Exhibit 10.7
PURCHASE AGREEMENT
BY AND AMONG
DOLLAR FINANCIAL GROUP, INC.
AS PURCHASER,
DFG HOLDINGS, INC.,
ANY KIND CHECK CASHING CENTERS, INC.,
THE PERSONS LISTED ON SCHEDULE II,
AS THE SHAREHOLDERS,
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP
THE PERSONS LISTED ON SCHEDULE III,
AS THE LIMITED PARTNERS
AND
GEORGE H. BRIMHALL
INDIVIDUALLY, AND
AS THE SELLERS' REPRESENTATIVE
Dated as of August 8, 1996
TABLE OF CONTENTS
------------------
Section Page
------- ----
ARTICLE I
SALE AND PURCHASE OF SHARES AND LP INTERESTS 2
1.1 Sale and Purchase of Shares and LP Interests 2
--------------------------------------------
1.2 Assets 2
------
1.3 Excluded Assets 4
---------------
1.4 Apportionments 5
--------------
1.5 Capital Expenditures 5
--------------------
ARTICLE II
PURCHASE PRICE AND PAYMENT 6
2.1 Amount of Purchase Price 6
------------------------
2.2 Payments of Cash 6
----------------
2.3 Issuance of DFG Common Stock 6
----------------------------
2.4 Certification of Amount of Cash on Hand 7
---------------------------------------
2.5 Ralph's Kiosk Contract 7
----------------------
2.6 Post-Closing Adjustment 8
-----------------------
ARTICLE III
CLOSING AND TERMINATION 9
3.1 Closing Date 9
------------
3.2 Termination of Agreement 9
------------------------
3.3 Procedure Upon Termination 10
--------------------------
3.4 Effect of Termination 10
---------------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS 10
4.1 Organization and Good Standing 11
------------------------------
4.2 Authorization of Agreement 11
--------------------------
4.3 Capitalization 11
--------------
4.4 Subsidiaries and Other Interests 12
--------------------------------
4.5 Corporate Records 12
-----------------
4.6 Conflicts; Consents of Third Parties 13
------------------------------------
4.7 Ownership and Transfer of Shares and LP Interests 13
-------------------------------------------------
4.8 Financial Statements 14
--------------------
4.9 No Undisclosed Liabilities 14
--------------------------
4.10 Absence of Certain Developments 14
-------------------------------
4.11 Taxes 16
-----
4.12 Real Property 18
-------------
4.13 Tangible Personal Property 20
--------------------------
Section Page
------- ----
4.14 Intangible Property 20
-------------------
4.15 Material Contracts 21
------------------
4.16 Employee Benefits 22
-----------------
4.17 Labor 24
-----
4.18 Litigation 24
----------
4.19 Compliance with Laws 24
--------------------
4.20 Environmental Matters 25
---------------------
4.21 Insurance 26
---------
4.22 Payables 26
--------
4.23 Related Party Transactions 26
--------------------------
4.24 ADA Matters 26
-----------
4.25 Banks 27
-----
4.26 Consumer Loans; Louisiana Pay Day Loans 27
---------------------------------------
4.27 Financial Advisors 28
------------------
4.28 Capital Expenditures 28
--------------------
4.29 Name 28
----
4.30 Investment Intention 28
--------------------
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND DFG 28
5.1 Organization and Good Standing 28
------------------------------
5.2 Authorization of Agreement 29
--------------------------
5.3 Conflicts; Consents of Third Parties 29
------------------------------------
5.4 Litigation 30
----------
5.5 Investment Intention 30
--------------------
5.6 Financial Advisors 30
------------------
5.7 DFG Common Stock 30
----------------
ARTICLE VI
COVENANTS 30
6.1 Access to Information 30
---------------------
6.2 Conduct of the Business Pending the Closing 31
-------------------------------------------
6.3 Consents 34
--------
6.4 Consents to Real Property Leases;
---------------------------------
Releases of Personal Guarantees 34
-------------------------------
6.5 No Solicitation 34
---------------
6.6 Preservation of Records 35
-----------------------
6.7 Publicity 35
---------
6.8 Repayment of Loans; Turn Over of Funds 35
--------------------------------------
6.9 Use of Name 36
-----------
6.10 Non-Competition Agreements 36
--------------------------
6.11 Seller Releases 36
---------------
6.12 Employee Benefits and Employment 36
--------------------------------
6.13 Tax Matters 36
-----------
Section Page
------- ----
ARTICLE VII
CONDITIONS TO CLOSING 39
7.1 Conditions Precedent to Obligations of Purchaser 39
------------------------------------------------
7.2 Conditions Precedent to Obligations of the Sellers 41
--------------------------------------------------
ARTICLE VIII
DOCUMENTS TO BE DELIVERED 42
8.1 Documents to be Delivered by the Sellers 42
----------------------------------------
8.2 Documents to be Delivered by the Purchaser and DFG 44
--------------------------------------------------
ARTICLE IX
INDEMNIFICATION 44
9.1 Survival 44
--------
9.2 General Indemnification 45
-----------------------
9.3 Limitations on Indemnification for Breaches of
----------------------------------------------
Representations and Warranties 49
------------------------------
9.4 Indemnification Procedures 49
--------------------------
9.5 Tax Matters 50
-----------
9.6 Employee Benefits and Labor Indemnity 51
-------------------------------------
9.7 Waiver of Subrogation and Other Rights 51
--------------------------------------
9.8 Right of Offset 52
---------------
9.9 Treatment of Payment 52
--------------------
ARTICLE X
MISCELLANEOUS 52
10.1 Certain Definitions 52
-------------------
10.2 Expenses 62
--------
10.3 Specific Performance 62
--------------------
10.4 Further Assurances 62
------------------
10.5 Arbitration 62
-----------
10.6 Entire Agreement; Amendments and Waivers
----------------------------------------
Confidentiality 63
---------------
10.7 Governing Law 63
-------------
10.8 Counterparts 63
------------
10.9 Table of Contents and Headings 63
------------------------------
10.10 Notices 63
-------
10.11 Severability 65
------------
10.12 Binding Effect; Assignment 65
--------------------------
10.13 Sellers' Representative 65
-----------------------
SCHEDULES AND EXHIBITS
Schedule I - List of Stores
Schedule II - Shareholders
Schedule III - Limited Partners
Schedule 1.4(a) - Pre-Closing Allocation of Expenses
Schedule 1.5 - Incurred Capital Expenditures
Schedule 4.1 - Seller Information
Schedule 4.3(c) - Ownership of Partnership Interests in U.S. Check
Schedule 4.6 - Conflicts and Consents
Schedule 4.7 - Shareholder and Limited Partner Holdings
Schedule 4.9 - Undisclosed Liabilities
Schedule 4.10 - Certain Developments
Schedule 4.11 - Tax Matters
Schedule 4.12(a) - List of Company Properties
Schedule 4.13(a) - Personal Property Leases
Schedule 4.14 - Intangibles
Schedule 4.15 - Material Contracts
Schedule 4.16(a) - Employee Benefits
Schedule 4.16(c) - Loss of Status as a Qualified Plan
Schedule 4.16(h) - Conformity with Applicable ERISA Provisions
Schedule 4.16(j) - Acceleration of Employee Benefits
Schedule 4.18 - Litigation
Schedule 4.19 - License Revocation Proceedings
Schedule 4.20 - Environmental
Schedule 4.21 - Insurance
Schedule 4.23 - Related Party Transactions
Schedule 4.25 - Bank Accounts
Schedule 4.26 - Consumer Loans & Pre-Closing Estimate of
Consumer Loan Amount
Schedule 4.27 - Financial Advisors
Schedule 4.28 - Capital Expenditures; New Store Locations
Schedule 5.3 - Purchaser Conflicts/Consents
Schedule 6.4 - Personal Guaranties
Schedule 9.2(b) - Shareholders Allocation of Liability for Losses
Schedule 9.2(c) - Limited Partners Allocation of Liability for
Losses
Exhibit A - Form of Noncompetition Agreement
Exhibit B - Form of Amended and Restated Shareholders
Agreement
Exhibit C - Form of Legal Opinion (Sellers)
Exhibit D - Form of Legal Opinion (Purchaser)
Exhibit E - Form of Seller Release
Exhibit F - Form of DFG Holdings, Inc. Stock Purchase
Agreement
PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT, dated as of August 8, 1996 (the
"Agreement"), by and among Dollar Financial Group, Inc., a New York
corporation (the "Purchaser"), DFG Holdings, Inc., a Delaware
corporation ("DFG"), Any Kind Check Cashing Centers, Inc., an Arizona
corporation ("Any Kind"), the persons listed on Schedule II
(individually, a "Shareholder" and collectively, the "Shareholders"),
U.S. Check Exchange Limited Partnership, an Arizona limited
partnership ("U.S. Check"), the persons listed on Schedule III
(individually, a "Limited Partner" and collectively, the "Limited
Partners") and George H. Brimhall, individually and as the Sellers'
Representative.
W I T N E S S E T H:
--------------------
WHEREAS, Any Kind and U.S. Check (each, a "Company" and
collectively, the "Companies") presently own and operate check cashing
stores located in the states of Arizona, California, the District of
Columbia, Hawaii, Louisiana, Maryland, Pennsylvania and Texas; all of
which are listed on Schedule I (collectively, the "Stores"), which
Schedule identifies as to each Store the Company by which it is owned;
WHEREAS, the Shareholders own an aggregate of 100,000 shares
of common stock, par value $0.25 per share, of Any Kind (the
"Shares"), which Shares constitute all of the issued and outstanding
shares of capital stock of Any Kind;
WHEREAS, Any Kind is the sole general partner, and the
Limited Partners are all the limited partners, of U.S Check;
WHEREAS, Purchaser is a wholly-owned subsidiary of DFG;
WHEREAS, DFG is entering into this Agreement in order to
cause Purchaser to fulfill its obligations hereunder;
WHEREAS, (i) Purchaser desires to purchase from the
Shareholders, and the Shareholders desire to sell to Purchaser, the
Shares and (ii) Purchaser desires to purchase from the Limited
Partners, and the Limited Partners desires to sell to Purchaser, the
LP Interests (as defined in Section 10.1) held by such Limited
Partner, for the purchase price and upon the terms and conditions
hereinafter set forth;
WHEREAS, the Purchaser desires to become a substitute
limited partner in U.S. Check;
WHEREAS, Purchaser desires that, effective upon the Closing
Date, each of the Shareholders and the Limited Partners will agree not
to compete with Purchaser or any of its affiliates pursuant to
separate Noncompetition Agreements to be entered into on the Closing
Date in substantially the form set forth on Exhibit A hereto;
WHEREAS, certain of the Shareholders and Limited Partners
are entering into the DFG Purchase Agreement and the Shareholders
Agreement; and
WHEREAS, certain terms used in this Agreement are defined in
Section 10.1;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties
hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES AND LP INTERESTS
1.1 Sale and Purchase of Shares and LP Interests. Upon
--------------------------------------------
the terms and subject to the conditions contained herein, on the
Closing Date (i) the Shareholders shall sell, assign, transfer, convey
and deliver to the Purchaser good and marketable title, free and clear
of all Liens (except for Securities Act and state blue sky law
restrictions on the resale and distribution of the Shares) and DFG
shall cause the Purchaser to purchase from the Shareholders, the
Shares, and (ii) the Limited Partners shall sell, assign, transfer,
convey and deliver to the Purchaser good and marketable title, free
and clear of all Liens (except for Securities Act and state blue sky
law restrictions or the resale and distribution of the LP Interests)
and DFG shall cause the Purchaser to purchase from the Limited
Partners, the LP Interests.
In addition, each of the Sellers agrees to provide, or cause
to be provided, to Purchaser, Any Kind and U.S. Check access to all
documents and/or information as may be reasonably necessary to enable
each of them to see to the efficient and proper conduct and
administration of the assets owned by U.S. Check (the "U.S. Check
Assets") and to enable Any Kind to see to the efficient and proper
conduct and administration of the assets owned by Any Kind (the "Any
Kind Assets" and, collectively with the U.S. Check Assets, the
"Assets") from and after the Closing Date, including,
without limitation, all historical files, Tax Returns, records and
personnel data.
1.2 Assets. Without limiting the foregoing, the Sellers
------
agree that, as a condition to Closing (as hereinafter defined), all of
the properties, business, rights, good-will and assets of Any Kind and
U.S. Check (including all properties, business, rights, good-will and
assets used or useable in the operation of the Stores), other than the
Excluded Assets, including, but not limited to, the following, shall
be owned by the Companies, free and clear of all Liens except for the
(i) Permitted Exceptions, and (ii) Liens expressly consented to by
Purchaser in writing:
(a) Licenses and Authorizations. All authorizations,
---------------------------
approvals, orders, licenses, franchises, certificates and permits
(collectively, "Licenses") of and from all Governmental Bodies
necessary to own or lease the properties and assets used or useable in
the operation of either Company, together with any renewals,
extensions or modifications thereof and additions thereto and other
pending applications or applications to be filed with any Governmental
Body between the date of this Agreement and the Closing Date.
(b) Personal Property, etc. All tangible and intangible
-----------------------
personal property, equipment, machinery, furniture, fixtures, tools,
computer hardware, supplies and other assets, wherever located, used
or useable in the operation of either Company, together with such
additions, modifications and replacements thereto, and subject to
deletions therefrom in connection with any such replacements, as may
be made in accordance with the terms of this Agreement and in the
ordinary course of business between the date of this Agreement and the
Closing Date.
(c) Real Property. All leased real property, buildings
-------------
and structures, leasehold improvements, fixtures and appurtenances
used or useable in the operation of either Company and each Company's
interests and rights arising under all agreements, rights and
appurtenances relating thereto (including all Real Property Leases),
any renewals, extensions, amendments or modifications thereof, and any
additional agreements and leases made or entered into in accordance
with the terms of this Agreement and in the ordinary course of
business between the date of this Agreement and the Closing Date.
(d) Leases and Agreements. All leases, commitments,
---------------------
orders, contracts and agreements to which either Company is a party,
including any renewals, extensions, amendments or modifications
thereof, and any additional agreements, leases,
contracts, commitments and orders made or entered into in accordance
with the terms of this Agreement and in the ordinary course of
business between the date of this Agreement and the Closing Date.
(e) Intellectual Property, etc. All copyrights,
---------------------------
trademarks, service marks, trade secret rights, computer programs and
software, permits, licenses or other similar rights used or useable in
the operation of either Company, including, specifically, the
tradenames enumerated on Schedule 4.14 hereof, as well as all other
copyrights, trademarks, service marks, trade secret rights, computer
programs and software, permits, licenses or other similar rights
utilized in the operation of either Company, together with any
additions or modifications thereto and subject to any deletions
therefrom made in accordance with the terms of this Agreement and in
the ordinary course of business between the date of this Agreement and
the Closing Date.
(f) Books and Records. All books, records and files
-----------------
pertaining to the business conducted by either Company for all periods
ending on or before the Closing Date, including, in the case of Any
Kind, such Company's minute books and stock register.
(g) Prepaid Expenses. All security deposits and other
----------------
prepaid expenses of each Company existing as of the Closing Date.
(h) Customer Lists. All customer lists, vendor lists and
--------------
other intangible assets of each Company.
(i) Cash On Hand. All Cash on Hand.
------------
(j) Consumer Loans. All Consumer Loans.
--------------
(k) General Partnership Interest. The general partnership
----------------------------
interest in U.S. Check held by Any Kind.
(l) Louisiana Pay Day Loans. All Louisiana Pay Day Loans.
-----------------------
The term "computer programs and software" as used in subparagraph
(e) above shall include, without limitation, all point-of-sale ("POS")
software developed and/or owned by the Companies.
1.3 Excluded Assets. It is agreed that (a) the Excluded
---------------
Pay Day Loans, (b) any cash (other than Cash on Hand), savings
accounts, checks returned unpaid, accounts receivable (other than the
Consumer Loans and Louisiana Pay Day Loans), notes receivable (other
than the Consumer Loans and Louisiana Pay Day Loans), refunds of
unearned insurance premiums, bank deposits and
items in the process of collection (other than the Consumer Loans and
Louisiana Pay Day Loans) held by either Company, (c) the current
claims and litigation relating to any of the Rawle Entities or
Lightning Tax in Virginia, Maryland, Utah and California and (d) each
of the bank accounts described on Schedule 4.25 (collectively, the
"Excluded Assets") shall not constitute part of the Assets. The
Excluded Assets shall be transferred by Any Kind and U.S. Check to the
Shareholders and the Limited Partners, respectively, prior to Closing,
in a manner reasonably satisfactory to Purchaser, the Shareholders and
the Limited Partners. Solely as an accommodation to the Sellers,
Purchaser will, during the 45-day period following the Closing Date,
use reasonable efforts to collect (at the sole cost and expense of the
Sellers) each Company's Excluded Assets constituting outstanding
accounts receivable and other items in the process of collection
(other than the Consumer Loans) as of the Closing Date (the
"Collectible Amounts") and will remit to the Sellers' Representative
any amounts so collected (net of expenses incurred by Purchaser,
including reasonable attorneys' fees; provided, however, that
-------- -------
Purchaser shall not incur any attorneys' fees in collecting the
Collectible Amounts without first receiving the written consent of the
Shareholders or the Limited Partners, as the case may be); provided,
--------
further, that (i) the Shareholders or the Limited Partners, as the
-------
case may be, shall promptly pay to Purchaser (or Purchaser may retain
from such proceeds) an amount equal to 10% of all amounts collected,
(ii) Purchaser shall not be obligated to institute litigation or any
proceedings to collect such amounts and (iii) the Sellers shall
reimburse Purchaser immediately upon demand for any and all expenses
of Purchaser (including, without limitation, reasonable attorneys'
fees and expenses incurred with the written consent of the
Shareholders or the Limited Partners, as the case may be) to the
extent Purchaser shall not therefore have reimbursed itself out of
amounts collected by Purchaser as described above. Following the 45-
day period described in the immediately preceding sentence, Purchaser
will reasonably cooperate (at the sole cost and expense of the
Sellers) with attempts made by the Sellers to collect any Collectible
Amounts which remain outstanding.
1.4 Apportionments. (a) Rents, additional rent, real
--------------
estate taxes, personal property taxes, water, utilities, and wages and
other employee benefits (including accrued vacation and holidays),
supplies and other types of assets described on 1.4(a)(i) (the
"Expenses") that are (i) paid by, or on behalf of, either Company on
or prior to the Closing Date and allocable, in whole or in part, to
any period following the Closing Date, shall be credited to the
Shareholders and the Limited Partners, as the case may be, to the
extent so allocable, or (ii) unpaid on or prior to the Closing Date
and allocable, in whole or in part, to any period prior to the Closing
Date, shall be credited to
Purchaser. In addition, to the extent that, in connection with any
real property leases that continue to be held by Any Kind or U.S.
