. 6. COVENANTS OF BANK (a) Bank shall act as User's sponsor with respect to the participation of the Covered ATMs in each Selected Network in accordance with the Network Rules of each such Selected Network and with respect to the laws and regulations set forth at Schedule A for each Selected State. 5 (b) Bank shall maintain its status as member or participant in good standing with each Selected Network and shall comply with all Network Rules applicable to Bank's sponsorship of User's participation in each such Selected Network; provided, however, that Bank may terminate its sponsorship with User in any Selected Network (i) immediately upon written notice to User if Bank's authority to participate in such Selected Network or act as sponsor of User in such Selected Network is terminated by such Selected Network or (ii) upon thirty (30) days prior written notice, if Bank determines to terminate its membership or participation in such Selected Network. (c) Bank may, in its sole discretion, determine not to sponsor any Covered ATM. 7. COVENANTS OF MAS MAS hereby agrees to accept Bank as User's sponsor with respect to the Selected Networks. 8. FEES In addition to all other fees set forth in the Agreement, User shall compensate Bank for its services hereunder in accordance with the provisions of Schedule C attached hereto and the fee payment provisions of the Agreement. Bank shall pay its own costs of membership or participation in each Selected Network, but User shall pay any third party fee or charge incurred as a result of Bank's sponsorship of User. 9. TERM; TERMINATION (a) This Addendum shall be effective as of the date first written above and shall continue in effect during the term, including the initial term and any renewal term, of the Agreement, unless earlier terminated by any party pursuant to this Section. This Addendum will terminate without further action of any party upon the expiration or termination of the Agreement. (b) Any party may terminate this Addendum as of the end of the initial term or any renewal term of the Agreement by providing sixty (60) days prior written notice to the other parties. (c) Bank or MAS may terminate this Addendum or Bank's sponsorship of User in any Selected Network or with respect to the specified Applicable Laws of any Selected State upon occurrence or discovery of one or more of the following events: (i) Immediately upon notice to User of the occurrence at any time of any of the conditions set forth at Subsections 2(e)(i), (ii), (iv), (v) or (vi) or 4(c)(i) or (iv). (ii) Thirty (30) days after written notice by Bank or MAS to User, upon the occurrence of any of the conditions set forth Subsections 2(e)(iii) or 4(c)(ii) or (iii). 6 (iii) In the event any financial statement, representation, warranty, statement or certificate furnished is materially false or misleading. (iv) Immediately upon the occurrence of any other circumstance with respect to this Addendum that may reasonably be expected to have an adverse effect on Bank. (d) In addition to the foregoing, any party may terminate this Addendum upon provision of thirty (30) days prior written notice to the other parties of any material breach of this Addendum by another party, provided that the defaulting party has not cured such breach within such thirty (30) day period. (e) Upon any termination of this Addendum by Bank or MAS pursuant to Subsections 9(c) or (d) above, User shall pay to Bank an early termination fee equal to the number of months remaining in the then-current term multiplied by the greater of (i) the highest average monthly amount of fees and charges incurred by User hereunder in any consecutive three (3) month period or (ii) $5,000 (the "Early Termination Fee"). The parties agree that in the event of termination pursuant to Subsections 9(c) or (d) above, it would be extremely difficult and impracticable to fix the actual damages to MAS resulting from such termination, and that, therefore, User shall pay to Bank the Early Termination Fee set forth above as liquidated damages and not as a penalty. The parties further agree that the Early Termination Fee represents a reasonable endeavor by the parties to estimate fair compensation for the foreseeable losses that might result from such termination. 10. INDEMNIFICATION User shall indemnify and hold harmless Bank and MAS, their affiliates (including parents and subsidiaries), and their respective officers, directors, employees, successors and assigns, from and against any and all direct or contingent losses, costs, claims, demands, and causes of action (including, without limitation, the cost of investigating the claim, the cost of litigation, and reasonable attorneys' fees, whether or not legal proceedings are instituted) paid or incurred by or on behalf of Bank or MAS as a result of User's violation of any of the terms of this Addendum, any Schedule hereto, Network Rules, or Applicable Laws, or otherwise arising from or related to Bank's sponsorship of User in any Selected Network. 11. SURVIVAL All representations and warranties, the rights and obligations of the parties pursuant to Sections 5, 9(e) and 10 and User's obligations to pay accrued fees shall survive the expiration or termination of this Agreement. 12. NOTICES For purposes of the notices provision of the Agreement, notices to Bank shall be sent to: EFS National Bank, 2525 Horizon Lake Drive, Suite 120, Memphis, Tennessee 38133, Attention: Senior Vice President. 7 13. AMENDMENT OF AGREEMENT Except as amended, modified and supplemented hereby, the Agreement is hereby ratified and shall continue in full force and effect in accordance with its terms. Bank shall be the beneficiary, to the same extent as MAS, of each representation, warranty, covenant and condition of User under the Agreement and of all disclaimers and limitations of liability of MAS thereunder, but shall in no way be liable for any act or omission of MAS. IN WITNESS WHEREOF, this Addendum is executed by the parties as of the date and year below. EFS National Bank By: /s/ E. T. Haslam ----------------------------------------------- Name and Title: E. T. Haslam, CFO CARDTRONICS, LP By: /s/ Ralph H. Clinard ----------------------------------------------- Name and Title: Ralph H. Clinard, President and CEO MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ----------------------------------------------- Name and Title: E. T. Haslam, CFO 8 SCHEDULE A SELECTED NETWORKS User, Bank and MAS hereby agree that Bank shall act as sponsor for User, pursuant to the terms and conditions of the Addendum, with respect to the following Networks and in the states identified below: [User and Bank to initial] _____ _____ Cirrus/ MasterCard _____ _____ PLUS/ VISA _____ _____ American Express Card _____ _____ Discover Card _____ _____ MagicLine _____ _____ Infinet _____ _____ Honor _____ _____ Maestro U.S.A. Inc. _____ _____ Interlink _____ _____ MAC _____ _____ QUEST EBT _____ _____ AFFN _____ _____ STAR /s/ RHC ____ Other (Specify) NYCE - ------- [User and Bank to initial] _____ _____ West Virginia (Section 3lA-8-l26, West Virginia Code Ann. (Supp. 1998), and Title 106, Series 7 of the West Virginia Division of Banking's Legislative Rules.) Pursuant to West Virginia law, User will maintain a sign on each Covered ATM, in a size and format acceptable to Bank showing the sponsorship of Bank with respect to such ATM. _____ _____ Connecticut (Pursuant to Connecticut Division of Banking's Legislative Rules) Pursuant to Connecticut law, User will maintain a sign on each Covered ATM, in a size and format acceptable to Bank showing the sponsorship of Bank with respect to such ATM. Schedule A - 1 SCHEDULE B LITIGATION LISTINGS None. Schedule B - 1 SCHEDULE C FEES 1. Start Up Fee $ * 2. All applicable network transaction fees including but not limited to: ATM fees, fines and assessments, POS fees, adjustment fees and interchange fees/payments per the interchange table will be passed through as incurred by MAS. 3. Sponsorship Transaction fees - Waived * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Schedule C - 1 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR GATEWAY/STATE SPONSORSHIP This Addendum ("Sponsorship Addendum") is dated as of September 6, 2001, by and among CARDTRONICS, LP ("User"), EFS National Bank, a national banking association ("Bank") and MONEY ACCESS SERVICE INC. ("MAS") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between User and MAS (together with all exhibits, addenda and schedules thereto, the ("Agreement"). BACKGROUND MAS provides processing services for User's ATMs and Gateway access to certain Networks pursuant to the Agreement. In order to enable User's ATMs to participate in such Networks and to enable User to establish ATMs in certain states, User seeks the services of a sponsor. Bank is willing to provide sponsorship services with respect to the Networks and states selected on Schedule A hereto (the "Selected Networks" and "Selected States," respectively) in accordance with the terms and conditions of this Addendum, and MAS is willing to accept Bank as a sponsor. NOW, THEREFORE, in consideration of the promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINED TERMS Except as otherwise expressly indicated herein, all capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the MAS Processing Agreement or Exhibit A thereto. For purposes of this Addendum, the term "Network" shall include programs for electronic, debit card-based distribution of government benefits in addition to Networks as defined in Exhibit A to the MAS Processing Agreement. 2. USER REPRESENTATIONS AND WARRANTIES User represents and warrants to Bank and MAS that: (a) The Agreement and this Addendum are valid, binding and enforceable against User in accordance with their terms. (b) User is duly organized, validly existing, and in good standing under the laws of the state of its organization and authorized to do business in each state in which the nature of User's activities make such authorization necessary or required. (c) User has the full power and authority to execute and deliver the Agreement and this Addendum and perform all of its obligations hereunder. 1 (d) The execution, delivery and performance of the Agreement and this Addendum by User are not in conflict with User's articles of incorporation and by-laws or other chartering documents, or any agreement, contract, lease or obligation to which User is a party or by which it is bound. (e) Neither User, nor any principal of User, nor any company owned or controlled by, or under common control with, User or any principal of User is or has been the subject of any of the following: (i) Criminal conviction (except minor traffic offenses and other petty offenses); (ii) Bankruptcy filing or petition; (iii) Federal or state tax lien; (iii) Federal or state tax lien; (iv) Administrative or enforcement proceeding commenced by any state or federal regulatory agency, including any banking or securities agency, or entity operating an EBT Network; (v) Restraining order, decree, injunction, or judgment in any proceeding or lawsuit alleging fraud or deceptive practice on the part of User or any principal thereof; or (vi) Any action of any Network to prohibit or terminate User's direct or indirect activities with respect to such Network. For purposes of this Addendum the word "principal" shall include any person directly or indirectly owning ten percent (10%) or more of User, any officer or director of User, any person actively participating in the control of User's business, and any spouse of any of the foregoing. (f) There is not now pending or threatened against User, any litigation or proceeding, judicial, tax or administrative, the outcome of which might adversely affect the continuing operations of the User. Attached as part of Schedule B is a list and brief description of all pending lawsuits to which User is a party. (g) User's financial statements, subject to any limitations stated therein, which have been or which hereafter shall be furnished to Bank or MAS to induce them to enter into this Addendum do or will, respectively, fairly represent the financial condition of User, and all other information, reports and other papers furnished to Bank or MAS will be, at the time the same are furnished, accurate and complete in all material respects. 3. BANK REPRESENTATIONS AND WARRANTIES Bank represents and warrants to User that, as of the date of this Addendum, Bank is a member or participant in good standing with respect to each Selected Network, with full right, power and authority to act as sponsor for otherwise eligible ATM owners in such Selected Networks. 2 4. COVENANTS OF USER (a) User will execute and deliver any application, participation or membership agreement or other document necessary to enable Bank to act as sponsor for User in each Selected Network and Selected State. (b) User will comply with all federal, state and local laws, rules, regulations and ordinances ("Applicable Laws"), including those specifically identified in Schedule A with respect to any Selected State, and with all by-laws, regulations, rules and operating guidelines of the Selected Network ("Network Rules") related to User's ownership, control or operation of the ATMs serviced by MAS pursuant to the Agreement (the "Covered ATMs") and shall obtain all consents, approvals, authorizations or orders of any governmental agency or body required for the execution, delivery and performance of the Agreement and this Addendum. (c) User will provide prompt written notice to Bank of: (i) any material adverse change in the assets, operations or condition, financial or otherwise, of User; (ii) the threat or filing of any litigation against User; (iii) any investigation of User or any principal of User by any federal, state or local governmental agency; (iv) any disciplinary action taken by any Network against User or any principal of User; or (v) the occurrence of any other item set forth at Subsection 2(e). (d) As soon as possible and in any event within sixty (60) days after the end of each quarter, commencing with the calendar quarter in which the date of this Addendum falls, User will provide Bank with a copy of the User's balance-sheet as of the end of such period and related profit, loss and surplus statements. (e) User agrees that this Addendum applies only to the Covered ATMs and that Bank shall be the exclusive sponsor of such Covered ATMs for the purposes of any Network to which MAS provides Gateway services, other than Networks to which Bank does not have the right or authority to provide sponsorship services. (f) Except as required to comply with Applicable Laws related to sponsorship of ATMs in any Selected State, User shall not in any way indicate that Bank or MAS endorse User's activities, products or services. The parties hereto are and shall remain independent contractors, and neither they, nor their respective individual employees shall have or hold themselves out as having, any power to bind the other to any third party. Nothing contained in this Addendum shall be construed to create or constitute a partnership, joint venture, employer-employee or agency relationship among the parties. 3 (g) If Bank is to act as sponsor with respect to Covered ATMs in any Selected State, User shall (i) provide Bank advance written notice of the proposed locations of each Covered ATM in any such Selected State, including the identity of operators of the premises where such Covered ATMs are located, and of any other information related to such Covered ATM or location as Bank shall reasonably require; (ii) provide Bank advance written notice of any Applicable Laws related to the establishment and operation of ATMs at each such location, other than federal laws and regulations; (iii) assist Bank in preparing any and all filings or applications required by Applicable Law with respect to the establishment and operation of ATMs in each Selected State; (iv) immediately notify Bank of any communication, whether oral or written (including electronic communication), from any representative of federal, state, or local government related to any Covered ATM; and (v) engage in no act or omission related to any Covered ATM which would cause Bank to be in violation of any Applicable Law. 5. SECURITY DEPOSIT Within three (3) business days of notice from MAS, User shall establish and maintain with Bank a segregated, restricted interest-bearing deposit account as to which User shall not have withdrawal privileges, dominion or control (the "Cash Collateral Account"), and deposit into such Cash Collateral Account collected funds in such amount requested by Bank in its sole discretion, but not in excess of one (1) days settlement or $10,000, whichever is greater. User hereby pledges and grants to Bank and MAS a security interest in the Cash Collateral Account and all money in the Cash Collateral Account and proceeds thereof as security for prompt payment in full of all User's obligations under the Agreement and this Addendum, including its obligations to any Network for fees, fines or assessments, and authorizes Bank and MAS to exercise a right of set-off against funds in the Cash Collateral Account or any other funds or payment due and owing to User under the Agreement, including interchange payments. User agrees to take any steps necessary to ensure the attachment, perfection or protection of Bank's and MAS's security interest in the Cash Collateral Account. 6. COVENANTS OF BANK (a) Bank shall act as User's sponsor with respect to the participation of the Covered ATMs in each Selected Network in accordance with the Network Rules of each such Selected Network and with respect to the laws and regulations set forth at Schedule A for each Selected State. 4 (b) Bank shall maintain its status as member or participant in good standing with each Selected Network and shall comply with all Network Rules applicable to Bank's sponsorship of User's participation in each such Selected Network; provided, however, that Bank may terminate its sponsorship with User in any Selected Network (i) immediately upon written notice to User if Bank's authority to participate in such Selected Network or act as sponsor of User in such Selected Network is terminated by such Selected Network or (ii) upon thirty (30) days prior written notice, if Bank determines to terminate its membership or participation in such Selected Network. (c) Bank may, in its sole discretion, determine not to sponsor any Covered ATM. 7. COVENANTS OF MAS MAS hereby agrees to accept Bank as User's sponsor with respect to the Selected Networks. 8. FEES In addition to all other fees set forth in the Agreement, User shall compensate Bank for its services hereunder in accordance with the provisions of Schedule C attached hereto and the fee payment provisions of the Agreement. Bank shall pay its own costs of membership or participation in each Selected Network, but User shall pay any third party fee or charge incurred as a result of Bank's sponsorship of User. 9. TERM: TERMINATION (a) This Addendum shall be effective as of the date first written above and shall continue in effect during the term, including the initial term and any renewal term, of the Agreement, unless earlier terminated by any party pursuant to this Section. This Addendum will terminate without further action of any party upon the expiration or termination of the Agreement. (b) Any party may terminate this Addendum as of the end of the initial term or any renewal term of the Agreement by providing sixty (60) days prior written notice to the other parties. (c) Bank or MAS may terminate this Addendum or Bank's sponsorship of User in any Selected Network or with respect to the specified Applicable Laws of any Selected State upon occurrence or discovery of one or more of the following events: (i) Immediately upon notice to User of the occurrence at any time of any of the conditions set forth at Subsections 2(e)(i), (ii), (iv), (v) or (vi) or 4(c)(i) or (iv). (ii) Thirty (30) days after written notice by Bank or MAS to User, upon the occurrence of any of the conditions set forth Subsections 2(e)(iii) or 4(c)(ii) or (iii). 5 (iii) In the event any financial statement, representation, warranty, statement or certificate furnished is materially false or misleading. (iv) Immediately upon the occurrence of any other circumstance with respect to this Addendum that may reasonably be expected to have an adverse effect on Bank. (d) In addition to the foregoing, any party may terminate this Addendum upon provision of thirty (30) days prior written notice to the other parties of any material breach of this Addendum by another party, provided that the defaulting party has not cured such breach within such thirty (30) day period. (e) Upon any termination of this Addendum by Bank or MAS pursuant to Subsections 9(c) or (d) above, User shall pay to Bank an early termination fee equal to the number of months remaining in the then-current term multiplied by the greater of (i) the highest average monthly amount of fees and charges incurred by User hereunder in any consecutive three (3) month period or (ii) $5,000 (the "Early Termination Fee"). The parties agree that in the event of termination pursuant to Subsections 9(c) or (d) above, it would be extremely difficult and impracticable to fix the actual damages to MAS resulting from such termination, and that, therefore, User shall pay to Bank the Early Termination Fee set forth above as liquidated damages and not as a penalty. The parties further agree that the Early Termination Fee represents a reasonable endeavor by the parties to estimate fair compensation for the foreseeable losses that might result from such termination. 10. INDEMNIFICATION User shall indemnify and hold harmless Bank and MAS, their affiliates (including parents and subsidiaries), and their respective officers, directors, employees, successors and assigns, from and against any and all direct or contingent losses, costs, claims, demands, and causes of action (including, without limitation, the cost of investigating the claim, the cost of litigation, and reasonable attorneys' fees, whether or not legal proceedings are instituted) paid or incurred by or on behalf of Bank or MAS as a result of User's violation of any of the terms of this Addendum, any Schedule hereto, Network Rules, or Applicable Laws, or otherwise arising from or related to Bank's sponsorship of User in any Selected Network. 11. SURVIVAL All representations and warranties, the rights and obligations of the parties pursuant to Sections 5, 9(e) and 10 and User's obligations to pay accrued fees shall survive the expiration or termination of this Agreement. 12. NOTICES For purposes of the notices provision of the Agreement, notices to Bank shall be sent to: EFS National Bank, 2525 Horizon Lake Drive, Suite 120, Memphis, Tennessee 38133, Attention: Senior Vice President. 