Exhibit 10.1(a)
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
MONETARY MANAGEMENT CORP.
("PURCHASER")
AND
HAPPY'S CHECK CASHING, A SOLE PROPRIETORSHIP
(THE "COMPANY")
AND
CHASE MONEY LOAN, INC.
("CML")
AND
XXXXXX XXXXX
("XXXXX")
DATED
JANUARY 9, 1995
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of this 9th day of January,
1995 by and among MONETARY MANAGEMENT CORP., a Pennsylvania corporation
("Purchaser"), HAPPY'S CHECK CASHING, an unincorporated Pennsylvania sole
proprietorship (the "Company"), CHASE MONEY LOAN, INC. ("CML"), and XXXXXX XXXXX
("Xxxxx").
W I T N E S S E T H :
WHEREAS, Xxxxx is the beneficial and record owner and operator of
the Company and the beneficial and record owner of all of the issued and
outstanding capital stock of CML.
WHEREAS, the Company presently owns and operates 28 check cashing
stores located in Pennsylvania, as listed on Exhibit A attached hereto (the
"Principal Stores"), and desires to sell to Purchaser the Assets (as defined
below) of the Principal Stores, except for the Assets of those Principal Stores
numbered 10 and 26 on Exhibit A (the Principal Stores to be sold hereunder are
hereinafter referred to as the "Stores");
WHEREAS, CML owns and operates a pawn brokering business in certain
of the Stores and desires to sell to Purchaser the Assets of such pawn brokering
business;
WHEREAS, Purchaser desires to acquire and the Company, CML and Xxxxx
desire to sell the Assets to the Purchaser;
WHEREAS, Purchaser desires that, following the Closing Date, Xxxxx,
the Company, Xxxxxx Xxxxx and CML, except for operation of the Principal Stores
numbered 10 and 26 on Schedule A, will not compete with Purchaser and its
affiliates under certain terms and in exchange for certain consideration as set
forth in separate Non-Competition Agreements to be entered into on the Closing
Date between the Purchaser and each of such persons (the "Non-Competition
Agreements") as set forth on Exhibit C hereto.
NOW, THEREFORE, in consideration of the covenants, warranties and
mutual agreements set forth herein and in reliance upon the representations and
warranties contained herein, the parties, intending to be legally bound, do
hereby agree as follows:
SECTION 1. PURCHASE AND SALE OF ASSETS; ASSUMPTION OF CERTAIN
LIABILITIES.
1.1 PURCHASE OF ASSETS. The Purchase Price for the Assets covered by
this Agreement has been determined through arm's length negotiations between the
parties. Subject to and in reliance upon the representations, warranties and
agreements herein set forth, and subject to the terms and conditions herein
contained, the Company, CML and Xxxxx (collectively sometimes hereafter, the
"Sellers") agree, on the Closing Date, to convey, sell, assign, transfer and
deliver the Assets to the Purchaser, and to perform all of its and their
obligations pursuant to this Agreement, and the Purchaser agrees to perform all
of its obligations pursuant to this Agreement and to purchase and accept, the
Assets. The Sellers have provided Purchaser with access to all of the original
entry books and records in connection with the Stores. In addition, the Sellers
agree to provide Purchaser with access to all documents and/or information as
may be reasonably necessary to enable Purchaser to see to the efficient and
proper conduct and administration of the Assets from and after the Closing Date,
including, without limitation, all historical files, tax returns, records and
personnel data in connection with the Stores. Provided, however that the Sellers
will retain their original financial books and records and other financial
documents now in their possession required for preparation of tax returns but
will provide copies of such books and records to Purchaser at Purchaser's
request.
1.2 ASSETS. It is understood that, on the Closing Date at the time
of Closing (as hereinafter defined) of the transactions contemplated hereby, all
of the properties, business, good will and assets at present used or useable in
the operation of the Stores, except for the Excluded Assets (as defined below)
(collectively the "Assets"), including, but not limited to, the following, shall
be owned by the Sellers, free and clear of all liens, charges, judgments,
encumbrances, taxes, imports or levies, except for the Permitted Encumbrances
(as hereinafter defined) and shall be transferred to the Purchaser:
(a) Licenses and Authorizations. To the extent legally
transferable, and to the extent requested by the Purchaser, the licenses,
permits and authorizations used or useable in the operation of the Stores,
including, specifically, the licenses, permits and authorizations listed on
Schedule 1.2(a) hereto, together with any renewals, extensions or modifications
thereof and additions thereto and other pending applications or applications to
be filed with any regulatory or governmental body made in the ordinary course of
business between the date of this Agreement and the Closing Date (the
"Licenses").
(b) Personal Property, etc. The tangible and intangible
personal property, equipment, machinery, furniture, fixtures, tools, supplies
and other assets, wherever located, used or useable in the operation of the
Stores including, specifically, but not limited to, the property listed on
Schedule 1.2(b) hereto, together with such additions, modifications and
replacements thereto, and subject to deletions therefrom in
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connection with any such replacements, as may be made in the ordinary course of
business between the date of this Agreement and the Closing Date (the "Personal
Property"). The mobile check cashing vehicle shall be excluded from the Assets,
but the use of such vehicle shall be limited to Xxxxx Xxxxx at 1) Xxxx Company,
2) 31st St. SEPTA, 3) Proccaici Bros., 4) Xxxxx Fargo at 3rd and Callowhill and
5) Xxxxxx at 2nd and Race.