Check after the Closing, security deposits paid thereunder by either
of the Companies (the "Reimbursable Security Deposits") are to remain
in place on and after the Closing and Purchaser shall reimburse the
Sellers' Representative for such amounts at Closing, which
reimbursements shall be an adjustment to the Purchase Price.
(b) Schedule 1.4(a) sets forth the parties'
apportionment of the Expenses (the "Pre-Closing Allocation of
Expenses") and corresponding adjustments to the Purchase Price to the
extent practicable as of the date of Schedule 1.4(a). However,
because a number of the Expenses will not be readily determinable
until after the Closing Date, final apportionments cannot be made as
of the Closing Date. Therefore, the final apportionment of the
Expenses will be effected pursuant to Section 2.6 hereof.
1.5 Capital Expenditures. At the Closing and as an
--------------------
element of the aggregate Purchase Price, Purchaser shall pay to the
Sellers' Representative an amount equal to the amount of the Capital
Expenditures made by Any Kind or U.S. Check, as applicable, which were
made in respect of new store build outs and opening and operating
expenses for stores opened after January 1, 1996 for stores opened
after January 1, 1996, but only to the extent that Purchaser shall
have received evidence satisfactory to it that either Any Kind or U.S.
Check has actually incurred such capital expenditures ("Incurred
Capital Expenditures"). Schedule 1.5 sets forth the parties' estimate
of the Incurred Capital Expenditures as of the date of such Schedule
1.5. The final amount of the Incurred Capital Expenditures will be
established and the Purchase Price adjusted pursuant to Section 2.6
hereof.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 Amount of Purchase Price. The purchase price for the
------------------------
Shares and the LP Interests (the "Purchase Price") shall be an amount
equal to the sum of (i) $31,000,000 in cash, (ii) the Cash on Hand as
certified pursuant to the provisions of Section 2.4 below, (iii) the
Incurred Capital Expenditures, (iv) the Reimbursable Security
Deposits, (v) the Consumer Loan Amount, (vi) the amount of the
allocations of the Expenses provided for in Section 1.4 (vii) the
estimated Louisiana Pay Day Loan Amount set forth in Section 4.26(c)
and (viii) the Western Union Amount. The Purchase Price is subject to
adjustment as provided in this Agreement.
2.2 Payments of Cash. (a) On the Closing Date, the
----------------
Purchaser shall pay to the Sellers' Representative, an amount equal to
the sum of (i) $29,000,000, (ii) the Cash on Hand, (iii) the amount of
the Incurred Capital Expenditures set forth on Schedule 1.5, (iv)
Reimbursable Security Deposits, (v) the aggregate Consumer Loan Amount
for each Consumer Loan set forth on Schedule 4.26, (vi) the Pre-
Closing Allocation of Expenses, (vii) the estimated Louisiana Pay Day
Loan Amount set forth in Section 4.26(c) and (viii) the Western Union
Amount, in cash by the delivery to the Sellers' Representative of a
certified or bank cashier's check in New York Clearing House Funds,
payable to the order of the Sellers' Representative (or, at the
Sellers' Representative's option, by wire transfer of immediately
available funds into an account designated, prior to the Closing, by
the Sellers' Representative).
(b) On the Closing Date, the Sellers hereby authorize
and direct the Purchaser to pay DFG, for the account and on behalf of
the DFG Stock Purchaser, an amount equal to $2,000,000 (constituting a
portion of the Purchase Price) as consideration for the purchase by
such DFG Stock Purchaser of 1,250 shares of DFG Common Stock pursuant
to the DFG Purchase Agreement.
2.3 Issuance of DFG Common Stock. On the Closing Date,
----------------------------
DFG shall issue to the DFG Stock Purchaser 1,250 shares of DFG Common
Stock pursuant to the terms of the DFG Purchase Agreement.
2.4 Certification of Amount of Cash on Hand. On the
---------------------------------------
Closing Date, the Sellers shall (i) determine the amount of (x)
Foreign Cash on Hand, and (y) U.S. Cash on Hand as of the opening of
business on the Closing Date at each of the Stores, (ii) deliver a
statement containing such determination to the Purchaser and (iii) in
cooperation with the Purchaser, calculate the value of the Foreign
Cash on Hand in U.S. Currency (the "U.S. Currency Equivalent") based
upon the spot price as published in The Wall Street Journal on such
date or, if not published on such date, on the next preceding date on
which it was published. The Sellers shall determine the U.S. Cash on
Hand and Foreign Cash on Hand by having two employees at each Store
count all U.S. Cash on Hand and Foreign Cash on Hand as of the opening
of business at such Store on the Closing Date and transmit such total
to an officer of Any Kind. Such officer will tally all such amounts
and deliver the statement referred to in clause (ii) above.
2.5 Ralph's Kiosk Contract. The Sellers' Representative
----------------------
shall have the right until December 31, 1996 to enter into
negotiations and discussions with Ralph's Grocery Stores, Inc.
("Ralph's") regarding the terms and conditions
pursuant to which the Purchaser or any of its Affiliates (including,
after the Closing, Any Kind and U.S. Check) (collectively, the
"Purchaser Parties") would develop, open and operate five or more
check cashing kiosks in Ralph's grocery store locations. The Sellers'
Representative will keep the Purchaser Parties apprised of the status
and terms of such negotiations and discussions and will afford the
Purchaser Parties the opportunity to attend meetings held between the
Sellers' Representative and Ralph's for the purpose of conducting
negotiations and discussion regarding any Proposed Kiosk Contract. In
the event the Sellers' Representative and Ralph's reach agreement on
such terms and conditions and are able to reduce such agreement to a
definitive written contract (a "Proposed Kiosk Contract"), the
Sellers' Representative may tender such Proposed Kiosk Contract to the
Purchaser Parties. The Purchaser Parties may, in the exercise of
their reasonable business judgment, accept or decline to enter into
such Proposed Kiosk Contract. In the event the Purchaser Parties
decline to enter into a Proposed Kiosk Contract, they shall specify
the terms or conditions of such Proposed Kiosk Contract which are not
acceptable to the Purchaser Parties and shall notify the Sellers'
Representative of the terms and conditions that would be acceptable to
them. In the event the Sellers' Representative is able to obtain such
modified terms and conditions, the Purchaser Parties shall be
obligated to enter into such modified proposal Kiosk. The Sellers'
Representative may, until December 31, 1996, tender to the Purchaser
Parties revised Proposed Kiosk Contracts, which may be accepted or
rejected by the Purchaser Parties. In the event any Purchaser Party
enters into any Proposed Kiosk Contract that has been tendered to them
on or before December 31, 1996 by the Sellers' Representative, the
Purchaser will pay promptly the Sellers' Representative, on behalf of
the Sellers, an amount equal to $500,000. The Purchaser Parties may
decline to enter into any Proposed Kiosk Contract in the exercise of
their reasonable business judgment with no liability or obligation
arising to any of the Sellers or the Sellers' Representative
hereunder. The Sellers' Representative's rights and the Purchaser
Parties' obligations under this Section 2.5 shall expire on January 1,
1997.
2.6 Post-Closing Adjustments. (a) Purchaser shall prepare
------------------------
and deliver to Sellers, as promptly as practicable after the Closing
Date, updated versions of: Schedule 1.4(a) (Allocation of Expenses)
which shall be a final allocation of the Expenses in accordance with
Section 1.4, Schedule 1.5 (Incurred Capital Expenditures) which shall
be a listing of all Incurred Capital Expenditures and Schedule 4.26
(Consumer Loans and Louisiana Pay Day Loans) which shall list all
Consumer Loans and Louisiana Pay Day Loans which were outstanding and
owned by either Company on the Closing Date, the outstanding principal
balance thereof, the Consumer Loan Amount for each Consumer Loan on
such
schedule as of the Closing Date and the Louisiana Pay Day Loan Amount
for each Louisiana Pay Day Loan on such schedule as of the Closing
Date (collectively, the "Updated Schedules") all of which shall be
dated as of the Closing Date. The representations and warranties
contained in this Agreement shall be deemed to have been made with
respect to all of the Consumer Loans and Louisiana Pay Day Loans
reflected on the Updated Schedule 4.26 on and as of the Closing Date.
(b) The Purchase Price shall be increased or decreased (i)
as provided in Section 1.4 with respect to Expenses, (ii) for any
increase or decrease in Incurred Capital Expenditures reflected on the
Updated Schedule 1.5 as compared to Schedule 1.5 attached to this
Agreement, (iii) for any increase or decrease in the principal amount
of any of the Consumer Loans reflected on the Updated Schedule 4.26 as
compared to the Schedule 4.26 attached to this Agreement; provided
--------
that if any of the Consumer Loans listed on Schedule 4.26 attached to
this Agreement are not owned by either Company as of the Closing Date
or have been repaid in full or have been written off to a zero loan
balance by either Company, such Consumer Loan shall not be reflected
on the Updated Schedule 4.26 and the Purchase Price shall be adjusted
down in an amount equal to the Consumer Loan Amount for all such
Consumer Loans and (iv) for any increase or decrease in the Louisiana
Pay Day Loan Amount reflected on such Updated Schedule 4.26 as
compared to the estimated Louisiana Pay Day Loan Amount in Section
4.26 (c) (the adjustments made pursuant to clauses (i) through (iv),
the "Adjustment Amount").
(c) As soon as is reasonably practicable following the
preparation and delivery of the Updated Schedules, Purchaser shall
prepare and deliver to the Sellers' Representative the Closing
Statement which shall set forth the adjustments to the Purchase Price
to be made, if any, in accordance with this Agreement. Concurrently
with its delivery of the Closing Statement to the Sellers'
Representative, Purchaser shall cause reasonable access to be granted
to the Sellers' Representative to the work papers, schedules and other
documents prepared or used by Purchaser and its accountants in
connection with the preparation of the Closing Statement.
(d) To the extent the Adjustment Amount results in an
increase of the Purchase Price, Purchaser shall promptly pay the
amount of such increase to the Sellers' Representative. To the extent
the Adjustment Amount results in a decrease to the Purchase Price, the
Sellers in each case, on a several, not joint, basis shall promptly
pay the full amount of such decrease to Purchaser; provided, however,
-------- -------
Brimhall shall be obligated to pay the full amount of any such
decrease to the Purchaser. Any amounts paid
pursuant to this Section 2.6 shall be an adjustment to the Purchase
Price.
(e) In the event that the Sellers' Representative gives
Purchaser written notice within 15 days after delivery to the Sellers'
Representative of the Closing Statement that the Sellers'
Representative disputes any portion of the Closing Statement (a
"Dispute Notice") and such dispute is not resolved within 20 days
after delivery of such Dispute Notice to Purchaser, either Sellers'
Representative or Purchaser may submit such dispute to arbitration in
Maricopa County, Arizona for final resolution in accordance with the
commercial arbitration rules of the American Arbitration Association
then in effect. The determination of such arbitrators shall be final
and binding upon the parties hereto, and the fees of such arbitrators
in connection with the determination shall be paid by the party
against whom the award was made, or if a compromise was made, shared
equally. Any portion of the Closing Statement not subject to a
Dispute Notice shall become binding and final upon the parties on the
16th day after delivery of the Closing Statement to the Sellers'
Representative.
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date. Subject to the satisfaction of the
------------
conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver
thereof by the party entitled to waive that condition), the closing of
the sale and purchase of the Shares and the LP Interests provided for
in Section 1.1 hereof (the "Closing") shall take place at 10:00 A.M.
at the offices of Prindle, Decker & Amaro located at 310 Golden Shore,
Fourth Floor, Long Beach, California 90802-4246 (or at such other
place as the parties may designate in writing) on a Business Day to be
agreed by the parties which Business Day is no more than seven
Business Days after the satisfaction of the conditions precedent set
forth in Sections 7.1(m) and 7.2(i) below, or on such other date and
at such other place as the Sellers' Representative and the Purchaser
may jointly designate in writing. The date on which the Closing shall
be held is referred to in this Agreement as the "Closing Date."
3.2 Termination of Agreement. This Agreement may be
------------------------
terminated prior to the Closing as follows:
(a)At the election of either the Sellers' Representative or the
Purchaser on or after August 16, 1996, if the Closing shall not have
occurred by the close of business on such date, provided that the
terminating party is not in breach of this Agreement or
otherwise in default of any of its obligations hereunder; provided,
--------
however, that if the sole reason that the Closing shall not have
-------
occurred by such date is that the condition set forth in Section
7.1(m) hereof shall not have been satisfied, and, as of such date, the
Minimum Lease Condition shall have been satisfied, then (i) the
Sellers shall have the right to deliver to Purchaser irrevocable
written notice under this Section 3.2(a) of their election to
consummate the transactions contemplated hereby and (ii) the Purchaser
shall have the right to deliver to Sellers irrevocable written notice
under this Section 3.2(a) of its election to consummate the
transactions contemplated hereby. Upon receipt of such a notice, the
recipient thereof shall be obligated to proceed with the Closing;
(b) by mutual written consent of the Sellers'
Representative and the Purchaser; or
(c) by the Sellers' Representative or the Purchaser if
there shall be in effect a final nonappealable Order of a Governmental
Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby.
3.3 Procedure Upon Termination. In the event of
--------------------------
termination of this Agreement pursuant to Section 3.2 hereof, written
notice thereof shall forthwith be given by the terminating party to
the other party or parties, and this Agreement shall terminate, and
the purchase of the Shares and the LP Interests hereunder shall be
abandoned, without further action by the Purchaser or the Sellers. If
this Agreement is terminated as provided herein, each party shall
redeliver all documents, work papers and other material of any other
party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing
the same.
3.4 Effect of Termination. In the event that this
---------------------
Agreement is validly terminated as provided herein, then the parties
shall be relieved of their duties and obligations arising under this
Agreement after the date of such termination and such termination
shall be without liability to the Purchaser, the Companies or any
Seller; provided, however, that the obligations of the parties set
-------- -------
forth in Section 10.2 hereof shall survive any such termination and
shall be enforceable hereunder; and provided, further, however, that
-------- ------- -------
nothing in this Section 3.4 shall relieve any party hereto of any
liability for a breach of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Shareholders (other than Brimhall) hereby
jointly and severally represents and warrants to Purchaser as follows
(except to the extent that any such representation and warranty only
relates to U.S. Check), each of the Limited Partners hereby represents
and warrants to Purchaser as follows (except to the extent that any
such representation and warranty only relates to Any Kind), and
Brimhall hereby represents and warrants to Purchaser as follows:
4.1 Organization and Good Standing. Each Company, each
------------------------------
Shareholder and each Limited Partner (other than Shareholders and
Limited Partners that are natural persons) is a corporation,
partnership or trust duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and
has all requisite corporate, partnership or trust power and authority
to own, lease and operate its properties and to carry on its business
as now conducted. Schedule 4.1 sets forth, for each Seller that is
not a natural person, the date of its formation, the jurisdiction
under which it was organized and, for each Seller which is a trust,
the name of all trustees of such trust. Each Company is duly
qualified or authorized to do business as a foreign corporation or
partnership and is in good standing under the laws of each
jurisdiction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of
its properties requires such qualification or authorization, except
where the failure to so qualify would not have a material adverse
effect.
4.2 Authorization of Agreement. Each Seller and each
--------------------------
other party hereto (other than Purchaser or DFG) has all requisite
power, authority and legal capacity to execute and deliver this
Agreement, a Noncompetition Agreement substantially in the form of
Exhibit A hereto (collectively, the "Noncompetition Agreements") and
each other agreement, document, instrument or certificate contemplated
by this Agreement or to be executed by such Person in connection with
the consummation of the transactions contemplated by this Agreement
(together with this Agreement, the Seller Releases and the
Noncompetition Agreements, the "Seller Documents"), and to consummate
the transactions contemplated hereby and thereby. This Agreement has
been, and each of the Seller Documents will be at or prior to the
Closing, duly and validly executed and delivered by each Seller and
each other party thereto (other than Purchaser or DFG) and (assuming
the due authorization, execution and delivery by Purchaser and DFG, if
a party thereto) this Agreement constitutes, and each of the Seller
Documents when so executed and delivered will constitute, the legal,
valid and binding obligations of each Seller and each other party
thereto (other than Purchaser or DFG), enforceable against such Person
in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
4.3 Capitalization.
--------------
(a) The authorized capital stock of Any Kind consists
solely of 1,000,000 shares of common stock, $0.25 par value per share
(the "Common Stock"). There are 100,000 shares of Common Stock issued
and outstanding and no shares of Common Stock are held by Any Kind as
treasury stock. The Shares constitute all of the issued and
outstanding shares of Common Stock and were duly authorized for
issuance and are validly issued, fully paid and non-assessable.
(b) There is no existing option, warrant, call, right,
commitment or other agreement of any character to which any
Shareholder or Any Kind is a party requiring, and there are no
securities of Any Kind outstanding which upon conversion or exchange
would require, the issuance, sale or transfer of any shares of capital
stock or other equity securities of Any Kind or other securities
convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other equity
securities of Any Kind. None of the Shareholders or Any Kind is a
party to any voting trust or other voting agreement with respect to
any of the shares of Common Stock or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the
capital stock of Any Kind.
(c) Schedule 4.3(c) sets forth a complete listing of
(i) each of the partners of U.S. Check, (ii) the percentage interest
in U.S. Check owned by each such partner, and (iii) the type of
partnership interest (general or limited) held by such partner. The
LP Interests to be transferred by the Limited Partners to Purchaser at
Closing constitute all of the partnership interests in U.S. Check,
other than the general partnership interest held by Any Kind. There
is no existing option, warrant, call, right, commitment or other
agreement of any character to which any Limited Partner, Any Kind or
U.S. Check is a party requiring, and there are no securities or
interests of U.S. Check outstanding which upon conversion or exchange
would require, the issuance, sale or transfer of any equity interests
of U.S. Check or other securities convertible into, exchangeable for
or evidencing the right to subscribe for or purchase equity interests
of U.S. Check. None of the Limited Partners, U.S. Check or Any Kind
is a party to any voting trust or other voting agreement with respect
to U.S. Check or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the
equity interests of U.S. Check.
(d) The Partnership Interests are not documented by
certificates or other documentary evidence.