6 13. AMENDMENT OF AGREEMENT Except as amended, modified and supplemented hereby, the Agreement is hereby ratified and shall continue in full force and effect in accordance with its terms, Bank shall be the beneficiary, to the same extent as MAS, of each representation, warranty, covenant and condition of User under the Agreement and of all disclaimers and limitations of liability of MAS thereunder, but shall in no way be liable for any act or omission of MAS. IN WITNESS WHEREOF, this Addendum is executed by the parties as of the date and year below. EFS National Bank By: /s/ E. T. Haslam ------------------------------------------------- Name and Title: E. T. Haslam, CFO CARDTRONICS, LP By: /s/ Michael Clinard ------------------------------------------------- Name and Title: Michael Clinard, COO MONEY ACCESS SERVICE, INC. By: /s/ E. T. Haslam ------------------------------------------------- Name and Title: E. T. Haslam, CFO 7 SCHEDULE A SELECTED NETWORKS User, Bank and MAS hereby agree that Bank shall act as sponsor for User, pursuant to the terms and conditions of the Addendum, with respect to the following Networks and in the states identified below: [User and Bank to initial] /s/ MC _____ Cirrus/ MasterCard - ------ /s/ MC _____ PLUS/ VISA - ------ /s/ MC _____ American Express Card - ------ ______ _____ Discover Card ______ _____ MagicLine ______ _____ Infinet ______ _____ Honor ______ _____ Maestro U.S.A. Inc. ______ _____ Interlink ______ _____ MAC /s/ MC _____ QUEST EBT - ------ ______ _____ AFFN /s/ MC _____ STAR - ------ ______ _____ Other (Specify) NYCE [User and Bank to initial] _____ _____ West Virginia (Section 31A-8-l26, West Virginia Code Ann. (Supp. 1998), and Title 106, Series 7 of the West Virginia Division of Banking's Legislative Rules.) Pursuant to West Virginia law, User will maintain a sign on each Covered ATM, in a size and format acceptable to Bank showing the sponsorship of Bank with respect to such ATM. _____ _____ Connecticut (Pursuant to Connecticut Division of Banking's Legislative Rules) Pursuant to Connecticut law, User will maintain a sign on each Covered ATM, in a size and format acceptable to Bank showing the sponsorship of Bank with respect to such ATM. Schedule A - 1 SCHEDULE B LITIGATION LISTINGS None. Schedule B - 1 SCHEDULE C FEES 1. Start Up Fee $ * 2. All applicable network transaction fees including but not limited to: ATM fees, fines and assessments, POS fees, adjustment fees and interchange fees/payments per the interchange table will be passed through as incurred by MAS. 3. Sponsorship Transaction fees - Waived * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Schedule C - 1 MONEY ACCESS SERVICE(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES EBT PROCESSING SERVICES (RADs) This ADDENDUM FOR EBT PROCESSING SERVICES ("EBT ADDENDUM") is entered by and between MONEY ACCESS SERVICE INC. ("MAS"), a Delaware corporation, and CARDTRONICS, LP, a Delaware limited partnership ("Institution"), as of September 6, 200l. 1. GENERAL. MAS and Institution have entered into an agreement for processing services dated as of _____________, ______ (the "Agreement"). This EBI ADDENDUM is intended by the parties to amend and supplement the Agreement as set forth below, and shall for all purposes be considered part of such Agreement. Except as modified by this EBT ADDENDUM, the Agreement shall continue in full force and effect in accordance with its terms and shall be applicable to the services provided pursuant to this EBI ADDENDUM. 2. DEFINED TERMS. All capitalized terms used in this EBT ADDENDUM and not otherwise defined herein shall have the meanings set forth in the Agreement, including Exhibit A thereto. 3. CHOICE OF EBT PROGRAMS. Institution will participate in and MAS will provide access to the programs for electronic, debit card-based distribution of government benefits designated by mutual agreement in Schedule EBT- I ("EBI Programs"), as such Schedule may be amended from time to time by mutual agreement of the parties. Institution agrees that MAS shall be the exclusive provider to Institution of gateway access for electronic benefits transfer programs to the extent that MAS provides access to such programs. Each EBT Program shall be treated as a "Network" for purposes of the Agreement. 4. INSTITUTION REPRESENTATIONS AND WARRANTIES. Institution hereby represents and warrants that it is qualified to participate in each EBT Program it has selected in accordance with all applicable laws, regulations, rules, and administrative guidelines related to such EBT Program, including without limitation any applicable laws, regulations, rules, and administrative guidelines pertaining to delivery of services to EBT recipients and recipient confidentiality, the QUEST(R) Operating Rules for EBT Programs participating in QUEST, the federal Civil Rights Act of 1964, Rehabilitation Act of 1973, Americans with Disabilities Act of 1990, Clean Air Act, Clean Water Act, Energy Policy and Conservation Act, Immigration Reform and Control Act of 1986, and, to the extent food stamp transactions are processed hereunder, regulations issued by the Department of Agriculture pertaining to the Food Stamp Program. Institution represents and warrants that it has obtained any and all consents, approvals, certifications or other evidence of authority, and has properly executed and delivered any and all applications, agreements or other documents necessary to participate, and to allow MAS to process and settle transactions on its behalf, in each such EBT Program. Institution shall cooperate with MAS in obtaining any further consents, approvals, certifications or other 1 evidence of authority, and executing and delivering any further applications, agreements or other documents that may be required from time to time in connection with Institution's participation in each EBT Program and MAS's provision of services hereunder. If a financial institution or other sponsor is required for Institution to participate in an EBT Program, Institution shall provide to MAS a duly executed certification of each such sponsor in a form provided by MAS. 5. INSTITUTION OBLIGATIONS. a. At all times during the term, including any renewal thereof, of this EBT ADDENDUM, Institution shall remain a participant in good standing in each EBT Program selected hereunder. b. The fees set forth in the Agreement, including in the schedules, exhibits and addenda thereto shall apply to electronic benefit transfer transactions to the same extent as on-line debit transactions, provided however, that MAS may modify or add fees and charges for the support of services for an EBT Program that imposes additional costs on MAS. c. Institution will comply with all applicable laws, regulations, rules, or administrative guidelines related to its participation in each EBT Program and acceptance of EBT cards, including any Network rules or restrictions implemented by Institution's sponsor into any EBT Program. Institution shall not resubmit any EBT Transaction except as specifically permitted by the rules applicable to such EBT Program. Institution will not take any action that would cause MAS to be in violation of any law, regulation, rule or administrative guideline applicable to an EBT Program, including any Network rules. d. With respect to each EBT Program in which Institution participates, Institution shall comply with any obligations or duties imposed on participants in such FBI Program under any agreement ("Master Agreement") between MAS and the administrator of the FBI Program ("EBT Provider") pursuant to which MAS is authorized to process Transactions for the EBT Program, and the EBT Provider shall have the right to directly enforce the terms and conditions of the Master Agreement against Institution in the event that Institution breaches its obligations hereunder. MAS will provide Institution with a copy of any Master Agreement which imposes obligations or duties on participants or with other reasonable notice of such obligations and duties. Institution shall not take any action that would cause MAS to be in violation of any Master Agreement, including any performance standards thereunder. e. Institution agrees that MAS may release information regarding Institution's use of the EBT Program upon request by any Federal or State agency, and that Institution shall not have a claim or cause of action for such release of information. f. Institution shall maintain records of EBT Transactions as required by applicable laws, regulations, rules, or administrative guidelines related to its participation in each EBT Program, including any Network rules. g. Institution shall not use or disclose any information concerning a Recipient for any purpose not directly connected with the performance of Institution's duties under an EBT Program. 2 h. Institution shall not discriminate in the provision or denial of any EBT Transaction on the basis of a Recipient's disability or handicap (if any), age, race, color, religion, sex, sexual preference, political belief, national origin creed, marital status or veteran's status. i. Institution shall provide to MAS and any EBT Provider any information reasonably required by MAS or the EBT Provider to assist MAS or the EBI Provider in ensuring the integrity, security and successful performance of the EBT Network, including without limitation advance notice of the location and ownership of each ATM to participate in any EBT Program. 6. INDEMNIFICATION. In addition to any indemnification obligations of Institution set forth in the Agreement, Institution shall indemnify and hold harmless MAS, and its directors, officers, employees, agents and affiliates from and against any and all claims or losses arising out of (i) any breach of this EBT Addendum by Institution and (ii) any negligent or fraudulent act or omission or intentional misconduct of Institution. 7. MAS REPRESENTATIONS AND WARRANTIES. MAS hereby represents and warrants that it is a qualified processor in each EBT Program identified in Schedule EBT- 1 and that it has obtained any and all authorizations, certifications or other evidence of authority, and has properly executed and delivered any and all applications, agreements or other documents necessary to participate in each such EBT Program. 8. MAS OBLIGATIONS. a. MAS shall provide the MAS Processing Services with respect to EBT Programs identified on Schedule EBT- 1 in accordance with the terms of this EBT ADDENDUM, the Agreement and applicable laws, regulations, rules and administrative guidelines applicable to each selected EBT Program, including any Network rules. b. MAS shall have the authority, without any liability, to terminate or suspend the provision of services hereunder with respect to each and every EBT Program, at the direction of any federal, state or other authority with responsibility for oversight or implementation of such EBT Program, including any EBT Provider, upon MAS's determination to terminate support for such EBT Program for all customers, or upon Institution's loss of eligibility or authority to participate in such EBT Program. If MAS is directed to terminate or suspend the provision of services hereunder with respect to an EBT Program, MAS may also terminate or suspend provision of services hereunder for any other EBT Program without liability. 9. LIMITATION OF LIABILITY. In addition to the limitation of liability set forth in the Agreement, Institution agrees and acknowledges that MAS shall have no liability to Institution arising out of any act or omission by an EBT Provider, including without limitation, an EBT Provider's rejection, chargeback or other failure to fully process in the ordinary course and without penalty any adjustment based upon a restriction on EBT Provider's ability to process such adjustment to the account of a recipient of government benefits, regardless of whether the error being adjusted or corrected was caused in whole or in part by MAS. 10. TERM AND TERMINATION. This EBT ADDENDUM shall be effective as of the date first written above and shall continue in full force and effect until the expiration or termination of 3 the Agreement in accordance with its terms. This FBI Addendum may also be terminated by either party in the event the other party has materially breached this EBT Addendum and has not cured such breach within thirty (30) days of written notice of such breach from the non-breaching party; provided however, that MAS may terminate this EBT Addendum within such thirty (30) day period if MAS believes that such breach may cause a penalty, fine or other sanction to be imposed on MAS or will otherwise adversely affect MASs ability to provide processing services in any EBT Program. 11. EFUNDS EBI PROGRAMS. Institution agrees that if it participates in an EBI Program for which eFunds ("eFunds") is the EBT Provider, and such EBT Program does not operate under the Quest Operating Rules, eFunds shall have no liability to Institution arising out of e-Fund's management of the EBT Program or processing of Transactions except for Institution's direct damages caused by fraud or intentional misconduct committed by eFund's employees. In no event shall eFund be liable to Institution for indirect, incidental or consequential damages. Institution agrees and acknowledges that eFund is a third party beneficiary of this FBI ADDENDUM for purposes of this limitation of liability. IN WITNESS WHEREOF, the parties hereto have executed this EBT ADDENDUM by their duly authorized representatives as of the date first written above. MONEY ACCESS SERVICE INC. By: /s/ E. T. Haslam ------------------------------------------------ Name and Title: E. T. Haslam, CFO CARDTRONICS, LP By: /s/ Michael Clinard ------------------------------------------------ Name and Title: Michael Clinard, COO 4 SCHEDULE EBT-1 EBT PROGRAMS
STATE PROGRAM SPECIFICATION - ----- --------------------- Alabama Citibank/Quest Alaska " Arizona " Arkansas " Colorado " Connecticut " Florida " Georgia " Hawaii " Idaho " Indiana " Kentucky (Federal Benefits Only) " Maine (Future) " Maryland " Massachusetts " Missouri " New Hampshire " New York " North Carolina (Federal Benefits Only) " Pennsylvania " Rhode Island " Tennessee " Vermont " Washington " Washington, DC Lockheed Martin Kansas eFunds Louisiana " Utah "
Schedule EBT-1 - 1 RAD/ISO EBT SPONSOR CERTIFICATION The undersigned "Sponsor" hereby represents, warrants and certifies that, on the basis of certain representations, warranties or covenants by Sponsor to the respective entities operating each of the following programs for the electronic distribution of government benefits (each, an "EBT Program"), Institution has received all necessary authorizations, consents and approvals and has made all necessary filings and submissions to participate in each such EBT Program. Sponsor acknowledges that MAS is relying upon the foregoing in providing processing services to Institution with respect to such EBI Programs. State Program ________________________________________________________________________________ ________________________________________________________________________________ Sponsor and Institution agree to provide MAS with at least thirty (30) days written notice prior to any termination or modification of Sponsor's agreement with Institution, or with any of the respective entities operating the foregoing EBT Programs, that would adversely affect Institution's right, power or authority to fully participate in any such EBT Program. If Sponsor enters into any arrangement that would limit the authority of Institution to charge card holders a fee for use of Institution's terminals, Sponsor shall provide MAS written notice thereof on or before the execution of this RAD/ISO EBT SPONSOR CERTIFICATION or thereafter at least sixty (60) days prior to the effectiveness of such limitation. ACKNOWLEDGED AND AGREED: SPONSOR INSTITUTION EFS NATIONAL BANK CARDTRONICS, LP By: /s/ E. T. Haslam By: /s/ Michael Clinard ------------------------------ ----------------------------------- PRINT: E. T. Haslam PRINT: Michael Clinard TITLE: Chief Financial Officer TITLE: Chief Operating Officer 1 NON-MEMBER TERMINAL AGREEMENT AND SERVICE MARK LICENSE THIS AGREEMENT made by and between CIRRUS System, Inc. (hereinafter "CIRRUS") and Cardtronics, LP (hereinafter "Non-member). WITNESSETH WHEREAS CIRRUS has established an electronic system (the "CIRRUS System") to facilitate the ability of the customers of its Members to obtain various electronic funds transfer services; and WHEREAS, in connection with the operation of the CIRRUS System, CIRRUS has adopted and is the exclusive owner of certain service marks as set forth in the CIRRUS Operating Manual, including the name "CIRRUS," U.S. trademark Registration No. 1,259,615, and the graphic design with the name "CIRRUS," U.S. Trademark Registration No. 1,298,026, and may in the future adopt and become the owner of other service marks for use in connection with the CIRRUS System (such current and future service marks to be referred to hereinafter as the "Marks"); and WHEREAS Non-member has lawfully established automated teller machines or other electronic terminals which it owns or rents and which it wishes to be connected to the CIRRUS System in accordance with the rules of said system; NOW, THEREFORE, in consideration of the premises and the covenants set forth herein, it is agreed as follows: 1. CIRRUS hereby grants to Non-member upon the terms and conditions set forth herein, a royalty-free, nonexclusive, revocable, nontransferable right and license to use the Marks for services which are designated by CIRRUS, on automated teller machines or other electronic terminals which grant access to the CIRRUS System, in advertising and promotional literature, and in such other manner as may be prescribed in writing by CIRRUS from time to time. Non-member hereby agrees to adhere to the standards of quality established by CIRRUS and to provide electronic funds transfer services in connection with the Marks in conformity with the standards of practice prescribed by CIRRUS. 2. Non-member agrees to adhere to the established rules and regulations for use of the Marks and operation of the CIRRUS System, as such rules and regulations from time to time may be amended, modified or revised, including without limitation the CIRRUS Operating Rules, the CIRRUS Identification Standards Manual and all bulletins promulgated by CIRRUS from time to time. NON-MEMBER ACKNOWLEDGES THAT SAID RULES AND REGULATIONS CONTAIN IMPORTANT LIMITATIONS NOT REFLECTED IN THE EXPRESS TERMS OF THIS AGREEMENT, AND THAT NON-MEMBER MAY BE LIABLE FOR SUBSTANTIAL PENALTIES FOR VIOLATION OF SAID RULES AND REGULATIONS. 3. CIRRUS shall have the right to inspect the use of the Marks by Non-member at reasonable intervals during business hours for the purpose of determining whether Non-member 1 is adhering to the standards established for use of the Marks and operation of the CIRRUS System. Non-member shall, upon request, supply CIRRUS with any material or information requested by CIRRUS and reasonably related to the subject matter of this Agreement. 4. The license granted by this Agreement shall be deemed to be revoked automatically upon the occurrence of any of the following events: (a) bankruptcy or insolvency of the Non-member. (b) voluntary or involuntary liquidation of Non-member, or (c) any action by any government authority which terminates or impairs the ability of Non-member to make available electronic funds transfer services through the Non-member's automated teller machines or other electronic terminals. 5. The license granted by this Agreement may, at any time, with or without cause, be revoked by CIRRUS, and the terms and conditions of this Agreement may be modified by CIRRUS at any time by giving written notice thereof to Non-member. Upon notice of revocation, Non-member agrees to cease immediately all use of or reference to the Marks. All material in the possession of Non-member or subject to its control, on or in connection with which the Marks appear, shall be destroyed by Non-member within thirty (30) days after the date of revocation. 6. Non-member shall not acquire any right, title or interest in or to the use of the Marks which may be construed to survive the revocation of the license granted by this Agreement. 7. Non-member further agrees that: (a) Non-member shall have no power, right or authority to transfer, assign or license any rights in or ID the use of the Marks hereby licensed to it. (b) Nonmember will not at any time do or cause to be done any act or deed in any way impairing or intended to impair the right of CIRRUS to the use of the Marks, or their validity in any jurisdiction. (c) Non-member is not a Member of CIRRUS and has not acquired, through this Agreement, such status or any of the rights thereof, and Non-member agrees not to represent itself to anyone as a Member of CIRRUS. (d) Non-member is not authorized to issue cards for use as access devices in the CIRRUS System, or apply the Marks to any cards. Such use of the Marks by Non-member is hereby expressly prohibited. 8. Non-member shall be solely responsible for its compliance with any and all local, State, federal or foreign statutes, rules and regulations which may be applicable to the ownership, establishment or operation of its automated teller machines or other electronic terminals or to any other aspect of the services it provides in connection with its use of the Marks. 2 9. Non-member shall indemnify CIRRUS and its Members and hold them harmless from and against any and all damage losses or expenses, including reasonable attorneys' fees, which may be incurred in connection with any claims, demands, lawsuits, or judgments arising from or in connection with Non-member's use of the Marks or its provision of electronic funds transfer services in connection with the CIRRUS System in any manner other than as expressly permitted by this Agreement. 10. This Agreement and the license granted hereby shall be governed by the laws of the State of Illinois and the trademark laws of the United States of America. 11. This Agreement and the license granted hereby shall be effective as of ________________, 199___. CIRRUS SYSTEM, INC. Cardtronics, LP 3000 Hayes, Suite 101 Houston, Texas 77082 By: _______________________________ ________________________________ John O. Smith, President (Name and Address of Non-Member) By: /s/ Michael Clinard, COO ---------------------------- (Name, Title) ________________________________ License Identification Number 3 STAR(R) PROCESSING AGREEMENT ADDENDUM FOR GATEWAY/STATE SPONSORSHIP This Addendum ("Sponsorship Addendum") is dated as of April 2003 by and among CARDTRONICS, LP ("User"), Concord EFS National Bank, a national banking association ("Bank") and STAR PROCESSING, INC., A CONCORD EFS, INC. COMPANY ("SPI") f/k/a MONEY ACCESS SERVICE, INC. and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between User and SPI (together with all exhibits, addenda and schedules thereto, the ("Agreement"). BACKGROUND SPI provides processing services for User's ATMs and Gateway access to certain Networks pursuant to the Agreement. In order to enable User's ATMs to participate in such Networks and to enable User to establish ATMs in certain states, User seeks the services of a sponsor. Bank is willing to provide sponsorship services with respect to the Networks and states selected on Schedule A hereto (the "Selected Networks" and "Selected States," respectively) in accordance with the terms and conditions of this Addendum, and SPI is willing to accept Bank as a sponsor. NOW, THEREFORE, in consideration of the promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINED TERMS Except as otherwise expressly indicated herein, all capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the SPI Processing Agreement or Exhibit A thereto. For purposes of this Addendum, the term "Network" shall include programs for electronic, debit card-based distribution of government benefits in addition to Networks as defined in Exhibit A to the SPI Processing Agreement. 