SECOND AMENDMENT To ASSET PURCHASE AGREEMENT
Exhibit 10.1
SECOND AMENDMENT
To
This SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”), dated as of
November 22, 2005 (the “Amendment Date”), is entered into among ACE CASH EXPRESS, INC., a
Texas corporation (“Purchaser”), POPULAR CASH EXPRESS, INC., a Delaware corporation
(“PCE”), POPULAR CASH EXPRESS — CALIFORNIA, INC., a California corporation (“PCEC”;
PCE and PCEC are collectively referred to herein as “Seller”), and POPULAR NORTH AMERICA,
INC., a Delaware corporation (“Shareholder”). Purchaser, Seller and Shareholder are
collectively referred to herein as the “Parties.”
RECITALS
WHEREAS, the Parties (i) previously entered into that certain Asset Purchase Agreement, dated
as of September 21, 2005 (as amended, the “Agreement”) and (ii) wish to make certain
amendments to the Agreement as herein provided;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein
and the Agreement, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms used but not defined herein are used as
defined in the Agreement.
SECTION 2. Amendments to the Agreement. Effective as of the Amendment Date, the
Agreement is hereby amended as follows:
2.1. Section 1.1(c) of the Agreement is hereby amended and restated in its
entirety as follows:
(c) As full consideration for the Assets and for the noncompetition and
nonsolicitation agreements of Seller and Shareholder set forth in this
Agreement (the “Noncompetition Agreements”), Purchaser shall pay
Seller the following amounts (collectively, the “Purchase Price”) at
each Closing (as hereinafter defined) for a Location as follows. The
aggregate Purchase Price for the acquisition of all Locations shall be
$33,632,655 of which up to $14,232,655 of such amount shall be in the form
of cash (the “Cash Amount”) and $19,400,000 of such amount shall be
in the form of Convertible Notes (as hereinafter defined) (the
“Convertible Note Amount”), subject in each case to adjustment as
set forth below:
(i) On the first Closing Date (the “First Closing Date”),
for the Locations acquired on such First Closing Date (together
with Locations acquired on any subsequent Closing Date, the
“Acquired Locations”), an amount in cash equal to the sum of
the amounts
attributable to such Acquired Locations on the Phased Closing
Schedule (as hereinafter defined);
(ii) On the second Closing Date (the “Second Closing Date”),
for the Locations acquired on such Second Closing Date: (A) an
amount in cash equal to the sum of the amounts attributable to such
Acquired Locations on the Phased Closing Schedule (provided that the
aggregate amount of cash paid at the First Closing Date and the
Second Closing Date shall not exceed $10,000,000), and (B) to the
extent that the cash paid in clause (A) is insufficient to pay the
amount owed for the Locations acquired on the Second Closing Date, a
promissory note (a “Convertible Note”) with a face amount
equal to such excess amount. Such Convertible Note will provide for
an interest rate, right to convert into common stock of Purchaser
(the “Common Stock”) and certain other terms and conditions
more particularly described on Exhibit C attached hereto and
made a part hereof, subject to any revisions requested by the
Lenders under the ACE Credit Agreement (as hereinafter defined);
(iii) Subject to Section 1.9, on each Closing Date occurring
after the Second Closing Date: (A) a Convertible Note with a face
amount equal to the sum of the amounts attributable to such Acquired
Locations on the Phased Closing Schedule (provided that the
aggregate face amount of the Convertible Notes issued at the Second
Closing Date and all subsequent Closing Dates shall not exceed
$19,400,000 (subject to adjustment as set forth in Section
1.1(c)(iv) below), and (B) to the extent that the face amount
of the Convertible Note issued as provided in clause (A) is
insufficient to pay the amount owed for the Locations acquired on
such Closing Date, an amount in cash equal to such excess amount;
(iv) Notwithstanding anything to the contrary in this Section
1.1(c), in the event that, at the First Closing Date, the
Convertible Note Ownership Percentage (as defined below) is equal to
or greater than five percent (5%), then the Cash Amount portion of
the Purchase Price shall be increased, and the Convertible Note
Amount portion of the Purchase Price shall be decreased, on a dollar
for dollar basis, such that the Convertible Note Ownership
Percentage at the First Closing Date is less than five percent (5%).