(c) Real Property. The interest of the Sellers in and to the
leased real property, buildings and structures, leasehold improvements, fixtures
and appurtenances used or useable in the operation of the Stores, described in
Schedule 1.2(c) hereto (the "Real Property") and, to the extent requested by the
Purchaser, the Sellers' interests and rights arising under all legal and valid
agreements, rights and appurtenances relating thereto, including, specifically,
the lease agreements listed on Schedule 1.2(c) hereto (the "Leases"), any
renewals, extensions, amendments or modifications thereof, and any additional
agreements and leases made or entered into in the ordinary course of business
between the date of this Agreement and the Closing Date.
(d) Leases and Agreements. The rights of the Company arising
under the "Assumed Contracts", as defined in Section 5.11(a) hereof, including
specifically, the Leases and other agreements specifically listed on Schedule
5.11 hereto, including any renewals, extensions, amendments or modifications
thereof, and any additional third party agreements, leases, commitments and
orders made or entered into 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 the Stores,
including, specifically, the copyrights, trademarks, service marks, trade secret
rights, computer programs and software, permits, licenses or other similar
rights listed on Schedule 1.2(e) hereto, together with any additions or
modifications thereto and subject to any deletions therefrom made in the
ordinary course of business between the date of this Agreement and the Closing
Date (the "Intellectual Property").
(f) Except as provided above, all books, records and files
pertaining to the business conducted by the Stores for all periods ending on or
before the Closing Date (the "Books and Records"), subject to the limitations
set forth in 1.1 above and 5.7 below.
(g) Prepaid expenses of the Company existing as of the
Closing Date (the "Prepaid Expenses").
(h) Customer lists, vendor lists and other similar intangible
assets of the Sellers relating to the Stores (the "Intangible Assets").
(i) All of CML's pawn pledges and the Sellers' interest and
possession of collateral delivered in connection thereto.
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1.3 CASH. It is understood that, any cash, savings accounts,
accounts receivable, refunds of unearned insurance premiums, bank deposits and
items in the process of collection held by the Sellers shall not constitute part
of the Assets and shall be retained by Sellers (the "Excluded Assets"). Solely
as an accommodation to the Sellers, Purchaser will attempt to collect the
Company's outstanding accounts receivable and other items in the process of
collection and will remit to the Company any amounts so collected; and the
Sellers shall pay to Purchaser an amount equal to 10% of all amounts collected
against accounts receivable and items in the process of collection that are 30
days or older as of the Closing Date. Purchaser shall have no affirmative duty
to collect any of such items.
1.4 LIENS. The Sellers agree that, as of Closing, the Assets will be
free and clear of all liens, charges, encumbrances, taxes, imports or levies
except for the Permitted Encumbrances and specifically agree that all liens,
charges, encumbrances or taxes, other than the Permitted Encumbrances, shall be
satisfied upon consummation of the Closing.
1.5 ASSUMED CONTRACTS. Upon Closing, the Sellers will assign,
transfer and convey and deliver, and Purchaser will assume and agree to perform
and discharge, the obligations of the Sellers under the Assumed Contracts.
SECTION 2. LIABILITIES.
2.1 LIABILITIES TO BE ASSUMED. As of the Closing Date, at the time
of Closing, the Sellers shall have satisfied all of its and their obligations
and liabilities other than (i) liabilities or obligations (absolute, contingent
or otherwise) arising after the Closing Date in respect of the Assumed Contracts
(the "Contract Liabilities"); (ii) other liabilities to the extent Purchaser
shall have received a credit therefor pursuant to the apportionment provisions
of Section 2.3 hereof) ("Credited Liabilities"); and (iii) liabilities or
obligations to Xxxxx or his affiliated entities. The Contract Liabilities and
the Credited Liabilities shall be assumed by Purchaser at Closing. The
liabilities referred to in (i) through (iii) above shall be sometimes
hereinafter referred to as the "Permitted Liabilities".
2.2 OTHER LIABILITIES. Without limiting the generality of Section
2.1 hereof, and regardless of whether any of the following may be disclosed to
Purchaser pursuant to Section 5 hereof or otherwise, or whether Purchaser may
have knowledge of the same: (a) Purchaser shall not assume, and shall not be
deemed to have assumed, any other obligation or liability of the Sellers other
than the Contract Liabilities and the Credited Liabilities; (b) The Sellers will
be jointly and severally liable for and will pay and indemnify Purchaser in
respect of any taxes or other governmental charges or assessments of whatever
kind or nature imposed upon the Purchaser, the Assets, the Stores or the Sellers
(including without limitation any income, franchise or any other similar taxes
based on or measured by income or otherwise, any sales or use taxes, or any
property, excise or other taxes together with any interest or penalties
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relating thereto) arising out of the operation of the Stores or otherwise or the
ownership of the Assets for periods or events prior to the Closing Date; and (c)
The Sellers shall retain responsibility for and shall pay, perform, satisfy or
obtain a discharge or release from, as of Closing, any obligation, payment,
liability or expense imposed on the Sellers or the Purchaser other than the
Contract Liabilities and the Credited Liabilities.
2.3 APPORTIONMENTS. Rents, additional rent, real estate taxes and
security deposits, personal property taxes, water, utilities, wages and other
employee benefits (including accrued vacation) and other expenses arising from
or by virtue of the Sellers' obligations under the Assumed Contracts (the
"Expenses") paid by, or on behalf of, the Sellers prior to the Closing Date and
allocable, in whole or in part, to any period following the Closing Date, shall
be credited to the Sellers to the extent so allocable, or if unpaid by, or on
behalf of, the Sellers 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.