2. USER REPRESENTATIONS AND WARRANTIES User represents and warrants to Bank and SPI that: (a) The Agreement and this Addendum are valid, binding and enforceable against User in accordance with their terms. (b) User is duly organized, validly existing, and in good standing under the laws of the state of its organization and authorized to do business in each state in which the nature of User's activities make such authorization necessary or required. (c) User has the full power and authority to execute and deliver the Agreement and this Addendum and perform all of its obligations hereunder. 1 (d) The execution, delivery and performance of the Agreement and this Addendum by User are not in conflict with User's articles of incorporation and by-laws or other chartering documents, or any agreement, contract, lease or obligation to which User is a party or by which it is bound. (e) Neither User, nor any principal of User, nor any company owned or controlled by, or under common control with, User or any principal of User is or has been the subject of any of the following: (i) Criminal conviction (except minor traffic offenses and other petty offenses); (ii) Bankruptcy filing or petition; (iii) Federal or state tax lien; (iv) Administrative or enforcement proceeding commenced by any state or federal regulatory agency, including any banking or securities agency, or entity operating an EBT Network; (v) Restraining order, decree, injunction, or judgment in any proceeding or lawsuit alleging fraud or deceptive practice on the part of User or any principal thereof; or (vi) Any action of any Network to prohibit or terminate User's direct or indirect activities with respect to such Network. For purposes of this Addendum the word "principal" shall include any person directly or indirectly owning ten percent (10%) or more of User, any officer or director of User, any person actively participating in the control of User's business, and any spouse of any of the foregoing. (f) There is not now pending or threatened against User, any litigation or proceeding, judicial, tax or administrative, the outcome of which might adversely affect the continuing operations of the User. Attached as part of Schedule B is a list and brief description of all pending lawsuits to which User is a party. (g) User's financial statements, subject to any limitations stated therein, which have been or which hereafter shall be furnished to Bank or SPI to induce them to enter into this Addendum do or will, respectively, fairly represent the financial condition of User, and all other information, reports and other papers furnished to Bank or SPI will be, at the time the same are furnished, accurate and complete in all material respects. 3. BANK REPRESENTATIONS AND WARRANTIES Bank represents and warrants to User that, as of the date of this Addendum, Bank is a member or participant in good standing with respect to each Selected Network, with full right, power and authority to act as sponsor for otherwise eligible ATM owners in such Selected Networks. 2 4. COVENANTS OF USER (a) User will execute and deliver any application, participation or membership agreement or other document necessary to enable Bank to act as sponsor for User in each Selected Network and Selected State. (b) User will comply with all federal, state and local laws, rules, regulations and ordinances ("Applicable Laws"), including those specifically identified in Schedule A with respect to any Selected State, and with all by-laws, regulations, rules and operating guidelines of the Selected Network ("Network Rules") related to User's ownership, control or operation of the ATMs serviced by SPI pursuant to the Agreement (the "Covered ATMs") and shall obtain all consents, approvals, authorizations or orders of any governmental agency or body required for the execution, delivery and performance of the Agreement and this Addendum. (c) User will provide prompt written notice to the Bank of: (i) any material adverse change in the assets, operations or condition, financial or otherwise, of User; (ii) the threat or filing of any litigation against User; (iii) any investigation of User or any principal of User by any federal, state or local governmental agency; (iv) any disciplinary action taken by any Network against User or any principal of User; or (v) the occurrence of any other item set forth at Subsection 2(e). (d) As soon as possible and in any event within sixty (60) days after the end of each quarter, commencing with the calendar quarter in which the date of this Addendum falls, User will provide Bank with a copy of the User's balance sheet as of the end of such period and related profit, loss and surplus statements. (e) User agrees that this Addendum applies only to the Covered ATMs and that Bank shall be the exclusive sponsor of such Covered ATMs for the purposes of any Network to which SPI provides Gateway services, other than Networks to which Bank does not have the right or authority to provide sponsorship services. (f) Except as required to comply with Applicable Laws related to sponsorship of ATMs in any Selected State, User shall not in any way indicate that Bank or SPI endorse User's activities, products or services. The parties hereto are and shall remain independent contractors, and neither they, nor their respective individual employees shall have or hold themselves out as having, any power to bind the other to any third party. Nothing contained in this Addendum shall be construed to create or constitute a partnership, joint venture, employer-employee or agency relationship among the parties. 3 (g) If Bank is to act as sponsor with respect to Covered ATMs in any Selected State, User shall (i) provide Bank advance written notice of the proposed locations of each Covered ATM in any such Selected State, including the identity of operators of the premises where such Covered ATMs are located, and of any other information related to such Covered ATM or location as Bank shall reasonably require; (ii) provide Bank advance written notice of any Applicable Laws related to the establishment and operation of ATMs at each such location, other than federal laws and regulations; (iii) assist Bank in preparing any and all filings or applications required by Applicable Law with respect to the establishment and operation of ATMs in each Selected State; (iv) immediately notify Bank of any communication, whether oral or written (including electronic communication), from any representative of federal, state, or local government related to any Covered ATM; and (v) engage in no act or omission related to any Covered ATM which would cause Bank to be in violation of any Applicable Law. 5. SECURITY DEPOSIT Within three (3) business days of notice from SPI, User shall establish and maintain with Bank a segregated, restricted interest-bearing deposit account as to which User shall not have withdrawal privileges, dominion or control (the "Cash Collateral Account"), and deposit into such Cash Collateral Account collected funds in such amount requested by Bank in its sole discretion, but not in excess of one (1) days settlement or $10,000, whichever is greater. User hereby pledges and grants to Bank and SPI a security interest in the Cash Collateral Account and all money in the Cash Collateral Account and proceeds thereof as security for prompt payment in full of all User's obligations under the Agreement and this Addendum, including its obligations to any Network for fees, fines or assessments, and authorizes Bank and SN to exercise a right of set-off against funds in the Cash Collateral Account or any other funds or payment due and owing to User under the Agreement, including interchange payments. User agrees to take any steps necessary to ensure the attachment, perfection or protection of Bank's and SPI's security interest in the Cash Collateral Account. 6. COVENANTS OF BANK (a) Bank shall act as User's sponsor with respect to the participation of the Covered ATMs in each Selected Network in accordance with the Network Rules of each such Selected Network and with respect to the laws and regulations set forth at Schedule A for each Selected State. 4 (b) Bank shall maintain its status as member or participant in good standing with each Selected Network and shall comply with all Network Rules applicable to Bank's sponsorship of User's participation in each such Selected Network; provided, however, that Bank may terminate its sponsorship with User in any Selected Network (i) immediately upon written notice to User if Bank's authority to participate in such Selected Network or act as sponsor of User in such Selected Network is terminated by such Selected Network or (ii) upon thirty (30) days prior written notice, if Bank determines to terminate its membership or participation in such Selected Network. (c) Bank may, in its sole discretion, determine not to sponsor any Covered ATM. 7. COVENANTS OF SPI SPI hereby agrees to accept Bank as User's sponsor with respect to the Selected Networks. 8. FEES In addition to all other fees set forth in the Agreement, User shall compensate Bank for its services hereunder in accordance with the provisions of Schedule C attached hereto and the fee payment provisions of the Agreement. Bank shall pay its own costs of membership or participation in each Selected Network, but User shall pay any third party fee or charge incurred as a result of Bank's sponsorship of User. 9. TERM; TERMINATION (a) This Addendum shall be effective as of the date first written above and shall continue in effect during the term, including the initial term and any renewal term, of the Agreement, unless earlier terminated by any party pursuant to this Section. This Addendum will terminate without further action of any party upon the expiration or termination of the Agreement. (b) Any party may terminate this Addendum as of the end of the initial term or any renewal term of the Agreement by providing sixty (60) days prior written notice to the other parties. (c) Bank or SPI may terminate this Addendum or Bank's sponsorship of User in any Selected Network or with respect to the specified Applicable Laws of any Selected State upon occurrence or discovery of one or more of the following events: (i) Immediately upon notice to User of the occurrence at any time of any of the conditions set forth at Subsections 2(e)(i), (ii), (iv), (v) or (vi) or 4(c)(i) or (iv). (ii) Thirty (30) days after written notice by Bank or SPI to User, upon the occurrence of any of the conditions set forth Subsections 2(e)(iii) or 4(c)(ii) or (iii). 5 (iii) In the event any financial statement, representation, warranty, statement or certificate furnished is materially false or misleading. (iv) Immediately upon the occurrence of any other circumstance with respect to this Addendum that may reasonably be expected to have an adverse effect on Bank. (d) In addition to the foregoing, any party may terminate this Addendum upon provision of thirty (30) days prior written notice to the other parties of any material breach of this Addendum by another party, provided that the defaulting party has not cured such breach within such thirty (30) day period. (e) Upon any termination of this Addendum by Bank or SPI pursuant to Subsections 9(c) or (d) above, User shall pay to Bank an early termination fee equal to the number of months remaining in the then-current term multiplied by the greater of (i) the highest average monthly amount of fees and charges incurred by User hereunder in any consecutive three (3) month period or (ii) $5,000 (the "Early Termination Fee"). The parties agree that in the event of termination pursuant to Subsections 9(c) or (d) above, it would be extremely difficult and impracticable to fix the actual damages to SPI resulting from such termination, and that, therefore, User shall pay to Bank the Early Termination Fee set forth above as liquidated damages and not as a penalty. The parties further agree that the Early Termination Fee represents a reasonable endeavor by the parties to estimate fair compensation for the foreseeable losses that might result from such termination. 10. INDEMNIFICATION User shall indemnify and hold harmless Bank and SPI, their affiliates (including parents and subsidiaries), and their respective officers, directors, employees, successors and assigns, from and against any and all direct or contingent losses, costs, claims, demands, and causes of action (including, without limitation, the cost of investigating the claim, the cost of litigation, and reasonable attorneys' fees, whether or not legal proceedings are instituted) paid or incurred by or on behalf of Bank or SPI as a result of User's violation of any of the terms of this Addendum, any Schedule hereto, Network Rules, or Applicable Laws, or otherwise arising from or related to Bank's sponsorship of User in any Selected Network. 11. SURVIVAL All representations and warranties, the rights and obligations of the parties pursuant to Sections 5, 9(e) and 10 and User's obligations to pay accrued fees shall survive the expiration or termination of this Agreement. 12. NOTICES For purposes of the notices provision of the Agreement, notices to Bank shall be sent to: Concord EFS National Bank, 2525 Horizon Lake Drive, Suite 120, Memphis, Tennessee 38133, Attention: Senior Vice President. 6 13. AMENDMENT OF AGREEMENT Except as amended, modified and supplemented hereby, the Agreement is hereby ratified and shall continue in full force and effect in accordance with its terms. Bank shall be the beneficiary, to the same extent as SPI, of each representation, warranty, covenant and condition of User under the Agreement and of all disclaimers and limitations of liability of SPI thereunder, but shall in no way be liable for any act or omission of SPI. IN WITNESS WHEREOF, this Addendum is executed by the parties as of the date and year below. Concord EFS National Bank By: /s/ E. T. Haslam ------------------------------------------------ Name and Title E. T. Haslam, CFO CARDTRONICS, LP By: /s/ Jack M. Antonini ------------------------------------------------ Name and Title: Jack M. Antonini, President and CEO STAR PROCESSING, INC., A CONCORD EFS, INC. COMPANY By: /s/ E. T. Haslam ------------------------------------------------ Name and Title: E. T. Haslam, CFO 7 SCHEDULE A SELECTED NETWORKS User, Bank and SPI hereby agree that Bank shall act as sponsor for User, pursuant to the terms and conditions of the Addendum, with respect to the following Networks and in the states identified below: [User and Bank to initial] _____ _____ Cirrus/ MasterCard _____ _____ PLUS/ VISA _____ _____ American Express Card _____ _____ Discover Card _____ _____ NYCE _____ _____ Infinet _____ _____ Honor _____ _____ Maestro U.S.A. Inc. _____ _____ Interlink _____ _____ QUEST EBT /s/ JMA ____ AFFN - ------- _____ _____ STAR /s/ JMA ____ Other (Specify) CU24 - ------- [User and Bank to initial] _____ _____ West Virginia (Section 3lA-8-l26, West Virginia Code Ann. (Supp. 1998), and Title 106, Series 7 of the West Virginia Division of Banking's Legislative Rules.) Pursuant to West Virginia law, User will maintain a sign on each Covered ATM, in a size and format acceptable to Bank showing the sponsorship of Bank with respect to such ATM. _____ _____ Connecticut (Pursuant to Connecticut Division of Banking's Legislative Rules) Pursuant to Connecticut law, User will maintain a sign on each Covered ATM, in a size and format acceptable to Bank showing the sponsorship of Bank with respect to such ATM. Schedule A - 1 SCHEDULE B LITIGATION LISTINGS User (Cardtronics) is not involved in any litigation that might adversely affect its continuing obligations. User has initiated numerous lawsuits against various merchants to enforce the terms and conditions of its contracts with said merchants. Schedule A - 1 SCHEDULE C FEES 1. Start Up Fee $ * 2. All applicable network transaction fees including but not limited to: ATM fees, fines and assessments, POS fees, adjustment fees and interchange fees/payments per the interchange table will be passed through as incurred by SPI. 3. Sponsorship Transaction fees - Waived * Denotes Confidential Portion Omitted and Filed Separately with the Commission. Schedule C - 1 STAR(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES GATEWAY SERVICE This Addendum is dated April 24, 2003 by and between STAR PROCESSING, INC., A CONCORD EFS, INC. COMPANY f/k/a MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("SPI", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between SPI and User ("SPI Processing Agreement"). BACKGROUND In addition to the SPI Processing Services set forth in the SPI Processing Agreement, SPI offers other services which facilitate the processing of Transactions ("Additional Processing Services"). User elects the Additional Processing Services described herein. NOW, THEREFORE, in consideration of the mutual premises herein contained, SPI and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the SPI Processing Agreement or Exhibit A thereto. 2. GATEWAY SERVICE You hereby select and we hereby agree to provide you with Gateway Services to the Networks designated by your INITIALS below: _____ Cirrus/ MasterCard _____Cards _____ ATMs _____ PLUS/VISA _____Cards _____ ATMs _____ American Express Card _____ Discover Card _____ NYCE _____ Maestro U.S.A. Inc. _____ Interlink /s/ JMA Other (Specify) AFFN - ------- /s/ JMA Other (Specify) CU24 - ------- At all times during the provision of Gateway Services with respect to each Network and consistent with User's category of participation in each Network, User will remain an active member, participant, card issuer or acquirer of Transactions in good standing with each Network that User accesses through the Gateway Service. 1 3. OTHER USER RESPONSIBILITIES You are solely responsible for complying in all respects with the rules, regulations, bylaws and/or standards of the other Network(s) to which we provide Gateway Service pursuant to this Addendum and with applicable laws and regulations affecting User's cards, Terminals and Transactions. Notwithstanding any other provision of this Agreement, SN shall have no responsibility for losses caused, in whole or in part, by the error or delay of User in complying with applicable laws or regulations or Network rules, regulations, bylaws or standards in initiating or responding to chargebacks, representments, adjustments, and every other category of fees presently existing and hereafter imposed in connection with inquiries or other Network error resolution processes. 4. FEES For the Additional Processing Services described in this Addendum, you agree to pay SPI the applicable fees in accordance with the schedule of fees set forth on Exhibit GS-1 hereto. You will be solely responsible for all other Networks' membership and other fees, charges, assessments, fines, penalties and every other category of fees presently existing and hereafter imposed in connection with your participation in, or processing or settlement of Transactions in such Network through the Gateway Service. We will pay you on a net basis, fees we receive from Networks for your benefit, subject to our rights hereunder and under applicable law or regulation. 5. SETTLEMENT PROCEDURES SPI will calculate User's settlement obligation for each Business Day at such time as SPI shall set in its reasonable discretion. Settlement shall be on a net basis across all Networks selected by User, unless otherwise designated by SPI, and will be based on the Transaction records which SPI has processed between the cut-off time on that Business Day and the cut-off date time on the immediately preceding Business Day, and may include any fees and other charges payable by or due to User for that period. SPI also may include in net settlement User's settlement obligations in the STAR Network. User hereby grants and authorizes SPI to exercise a right of set-off against funds payable to User pursuant to this Agreement or any other agreement between SPI and User and other funds, including any pledge accounts, that User maintains with SPI or any Network. SPI may apply all such amounts as payment on User's obligations in a priority or order of payment determined by SPI in its sole discretion. 6. EFFECTIVE DATE AND TERM This Addendum shall be effective when fully executed by us in original form and the required payments hereunder have been delivered to us. This Addendum shall be for a term coterminous with the remaining initial term or current renewal term of the SPI Processing Agreement and shall, thereafter, be renewed automatically for successive one (1) year terms unless terminated in accordance with paragraph 17 of the SPI Processing Agreement. This Addendum shall terminate immediately upon expiration or earlier termination of the SPI Processing Agreement. 2 7. AMENDMENT OF SPI PROCESSING AGREEMENT Except as otherwise amended hereby, the SPI Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 8. AGREEMENT TO ADDENDUM User has agreed to the terms of this Addendum by at the time of its execution of the SPI Processing Agreement or at any later time by execution of an Addendum for Schedule of User's Selection of Additional Processing Services to supplement the SPI our rights hereunder and under applicable law or Processing Agreement. The signatures of SPI and regulation. User set forth in the SPI Processing Agreement and the above referenced Addendum shall serve as evidence of the parties' agreement to this Addendum. 