4.4 Subsidiaries and Other Interests. Neither Company has
--------------------------------
any Subsidiaries nor does either Company own any equity interests in
any Person other than the 51% general partnership interest owned by
Any Kind in U.S. Check.
4.5 Corporate Records.
-----------------
(a) Any Kind, U.S. Check and the Sellers have delivered to
the Purchaser true, correct and complete copies of the certificate of
incorporation or certificate of limited partnership (each certified by
the Secretary of State or other appropriate official of the applicable
jurisdiction of organization) and by-laws or partnership agreement
(each certified by the secretary, assistant secretary or other
appropriate officer) or comparable organizational documents of each
Company.
(b) The minute books of Any Kind have been previously made
available to the Purchaser and contain, in all material respects,
complete and accurate records of all meetings and accurately reflect
all other corporate action of the stockholders and board of directors
(including committees thereof) of Any Kind. The stock certificate
books and stock transfer ledgers of Any Kind have been previously made
available to the Purchaser and are true, correct and complete. All
stock transfer taxes levied or payable with respect to all transfers
of shares of Any Kind prior to the date hereof have been paid and
appropriate transfer tax stamps affixed.
4.6 Conflicts; Consents of Third Parties. Except as set
------------------------------------
forth on Schedule 4.6, (a) none of the execution and delivery by any
Seller or any other party thereto (other than Purchaser or DFG) of
this Agreement and the Seller Documents, the consummation by each of
Seller and each other party thereto (other than Purchaser or DFG) of
the transactions contemplated hereby and thereby, or compliance by any
Seller or any other party thereto (other than Purchaser or DFG) with
any of the provisions hereof or thereof will (i) conflict with, or
result in the breach of, any provision of the certificate of
incorporation, by-laws, partnership agreement, trust agreement or
other organizational documents of any Seller or either Company;
(ii) conflict with, violate, result in the breach or termination of,
constitute a default under, or give rise to any right of acceleration
under, any note, bond, mortgage, deed of trust, document evidencing a
Consumer Loan, indenture, license, lease, agreement or other
instrument or obligation to which any Seller or either Company is a
party or by which any of them or any of their respective properties or
assets is bound if such conflict, violation, breach, termination,
default or acceleration would have a material adverse effect on the
applicable Seller or Company; (iii) violate any material statute,
rule, regulation, judgment or Order of any Governmental Body by which
any Seller or either Company is bound; or (iv) result in the creation
of any Lien upon the properties or assets of either Company.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of any Seller
or any other party hereto (other than the Purchaser or DFG) in
connection with the execution and delivery of this Agreement or the
Seller Documents, or the compliance by each Seller or any other party
hereto (other than the Purchaser or DFG), as the case may be, with any
of the provisions hereof or thereof.
4.7 Ownership and Transfer of Shares and LP Interests.
-------------------------------------------------
Each Seller is the record and beneficial owner of the Shares and the
LP Interests indicated as being owned by such Seller on Schedule 4.7,
free and clear of any and all Liens. Each Seller has the power and
authority to sell, transfer, assign and deliver such Shares and LP
Interests as provided in this Agreement, and such delivery will convey
to the Purchaser good and marketable title to such Shares and LP
Interests, free and clear of any and all Liens. Immediately after the
Closing, Purchaser will own all the equity interests in Any Kind and
all the partnership interests in U.S. Check (except for the general
partnership interest in U.S. Check which will be owned by Any Kind).
4.8 Financial Statements. Any Kind and the Sellers have
--------------------
delivered to the Purchaser copies of (i) the audited consolidated
balance sheets of each Company as at December 31, 1993, 1994 and 1995
and the related audited consolidated statements of income and of cash
flows of each Company for the years then ended and (ii) the unaudited
consolidated balance sheet of each Company as at April 30, 1996 and
the related consolidated statements of income and cash flows of each
Company for the period then ended (such audited and unaudited
statements, including the related notes and schedules thereto, are
referred to herein as the "Financial Statements"). Each of the
Financial Statements is complete and correct in all material respects,
has been prepared in accordance with GAAP (subject to normal year-end
adjustments in the case of the unaudited statements) and in conformity
with the practices consistently applied by such Company to which it
relates without modification of the accounting principles used in the
preparation thereof, and presents fairly in accordance with GAAP the
consolidated financial position, results of operations and
cash flows of such Company as at the dates and for the periods
indicated.
For the purposes hereof, the audited consolidated balance
sheet of each Company as at December 31, 1995 is collectively referred
to as such Company's "Balance Sheet" and December 31, 1995 is referred
to as the "Balance Sheet Date".
4.9 No Undisclosed Liabilities. Except as set forth on
--------------------------
Schedule 4.9, neither Company has any indebtedness, obligations or
liabilities of any kind (whether absolute, contingent or otherwise,
and whether due or to become due) which are not reflected on its
respective Balance Sheet other than such indebtedness, obligations or
liabilities (i) as were incurred in the ordinary and usual course of
business consistent with its past practices since the Balance Sheet
Date, (ii) existing pursuant to any contract or agreement disclosed on
Schedules 4.12(a), 4.13 or 4.15 (or any contract or agreement not
required to be disclosed thereon because such contract or agreement
was not of the type required to be disclosed thereon by such Sections)
or (iii) which will be repaid or discharged prior to the Closing.
4.10 Absence of Certain Developments. Except as expressly
-------------------------------
required by this Agreement or as set forth on Schedule 4.10, since the
Balance Sheet Date:
(a) there has not been any Material Adverse Change;
(b) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and
assets of either Company having a replacement cost of more than
$100,000 for all such losses;
(c) except as required by Section 1.3 with respect to the
Excluded Assets, there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares
of capital stock or equity securities of either Company or any
repurchase, redemption or other acquisition by either Company of any
outstanding shares of capital stock or other securities of, or other
ownership interest in, either Company;
(d) neither Company has awarded or paid any bonuses to
employees of either Company with respect to the fiscal year ended
December 31, 1995, or entered into, or increased or agreed to increase
the compensation payable or to become payable by it or the coverage or
benefits available under, any employment agreement, deferred
compensation agreement, severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee
benefit plan, payment or arrangement made to, for or with either
Company's directors, officers, employees, agents or representatives
(other than in the ordinary course of business consistent with past
practice and that in the aggregate have not resulted in a material
increase in the benefits or compensation expense of the Companies
taken as a whole);
(e) there has not been any change by either Company in
accounting or Tax reporting principles, methods or policies;
(f) neither Company has entered into any transaction or
Contract or conducted its business other than in the ordinary course
consistent with past practice;
(g) neither Company has failed to promptly pay and
discharge current liabilities except where disputed in good faith by
appropriate proceedings;
(h) neither Company has made any loans, advances or
capital contributions to, or investments in, any Person or paid any
fees or expenses to any Seller or any Affiliate of any Seller;
(i) neither Company has mortgaged, pledged or subjected to
any Lien any of its assets, or acquired any assets or sold, assigned,
transferred, conveyed, leased or otherwise disposed of any assets,
except for assets acquired or sold, assigned, transferred, conveyed,
leased or otherwise disposed of in the ordinary course of business
consistent with past practice;
(j) neither Company has discharged or satisfied any Lien,
or paid any obligation or liability (fixed or contingent), except in
the ordinary course of business consistent with past practice and
which, in the aggregate, would not be material to the Companies taken
as a whole;
(k) neither Company has canceled or compromised any debt
or claim or amended, canceled, terminated, relinquished, waived or re-
leased any Contract or right except in the ordinary course of business
consistent with past practice and which, in the aggregate, would not
be material to the Companies taken as a whole;
(l) neither Company has committed to make any capital
expenditures or capital additions or betterments in excess of $10,000
individually or $25,000 in the aggregate;
(m) neither Company has entered into any transaction,
arrangement or agreement with a Seller or any of its or any Seller's
Affiliates (including, without limitation, Brimhall or any of his
Affiliates);
(n) neither Company has instituted or settled any material
Legal Proceeding; and
(o) none of the Sellers or any of the Companies has agreed
to take any of the actions set forth in this Section 4.10.
4.11 Taxes.
-----
(a) All Tax Returns required to be filed by or with
respect to each Company or their respective assets have been properly
prepared and duly and timely filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are
required to be filed, and all such Tax Returns are true, complete and
correct in all material respects. Each Company has duly and timely
paid all Taxes that are due and payable or claimed or asserted by any
taxing authority to be due, from or with respect to it for periods
covered by such Tax Returns. With respect to any period for which Tax
Returns have not yet been filed, or for which Taxes are not due or
owing, each Company has made sufficient current accruals for such
Taxes and such accruals are reflected on the Financial Statements.
Each Company has made all required estimated Tax payments sufficient
to avoid any underpayment penalties.
(b) Each Company has duly and timely withheld from
employee salaries, wages and other compensation and has paid over to
the appropriate taxing authorities all amounts required to be so
withheld and paid over for all periods under all applicable laws.
(c) No waivers of statutes of limitation have been given
or requested with respect to any Company in connection with any Tax
Returns covering such Company with respect to any Taxes payable by it
and no power of attorney with respect to any Tax matter is currently
in force. No issue has been raised by any taxing authority in any
audit or examination of either Company which, by application of the
same or similar principles, could reasonably be expected to result in
a deficiency for any subsequent period (including periods subsequent
to the Closing Date). There are no outstanding agreements, waivers,
or arrangements extending the statutory period of limitation
applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to each Company for any
taxable period. No closing agreement pursuant to Section 7121 of the
Code (or any predecessor provision) or any similar provision of any
state, local, or foreign law has been entered into by or with respect
to either Company.
(d) The Sellers have delivered or made available to the
Purchaser true and complete copies of each of (i) any audit
reports issued by any taxing authority within the last three years
relating to the federal, state, local or foreign Taxes due from or
with respect to either Company, and (ii) all of the federal, state,
local and foreign Tax Returns, for each of the last three years filed
by either Company.
(e) All deficiencies asserted or assessments made as a
result of any examinations by the Internal Revenue Service or any
other taxing authority of the Tax Returns of or covering or including
either Company have been fully paid, and there are no other audits or
investigations by any taxing authority in progress, nor has either
Company received any notice from any taxing authority that it intends
to conduct such an audit or investigation.
(f) Neither Any Kind nor any other Person on behalf of Any
Kind has filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any disposition
of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by Any Kind. Neither Company has agreed
to or is required to make any adjustments pursuant to Section 481(a)
of the Code or any similar provision of state, local or foreign law by
reason of a change in accounting method initiated by such Company or
has any knowledge that the Internal Revenue Service has proposed any
such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any
changes in accounting methods that relate to the business or
operations of such Company.
(g) No Seller is a foreign person within the meaning of
Section 1445 of the Code.
(h) Schedule 4.11 lists all material types of Taxes paid
and material types of Tax Returns filed by each Company. No claim has
been made by a taxing authority in a jurisdiction where either Company
does not file Tax Returns such that it is or may be subject to
taxation by that jurisdiction.
(i) No property owned on the Closing Date by any Company
will be required to be treated as being (i) owned by another Person
pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986 or (ii) tax-exempt use
property within the meaning of Section 168(h)(1) of the Code.
(j) Except for the leases described on Schedule 4.12 which
require one of the Companies to make tax payments relating soley to
the use or occupancy of the leased premises associated therewith,
neither Company is a party to any tax sharing or
similar agreement or arrangement (whether or not written) pursuant to
which it will have any obligation to make any payments after the
Closing.
(k) The performance of the transactions contemplated by
this Agreement will not (either alone or upon the occurrence of any
additional or subsequent event) result in the any payment that would
constitute an "excess parachute payment" within the meaning of Section
280G of the Code.
(l) Any Kind is not subject to any private letter ruling
of the Internal Revenue Service or comparable rulings of other taxing
authorities.
(m) Except as set forth on Schedule 4.11, there are no
liens with respect to Taxes upon any of the assets of either Company.
(n) Schedule 4.11 sets forth all material Federal, state,
local and foreign Tax elections under the Code and other applicable
provisions of law that are in effect with respect to either Company.
(o) Neither Company has ever been a member of an
affiliated group of corporations filing a consolidated, combined or
unitary Tax Return.
(p) Since its formation, U.S. Check has been taxed as a
partnership for federal, state and local income tax purposes and not
as an association taxable as a corporation and no claim has been made
by the Internal Revenue Service or any other taxing authority that
U.S. Check is or may be an association taxable as a corporation.
4.12 Real Property.
-------------
(a) Schedule 4.12(a) sets forth a complete list of all
real property and interests in real property leased by any Company
(individually, a "Real Property Lease" and the real properties
specified in such leases being referred to herein individually as a
"Company Property" and collectively as the "Company Properties") as
lessee or lessor. The Company Properties constitute all interests in
real property currently used or currently held for use in connection
with the business of either Company and which are necessary for the
continued operation of the business of the Companies as their
businesses are currently conducted. To the best of Sellers' knowledge
the premises leased pursuant to the Real Property Leases comply with
all building, fire, zoning and other ordinances and regulations
applicable thereto. The Companies have paid all rent, additional rent
and/or other charges
reserved and payable under each of the Real Property Leases to the
extent so payable as of the Closing Date. One of the Companies has a
valid and enforceable leasehold interest under each of the Real
Property Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity); neither Company has
caused an event of default or received any written notice of any
default or event that with notice or lapse of time, or both, would
constitute a default by such Company under any of the Real Property
Leases; and none of the landlords in respect of the Real Property
Leases has caused an event of default that with notice or lapse of
time, or both, would constitute a default by any one of such landlords
under any of the Real Property Leases. Each of the Company Properties
and each of the buildings, fixtures and improvements thereon is in
good operating condition and repair (subject to normal wear and tear).
With respect to each Company Property, there is no management
agreement, equipment lease, service contract or other contract or
agreement to which the Company is a party affecting such Company
Property (collectively, "Property Contracts") which (i) was not made
in the ordinary course of business, (ii) is not terminable upon 30
days' prior notice by the Company without payment of a premium or
penalty or (iii) requires payments in excess of an amount that, if
added to the monthly payment obligations of all other Property
Contracts in respect of such Company Property, would cause the
aggregate amount of all monthly payment obligations in respect of all
Property Contracts for such Company Property to exceed $1,000. Any
Kind and the Sellers have delivered to the Purchaser true, correct and
complete copies of the Real Property Leases, together with all
amendments, modifications or supplements, if any, thereto. The
Companies presently own and operate check cashing stores at the
locations set forth next to each Company Property on Schedule 4.12(a).
(b) The Companies have all certificates of occupancy and
Permits of any Governmental Body necessary or useful for the current
use and operation of each Company Property, and to the best of each
Seller's knowledge each Company has fully complied with all material
conditions of the Permits applicable to it. To the best of each
Seller's knowledge, no default or violation, or event that with the
lapse of time or giving of notice or both would become a default or
violation, has occurred in the due observance of any Permit.
(c) There does not exist any actual or, to the best
knowledge of Any Kind and the Sellers, threatened or contemplated
condemnation or eminent domain proceedings that affect any Company
Property or any part thereof, and none of Any Kind or any of the
Sellers has received any notice, oral or written, of the intention of
any Governmental Body or other Person to take or use all or any part
thereof.
(d) None of the Sellers or the Companies has received any
written notice from any insurance company that has issued a policy
with respect to any Company Property requiring performance of any
structural or other repairs or alterations to such Company Property.
(e) Neither Company owns or holds, or is obligated under
or a party to, any option to purchase or acquire, right of first
refusal or other Contract right to purchase, acquire, sell, assign or
dispose of any real estate or any portion thereof or interest therein
(other than options to renew the Real Property Leases).
(f) Neither Company owns or holds any real property in
fee.
4.13 Tangible Personal Property.
--------------------------
(a) Schedule 4.13(a) sets forth all leases of personal
property ("Personal Property Leases") relating to personal property
used in the business of any of the Companies or to which any of the
Companies is a party or by which the properties or assets of any of
the Companies is bound. Any Kind and the Sellers have delivered or
otherwise made available to the Purchaser true, correct and complete
copies of the Personal Property Leases, together with all amendments,
modifications or supplements thereto.
(b) Each Company has a valid leasehold interest under each
of the Personal Property Leases under which it is a lessee, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity), and there is no default under any Personal Property Lease
by either Company or, to the best knowledge of Any Kind or any of the
Sellers, by any other party thereto, and no event has occurred that
with the lapse of time or the giving of notice or both would
constitute a default thereunder.
(c) Each Company has good and marketable title to all of
the items of tangible personal property reflected in its respective
Balance Sheet (except as sold or disposed of subsequent to the date
thereof in the ordinary course of business consistent with past
practice), free and clear of any and all Liens other
than the Permitted Exceptions or as set forth on Schedule 4.13(c).
All such items of tangible personal property which, individually or in
the aggregate, are material to the operation of the business of each
Company are in good condition and in a state of good maintenance and
repair (ordinary wear and tear excepted) and are suitable for the
purposes used.
(d) Each of the items of tangible personal property used
by either Company under the Personal Property Leases is in good
condition and repair (ordinary wear and tear excepted) and is suitable
for the purposes used.
4.14 Intangible Property. Schedule 4.14 contains a
-------------------
complete and correct list of each patent, trademark, trade name,
computer program, software, service mark, brand name, brand mark and
copyright owned or used by either Company as well as all registrations
thereof and pending applications therefor, and each license or other
agreement relating thereto. Except as set forth on Schedule 4.14,
each of the foregoing is owned by the party shown on such Schedule as
owning the same, free and clear of all Liens and is in good standing
and not the subject of any challenge. There have been no claims made
and none of the Sellers nor any of the Companies has received any
notice or otherwise knows or has reason to believe that any of the
foregoing is invalid or conflicts with the asserted rights of others.
Each Company possesses all patents, patent licenses, trade names,
trademarks, service marks, brand marks, brand names, copyrights, know-
how, formulae and other proprietary and trade rights necessary for the
conduct of its business as now conducted, not subject to any
restrictions and without any known conflict with the rights of others
and neither Company has forfeited or otherwise relinquished any such
patent, patent license, trade name, trademark, service mark, brand
mark, brand name, copyright, know-how, formulae or other proprietary
right necessary for the conduct of its business as conducted on the
date hereof. Neither Company is under any obligation to pay any
royalties or similar payments in connection with any license to any
Seller or any Affiliate thereof.