The parties hereto shall as of the Closing Date make apportionments
and shall calculate the Pawn Purchase Price and the Inventory Purchase Price (as
defined below). Any GGP bonus, which may include volume bonuses and super
bonuses payable under the Company's agreement with Western Union shall be split
evenly between Purchaser and the Company promptly after receipt from Western
Union.
SECTION 3 CONSIDERATION FOR TRANSFER OF ASSETS AND NON-COMPETITION
AGREEMENTS.
(a) Purchaser shall acquire the Assets, for an aggregate base
purchase price (the "Purchase Price") of Two Million Seven Hundred Thousand
($2,700,000) Dollars, as adjusted pursuant to Sections 2.1 and 2.3 above. The
Purchase Price shall be paid by delivery of a subordinated judgment note (the
"Judgment Note") to be delivered at Closing, in substantially the form attached
hereto as Exhibit A, subject to such revisions as shall be required or requested
by Purchaser's principal bank(s) and reasonably acceptable to Sellers' counsel
and a standard confession of judgment provision, including reference to
reasonable costs of enforcement. The Judgment Note shall have a four (4) year
term with interest to accrue at a floating rate equal to the prime rate as
announced from time to time by Chemical Manufacturers Hanover Bank, plus one
(1%) percent per annum, but in no event shall the applicable rate of interest be
less than 8-1/2% nor more than 10-1/2%. The Purchase Price for the Assets shall
be allocated by the parties for tax purposes as set forth on Schedule 3.1
hereto. Sellers shall not be subordinated to any future seller financing.
In addition to the Purchase Price, Purchaser shall pay to Sellers,
at Closing an amount equal to one hundred twenty five (125%) percent of the face
value of the advances/loans (which amount includes a twenty five (25%) percent
premium) made by CML in connection with the current pawn pledges delivered by
CML to Purchaser as part of the Assets (the "Pawn Pledge Advances") outstanding
as of the Closing Date (the "Pawn Purchase Price"). The
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instruments/pawn tickets evidencing such advances shall be transferred to
Purchaser as part of the Assets; and all collateral delivered to CML in
connection with all of its Pawn Pledge Advances shall be transferred to
Purchaser in connection with the transfer of the instruments/pawn tickets
evidencing the advances. To the extent that the pawn tickets, transferred to
Purchaser are unredeemed at a rate which is less than the historical rate
experienced by CML, and as disclosed to Purchaser, Purchase shall have the right
to setoff against amounts due under the Judgment Note, up to the twenty five
(25%) percent premium paid.
In addition to the Purchase Price and the Pawn Purchase Price,
Purchaser shall pay to Sellers at Closing an amount equal to the Agreed Value
(as hereinafter defined) of CML's Inventory (as hereinafter defined) (the
"Inventory Purchase Price").
For purposes hereof:
"Agreed Value" shall mean an amount calculated as:
(a) $11.00 per xxxxx weight of gold jewelry
Inventory, plus
(b) 50% of the stated retail selling value of
the electronic and watch Inventory, plus
(c) the cost to Sellers of all other Inventory;
except diamonds.
No other value shall be included in the Agreed Value of the
Inventory for purposes of calculating the Inventory Purchase Price. No item held
by CML as collateral for Pawn Pledge Advance shall be considered Inventory.
"Inventory" shall mean all items in saleable form as of
Closing which CML owns and holds out for sale to the public in the Stores, all
of which shall be part of the Assets transferred to Purchaser hereunder.
(b) Purchaser and the Sellers represent, warrant and agree that the
allocation set forth in Schedule 3.1 hereto were determined through arms' length
negotiation between the parties hereto.
SECTION 4. CLOSING. Provided that the conditions to the obligations
of the Sellers and Purchaser contained in Sections 8 and 9 hereof have been
satisfied (or waived by the parties entitled to enforce such conditions), a dry
closing of the consummation of the purchase and sale of the Assets contemplated
by this Agreement shall take place at 10:00 a.m. on Saturday February 18, 1995.
The Sellers shall cease conducting business at the Stores as of the close of
business on Friday, February 17, 1995. The parties shall complete the
apportionments as required by Section 2.3 on February 18 and 19. The Funded
Closing (the "Closing") shall, unless another date or place is agreed to by the
Sellers and Purchaser, take place at 10:00 a.m.
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at the offices of Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx on Monday,
February 20, 1995 (the "Closing Date"). The Closing shall be deemed to take
place as of the close of business on Friday, February 17, 1995.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The
Sellers hereby represent, warrant and covenant to Purchaser as follows:
5.1 ORGANIZATION AND GOOD STANDING; ACTIVITIES; CAPITAL STOCK.
(a) The Company is an unincorporated sole proprietorship owned
solely and completely by Xxxxx and doing business under the name Happy's Check
Cashing and no other name; and CML is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania. The Company is, and has been since its date of inception, engaged
solely in the business of owning and operating check cashing outlets and
conducts business in no jurisdiction other than Pennsylvania. CML is, and has
been since its date of inception, engaged solely in the business of owning and
operating a pawn brokering business and conducts business in no jurisdiction
other than Pennsylvania.