3 EXHIBIT GS-I SCHEDULE OF FEES FOR ADDITIONAL PROCESSING SERVICES GATEWAY SERVICE The fees payable by User for Gateway Service shall be as follows: PROCESSING FEES 1. A per transaction processing fee including withdrawals, transfers, balance inquiries, declines, reversals and terminal balancing as follows: 1 -- 3,000,000 transactions $ * 3,000,001 -- 5,000,000 transactions $ * Over 5,000,000 transactions $ * 2. Network sponsorship fees for national and regional networks are included in the transaction processing fee. All applicable regional and national network transaction fees including but not limited to: indirect processing, licensing, gateway processing, charge back, adjustment or other fees relating to participation in a particular network, will be passed through as incurred by SPI. EXHIBIT GS-I - 1 * Denotes Confidential Portion Omitted and Filed Separately with the Commission. STAR(R) PROCESSING AGREEMENT ADDENDUM FOR SCHEDULE OF USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES This Addendum is dated April 24, 2003 by and between STAR PROCESSING, INC., A CONCORD EFS, INC. COMPANY f/k/a MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("SPI", "we" or "us") and CARDTRONICS, LP with offices located at 3000 HAYES, SUITE 101, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001 between SPI and User ("SPI Processing Agreement"). BACKGROUND In connection with the SPI Processing Services set forth in the SPI Processing Agreement, SPI offers other services which facilitate the processing of Transactions ("Additional Processing Services"). At the time of execution of the SPI Processing Agreement or at any later time, User may select Additional Processing Services. User's most recent selection of Additional Processing Services is itemized herein. Any previous selections by User of Additional Processing Services are reflected on earlier addenda. The features of and charges for the Additional Processing Services that User selects on this addenda are set forth in separate Addenda to the SPI Processing Agreement which are attached hereto and incorporated herein by reference. NOW, THEREFORE, in consideration of the mutual premises herein contained, SPI and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the SPI Processing Agreement or Exhibit A thereto. 2. USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES. From the list below, User selects those Additional Processing Services by which it places its initials. ________ Advanced ATM Functionality ________ Cardholder Service Charging Service ________ Card Production Service ________ Dial-Up ATM ________ EBT Processing Service ________ Electronic Banking Service 1 /s/ JMA Gateway Service -------- /s/ JMA Gateway Sponsorship -------- ________ MasterCard Debit Card/Visa Check Card ________ On-Line Services ________ Signature Debit Fraud Risk Identification Service ________ Self Service Banking ________ Telephone Banking Card Service ________ Verified by VISA Processing ________ Other Special Terms 3. CONFIRMATION OF SPI PROCESSING AGREEMENT. Except as otherwise amended hereby, the SPI Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 4. AGREEMENT TO SEPARATE ADDENDA. The execution by SPI and User of this Addendum for Schedule of User's Selection of Additional Processing Services shall evidence the parties' agreement to the terms, conditions and pricing set forth in the separate Addenda for each of the Additional Processing Services that User selects hereinabove. 5. NEWLY SELECTED ADDITIONAL PROCESSING SERVICES. This Addendum reflects User's newly selected Additional Processing Services and shall supplement any earlier addenda executed for such purpose. In Witness Whereof, the parties hereto have executed this Addendum by their duly authorized representatives on the date first written above. 2 STAR PROCESSING, INC., A CONCORD EFS, INC. COMPANY By: /s/ E. T. Haslam ----------------------------------------------- E. T. Haslam, CFO ----------------------------------------------- Name and Title (Printed) CARDTRONICS, LP By: /s/ Jack M. Antonini ----------------------------------------------- Jack M. Antonini, President and CEO ----------------------------------------------- Name and Title (Printed) _______________________________________________ User Identification Number 3 STAR(R) PROCESSING AGREEMENT ADDENDUM FOR SCHEDULE OF USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES This Addendum is dated May 2, 2003 by and between STAR PROCESSING, INC., A CONCORD EFS, [NC. COMPANY f/k/a MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("SPI", "we" or "us") and CARDTRONICS, LP with offices located at 3110 HAYES ROAD. SUITE 300, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001 between SPI and User ("SPI Processing Agreement"). BACKGROUND In connection with the SPI Processing Services set forth in the SPI Processing Agreement, SPI offers other services which facilitate the processing of Transactions ("Additional Processing Services"). At the time of execution of the SPI Processing Agreement or at any later time, User may select Additional Processing Services. User's most recent selection of Additional Processing Services is itemized herein. Any previous selections by User of Additional Processing Services are reflected on earlier addenda. The features of and charges for the Additional Processing Services that User selects on this addenda are set forth in separate Addenda to the SPI Processing Agreement which are attached hereto and incorporated herein by reference. NOW, THEREFORE, in consideration of the mutual premises herein contained, SPI and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the SPI Processing Agreement or Exhibit A thereto. 2. USER'S SELECTION OF ADDITIONAL PROCESSING SERVICES. From the list below, User selects those Additional Processing Services by which it places its INITIALS. ________ Advanced ATM Functionality /s/ JMA ATM Key Initialization System -------- ________ Cardholder Service Charging Service ________ Card Production Service ________ Dial-Up ATM 1 ________ EBT Processing Service ________ Electronic Banking Service ________ Gateway Service ________ Gateway Sponsorship ________ MasterCard Debit Card/Visa Check Card ________ On-Line Services ________ Signature Debit Fraud Risk Identification Service ________ Self Service Banking ________ Telephone Banking Card Service ________ Verified by VISA Processing ________ Other Special Terms 3. CONFIRMATION OF SPI PROCESSING AGREEMENT. Except as otherwise amended hereby, the SPI Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 4. AGREEMENT TO SEPARATE ADDENDA. The execution by SPI and User of this Addendum for Schedule of User's Selection of Additional Processing Services shall evidence the parties' agreement to the terms, conditions and pricing set forth in the separate Addenda for each of the Additional Processing Services that User selects hereinabove. 5. NEWLY SELECTED ADDITIONAL PROCESSING SERVICES. This Addendum reflects User's newly selected Additional Processing Services and shall supplement any earlier addenda executed for such purpose. In Witness Whereof, the parties hereto have executed this Addendum by their duly authorized representatives on the date first written above. STAR PROCESSING, INC., A CONCORD EFS, INC. COMPANY By: /s/ E. T. Haslam ----------------------------------------------- E. T. Haslam, CFO ----------------------------------------------- Name and Title (Printed) 2 CARDTRONICS, LP By: /s/ Jack M. Antonini ----------------------------------------------- Jack M. Antonini, President and CEO ----------------------------------------------- Name and Title (Printed) _______________________________________________ User Identification Number 3 STAR(R) PROCESSING AGREEMENT ADDENDUM FOR ADDITIONAL PROCESSING SERVICES ATM KEY INITIALIZATION SYSTEM This Addendum is dated May 2, 2003 by and between STAR PROCESSING, INC., A CONCORD EFS, [NC. COMPANY f/k/a MONEY ACCESS SERVICE INC. with offices located at 1100 Carr Road, Wilmington, Delaware 19809 ("STAR", "we" or "us") and CARDTRONICS, LP with offices located at 3110 HAYES ROAD, SUITE. 300, HOUSTON, TEXAS 77082 ("User" or "you") and shall supplement, amend and become part of the MONEY ACCESS SERVICE Processing Agreement dated September 6, 2001, between STAR and User ("STAR Processing Agreement"). BACKGROUND In addition to the STAR Processing Services set forth in the STAR Processing Agreement, STAR offers other services which facilitate the processing of Transactions ("Additional Processing Services"). User elects the Additional Processing Services described herein. NOW, THEREFORE, in consideration of the mutual premises herein contained, STAR and User agree to be legally bound by the terms of this Addendum as hereinafter set forth. 1. DEFINED TERMS. All capitalized terms used in this Addendum and not otherwise defined herein shall have the meanings set forth in the STAR Processing Agreement or Exhibit A thereto. 2. THE SERVICE. You hereby request and we hereby agree to provide you with the ATM Key Initialization System (the "Key Service"), which is a method of establishing a unique cryptographic key for communication between individual User ATMs and our host ATM driving system. 3. STAR RESPONSIBILITIES. STAR will administer the Key Service for ATMs for which STAR provides ATM driving services under the STAR Processing Agreement so that each ATM can produce a unique cryptographic key for communication with the STAR host processing system either (i) by providing User cryptographic key components that User may manually load in ATMs ("First Key Service") or (ii) by electronically delivering to User's ATM an unique cryptographic key ("Remote Key Update") in order to update an existing cryptographic key. The First Key Service component of the Key Service also will include a voice response unit or other system for registering the loading of such key components with the STAR host processing system. 4. USER RESPONSIBILITIES. User will be responsible for properly following instructions for use of the Key Service, including correct entry of data elements, as provided by STAR from time to time. User will safeguard any and all components of the Key Service that are under User's control at any time, including any passwords, access codes, cryptographic key components, user identification codes, and terminal identification codes, that provide access to, 1 or are used in providing, any element of the Key Service regardless of the form in which such components are provided. 5. FEES. For the Additional Processing Services described in this Addendum, User agrees to pay STAR the applicable fees in accordance with the schedule of fees set forth in Exhibit KEY-I hereto. 6. TERM. This Addendum shall be effective when fully executed by both parties in original form and shall be for a term coterminous with the STAR Processing Agreement. 7. NO WARRANTIES. IN ADDITION TO THE DISCLAIMER OF WARRANTIES IN THE STAR PROCESSING AGREEMENT, THE KEY SERVICE IS NOT WARRANTED TO BE FREE FROM ERROR OR INTERRUPTION OR TO PREVENT UNLAWFUL ACCESS TO ANY SYSTEM OR TRANSACTION. NO DESCRIPTIONS OR SPECIFICATIONS, WHETHER OR NOT INCORPORATED INTO THIS ADDENDUM SHALL CONSTITUTE WARRANTIES OF ANY KIND. 8. CONFIRMATION OF AGREEMENT. Except as otherwise amended hereby, the STAR Processing Agreement is hereby ratified in all respects and shall remain in full force and effect. 2 EXHIBIT KEY-1 SCHEDULE OF FEES FOR ADDITIONAL PROCESSING SERVICES ATM KEY INITIALIZATION SYSTEM User agrees to pay SPI: ANNUAL FEE 1. A Unique Key VRU Subscription Fee to access VRU system of $ * per year, which shall be billed in monthly increments of $ * Waived ONE-TIME SETUP 1. Two comvelopes per Terminal Waived 2. Two Servicer ID's Waived RECURRING FEES 1. A Comvelope re-order fee shall be based on the following tier below:
Comvelopes** Fee - ------------ --- ~~10 * Waived 50 * Waived~~
2. A User ID setup fee of $ * per User ID requested after the initial two (2). Waived 3. A Remote Key Update fee of $ * per Terminal after the first one. Waived ** Must be ordered in increments of 10. NOTE: EACH KEY INJECTION REQUIRES TWO COMVELOPES * Denotes Confidential Portion Omitted and Filed Separately with the Commission. EXHIBIT KEY-1 - 1 EX-10.9 11 h12528exv10w9.txt CORE DATA RESOURCES, INC. EFT PROCESSING AGREEMENT EXHIBIT 10.9 AMENDMENT TO MONEY ACCESS SERVICE PROCESSING AGREEMENT This Amendment (the "Amendment") to the Processing Agreement (defined below) is dated February 25, 2004 and is by and between Star Processing, Inc., a Concord EFS, Inc. company (formerly known as MONEY ACCESS SERVICE INC. and hereinafter referred to as "SPI"), and Cardtronics, LP, a Delaware limited partnership (hereinafter referred to as "Cardtronics"). RECITALS WHEREAS, on September 6, 2001, SPI and Cardtronics executed that Money Access Service Processing Agreement, together with various Addenda executed on that date and from time to time thereafter (said processing agreement and all such addenda are hereinafter collectively called the "Processing Agreement"); WHEREAS, dated effective as of October 1, 2001, Cardtronics and Core Data Resources, Inc. ("Core Data") entered into that EFT Processing Agreement (the "CoreData Agreement"); WHEREAS, Concord EFS, Inc. acquired Core Data in 2003; and WHEREAS, SPI and Cardtronics now desire to consolidate all on-going and future ATM processing operations and activities under the Processing Agreement and to make certain modifications and other changes to the Processing Agreement as set forth below. AGREEMENTS NOW, THEREFORE, for good and valuable consideration, SPI and Cardtronics agree that: 1. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Processing Agreement. 2. Effective as of March 1, 2004, Exhibit "B" (Schedule of Fees") is changed as follows: (a) Paragraph 1 under "DIAL-UP ATM DEVICE FEES" is waived. = (b) Paragraph 2 under "DIAL-UP ATM DEVICE FEES" is waived. (c) Paragraph 1 under "DEDICATED LINE DEVICE FEES" is waived.. (d) Paragraph 3 under ""DEDICATED LINE DEVICE FEES" is modified by adding at the end, "if telecommunications services are provided by SPI." 3. Notwithstanding anything to the contrary in the Processing Agreement, effective March 1, 2004 there will be no fee or charge for any status message from any ATM serviced for Cardtronics under the Processing Agreement, provided that the volume of status messages received by SPI from Cardtronics ATMs that produce status messages remains at or below 15% of the total transaction volume for such Cardtronics ATMs. Any status messages in excess of 15% will be charged at a rate of $. * per status message. Status messages include, but are not limited to messages regarding hardware, communication and cash fault messages, as well as "I'm Alive", activity monitoring, and servicing messages. * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 1 4. Section 16 of the Processing Agreement is hereby deleted in its entirety and replaced with the following: This Agreement shall be effective as of the date above until August 31, 2007, and thereafter, for successive one (1) year renewal terms unless terminated in accordance with paragraph 17 herein. 5. Notwithstanding anything to the contrary in the "Addendum for Additional Processing Services Gateway Service" Processing Agreement, Exhibit "GS-1" (Schedule of Fees") is changed as follows effective March 1, 2004: The fee schedule at paragraph 1 is replaced with the following: MONTHLY TRANSACTIONS PER TRANSACTION FEE ------------------------ ------------------- 0 to 5,000,000 Transactions: $ * 5,000,001 to 7,000,000 $ * 7,000,001 to 9,000,000 $ * 9,000,001 to 11,000,000 $ * 11,000,001 to 13,000,000 $ * 13,000,001 to 15,000,000 $ * 15,000,001 + $ * All Transactions for any month will be priced at the fee rate for the highest Transaction level reached during that month. For example, if there are 8,325,000 Transactions during a given month, the fee for each of those Transactions is $ * . 6. On all Transactions, SPI will comply with applicable Network routing rules, and card issuer routing selections pursuant to those rules, as such may change from time to time, provided that SPI shall have no liability in the event of any conflict between Network routing rules. 7. That notwithstanding anything to the contrary in the Processing Agreement, including without limitation Section 2(a) of that "Addendum for Special Terms" dated September 6, 2001, but subject paragraph 11 of this Amendment, from time to time Cardtronics may remove ATMs connected to and supported by SPI under the Processing Agreement if such ATMs are branded with the trademarks or service marks of a financial institution under agreement with Cardtronics and such financial institution wishes to drive such ATMs internally. 8. In order to improve communications between the parties, on a quarterly basis, SPI will visit Cardtronics' offices in Houston to review and discuss ongoing operations. Such meetings will be in addition to monthly product development conference calls and weekly production conference calls. Within 30 days of the date hereof, SPI shall deliver for Cardtronics review and approval a Service Level Agreement ("SLA") that will provide the following services: (a) Internet based access to Automated Work Station in order to improve speed and performance of access to Network management information; (b) Direct connection to SPI's ATM monitoring system enabling Cardtronics to perform ATM monitoring functions in real-time including opening and closing tickets, dispatching of maintenance vendors, and reporting of uptime status and ticket resolution; and (c) Connectivity for direct authorization and settlement to a financial institution that has co-branded a Cardtronics ATM. Connectivity shall include IP based protocol * Denotes Confidential Portion Omitted and Filed Separately with the Commission. 2 and shall permit authorization and other financial institution related transaction information to be passed through to the ATM. Additionally, the SLA will specify the monthly reports to be provided Cardtronics, which reports must include: (d) A Consolidated Month End Billing Summary Report with a detail level by terminal for both transaction and financial activity (similar to the month-end report currently provided by Core Data); (e) Daily Interchange Forecasting that can be validated in the Consolidated Month End Billing Summary that accounts for all the interchange earnings due Cardtronics; and (f) A periodic report validating SPI's routing of Cardtronics ATM transactions as required by Section 6 above. 9. As an incentive for Cardtronics to agree to the modifications of the Processing Agreement as set forth herein, SPI agrees to pay Cardtronics a one-time financial incentive payment of $ * (the "Financial Incentive"). SPI must pay the Financial Incentive no later than March 31, 2004. In recognition of the Financial Incentive, Cardtronics agrees that in the even of any termination of the Processing Agreement prior to its scheduled termination date (as amended hereby), except as set forth below, it will (a) refund to SPI a portion of the Financial Incentive equal to the number of months remaining in the term hereof multiplied by $ * and (b) pay to SPI an early termination fee that will be the lesser of (i) $ * multiplied by the number of months remaining in the term as of the date of said termination; or (ii) $ * ; provided, however, neither the refund of the Incentive Payment or the early termination fee will be due and payable if (x) such termination was the consequence of SPI's material breach of the Processing Agreement which is not cured by SPI within thirty (30) days of notice by Cardtronics; or (y) such termination occurred during any renewal period. The above-described refund and early termination fee (collectively the "Termination Payments") shall satisfy any and all financial obligations and liabilities of Cardtronics to SPI under the Processing Agreement arising solely out of such termination, save and except for any amounts due and owing as of the date of said early termination, financial obligations or liabilities of Cardtronics with respect to Transactions processed hereunder and any financial obligations or liabilities of Cardtronics to SPI with respect to third party claims against SPI. 10. Upon the Effective Date of this Amendment, SPI and Cardtronics agree that the Core Data Agreement shall terminate and be of no further force and effect and that all ATMs covered and affected by the CoreData Agreement shall henceforth immediately be covered and affected by the Processing Agreement, as amended hereby; provided, however, each party shall retain their respective rights under the CoreData Agreement with respect acts or omissions prior to such termination, including for the payment of any sums due and owing to them as of the Effective Date. 11. Notwithstanding any other provision of the Processing Agreement and this Amendment, Cardtronics shall pay to SPI each month during the initial term of the Processing Agreement the greater of (i) the fees accrued under the Processing Agreement for such month (not including any Network or pass-through fees), and (ii) * . 12. Promptly following execution and delivery of this Amendment, the parties shall publish a mutually agreed press release announcing the amendment of the Processing Agreement. 13. Unless specifically provided otherwise herein, all other terms and conditions of the Processing Agreement are hereby ratified and confirmed in all respects and continue in full force and effect. 3 14. In the event of a conflict between the provisions of the Processing Agreement and this Amendment, the terms and provisions of this Amendment shall control and govern the rights and obligations of the parties. IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first written above. STAR PROCESSING, INC. (f/k/a Money Access Service, Inc.) By: /s/ E. T. Haslam ---------------------------------- Name: E. T. Haslam ---------------------------------- Title: SVP, CFO and Treasurer ---------------------------------- CARDTRONICS, LP By: /s/ Jack M. Antonini ---------------------------------- Jack M. Antonini Chief Executive Officer 4 EX-10.10 12 h12528exv10w10.txt EMPLOYMENT AGREEMENT - JACK M. ANTONINI EXHIBIT 10.10 ================================================================================ EMPLOYMENT AGREEMENT BETWEEN CARDTRONICS, LP AND JACK M. ANTONINI JANUARY 20, 2003 ================================================================================ TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 1.1 DEFINITIONS....................................................... 1 1.2 CONSTRUCTION...................................................... 1 ARTICLE 2 EMPLOYMENT AND DUTIES 2.1 EMPLOYMENT; EFFECTIVE DATE........................................ 1 2.2 POSITION.......................................................... 1 2.3 DUTIES AND SERVICES............................................... 1 2.4 DUTY OF LOYALTY................................................... 2 ARTICLE 3 STATED TERM AND TERMINATION OF EMPLOYMENT 3.1 EMPLOYMENT TERM................................................... 2 3.2 THE COMPANY'S RIGHT TO TERMINATE.................................. 2 3.3 EFFECT OF TERMINATION............................................. 2 ARTICLE 4 COMPENSATION, BONUSES AND BENEFITS 4.1 BASE SALARY....................................................... 4 4.2 BONUSES........................................................... 4 4.3 BENEFITS.......................................................... 4 ARTICLE 5 PROTECTION OF INFORMATION 5.1 DISCLOSURE TO AND PROPERTY OF THE COMPANY......................... 5 5.2 DISCLOSURE TO THE EMPLOYEE........................................ 5 5.3 NO UNAUTHORIZED USE OR DISCLOSURE................................. 5 5.4 OWNERSHIP BY COMPANY.............................................. 6 5.5 ASSISTANCE BY THE EMPLOYEE........................................ 6 5.6 REMEDIES.......................................................... 6 ARTICLE 6 STATEMENTS CONCERNING THE COMPANY 6.1 IN GENERAL........................................................ 7 ARTICLE 7 NON-COMPETITION AFTER TERMINATION 7.1 IN GENERAL........................................................ 7