4.15 Material Contracts. Schedule 4.15 sets forth all of
------------------
the following Contracts to which either Company is a party or by which
it is bound (collectively, the "Material Contracts"): (i) Contracts
with any Shareholder, Limited Partner or any direct or indirect
shareholder, partner or equity holder of either Company (or any
Affiliates of any of the foregoing) or any current or former officer
or director of either Company; (ii) Contracts with any labor union or
association representing any employee of either Company; (iii)
Contracts pursuant to which any Person is required to purchase or sell
a stated portion of its requirements or output from or to another
Person; (iv) Contracts for the sale
of any of the assets of either Company other than in the ordinary
course of business or for the grant to any Person of any preferential
rights to purchase any of its assets; (v) partnership or joint venture
agreements; (vi) Contracts containing covenants of either Company or
any of its Affiliates not to compete in any line of business or with
any Person in any geographical area or covenants of any other Person
not to compete with either Company in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by
either Company of any operating business or the capital stock of any
other Person; (viii) Contracts relating to the borrowing of money;
(ix) any other Contracts, other than Real Property Leases, which were
not entered into in the ordinary course consistent with past practice,
or which involve the expenditure of more than $20,000 in the aggregate
(per contract) or require performance by any party more than one year
from the date hereof; (x) Contracts involving an obligation to make a
Capital Expenditure; (xi) franchise or licensing agreements pursuant
to which either Company is a franchisor or licensor; and (xii) all
Consumer Loans. There have been made available to the Purchaser true
and complete copies of each of the Material Contracts. Except as set
forth on Schedule 4.15, each of the Material Contracts and other
agreements is in full force and effect and is the legal, valid and
binding obligation of each party thereto, enforceable against such
party in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as
set forth on Schedule 4.15, neither Company is in default in any
material respect under any Material Contracts, nor, to the knowledge
of any Seller or Any Kind, is any other party to any Material Contract
in default thereunder in any material respect. Upon the consummation
of the transactions contemplated hereby and subject to the terms and
conditions hereof, the Purchaser will be entitled to all of the
benefits due and owing to either Company under each of the Material
Contracts (accruing from and after the Closing).
4.16 Employee Benefits.
-----------------
(a) Schedule 4.16(a) sets forth a complete and correct
list of (i) all "employee benefit plans", as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and any other severance pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred compensation,
bonus or other incentive compensation, stock purchase arrangements or
policies, life insurance, scholarship or other employee benefit plan,
program or arrangement maintained by either Company or to which either
Company has any
liability (contingent or otherwise) with respect to employees,
officers, directors or shareholders of either Company ("Employee
Benefit Plans"). Schedule 4.16(a) clearly identifies, in separate
categories, Employee Benefit Plans that are (i) subject to Section
4063 and 4064 of ERISA ("Multiple Employer Plans"), (ii) multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) ("Multiemployer
Plans") or (iii) "benefit plans", within the meaning of Section
5000(b)(1) of the Code providing continuing benefits after the
termination of employment (other than as required by Section 4980B of
the Code or Part 6 of Title I of ERISA and at the former employee's or
his beneficiary's sole expense).
(b) Neither Company would have any withdrawal or other
liability (contingent or otherwise) under Title IV of ERISA with
respect to any Multiple Employer Plan or Multiemployer Plan if
Purchaser had not purchased the Shares from Seller on the Closing Date
in accordance with the terms of this Agreement.
(c) Each of the Employee Benefit Plans intended to qualify
under Section 401 of the Code ("Qualified Plans") so qualify and the
trusts maintained thereto are exempt from federal income taxation
under Section 501 of the Code, and, except as disclosed on Schedule
4.16(c), nothing has occurred with respect to the operation of any
such plan which could cause the loss of such qualification or
exemption or the imposition of any liability, penalty or tax under
ERISA or the Code.
(d) All contributions and premiums required by law or by
the terms of any Employee Benefit Plan or any agreement relating
thereto have been timely made (without regard to any waivers granted
with respect thereto).
(e) The benefit liabilities, as defined in Section
4001(a)(16) of ERISA, of each of the Employee Benefit Plans subject to
Title IV of ERISA using the actuarial assumptions set forth in the
most recent actuarial valuation with respect to such Plan do not
exceed the fair market value of the assets of such plan. The
liabilities of each Employee Benefit Plan that has been terminated or
otherwise wound up, have been fully discharged in full compliance with
applicable Law.
(f) True, correct and complete copies of the following
documents, with respect to each of the Employee Benefit Plans have
been delivered to the Purchaser (A) any plans and related trust
documents, and all amendments thereto, (B) the most recent Forms 5500
for the past two years and schedules thereto, (C) the most recent
financial statements and actuarial valuations for the past two years,
(D) the most recent Internal Revenue Service determination letter, (E)
the most recent summary plan
descriptions (including letters or other documents updating such
descriptions) and (F) written descriptions of all non-written
agreements relating to the Employee Benefit Plans.
(g) There are no pending Legal Proceedings which have been
asserted or instituted against any of the Employee Benefit Plans, the
assets of any such plans or either Company, or the plan administrator
or any fiduciary of the Employee Benefit Plans with respect to the
operation of such plans (other than routine, uncontested benefit
claims), and, to the each Seller's knowledge, there are no facts or
circumstances which could form the basis for any such Legal
Proceeding.
(h) Each of the Employee Benefit Plans has been
maintained, in all material respects, in accordance with its terms and
all provisions of applicable Law. All amendments and actions required
to bring each of the Employee Benefit Plans into conformity in all
material respects with all of the applicable provisions of ERISA and
other applicable Laws have been made or taken except to the extent
that such amendments or actions are not required by law to be made or
taken until a date after the Closing Date and are disclosed on
Schedule 4.16(h).
(i) None of the Companies, the Sellers, or any ERISA
Affiliate or any organization to which any is a successor or parent
corporation, has divested any business or entity maintaining or
sponsoring a defined benefit pension plan having unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of ERISA) or
transferred any such plan to any person other than the Sellers or any
ERISA Affiliate during the five-year period ending on the Closing
Date.
(j) Except as disclosed on Schedule 4.16(j), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment
becoming due to any employee of either Company; (ii) increase any
benefits otherwise payable under any Employee Benefit Plan; or (iii)
result in the acceleration of the time of payment or vesting of any
such benefits.
4.17 Labor.
-----
(a) Neither Company is party to any labor or collective
bargaining agreement and there are no labor or collective bargaining
agreements which pertain to employees of either Company.
(b) No employees of either Company are represented by any
labor organization. No labor organization or group of employees of
either Company has made a pending demand for
recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the best
knowledge of Any Kind or any Seller, threatened to be brought or
filed, with the National Labor Relations Board or other labor
relations tribunal. There is no organizing activity involving either
Company pending or, to the best knowledge of Any Kind or any Seller,
threatened by any labor organization or group of employees of either
Company.
(c) There are no (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) material grievances or other labor
disputes pending or, to the best knowledge of Any Kind or any Seller,
threatened against or involving either Company. There are no unfair
labor practice charges, grievances or complaints pending or, to the
best knowledge of Any Kind or any Seller, threatened by or on behalf
of any employee or group of employees of either Company.
4.18 Litigation. Except as set forth in Schedule 4.18,
----------
there is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of Any Kind or any Seller, overtly
threatened against either Company (or to the knowledge of Any Kind or
any Seller, pending or threatened, against any of the officers,
directors or key employees of either Company with respect to their
business activities on behalf of either Company), or to which any of
the Sellers or either Company is otherwise a party, before any court,
or before any governmental department, commission, board, agency, or
instrumentality; nor, to the knowledge of Any Kind or any Seller, is
there any reasonable basis for any such action, proceeding, or
investigation. Neither Company is subject to any judgment, Order or
decree of any court or Governmental Body and neither Company is
engaged in any legal action to recover monies due it or for damages
sustained by it.
4.19 Compliance with Laws. Each Company possesses all
--------------------
Licenses of and from all Governmental Bodies, and has made all filings
with all Governmental Bodies, necessary to own or lease its respective
properties and assets and to conduct the business(es) in which it is
engaged. Except as set forth on Schedule 4.19, no proceeding has been
threatened or commenced which seeks to, or could reasonably be
anticipated to, cause the suspension, modification, revocation or
withdrawal of any License held by either Company. Each Company is
currently, and at all times has been, in material compliance with all
Laws applicable to such Company and/or the businesses in which they
are engaged including, without limitation, all applicable credit,
banking and consumer protection Laws (such as, for example, the Truth
in Lending Act and its implementing Regulation Z, the Equal Credit
Opportunity Act and its implementing Regulation B, the Fair Credit
Reporting Act, the Federal Trade Commission Credit Practices Trade
Regulation Rule and analogous provisions of state Law, Laws regulating
check cashing, collateral loan brokerage, small loans or other loans,
interest and usury and debt collection, plain language Laws and Laws
proscribing unfair and/or deceptive acts or practices) and franchise
disclosure Laws (such as, for example, 16 C.F.R. Sections 436 et seq. and
-- ---
analogous provisions of state Law). Neither Company nor any of their
directors, officers, employees or representatives has offered,
proposed, promised or made any illegal payment to officers, employees
or representatives of any Governmental Body, or engaged in any illegal
reciprocal practices or made any illegal payment or given any other
illegal consideration to any third party.
4.20 Environmental Matters. Except as set forth on
---------------------
Schedule 4.20 hereto:
(a) the operations of each Company have been and are in
compliance with all applicable material Environmental Laws and all
Licenses issued pursuant to applicable material Environmental Laws
("Environmental Permits");
(b) each Company has obtained all material Environmental
Permits necessary to operate its business and is in compliance with
such Environmental Permits;
(c) neither Company is the subject of any outstanding
written order, agreement or Contract with any governmental authority
or person respecting (i) applicable Environmental Laws, (ii) Remedial
Action, (iii) any Release or threatened Release of a Hazardous
Material or (iv) any Environmental Claim;
(d) neither Company has received any written communication
alleging that either Company or the operations thereof may be in
violation of any applicable Environmental Law or any Environmental
Permit, or may have any liability under any applicable Environmental
Law;
(e) to the best of each Seller's knowledge, neither
Company has any liability in connection with any Release of any
Hazardous Materials into the indoor or outdoor environment (whether
on-site or off-site) and, to the best of each Seller's knowledge, no
facts or circumstances exist which could reasonably be expected to
give rise to such liability under applicable Environmental Laws;
(f) there are no legal or administrative proceedings
pending or, to the knowledge of any of the Sellers or Any Kind,
threatened against the Company alleging the violation of or seeking to
impose liability pursuant to applicable Environmental Laws;
(g) to the best of each Seller's knowledge, there are no
investigations of the business, operations, or currently or previously
owned, operated or leased property of either Company pending or, to
the knowledge of any of the Sellers or Any Kind, threatened which
could lead to the imposition of any liability pursuant to applicable
Environmental Law;
(h) to the best of each Seller's knowledge, there is not
located at any of the properties of either Company any (i) underground
storage tanks, (ii) asbestos-containing material or (iii) equipment
containing polychlorinated biphenyls; and
(i) Any Kind and the Sellers have provided to the
Purchaser copies of all environmentally related audits, studies,
reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned, leased or
operated properties of either Company.
4.21 Insurance. Schedule 4.21 sets forth a complete and
---------
accurate list of all policies of insurance of any kind or nature
covering either Company or any of their respective employees,
properties or assets, including, without limitation, policies of life,
disability, fire, theft, workers compensation, employee fidelity and
other casualty and liability insurance. All such policies are in full
force and effect and neither Company is in default of any provision
thereof.
4.22 Payables. All accounts payable of either Company
--------
reflected in their respective Balance Sheets or arising after the date
thereof are the result of bona fide transactions in the ordinary
course of business and have been paid or are not yet due and payable.
4.23 Related Party Transactions. Except as set forth on
--------------------------
Schedule 4.23, none of the Sellers or any Affiliate of any of the
Companies or any Seller has borrowed any monies from or has
outstanding any indebtedness or other similar obligations to either
Company. Except as set forth in Schedule 4.23, none of any Sellers,
any of the Companies, any Affiliate of either Company or any Seller or
any officer or employee of any of them (i) owns any direct or indirect
interest of any kind in, or controls or is a director, officer,
employee or partner of, or consultant to, or lender to or borrower
from or has the right to participate in the profits of, any Person
which is (A) a competitor, supplier, customer, landlord, tenant,
creditor or debtor of either Company, (B) engaged in a business
related to the business of either Company, or (C) a participant in any
transaction to which either Company is a party or (ii) is a party to
any Contract or transaction with either Company.
4.24 ADA Matters. None of any Company or any of the
-----------
Shareholders or Limited Partners has received any notification, or is
aware of any circumstance, regarding any real property which is the
subject of any of the Real Property Leases which would require that
the lessee under any such Real Property Lease make any additions,
renovations or improvements to such property pursuant to the terms of
the Americans With Disabilities Act ("ADA") or otherwise.
4.25 Banks. Schedule 4.25 contains a complete and correct
-----
list of the names and locations of all banks in which either Company
has accounts or safe deposit boxes and the names of all persons
authorized to draw thereon or to have access thereto. Except as set
forth on Schedule 4.25, no person holds a power of attorney to act on
behalf of either Company.
4.26 Consumer Loans; Louisiana Pay Day Loans.
---------------------------------------
(a) Schedule 4.26 contains a complete and correct list of all
Consumer Loans as of the date such schedule was prepared together with
the outstanding principal balance and Consumer Loan Amount for each
Consumer Loan set forth thereon, in each case, as of the date such
schedule was prepared. Schedule 4.26 also contains the standard form
of the note and other loan documentation used by either Company to
evidence the Consumer Loans. Each of the Consumer Loans and Louisiana
Pay Day Loan is in full force and effect and is the legal, valid and
binding obligation of the obligor thereunder, enforceable against such
Person in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as
set forth on Schedule 4.26, to the knowledge of any Seller or Any
Kind, no obligor under any Consumer Loan or Louisiana Pay Day Loan is
in default thereunder in any material respect. Each Consumer Loan and
Louisiana Pay Day Loan was made in (i) the ordinary and usual course
of business and (ii) conformity to the credit policies and
underwriting standards, in each case, of the Company which made such
Consumer Loan or Louisiana Pay Day Loan. Each Company has in its
possession (A) a fully executed original note or post-dated check
representing each Consumer Loan or Louisiana Pay Day Loan owned by
such Company and (B) a fully executed original or a true, complete and
correct copy of all other documents relating to the Consumer Loan or
Louisiana Pay Day Loan represented by such note or post-dated check,
the rights and duties of the obligor under such Consumer Loan or
Louisiana Pay Day Loan, the operative terms and conditions of such
Consumer Loan or Louisiana Pay Day Loan, the rights and obligations of
any other Person relating to such Consumer Loan or Louisiana Pay Day
Loan and any collateral associated therewith) and all other documents
necessary to enforce such Consumer Loan or Louisiana Pay Day Loan or
perfect the security interest thereunder.
(b) To the best of each Seller's knowledge (i) each of the
Companies is in compliance with all laws enacted by and all
regulations promulgated or issued by any Governmental Body pertaining
to usury, truth-in-lending, installment or conditional sales and sales
financing, and (ii) neither the billing and collection nor enforcement
of any Consumer Loan or Louisiana Pay Day Loan in accordance with the
express contractual terms thereof will result in the violation of any
Laws enacted by or regulations promulgated or issued by any
Governmental Body.
(c) As of the date hereof, the parties agree that $2,493
is the estimated Louisiana Pay Day Loan Amount.
4.27 Financial Advisors. Except as set forth on Schedule
------------------
4.27, no Person has acted, directly or indirectly, as a broker, finder
or financial advisor for any of the Sellers or any of the Companies in
connection with the transactions contemplated by this Agreement and no
Person is entitled to any fee or commission or like payment in respect
thereof.
4.28 Capital Expenditures. Schedule 4.28 contains, with
--------------------
respect to each of the Companies, a complete and correct list of all
Capital Expenditures (other than Incurred Capital Expenditures) that
(i) have been actually incurred by either of the Companies during the
period from the Balance Sheet Date through the date hereof or (ii) are
budgeted to be made by either Company during the period from the date
hereof through the Closing Date. Schedule 4.28 also lists all Stores
opened since the Balance Sheet Date and all locations which are
currently under development and/or construction to be operated by
either Company.
4.29 Name. "Any Kind", "Any Kind Check Cashing", "U.S.
----
Check" and "U.S. Check Exchange" are the only names used by Any Kind
or U.S. Check in the operation of the Stores.
4.30 Investment Intention. The DFG Stock Purchaser is
--------------------
acquiring the DFG Common Stock for its own account, for investment
purposes only and not with a view to the resale or distribution (as
such term is used in Section 2(11) of the Securities Act of 1933, as
amended (the "Securities Act") thereof. The DFG Stock Purchaser
understands that the shares of DFG Common Stock received by it will
not have been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or an
exemption from such registration is available. The DFG Stock
Purchaser hereby acknowledges that the certificates delivered to it
evidencing its shares of DFG Common Stock shall be legended as
indicated in the previous sentence and as provided in
the Shareholders Agreement. The DFG Stock Purchaser is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND DFG
The Purchaser and DFG hereby represent and warrant to the
Sellers that:
5.1 Organization and Good Standing. The Purchaser is a
------------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of New York. DFG is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
5.2 Authorization of Agreement. Each of the Purchaser and
--------------------------
DFG has full corporate power and authority to execute and deliver this
Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the
Purchaser or DFG, as the case may be, in connection with the
consummation of the transactions contemplated hereby and thereby (the
"Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance by each of the Purchaser and DFG of this Agreement and
each Purchaser Document have been duly authorized by all necessary
corporate action on behalf of the Purchaser and DFG. This Agreement
has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by the Purchaser and DFG and
(assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each
Purchaser Document when so executed and delivered will constitute,
legal, valid and binding obligations of the Purchaser and DFG,
enforceable against each of them in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
------------------------------------
(a) Except as set forth on Schedule 5.3 hereto, none of
the execution and delivery by the Purchaser and DFG of this Agreement
and of the Purchaser Documents, the consummation by the Purchaser and
DFG of the transactions contemplated hereby and
thereby, or compliance by the Purchaser and DFG with any of the
provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the certificate of incorporation or by-
laws of the Purchaser or DFG, as the case may be, (ii) conflict with,
violate, result in the breach or termination of, constitute a default
under, or give rise to any right of acceleration under, any note,
bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Purchaser or DFG is a party or by which the
Purchaser or DFG or any of their respective properties or assets are
bound or (iii) violate any statute, rule, regulation, judgment or
Order of any Governmental Body by which the Purchaser or DFG is bound.
(b) Except as set forth on Schedule 5.3, no consent,
waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is
required on the part of the Purchaser or DFG in connection with the
execution and delivery of this Agreement or the Purchaser Documents or
the compliance by Purchaser or DFG with any of the provisions hereof
or thereof.