(b) To the best of the knowledge of the Sellers after due
inquiry, the Company and CML have the power and authority (corporate and
otherwise) to own, lease or operate their properties and to carry on their
business as now conducted, and the Licenses represent all of the material
governmental or regulatory approvals, permits and licenses necessary for the
operation of the business of the Stores as presently conducted.
(c) As of the date hereof all of the issued and outstanding
shares of common stock of CML (the "Shares") are owned of record and
beneficially by Xxxxx. All of the issued and outstanding Shares are fully-paid
and non-assessable and have been duly authorized and issued.
5.2 CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
(a) The Sellers have full power and authority to execute and
deliver this Agreement and the other agreements and instruments to be executed
and delivered by the Sellers pursuant hereto, and to consummate the transactions
contemplated hereby and thereby. On or prior to the Closing Date, all acts and
other proceedings required to be taken by or on the part of the Sellers to
authorize it to carry out this Agreement and such other agreements and
instruments and the transactions contemplated hereby and thereby will have been
duly and properly taken. This Agreement has been duly executed and delivered by
the Sellers and constitutes, and such other agreements and instruments, when
duly executed and delivered by the Sellers, will constitute, legal, valid and
binding obligations enforceable in accordance with their respective terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
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reorganization, insolvency, moratorium or other similar laws and equitable
principles affecting the enforcement of creditors' rights generally from
time-to-time in effect). The execution and delivery by the Sellers of this
Agreement and such other agreements and instruments and the consummation of the
transactions contemplated hereby and thereby will not violate any law or
conflict with or result in any breach of or constitute a material default (or an
event which with notice or lapse of time or both would become a material
default) under, or result in the creation of a lien or encumbrance on any of the
Assets pursuant to, any indenture, mortgage, lease, agreement or other
instrument to which the Sellers are a party by which it or any of the Assets may
be bound or affected provided that the consents and approvals disclosed on
Schedule 5.2(a) have been obtained. Except as specifically disclosed on Schedule
5.2(a) hereto, and except for the matters described in Section 8.1, no approval,
authorization, consent or other order or action of or filing by the Sellers with
(i) any court, administrative agency, or other governmental authority or (ii)
party to one of the Assumed Contracts is required for the execution and delivery
by the Sellers of this Agreement or such other agreements and instruments or its
consummation of the transactions contemplated hereby or thereby.
(b) Xxxxx may execute, deliver and perform this Agreement, the
Non-Competition Agreements and all other agreements to be executed in connection
herewith without the necessity of obtaining any consent, approval, authorization
or waiver or giving any notice or otherwise. This Agreement constitutes and,
when executed and delivered, the Non-Competition Agreement will constitute the
legal, valid and binding obligations of Xxxxx enforceable in accordance with
their respective terms.
(c) The execution, delivery and performance of this Agreement
and the Non-Competition Agreements, assuming that the consents, approvals,
authorizations, waivers and notices set forth on Schedule 5.2(a) hereto are
obtained or given, will not:
(i) to the best of the knowledge of Sellers after due
inquiry, conflict with, result in a material breach of, constitute a default,
with or without notice and/or lapse of time, under, result in being declared
void or voidable any provision of, or result in any right to terminate or cancel
any of the Assumed Contracts or any contract, agreement, license or commitment
to which Sellers or any of their properties is bound and which is material to
the operations of the Company or CML;
(ii) constitute a material violation of any statute,
judgment, order, decree or regulation or rule of any court, governmental
authority or arbitrator applicable or relating to the Assets or the business of
the Company or CML to be acquired by Purchaser pursuant to this Agreement; or
(iii) result in (A) the acceleration of any material
debt or other obligation of the Sellers, except for debts and obligations
identified in Schedule 5.2(c)(iii) hereto
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which will be satisfied by the Sellers at the Closing; (B) the creation of any
Lien (as defined in Section 5.4) upon any of the Assets; or (C) the termination
or cancellation or right to terminate or cancel any obligation owed to the
Sellers.
5.3 FINANCIAL STATEMENTS AND FINANCIAL CONDITION.
(a) The books of account of the Company and CML, for years
prior to 1994, have not been maintained in accordance with applicable laws,
rules and regulations or with generally accepted accounting principles
consistently applied, insofar as such books and records understated the amounts
of income earned by the Sellers. However, accurate records of the true amount of
such income have been separately maintained by Sellers, which records have been
heretofore delivered to Purchaser. Such records are complete and accurate in all
material respects.
5.4 TITLE AND CONDITION OF ASSETS.
(a) Schedule 1.2(b) includes a complete list of all Personal
Property located at the Stores or used in the operation of the Stores. The
Sellers own good and marketable title to all of the Assets, including the
Personal Property, free and clear of liens, encumbrances, claims of third
parties, security interests, mortgages, pledges, agreements, options and rights
of others of any kind whatsoever, whether or not filed, recorded or perfected,
and including, without limitation, any conditional sale or title retention
agreement or lease in the nature thereof or any financing statements filed in
any jurisdiction or any agreement to give any such financing statements
(hereinafter collectively referred to as "Liens"), other than rights of third
parties under leases of tangible personal property disclosed on Schedule 5.11
hereto and liens for taxes not yet due and payable (hereinafter collectively
referred to as the "Permitted Encumbrances").