EMPLOYMENT AGREEMENT TABLE OF CONTENTS i ARTICLE 8 MISCELLANEOUS 8.1 NOTICES........................................................... 9 8.2 APPLICABLE LAW.................................................... 9 8.3 NO WAIVER......................................................... 9 8.4 SEVERABILITY...................................................... 9 8.5 COUNTERPARTS...................................................... 10 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS................ 10 8.7 HEADINGS.......................................................... 10 8.8 GENDER AND PLURALS................................................ 10 8.9 ASSIGNMENT........................................................ 10 8.10 AMENDMENT; ENTIRE AGREEMENT....................................... 10 8.11 ARBITRATION....................................................... 10 8.12 EMPLOYEE'S REPRESENTATION......................................... 11 8.13 OTHER MATTERS..................................................... 11

EXHIBITS: A - Definitions ii EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into by and between Cardtronics, LP, a Delaware limited partnership (the "COMPANY"), and Jack M. Antonini (the "EMPLOYEE") effective as of January 20, 2003 (the "EFFECTIVE DATE"). NOW, THEREFORE, in consideration of the employment by the Company, and of the compensation and other remuneration to be paid by the Company to the Employee for such employment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Employee, the Company and the Employee agree as follows: ARTICLE 1 DEFINITIONS 1.1 DEFINITIONS. In addition to terms defined in the body of this Agreement, capitalized terms used herein shall have the meanings given to them in Exhibit A. 1.2 CONSTRUCTION. Unless the context requires otherwise: (a) references to Articles and Sections refer to articles and sections of this Agreement; (b) references to Exhibits and Schedules are to exhibits and schedules attached to this Agreement, each of which is made a part of this Agreement for all purposes; and (c) references to money refer to legal currency of the United States of America. ARTICLE 2 EMPLOYMENT AND DUTIES 2.1 EMPLOYMENT; EFFECTIVE DATE. Subject to the terms of this Agreement, the Company agrees to employ the Employee, and the Employee agrees to be employed by the Company, beginning as of the Effective Date and continuing until the last day of the Employment Term. 2.2 POSITION. During the Employment Term, the Employee shall serve as the President and Chief Executive Officer. The Employee shall also serve as a member of the board of directors for Cardtronics GP, Inc. (the "General Partner") and to Cardtronics Group, Inc. (the "Parent Company"). 2.3 DUTIES AND SERVICES. The Employee shall perform diligently and to the best of his abilities the duties and services appertaining to the Employee's position as provided in Section 2.2, as well as such additional duties and services appropriate to such position that the Board of Directors of the Company (the "BOARD") may determine from time to time. The Employee's employment shall also be subject to the policies maintained and established by the Board, as the same may be amended from time to time. In furtherance of the foregoing, the Employee shall devote his full business time, energy and efforts to the business and affairs of the Company and its Affiliates and shall not engage, directly or indirectly, in any other business or CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 1 businesses, whether or not similar to that of the Company. The foregoing notwithstanding, the parties recognize that the Employee may engage in passive personal investments and other non-competitive business activities that do not conflict with the business and affairs of the Company or its Affiliates or interfere with the Employee's performance of his duties hereunder. 2.4 DUTY OF LOYALTY. The Employee acknowledges and agrees that the Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Company and its Affiliates and to do no act that would injure the business, interests or reputation of the Company or any of its Affiliates. In keeping with these duties, the Employee shall make full disclosure to the Board of all business opportunities pertaining to the Company's business and shall not appropriate for the Employee's own benefit any such business opportunities. ARTICLE 3 STATED TERM AND TERMINATION OF EMPLOYMENT 3.1 EMPLOYMENT TERM. The term of this Agreement shall commence on the Effective Date and end on January 20, 2006 (the "STATED TERM") unless earlier terminated in accordance with this Agreement (such period of employment, as it may be earlier terminated, being referred to herein as the "EMPLOYMENT TERM"). 3.2 THE COMPANY'S RIGHT TO TERMINATE. Notwithstanding the provisions of Section 3.1, the Employee's employment shall terminate prior to the expiration of the Stated Term (a) upon the Employee's death or voluntary resignation or (b) upon termination by the Company for any of the following reasons: (i) the Employee's becoming incapacitated by accident, sickness or other circumstance that renders him Totally Disabled; (ii) for Cause; or (iii) for any reason not described in Section 3.2(a) or Sections 3.2(b)(i) or 3.2(b)(ii) ("WITHOUT CAUSE TERMINATION"), and the Company shall give Employee 30 days advanced notice of any such Without Cause Termination; or (c) upon termination by the Employee for the following reason: (i) a Change of Control occurs. 3.3 EFFECT OF TERMINATION. (a) If the Employee's employment shall terminate upon the expiration of the Stated Term or pursuant to Section 3.2(a), 3.2(b)(i) or 3.2(b)(ii), then, notwithstanding any other provision herein, all compensation, bonuses and benefits to the Employee not yet accrued or CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 2 vested hereunder shall terminate contemporaneously with the expiration of the Employment Term. (b) If the Employee's employment shall terminate pursuant to Section 3.2(b)(iii), then the Employee shall be entitled to receive severance pay equal to the Base Salary for the lesser of (A) six months or (B) the number of months remaining in the Stated Term and all other compensation, bonuses, benefits and other rights then accrued or vested. (c) If the Employee's employment shall terminate pursuant to Section 3.2(c)(i), then the Employee shall be entitled to receive severance pay equal to the Base Salary for the lesser of (A) 12 months or (B) the number of months remaining in the Stated Term and all other compensation, bonuses, benefits and other rights then accrued or vested. (d) All payments due under this Section 3.3 shall be due and payable in such installments as would have been payable if the Employee had not been so terminated. (e) In light of the difficulties in estimating the damages for an early termination of this Agreement, the Company and the Employee hereby agree that the payments, if any, to be received by the Employee pursuant to this Section 3.3 shall be received by the Employee as liquidated damages, and the Employee shall not have any right to any other payment or damages except for such liquidated damages. (f) The Company may set off any amounts of money, goods or services owed by the Employee to the Company against any final payments made to the Employee, as appropriate under applicable state law. (g) In the event the Employment Term is terminated and the Company is obligated to make payments pursuant to this Section 3.3, the Employee upon receipt of such payments hereby releases and waives any and all claims against the Company, its subsidiaries, and their respective officers, directors, employees, agents, or representatives, stockholders and Affiliates relating to this Agreement and to his employment and, as a condition to receiving salary continuation or severance payments, the Employee will enter into and deliver to the Company a separate release and waiver in a form reasonably satisfactory to the Company to further evidence such release and waiver. (h) Articles 5, 6, 7 and 8 shall survive and continue to be binding after the termination of the Employment Term and/or the breach or termination of this Agreement. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 3 ARTICLE 4 COMPENSATION, BONUSES AND BENEFITS 4.1 BASE SALARY. During the Employment Term, the Company shall pay the Employee a gross base salary of $25,000 per calendar month (the "BASE SALARY"), which the Company shall pay to the Employee in equal installments in accordance with the Company's regular payroll practice for management employees. 4.2 BONUSES. In addition to the Base Salary due under Section 4.1, the Employee will be eligible for a bonus (a "BONUS") in each fiscal year during the Employment Term in accordance with and pursuant to the Company's then-current bonus plan ("BONUS PLAN"). The Bonus Plan will be implemented and administered by the Compensation Committee of the Board, and any bonuses payable thereunder shall be based upon a number of factors determined and set by the Compensation Committee in its sole discretion. Such factors may include, but not be limited to, the achievement by the Company of certain performance objectives and the operation of the Company within the budgets approved by the Board. Subject to achieving the performance standards set by the Compensation Committee, the targeted Bonus payable to the Employee will be 40% of the Employee's annual Base Salary, but the ultimate Bonus amount paid to the Employee, if any, will be determined at the sole discretion of the Compensation Committee. The Bonus, if any, paid to Employee for any partial year, but excluding calendar year 2003 for which there will be no proration, shall be prorated for the actual number of days Employee is employed by the Company in such year. 4.3 BENEFITS. (a) During the Employment Term, the Employee shall be eligible for participation in and to receive all benefits under welfare benefit plans, practices, policies and programs of the Company, including the Company's medical, disability, and 401K plans as may be in effect from time to time for other similarly situated employees of the Company. The Employee shall be entitled to vacations and sick leave in accordance with the Company's prevailing policy for its executives, with the parties anticipating at the minimum that the Employee will receive four weeks paid vacation during each one-year period commencing on the Effective Date and each anniversary thereof. (b) Contemporaneously with the execution and delivery of this Agreement, the Parent Company and the Employee have entered into a Restrictive Stock Agreement pursuant to which the Parent Company has sold to the Employee eighty thousand (80,000) shares of Common Stock of the Parent Company. Such Restrictive Stock Agreement (and the Investors Agreement referenced therein) shall govern Employee's ownership and disposition of said shares. (c) At the discretion of the Compensation Committee, Employee may be granted stock options as part of his Bonus. If and when such stock options are granted, the Company and the Employee will enter into a Nonstatutory Stock Option Agreement in the form attached hereto as Exhibit "B". Such Nonstatutory Stock Option Agreement (and the stock option plan referenced therein) shall govern any options granted to the Employee pursuant to said agreement. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 4 ARTICLE 5 PROTECTION OF INFORMATION 5.1 DISCLOSURE TO AND PROPERTY OF THE COMPANY. All information, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by the Employee, individually or in conjunction with others, during the Employment Term (whether during business hours or otherwise and whether on the Company's premises or otherwise) that relate to the Company's or any of its Affiliates' business, products or services (including, without limitation, all such information relating to corporate opportunities, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisitions prospects, the identity of customers or their requirements, the identity of key contacts within the customer's organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks) (collectively, "CONFIDENTIAL INFORMATION") shall be disclosed to the Company and are and shall be the sole and exclusive property of the Company or its Affiliates. Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression (collectively, "WORK PRODUCT") are and shall be the sole and exclusive property of the Company or its Affiliates. Upon termination of the Employee's employment by the Company, for any reason, the Employee promptly shall deliver such Confidential Information and Work Product, and all copies thereof, to the Company. 5.2 DISCLOSURE TO THE EMPLOYEE. The Company may disclose to the Employee, or place the Employee in a position to have access to or develop, Confidential Information and Work Product of the Company or its Affiliates. Except as required for the operations of the business of the Company, the Employee agrees to preserve and protect the confidentiality of all Confidential Information or Work Product of the Company or its Affiliates. 5.3 NO UNAUTHORIZED USE OR DISCLOSURE. The Employee agrees that he will not, at any time during or after the Employee's employment by the Company, make any unauthorized disclosure of, and will use reasonable efforts to prevent the removal from the Company premises of, Confidential Information or Work Product of the Company or its Affiliates, or make any use thereof, except in the carrying out of the Employee's responsibilities hereunder. The Employee shall use commercially reasonable efforts to have procedures prepared to cause all persons or entities to whom any Confidential Information shall be disclosed by him hereunder to observe the terms and conditions set forth herein as though each such person or entity was bound hereby. The Employee shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by law; provided, however, that in the event disclosure is required by applicable law, the Employee shall provide the Company with prompt notice of such requirement prior to making any such disclosure, so CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 5 that the Company may seek an appropriate protective order. At the request of the Company, the Employee agrees to deliver to the Company, at any time during the Employment Term, all Confidential Information that he may possess or control. The Employee agrees that all Confidential Information of the Company (whether now or hereafter existing) conceived, discovered or made by him during the Employment Term exclusively belongs to the Company (and not to the Employee, and the Employee will promptly disclose such Confidential Information to the Company and at the expense of the Company perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership. Affiliates of Company shall be third party beneficiaries of the Employee's obligations under this Section. As a result of the Employee's employment by Company, the Employee may also from time to time have access to, or knowledge of, Confidential Information or Work Product of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its Affiliates. The Employee also agrees to preserve and protect the confidentiality of such third party Confidential Information and Work Product to the same extent, and on the same basis, as Company's Confidential Information and Work Product. 5.4 OWNERSHIP BY COMPANY. If, during the Employee's employment by Company, the Employee creates any work of authorship fixed in any tangible medium of expression that is the subject matter of copyright (such as videotapes, written presentations, or acquisitions, computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural renditions, models, manuals, brochures, or the like) relating to Company's business, products, or services, whether such work is created solely by the Employee or jointly with others (whether during business hours or otherwise and whether on Company's premises or otherwise), Company shall be deemed the author of such work if the work is prepared by the Employee in the scope of the Employee's employment; or, if the work is not prepared by the Employee within the scope of the Employee's employment but is specially ordered by Company as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, or as an instructional text, then the work shall be considered to be work made for hire and Company shall be the author of the work. If such work is neither prepared by the Employee within the scope of the Employee's employment nor a work specially ordered that is deemed to be a work made for hire, then the Employee hereby agrees to assign, and by these presents does assign, to Company all of the Employee's worldwide right, title, and interest in and to such work and all rights of copyright therein. 5.5 ASSISTANCE BY THE EMPLOYEE. During the period of the Employee's employment by the Company and thereafter, the Employee at the expense of the Company shall assist the Company and its nominee, at any time, in the protection of the Company's or its Affiliates' worldwide right, title and interest in and to Work Product and the execution of all formal assignment documents requested by the Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries. 5.6 REMEDIES. The Employee acknowledges that money damages would not be sufficient remedy for any breach of this Article 5 by the Employee, and the Company or its Affiliates shall be entitled to enforce the provisions of this Article 5 by specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 6 remedies available at law or in equity, including the recovery of damages from the Employee and his agents. ARTICLE 6 STATEMENTS CONCERNING THE COMPANY 6.1 IN GENERAL. The Employee shall refrain, both during the Employment Term and thereafter, from publishing any oral or written statements about the Company, any of its Affiliates or any of such entities' officers, employees and consultants, agents or representatives that are (a) slanderous, libelous or defamatory, (b) that disclose Confidential Information about the Company, any of its Affiliates or any of such entities' business affairs, officers, employees and consultants, agents or representatives except as required by the business of the Company, (c) that constitute an intrusion into the seclusion or private lives of any officers, employees and consultants, agents or representatives of the Company or any of its Affiliates except as required by the business of the Company, (d) that give rise to unreasonable publicity about the private lives of any officers, employees and consultants, agents or representatives of the Company or any of its Affiliates, (e) that place the Company, any of its Affiliates, or any of such entities' officers, employees and consultants, agents or representatives in a false light before the public or (f) that constitute a misappropriation of the name or likeness of the Company, any of its Affiliates or any of such entities' officers, employees and consultants, agents or representatives. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded the Company and its Affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law. ARTICLE 7 NON-COMPETITION AFTER TERMINATION 7.1 IN GENERAL. The Employee agrees that, from the date hereof until 24 months after the end of the Employment Term (the "NON-COMPETE PERIOD"), the Employee shall not: (a) directly or indirectly participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, contractor or otherwise with, or have any financial interest in or aid or assist anyone else in the conduct of, any business in any of the business territories in which the Company is presently or from time-to-time conducting business that either conducts a business similar to that conducted by the Company or its Affiliates or provides or sells a service or product that is the same, substantially similar to or otherwise competitive with the products and services provided or sold by the Company or its Affiliates (a "COMPETITIVE OPERATION"); provided, however, that this provision shall not preclude the Employee from (i) being employed by any financial institution so long as Employee's principal duties as such institution are not directly and primarily related to the principal business of the Company, as such business exists on the date Employee's employment with the Company terminates; or (ii) owning less than 2% of the equity securities of any publicly held Competitive Operation so long as the Employee does not serve as an employee, officer, director or consultant to such business; CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 7 (b) directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity either (i) hire, contract or solicit, or attempt any of the foregoing, with respect to hiring any employee of the Company or its Affiliates, or (ii) induce or otherwise counsel, advise or encourage any employee of the Company or its Affiliates to leave the employment of the Company or its Affiliates; (c) directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity call upon, solicit, divert or take away, any customer or vendor of the Company or its Affiliates with whom the Employee dealt, directly or indirectly, during his engagement with the Company or its Affiliates, in connection with a Competitive Operation; (d) call upon any prospective acquisition candidate on the Employee's own behalf or on behalf of any Competitive Operation, which candidate is a Competitive Operation or which candidate was, to the Employee's knowledge after due inquiry, either called upon by the Company or for which the Company or any of its Affiliates made an acquisition analysis, for the purpose of acquiring such entity; provided, however, this restriction shall apply to Employee only during the term of his employment with the Company; or (e) directly or indirectly participate in the ownership, management, operation or control of more than 5% of the ownership interest in any customer, vendor, supplier or lessor of goods and services to the Company without the written consent of the Board. This restriction shall include any Family Member of the Employee. Further, the Employee shall, on an annual basis or from time to time as required by the Company, disclose which entities, if any, in which they or any Family Member directly or indirectly participate in the ownership, management, operation or control of, or are connected as an officer, employee, partner, director or otherwise with, or have any financial interest in or aid or assist anyone else in the conduct of any business that is a customer, vendor, supplier or lessor of goods, services or real property to the Company. (f) It is agreed by the parties that the foregoing covenants in this Article 7 impose a reasonable restraint on the Employee. (g) The covenants in this Article 7 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that the court deems reasonable, and the Agreement shall thereby be reformed. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 8 ARTICLE 8 MISCELLANEOUS 8.1 NOTICES. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Company to: Cardtronics, LP 3110 Hays, Suite 300 Houston, Texas 77082 Attention: General Counsel With a copy to: CapStreet Group, LLC 600 Travis, Suite 6110 Houston, Texas 77002 Attention: Mr. Fred Lummis If to the Employee to: Jack M. Antonini 22107 Laurel Terrace Ct Katy, Texas 77450 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt. 8.2 APPLICABLE LAW. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas. 8.3 NO WAIVER. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 8.4 SEVERABILITY. To the extent permitted by applicable law, the Company and the Employee hereby agree that any term or provision of this Agreement that renders such term or provision or any other term or provision hereof invalid or unenforceable in any respect shall be modified to the extent necessary to avoid rendering such term or provision invalid or unenforceable, and such modification shall be accomplished in the manner that most nearly preserves the benefit of the Company and the Employee's bargain hereunder. If a court of competent jurisdiction determines that any term or provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that term or provision shall not affect the validity or enforceability of any other term or provision of this Agreement, and all other terms or provisions shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in a materially adverse manner with respect to either party. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 9 8.5 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to the Company's employees generally. 8.7 HEADINGS. The section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. 8.8 GENDER AND PLURALS. Wherever the context so requires, the masculine gender includes the feminine or neuter, the singular number includes the plural and vice-versa, "or" has the inclusive meaning identified with the phrase "and/or" and "including" has the inclusive meaning frequently identified with the phrase "but not limited to." 8.9 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company, by merger or otherwise. Except as provided in the preceding sentence and except that the Company may assign its rights together with its obligations (such obligations being guaranteed by the Company) hereunder to an Affiliate, this Agreement and the rights and obligations of the parties hereunder are personal and neither this Agreement nor any right, benefit or obligation of either party hereto shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party. 8.10 AMENDMENT; ENTIRE AGREEMENT. This Agreement may not be changed orally but only by an agreement in writing agreed to and signed by both parties. This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of the Employee by the Company and supersedes any and all prior agreements, including employment agreements, bonus plans, benefit plans and other compensation or benefit plans and agreements. 8.11 ARBITRATION. In the event of any dispute, difference or question arising between the Company and the Employee in connection with this Agreement or the discussion, negotiation, drafting or making hereof, or any clause or the construction thereof, or the rights, duties or liabilities of either party, then and in every such case, unless the parties agree on the appointment of a single arbitrator, the matter of difference shall be referred to one arbitrator appointed by the American Arbitration Association, and the arbitration of such dispute shall be administered in accordance with the employment rules of the American Arbitration Association. The arbitrator shall determine the place or places in Harris County, Texas, where meetings are to be held. The arbitrator must base his or her decision, with respect to the difference before him or her, on the contents of this Agreement and the relevant facts, and the decision of the arbitrator shall be binding on both parties. Nothing herein is or shall be deemed to preclude the Company's resort to the injunctive relief prescribed in this Agreement, including any injunctive relief implemented by the arbitrators pursuant to this Section 8.11. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 10 8.12 EMPLOYEE'S REPRESENTATION. The Employee hereby warrants and represents to Company that the Employee has carefully reviewed the Agreement and has consulted with such advisors as the Employee considers appropriate in connection with this Agreement, and is not subject to any covenants, agreements or restrictions, including without limitation any covenants, agreements or restrictions arising out of the Employee's prior employment that would be breached or violated by the Employee's execution of this Agreement or by the Employee's performance of his duties hereunder. 8.13 OTHER MATTERS. Employee agrees and herby acknowledges that the obligations owed to the Employee under this Agreement are solely those of the Company, and that none of the Company's stockholders, directors, officers, Affiliates, representatives, agents or lenders will have any obligations or liabilities in respect of this Agreement and the subject matter hereof. [The remainder of this page is intentionally left blank] CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI 11 EXHIBIT A DEFINED TERMS As used in the Agreement, the following terms shall have the respective meanings set forth below. "AFFILIATE" shall mean, with respect to any other person or entity, any other person or entity (a) that is directly or indirectly controlled by the person or entity in question, (b) that directly or indirectly controls the person or entity in question, or (c) that directly or indirectly is under common control with the person or entity in question. For purposes of the foregoing definition, (x) a person or entity controls another entity if it or he directly or indirectly owns, or has the right to vote, at least 20% of the beneficial interests in the entity or if through other agreements (e.g., management agreement) has the right to control the policies of such entity; (y) indirect control includes control held through one or more tiers of subsidiary or intervening entities (such as corporations, partnerships, trusts, or limited liability companies); and (z) "control" includes the ability, directly or indirectly, to direct the management or policies of such entity, whether through the ownership of voting rights, pursuant to a contract, or otherwise. "CAUSE" shall mean if the Employee (A) has engaged in gross negligence or willful misconduct in the performance of the duties required of him hereunder, (B) has been indicted with respect to a felony offense, (C) has willfully refused to perform the duties and responsibilities required of him hereunder which would not be materially injurious to the Company or its Affiliates in his capacity of the Chief Executive Officer as required expressly by the Board of Directors of the Company, (D) has materially breached any Company policy or code of conduct established by the Company of which he is aware or should have been aware, (E) has willfully engaged in conduct that he knows or should know is materially injurious to the Company or any of its Affiliates or (F) has materially breached and failed to cure within a reasonable period of time any provision of this Agreement. "CHANGE OF CONTROL" shall mean any event or events that result in the Summit Investors collectively selling sufficient holdings of Common Stock of the Company so that either (i) the Summit Group's equity ownership in the Company is no longer sufficient to elect a majority of the Board of Directors; or (ii) selling more than fifty percent (50%) of their existing holdings of common stock of the Company, whichever is less. "COMPENSATION COMMITTEE" shall mean a committee formed by the Board for the purpose of determining compensation levels (including base salary, bonus and stock options) of key management and officers of the Company; provided, however, that in the event the Board does not appoint such a committee, the Board shall be considered the Compensation Committee for purposes of this Agreement. "FAMILY MEMBER" shall mean any relative or spouse of such person or any relative of such spouse, any one of whom has the same home as such person. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI EXHIBIT A "TOTALLY DISABLED" shall mean failure by the Employee, by reason of illness, incapacity or other disability, to perform his duties or fulfill his obligations under this Agreement in the view of the Company and as certified in writing by a competent medical physician chosen by the Company, for a cumulative total of 180 days in any 12-month period. [End of Exhibit "A"] CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL E. KELLER EXHIBIT A - DEFINED TERMS Page 2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above, to be effective as of the Effective Date. The Company: CARDTRONICS, LP By: /s/ Fred Lummis ------------------------------------------- Fred Lummis, Chairman EMPLOYEE: /s/ JACK M. ANTONINI ----------------------------------------------- JACK M. ANTONINI CARDTRONICS, LP EMPLOYMENT AGREEMENT OF JACK M. ANTONINI SIGNATURE PAGE EX-10.11 13 h12528exv10w11.txt 1ST AMEND. TO EMPLOYMENT AGMT.-JACK M. ANTONINI EXHIBIT 10.11 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("First Amendment") is entered into by and between Cardtronics, LP., a Delaware limited partnership (the "Company"), and Jack M. Antonini (the "Employee") as of February 4, 2004. WHEREAS, the Company and the Employee have heretofore entered into that certain Employment Agreement dated as of January 20, 2003 (the "Employment Agreement"); and WHEREAS, the Company and the Employee desire to amend the Employment Agreement in certain respects; NOW, THEREFORE, in consideration of the premises set forth above and the mutual agreements set forth herein, the Company and the Employee hereby agree, effective as of the date first set forth above, that the Employment Agreement shall be amended as hereafter provided: 1. The second sentence of Section 2.2 of the Employment Agreement shall be deleted in its entirety. 2. Exhibit B to the Employment Agreement and the second and third sentences of Section 4.3(c) of the Employment Agreement shall be deleted in their entirety. 3. The definition of the term "Change of Control" in Exhibit A to the Employment Agreement shall be deleted and the following shall be substituted therefor: ""CHANGE OF CONTROL" means: (a) prior to the date of an IPO, any transaction or event pursuant to which the Summit Investors (as such term is defined in that certain Investors Agreement dated as of June 4, 2001, among the Parent Company and certain of its stockholders, as the same has been or may be amended or restated from time to time) cease to collectively own 50% or more of the number of shares of the Parent Company's common stock that they own on the date of the First Amendment to this Agreement; and (b) from and after the date of an IPO, (A) a merger of the Parent Company with another entity, a consolidation involving the Parent Company, or the sale of all or substantially all of the assets of the Parent Company to another entity if, in any such case, (i) the holders of equity securities of the Parent Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of the Parent Company immediately prior to such transaction or event or (ii) the persons -1- who were members of the Board of Directors of the Parent Company (the "Parent Board") immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (B) the dissolution or liquidation of the Parent Company, (C) when any person or entity, including a "group" as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, (other than the Summit Investors) acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (i) if the Parent Company has not engaged in a merger or consolidation, the Parent Company, or (ii) if the Parent Company has engaged in a merger or consolidation, the resulting entity, or (D) as a result of or in connection with a contested election of directors, the persons who were members of the Parent Board immediately before such election shall cease to constitute a majority of the Parent Board. For purposes of this subparagraph (b), (1) "resulting entity" in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of the Parent Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change of Control, the term "Parent Company" shall refer to the resulting entity and the term "Parent Board" shall refer to the board of directors (or comparable governing body) of the resulting entity. Notwithstanding the foregoing, in no event shall an IPO constitute a Change of Control." 4. The following definitions shall be added to Exhibit A of the Employment Agreement: ""GENERAL PARTNER" means Cardtronics GP, Inc. "IPO" means the initial sale of any class of common stock of the Parent Company pursuant to an effective registration statement under the Securities Act of 1933, as amended (other than a registration statement on Form S-8, Form S-4 or any successor forms). "PARENT COMPANY" means Cardtronics, Inc." 5. This First Amendment (a) shall supersede any prior agreement between the Company and the Employee relating to the subject matter of this First Amendment and (b) shall be binding upon and inure to the benefit of the parties hereto and any successors to the Company and all persons lawfully claiming under the Employee. -2- 6. Except as expressly modified by this First Amendment, the terms of the Employment Agreement shall remain in full force and effect and are hereby confirmed and ratified. IN WITNESS WHEREOF, the parties hereto have executed and delivered this First Amendment as of the date first set forth above. "EMPLOYEE" "COMPANY" CARDTRONICS, LP /s/ JACK M. ANTONINI BY: /s/ FRED LUMMIS - ------------------------------ --------------------------------- JACK M. ANTONINI FRED LUMMIS, CHAIRMAN -3- EX-10.12 14 h12528exv10w12.txt EMPLOYMENT AGREEMENT - MICHAEL H. CLINARD EXHIBIT 10.12 ================================================================================ EMPLOYMENT AGREEMENT BETWEEN CARDTRONICS, LP AND MICHAEL H. CLINARD JUNE 4, 2001 ================================================================================ TABLE OF CONTENTS ARTICLE 1 CANCELLATION; DEFINITIONS 1.1 CANCELLATION....................................................... 1 1.2 DEFINITIONS........................................................ 1 1.3 CONSTRUCTION....................................................... 1 ARTICLE 2 EMPLOYMENT AND DUTIES 2.1 EMPLOYMENT; EFFECTIVE DATE......................................... 1 2.2 POSITION........................................................... 1 2.3 DUTIES AND SERVICES................................................ 1 2.4 DUTY OF LOYALTY.................................................... 2 ARTICLE 3 STATED TERM AND TERMINATION OF EMPLOYMENT 3.1 EMPLOYMENT TERM.................................................... 2 3.2 THE COMPANY'S RIGHT TO TERMINATE................................... 2 3.3 EMPLOYEE'S RIGHT TO TERMINATE FOR "GOOD REASON".................... 2 3.4 EFFECT OF TERMINATION.............................................. 3 ARTICLE 4 COMPENSATION, BONUSES AND BENEFITS 4.1 BASE SALARY........................................................ 4 4.2 BONUSES............................................................ 4 4.3 BENEFITS........................................................... 5 ARTICLE 5 PROTECTION OF INFORMATION 5.1 DISCLOSURE TO AND PROPERTY OF THE COMPANY.......................... 5 5.2 DISCLOSURE TO THE EMPLOYEE......................................... 6 5.3 NO UNAUTHORIZED USE OR DISCLOSURE.................................. 6 5.4 OWNERSHIP BY COMPANY............................................... 7 5.5 ASSISTANCE BY THE EMPLOYEE......................................... 7 5.6 REMEDIES........................................................... 7 ARTICLE 6 STATEMENTS CONCERNING THE COMPANY AND THE EMPLOYEE 6.1 STATEMENTS CONCERNING THE COMPANY.................................. 8 6.2 STATEMENTS CONCERNING THE EMPLOYEE................................. 8 ARTICLE 7 NONCOMPETITION AFTER TERMINATION 7.1 IN GENERAL......................................................... 8 ARTICLE 8 MISCELLANEOUS 8.1 NOTICES............................................................ 10 8.2 APPLICABLE LAW..................................................... 10 8.3 NO WAIVER.......................................................... 10 8.4 SEVERABILITY....................................................... 10 8.5 COUNTERPARTS....................................................... 11 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS................. 11 8.7 HEADINGS........................................................... 11 8.8 GENDER AND PLURALS................................................. 11 8.9 ASSIGNMENT......................................................... 11 8.10 AMENDMENT; ENTIRE AGREEMENT........................................ 11 8.11 ARBITRATION........................................................ 11