5.4 Litigation. There are no Legal Proceedings pending
----------
or, to the best knowledge of the Purchaser or DFG, threatened that are
reasonably likely to prohibit or restrain the ability of the Purchaser
or DFG to enter into this Agreement or consummate the transactions
contemplated hereby.
5.5 Investment Intention. The Purchaser is acquiring the
--------------------
Shares and LP Interests for its own account, for investment purposes
only and not with a view to the resale or distribution (as such term
is used in Section 2(11) of the Securities Act) thereof. Purchaser
understands that the Shares and LP Interests have not been registered
under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available.
5.6 Financial Advisors. No Person, other than Beau
------------------
Jeffries, has acted, directly or indirectly, as a broker, finder or
financial advisor for the Purchaser or DFG in connection with the
transactions contemplated by this Agreement and, other than Beau
Jeffries, no person is entitled to any fee or commission or like
payment in respect thereof.
5.7 DFG Common Stock. The shares of DFG Common Stock to
----------------
be issued as a part of the Purchase Price will be validly issued,
fully paid and non-assessable, and such shares will be issued free and
clear of any and all Liens, except for (a) Securities Act restrictions
on the resale or distribution of such shares and state blue sky laws
and (b) restrictions contained in the Shareholders Agreement.
ARTICLE VI
COVENANTS
6.1 Access to Information. (a) Any Kind and the Sellers
---------------------
agree that, prior to the Closing Date, the Purchaser shall be
entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants),
to make such investigation of the properties, businesses and
operations of the Companies and such examination of the books, records
and financial condition of the Companies as it reasonably requests and
to make extracts and copies of such books and records. Any such
investigation and examination shall be conducted during regular
business hours and under reasonable circumstances, and Any Kind and
the Sellers shall cooperate, and shall cause the Companies to
cooperate, fully therein. In order that the Purchaser may have full
opportunity to make such physical, business, accounting and legal
review, examination or investigation as it may reasonably request of
the affairs of the Companies, Any Kind and the Sellers shall cause the
officers, employees, consultants, agents, accountants, attorneys and
other representatives of the Companies to cooperate fully with such
representatives in connection with such review and examination.
(b) The determination of the Foreign Cash on Hand to be
delivered by the Sellers to the Purchaser pursuant to Section 2.4
hereof shall be true and correct.
6.2 Conduct of the Business Pending the Closing.
-------------------------------------------
(a) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld or delayed), each of the
Sellers covenant that each Company shall:
(i) conduct its businesses only in the ordinary course
consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without limitation,
management and the sales force) and goodwill and (B) preserve its
present relationship with Persons having business dealings with
it;
(iii) maintain (A) all of its assets and properties in
their current condition, ordinary wear and tear excepted and
(B) insurance upon all of its properties and assets in such
amounts and of such kinds comparable to that in effect on the
date of this Agreement;
(iv) (A) maintain its books, accounts and records in the
ordinary course of business consistent with past practices,
(B) continue to collect accounts receivable and pay accounts
payable utilizing normal procedures and without discounting or
accelerating payment of such accounts except for such discounting
or accelerating as may be done in the ordinary course consistent
with past practice, and (C) comply with all contractual and other
obligations applicable to its operations;
(v) promptly pay and discharge all liabilities (including
liabilities for services rendered or goods delivered to either of
the Companies) that are due and payable by it prior to the
Closing Date except where such liabilities are being disputed in
good faith by appropriate proceedings; and
(vi) comply in all material respects with applicable Laws,
including, without limitation, Environmental Laws.
(b) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld in the case of
subparagraphs (v), (vii), (viii) or (xii) below), the Sellers covenant
that they shall not permit either Company to:
(i) except as expressly provided in Section 1.3, declare,
set aside, make or pay any dividend or other distribution in
respect of the capital stock of either of the Companies or repur-
chase, redeem or otherwise acquire any outstanding shares of the
capital stock or other securities of, or other ownership
interests in, either Company;
(ii) transfer, issue, sell or dispose of any shares of
capital stock, partnership interests or other securities of
either Company or grant options, warrants, calls or other rights
to purchase or otherwise acquire shares of the capital stock,
partnership interests or other securities of either Company;
(iii) effect any recapitalization, reclassification, stock
split or like change in the capitalization of either Company;
(iv) amend the certificate of incorporation, by-laws,
certificate of limited partnership or partnership agreement of
either Company;
(v) (A) increase by 10% or more in the aggregate the
annual level of compensation of any employee of either
Company whose annual compensation exceeds $25,000, (B) increase
the annual level of compensation payable or to become payable by
either Company to any of their respective executive officers, (C)
grant any bonus, benefit or other direct or indirect compensation
to any employee, director or consultant whose annual compensation
exceeds $25,000, other than in the ordinary course consistent
with past practice and in such amounts as are fully reserved
against in the Financial Statements, (D) increase the coverage or
benefits available under any (or create any new) severance pay,
termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation,
bonus or other incentive compensation, insurance, pension or
other employee benefit plan or arrangement made to, for, or with
any of the directors, officers, employees, agents or representa-
tives of either Company or otherwise modify or amend or terminate
any such plan or arrangement or (E) enter into any employment,
deferred compensation, severance, consulting, non-competition or
similar agreement (or amend any such agreement) to which either
Company is a party or involving a director, officer or employee
of either Company in his or her capacity as a director, officer
or employee of either Company;
(vi) except for trade payables and for indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice, borrow monies for any reason or
draw down on any line of credit or debt obligation, or become the
guarantor, surety, endorser or otherwise liable for any debt,
obligation or liability (contingent or otherwise) of any other
Person;
(vii) subject to any Lien, any of the properties or assets
(whether tangible or intangible) of either Company;
(viii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose of any of
the material properties or assets (except for fair consideration
in the ordinary course of business consistent with past practice)
of either Company;
(ix) cancel or compromise any debt or claim or waive or
release any material right of either Company except in the
ordinary course of business consistent with past practice;
(x) enter into any commitment for Capital Expenditures,
except as provided in Schedule 4.28 hereto;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement of either Company or, through
negotiation or otherwise, make any commitment or incur any
liability to any labor organization with respect to either
Company;
(xii) introduce any material change with respect to the
operation of either Company, including any material change in the
types, nature, composition or quality of its products or services
or, other than in the ordinary course of business, make any
change in product specifications or prices or terms of
distributions of such products;
(xiii) become obligated to develop any new locations except
as provided on Schedule 4.28;
(xiv) enter into or agree to enter into any merger or
consolidation with any Person or engage in any new business or
invest in, make a loan, advance or capital contribution to, or
otherwise acquire the securities of, any other Person;
(xv) except for transfers of cash pursuant to normal cash
management practices, make any investments in or loans to, or pay
any fees or expenses to, or enter into or modify any Contract
with, any Seller or any shareholder, partner or Affiliate of any
Seller;
(xvi) restructure, change, modify or renegotiate the terms
of any obligation of either Company to another Person which
restructuring, change, modification or renegotiation has the
effect of extending, delaying or deferring the time for payment
or performance of any such obligation, other than in the ordinary
course of business consistent with past practice;
(xvii) modify its credit eligibility policies, underwriting
standards, reserve practices or standard form documentation
relating to any Consumer Loans;
(xviii) agree to do anything prohibited by this Section 6.2
or take or omit to take any action which would make any of the
representations and warranties of the Sellers in this Agreement
or the Seller Documents untrue or incorrect in any material
respect as of any time through and including the Closing Date; or
(xix) make any material Tax election or settle or
compromise any Tax liability for an amount materially in excess
of the liability therefor that is reflected on the Financial
Statements of either Company, as the case may be.
6.3 Consents. Except to the extent provided in Section
--------
6.4 hereof, Any Kind, U.S. Check and the Sellers shall use their best
efforts, and the Purchaser and DFG shall cooperate with Any Kind, U.S.
Check and the Sellers, to obtain at the earliest practicable date all
consents, waivers, approvals, Orders, Permits and authorizations of
any Person or Governmental Body required to be obtained by Any Kind or
U.S. Check to consummate the transactions contemplated by this
Agreement, including, without limitation, the consents, waivers,
approvals, Orders, Permits and authorizations of any Person or
Governmental Body referred to in Section 4.6(b) hereof.
6.4 Consents to Real Property Leases; Releases of Personal
------------------------------------------------------
Guarantees. Any Kind, U.S. Check and the Sellers, Purchaser and DFG
----------
will jointly cooperate and use commercially reasonable efforts to
(i) obtain all consents and estoppels from landlords and lessors which
are required to be obtained to consummate the transactions
contemplated by this Agreement pursuant to the terms of any of the
Real Property Leases, and (ii) obtain releases of the guarantees that
are listed on Schedule 6.4 hereto and which were made by any of the
Shareholders.
6.5 No Solicitation. Neither Any Kind nor the Sellers
---------------
will, nor will they cause or permit either Company or any of either
Company's directors, officers, employees, representatives or agents
(collectively, the "Representatives") to, directly or indirectly,
(i) discuss, negotiate, undertake, authorize, recommend, propose or
enter into, either as the proposed surviving, merged, acquiring or
acquired corporation, any transaction involving a merger,
consolidation, business combination, purchase or disposition of any
capital stock or other equity interest in, or material assets of,
either Company other than the transactions set forth in this Agreement
(an "Acquisition Transaction"), (ii) facilitate, encourage, solicit or
initiate discussions, negotiations or submissions of proposals or
offers in respect of an Acquisition Transaction, (iii) furnish or
cause to be furnished, to any Person, any information concerning the
business, operations, properties or assets of either Company in
connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other Person to do or seek any
of the foregoing. Any Kind and the Sellers will inform the Purchaser
in writing immediately following the receipt by any Seller, either
Company or any Representative of any proposal or inquiry in respect of
any Acquisition Transaction.
6.6 Preservation of Records. Subject to Section 6.13(b)
-----------------------
hereof (relating to the preservation of Tax records), the Sellers and
the Purchaser agree that each of them shall preserve and keep the
records held by any of them relating to the business
of the Companies for a period of four years from the Closing Date and
shall make such records and personnel available to the other as may be
reasonably required by such party in connection with, among other
things, any insurance claims by, legal proceedings against or
governmental investigations of the Sellers or the Purchaser or any of
their Affiliates or in order to enable the Sellers or the Purchaser to
comply with their respective obligations under this Agreement, the
Noncompetition Agreements and each other agreement, document or
instrument contemplated hereby or thereby. In the event any of the
Sellers or the Purchaser wishes to destroy such records after that
time, such party shall first give ninety (90) days prior written
notice to the other and such other party shall have the right at its
option and expense, upon prior written notice given to such party
within that ninety (90) day period, to take possession of the records
within one hundred and eighty (180) days after the date of such
notice.
6.7 Publicity. None of Any Kind, U.S. Check, the Sellers,
---------
the Purchaser or DFG shall issue any press release or public
announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of
the other parties hereto, which approval will not be unreasonably
withheld or delayed, unless, in the sole judgment of the Purchaser,
disclosure is otherwise required by applicable Law, provided that, to
the extent required by applicable Law, the party intending to make
such release shall use its best efforts consistent with such
applicable Law to consult with the other party with respect to the
text thereof.
6.8 Repayment of Loans; Turn Over of Funds. (a) On or
--------------------------------------
prior to the Closing Date, all loans or other advances from either
Company to the Sellers or any of their Affiliates, including any
accrued and unpaid interest thereon, shall be repaid in full and all
loans or other advances from the Sellers or any of their Affiliates to
either Company, including any accrued interest thereon, shall be paid
in full (collectively the "Affiliate Loans").
(b) On or prior to the Closing Date, the Sellers shall
cause the obligations owed to Wells Fargo Bank pursuant to loan
numbers 02-980-4850-4 and 02-9804-930-4 to be repaid and discharged in
full.
(c) All amounts which are paid in respect of the Excluded
Assets and are received by either Company following the Closing shall
be received by them as agent, in trust for and on behalf of the
Shareholders, the Limited Partners and Any Kind, in its capacity as
the general partner of U.S. Check, as applicable. All amounts which
are received by any of the Sellers following
the Closing relating to the operations or business of either Company
(other than those amounts received by any of them in respect of the
Excluded Assets) shall be received by them as agent, in trust for and
on behalf of the applicable Company. The Purchaser and DFG shall
cause the Companies to, and the Sellers shall, pay promptly all such
amounts to the Person that is entitled to such amounts and shall
provide to such Person information as to the nature, source and
classification of such payments, including any invoice relating
thereto.
6.9 Use of Name. The Sellers hereby agree that upon the
-----------
consummation of the transactions contemplated hereby, the Purchaser,
Any Kind and U.S. Check shall have the sole right to the use of the
names "Any Kind", "Any Kind Check Cashing", "U.S. Check", and "U.S.
Check Exchange" and the Sellers shall not, and shall not cause or
permit any of their Affiliate to, use such names or any variation or
simulation thereof in any business or manner, either involving check
cashing or otherwise; provided, however, the Baltimore area may
-------- -------
continue to use the name "All Kinds of Checks Cashed."
6.10 Non-Competition Agreements. Each Seller hereby agrees
--------------------------
that, on or prior to the Closing Date, such Person shall execute and
deliver to Purchaser a Noncompetition Agreement, substantially in the
form of Exhibit A hereto.
6.11 Seller Releases. Each Seller hereby agrees that, on
---------------
or prior to the Closing Date, such Person shall execute and deliver to
the Purchaser and the Companies a release, substantially in the form
of Exhibit E hereto (the "Seller Release").
6.12 Employee Benefits and Employment.
--------------------------------
(a) The Sellers shall, no later than the Closing Date,
assume and maintain sponsorship and full responsibility of each of the
Employee Benefit Plans, and to the extent necessary shall cause Any
Kind and U.S. Check to terminate or otherwise cease its sponsorship of
the Employee Benefit Plans.
(b) Sellers shall deliver to Purchaser at least 5 Business
Days prior to the Closing Date a complete and correct list of all
employees of either of the Companies (the "Employees") setting forth
their names, employment position, salary or hourly wage rate, location
as of June 30, 1996 and separately identifying those Employees who
were actively employed on such date ("Active Employees") and those
Employees who were not actively employed on such date (i.e., were
absent due to disability, sickness or leave of absence) (the "Inactive
Employees").
6.13 Tax Matters.
-----------
(a) Preparation of Tax Returns; Payment of Taxes
--------------------------------------------
(i)The Sellers' Representative, Any Kind and Purchaser will, to the
extent permitted by applicable law, elect with the relevant taxing
authority to close the taxable period of Any Kind on the Closing Date.
In any case where applicable law does not permit Any Kind to close its
taxable year on the Closing Date, then Taxes, if any, attributable to
the taxable period of Any Kind beginning before and ending after the
Closing Date shall be allocated (a) to the Shareholders for the period
up to and including the Closing Date, and (a) to Purchaser for the
period subsequent to the Closing Date. For purposes of this Section
6.13(a), Taxes for the period up to and including the Closing Date and
for the period subsequent to the Closing Date shall be determined on
the basis of an interim closing of the books as of the Closing Date
or, to the extent not susceptible to such allocation, by apportionment
on the basis of elapsed days.
(ii) The Sellers' Representative shall be responsible
for filing or causing to be filed all Tax Returns required to be filed
by or on behalf of Any Kind, U.S. Check and/or their operations and
assets on or before the Closing Date (taking into account applicable
extensions) and shall pay or cause to be paid any Taxes shown to be
due thereon. The Sellers' Representative shall file all such Tax
Returns in a manner consistent with past practices and, upon
Purchaser's request, shall provide copies of such Tax Returns to
Purchaser for Purchaser's review and comment at least twenty (20)
Business Days prior to filing. Purchaser shall be responsible for
filing or causing to be filed all Tax Returns required to be filed by
or on behalf of Any Kind, U.S. Check and/or their operations and
assets after the Closing Date (taking into account applicable
extensions) and shall pay or cause to be paid any Taxes shown to be
due thereon subject to the amount of any Taxes that are the
responsibility of the Shareholders pursuant to Section 6.13(a)(iii).
(iii) With respect to any Tax Return of Any Kind
required to be filed by Purchaser for a taxable period of Any Kind
beginning before and ending on or after the Closing Date, Purchaser
shall provide the Sellers' Representative with a statement setting
forth the amount of Tax shown on such Tax Return for which the
Shareholders are responsible pursuant to Section 6.13(a)(i) (the
"Statement") at least twenty (20) business days prior to the due date
for filing of such Tax Return (including extensions). Not later than
five (5) business days before the due date for payment of Taxes with
respect to such Tax Return, the Shareholders shall pay to Purchaser an
amount equal to the Taxes
shown on the Statement as being the responsibility of the Shareholders
pursuant to Section 6.13(a)(i) hereof. No payment pursuant to this
Section 6.13(a)(iii) shall excuse the Shareholders from their
indemnification obligations pursuant to Section 9.5 hereof should the
amount of Taxes as ultimately determined (on audit or otherwise), for
the periods covered by such Tax Returns and which are the
responsibility of the Shareholders, exceed the amount of the
Shareholders' payment under this Section 6.13(a)(iii).
(iv) The Shareholders may not file any amended Tax
Returns or refund claims in respect of any taxable period of Any Kind
ending on or prior to the Closing Date without the prior written
consent of Purchaser.
(v) All profits and losses of U.S. Check attributable
to the limited partners' interests in U.S. Check shall be allocated
between the Limited Partners and the Purchaser, as the substitute
limited partner of U.S. Check, in accordance with Section 706 of the
Code and the Treasury Regulations promulgated thereunder on the basis
of an interim closing of the books. Distributions (not including the
Purchase Price) made by U.S. Check in respect of the limited partners'
interests after the Closing shall be made to the Purchaser, as the
substitute limited partner of U.S. Check.
(b) Cooperation with Respect to Tax Returns. Purchaser
---------------------------------------
and Sellers agree to furnish or cause to be furnished to each other,
and each at their own expense, as promptly as practicable, such
information (including access to books and records) and assistance,
including making employees available on a mutually convenient basis to
provide additional information and explanations of any material
provided, relating to each Company as is reasonably necessary for the
filing of any Tax Return, for the preparation for any audit, and for
the prosecution or defense of any claim, suit or proceeding relating
to any adjustment or proposed adjustment with respect to Taxes.