(b) The Assets constitute all assets that are material in or
to the operation of the business of the Company and CML as conducted in the
Stores. The Assets owned or leased are adequate to carry on the business of the
Company and CML as conducted in the Stores as it is now being conducted and,
except as set forth on Schedule 5.2(a) hereto, no consent of any third party is
required in order to transfer any of the Assets to the Purchaser (including
rights under the Assumed Contracts) based upon the change in control of the
Assets contemplated hereby. The Personal Property constituting part of the
Assets is in adequate operating condition for continued operation of all of the
Stores as presently conducted.
(c) The Pawn Pledge Advances represent the valid and binding
obligation of the obligors thereunder in accordance with their terms and were
entered into by CML and Xxxxx in good faith and in the ordinary course of
business. The collateral to be
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transferred to Purchaser in connection with the Pawn Pledge Advances was valued
by CML and Xxxxx in good faith and, to the best of knowledge of the Sellers
after due inquiry, the collateral is owned by the obligor under the applicable
Pawn Pledge Advance and is not stolen property.
5.5 [INTENTIONALLY DELETED]
5.6 LITIGATION AND COMPLIANCE.
(a) Subject to the matters set forth in 5.7 below, there are
no actions, suits, claims or proceedings, whether in equity or at law, or
governmental or administrative investigations pending or, to the best knowledge
of the Sellers, threatened, nor, to the best knowledge of the Sellers, is there
any reasonable basis for any such action, suit, claim or proceeding (i) by,
against or otherwise involving any of the Sellers or the Stores which, if
adversely determined would have a material adverse affect on the financial
condition or results of operation of the Company and/or CML, any of the Assets
or any asset or property of others leased or used in connection with the
business of the Stores pursuant to any agreement to which any of the Sellers is
a party or (ii) which questions or challenges the validity of this Agreement or
any action taken or to be taken pursuant to this Agreement.
(b) Subject to the matters set forth in 5.7 below, to the best
of the knowledge of the Sellers after due inquiry, the operations of the Company
and CML are and at all times have been in substantial compliance with, are not
currently in material default or violation in any material respect under, and
neither the Company nor CML have been charged with nor have the Company or CML
received any notice at any time of any violation of, any statute, law,
ordinance, regulation, decree or order applicable to the business or operations
of the Company or CML.
(c) Subject to the matters set forth in 5.7 below, neither the
Sellers, the Assets, nor the transactions contemplated under this Agreement, is
subject to any judgment, order or decree entered in any lawsuit or proceeding
applicable to the business and operations of the Company or CML.
(d) To the best of the knowledge of the Sellers after due
inquiry, other than for approximately five currency transaction reports which
Sellers have disclosed to Purchaser they inadvertently failed to file and which
are now the subject of an IRS investigation, the Sellers have duly filed or
caused to be filed all material reports and returns required to be filed by the
Sellers with all governmental authorities (including, without limitation, any
currency reporting requirements) and has obtained all material governmental
permits and licenses and other governmental consents (a complete list of which
permits, licenses and consents is set forth on Schedules 1.2(a) and 5.2(a)
hereto) which are required in connection with the business and
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operations of the Stores. To the best of the Sellers' knowledge no proceedings
for the suspension or cancellation of any of such permits, licenses or consents
is pending or threatened.
5.7 TAXES.
Sellers have disclosed to Purchaser that they are currently
the focus of a criminal investigation by the Internal Revenue Service and that a
Grand Jury has been impaneled for this purpose. The Sellers have admitted to the
IRS that their tax returns were incomplete in that they omitted certain amounts
of income for years prior to January 1, 1994. Sellers have cooperated with the
IRS and disclosed to it the amount of unreported income. Sellers have also
remitted to the Government substantial sums of money to be posted as a cash bond
pending the determination of their tax deficiencies.
5.8 EMPLOYEES AND CONTRACTORS.
(a) Schedule 5.8(a) hereto contains a list of all persons who
received compensation in respect of the operations of the Company or CML
(including compensation in the form of commissions and independent contractors'
fees) in excess of $25,000 during the last fiscal year or who are currently
receiving compensation (including compensation in the form of commissions and
independent contractors' fees) at a rate in excess of $25,000 per annum and a
description of all compensation arrangements (including without limitation,
salaries and bonus compensation) affecting them.
(b) The Company and CML have good relations with their
employees, independent sales people and contractors, and except as disclosed on
Schedule 5.8(b), have not received any material complaint from, and have not
engaged in any material dispute with, any of their employees, independent sales
people and contractors during the twelve (12) months prior to the date hereof.
Except as disclosed in Schedule 5.8(b), the Sellers are not aware of any
employee or independent sales person or contractor who plans to terminate
employment or association with the Company or CML whether currently or as a
result of the transactions contemplated hereby.
5.9 ERISA.
(a) Sellers never have had nor do they now have any employee
benefit plan (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")). Included on Schedule 5.9 is
a list of each employment agreement which may not be terminated by the Sellers
without penalty or liability on notice of thirty (30) days or less or,
management or consulting agreement, severance pay plan, employee relations
policy, practice or arrangement, agreements with respect to leased or temporary
employees, vacation plan or arrangement, sick plan, stock purchase plan, stock
option plan,
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fringe benefit plan, bonus plan and any deferred compensation agreement, plan or
program covering any present or former employee of the Company or CML.
5.10 LABOR RELATIONS.
(a) No employees of the Company or CML are covered by any
collective bargaining agreement.
