EXHIBIT 2.2
ESCROW AGREEMENT DATED NOVEMBER 10, 2000, BY AND AMONG THE REGISTRANT, CHECK
CASHIERS OF ARIZONA, INC., CHECK CASHIERS OF CALIFORNIA, INC., CORPUS CHRISTI
CHECK CASHIERS, INC., U.S. MONEY ORDER COMPANY, INC., AND VALLEY CHECK CASHIERS,
INC.
ESCROW AGREEMENT
(CTIC Escrow Number: ______________)
THIS ESCROW AGREEMENT (this "Escrow Agreement"), dated as of November
_____, 2000, among Ace Cash Express, Inc., a Texas corporation ("Purchaser"),
Check Cashiers of Arizona, Inc., an Arizona corporation, Check Cashiers of
California, Inc., a California corporation, Corpus Christi Check Cashiers, Inc.,
a Texas corporation, U.S. Money Order Company, Inc., a California corporation,
and Valley Check Cashiers, Inc., a Texas corporation (collectively, "Seller"),
and Chicago Title Insurance Company, a Missouri corporation, as escrow agent
("Escrow Agent"). This is the Escrow Agreement defined in Section 1.1.(c) of the
Asset Purchase Agreement of even date herewith (the "Purchase Agreement") among
Purchaser and Seller, a copy of which is attached hereto as Exhibit A.
Capitalized terms used in this Escrow Agreement without definition shall have
the respective meanings given to them in the Purchase Agreement.
The parties, intending to be legally bound, hereby agree as follows:
1. Establishment of Escrow.
(a) Purchaser is depositing with Escrow Agent an amount equal to
TWENTY NINE MILLION SEVEN HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS
($29,720,000.00) in immediately available funds (as hereafter increased by any
earnings thereon and as reduced by any disbursements, amounts withdrawn under
Section 4.(j), or losses on investments (the "Escrow Fund"). Escrow Agent
acknowledges receipt thereof.
(b) Escrow Agent hereby agrees to act as Escrow Agent and to hold,
safeguard and disburse the Escrow Fund pursuant to the terms and conditions of
this Escrow Agreement.
2. Investment of Funds.
Purchaser and Seller will jointly instruct Escrow Agent in writing as
to investment instructions, which shall be limited to the investment of the
Escrow Fund in United States Treasury securities. Thereafter, Seller will
instruct Escrow Agent in writing as to investment instructions, which shall be
limited to the investment of the Escrow Fund in United States Treasury
securities. Escrow Agent is authorized to liquidate in accordance with its
customary procedures any portion of the Escrow Fund consisting of investments to
provide for payments required to be made under this Escrow Agreement.
Except as to deposits of funds for which Escrow Agent has received
express written direction concerning investment or other handling, the parties
hereto direct the Escrow Agent NOT to invest any funds deposited by the parties
under the terms of this escrow and waive any rights which they may have under
Section 2.8. of the Corporate Fiduciary Act (205 ILCS 620/2-8) to receive
interest on funds deposited hereunder. In the absence of an authorized direction
to invest funds, the parties hereto agree that Escrow Agent shall be under no
duty to invest or reinvest any such funds at any time held by it hereunder; and
further, that Escrow Agent may commingle such deposits with other deposits or
with its own funds in the manner provided for the administration of funds under
Section 2.8. of the Corporate Fiduciary Act (205 ILCS 620/2-8) and may use any
part or all such funds for its own benefit without obligation to any party for
interest or earnings derived thereby, if any. Provided, however, nothing herein
shall diminish Escrow Agent's obligation to apply the full amount of the
deposits in accordance with the terms of these escrow trust instructions.
3. Disbursements and Claims.
Escrow Agent shall disburse the Escrow Fund, as follows:
(a) The Allocated Locations Values reflected in executed Closing
Certificates, in the form attached hereto as Exhibit B, transmitted to Escrow
Agent by Seller and Purchaser, to Seller.