i ~~8.12 EMPLOYEE'S REPRESENTATION.......................................... 12 8.13 OTHER MATTERS...................................................... 12~~

EXHIBITS: A - Definitions ii EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into by and between Cardtronics, LP, a Delaware limited partnership (the "COMPANY"), and Michael H. Clinard (the "EMPLOYEE") effective as of June 4, 2001 (the "EFFECTIVE DATE"). WHEREAS, Card Pro, Inc. and Employer are parties to that certain Employment Agreement dated as of September 1, 1997 (as amended, the "OLD EMPLOYMENT AGREEMENT"); in connection with certain transactions occurring on the date hereof, Card Pro, Inc. has converted into Cardtronics, LP; and Employer and Company desires to cancel and terminate the Old Employment Agreement in its entirety and enter into this Agreement. NOW, THEREFORE, in consideration of the employment by the Company, and of the compensation and other remuneration to be paid by the Company to the Employee for such employment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Employee, the Company and the Employee agree as follows: ARTICLE 1 CANCELLATION; DEFINITIONS 1.1 CANCELLATION. The Old Agreement is hereby terminated in its entirety. 1.2 DEFINITIONS. In addition to terms defined in the body of this Agreement, capitalized terms used herein shall have the meanings given to them in Exhibit A. 1.3 CONSTRUCTION. Unless the context requires otherwise: (a) references to Articles and Sections refer to articles and sections of this Agreement; (b) references to Exhibits and Schedules are to exhibits and schedules attached to this Agreement, each of which is made a part of this Agreement for all purposes; and (c) references to money refer to legal currency of the United States of America. ARTICLE 2 EMPLOYMENT AND DUTIES 2.1 EMPLOYMENT; EFFECTIVE DATE. Subject to the terms of this Agreement, the Company agrees to employ the Employee, and the Employee agrees to be employed by the Company, beginning as of the Effective Date and continuing until the last day of the Employment Term. 2.2 POSITION. During the Employment Term, the Employee shall serve as the Chief Operating Officer of the Company. 2.3 DUTIES AND SERVICES. The Employee shall perform diligently and to the best of his abilities the duties and services appertaining to the Employee's position as provided in Section 2.2, namely being responsible for overseeing and directing the functions and duties of all aspects of customer service, corporate and customer affairs, technical operations and management information systems, as well as such additional duties and services appropriate to such position that the Board of Directors of the Company (the "BOARD") may determine from time to time. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 1 The Employee's employment shall also be subject to the policies maintained and established by the Board, as the same may be amended from time to time. In furtherance of the foregoing and except as set forth in the next sentence, the Employee shall devote his full business time, energy and efforts to the business and affairs of the Company and its Affiliates and shall not engage, directly or indirectly, in any other business or businesses, whether or not similar to that of the Company, except with the consent of the Board, which consent may be withheld by the Board in its sole discretion. The foregoing notwithstanding, the parties recognize that, without the approval of the Board, the Employee may engage in passive personal investments and other non-competitive business activities that do not conflict with the business and affairs of the Company or interfere with the Employee's performance of his duties hereunder. 2.4 DUTY OF LOYALTY. The Employee acknowledges and agrees that the Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Company and its Affiliates and to do no act that would injure the business, interests or reputation of the Company or any of its Affiliates. In keeping with these duties, the Employee shall make full disclosure to the Board of all business opportunities pertaining to the Company's business and shall not appropriate for the Employee's own benefit any such business opportunities. ARTICLE 3 STATED TERM AND TERMINATION OF EMPLOYMENT 3.1 EMPLOYMENT TERM. The term of this Agreement shall commence on the Effective Date and end on June 4, 2004 (the "STATED TERM") unless earlier terminated in accordance with this Agreement (such period of employment, as it may be earlier terminated, being referred to herein as the "EMPLOYMENT TERM"). 3.2 THE COMPANY'S RIGHT TO TERMINATE. Notwithstanding the provisions of Section 3.1, the Employee's employment shall terminate prior to the expiration of the Stated Term (a) upon the Employee's (i) death or (ii) voluntary resignation or (b) upon termination by the Company for any of the following reasons: (i) the Employee's becoming incapacitated by accident, sickness or other circumstance that renders him Totally Disabled; (ii) for Cause; or (iii) for any reason not described in Section 3.2(a) or Sections 3.2(b)(i) or 3.2(b)(ii) ("WITHOUT CAUSE TERMINATION"), and the Company shall give Employee 15 days advanced notice of any such Without Cause Termination. 3.3 EMPLOYEE'S RIGHT TO TERMINATE FOR "GOOD REASON". Employee may terminate his employment hereunder for Good Reason at any time during the Stated Term, in which event Employee shall resign from all of his positions with the Company. For purposes of this Agreement, "GOOD REASON" shall mean any of the following should they occur without the Employee's prior consent: CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 2 (a) The assignment to Employee by the Company of duties inconsistent with Employee's position as Chief Operating Officer of the Company, or any significant reduction or significant change in either position, stature, or job function, except in connection with the termination of employment for Cause or in connection with the termination of employment by reason of Employee becoming Totally Disabled; provided, that "Good Reason" shall not occur pursuant to this Section 3.3(a) unless and until such assignment, significant reduction or significant change remains uncorrected for 30 days following written notice to the Company by Employee of same; or (b) A reduction by the Company in the Base Salary or benefits received by Employee in violation of this Agreement; provided, that "Good Reason" shall not occur pursuant to this Section 3.3(b) unless and until such reduction of Base Salary or benefits remains uncorrected for 30 days following written notice to the Company by Employee of same. Upon any delivery by Employee of written notice to the Company pursuant to Section 3.3(a) or (b) (a "GOOD REASON NOTICE"), during the 30-day period referred to in Sections 3.3(a) and (b), the Company agrees that it will not terminate Employee for Cause based on Employee's performance under this Agreement during such period as it relates to the matters covered by the Good Reason Notice. 3.4 EFFECT OF TERMINATION (a) If the Employee's employment shall terminate upon the expiration of the Stated Term or pursuant to Section 3.2(a)(ii) or 3.2(b)(ii), then, notwithstanding any other provision herein, all compensation, bonuses and benefits to the Employee not yet accrued hereunder shall terminate contemporaneously with the expiration of the Employment Term. (b) If the Employee's employment shall terminate pursuant to Section 3.2(a)(i) or 3.2(b)(i), then the Employee shall be entitled to receive, as salary continuation, payments equal to the difference between the Base Salary and any disability benefits received by Employee under the Company's disability benefit plans for the lesser of (i) 12 months after the Employee becomes Totally Disabled or (ii) the number of months from the date Employee becomes Totally Disabled through the end of the Stated Term. (c) (i) If the Employee's employment shall terminate pursuant to Section 3.2(b)(iii) or for "Good Reason" at any time during the period beginning on the Effective Date and ending on the date that is one year after the Effective Date, then the Employee shall be entitled to receive severance pay equal to the Base Salary for a number of months after such termination of employment equal to (A) 24 months less (B) the number of months in the period beginning on the Effective Date and ending on the expiration of the Employment Term (rounded to the nearest whole month). (ii) If the Employee's employment shall terminate pursuant to Section 3.2(b)(iii) or for "Good Reason" at any time during the period beginning on the date that is one year after the Effective Date and ending on the expiration of the Employment Term, then the Employee shall be entitled to receive severance pay equal to the Base Salary for the lesser of (A) 12 months or (B) the number of months remaining in the Stated Term. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 3 (d) All payments due under this Section 3.4 shall be due and payable in such installments as would have been payable if the Employee had not been so terminated. (e) In light of the difficulties in estimating the damages for an early termination of this Agreement, the Company and the Employee hereby agree that the payments, if any, to be received by the Employee pursuant to this Section 3.4 shall be received by the Employee as liquidated damages, and the Employee shall not have any right to any other payment or damages except for such liquidated damages. (f) The Company may set off any amounts of money or goods owed by the Employee to the Company against any final payments made to the Employee, as appropriate under applicable state law. (g) In the event the Employment Term is terminated and the Company is obligated to make payments pursuant to this Section 3.4, the Employee hereby releases and waives any and all claims against the Company, its subsidiaries, and their respective officers, directors, employees, agents, or representatives, stockholders and Affiliates relating to this Agreement and to his employment and, as a condition to receiving salary continuation or severance payments, the Employee will enter into and deliver to the Company a separate release and waiver in a form reasonably satisfactory to the Company to further evidence such release and waiver; provided, that such release shall not include a release of any claims that may arise in favor of the Employee as a result of the Company's failure to pay Employee any salary continuation or severance payments due to Employee pursuant to this Section 3.4 after the date Employee enters into such release and waiver, and provided that such release and waiver shall not include a release of any claims under the Transaction Documents (unless such claim related to this Agreement or to Employee's employment with the Company). (h) Articles 5, 6, 7 and 8 shall survive and continue to be binding after the termination of the Employment Term and/or the breach or termination of this Agreement. ARTICLE 4 COMPENSATION, BONUSES AND BENEFITS 4.1 BASE SALARY. During the Employment Term, the Company shall pay the Employee a gross base salary of $15,000 per calendar month (as it may be increased in accordance with this Agreement, the "BASE SALARY"), which the Company shall pay to the Employee in equal installments in accordance with the Company's regular payroll practice for management employees. On each anniversary of the Effective Date, the Compensation Committee may, in its sole discretion, increase the Base Salary in an amount determined by the Compensation Committee in its sole discretion, with such increase being targeted to be 5% of the previous year's Base Salary. 4.2 BONUSES. In addition to the Base Salary due under Section 4.1, the Employee may be eligible for a bonus (a "BONUS") in each fiscal year during the Employment Term in accordance with and pursuant to the Company's then-current bonus plan ("BONUS PLAN"). The Bonus Plan will be implemented and administered by the Compensation Committee, and any bonuses payable thereunder shall be based upon a number of factors determined and set by the CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 4 Compensation Committee in its sole discretion. Such factors may include, but not be limited to, the achievement by the Company of certain performance objectives, and the operation of the Company within the budgets approved by the Board. Subject to achieving the performance standards set by the Compensation Committee, the targeted Bonus payable to the Employee will be 15% of the Employee's annual Base Salary, but the ultimate Bonus amount paid to the Employee will be determined at the discretion of the Compensation Committee. The Bonus, if any, paid to Employee for any partial year shall be prorated for the actual number of days Employee is employed by the Company in such year. 4.3 BENEFITS. (a) During the Employment Term, the Employee shall be eligible for participation in and to receive all benefits under welfare benefit plans, practices, policies and programs of the Company (including the Company's existing benefit plans), as may be in effect from time to time for other similarly situated employees of the Company, and the Employee shall be entitled to vacations and sick leave in accordance with the Company's prevailing policy for its executives, with the parties anticipating that the Employee will receive three weeks paid vacation during each one-year period commencing on the Effective Date and each anniversary thereof. (b) The Company shall reimburse the Employee for all reasonable and proper travel and out-of-pocket expenses incurred by the Employee in connection with the performance of his duties, all in accordance with the Company's written policies as provided to the Employee from time to time, as to the allowable amount of such expenses and the provision of itemized reports. (c) During the Employment Term, the Company shall pay the Employee a monthly automobile allowance of $750 to cover the Employee's business automobile expenses (including related insurance and maintenance expenses). (d) Contemporaneously with the execution and delivery of this Agreement, the Company and the Employee have entered into a Stock Option Agreement pursuant to which the Company has granted the Employee the option to purchase a number of shares of Common Stock of the Company. Such Stock Option Agreement (and the stock option plan referenced therein) shall govern the options granted to the Employee. ARTICLE 5 PROTECTION OF INFORMATION 5.1 DISCLOSURE TO AND PROPERTY OF THE COMPANY. All information, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by the Employee, individually or in conjunction with others, during the Employment Term (whether during business hours or otherwise and whether on the Company's premises or otherwise) that relate to the Company's or any of its Affiliates' business, products or services (including, without limitation, all such information relating to corporate opportunities, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisitions prospects, the identity of customers or their requirements, the identity of key contacts within the customer's organizations or within the CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 5 organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks) (collectively, "CONFIDENTIAL INFORMATION") shall be disclosed to the Company and are and shall be the sole and exclusive property of the Company or its Affiliates. Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression (collectively, "WORK PRODUCT") are and shall be the sole and exclusive property of the Company or its Affiliates. Upon termination of the Employee's employment by the Company, for any reason, the Employee promptly shall deliver such Confidential Information and Work Product, and all copies thereof, to the Company. 5.2 DISCLOSURE TO THE EMPLOYEE. The Company may disclose to the Employee, or place the Employee in a position to have access to or develop, Confidential Information and Work Product of the Company or its Affiliates. 5.3 NO UNAUTHORIZED USE OR DISCLOSURE. The Employee agrees that he will preserve and protect the confidentiality of all Confidential Information and Work Product of the Company and its Affiliates, and will not, at any time during or after the Employee's employment by the Company, make any unauthorized disclosure of, and will use his best reasonable efforts to prevent the removal from the Company premises of, Confidential Information or Work Product of the Company or its Affiliates, or make any use thereof, in each case, except in the carrying out of the Employee's responsibilities hereunder. The Employee shall inform all persons or entities to whom any Confidential Information shall be disclosed by him in accordance with this Agreement about the confidential nature of such Confidential Information, and the Employee shall ensure that such Confidential Information is identified as being confidential, and shall call such identifying mark to such recipient's attention. The Employee shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure of any thereof is specifically required by law; provided, however, that in the event disclosure is required by applicable law and Employee is making such disclosure, the Employee shall provide the Company with prompt notice of such requirement, and shall use his commercially reasonable efforts to give such notice prior to making any disclosure, so that the Company may seek an appropriate protective order. At the request of the Company, the Employee agrees to deliver to the Company, at any time during the Employment Term, or thereafter, all Confidential Information which he may possess or control. The Employee agrees that all Confidential Information of the Company (whether now or hereafter existing) conceived, discovered or made by him during the Employment Term, as between the Employee and the Company, exclusively belongs to the Company (and not to the Employee, and the Employee will promptly disclose such Confidential Information to the Company and perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership. Affiliates of Company shall be third party beneficiaries of the Employee's obligations under this Section. As a result of the Employee's employment by Company, the Employee may also from time to time have access to, or knowledge of, Confidential Information or Work Product of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its Affiliates. The Employee also agrees to preserve and protect the confidentiality of such third party Confidential CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 6 Information and Work Product to the same extent, and on the same basis, as Company's Confidential Information and Work Product. 5.4 OWNERSHIP BY COMPANY. If, during the Employee's employment by Company, the Employee creates any work of authorship fixed in any tangible medium of expression that is the subject matter of copyright (such as videotapes, written presentations, or acquisitions, computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural renditions, models, manuals, brochures, or the like) relating to Company's business, products, or services, whether such work is created solely by the Employee or jointly with others (whether during business hours or otherwise and whether on Company's premises or otherwise), Company shall be deemed the author of such work if the work is prepared by the Employee in the scope of the Employee's employment; or, if the work is not prepared by the Employee within the scope of the Employee's employment but is specially ordered by Company as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, or as an instructional text, then the work shall be considered to be work made for hire and Company shall be the author of the work. If such work is neither prepared by the Employee within the scope of the Employee's employment nor a work specially ordered that is deemed to be a work made for hire, then the Employee hereby agrees to assign, and by these presents does assign, to Company all of the Employee's worldwide right, title, and interest in and to such work and all rights of copyright therein. 5.5 ASSISTANCE BY THE EMPLOYEE. During the period of the Employee's employment by the Company, the Employee shall assist the Company and its nominee, at any time, in the protection of the Company's or its Affiliates' worldwide right, title and interest in and to Work Product and the execution of all formal assignment documents requested by the Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries. After the Employee's employment with the Company, at the request of the Company or its Affiliates, the Employee shall reasonably assist the Company and its nominee, at reasonable compensation and at reasonable times and for reasonable periods, in the protection of the Company's or its Affiliates' worldwide right, title and interest in and to Work Product and the execution of all formal assignment documents requested by the Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries, all as may be requested by the Company from time to time. 5.6 REMEDIES. The Employee acknowledges that money damages would not be sufficient remedy for any breach of this Article 5 by the Employee, and the Company or its Affiliates shall be entitled to enforce the provisions of this Article 5 by specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity, including the recovery of damages from the Employee and his agents. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 7 ARTICLE 6 STATEMENTS CONCERNING THE COMPANY AND THE EMPLOYEE 6.1 STATEMENTS CONCERNING THE COMPANY. The Employee shall refrain, both during the Employment Term and thereafter, from publishing any oral or written statements about the Company, any of its Affiliates or any of such entities' officers, employees and consultants, agents or representatives that are (a) slanderous, libelous or defamatory, (b) that disclose Confidential Information about the Company, any of its Affiliates or any of such entities' business affairs, officers, employees and consultants, agents or representatives, (c) that constitute an intrusion into the seclusion or private lives of any officers, employees and consultants, agents or representatives of the Company or any of its Affiliates, (d) except as required by law, that give rise to unreasonable publicity about the private lives of any officers, employees and consultants, agents or representatives of the Company or any of its Affiliates, (e) except as required by law, that place the Company, any of its Affiliates, or any of such entities' officers, employees and consultants, agents or representatives in a false light before the public or (f) that constitute a misappropriation of the name or likeness of the Company, any of its Affiliates or any of such entities' officers, employees and consultants, agents or representatives. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded the Company and its Affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law. 6.2 STATEMENTS CONCERNING THE EMPLOYEE. The Company shall refrain, both during the Employment Term and thereafter, from publishing any oral or written statements about the Employee that are (a) slanderous, libelous or defamatory, (b) that disclose Confidential Information about the Employee, (c) that constitute an intrusion into the seclusion or private lives of the Employee, (d) except as required by law, that give rise to unreasonable publicity about the private lives of the Employee, (e) except as required by law, that place the Employee in a false light before the public or (f) that constitute a misappropriation of the Employee's name or likeness. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded the Employee under this provision are in addition to any and all rights and remedies otherwise afforded by law. ARTICLE 7 NONCOMPETITION AFTER TERMINATION 7.1 IN GENERAL. The Employee agrees that, from the date hereof until 24 months after the end of the Employment Term (the "NON-COMPETE PERIOD"), the Employee shall not: (a) directly or indirectly participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, contractor or otherwise with, or have any financial interest in or aid or assist anyone else in the conduct of, any business in any of the business territories in which the Company is presently or from time-to-time conducting BUSINESS that either conducts a business substantially similar to that conducted by the Company or its Affiliates or provides or sells a service or product that is the same, substantially similar to or otherwise competitive with the products and services provided or sold by the Company or its Affiliates (a "COMPETITIVE OPERATION"); provided, however, that this provision shall not preclude the Employee from owning less than 2% of the equity securities of any CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 8 publicly held Competitive Operation so long as the Employee does not serve as an employee, officer, director or consultant to such business; (b) directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity either (i) attempt to hire, contract or solicit with respect to hiring any employee of the Company or its Affiliates, or (ii) induce or otherwise counsel, advise or encourage any employee of the Company or its Affiliates to leave the employment of the Company or its Affiliates; (c) directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity call upon, solicit, divert or take away, any customer or vendor of the Company or its Affiliates with whom the Employee dealt, directly or indirectly, during his engagement with the Company or its Affiliates, in connection with a Competitive Operation; (d) (i) call upon any prospective acquisition candidate during Employee's employment with the Company, on the Employee's own behalf or on behalf of any Competitive Operation, which candidate is a Competitive Operation or which candidate was, to the Employee's knowledge after due inquiry, either called upon by the Company or for which the Company or any of its Affiliates made an acquisition analysis, for the purpose of acquiring such entity, or (ii) call upon any prospective acquisition candidate after Employee's employment with the Company, on the Employee's own behalf or on behalf of any Competitive Operation, which candidate Employee knows or should have known is a Competitive Operation as of the termination of Employee's employment with the Company, or which candidate Employee knows or should have known was called upon by the Company or for which the Company or any of its Affiliates made an acquisition analysis, for the purposes of acquiring such entity; or (e) directly or indirectly participate in the ownership, management, operation or control of more than 2% of the ownership interest in any customer, vendor, supplier or lessor of goods and services to the Company without the written consent of the Board. This restriction shall include any Family Member of the Employee. Further, the Employee shall, on an annual basis or from time to time as required by the Company, disclose which entities, if any, in which they or any Family Member directly or indirectly participate in the ownership, management, operation or control of, or are connected as an officer, employee, partner, director or otherwise with, or have any financial interest in or aid or assist anyone else in the conduct of any business that is a customer, vendor, supplier or lessor of goods, services or real property to the Company. (f) It is agreed by the parties that the foregoing covenants in this Article 7 impose a reasonable restraint on the Employee. (g) The covenants in this Article 7 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 9 restrictions be enforced to the fullest extent that the court deems reasonable, and the Agreement shall thereby be reformed. ARTICLE 8 MISCELLANEOUS 8.1 NOTICES. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Company to: Cardtronics, LP 3000 Hays, Suite 101 Houston, Texas 77082 Attention: Chief Executive Officer With a copy to: Summit Capital Group, LLC 600 Travis, Suite 6110 Houston, Texas 77002 Attention: Mr. Fred Brazelton and a copy to: Vinson & Elkins L.L.P. 1001 Fannin Street, Suite 2300 Houston, Texas 77002 Attention: Mr. Bruce C. Herzog If to the Employee to: Michael H. Clinard 19415 Vardes Court Houston, TX 77094 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt. 8.2 APPLICABLE LAW. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas. 8.3 NO WAIVER. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 8.4 SEVERABILITY. To the extent permitted by applicable law, the Company and the Employee hereby agree that any term or provision of this Agreement that renders such term or provision or any other term or provision hereof invalid or unenforceable in any respect shall be modified to the extent necessary to avoid rendering such term or provision invalid or unenforceable, and such modification shall be accomplished in the manner that most nearly preserves the benefit of the Company and the Employee's bargain hereunder. If a court of CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 10 competent jurisdiction determines that any term or provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that term or provision shall not affect the validity or enforceability of any other term or provision of this Agreement, and all other terms or provisions shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in a materially adverse manner with respect to either party. 8.5 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to the Company's employees generally. 8.7 HEADINGS. The section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. 8.8 GENDER AND PLURALS. Wherever the context so requires, the masculine gender includes the feminine or neuter, the singular number includes the plural and vice-versa, "or" has the inclusive meaning identified with the phrase "and/or" and "including" has the inclusive meaning frequently identified with the phrase "but not limited to." 8.9 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company, by merger or otherwise. Except as provided in the preceding sentence and except that the Company may assign its rights hereunder to an Affiliate, this Agreement and the rights and obligations of the parties hereunder are personal and neither this Agreement nor any right, benefit or obligation of either party hereto shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party. 8.10 AMENDMENT; ENTIRE AGREEMENT. This Agreement may not be changed orally but only by an agreement in writing agreed to and signed by both parties. This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of the Employee by the Company and supersedes any and all prior agreements, including employment agreements, bonus plans, benefit plans and other compensation or benefit plans and agreements. 8.11 ARBITRATION. In the event of any dispute, difference or question arising between the Company and the Employee in connection with this Agreement or the discussion, negotiation, drafting or making hereof, or any clause or the construction thereof, or the rights, duties or liabilities of either party, then and in every such case, unless the parties agree on the appointment of a single arbitrator, the matter of difference shall be referred to one arbitrator appointed by the American Arbitration Association, and the arbitration of such dispute shall be administered in accordance with the employment rules of the American Arbitration Association. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 11 The arbitrator shall determine the place or places in Harris County, Texas, where meetings are to be held. The arbitrator must base his or her decision, with respect to the difference before him or her, on the contents of this Agreement and the relevant facts, and the decision of the arbitrator shall be binding on both parties. Nothing herein is or shall be deemed to preclude the Company's resort to the injunctive relief prescribed in this Agreement, including any injunctive relief implemented by the arbitrators pursuant to this Section 8.11. 8.12 EMPLOYEE'S REPRESENTATION. The Employee hereby warrants and represents to Company that the Employee has carefully reviewed the Agreement and has consulted with such advisors as the Employee considers appropriate in connection with this Agreement, and is not subject to any covenants, agreements or restrictions, including without limitation any covenants, agreements or restrictions arising out of the Employee's prior employment that would be breached or violated by the Employee's execution of this Agreement or by the Employee's performance of his duties hereunder. 8.13 OTHER MATTERS. Employee agrees and herby acknowledges that the obligations owed to the Employee under this Agreement are solely those of the Company, and that none of the Company's stockholders, directors, officers, Affiliates, representatives, agents or lenders will have any obligations or liabilities in respect of this Agreement and the subject matter hereof. [The remainder of this page is intentionally left blank] CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above, to be effective as of the Effective Date. THE COMPANY: CARDTRONICS, LP By: ______________________________________ Name: ______________________________________ Title: ______________________________________ EMPLOYEE: _____________________________________________ Michael H. Clinard CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD SIGNATURE PAGE EXHIBIT A DEFINED TERMS As used in the Agreement, the following terms shall have the respective meanings set forth below or set forth in the provision of the Agreement following such term. "AFFILIATE" shall mean, (a) with respect to the Company, (i) any person or entity that is directly or indirectly controlled by the Company, (ii) Cardtronics Group, Inc., and (iii) any person or entity that is directly or indirectly controlled by Cardtronics Group, Inc., and (b) with respect to any other person or entity, any other person or entity (i) that is directly or indirectly controlled by the person or entity in question, (ii) that directly or indirectly controls the person or entity in question, or (iii) that directly or indirectly is under common control with the person or entity in question. For purposes of the foregoing definition, (x) a person or entity controls another entity if it or he directly or indirectly owns, or has the right to vote, at least 20% of the beneficial interests in the entity or if through other agreements (e.g., management agreement) has the right to control the policies of such entity; (y) indirect control includes control held through one or more tiers of subsidiary or intervening entities (such as corporations, partnerships, trusts, or limited liability companies); and (z) "control" includes the ability, directly or indirectly, to direct the management or policies of such entity, whether through the ownership of voting rights, pursuant to a contract, or otherwise. "AGREEMENT" shall have the meaning ascribed to such term in the preamble of this Employment Agreement. "BASE SALARY" shall have the meaning ascribed to such term in Section 4.1 of this Agreement. "BOARD" shall have the meaning ascribed to such term in Section 2.3 of this Agreement. "BONUS" shall have the meaning ascribed to such term in Section 4.2 of this Agreement. "CAUSE" shall mean if the Employee (A) has engaged in gross negligence (other than any gross negligence of Employee in operating a motor vehicle) or willful misconduct in the performance of the duties required of him hereunder, (B) has been indicted with respect to a felony offense, (C) has materially breached any Company policy or code of conduct established by the Company of which he is aware or should have been aware, (D) has willfully engaged in conduct that he knows or should know is materially injurious to the Company or any of its Affiliates or (E) has materially breached any provision of this Agreement. "COMPANY" shall have the meaning ascribed to such term in the preamble of this Agreement. "COMPENSATION COMMITTEE" shall mean a committee formed by the Board for the purpose of determining compensation levels (including base salary, bonus and stock options) of key management and officers of the Company; provided, however, that in the event the Board CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD EXHIBIT A - DEFINED TERMS Page 1 does not appoint such a committee, the Board shall be considered the Compensation Committee for purposes of this Agreement. "COMPETITIVE OPERATION" shall have the meaning ascribed to such term in Section 7.1(a) of this Agreement. "CONFIDENTIAL INFORMATION" shall have the meaning ascribed to such term in Section 5.1 of this Agreement. "EFFECTIVE DATE" shall have the meaning ascribed to such term in the preamble of this Agreement. "EMPLOYEE" shall have the meaning ascribed to such term in the preamble of this Agreement. "EMPLOYMENT TERM" shall have the meaning ascribed to such term in Section 3.1 of the Agreement. "FAMILY MEMBER" shall mean any relative or spouse of such person or any relative of such spouse, any one of whom has the same home as such person. "INITIAL AWARD" shall have the meaning ascribed to such term in Section 4.3(d) of this Agreement. "MANAGEMENT OPTIONS" shall have the meaning ascribed to such term in Section 4.3(d) of this Agreement. "NON-COMPETE PERIOD" shall have the meaning ascribed to such term in Section 7.1 of this Agreement. "TOTALLY DISABLED" shall mean failure by the Employee, by reason of illness, incapacity or other disability, to perform his duties or fulfill his obligations under this Agreement in the view of the Company and as certified in writing by a competent medical physician chosen by the Company, for a cumulative total of 180 days in any 12-month period. "WITHOUT CAUSE TERMINATION" shall have the meaning ascribed to such term in Section 3.2(b)(iii) of this Agreement. "WORK PRODUCT" shall have the meaning ascribed to such term in Section 5.1 of this Agreement. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF MICHAEL H. CLINARD EXHIBIT A - DEFINED TERMS Page 2 EX-10.13 15 h12528exv10w13.txt EMPLOYMENT AGREEMENT - THOMAS E. UPTON EXHIBIT 10.13 ================================================================================ EMPLOYMENT AGREEMENT BETWEEN CARDTRONICS, LP AND THOMAS E. UPTON JUNE 1, 2001 ================================================================================ TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 1.1 DEFINITIONS ............................................................. 1 1.2 CONSTRUCTION ............................................................ 1 ARTICLE 2 EMPLOYMENT AND DUTIES 2.1 EMPLOYMENT; EFFECTIVE DATE .............................................. 1 2.2 POSITION ................................................................ 1 2.3 DUTIES AND SERVICES ..................................................... 1 2.4 DUTY OF LOYALTY ......................................................... 2 ARTICLE 3 STATED TERM AND TERMINATION OF EMPLOYMENT 3.1 EMPLOYMENT TERM ......................................................... 2 3.2 THE COMPANY'S RIGHT TO TERMINATE ........................................ 2 3.3 EFFECT OF TERMINATION ................................................... 2 ARTICLE 4 COMPENSATION, BONUSES AND BENEFITS 4.1 BASE SALARY ............................................................. 3 4.2 BONUSES ................................................................. 3 4.3 BENEFITS ................................................................ 4 ARTICLE 5 PROTECTION OF INFORMATION 5.1 DISCLOSURE TO AND PROPERTY OF THE COMPANY ............................... 4 5.2 DISCLOSURE TO THE EMPLOYEE .............................................. 5 5.3 NO UNAUTHORIZED USE OR DISCLOSURE ....................................... 5 5.4 OWNERSHIP BY COMPANY .................................................... 5 5.5 ASSISTANCE BY THE EMPLOYEE .............................................. 6 5.6 REMEDIES ................................................................ 6 ARTICLE 6 STATEMENTS CONCERNING THE COMPANY 6.1 IN GENERAL .............................................................. 6 ARTICLE 7 NON-COMPETITION AFTER TERMINATION 7.1 IN GENERAL .............................................................. 7