(b) To the best of the knowledge of the Sellers after due
inquiry, the Company and CML have complied, and are currently in compliance, in
all material respects with any applicable laws (including, without limitation,
ERISA rules and regulations relating to the employment of labor, including,
without limitation, those relating to wages, hours, unfair labor practices,
discrimination and payment of social security and similar taxes with respect to
their respective employees.
(c) To the best of the knowledge of the Sellers after due
inquiry, neither the Company nor CML have engaged in or are currently engaging
in, any unfair labor practice. No complaint against the Company or CML is
currently pending or, to the best knowledge of the Sellers, threatened before
the National Labor Relations Board or any state or local labor agency by or on
behalf of any employee of the Company or CML; no representation questions,
arbitration proceedings, labor strikes, slow-downs or stoppages, material
grievances or other labor troubles are currently pending or, to the best
knowledge of the Sellers, threatened with respect to any of the Company's or
CML's employees.
5.11 CONTRACTS.
(a) All material contracts, leases, agreements, licenses,
commitments and purchase orders to which the Company or CML is a party or by
which the Company or any of the Assets is bound and which fall within the
categories set forth below are listed on Schedule 5.11(a) hereto. Also indicated
on Schedule 5.11(a) is whether such contract, etc. is with a related party or
affiliate of the Sellers or any immediate family member thereof. The contracts,
leases, agreements, licenses, etc. required to be disclosed on Schedule 5.11(a)
shall fall in one or more of the following categories:
(i) contracts or agreements with respect to which,
individually, the amount reasonably expected to be received or paid by the
Company or CML in the future exceeds $10,000 annually in the aggregate;
(ii) joint venture contracts or arrangements or other
agreements involving a sharing of profits or expenses;
-12-
(iii) confidentiality, non-competition or non-disclosure
agreements;
(b) contracts or agreements restricting the ability of the Sellers
to sell or transfer any of the Assets; and
(i) contracts or arrangements involving any restriction with
respect to the geographical area of operations or scope or type of business of
the Company or CML.
For purposes of this Agreement, only those contracts indicated
with an asterisk on Schedule 5.11(a) shall be deemed to be "Assumed Contracts."
(c) All of the Assumed Contracts are valid and in full force
and effect and constitute the legal, valid and binding obligations of the
Company or CML, as indicated, and the other parties thereto and there are no
existing material defaults by the Sellers or by any other party thereto and no
event, act or omission has occurred which (with or without notice, lapse of time
and/or the happening or occurrence of any other event) would result in a
material default thereunder. No other party to any of such Assumed Contracts has
in writing asserted the right, and to the current actual knowledge of the
Sellers, no basis exists for the assertion of any enforceable right, to
renegotiate, or cancel or terminate prior to the full term thereof, any of the
terms or conditions of any of such Assumed Contracts nor do the Sellers, have
knowledge that any party to any of such Assumed Contracts would refuse to renew
such Assumed Contract upon termination of its current term.
(d) Except as disclosed in Schedule 5.2(a), no consent of any
party to any of the Assumed Contracts is required for the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby, including, but not limited to, the assignment to the
Purchaser of the Leases for the Stores.
(e) Sellers have heretofore delivered to Purchaser true,
correct and complete copies of all of the Assumed Contracts, as amended or
supplemented, as well as summaries of the current rents, additional rents and
other payments due pursuant to the terms thereof.
5.12 ABSENCE OF CERTAIN CHANGES, ETC. Since the time of Purchaser's
due diligence visit to Sellers' corporate offices (the "Due Diligence Date") and
subject to the matters disclosed in 5.7 above, there has been no material
adverse change in the Assets (including the fair market value thereof),
business, operations, financial condition or prospects of the Company or CML or
in the condition of any of the Assets, or the assets or properties of others
leased or used by the Company or CML and, to the best knowledge of the Sellers,
there are no events
-13-
with respect to any of the foregoing that threaten to disrupt, prevent or impair
in a materially adverse manner the conduct of the Company's or CML's business
going forward.
Since the Due Diligence Date, the Company and/or CML has not:
(a) experienced any damage, destruction or loss to or of any
of its or their material assets, whether or not covered by insurance;
(b) increased or agreed to make any increase in the
compensation payable to any employee or independent contractor, other than in
the ordinary course of business;
(c) conducted its operations or participated in any
transaction otherwise than in the ordinary course of business;
(d) entered into any transaction or contract, or amended or
terminated any transaction or contract which transaction or contract, or
amendment or termination thereof, might to the knowledge of the Sellers have a
material adverse effect on the financial condition, business or operations of
the Company or CML;
(e) cancelled or waived any claim or right of substantial
value or sold, transferred, distributed or otherwise disposed of any of its
assets, except for a fair consideration in the ordinary course of business;
(f) other than as specifically referred to herein, distributed
any of its property or assets to Xxxxx;
(g) incurred any obligation or liability (absolute or
contingent) in all cases exceeding $10,000 in the aggregate;
(h) discharged or satisfied any lien or encumbrance or paid
any obligation or liability (absolute or contingent) other than liabilities
disclosed in the Schedules hereto or current liabilities incurred since the date
of the Financial Statements in the ordinary course of business;
(i) mortgaged, pledged or subjected to any Lien (as defined
Section 5.4) or charge or any other encumbrance, any assets, tangible or
intangible, other than the lien of current state or local property taxes not yet
due;
(j) received notice or had knowledge of any labor trouble or
union organizing activity other than routine matters, none of which is material,
-14-
(k) knowingly waived any rights of substantial value, whether
or not in the ordinary course of business;
(l) failed to pay all debts (including all trade accounts
payable) and obligations promptly as they became due, or in advance or otherwise
to the extent consistent with prior practice, delayed the payment of any debt or
obligation after such date except in the case of a bona fide dispute over the
amount thereof; or
(m) entered into any agreement, commitment, letter of intent
or other contract providing for any of the foregoing actions.