(b) $856,000.00 (the Earn-Out) in thirty-six (36) monthly
installments of $23,777.78 each, commencing on December 1, 2000 and disbursed on
the first (1st) business day of each month thereafter until paid in full
(subject to the provisions of Section 1.1. of the Purchase Agreement), upon
written directions transmitted to Escrow Agent by Seller and Purchaser, to
Seller.
(c) $250,000.00 (representing the amount of the Purchase Price
allocated to the covenants of Seller set forth in Section 4.2. of the Purchase
Agreement) in one hundred (100)installments of $2,500.00 each to Seller (each
such payment to be referred to in the Closing Certificate as a "Covenant
Payment"), to be paid upon the submission of each Closing Certificate, in the
form attached hereto as Exhibit B, transmitted to Escrow Agent by Seller and
Purchaser, until paid in full.
(d) Managed Location Payments upon written directions transmitted
to Escrow Agent by Seller and Purchaser, to Seller.
(e) Interest earned on the Escrow Fund upon written directions
transmitted to Escrow Agent by Seller and Purchaser (which shall be not less
than on a monthly basis), to Seller or Purchaser, as the case may be.
(f) All other portions of the Escrow Fund, not otherwise
specifically provided for in this Escrow Agreement, upon written directions
transmitted to Escrow Agent by Seller and Purchaser, in accordance with the
terms of the Purchase Agreement.
(g) Escrow Agent is directed to make a disbursement of the
aggregate amounts due Seller or Purchaser, pursuant to directions received
during the course of a single day, in one (1) disbursement, if so directed by
the party receiving the disbursements.
(h) The amounts to be disbursed to Seller or Purchaser shall be
disbursed pursuant to the instructions of the party to whom the disbursement is
being made.
(i) In the event Seller or Purchaser makes a claim against the
other in accordance with Section 1.10. of the Purchase Agreement (the "Claim")
and wants to receive satisfaction of the Claim from the Escrow Fund (the
"Claiming Party"), it shall serve notice of the Claim on the party against whom
the Claim is being made (the "Responding Party") and Escrow Agent in the manner
provided for hereinafter, along with a certification executed by the Claiming
Party stating, (i) the provision(s) of the Purchase Agreement for which payment
is claimed; (ii) the representation, warranty, covenant or other obligation
under the Purchase Agreement alleged to have been breached, including but not
limited to all facts and circumstances of such breach; (iii) the amount claimed,
including but not limited to the calculation of such amount; (iv) a copy of the
notice required to be given to the Responding Party pursuant to Section 6.13. of
the Purchase Agreement; and (v) a certification by the President of the Claiming
Party, that the information is true and correct in all respects, and that the
breach has not been cured within the time permitted by Section 6.13. of the
Purchase Agreement (collectively the "Claim Notice").
The Responding Party shall have thirty (30) days after its receipt of
the Claim Notice to serve Escrow Agent and the Claiming Party with a notice
disputing the Claiming Party's right to receive proceeds from the Escrow Fund
(the "Counter-Notice"). If the Counter-Notice is served within the aforesaid
thirty (30) day period, Escrow Agent shall continue to hold the funds in
accordance with the provisions of Section 4.(i) of this Escrow Agreement, or the
joint direction of Purchaser and Seller, whichever shall first occur.
Notwithstanding anything in this Escrow Agreement to the contrary, the
transmission of executed Closing Certificates and/or directions or instructions
to Escrow Agent by facsimile, shall be deemed to be the delivery to Escrow Agent
of an instruction to make a disbursement pursuant to the direction of either or
both of the Parties by whom the direction (or instruction) was made.
4. Duties of Escrow Agent.
(a) Escrow Agent shall not be under any duty to give the Escrow
Fund held by it hereunder any greater degree of care than it gives its own
similar property and shall not be required to invest any funds held hereunder
except as directed in this Escrow Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
(b) Escrow Agent shall not be liable, except for its own
negligence, willful misconduct or violations of its obligations pursuant to this
Escrow Agreement and, except with respect to claims based upon such negligence,
willful misconduct or violations of its obligations pursuant to this Escrow
Agreement that are successfully asserted against Escrow Agent, the other parties
hereto shall jointly and severally indemnify and hold harmless Escrow Agent (and
any successor Escrow Agent) from and against any and all losses, liabilities,
claims, actions, damages and expenses, including reasonable attorneys fees and
disbursements, arising out of and in connection with this Escrow Agreement.