“Convertible Note Ownership Percentage” means the
(A) the number of shares (the “Issuable Shares”) of common stock of Purchaser
which Seller would have the right to acquire upon conversion of
Convertible Notes, assuming that $19,400,000 of Convertible Notes
were issued at the First Closing Date, divided by (B) (1) the number
of outstanding shares of the common stock
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of Purchaser at the First Closing Date, plus (2) the number of
Issuable Shares; and
(v) At the Closing for the Locations set forth in Section 1(c) of
the Phased Closing Schedule, the cash portion of the Purchaser Price
to be paid by Purchaser shall be reduced by an amount equal to the
difference between the Purchase Price actually paid for the
Locations acquired on the First Closing Date and the Second Closing
Date, as reflected on the original Phased Closing Schedule attached
to the Agreement, and the Purchase Price for such Locations as
reflected on the Phased Closing Schedule attached to this
Amendment.”
2.2. Schedule 1 is hereby amended and restated in its entirety as the Schedule
1 attached to the Amendment. Schedule 1.4 of the Agreement is hereby amended and
restated in its entirety as the Schedule 1.4 attached to the Amendment.
2.3. Section 1.5 of the Agreement is hereby amended and restated in its
entirety as follows:
1.5 Phased Closing Schedule. Except as set forth in
Section 1.9, the Parties shall consummate the Closings
pursuant to the Phased Closing Schedule on Schedule 1.4.
Seller shall deliver possession of each Acquired Location to be
delivered to Purchaser pursuant to the Phased Closing Schedule at
the beginning of business on the Closing Date identified in the
Phased Closing Schedule. Except as set forth in Section
1.9, upon completion of delivery by Seller of each Acquired
Location, Purchaser shall (i) pay to Seller the Closing Amount for
such Acquired Locations and (ii) execute and deliver to Seller the
Convertible Note attributable to such Acquired Locations.
Purchaser’s acquisition of the Business and Assets with respect to
the Acquired Locations on a Closing Date shall be effective as of
the beginning of business on such Closing Date. Seller shall be
entitled to all revenues of the Acquired Locations transferred on a
Closing Date for the period through the day before such Closing Date
and Purchaser shall be entitled to all revenues of such Acquired
Locations as of such Closing Date. Seller shall be responsible for
all costs and expenses of operations at the Acquired Locations
transferred on a Closing Date through the day before such Closing
Date and Purchaser shall be responsible for all costs and expenses
of operations at such Acquired Locations as of such Closing Date.
The Parties acknowledge the possibility that, due to damage to or
destruction of a Location or the failure to satisfy any or all of
the conditions set forth in Section 6.1, a Location
contemplated by this Agreement to be acquired by and delivered to
Purchaser on a Closing Date may not be so acquired and delivered on
such Closing Date. To the extent that there is not a Closing for
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a Location as a result of the foregoing, the Parties shall proceed
with the Closing as to all other Locations to be transferred on such
Closing Date pursuant to the Phased Closing Schedule and postpone
the Closing with respect to the other Locations until such time as
Purchaser determines in its reasonable discretion that Seller has
repaired or replaced such damaged or destroyed Locations or the
conditions set forth in Section 6.1 have been satisfied, as
applicable (at which time the Closing for such other Locations shall
occur in accordance with this Agreement). If such damaged or
destroyed Locations have not been repaired or replaced or if the
conditions set forth in Section 6.1 with respect to a
Closing have not been satisfied to the reasonable satisfaction of
Purchaser on or before ninety (90) days after the scheduled Closing
Date for such Locations, Purchaser may, at its option, notify Seller
in writing that it elects to terminate the Agreement with respect to
such Location (each, a “Terminated Location” and
collectively, the “Terminated Locations”), in which event
Purchaser shall not acquire such Terminated Locations and the
Purchaser Price shall be reduced by the value attributable to each
such Terminated Locations on Schedule 1.4.