5.13 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as disclosed on
Schedule 5.13, the Sellers have not used, treated, stored or disposed of
hazardous waste or toxic substances on any store property owned or leased by the
Company (whether owned, leased, subleased or used, the "Property") in violation
of any federal, state or local environmental protection, toxic substance, human
health or similar statute, regulation or ordinance (collectively, the
"Environmental Laws"), and, to the best of the Sellers' knowledge, after due
inquiry, there have been no spills or releases of hazardous substances on or
from any Property that, in any such case, could subject the owner or occupier of
the Property to liability. The Property and all operations conducted on such
Property during the period of the Company's or CML's ownership or occupancy have
been in compliance with all Environmental Laws. The Sellers have not received
any notice, nor are aware, of any administrative or judicial investigations,
proceedings or actions with respect to violations, alleged or proven, of any
Environmental Law by the Company, CML or sub-lessee or any lessor of the Company
or CML, if any, or otherwise involving the Property or the operations conducted
on the Property. No asbestos containing material is present in any of the
improvements on any Property or is otherwise located on any Property. To the
best of the knowledge of the Sellers after due inquiry, all operations conducted
on the Property are in compliance with all federal and state statutes and
regulations relating to asbestos. Except as disclosed on Schedule 5.13, to the
best of the knowledge of the Sellers after due inquiry, no underground storage
tanks, whether in use or closed, are on or under any Property. Sellers have no
knowledge of any use, storage or disposal of hazardous waste or toxic substances
on the Property by any prior user or owner of the Property.
5.14 NO TAKING. Subject to the matters disclosed in 5.7 hereof, the
Sellers have not received notice of any pending, threatened, proposed or
contemplated eminent domain or condemnation proceeding or similar taking, with
or without payment of compensation therefor, or any pending or threatened
rezoning affecting the real property which is the subject of the Leases included
among the Assumed Contracts.
5.15 [INTENTIONALLY DELETED].
-15-
5.16 ADA MATTERS. The Sellers have not received any notification,
nor are aware of any circumstance, regarding any of the real property which is
the subject of the Leases which would require that the lessee under any such
Leases make any additions, renovations or improvements to such property pursuant
to the terms of the Americans With Disabilities Act ("ADA") or otherwise;
provided however that the Sellers specifically disclaim any warranty or
representation that said property in its current state conforms to the ADA.
5.17 ACCURACY OF STATEMENTS. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of the Sellers to Purchaser or any
representative or affiliate of the Purchaser in connection with this Agreement
or any of the transactions contemplated hereby contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they are made, not misleading. All representations,
covenants and warranties made by or on behalf of the Sellers in this Agreement
shall, pursuant to Section 10.1 hereof, survive the execution and delivery of
this Agreement and the closing of the transactions contemplated hereby.
* * *
In defending a claim based upon the breach of any representation,
warranty or covenant contained in this Agreement, the Sellers shall not assert
as a defense thereto that Purchaser had constructive knowledge of the falsehood
of any such representation, warranty or covenant.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Sellers, as follows:
6.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania.
6.2 CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
(a) Purchaser may execute, deliver and perform this Agreement,
the Non-Competition Agreements and all other agreements to be executed in
connection herewith without the necessity of obtaining any consent, approval,
authorization or waiver or giving any notice or otherwise, except for such
consents, approvals, authorizations, waivers and notices set forth on Schedule
6.2 hereto.
-16-
(b) This Agreement and the Non-Competition Agreements have
been duly and validly authorized by Purchaser and this Agreement constitutes
and, when executed and delivered, the Non-Competition Agreements will constitute
the legal, valid and binding obligation of Purchaser enforceable in accordance
with their respective terms. The execution, delivery and performance of this
Agreement will not:
(i) constitute a violation of the Articles of
Incorporation or the By-Laws, as amended, of Purchaser;
(ii) constitute a material violation of any statue,
judgment, order, decree or regulation or rule of any court, governmental
authority or arbitrator applicable or relating to Purchaser.
6.3 FINANCIAL STATEMENTS AND FINANCIAL CONDITION OF MONETARY
MANAGEMENT CORPORATION.
(a) Annexed as Schedule 6.3(a) hereto are the audited
financial statements of Monetary Management Corporation ("MMC") for the twelve
month period ended December 31, 1993, and for the six month period ended June
30, 1994 and its unaudited financial statements for the five month period ended
November 30, 1994 (collectively, the "Financial Statements") and the balance
sheets included therein (the "Balance Sheets").
(b) The Financial Statements have been prepared in accordance
with the books of account of MMC, in conformity with generally accepted
accounting principles consistently applied, and present fairly the financial
position of MMC as of the date of the Financial Statements and the results of
operations of MMC for the periods covered thereby; provided, however that the
Financial Statements for the five month period ended November 30, 1994 may not
contain all adjustments or footnotes necessary under generally accepted
accounting principles.