Without limiting the foregoing, Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash held by it hereunder
in good faith, in accordance with the terms hereof and not inconsistent with the
instructions of Seller and/or Purchaser, as the case may be, including, without
limitation, any liability for any delays (not resulting from its gross
negligence, willful misconduct or violations of its obligations pursuant to this
Escrow Agreement) in the investment or reinvestment of the Escrow Fund, or any
loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of its counsel
with respect to any matter relating to this Agreement and shall not be liable
for any action taken or omitted by it in good faith in accordance with such
advice.
(e) Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from this Escrow Fund shall be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide Escrow Agent with appropriate Internal
Revenue Service Forms W-9 for tax identification number certification, or
non-resident alien certifications. This Section 4.(e) and Section 4.(b) shall
survive notwithstanding any termination of this Escrow Agreement or the
resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party as
to the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Fund to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent shall be discharged of and from
any and all further obligations arising in connection with this Escrow
Agreement. The resignation of Escrow Agent will take effect on the earlier of
(i) the appointment of successor (including a court of competent jurisdiction)
or (ii) the day which is thirty (30) days after the date of delivery of its
written notice of resignation to the other parties hereto. If at that time
Escrow Agent has not received a designation of a successor Escrow Agent, Escrow
Agent's sole responsibility after that time shall be to retain and safeguard the
Escrow Fund until receipt of a designation of successor Escrow Agent or a joint
written disposition instruction by the other parties hereto or a final
non-appealable order of a court of competent jurisdiction.
(i) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection with the
Escrow Fund or in the event that Escrow Agent is in doubt as to what action it
should take hereunder, Escrow Agent shall be entitled to retain the Escrow Fund
until Escrow Agent shall have received a final non-appealable order of a court
of competent jurisdiction directing delivery of the Escrow Fund, in which event
Escrow Agent shall disburse the Escrow Fund in accordance with such order or
agreement. Any court order shall be accompanied by a legal opinion by counsel
for the presenting party satisfactory to Escrow Agent to the effect that the
order is final and non-appealable. Escrow Agent shall act on such court order
and legal opinion without further question.
(j) Purchaser and Seller shall pay Escrow Agent compensation (as
payment in full) for the services to be rendered by Escrow Agent hereunder in
the amount of TWELVE HUNDRED AND NO/100 DOLLARS ($1,200.00) at the time of
execution of this Escrow Agreement, and annual maintenance fees thereafter, and
agree to reimburse Escrow Agent for all reasonable expenses, disbursements and
advances incurred or made by Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements of its counsel). Any such
compensation and reimbursement to which Escrow Agent is entitled shall be borne
fifty percent (50%) by Purchaser and fifty percent (50%) by Seller. Any fees or
expenses of Escrow Agent or its counsel that are not paid as provided for herein
may be taken from any property held by Escrow Agent hereunder.
(k) No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional material) that
mentions Escrow Agent's name or the rights, powers, or duties of Escrow Agent
shall be issued by the other parties hereto or on such parties' behalf unless
Escrow Agent shall first have given its specific written consent thereto, which
shall not be unreasonably withheld.
(l) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States central
securities depository it reasonably deems appropriate.
5. Limited Responsibility.
This Agreement expressly sets forth all the duties of Escrow Agent
with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Escrow Agreement against Escrow Agent.
Escrow Agent shall not be bound by the provisions of any agreement among the
other parties hereto except this Escrow Agreement.
6. Ownership for Tax Purposes.
Purchaser and Seller agree that Seller, for purposes of federal
and other taxes based on income, will be treated as the owner of the Escrow
Fund; however, Seller and Purchaser will report all income, if any, that is
earned on, or derived from, the Escrow Fund and which each receives as its
income, respectively, in the taxable year or years in which such income is
properly included and pay any taxes attributable thereto. This understanding
does not affect the rights of the parties to the Escrow Fund under the Purchase
Agreement.