Purchaser and Sellers shall retain all information, records or
documents in their possession relating to each Company that might be
relevant to computations or payments required after the Closing Date
with respect to Tax matters relating to any taxable period ending on,
prior to or including the Closing Date until the expiration of the
relevant statute of limitations or extensions thereof or, if a
proceeding has been instituted for which the information, records or
documents is required, until there is a final determination with
respect to such proceeding.
(c) Tax Audits.
----------
(i) Purchaser shall promptly notify the Sellers'
Representative upon receipt by Purchaser or Any Kind of written notice
of any Tax audits of or proposed assessments against Any Kind for
taxable periods of Any Kind ending on or prior to the Closing Date;
provided, however, that the failure of Purchaser to give the Sellers'
-------- -------
Representative prompt notice as required herein shall not relieve the
Shareholders of any of their obligations to pay such Taxes except and
to the extent that the Shareholders are actually and materially
prejudiced thereby. The Sellers' Representative shall have the right
to represent Any Kind's interests in any such Tax audit or
administrative or court proceeding and to employ counsel of its
choice; provided, that (i) the Sellers' Representative shall keep the
--------
Purchaser apprised of the status of any Tax audits or administrative
or court proceedings and the Purchaser shall have the right to consult
with the Sellers' Representative and its counsel, at the Purchaser's
cost and expense, in connection therewith and (ii) in the event that a
settlement or compromise thereof would obligate either Company or the
Purchaser to make any monetary payment or would otherwise adversely
effect either Company, the Purchaser or any of their Affiliates, the
Sellers' Representative and/or the Sellers may not agree to such a
settlement or compromise without the prior consent of the Purchaser
which consent will not be unreasonably withheld or delayed.
(ii) The Sellers' Representative shall promptly
notify Purchaser upon receipt by any of the Sellers of written notice
of any Tax audit or proposed assessment or other proposed change or
adjustment which may affect either Company or its Tax attributes. The
Sellers' Representative shall keep Purchaser duly informed of the
progress thereof and, if the results of such Tax audit or proceeding
may have an adverse effect on either Company, Purchaser or any of
their Affiliates for any taxable period including or ending after the
Closing Date, then the Sellers' Representative and/or the Sellers may
not agree to a settlement or compromise thereof without Purchaser's
consent, which consent will not be unreasonably withheld or delayed.
(d) Transfer Taxes. The Purchaser shall be liable for and
--------------
shall pay all sales, use, stamp, documentary, filing, recording,
transfer or similar fees or taxes or governmental charges (including,
without limitation, FAA, ICC, DOT, real estate and motor vehicle
registration, title recording or filing fees and other amounts payable
in respect of transfer filings) as levied by any taxing authority or
governmental agency in connection with the transactions contemplated
by this Agreement (other than taxes measured by or with respect to
income imposed on any Seller or their respective Affiliates). The
Sellers hereby agree to file all necessary documents (including, but
not limited to, all Tax Returns) with respect to all such amounts in a
timely manner.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Purchaser. The
------------------------------------------------
obligation of the Purchaser and DFG to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or
all of which may be waived by the Purchaser in whole or in part):
(a) all representations and warranties of the Sellers
contained herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Sellers
contained herein qualified as to materiality shall be true and
correct, and the representations and warranties of the Sellers
contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with
the same effect as though those representations and warranties had
been made again at and as of that time;
(c) The Sellers and the Companies shall have performed and
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by them on
or prior to the Closing Date;
(d) the Purchaser shall have been furnished with a
certificate (dated the Closing Date and in form and substance
reasonably satisfactory to the Purchaser) executed by the Sellers'
Representative certifying as to the fulfillment of the conditions
specified in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
(e) certificates representing 100% of the DFG stock to be
acquired by the DFG Stock Purchaser pursuant to the DFG Purchase
Agreement shall have been, or shall at the Closing be, delivered
pursuant to the terms of the DFG Purchase Agreement;
(f) the Purchaser shall have obtained all consents and
waivers referred to in Section 5.3 hereof with respect to the
transactions contemplated by this Agreement and the Purchaser
Documents;
(g) the Purchaser shall have received from each of Any
Kind and U.S. Check audited financial statements as of, and for the
years ending, December 31, 1994 and 1995;
(h) there shall not have been or occurred any Material
Adverse Change since December 31, 1995 nor shall the audited financial
statements as of, and for the year ending, December 31,
1995 reflect any significant adjustments from the unaudited financial
statements previously provided to the Purchaser;
(i) the Sellers shall have obtained all consents and
waivers referred to in Section 4.6 hereof, in a form reasonably
satisfactory to the Purchaser, with respect to the transactions
contemplated by this Agreement and the Seller Documents;
(j) no Legal Proceedings shall have been instituted or
threatened or claim or demand made against any of the Sellers, the
Companies, or the Purchaser seeking to restrain or prohibit or to
obtain substantial damages with respect to the consummation of the
transactions contemplated hereby, and there shall not be in effect any
Order by a Governmental Body of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(k) all Affiliate Loans shall have been repaid to or by
Any Kind and U.S. Check on or prior to the Closing Date;
(l) the Sellers shall have furnished, or caused to be
furnished, to Purchaser, in form and substance satisfactory to
Purchaser, such certificates and other evidence as Purchaser may have
reasonably requested as to the satisfaction of the conditions
contained in this Section and as to such other matters relating to the
representations, warranties, covenants and undertakings in this
Agreement as Purchaser may reasonably request;
(m) estoppels and any necessary consents from the
landlords and lessors under each Real Property Lease shall have been
obtained in form and substance satisfactory to Purchaser;
(n) in accordance with Section 1.5, the Sellers shall have
furnished, or caused to be furnished, to Purchaser in form and
substance satisfactory to Purchaser, such evidence as Purchaser may
have reasonably requested as to the making of the Incurred Capital
Expenditures;
(o) Any Kind and the Limited Partners shall have taken all
steps necessary to enable Purchaser to become a substitute limited
partner in U.S. Check as of the Closing;
(p) the DFG Stock Purchaser shall have executed the DFG
Purchase Agreement and the Shareholders Agreement; and
(q) the Purchaser shall have received duly executed copies
of each of the documents enumerated in Section 8.1.
7.2 Conditions Precedent to Obligations of the Sellers.
--------------------------------------------------
The obligations of the Sellers to consummate the
transactions contemplated by this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by the Sellers'
Representative in whole or in part to the extent permitted by
applicable law):
(a) all representations and warranties of the Purchaser
contained herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Purchaser
contained herein qualified as to materiality shall be true and
correct, and all representations and warranties of the Purchaser
contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with
the same effect as though those representations and warranties had
been made again at and as of that date;
(c) the Purchaser and DFG shall have performed and
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by
Purchaser or DFG on or prior to the Closing Date;
(d) payment of the amounts specified in Section 2.2;
(e) the Sellers shall have been furnished with a
certificate (dated the Closing Date and in form and substance
reasonably satisfactory to the Sellers) executed by the Chief
Executive Officer of each of the Purchaser and DFG certifying as to
the fulfillment of the conditions specified in Sections 7.2(a), 7.2(b)
and 7.2(c);
(f) certificates representing 100% of the DFG stock to be
acquired by the DFG Stock Purchaser pursuant to the DFG Purchase
Agreement shall have been, or shall at the Closing be, delivered
pursuant to the terms of the DFG Purchase Agreement;
(g) there shall not have been or occurred any material
adverse change in the business, properties, results of operations, or
financial condition of DFG and its Subsidiaries, taken as a whole,
since December 31, 1995;
(h) no Legal Proceedings shall have been instituted or
threatened or claim or demand made against the Sellers seeking to
restrain or prohibit or to obtain substantial damages with respect to
the consummation of the transactions contemplated hereby, and there
shall not be in effect any Order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;
(i) DFG shall have executed the DFG Purchase Agreement;
(j) DFG and the Purchaser shall have furnished, or caused
to be furnished, to Sellers, in form and substance satisfactory to
Sellers, such certificates and other evidence as Sellers may have
reasonably requested as to the satisfaction of the conditions
contained in this Section and as to such other matters relating to the
representations, warranties, covenants and undertakings in this
Agreement as Sellers may reasonably request; and
(k) the Sellers shall have received duly executed copies
of each of the documents enumerated in Section 8.2.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Sellers. At the
----------------------------------------
Closing, the Sellers shall deliver, or cause to be delivered, to the
Purchaser the following:
(a) stock certificates representing the Shares, duly
endorsed in blank or accompanied by stock transfer powers and with all
requisite stock transfer tax stamps attached;
(b) the certificate referred to in Section 7.1(d) hereof;
(c) the opinion of Prindle, Decker & Amaro, special
counsel to the Sellers, in substantially the form of Exhibit C hereto;
(d) copies of all consents and waivers referred to in
Section 7.1(i) hereof;
(e) written evidence of (i) the repayment to Any Kind and
U.S. Check of all Affiliate Loans, and (ii) the repayment by each of
Any Kind and U.S. Check of all Affiliate Loans;
(f) Noncompetition Agreements, substantially in the form
of Exhibit A hereto, duly executed by each Seller;
(g) written resignations of each of the directors of Any
Kind;
(h) duly executed FIRPTA Affidavits for each Seller;
(i) certificates of good standing with respect to each
Company issued by the Secretary of State of the state of their
organization and for each state in which such Person is qualified to
do business as a foreign corporation or limited partnership;
(j) a duly executed copy of the Shareholders Agreement,
executed by each DFG Stock Purchaser;
(k) the Limited Partners shall have delivered to Purchaser
such bills of sale, assignments, special warranty deeds and other good
and sufficient instruments of transfer and conveyance, in form and
substance satisfactory to Purchaser and its counsel, as shall be
effective to vest in Purchaser, and to evidence the vesting in
Purchaser of, good and marketable title to the LP Interests;
(l) full releases and discharges of any claims by any
Affiliates of the Companies (other than the Sellers) in respect of any
obligations owed by either Company to such Affiliate (other than in
respect of the leases relating to 2131 Canal Street, New Orleans La.
and 5612 N. Broad Street, Philadelphia, Pa.)
(m) Seller Releases, substantially in the form of Exhibit
E hereto, duly executed by each Seller;
(n) duly executed copies of the DFG Purchase Agreement,
executed by each DFG Stock Purchaser; and
(o) such other documents as the Purchaser shall reasonably
request.
8.2 Documents to be Delivered by the Purchaser and DFG.
--------------------------------------------------
At the Closing, the Purchaser and DFG shall deliver to the Sellers the
following:
(a) evidence of the payments required to be made pursuant
to Section 2.2 hereof;
(b) the certificate referred to in Section 7.2(d) hereof;
(c) two original counterparts of the opinion of Weil,
Gotshal & Manges LLP, counsel to the Purchaser, in the form of
Exhibit D hereto;
(d) certificates representing the DFG Common Stock
referred to in Section 2.3;
(e) a letter from Purchaser, dated the Closing Date,
regarding Purchaser's lack of actual knowledge as to the material
breach of any representation or warranty as of such date;
(f) a duly executed copy of the DFG Purchase Agreement,
executed by DFG; and
(g) such other documents as the Sellers shall reasonably
request.
ARTICLE IX
INDEMNIFICATION
9.1 Survival. The representations and warranties of the
--------
Sellers and Purchaser shall remain operative and in full force and
effect for a period of twenty-four (24) months after the Closing Date,
regardless of any investigation or statement as to the results thereof
made by or on behalf of any party hereto; provided that (i) the
representations and warranties contained in Section 4.20 as well as
the indemnities contained in any of Sections 9.2(a)(iii), 9.2(b)(iii)
and 9.2(c)(iii) shall remain operative and in full force and effect
until June 30, 2001, (ii) the representations and warranties contained
in Section 4.11 shall remain operative and in full force and effect
until sixty days following the expiration of the applicable Tax
statute of limitations with respect to the relevant taxable period
(including extensions), and (iii) the representations and warranties
contained in Sections 4.3, 4.4, 4.7 and 4.16 shall survive
indefinitely. Notwithstanding anything to the contrary herein, any
representation or warranty which is the subject of a claim or dispute
which is asserted in writing prior to the expiration of the applicable
period set forth above shall survive with respect to such claim or
dispute until the final resolution and satisfaction thereof.
9.2 General Indemnification.
-----------------------
(a) Brimhall hereby agrees to indemnify and hold harmless
the Purchaser and its Affiliates (including, after the Closing, the
Companies) and their respective directors, officers, employees,
agents, successors and assigns (collectively, the "Purchaser
Indemnified Parties") from and against and in respect of any and all
Losses resulting from, arising out of, based on or relating to:
(i) the failure of any representation or warranty of any
Seller or any of the Companies set forth in this Agreement, any
Seller Document or any certificate or
instrument delivered by or on behalf of any Seller pursuant to
this Agreement, to be true and correct in all respects both as of
the date of this Agreement and on the Closing Date at signing and
at Closing at signing and at Closing;
(ii) the breach, on or prior to Closing Date, of any
covenant or other agreement on the part of any Seller or any of
the Companies under this Agreement or any Seller Document and the
breach, after the Closing, of any covenant or other agreement on
the part of Brimhall under this Agreement or any Seller Document;
(iii) (A) any Release of Hazardous Materials in, on, at, or
from the Company Properties which occurred, or resulted from
operations occurring, as of or prior to the Closing; (B) any tort
liability to third parties as a result of any Releases or from
exposure to Hazardous Materials arising from any Releases as of
or prior to the Closing; (C) notification or designation under
any Environmental Law as a potentially responsible party for
onsite or offsite disposal of Hazardous Materials, which disposal
occurred as of or prior to the Closing, or the listing of any
asset of Any Kind or U.S. Check on the CERCLA National Priorities
List or any similar list under any Environmental Law as a result
of disposal of Hazardous Materials as of or prior to the Closing;
or (D) any other Environmental Costs and Liabilities and any
other Environmental Claim or Remedial Action resulting from or
based upon anything related to the property currently or
previously owned, leased or operated by Any Kind or U.S. Check or
any predecessors thereof conducted prior to Closing;
(iv) the Excluded Assets or the ownership, operation, lease
or use thereof, or any action taken with respect thereto, by Any
Kind, U.S. Check, or by any other Person; or
(v) the contract identified on Schedule 4.15 relating to
the obligations owned to National Financial Exchange, Inc.
relating to the store at 15381 Seventh Street, Victorville,
California or any of the liens disclosed on Schedule 4.11.
(b) The Shareholders (other than Brimhall) hereby agree to
indemnify and hold harmless the Purchaser Indemnified Parties from and
against and in respect of any and all Losses resulting from, arising
out of, based on or relating to:
(i) the failure of any representation or warranty of any
Shareholder or Any Kind set forth in this Agreement, any Seller
Document or any certificate or instrument delivered by or on
behalf of any of the Shareholders or Any Kind pursuant
to this Agreement, to be true and correct in all respects both as
of the date of this Agreement and on the Closing Date at signing
and at Closing;
(ii) the breach of any covenant or other agreement on the
part of any Shareholder under this Agreement or any Seller
Document;
(iii) (A) any Release of Hazardous Materials in, on, at, or
from the Company Properties of Any Kind which occurred, or
resulted from operations occurring, as of or prior to the
Closing; (B) any tort liability of Any Kind to third parties as a
result of any Releases or from exposure to Hazardous Materials
arising from any Releases as of or prior to the Closing;
(C) notification or designation under any Environmental Law as a
potentially responsible party for onsite or offsite disposal of
Hazardous Materials, which disposal occurred as of or prior to
the Closing, or the listing of any asset of Any Kind on the
CERCLA National Priorities List or any similar list under any
Environmental Law as a result of disposal of Hazardous Materials
as of or prior to the Closing in all cases related to Any Kind;
or (D) any other Environmental Costs and Liabilities and any
other Environmental Claim or Remedial Action resulting from or
based upon anything related to the property currently or
previously owned, leased or operated by Any Kind or any
predecessors thereof conducted prior to Closing;
(iv) the Excluded Assets owned by Any Kind or the
ownership, operation, lease or use thereof, or any action taken
with respect thereto, by Any Kind or any other Person; or
(v) any of the liens disclosed on Schedule 4.11.
The liability of each Shareholder (other than Brimhall) under
this Section 9.2(b) shall be proportionate and equal to the product of
(x) the amount of Losses subject to indemnification under this Section
9.2(b) and (y) the percentage set forth opposite such Shareholder's
name on Schedule 9.2(b); provided, however, each Shareholder (A) shall
-------- -------
be liable for all Losses resulting from, arising out of, based on or
relating to any breach, after the Closing, by such Shareholder, of any
covenant or other agreement on the part of such Shareholder under this
Agreement or any Seller Document and (B) shall not be liable for any
Losses resulting from, arising out of, based on or relating to any
breach, after the Closing, by another Shareholder, of any covenant or
other agreement on the part of such other Shareholder under this
Agreement or any Seller Document.
(c) The Limited Partners hereby agree to indemnify and
hold harmless the Purchaser Indemnified Parties from and against and
in respect of any and all Losses resulting from, arising out of, based
on or relating to:
(i) the failure of any representation or warranty of any
Limited Partner or U.S. Check set forth in this Agreement, any
Seller Document or any certificate or instrument delivered by or
on behalf of any of the Limited Partners or U.S. Check pursuant
to this Agreement, to be true and correct in all respects both as
of the date of this Agreement and on the Closing Date at signing
and at Closing;
(ii) the breach of any covenant or other agreement on the
part of any Limited Partner or U.S. Check under this Agreement or
any Seller Document;
(iii) (A) any Release of Hazardous Materials in, on, at, or
from the Company Properties of U.S. Check which occurred, or
resulted from operations occurring, as of or prior to the
Closing; (B) any tort liability of U.S. Check to third parties as
a result of any Releases or from exposure to Hazardous Materials
arising from any Releases as of or prior to the Closing;
(C) notification or designation under any Environmental Law as a
potentially responsible party for onsite or offsite disposal of
Hazardous Materials, which disposal occurred as of or prior to
the Closing, or the listing of any asset of U.S. Check on the
CERCLA National Priorities List or any similar list under any
Environmental Law as a result of disposal of Hazardous Materials
as of or prior to the Closing in all cases related to U.S. Check;
or (D) any other Environmental Costs and Liabilities and any
other Environmental Claim or Remedial Action resulting from or
based upon anything related to the property currently or
previously owned, leased or operated by U.S. Check or any
predecessors thereof conducted prior to Closing;
(iv) the Excluded Assets owned by U.S. Check or the
ownership, operation, lease or use thereof, or any action taken
with respect thereto, by U.S. Check or any other Person; or
(v) the contract identified on Schedule 4.15 relating to
the obligations owned to National Financial Exchange, Inc.
relating to the store at 15381 Seventh Street, Victorville,
California or any of the liens disclosed on Schedule 4.11.