EMPLOYMENT AGREEMENT TABLE OF CONTENTS i ARTICLE 8 MISCELLANEOUS 8.1 NOTICES ................................................................ 8 8.2 APPLICABLE LAW ......................................................... 8 8.3 NO WAIVER .............................................................. 9 8.4 SEVERABILITY ........................................................... 9 8.5 COUNTERPARTS ........................................................... 9 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS ..................... 9 8.7 HEADINGS ............................................................... 9 8.8 GENDER AND PLURALS ..................................................... 9 8.9 ASSIGNMENT ............................................................. 9 8.10 AMENDMENT; ENTIRE AGREEMENT ............................................ 9 8.11 ARBITRATION ............................................................ 10 8.12 EMPLOYEE'S REPRESENTATION .............................................. 10 8.13 OTHER MATTERS .......................................................... 10

EXHIBITS: A - Definitions ii EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into by and between Cardtronics, LP, a Delaware limited partnership (the "COMPANY"), and Thomas E. Upton (the "EMPLOYEE") effective as of June 1, 2001 (the "EFFECTIVE DATE"). NOW, THEREFORE, in consideration of the employment by the Company, and of the compensation and other remuneration to be paid by the Company to the Employee for such employment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Employee, the Company and the Employee agree as follows: ARTICLE 1 DEFINITIONS 1.1 DEFINITIONS. In addition to terms defined in the body of this Agreement, capitalized terms used herein shall have the meanings given to them in Exhibit A. 1.2 CONSTRUCTION. Unless the context requires otherwise: (a) references to Articles and Sections refer to articles and sections of this Agreement; (b) references to Exhibits and Schedules are to exhibits and schedules attached to this Agreement, each of which is made a part of this Agreement for all purposes; and (c) references to money refer to legal currency of the United States of America. ARTICLE 2 EMPLOYMENT AND DUTIES 2.1 EMPLOYMENT; EFFECTIVE DATE. Subject to the terms of this Agreement, the Company agrees to employ the Employee, and the Employee agrees to be employed by the Company, beginning as of the Effective Date and continuing until the last day of the Employment Term. 2.2 POSITION. During the Employment Term, the Employee shall serve as the Chief Financial Officer of the Company. 2.3 DUTIES AND SERVICES. The Employee shall perform diligently and to the best of his abilities the duties and services appertaining to the Employee's position as provided in Section 2.2, as well as such additional duties and services appropriate to such position that the Board of Directors of the Company (the "BOARD") may determine from time to time. The Employee's employment shall also be subject to the policies maintained and established by the Board, as the same may be amended from time to time. In furtherance of the foregoing, the Employee shall devote his full business time, energy and efforts to the business and affairs of the Company and its Affiliates and shall not engage, directly or indirectly, in any other business or businesses, whether or not similar to that of the Company. The foregoing notwithstanding, the parties recognize that the Employee may engage in passive personal investments and other non-competitive business activities that do not conflict with the business and affairs of the Company or its Affiliates or interfere with the Employee's performance of his duties hereunder. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 1 2.4 DUTY OF LOYALTY. The Employee acknowledges and agrees that the Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Company and its Affiliates and to do no act that would injure the business, interests or reputation of the Company or any of its Affiliates. In keeping with these duties, the Employee shall make full disclosure to the Board of all business opportunities pertaining to the Company's business and shall not appropriate for the Employee's own benefit any such business opportunities. ARTICLE 3 STATED TERM AND TERMINATION OF EMPLOYMENT 3.1 EMPLOYMENT TERM. The term of this Agreement shall commence on the Effective Date and end on June 1, 2005 (the "STATED TERM") unless earlier terminated in accordance with this Agreement (such period of employment, as it may be earlier terminated, being referred to herein as the "EMPLOYMENT TERM"). 3.2 THE COMPANY'S RIGHT TO TERMINATE. Notwithstanding the provisions of Section 3.1, the Employee's employment shall terminate prior to the expiration of the Stated Term (a) upon the Employee's death or voluntary resignation or (b) upon termination by the Company for any of the following reasons: (i) the Employee's becoming incapacitated by accident, sickness or other circumstance that renders him Totally Disabled; (ii) for Cause; or (iii) for any reason not described in Section 3.2(a) or Sections 3.2(b)(i) or 3.2(b)(ii) ("WITHOUT CAUSE TERMINATION"), and the Company shall give Employee 30 days advanced notice of any such Without Cause Termination. 3.3 EFFECT OF TERMINATION (a) If the Employee's employment shall terminate upon the expiration of the Stated Term or upon the Employee's voluntary resignation or 3.2(b)(ii), then, notwithstanding any other provision herein, all compensation, bonuses and benefits to the Employee not yet accrued hereunder shall terminate contemporaneously with the expiration of the Employment Term. (b) If the Employee's employment shall terminate pursuant to Section 3.2(b)(i) or upon Employee's death, then the Employee shall be entitled to receive severance pay equal to the Base Salary for the lesser of (A) twelve months or (B) the number of months remaining in the Stated Term. (c) If the Employee's employment shall terminate pursuant to Section 3.2(b)(iii), then the Employee shall be entitled to receive severance pay equal to the Base Salary for the lesser of (A) six months or (B) the number of months remaining in the Stated Term. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 2 (d) All payments due under this Section 3.3 shall be due and payable in such installments as would have been payable if the Employee had not been so terminated. (e) In light of the difficulties in estimating the damages for an early termination of this Agreement, the Company and the Employee hereby agree that the payments, if any, to be received by the Employee pursuant to this Section 3.3 shall be received by the Employee as liquidated damages, and the Employee shall not have any right to any other payment or damages except for such liquidated damages. (f) The Employee agrees promptly to notify the Company if he accepts any employment or enters into any service arrangement that provides Employee with compensation during the time he is receiving payments under this Section 3.3. (g) The Company may set off any amounts of money, goods or services owed by the Employee to the Company against any final payments made to the Employee, as appropriate under applicable state law. (h) In the event the Employment Term is terminated and the Company is obligated to make payments pursuant to this Section 3.3, the Employee hereby releases and waives any and all claims against the Company, its subsidiaries, and their respective officers, directors, employees, agents, or representatives, stockholders and Affiliates relating to this Agreement and to his employment and, as a condition to receiving salary continuation or severance payments, the Employee will enter into and deliver to the Company a separate release and waiver in a form reasonably satisfactory to the Company to further evidence such release and waiver. (i) Articles 5, 6, 7 and 8 shall survive and continue to be binding after the termination of the Employment Term and/or the breach or termination of this Agreement. ARTICLE 4 COMPENSATION, BONUSES AND BENEFITS 4.1 BASE SALARY. During the Employment Term, the Company shall pay the Employee a gross base salary of $12,500 per calendar month (the "BASE SALARY"), which the Company shall pay to the Employee in equal installments in accordance with the Company's regular payroll practice for management employees. The Compensation Committee may, in its sole discretion, increase the Base Salary in an amount determined by the Compensation Committee in its sole discretion, with such increase being targeted to be 5% of the previous year's Base Salary. 4.2 BONUSES. In addition to the Base Salary due under Section 4.1, the Employee may be eligible for a bonus (a "BONUS") in each fiscal year during the Employment Term in accordance with and pursuant to the Company's then-current bonus plan ("BONUS PLAN"). The Bonus Plan will be implemented and administered by the Compensation Committee of the Board, and any bonuses payable thereunder shall be based upon a number of factors determined and set by the Compensation Committee in its sole discretion. Such factors may include, but not CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 3 be limited to, the achievement by the Company of certain performance objectives, and the operation of the Company within the budgets approved by the Board. Subject to achieving the performance standards set by the Compensation Committee, the targeted Bonus payable to the Employee will be 15% of the Employee's annual Base Salary, but the ultimate Bonus amount paid to the Employee, if any, will be determined at the sole discretion of the Compensation Committee. The Bonus, if any, paid to Employee for any partial year, excluding the first bonus period, shall be prorated for the actual number of days Employee is employed by the Company in such year. Notwithstanding any other provision herein, the Bonus amount payable to the Employee attributable to the Employee's first bonus period (for the period June 1, 2001 through December 31, 2001) will not be less than $15,000 provided that the Employee is employed by the Company during the entirety of such first bonus period pursuant to the terms of this Agreement. 4.3 BENEFITS. (a) During the Employment Term, the Employee shall be eligible for participation in and to receive all benefits under welfare benefit plans, practices, policies and programs of the Company, including the Company's medical, dental, disability, and 401K plans as may be in effect from time to time for other similarly situated employees of the Company. The Employee shall be entitled to vacations and sick leave in accordance with the Company's prevailing policy for its executives, with the parties anticipating that the Employee will receive four weeks paid vacation during each one-year period commencing on the Effective Date and each anniversary thereof. (b) Contemporaneously with the execution and delivery of this Agreement, the Company and the Employee have entered into a Stock Option Agreement pursuant to which the Company has granted the Employee the option to purchase a number of shares of Common Stock of the Company. Such Stock Option Agreement (and the stock option plan referenced therein) shall govern the options granted to the Employee. ARTICLE 5 PROTECTION OF INFORMATION 5.1 DISCLOSURE TO AND PROPERTY OF THE COMPANY. All information, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by the Employee, individually or in conjunction with others, during the Employment Term (whether during business hours or otherwise and whether on the Company's premises or otherwise) that relate to the Company's or any of its Affiliates' business, products or services (including, without limitation, all such information relating to corporate opportunities, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisitions prospects, the identity of customers or their requirements, the identity of key contacts within the customer's organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks) (collectively, "CONFIDENTIAL INFORMATION") shall be disclosed to the Company and are and shall be the sole and exclusive property of the Company or its Affiliates. Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 4 voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression (collectively, "WORK PRODUCT") are and shall be the sole and exclusive property of the Company or its Affiliates. Upon termination of the Employee's employment by the Company, for any reason, the Employee promptly shall deliver such Confidential Information and Work Product, and all copies thereof, to the Company. 5.2 DISCLOSURE TO THE EMPLOYEE. The Company may disclose to the Employee, or place the Employee in a position to have access to or develop, Confidential Information and Work Product of the Company or its Affiliates. The Employee agrees to preserve and protect the confidentiality of all Confidential Information or Work Product of the Company or its Affiliates. 5.3 NO UNAUTHORIZED USE OR DISCLOSURE. The Employee agrees that he will not, at any time during or after the Employee's employment by the Company, make any unauthorized disclosure of, and will prevent the removal from the Company premises of, Confidential Information or Work Product of the Company or its Affiliates, or make any use thereof, except in the carrying out of the Employee's responsibilities hereunder. The Employee shall use commercially reasonable efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by him hereunder to observe the terms and conditions set forth herein as though each such person or entity was bound hereby. The Employee shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by law; provided, however, that in the event disclosure is required by applicable law, the Employee shall provide the Company with prompt notice of such requirement prior to making any such disclosure, so that the Company may seek an appropriate protective order. At the request of the Company, the Employee agrees to deliver to the Company, at any time during the Employment Term, or thereafter, all Confidential Information that he may possess or control. The Employee agrees that all Confidential Information of the Company (whether now or hereafter existing) conceived, discovered or made by him during the Employment Term exclusively belongs to the Company (and not to the Employee, and the Employee will promptly disclose such Confidential Information to the Company and perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership. Affiliates of Company shall be third party beneficiaries of the Employee's obligations under this Section. As a result of the Employee's employment by Company, the Employee may also from time to time have access to, or knowledge of, Confidential Information or Work Product of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its Affiliates. The Employee also agrees to preserve and protect the confidentiality of such third party Confidential Information and Work Product to the same extent, and on the same basis, as Company's Confidential Information and Work Product. 5.4 OWNERSHIP BY COMPANY. If, during the Employee's employment by Company, the Employee creates any work of authorship fixed in any tangible medium of expression that is the subject matter of copyright (such as videotapes, written presentations, or acquisitions, computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural renditions, models, manuals, brochures, or the like) relating to Company's business, products, or services, whether such work is created solely by the Employee or jointly with others (whether CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 5 during business hours or otherwise and whether on Company's premises or otherwise), Company shall be deemed the author of such work if the work is prepared by the Employee in the scope of the Employee's employment; or, if the work is not prepared by the Employee within the scope of the Employee's employment but is specially ordered by Company as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, or as an instructional text, then the work shall be considered to be work made for hire and Company shall be the author of the work. If such work is neither prepared by the Employee within the scope of the Employee's employment nor a work specially ordered that is deemed to be a work made for hire, then the Employee hereby agrees to assign, and by these presents does assign, to Company all of the Employee's worldwide right, title, and interest in and to such work and all rights of copyright therein. 5.5 ASSISTANCE BY THE EMPLOYEE. During the period of the Employee's employment by the Company and thereafter, the Employee shall assist the Company and its nominee, at any time, in the protection of the Company's or its Affiliates' worldwide right, title and interest in and to Work Product and the execution of all formal assignment documents requested by the Company or its nominee and the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries. 5.6 REMEDIES. The Employee acknowledges that money damages would not be sufficient remedy for any breach of this Article 5 by the Employee, and the Company or its Affiliates shall be entitled to enforce the provisions of this Article 5 by terminating payments then owing to the Employee under this Agreement or otherwise and to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity, including the recovery of damages from the Employee and his agents. ARTICLE 6 STATEMENTS CONCERNING THE COMPANY 6.1 IN GENERAL. The Employee shall refrain, both during the Employment Term and thereafter, from publishing any oral or written statements about the Company, any of its Affiliates or any of such entities' officers, employees and consultants, agents or representatives that are (a) slanderous, libelous or defamatory, (b) that disclose Confidential Information about the Company, any of its Affiliates or any of such entities' business affairs, officers, employees and consultants, agents or representatives, (c) that constitute an intrusion into the seclusion or private lives of any officers, employees and consultants, agents or representatives of the Company or any of its Affiliates, (d) that give rise to unreasonable publicity about the private lives of any officers, employees and consultants, agents or representatives of the Company or any of its Affiliates, (e) that place the Company, any of its Affiliates, or any of such entities' officers, employees and consultants, agents or representatives in a false light before the public or (f) that constitute a misappropriation of the name or likeness of the Company, any of its Affiliates or any of such entities' officers, employees and consultants, agents or representatives. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded the Company and its Affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 6 ARTICLE 7 NON-COMPETITION AFTER TERMINATION 7.1 IN GENERAL. The Employee agrees that, from the date hereof until 24 months after the end of the Employment Term (the "NON-COMPETE PERIOD"), the Employee shall not: (a) directly or indirectly participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, contractor or otherwise with, or have any financial interest in or aid or assist anyone else in the conduct of, any business in any of the business territories in which the Company is presently or from time-to-time conducting business that either conducts a business similar to that conducted by the Company or its Affiliates or provides or sells a service or product that is the same, substantially similar to or otherwise competitive with the products and services provided or sold by the Company or its Affiliates (a "COMPETITIVE OPERATION"); provided, however, that this provision shall not preclude the Employee from owning less than 2% of the equity securities of any publicly held Competitive Operation so long as the Employee does not serve as an employee, officer, director or consultant to such business; (b) directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity either (i) hire, contract or solicit, or attempt any of the foregoing, with respect to hiring any employee of the Company or its Affiliates, or (ii) induce or otherwise counsel, advise or encourage any employee of the Company or its Affiliates to leave the employment of the Company or its Affiliates; (c) directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity call upon, solicit, divert or take away, any customer or vendor of the Company or its Affiliates with whom the Employee dealt, directly or indirectly, during his engagement with the Company or its Affiliates, in connection with a Competitive Operation; (d) call upon any prospective acquisition candidate during or after Employee's employment with the Company, on the Employee's own behalf or on behalf of any Competitive Operation, which candidate is a Competitive Operation or which candidate was, to the Employee's knowledge after due inquiry, either called upon by the Company or for which the Company or any of its Affiliates made an acquisition analysis, for the purpose of acquiring such entity; or (e) directly or indirectly participate in the ownership, management, operation or control of more than 2% of the ownership interest in any customer, vendor, supplier or lessor of goods and services to the Company without the written consent of the Board. This restriction shall include any Family Member of the Employee. Further, the Employee shall, on an annual basis or from time to time as required by the Company, disclose which entities, if any, in which they or any Family Member directly or indirectly participate in the ownership, management, operation or control of, or are connected as an officer, employee, partner, director or otherwise CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 7 with, or have any financial interest in or aid or assist anyone else in the conduct of any business that is a customer, vendor, supplier or lessor of goods, services or real property to the Company. (f) It is agreed by the parties that the foregoing covenants in this Article 7 impose a reasonable restraint on the Employee. (g) The covenants in this Article 7 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent that the court deems reasonable, and the Agreement shall thereby be reformed. ARTICLE 8 MISCELLANEOUS 8.1 NOTICES. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Company to: Cardtronics, LP 3000 Hays, Suite 101 Houston, Texas 77082 Attention: Chief Executive Officer With a copy to: Summit Capital Group, LLC 600 Travis, Suite 6110 Houston, Texas 77002 Attention: Mr. Fred Brazelton and a copy to: Vinson & Elkins L.L.P. 1001 Fannin Street, Suite 2300 Houston, Texas 77002 Attention: Mr. Bruce C. Herzog If to the Employee to: Thomas E. Upton 4710 Woods Edge Drive Richmond, Texas 77469 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt. 8.2 APPLICABLE LAW. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 8 8.3 NO WAIVER. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 8.4 SEVERABILITY. To the extent permitted by applicable law, the Company and the Employee hereby agree that any term or provision of this Agreement that renders such term or provision or any other term or provision hereof invalid or unenforceable in any respect shall be modified to the extent necessary to avoid rendering such term or provision invalid or unenforceable, and such modification shall be accomplished in the manner that most nearly preserves the benefit of the Company and the Employee's bargain hereunder. If a court of competent jurisdiction determines that any term or provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that term or provision shall not affect the validity or enforceability of any other term or provision of this Agreement, and all other terms or provisions shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in a materially adverse manner with respect to either party. 8.5 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to the Company's employees generally. 8.7 HEADINGS. The section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. 8.8 GENDER AND PLURALS. Wherever the context so requires, the masculine gender includes the feminine or neuter, the singular number includes the plural and vice-versa, "or" has the inclusive meaning identified with the phrase "and/or" and "including" has the inclusive meaning frequently identified with the phrase "but not limited to." 8.9 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company, by merger or otherwise. Except as provided in the preceding sentence and except that the Company may assign its rights hereunder to an Affiliate, this Agreement and the rights and obligations of the parties hereunder are personal and neither this Agreement nor any right, benefit or obligation of either party hereto shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party. 8.10 AMENDMENT; ENTIRE AGREEMENT. This Agreement may not be changed orally but only by an agreement in writing agreed to and signed by both parties. This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, contains all the covenants, promises, representations, warranties and agreements between the parties with CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 9 respect to employment of the Employee by the Company and supersedes any and all prior agreements, including employment agreements, bonus plans, benefit plans and other compensation or benefit plans and agreements. 8.11 ARBITRATION. In the event of any dispute, difference or question arising between the Company and the Employee in connection with this Agreement or the discussion, negotiation, drafting or making hereof, or any clause or the construction thereof, or the rights, duties or liabilities of either party, then and in every such case, unless the parties agree on the appointment of a single arbitrator, the matter of difference shall be referred to one arbitrator appointed by the American Arbitration Association, and the arbitration of such dispute shall be administered in accordance with the employment rules of the American Arbitration Association. The arbitrator shall determine the place or places in Harris County, Texas, where meetings are to be held. The arbitrator must base his or her decision, with respect to the difference before him or her, on the contents of this Agreement and the relevant facts, and the decision of the arbitrator shall be binding on both parties. Nothing herein is or shall be deemed to preclude the Company's resort to the injunctive relief prescribed in this Agreement, including any injunctive relief implemented by the arbitrators pursuant to this Section 8.11. 8.12 EMPLOYEE'S REPRESENTATION. Except as disclosed, the Employee hereby warrants and represents to Company that the Employee has carefully reviewed the Agreement and has consulted with such advisors as the Employee considers appropriate in connection with this Agreement, and is not subject to any covenants, agreements or restrictions, including without limitation any covenants, agreements or restrictions arising out of the Employee's prior employment that would be breached or violated by the Employee's execution of this Agreement or by the Employee's performance of his duties hereunder. 8.13 OTHER MATTERS. Employee agrees and hereby acknowledges that the obligations owed to the Employee under this Agreement are solely those of the Company, and that none of the Company's stockholders, directors, officers, Affiliates, representatives, agents or lenders will have any obligations or liabilities in respect of this Agreement and the subject matter hereof. [The remainder of this page is intentionally left blank] CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON 10 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above, to be effective as of the Effective Date. THE COMPANY: CARDTRONICS, LP By: /s/ RALPH H. CLINARD ------------------------------------- Name: Ralph H. Clinard ------------------------------------- Title: President ------------------------------------- EMPLOYEE: /s/ THOMAS E. UPTON -------------------------------------------- Thomas E. Upton CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON SIGNATURE PAGE EXHIBIT A DEFINED TERMS As used in the Agreement, the following terms shall have the respective meanings set forth below or set forth in the provision of the Agreement following such term. "AFFILIATE" shall mean, with respect to any other person or entity, any other person or entity (a) that is directly or indirectly controlled by the person or entity in question, (b) that directly or indirectly controls the person or entity in question, or (c) that directly or indirectly is under common control with the person or entity in question. For purposes of the foregoing definition, (x) a person or entity controls another entity if it or he directly or indirectly owns, or has the right to vote, at least 20% of the beneficial interests in the entity or if through other agreements (e.g., management agreement) has the right to control the policies of such entity; (y) indirect control includes control held through one or more tiers of subsidiary or intervening entities (such as corporations, partnerships, trusts, or limited liability companies); and (z) "control" includes the ability, directly or indirectly, to direct the management or policies of such entity, whether through the ownership of voting rights, pursuant to a contract, or otherwise. "AGREEMENT" shall have the meaning ascribed to such term in the preamble of this Employment Agreement. "BASE SALARY" shall have the meaning ascribed to such term in Section 4.1 of this Agreement. "ANNUAL BASE SALARY" shall mean the Base Salary multiplied by twelve. "BOARD" shall have the meaning ascribed to such term in Section 2.3 of this Agreement. "BONUS" shall have the meaning ascribed to such term in Section 4.2 of this Agreement. "CAUSE" shall mean if the Employee (A) has engaged in gross negligence or willful misconduct in the performance of the duties required of him hereunder, (B) has been indicted with respect to a felony offense, (C) has willfully refused to perform the duties and responsibilities required of him hereunder, (D) has materially breached any Company policy or code of conduct established by the Company of which he is aware or should have been aware, (E) has willfully engaged in conduct that he knows or should know is materially injurious to the Company or any of its Affiliates or (F) has materially breached any provision of this Agreement. "COMPANY" shall have the meaning ascribed to such term in the preamble of this Agreement. "COMPENSATION COMMITTEE" shall mean a committee formed by the Board for the purpose of determining compensation levels (including base salary, bonus and stock options) of key management and officers of the Company; provided, however, that in the event the Board does not appoint such a committee, the Board shall be considered the Compensation Committee for purposes of this Agreement. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON EXHIBIT A - DEFINED TERMS Page 1 "COMPETITIVE OPERATION" shall have the meaning ascribed to such term in Section 7.1(a) of this Agreement. "CONFIDENTIAL INFORMATION" shall have the meaning ascribed to such term in Section 5.1 of this Agreement. "EFFECTIVE DATE" shall have the meaning ascribed to such term in the preamble of this Agreement. "EMPLOYEE" shall have the meaning ascribed to such term in the preamble of this Agreement. "EMPLOYMENT TERM" shall have the meaning ascribed to such term in Section 3.1 of the Agreement. "FAMILY MEMBER" shall mean any relative or spouse of Employee or any relative of such spouse, any one of whom has the same home as Employee. "NON-COMPETE PERIOD" shall have the meaning ascribed to such term in Section 7.1 of this Agreement. "TOTALLY DISABLED" shall mean failure by the Employee, by reason of illness, incapacity or other disability, to perform his duties or fulfill his obligations under this Agreement in the view of the Company and as certified in writing by a competent medical physician chosen by the Company, for a cumulative total of 180 days in any 12-month period. "WITHOUT CAUSE TERMINATION" shall have the meaning ascribed to such term in Section 3.2(b)(iii) of this Agreement. "WORK PRODUCT" shall have the meaning ascribed to such term in Section 5.1 of this Agreement. CARDTRONICS, LP EMPLOYMENT AGREEMENT OF THOMAS E. UPTON EXHIBIT A - DEFINED TERMS Page 2 EX-21.1 16 h12528exv21w1.txt SUBSIDIARIES OF THE COMPANY . . . EXHIBIT 21.1 SUBSIDIARIES OF CARDTRONICS, INC.
Entity Jurisdiction of Organization - ------ ---------------------------- ~~Cardtronics GP, Inc. Delaware Cardtronics LP, Inc. Delaware~~
EX-23.1 17 h12528exv23w1.txt CONSENT OF KPMG LLP EXHIBIT 23.1 Independent Auditors' Consent The Board of Directors and Stockholders of Cardtronics, Inc.: We consent to the use of our report included herein and to the reference to our firm under the heading "Experts" in the prospectus. As discussed in Note 1 to the Consolidated Financial Statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, on January 1, 2003. /s/ KPMG LLP Houston, Texas March 8, 2004 GRAPHIC 18 h12528h1252800.gif GRAPHIC begin 644 h12528h1252800.gif M1TE&.#EAX@!"`-4``+^_OW]_?S\_/P\/#_N_Q?4_4<_/S]_?W^_O[_A_BU]? M7Q\?'Y^?GR\O+_(/):^OKV]O;T]/3_W?XH^/C_9?;OJ?J/[O\/,?-/S/T_=O M?/9/7_[N\.[N[OJOMO0O0OF/F>[?X.W/TM[/T.R_P\Z_P/(`%P```/___P`` M```````````````````````````````````````````````````````````` M`````````````````````````````````"'Y!```````+`````#B`$(```;_ MP)-P2"P:C\BD$PNF\_/RJ7$;A<(Z+A\ M3J^?U.U\FV+O^_^`1@0%>H5L&H&)BHM:@X:/)0F,DY251Q*$D)!AEIV>?Q(4 MFJ-\GZ:G9A:BHZR+]L%*X;:\34WI4$W-?91A71W^B)CM[79!@-NX<^-^\)HF&V8B)B@N MNR`"`S*=61\X8F`"A*A/(4Q`,`0!`P5/QT(-P(`Z$0BTQQZ)D'DAR9^^"$$X908WXJ`F0=@6R_J)42-EC6``(*C M$4%A8`HP@%H`$QA1Y%M.%N'A=*I(WFB. MYN=6`T^(JEU;&"H*UPG6VF61*5`W!81&(O'KEN#'4#R``MG6H2I MVID,F`$IZT6R"1$D`6=>$22*:5O<,A'U6-11;0+4JI(UP%,@H]MS6R@5$^D0 M28NE,6T2NU7H"9V:$)=EV$&9=.`FR%I$QWE%.W9;?R/!J[NSNN6XU98)P,'< M9:$D#>9*JWMW$7GG!8$S;\TL1."#PZ6K6&\;3N!;8AOQ_WI@.*I];!,D,]E6 MU_U9-L"*H(N%4@EPC%ZY\GC3M@``&#A0O)Y%L`ZZ`(AG>CCMAL;M5JJ,PUXM M/C6(CO"5[PWGR'T M+R_#B]P0=+<8Q\7'@4/[306`)I:+K8MT\9G`%RQ&!`[$K6_NHJ#L]")"MC$! M``P(P+E,0`01WNHIHG$0`0$#O.)A[W:PV]ST+$"`$3S`A3PKW=ZT$X"M#0`$ M"6`@ACB@/[%4Q5M&RXNQQ`(F,BD.8`^L@G`>T[R&0ZU1Z"SO?\0;D+X%0!P!``7%L&%ICL!()?%N=WEKS:% M=!X&X[<\/B6``DUTT@H!$RV?94\L4S3!7IKXEJI,&M[!@>4A6O0&TD M2V,^I#@A$F$0AZ,%">YW@@.(\G?!JUHM[W0X5MT2DR?XI5@(1@0J@6IR95'= M";H8M%,.88Y=\Q#/Y/>^$V""#;$L006@.25A@@A]&QMD)E$YFKW0QH1>V=I; MMC;-1`[3F7E\RP'#0SSXU:HAV"00-#3`P'^ILRP!]-DR`3-.O-T2`O-UH<2S\#1@?$A@0`9"]+0`/:$WM#*C362D'::TY@$Y9(X+8>.0(R6G-\=J0 MA`H<%0H&``"'/)-1GZ*F6E'5*0(.X*:8&>$`S")+`Z9B``1,`#L">-U3J#*% MT\BT$YB(C`?R`)0E]&(DK'#`4P]C%PU`(BE(&(HMFL'7PA;&$'4MQT%8493" M%G8N>LB`(!9+"JXXEJ^'-80KTL**?%SVLR?HRR/X@`'?=+8@H+VL!?":!].. MX@*H3>UG-2,0/3Q$MK@]P6IK2U>-Y%:VM&5'27[[VVT()";$36X'V$$!GB3W CM_NH['.G*X1D1,.RU$VN!(2A!PW$-KO9Q0`!Q@O>+`0!`#L_ ` end -----END PRIVACY-ENHANCED MESSAGE-----