7. Notices.
All notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (i)
delivered by hand (with written confirmation of receipt), (ii) sent by
telecopier (with written confirmation of receipt) provided that a copy is mailed
by registered mail, return receipt requested, or (iii) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller: Morris Silverman Management Corp.
790 Estate Drive
Suite 100
Deerfield, Illinois 60015
Attention: Jeffrey D. Silverman
Facsimile Number: (847) 919-4829
with a copy to: Robert M. Wigoda
Wigoda & Wigoda
444 N. Michigan Ave.
26th floor
Chicago, Illinois 60611
Facsimile Number: (312) 263-8489
Purchaser: Ace Cash Express, Inc.
1231 Greenway Drive
Suite 800
Irving, Texas 75038
Attention: J. B. Shipowitz
Facsimile Number: (972) 582-1430
With copy to: Gardere & Wynne, L.L.P.
1601 Elm Street
Suite 3000
Dallas, Texas 75201
Attention: Richard A. Tulli
Facsimile Number: (214) 999-4667
Escrow Agent: Chicago Title Insurance Company
Attention: Dorothy Cammon
171 North Clark Street
Chicago, Illinois 60601
Facsimile Number: (312) 223-5888
8. Jurisdiction; Service of Process.
Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of this Escrow Agreement, in which action or
proceeding Escrow Agent is a party, may be brought against any of the parties in
the courts of the State of Illinois, County of Cook, or, if it has or can
acquire jurisdiction, in the United States District Court for the North District
of Illinois, and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the
world. The choice of venue in any action or proceeding in which Escrow Agent is
not a party, shall be governed by the Purchase Agreement.
9. Exclusive Agreement and Modification.
This Escrow Agreement supersedes all prior agreements among the
parties with respect to its subject matter and constitutes (along with the
documents referred to in this Escrow Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Escrow Agreement may not be amended except by a written
agreement executed by the Purchaser, the Seller and the Escrow Agent.
10. Purchase Agreement.
In the event of a conflict between the Purchase Agreement and the
Escrow Agreement, the terms of the Purchase Agreement control.
11. Successors and Assigns.
This Escrow Agreement and the rights, interests and obligations
hereunder shall be binding upon and shall inure to the benefits of the Parties
and their respective heirs, personal representatives, successors and assigns.
12. Entire Agreement.
This Escrow Agreement and attachments, if any, and the other
documents executed or delivered pursuant hereto contain the complete agreement
among the Parties with respect to the matters contemplated hereby.
13. Severability.
If any provision of this Escrow Agreement is held to be illegal,
invalid or unenforceable, such provision shall be fully severable, and this
Escrow Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Escrow Agreement, a provision as similar in its
terms to such illegal, invalid or unenforceable provision, may be possible and
be legal, valid or enforceable.
14. Counterparts.
This Escrow Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
15. Singular and Plural.
Whenever used herein, the singular number shall include the
plural, and the plural number shall include the singular when appropriate.
16. Headings and Captions.
The headings and captions herein are inserted for convenient
reference only and the same shall not limit or construe the paragraphs or
sections to which they apply or otherwise affect the interpretation hereof.
IN WITNESS WHEREOF, the parties have executed and delivered this Escrow
Agreement as of the date first written above.
PURCHASER: SELLER:
Ace Cash Express, Inc., Check Cashiers of Arizona,
a Texas corporation Inc., an Arizona corporation
By: ______________________ By: ______________________________
Jay B. Shipowitz, Jeffrey D. Silverman,
its President and COO its President
ESCROW AGENT: Check Cashiers of California, Inc.,
Chicago Title Insurance a California corporation
Company, a Missouri
Corporation By: ______________________________
Jeffrey D. Silverman, its President
By: ______________________ Corpus Christi Check Cashiers, Inc.,
a Texas corporation
By: ______________________________
Jeffrey D. Silverman, its President
U.S. Money Order Company, Inc.,
a California corporation
By: ______________________________
Jeffrey D. Silverman, its President
Valley Check Cashiers, Inc.,
a Texas corporation
By: ______________________________
Jeffrey D. Silverman, its President
EXHIBIT A
Purchase Agreement
EXHIBIT B
Closing Certificate