The liability of each Limited Partner under this Section
9.2(c) shall be equal to the product of (x) the amount of Losses
subject to indemnification under this Section 9.2(c) and (y) the
percentage set forth opposite such Limited Partner's name on Schedule
9.2(c); provided, however, each Limited Partner (A) shall be liable
-------- -------
for all Losses resulting from, arising out of, based on or relating to
any breach, after the Closing, by such Limited Partner, of any
covenant or other agreement on the part of such Limited Partner under
this Agreement or any Seller Document and (B) shall not be liable for
any Losses resulting from, arising out of, based on or relating to any
breach, after the Closing, by another Limited Partner, of any covenant
or other agreement on the part of such other Limited Partner under
this Agreement or any Seller Document.
(d) Purchaser and DFG hereby agree to indemnify and hold
harmless the Sellers and their respective Affiliates, and their
respective directors, officers, employees, agents, successors and
assigns (collectively, the "Seller Indemnified Parties") from and
against and in respect of any and all Losses resulting from, arising
out of, based on or relating to:
(i) the failure of any representation or warranty of the
Purchaser or DFG set forth in this Agreement or any Purchaser
Document or any certificate and instrument delivered by or on
behalf of the Purchaser or DFG pursuant to this Agreement, to be
true and correct in all respects both as of the date of this
Agreement and on the Closing Date;
(ii) the breach of any covenant or other agreement on the
part of the Purchaser or DFG under this Agreement or any
Purchaser Document;
(iii) any misrepresentation of fact made by Purchaser or
DFG to a lessor of real property to any of the Companies in any
document submitted by Purchaser or DFG to such lessor in
connection with seeking such lessor's consent to the transfer of
the Shares or the LP Interests, as the case may be;
(iv) the guarantees listed on Schedule 6.4; or
(v) any acts, omissions, occurrences, events or obligations
of Any Kind or U.S. Check, arising after the Closing Date,
whether in contract or tort (including obligations accruing after
the Closing Date based upon agreements entered into prior to the
Closing Date), unless (i) any Losses resulting from, arising out
of, based on or relating to any of the foregoing result, arise,
are based on or relate to a breach (or any circumstance or event
constituting a breach) of any representation, warranty or
covenant of any of the Sellers under this Agreement or any
Purchaser Document or (ii) such act, omission, occurrence,
event or obligation (or any Losses relating thereto) is of the
type or kind described in Sections 9.2(a), 9.2(b) or 9.2(c)
hereof.
9.3 Limitations on Indemnification for Breaches of
----------------------------------------------
Representations and Warranties.
------------------------------
(a) An indemnifying party shall not have any liability
under Section 9.2(a)(i), 9.2(b)(i), 9.2(c)(i) or 9.2(d)(i) hereof
unless and until the aggregate amount of Losses subject to
indemnification thereunder exceeds $50,000 and, in such event, the
indemnifying party shall be required to pay the entire amount of such
Losses in excess of $50,000.
(b) The liability of the Sellers, in the aggregate,
pursuant to (i) Sections 9.2(a)(i), 9.2(b)(i) or 9.2(c)(i) hereof
(solely to the extent that such indemnities in Sections 9.2(a)(i),
9.2(b)(i) or 9.2(c)(i) relate to a breach of the representations and
warranties contained in Section 4.20), and (ii) Sections 9.2(a)(iii),
9.2(b)(iii) or 9.2(c)(iii) hereof shall not exceed $75,000 (including
Losses arising from defense costs).
9.4 Indemnification Procedures. Except as provided in
--------------------------
Section 6.13 with respect to Taxes, for the purposes of administering
the indemnification provisions of Section 9.2, the following
procedures shall apply:
(a) If an indemnified party shall receive notice of any
action or proceeding by a third party with respect to which the
indemnified party asserts is indemnifiable under Section 9.2 (a
"Claim"), the indemnified party shall notify the indemnifying party
(the "Indemnitor") of such Claim in writing promptly following the
receipt of notice of the commencement of such Claim. The failure to
give notice as required by this Section 9.4 in a timely fashion shall
not result in a waiver of any right to indemnification hereunder
except to the extent that the Indemnitor is actually prejudiced
thereby.
(b) Except as provided below, the Indemnitor shall be
entitled to assume the defense or settlement of any Claim of the type
referred to in clause (a) hereof (with counsel reasonably satisfactory
to the indemnified parties) if the Indemnitor shall provide the
indemnified parties a written acknowledgement of its liability to
indemnify such indemnified parties against all Losses resulting from,
relating to or arising out of such Claim. If the Indemnitor assumes
any such defense or settlement, it shall pursue such defense or
settlement in good faith. If the Indemnitor fails to elect in
writing, within 10 days after the notification referred to above, to
assume the defense of any Claim as provided above, the indemnified
party may engage counsel to defend, settle
or otherwise dispose of such Claim, which counsel shall be reasonably
satisfactory to the Indemnitor; provided, however, that the
-------- -------
indemnified party shall not settle or compromise any such Claim
without the consent of the Indemnitor (which consent will not be
unreasonably withheld or delayed).
(c) Notwithstanding anything to the contrary contained
herein, the Purchaser shall have the sole right, with counsel
reasonably satisfactory to the Indemnitor, to defend and settle in its
sole discretion any Claim which constitutes a Non-Assumable Claim and
no other party hereto shall be entitled to assume the defense thereof
or settle such claim; provided, however, that the Purchaser shall seek
-------- -------
the written consent (which consent shall not be unreasonably withheld
or delayed) of the Indemnitor before agreeing to any monetary
settlement of any Non-Assumable Claim for which Purchaser seeks
indemnification pursuant to this Article 9. A "Non-Assumable Claim"
means any claim, action or proceeding (i) arising out of or in
connection with, or relating to, any violation or asserted violation
of any Law, Order, judgment or decree, (ii) involving any Governmental
Body, or (iii) seeking injunctive relief.
(d) In cases where the Indemnitor has elected to assume
the defense or settlement with respect to a Claim as provided above,
the Indemnitor shall be entitled to assume such defense or settlement
provided that: (i) the indemnified party (and its counsel) shall be
--------
entitled to continue to participate at its own cost in any such action
or proceeding or in any negotiations or proceedings to settle or
otherwise eliminate any claim for which indemnification is being
sought; (ii) the Indemnitor shall not be entitled to settle or
compromise any such claim without the consent or agreement of the
indemnified party (such consent not to be unreasonably withheld or
delayed); and (iii) after written notice by the Indemnitor to the
indemnified party of its election to assume control of the defense of
any Claim, the Indemnitor shall not be liable to such indemnified
party hereunder for any attorneys' fees and disbursements subsequently
incurred by such indemnified party in connection therewith.
(e) In the event that a claim or demand for
indemnification may be made by the Purchaser under more than one
provision of this Section 9, the Purchaser shall have the option to
elect the provision of this Section 9 under which it chooses to make
such claim or demand for indemnification by the Purchaser.
9.5 Tax Matters.
-----------
(a) Subject to the terms of subsection (b) hereof, the
Shareholders (other than Brimhall) (with respect to themselves and
Any Kind), the Limited Partners (with respect to themselves and U.S.
Check) and Brimhall (with respect to himself and each Company) agree
to indemnify and hold harmless the Purchaser and its Affiliates
(including, after the Closing, Any Kind and U.S. Check), and in each
case their respective directors, officers, employees and agents, from
and against any and all Losses resulting from, arising out of, based
on or relating to:
(i) any and all Taxes with respect to all taxable
periods (or portions thereof) of Any Kind or U.S. Check, as the case
may be, ending on or prior to the Closing and, to the extent provided
in Section 6.13(a) hereof, all taxable periods that include, and end
after, the Closing Date; and
(ii) any breach of any representation, warranty or
covenant contained in Sections 4.11 or 6.13 hereof; and
(iii) any Taxes for which the Shareholders are
liable pursuant to subsection 6.13(a) hereof.
(b) The liability of each Shareholder (other than
Brimhall) or Limited Partner, as the case may be, under Section 9.5(a)
shall be proportionate and equal to the product of (x) the amount of
Losses subject to indemnification under Section 9.5(a) and (y) the
percentage interest set forth opposite such Shareholder's or Limited
Partner's name on Schedule 9.2(b) or 9.2(c), as applicable.
(c) Any claim for indemnity made under this Section 9.5
may be made at any time prior to sixty days following the expiration
of the applicable Tax statute of limitations with respect to the
relevant taxable period (including extensions; provided that Purchaser
--------
shall not agree to any extensions without obtaining the prior Consent
of the Sellers' Representative).
9.6 Employee Benefits and Labor Indemnity. (a) The
-------------------------------------
Shareholders (other than Brimhall) (with respect to themselves and Any
Kind), the Limited Partners (with respect to themselves and U.S.
Check) and Brimhall (with respect to himself and each Company) hereby
agree to indemnify and hold the Purchaser Indemnified Parties harmless
from and against any and all Losses arising out of or based upon or
with respect to (i) any Employee Benefit Plan, including, but not
limited to, any obligations arising under Part 6 of Title I of ERISA
or Section 4980B of the Code or (ii) the employment or termination of
employment of any Person prior to the Closing with either of the
Companies including, without limitation, any claim with respect to,
relating to arising out of or in connection with discrimination by
either of the Companies or wrongful discharge, whether a claim is made
before or after Closing or (iii) the severance benefits granted to
Steve Burningham and John Sahlin.
(b) The liability of each Shareholder (other than Brimhall)
or Limited Partner, as the case may be, under Section 9.6(a) shall be
proportionate and equal to the product of (x) the amount of Losses
subject to indemnification under Section 9.6(a) and (y) the percentage
interest set forth opposite such Shareholder's or Limited Partner's
name on Schedule 9.2(b) or 9.2(c), as applicable.
9.7 Waiver of Subrogation and Other Rights. Each Seller
--------------------------------------
hereby agrees that if, following the Closing, any payment is made or
required to be made by it pursuant to the terms of this Agreement or
the Seller Documents (including without limitation this Article IX),
none of the Sellers shall have any rights against either Company,
whether by reason of subrogation or otherwise, in respect of any such
payments, and none of the Sellers shall take any action against either
Company with respect thereto. Any such rights which any Seller may,
by operation of law or otherwise, have against either Company shall,
effective at the time of the Closing, be deemed to be hereby expressly
and knowingly waived.
9.8 Right of Offset. Without in any way limiting any
---------------
other rights or remedies Purchaser may have at law or in equity, the
Purchaser and DFG shall have the right to set off against any
dividends, distributions or other payments that DFG would otherwise be
obligated to make in respect of any DFG Common Stock held by a DFG
Stock Purchaser, the amount of any claim that Purchaser may have for
indemnification pursuant to this Agreement which has been adjudicated
by a court of competent jurisdiction in a final non-appealable
judgment or order.
9.9 Treatment of Payment. The Sellers and Purchaser agree
--------------------
to treat any indemnity payment made pursuant to Sections 9.2, 9.5 or
9.6 of this Agreement as an adjustment to the Purchase Price for
federal, state, local and foreign income tax purposes.
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions. For purposes of this Agreement,
-------------------
the following terms shall have the meanings specified in this Section
10.1:
"Acquisition Transaction" shall have the meaning set forth
-----------------------
in Section 6.5 hereof.
"Active Employees" shall have the meaning ascribed to such
----------------
term in Section 6.12(b) hereof.
"Adjustment Amount" shall have the meaning ascribed to such
-----------------
term in Section 2.6 hereof.
"ADA" shall have the meaning ascribed to such term in
---
Section 4.24 hereof.
"Affiliate" means, with respect to any Person, any other
---------
Person controlling, controlled by or under common control with such
Person.
"Affiliate Loans" shall have the meaning ascribed to such
---------------
term in Section 6.8 hereof.
"Agreement" shall have the meaning ascribed to such term in
---------
the introductory paragraph hereto.
"Any Kind" shall have the meaning ascribed to such term in
--------
the introductory paragraph hereto.
"Any Kind Assets" shall have the meaning ascribed to such
---------------
term in Section 1.1 hereof.
"Assets" shall have the meaning ascribed to such term in
------
Section 1.1 hereof.
"Balance Sheet" shall have the meaning ascribed to such term
-------------
in Section 4.8 hereof.
"Balance Sheet Date" shall have the meaning ascribed to such
------------------
term in Section 4.8 hereof.
"Baltimore Store" means that certain store located in
---------------
Baltimore, Maryland and owned by Any Kind of Checks Cashed, L.P., an
Arizona limited partnership of which Any Kind is the limited partner
and Liberty, Inc. is the general partner.
"Brimhall" shall have the meaning ascribed to such term in
--------
Section 10.13 hereof.
"Business Day" means any day of the year on which national
------------
banking institutions in New York are open to the public for conducting
business and are not required or authorized to close.
"Capital Expenditures" means, for any Person for any period,
--------------------
the aggregate of all expenditures by such Person, except interest
capitalized during construction, during such period for
property, plant or equipment, including, without limitation, renewals,
improvements, replacements and capitalized repairs, that would be
reflected as additions to property, plant or equipment on a
consolidated balance sheet of such Person prepared in conformity with
GAAP. For the purpose of this definition, the purchase price of
equipment which is acquired simultaneously with the trade-in of
existing equipment owned by such Person or with insurance proceeds
shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the
seller of such equipment being traded in at such time or the amount of
such proceeds, as the case may be.
"Cash on Hand" means the sum of the U.S. Cash on Hand and
------------
the U.S. Currency Equivalent.
"Claim" shall have the meaning ascribed to such term in
-----
Section 9.4(a) hereof.
"Closing" shall have the meaning ascribed to such term in
-------
Section 3.1 hereof.
"Closing Date" shall have the meaning ascribed to such term
------------
in Section 3.1 hereof.
"Closing Statement" means a statement to be delivered by the
-----------------
Purchaser to the Sellers' Representative reflecting any adjustments
required to be made to the Purchase Price pursuant to Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collectible Amounts" shall have the meaning ascribed to
-------------------
such term in Section 1.3 hereof.
"Common Stock" shall have the meaning ascribed to such term
------------
in Section 4.3 hereof.
"Companies" and "Company" shall have the meaning ascribed to
--------- -------
such terms in the recitals hereto.
"Company Property" shall have the meaning ascribed to such
----------------
term in Section 4.12(a) hereof.
"Consumer Loan" means (i) any Contract (including any
-------------
schedule or amendment thereto or assignment, assumption, renewal or
novation thereof) in existence at the time of the Closing and any
ancillary agreements relating thereto, which is in the form of any
secured or unsecured loan, with respect to which either Company is the
lender, secured party or obligee (whether initially
or as an assignee) and (ii) any restructuring, modification or
extension of any Consumer Loan of the type described in clause (i)
hereof but "Consumer Loans" shall not include any Pay Day Loans.
"Consumer Loan Amount" means for a Consumer Loan, an amount
--------------------
equal to (i) the principal amount of such Consumer Loan outstanding on
the Closing Date, multiplied by (ii) 75%.
----------
"Contract" means any contract, agreement, indenture, note,
--------
bond, loan, instrument, lease, commitment or other arrangement or
agreement.
"DFG" shall have the meaning ascribed to such term in the
---
introductory paragraph hereto.
"DFG Common Stock" means the common stock of DFG Holdings,
----------------
Inc., par value $0.001 per share.
"DFG Purchase Agreement" means that certain Stock Purchase
----------------------
Agreement, substantially in the form of Exhibit F attached hereto.
"DFG Stock Purchaser" means GHB Charitable Trust #1, Lynn
-------------------
Stratford, Trustee.
"Employees" shall have the meaning ascribed to such term in
---------
Section 6.12(b) hereof.
"Employee Benefit Plans" shall have the meaning ascribed to
----------------------
such term in Section 4.16(a) hereof.
"Environmental Claim" means any accusation, allegation,
-------------------
notice of violation, action, claim, lien, demand, abatement or other
order or directive (conditional or otherwise) by any Governmental Body
or any other Person for personal injury (including sickness, disease
or death), tangible or intangible property damage, damage to the
environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions
resulting from or based upon (i) the existence, or the continuation of
the existence, of a Release (including, without limitation, sudden or
non-sudden accidental or non-accidental Releases) of, or exposure to,
any Hazardous Material, odor or audible noise in, into or onto the
environment (including, without limitation, the air, soil, surface
water or groundwater) at, in, by, from or related to any property
owned, operated or leased by either of the Companies or any activities
or operations thereof; (ii) the transportation, storage, treatment or
disposal of Hazardous Materials in connection with any property owned,
operated or leased by either of the Companies or any operations or
facilities thereof; or (iii) the violation, or
alleged violation, of any Environmental Law of or from any
Governmental Body relating to environmental matters connected with any
property owned, operated or leased by either of the Companies.
"Environmental Costs and Liabilities" means any and all
-----------------------------------
losses, liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including, without
limitation, fees, disbursements and expenses of legal counsel,
experts, engineers and consultants and the costs of investigation and
feasibility studies and Remedial Action) arising from or under any
Environmental Law or order or contract with any Governmental Body or
any other Person.
"Environmental Law" means any foreign, federal, state or
-----------------
local law, statute, regulation, code, ordinance, rule of common law or
other requirement in any way relating to the protection of human
health and safety or the environment as now or hereafter in effect
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.),
-- ----
the Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 et
--
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
----
et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean
-- ---- -- ----
Air Act (42 U.S.C. Section 7401 et seq.) the Toxic Substances Control Act
-- ----
(15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide, and
-- ----
Rodenticide Act (7 U.S.C. Section 136 et seq.), and the Occupational Safety
-- ----
and Health Act (29 U.S.C. Section 651 et seq.), as such laws have been
-- ----
amended or supplemented, and the regulations promulgated pursuant
thereto, and all analogous foreign, state or local laws.
"Environmental Permits" shall have the meaning ascribed to
---------------------
such term in Section 4.20(a).
"ERISA" shall have the meaning ascribed to such term in
-----
Section 4.16(a) hereof.
"Excluded Assets" shall have the meaning ascribed to such
---------------
term in Section 1.3 hereof.
"Excluded Pay Day Loans" means all Pay Day Loans other than
----------------------
any Louisiana Pay Day Loans.
"Expenses" shall have the meaning ascribed to such term in
--------
Section 1.4(a) hereof.
"Financial Statements" shall have the meaning ascribed to
--------------------
such term in Section 4.8 hereof.
"FIRPTA Affidavit" shall mean an affidavit of non-foreign
----------------
status that complies with Section 1445 of the Code.