Delaware	7389	76-0681190
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)






	Proposed Maximum
Title of Each Class of	Aggregate Offering	Amount of
Securities to be Registered	Price(1)	Registration Fee


Common Stock, par value $0.0001 per share	$115,000,000	$14,571


		Underwriting		Proceeds to
	Price to	Discounts and	Proceeds to	Selling
	Public	Commissions	Cardtronics	Stockholders

Per share	$	$	$	$
Total	$	$	$	$


	Page

PROSPECTUS SUMMARY		1
THE OFFERING		4
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA		5
RISK FACTORS		7
FORWARD-LOOKING STATEMENTS		15
USE OF PROCEEDS		16
DIVIDEND POLICY		16
CAPITALIZATION		17
DILUTION		18
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA		20
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		22
THE ATM INDUSTRY		35
BUSINESS		37
MANAGEMENT		47
RELATED PARTY TRANSACTIONS		54
PRINCIPAL AND SELLING STOCKHOLDERS		56
DESCRIPTION OF CAPITAL STOCK		58
SHARES ELIGIBLE FOR FUTURE SALE		62
CERTAIN U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS		64
UNDERWRITING		67
NOTICE TO CANADIAN RESIDENTS		70
LEGAL MATTERS		71
EXPERTS		71
ADDITIONAL INFORMATION		71
Palm Desert National Bank ATM Cash Agreement
Revised Exhibit "E", 2nd Reg. to Exhibit 10.1
ATM Vault Cash Agreement
NCR Corporation "ATM" Services Addendum
Quality Care Maintenance Agreement
Service Agreement Addendum No. 2
ATM Maintenance Agreement
Concord Processing Agreement
Core Data Resources, Inc. EFT Processing Agreement
Employment Agreement - Jack M. Antonini
1st Amend. to Employment Agmt.-Jack M. Antonini
Employment Agreement - Michael H. Clinard
Employment Agreement - Thomas E. Upton
Subsidiaries of the Company
Consent of KPMG LLP


Common stock offered		shares by us (or shares if the underwriters exercise the over-allotment option in full)

		shares by the selling stockholders

Total offering		shares (or shares if the underwriters exercise the over-allotment option in full)

Common stock outstanding after the offering		shares

Proposed Nasdaq National Market symbol		“CATM”

Use of proceeds		We intend to use the net proceeds from the sale of shares by us:


Bruce C. Herzog David P. Oelman Vinson & Elkins L.L.P. 1001 Fannin, Suite 2300 Houston, Texas 77002-6760 (713) 758-2222		Robert Evans III Thomas J. Friedmann Shearman & Sterling LLP 599 Lexington Avenue New York, New York 10022 (212) 848-4000


Dividend policy		We do not expect to pay any dividends on our common stock for the foreseeable future.

Risk factors		You should carefully read and consider the information set forth under “Risk Factors” and all other information set forth in this prospectus before investing in our common stock.



			Years Ended December 31,

			2001(1)			2002			2003(2)


			(Dollars in thousands,
			except per share data)
Consolidated Statements of Operations:
Revenues:
	ATM revenues		$	43,477		$	62,241		$	104,668
	Other revenues(3)			1,611			6,545			5,775

		Total revenues		45,087			68,786			110,442
Cost of revenues:
	Cost of ATM revenues			39,801			52,352			83,225
	Cost of other revenues			1,409			5,766			4,964

		Total cost of revenues		41,210			58,118			88,189
		Gross profit		3,878			10,668			22,253

Operating expenses:
	Selling, general and administrative expenses			4,925			6,142			7,229
	Depreciation and accretion expense			957			1,650			3,631
	Amortization expense			554			1,641			3,842

		Total operating expenses		6,436			9,433			14,702

Income (loss) from operations				(2,559	)		1,235			7,551
Other expenses:
	Interest expense			478			881			3,346
	Other(4)			—			58			106

		Total other expenses		478			939			3,452

Income (loss) before income taxes				(3,037	)		296			4,099
Income tax provision (benefit)				(997	)		154			1,511

Income (loss) before cumulative effect of change in accounting principle				(2,040	)		142			2,588
Cumulative effect of change in accounting principle for asset retirement obligations, net of related income tax benefit of $80(5)				—			—			134

Net income (loss)				(2,040	)		142			2,454
Dividends on preferred stock				741			1,880			2,089

Net income (loss) available to common stockholders			$	(2,780	)	$	(1,738	)	$	365



	Years Ended December 31,

	2001		2002		2003

Operating Data:
Total number of ATMs (at period end)		6,707		8,298		12,021
Total transactions (in thousands)		19,865		36,212		64,605
Total surcharge transactions (in thousands)		16,027		28,979		48,778



	As of December 31, 2003

	Actual			As adjusted(7)


	(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	5,554
Total assets		64,434
Total long-term debt, including current portion		31,371
Preferred stock(8)		21,322
Total stockholders’ equity (deficit)		(6,959	)


	*We rely on third parties to provide us with the cash we require to operate many of our ATMs.*


	*We operate in a changing and unpredictable regulatory environment.*


	We derive a substantial portion of our revenue from ATMs placed with a small number of merchants. If one or more of our top merchants were to cease doing business with us, or to substantially reduce its dealings with us, our revenues could decline.


	*The ATM industry is highly competitive and such competition is likely to increase, which may adversely affect our profit margins.*


	*Our growth initiatives may not be successful, and if we fail to effectively manage our growth, our financial results could be adversely affected.*


	The full impact of our recent acquisitions on our operating results is not fully reflected in our historical financial results, which as a result are not necessarily indicative of our future results of operations.


	*Changes in interest rates could adversely affect our results.*


	If we, or our transaction processors or our EFT network or other service providers, experience system failures, the ATM products and services we provide could be delayed or interrupted, which would harm our business.


	*We depend on ATM transaction fees for substantially all of our revenues and would be adversely affected by a decline in usage of our ATMs.*


	*Fraudulent activity by third parties, whether through tampering with our ATM machines or otherwise, could expose us to protracted and costly litigation.*


	*If we fail to adapt our products and services to changes in technology or in the marketplace, we could lose existing customers and be unable to attract new business.*


	*We rely on EFT network providers, transaction processors and maintenance providers; if they fail or no longer agree to provide their services, we could lose business.*


	*Taxes imposed at the state level may decrease our net income.*


	*The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.*


	*If our share price is volatile, we may be the target of securities litigation, which can be costly and time-consuming to defend.*


	*The requirements of being a public company may strain our resources and distract management.*


	*We do not intend to pay dividends on our common stock and, consequently, your only opportunity to achieve a return on your investment is if the price of our stock appreciates.*


	*There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity.*


	Future sales of our common stock in the public market could lower our stock price, and any additional capital raised by us through the sale of equity or convertible debt securities may dilute your ownership in us.


	Anti-takeover provisions in our certificate of incorporation, our bylaws and Delaware law could discourage a change of control that our stockholders may favor, which could negatively affect our stock price.


	Our executive officers, directors and principal stockholders will continue to own a large percentage of our voting stock after this offering, which may allow them to control substantially all matters requiring stockholder approval, and their interests may not align with the interests of our other stockholders.


	*We will have broad discretion in applying a portion of the net proceeds of the offering and may not use those proceeds in ways that will enhance our market value.*



				As of December 31, 2003

				Actual			As adjusted

							(unaudited)

				(In thousands, except
				share data)
Cash and cash equivalents				$	5,554		$

Long-term debt, including current portion(1)					31,371
Series A redeemable preferred stock, par value $0.0001 per share; 17,500 shares authorized; 17,500 shares issued and outstanding on an actual basis; zero shares issued and outstanding on an as adjusted basis					21,322
Stockholders’ equity (deficit):
	Common stock, par value $0.0001 per share, shares authorized; shares issued and outstanding on an actual basis; shares issued and outstanding on an as adjusted basis(2)				0
	Additional paid-in capital				1,039
		Total stockholders’ equity (deficit)			(6,959	)

			Total capitalization	$	45,734		$


Assumed initial public offering price per share of common stock		$
Net tangible book value per share at December 31, 2003
Pro forma net tangible book value per share of common stock after this offering
Increase in pro forma net tangible book value per share of common stock attributable to investors in this offering

Dilution per share to new investors		$



			Years Ended December 31,

			1999		2000		2001(1)			2002			2003(2)


			(In thousands)
Consolidated Statements of Operations:
Revenues:
	ATM revenues		$	14,747	$	26,034	$	43,477		$	62,241		$	104,668
	Other revenues(3)			—		—		1,611			6,545			5,775

		Total revenues		14,747		26,034		45,087			68,786			110,442
Cost of revenues:
	Cost of ATM revenues			10,776		22,179		39,801			52,352			83,225
	Cost of other revenues			—		—		1,409			5,766			4,964

		Total cost of revenues		10,776		22,179		41,210			58,118			88,189

		Gross profit		3,971		3,855		3,878			10,668			22,253

Operating expenses:
	Selling, general and administrative expenses			2,392		2,190		4,925			6,142			7,229
	Depreciation and accretion expense			338		528		957			1,650			3,631
	Amortization expense			—		—		554			1,641			3,842

		Total operating expenses		2,730		2,718		6,436			9,433			14,702

Income (loss) from operations				1,241		1,137		(2,559	)		1,235			7,551
Other expenses:
	Interest expense			187		278		478			881			3,346
	Other(4)			—		—		—			58			106

		Total other expenses		187		278		478			939			3,452

Income (loss) before income taxes				1,054		858		(3,037	)		296			4,099
Income tax provision (benefit)				360		317		(997	)		154			1,511

Income (loss) before cumulative effect of change in accounting principle				694		542		(2,040	)		142			2,588
Cumulative effect of change in accounting principle for asset retirement obligations, net of related income tax benefit of $80(5)				—		—		—			—			134

Net income (loss)				694		542		(2,040	)		142			2,454
Dividends on preferred stock				—		—		741			1,880			2,089

Net income (loss) available to common stockholders			$	694	$	542	$	(2,780	)	$	(1,738	)	$	365