2.4. The Agreement is hereby amended by the insertion of a new Section 1.9 as
follows:
1.9 Designated Locations Closing. With respect to the
Locations listed on Schedule 1.9, the Parties shall
consummate a Closing in accordance with this Article 1,
except Purchaser shall not be obligated to pay the respective
Closing Amount for any particular Location for which Sellers have
not delivered the required consents and approvals of all lessors
whose consent or approval is required pursuant to Section
6.1(d) (each a “Designated Location”) until Sellers’
have delivered all such consents and approvals in the form
previously approved by Purchaser, with respect to such Designated
Location. Delivery of such consents and approvals shall constitute
the sole condition precedent to Purchaser’s obligation to pay the
Closing Amount with respect to each such Designated Location. Upon
delivery by Seller to Purchaser of such consents and approvals for a
particular Designated Location, Purchaser shall pay the respective
Closing Amount to Sellers within three (3) Business Days, either in
cash or by issuing a Convertible Note; provided, however, that
Purchaser shall not be obligated to issue a Convertible Note to the
Sellers for any Closing Amount related to a Designated Location
until the aggregate Closing Amount to be paid by Purchaser for the
Designated Location(s) exceeds one million U.S. dollars
($1,000,000). Notwithstanding any of the foregoing, if Seller has
not delivered to the Purchaser the required consents and approvals
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for one or more Designated Locations by March 31, 2006, Purchaser,
at its option and in its sole discretion, shall have the right to
either pay the Closing Amount to Sellers for such Designated
Location(s) or reconvey the Assets of such Designated Location(s) to
Sellers, and in the case of a reconveyance, the Sellers will
reassume any and all obligations under any Assumed Contracts related
to such Designated Location(s) or other liabilities related to such
Designated Location(s) that Purchaser assumed at the time of the
Closing. The Parties shall execute and deliver such documents and
take such actions as may reasonably be deemed necessary or advisable
by the Parties to effect the reconveyance of such Assets and the
reassumption of such Assumed Contracts and liabilities, and any
expenses, including reasonable attorneys’ fees, incurred by
Purchaser in connection with such reconveyance and reassumption
shall be promptly reimbursed by the Sellers.
2.5. The Agreement is hereby amended by the insertion of a new Section 1.10 as
follows:
1.10 Reconveyance Locations Closing. With respect to the
Locations listed on Schedule 1.10 (the “Reconveyance
Locations”), which were acquired by the Purchaser on
October 30, 2005, upon the date that the Seller has delivered to
Purchaser the required consents and approvals of all lessors and
other third parties whose consent or approval is required to
reconvey the Reconveyance Locations to Sellers, in a form reasonably
satisfactory to Purchaser, the Purchaser shall reconvey the Assets
of such Reconveyance Location(s) to Sellers, and in the case of a
reconveyance, the Sellers will reassume any and all obligations
under any Assumed Contracts related to such Designated Location(s)
or other liabilities related to such Designated Location(s) that
Purchaser assumed at the time of the Closing. Seller shall bear all
costs and expenses incurred in order to obtain any required consents
or approvals. The Parties shall execute and deliver such documents
and take such actions as may reasonably be deemed necessary or
advisable by the Parties to effect the reconveyance of such Assets
and the reassumption of such Assumed Contracts and liabilities, and
any expenses, including reasonable attorneys’ fees, incurred by
Purchaser in connection with such reconveyance and reassumption
shall be promptly reimbursed by the Sellers.