"Foreign Cash on Hand" means all cash in a currency other
--------------------
than U.S. Currency that is physically located in any of the Stores (as
verified in accordance with Section 2.4) on the Closing Date.
"GAAP" means United States generally accepted accounting
----
principles as of the date hereof.
"Governmental Body" means any government or governmental or
-----------------
regulatory body thereof, or political subdivision thereof, whether
federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Hazardous Material" means any substance, material or waste
------------------
which is regulated by the United States, or any state or local
governmental authority including, without limitation, petroleum and
its by-products, asbestos, and any material or substance which is
defined as a "hazardous waste," "hazardous substance," "hazardous
material," "restricted hazardous waste," "industrial waste," "solid
waste," "contaminant," "pollutant," "toxic waste" or "toxic substance"
under any provision of Environmental Law.
"Inactive Employees" shall have the meaning ascribed to such
------------------
term in Section 6.12(b) hereof.
"Incurred Capital Expenditures" shall have the meaning
-----------------------------
ascribed to such term in Section 1.5 hereof.
"Indemnitor" shall have the meaning ascribed to such term in
----------
Section 9.4(a) hereof.
"Law" means any federal, state, local or foreign law
---
(including common law), statute, code, ordinance, rule, regulation or
other requirement.
"Legal Proceeding" means any judicial, administrative or
----------------
arbitral actions, suits, proceedings (public or private), claims or
governmental proceedings.
"Licenses" shall have the meaning ascribed to such term in
--------
Section 1.2(a) hereof.
"Lien" means any lien, pledge, mortgage, deed of trust,
----
security interest, claim, lease, charge, option, right of first
refusal, easement, servitude, transfer restriction under any
shareholder or similar agreement, encumbrance or any other restriction
or limitation whatsoever.
"Lightning Tax" means a dissolved general partnership
-------------
formerly between Any Kind and Lightning Tax, Inc.
"Limited Partner" shall have the meaning ascribed to such
---------------
term in the introductory paragraph hereto.
"Losses" means any and all losses, liabilities (accrued,
------
absolute, contingent or otherwise), suits, proceedings, judgments,
awards, demands, settlements, fines, assessments, damages, interest
and penalties, and costs and expenses (including without limitation
reasonable attorneys' fees and litigation expenses).
"Louisiana Pay Day Loans" means those Pay Day Loans
-----------------------
originated from the operations of Stores that are located in the State
of Louisiana.
"Louisiana Pay Day Loan Amount" means, for a Louisiana Pay
-----------------------------
Day Loan, an amount equal to (i) the principal amount of such
Louisiana Pay Day Loan outstanding on the Closing Date, multiplied by
(ii) 90%.
"LP Interests" means the limited partnership interests held
------------
by the Limited Partners in U.S. Check.
"Material Adverse Change" means any material adverse change
-----------------------
in the business, properties, results of operations, prospects or
condition (financial or otherwise) of, the Companies taken as a whole.
"Material Contracts" shall have the meaning ascribed to such
------------------
term in Section 4.15 hereof.
"Minimum Lease Condition" shall have the meaning ascribed to
-----------------------
such term in Section 10.14 hereof.
"Multiemployer Plans" shall have the meaning ascribed to
-------------------
such term in Section 4.16(a) hereof.
"Multiple Employer Plans" shall have the meaning ascribed to
-----------------------
such term in Section 4.16(a) hereof.
"Noncompetition Agreement" shall have the meaning ascribed
------------------------
to such term in Section 4.2 hereof.
"Order" means any order, injunction, judgment, decree,
-----
ruling, writ, assessment or arbitration award.
"Partnership Interests" means the general partnership
---------------------
interest held by Any Kind in U.S. Check and the LP Interests,
collectively.
"Pay Day Loans" means (i) any arrangement (including any
-------------
schedule or amendment thereto or assignment, assumption, renewal or
novation thereof) in existence as of the Closing and any agreements
relating thereto which is evidenced, in whole or in part, by a post-
dated check made payable to either Company and (ii) any restructuring,
modification or extension of any Pay Day Loan of the type described in
Clause (i) hereof.
"Permits" means any approvals, authorizations, consents,
-------
Licenses, permits or certificates.
"Permitted Exceptions" means (i) statutory liens for current
--------------------
taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being contested in good faith by
appropriate proceedings, provided an appropriate reserve is
established therefor; (ii) mechanics', carriers', workers', repairers'
and similar Liens arising or incurred in the ordinary course of
business that are not material to the business, operations and
financial condition of the property so encumbered or the Companies;
(iii) zoning, entitlement and other land use and environmental
regulations by any Governmental Body, provided that such regulations
have not been violated; and (iv) such other imperfections in title,
charges, easements, restrictions and encumbrances which do not
materially detract from the value of or materially interfere with the
present use of any Company Property subject thereto or affected
thereby.
"Person" means any individual, corporation, partnership,
------
firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Personal Property Lease" shall have the meaning ascribed to
-----------------------
such term in Section 4.13(a) hereof.
"Pre-Closing Allocation of Expenses" shall have the meaning
----------------------------------
ascribed to such term in Section 1.4(b) hereof.
"Property Contracts" shall have the meaning ascribed to such
------------------
term in Section 4.12(a) hereof.
"Purchase Price" shall have the meaning ascribed to such
--------------
term in Section 2.1 hereof.
"Purchaser" shall have the meaning ascribed to such term in
---------
the introductory paragraph hereto.
"Purchaser Documents" shall have the meaning ascribed to
-------------------
such term in Section 5.2 hereof.
"Purchaser Indemnified Parties" shall have the meaning
-----------------------------
ascribed to such term in Section 9.2(a) hereof.
"Qualified Plans" shall have the meaning ascribed to such
---------------
term in Section 4.16(c) hereof.
"Rawle Entities" mean any of Richard Rawle, Jon Todd Rawle,
---------------
Richard Tracy Rawle, Tosh Rawle, Lonnie Hayword, Liberty, Inc., Any
Kind Check Cashing I, Any Kind of Checks Cashed, Classique Financial
Exchange, Inc., Elite Financial Exchange, Inc. and Tosh, Inc.
"Real Property Lease" shall have the meaning ascribed to
-------------------
such term in Section 4.12(a) hereof.
"Reimbursable Security Deposits" shall have the meaning
------------------------------
ascribed to such term in Section 1.4(a) hereof.
"Release" means any release, spill, emission, leaking,
-------
pumping, pouring, dumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any property;
"Remedial Action" means all actions, including, without
---------------
limitation, any capital expenditures required, to (w) clean up,
remove, treat or in any other way address any Hazardous Material; (x)
prevent the Release or threat of Release of any Hazardous Material so
it does not endanger or threaten to endanger public health or welfare
or the indoor or outdoor environment; (y) perform pre-remedial studies
and investigations or post-remedial monitoring and care; or (z) bring
any facility owned, operated or leased by any Company and the
operations thereon into compliance with Environmental Laws.
"Representatives" shall have the meaning ascribed to such
---------------
term in Section 6.5 hereof.
"Securities Act" shall have the meaning ascribed to such
--------------
term in Section 4.30 hereof.
"Seller Documents" shall have the meaning ascribed to such
----------------
term in Section 4.2 hereof.
"Seller Indemnified Parties" shall have the meaning ascribed
--------------------------
to such term in Section 9.2(d) hereof.
"Seller Releases" shall have the meaning ascribed to such
---------------
term in Section 6.11 hereof.
"Sellers" shall mean the Shareholders and the Limited
-------
Partners.
"Sellers' Representative" shall have the meaning ascribed to
-----------------------
such term in Section 10.13 hereof.
"Shareholder" shall have the meaning ascribed to such term
-----------
in the introductory paragraph hereto.
"Shareholders Agreement" means that certain amended and
----------------------
restated shareholders agreement, substantially in the form of Exhibit
B hereto.
"Shares" shall have the meaning ascribed to such term in the
------
recitals hereto.
"Statement" shall have the meaning ascribed to such term in
---------
Section 6.13(a)(iii) hereof.
"Stores" shall have the meaning ascribed to such term in the
------
recitals hereto.
"Subsidiary" means any Person of which a majority of the
----------
outstanding voting securities or other voting equity interests are
owned, directly or indirectly, and any partnership of which a general
partnership or other interest representing a majority of interest in
profits or capital is owned by either Company, but in no event shall
U.S. Check be deemed a Subsidiary of Any Kind.
"Taxes" means all taxes, charges, fees, levies, imposts,
-----
duties, and other assessments, including but not limited to any
income, alternative minimum or add-on tax, estimated, gross income,
gross receipts, sales, use, transfer, gains, transactions,
intangibles, ad valorem, value-added, franchise, registration, title,
license, capital, paid-up capital, profits, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, recording,
real property, personal property, Federal highway use, commercial
rent, environmental, windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalties, or additions to
tax, and any interest or penalties imposed with respect to the filing,
obligation to file or failure to file any Tax Return.
"Tax Return" means any return, declaration, report, claim
----------
for refund, information return, statement, or other similar document
relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
"Updated Schedules" shall have the meaning ascribed to such
-----------------
term in Section 2.6 hereof.
"U.S. Cash on Hand" means all cash in U.S. Currency
-----------------
physically located in any of the Stores as of the opening of business
at the Stores on the Closing Date.
"U.S. Check" shall have the meaning ascribed to such term in
----------
the introductory paragraph hereto.
"U.S. Check Assets" shall have the meaning ascribed to such
-----------------
term in Section 1.1 hereof.
"U.S. Currency" means the lawful money (including coins and
-------------
currency) of the United States of America.
"U.S. Currency Equivalent" shall have the meaning ascribed
------------------------
to such term in Section 2.4 hereof.
"Western Union Guaranteed Growth Plan Amount" means
-------------------------------------------
$43,184.58.
10.2 Expenses. Except as otherwise provided in this
--------
Agreement, the Sellers and the Purchaser shall each bear their own
expenses incurred in connection with the negotiation and execution of
this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby, it being agreed that Any
Kind may bear any of such costs and expenses solely out of cash that
is an Excluded Asset.
10.3 Specific Performance. The Sellers acknowledge and
--------------------
agree that the breach of this Agreement would cause irreparable damage
to the Purchaser and that the Purchaser will not have an adequate
remedy at law. Therefore, the obligations of the Sellers under this
Agreement, including, without limitation, the Sellers' obligation to
sell the Shares and LP Interests to the Purchaser, shall be
enforceable by a decree of specific performance issued by any court of
competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. Such remedies shall,
however, be cumulative and not exclusive and shall be in addition to
any other remedies which any party may have under this Agreement or
otherwise.
10.4 Further Assurances. Each of the Sellers and the
------------------
Purchaser agrees to execute and deliver such other documents or
agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and
the consummation of the transactions contemplated hereby.
10.5 Arbitration. Any controversy arising under, out of,
-----------
in connection with, or relating to, this Agreement, and any amendment
hereof, or the breach hereof, shall be determined and settled by
arbitration in Maricopa County, Arizona, by a person or persons
mutually agreed upon, or in the event of a disagreement as to the
selection of the arbitrator or arbitrators, in accordance with the
rules of the American Arbitration Association. Any award rendered
therein shall specify the findings of fact of the arbitrator or
arbitrators and the reasons for such award, with the reference to and
reliance on relevant law. Any such award shall be final and binding
on each and all of the parties thereto and their personal
representatives, and judgment may be entered thereon in any court
having jurisdiction thereof and the fees of such arbitrators in
connection with the determination shall be paid by the party against
whom the award was made, or if a compromise was made, shared equally.
10.6 Entire Agreement; Amendments and Waivers
----------------------------------------
Confidentiality. This Agreement (including the schedules and exhibits
---------------
hereto), and paragraph 14 from that letter, dated January 31, 1996,
addressed to Mr. George H. Brimhall from Jeffrey A. Weiss on behalf of
Dollar Financial Group, Inc. represent the entire understanding and
agreement between the parties hereto with respect to the subject
matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making
specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver
is sought; provided, however, the provisions of such paragraph 14
-------- -------
shall expire on the Closing Date. No action taken pursuant to this
Agreement, including without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any
party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies
provided by law.
10.7 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of Arizona
without giving effect to principles of conflicts of law.
10.8 Counterparts. This Agreement may be executed in one
------------
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
10.9 Table of Contents and Headings. The table of contents
------------------------------
and section headings of this Agreement are for reference purposes only
and are to be given no effect in the construction or interpretation of
this Agreement.
10.10 Notices. All notices and other communications
-------
under this Agreement shall be in writing and shall be deemed given
when delivered personally or mailed by certified mail, return receipt
requested, to the parties (and shall also be transmitted by facsimile
to the Persons receiving copies thereof) at the following addresses
(or to such other address as a party may have specified by notice
given to the other party pursuant to this provision):
If to Purchaser or, after the Closing, Any Kind or U.S. Check:
c/o Dollar Financial Group, Inc.
Daylesford Plaza, Suite 210
1436 Lancaster Avenue
Berwyn, Pennsylvania 19312
Attention: Donald F. Gayhardt, Vice President - Corporate
Development
Telephone No.: (610) 296-3400
Telecopy No.: (610) 296-7844
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York
Attention: William M. Gutowitz, Esq.
Telephone No.: (212) 310-8000
Telecopy No.: (212) 310-8007
If to any Seller prior to the Closing:
Any Kind Check Cashing Centers, Inc.
10900 East 183rd Street
Cerritos, California 90703
Attention: Richard Anderson
Telephone No.: (310) 809-0737
Telecopy No.: (310) 809-0621
with a copy to:
GNS Development Corp.
10555 East Firestone Boulevard
Norwalk, California 90650
Attention: Lee Buttle
Telephone No.: (310) 868-9956
Telecopy No.: (310) 863-6709
If to any Seller after the Closing:
George H. Brimhall
9211 North Martingale
Paradise Valley, AZ 85253
Telephone No.: (602) 951-2444
Telecopy No.: (602) 991-8444
with a copy to:
GNS Development Corp.
10555 East Firestone Boulevard
Norwalk, California 90650
Attention: Leland Buttle
Telephone No.: (310) 868-9956
Telecopy No.: (310) 863-6709
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
10.11 Severability. If any provision of this Agreement
------------
is invalid or unenforceable, the balance of this Agreement shall
remain in effect.
10.12 Binding Effect; Assignment. This Agreement shall
--------------------------
be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement
or of any rights or obligations hereunder may be made by any party
hereto without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be
void; provided, however, that the Purchaser may assign this Agreement
-------- -------
and any or all rights hereunder (including, without limitation, the
Purchaser's rights to purchase the Shares and LP Interests and the
Purchaser's rights to seek indemnification hereunder) to (i) any
Affiliate of the Purchaser or (ii) after the Closing, to any purchaser
or transferee of any
of the stock or assets of Any Kind or any of the LP Interests or U.S.
Check Assets. Upon any such permitted assignment, the references in
this Agreement to the Purchaser shall also apply to any such assignee
unless the context otherwise requires.
10.13 Sellers' Representative. Subject to the terms of
-----------------------
that certain Sellers' Representative Agreement dated of even date
herewith, George H. Brimhall ("Brimhall") is hereby irrevocably
designated and authorized by each of the Sellers, as their
representative (the "Sellers' Representative") to act for and
represent the Sellers with respect to all matters arising out of
Article IX hereof and in those other matters with respect to which
this Agreement specifies that the Sellers' Representative shall or may
act, as well as matters which require or permit notice to be given to
any of the Sellers under this Agreement, and by his execution and
delivery of this document, George H. Brimhall hereby accepts such
designation and agrees to act as the Sellers' Representative with
respect to all matters arising out of Article IX hereof and in those
other matters with respect to which this Agreement specifies that the
Sellers' Representative shall or may act, as well as matters which
require or permit notice to be given to any of the Sellers under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
DOLLAR FINANCIAL GROUP, INC.
By: /s/ Jeffrey A. Weiss
------------------------------------------
Jeffrey A. Weiss
Chairman of the Board,
President and CEO
DFG HOLDINGS, INC.
By: /s/ Jeffrey A. Weiss
------------------------------------------
Jeffrey A. Weiss
Chairman of the Board,
President and CEO
ANY KIND CHECK CASHING CENTERS, INC.
By:/s/ George H. Brimhall
-------------------------
George H. Brimhall, President
/s/ George H. Brimhall
----------------------
George H. Brimhall, Individually and
as the Sellers' Representative
GHB Charitable Trust #1
By:/s/ Lynn R. Stratford
------------------------
Lynn R. Stratford, Trustee
GHB Charitable Trust #2
By:/s/ Lynn R. Stratford
------------------------
Lynn R. Stratford, Trustee
/s/ Leland Buttle
-----------------
Leland Buttle
/s/ Jeffrey Brooks
------------------
Jeffrey Brooks
WLBR Trust
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
SMBR Trust
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
SKBR Trust
By:/s/ Leland J. Buttle
-----------------------
Leland J. Buttle, Trustee
Brimhall Children's Trust FBO
Wells A. Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Joy Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Grant E. Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Shelly Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
Brimhall Children's Trust FBO
Ryan A. Brimhall
By:/s/ Stephen K. Brimhall
--------------------------
Stephen K. Brimhall, Trustee
WSBR Trust
By:/s/ Leland J. Buttle
-----------------------
Leland J. Buttle, Trustee
MJBR Trust
By:/s/ Leland J. Buttle
-----------------------
Leland J. Buttle, Trustee
U.S. CHECK EXCHANGE LIMITED PARTNERSHIP,
AN ARIZONA LIMITED PARTNERSHIP
By: ANY KIND CHECK CASHING CENTERS,
INC., its General Partner
By:/s/ George H. Brimhall
-------------------------
George H. Brimhall, President
LRS Unitrust #3
By:/s/ Lynn R. Stratford
------------------------
Lynn R. Stratford, Trustee
Marilyn Stratford Unitrust
By:/s/ Marilyn Stratford
------------------------
Marilyn Stratford, Trustee
/s/ Cal S. Volkert
------------------
Cal S. Volkert
LCS Unitrust
By:/s/ Larry C. Stratford, Trustee
----------------------------------
Larry C. Stratford, Trustee
CBS Unitrust
By:/s/ Carolyn B. Stratford, Trustee
------------------------------------
Carolyn B. Stratford, Trustee
/s/ Charlene Stratford
----------------------
Charlene Stratford
AMM Development Corporation
By:/s/ Thomas F. Clark
----------------------
Name: Thomas F. Clark
Title: President
/s/ Leland Buttle
-----------------
Leland Buttle