2.6 The second sentence of Section 4.2(a) of the Agreement is hereby
amended and restated in its entirety as follows:
“This noncompetition agreement shall in no event be applicable to
either (i) any full service bank branch not operating under the
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“Popular Cash Express” name now or hereafter owned and/or operated
by Banco Popular North America, or its affiliates or subsidiaries
(including, without limitation, services provide by Banco Popular
North America or its affiliates or subsidiaries to money service
business customers), (ii) the six (6) “Popular Cash Express” limited
service branches currently operated by Banco Popular North America
and identified on Schedule 4.2(a), (iii) the “Popular Cash Express”
branches located at 0000 X. Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 and
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx Xxxx, Xxxxxxxxxx 00000, or (iv)
any Location not acquired by Purchaser for any reason whatsoever,
including, without limitation, the Reconveyance Locations and any
Designated Location reconveyed to Sellers.”
2.7 The Agreement is hereby amended by the insertion of the following sentences
at the end of Section 5.3 of the Agreement:
“Purchaser hereby agrees that it has waived its ability to assert a
claim that there has been a material adverse change with respect to
any Location due to a decline in gross revenues of such Location
prior to the Closing Date for the Locations set forth in Section
1(c) of the Phased Closing Schedule.”
SECTION 3. Miscellaneous.
3.1. References to the Agreement. Upon the effectiveness of this Amendment,
each reference in the Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or
words of like import shall mean and be a reference to the Agreement as amended hereby, and
each reference to the Agreement in any other document, instrument or agreement executed
and/or delivered in connection with the Agreement shall mean and be a reference to the
Agreement as amended hereby.
3.2. Effect on Agreement. Except as specifically amended above, the Agreement
and all other documents, instruments and agreements executed and/or delivered in connection
therewith shall remain in full force and effect and are hereby ratified and confirmed.
3.3. No Waiver. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of the Purchaser under the
Agreement or any other document, instrument or agreement executed in connection therewith,
nor constitute a waiver of any provision contained therein, except as specifically set forth
herein.
3.4. Governing Law. The laws of the State of Texas shall govern this
Amendment, its terms and conditions, the interpretation hereof, and the rights and
obligations of the Parties hereunder. Any action at law or in equity brought to interpret
or enforce this Amendment or any other document executed or delivered in connection
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herewith shall be brought and prosecuted to final adjudication in federal or state
courts located in Dallas County, Texas, and the Parties consent to the jurisdiction of such
Texas state and federal courts and agree to the validity of service of process in any such
action by registered or certified mail, return receipt requested
3.5. Successors and Assigns. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and assigns.
3.6. Headings. The Section headings in this Amendment are inserted for
convenience of reference only and shall not affect the meaning or interpretation of this
Amendment or any provision hereof.
3.7. Counterparts. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
| SELLER: | ||||||||
| POPULAR CASH EXPRESS, INC. | ||||||||
| POPULAR CASH EXPRESS–CALIFORNIA, INC. | ||||||||
| By: | /s/ XXXXXXX X. XXXXXXXX | |||||||
| Name: | Xxxxxxx X. Xxxxxxxx | |||||||
| Title: | President & CEO | |||||||
| PURCHASER: | ||||||||
| ACE CASH EXPRESS, INC. | ||||||||
| By: | /s/ XXXXXXX X. XXXXXXXXX | |||||||
| Name: | Xxxxxxx X. XxXxxxxxx | |||||||
| Title: | Executive Vice President and CFO | |||||||
| SHAREHOLDER: | ||||||
| POPULAR NORTH AMERICA, INC. | ||||||
| By: | /s/ XXXXXXX X. XXXXXXXX | |||||
| Name: | Xxxxxxx X. Xxxxxxxx | |||||
| Title: | Executive Vice President | |||||
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New or Revised Schedules
Schedule 1 — Locations
Schedule 1.9 — Designated Locations
Schedule 1.4 — Phased Closing Schedule, with attached allocation of purchase price for 109 stores.
Schedule 1.10 — Reconveyance Locations
Schedule 1.9 — Designated Locations
Schedule 1.4 — Phased Closing Schedule, with attached allocation of purchase price for 109 stores.
Schedule 1.10 — Reconveyance Locations
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