(c) MMC has no liabilities (absolute, contingent or otherwise)
which, in accordance with generally accepted accounting principles, are required
to the reflected, reserved or otherwise disclosed in its Balance Sheets which
are not reflected, reserved or otherwise disclosed in said Balance Sheet except
(i) those incurred since the date of the November 30, 1994 Balance Sheet in the
ordinary course of business, consistent with past practice, in arm's length
transactions with unrelated parties, and which do not have and cannot reasonably
be expected to have, in the aggregate, a material adverse effect on the
business, operations, financial condition or prospects of MMC.
(d) Since the date of the November 30, 1994 Financial
Statements, there has been no material adverse change in the business,
operations, financial condition or
-17-
prospects of MMC and to the best knowledge of MMC there are no events with
respect to any of the foregoing that threaten to disrupt, prevent or impair in a
materially adverse manner the conduct of MMC's business going forward.
6.4 LITIGATION. No actions, suits, claims, proceedings or
investigations (whether or not purportedly on behalf of or against Purchaser),
are pending or threatened against Purchaser at law or in equity that relate to
the transactions contemplated by this Agreement or that will prohibit Purchaser
from performing the obligations to be performed by it hereunder.
* * *
In defending a claim based upon the breach of any representation,
warranty or covenant contained in this Agreement, Purchaser shall not assert as
a defense thereto that the Sellers had constructive knowledge of the falsehood
of any such representation, warranty or covenant.
SECTION 7. COVENANTS OF THE PARTIES.
7.1 ACCESS TO RECORDS AND PROPERTIES. Between the date of this
Agreement and the Closing Date, the Sellers shall give to Purchaser such access
to the premises, books and records of the Sellers and shall cause the officers
and employees of the Company and CML to furnish such financial and operating
data and other information as Purchaser may from time to time reasonably
request. Purchaser agrees to refrain from conducting any on-site due diligence
at the Stores and from contacting employees of the Stores without Xxxxx'x prior
consent which shall not be unreasonably withheld. Pending the Closing, all of
such information not in the public domain shall be maintained confidentially by
Purchaser and not used for any purpose other than in connection with the
transactions contemplated hereby. The financial information seized by the IRS
from Sellers and currently in its possession shall not, for the purposes of this
Agreement, be deemed to be in the public domain. From and after the Closing
Date, the Sellers shall give to Purchaser free and unrestricted access to the
books, files and records of the Sellers relating to the operations of the Stores
for the period prior to and including the Closing Date retained by the Sellers,
if any, and Purchaser shall give to Xxxxx reasonable access to the books, files
and records transferred to Purchaser's control relating to the business and
operations of the Stores prior to the Closing, as Xxxxx shall from time to time
reasonably request. Prior to the destroying or disposing of such books, files
and records, the Sellers and Purchaser shall give thirty (30) days' notice to
the other of the intended destruction or disposition, and the other, at its
option, shall have the right to take possession of the same or to make copies of
the same at their or its expense. Purchaser shall, after the Closing, provide
Sellers reasonable access and make available for copying relevant books and
files and records regarding the Stores as Sellers need to defend any tax claim
or proceeding.
-18-
Any investigation or access pursuant to this Section 7.1 shall be
conducted in such manner as not to interfere unreasonably with the operation of
the business of the other party.
7.2 OPERATION OF THE COMPANY. From and after the date hereof and
until the Closing, the Sellers shall:
(a) Operate the Stores diligently and only in the usual,
ordinary manner and, to the extent consistent with such operations, use their
best efforts to (i) preserve the current business organizations of the Stores
intact, and (ii) preserve current relationships with employees of the Stores and
all other persons having business dealings with the Company, CML and/or the
Stores.
(b) Maintain books, accounts and records in the usual and
ordinary manner, and in a manner that fairly and correctly reflects income,
expenses, assets and liabilities in accordance with generally accepted
accounting principles.
(c) Comply with all Federal, state, local and other
governmental (domestic or foreign) laws, statutes, ordinances, rules,
regulations, orders, writs, injunctions, decrees, awards or other requirements
of any court or other governmental or other authority or body applicable to the
Company, CML, the Assets or the Stores or to the conduct of their business, and
to substantially perform all of their obligations under all contracts,
agreements, franchises, licenses, permits instruments, undertakings or otherwise
without default.
(d) Except in the ordinary course of business, make no change
in the compensation payable or to become payable to any employee; make no change
in any existing, and enter into no new, arrangement or contract relating to
management, executive or clerical services or relating to the sharing of
administrative or other overhead or any management or supervisory fee; establish
or make no bonus, stock option, profit sharing, retirement or other similar
payment, plan or arrangement except as otherwise provided herein for in the
ordinary course of the administration of existing incentive, welfare, retirement
or other similar plans or arrangements hereinabove referred to; and enter into
no union contract and no employment agreement, or agreement with any salesman or
sales agent or any franchise agreement, independent dealer/distributor agreement
or other contract or arrangement with respect to the performance of services.
(e) Not enter into, modify or extend any Assumed Contract, or
engage in any activity or transaction not substantially in the ordinary course
of business and in accordance with past practice.
(f) Not sell or dispose of any capital assets.
-19-
(g) Not mortgage, pledge or subject to any Lien (as defined in
Section 5.4) or charge or other encumbrance, any assets, tangible or intangible,
other than the lien of current state or local property taxes not yet due.
(h) Not make any agreement, commitment or arrangement to take
any action materially inconsistent with the obligations under, or prohibited by,
the foregoing paragraphs.
7.3 CONSENTS AND NOTICES. Promptly after the date hereof, the
Sellers shall use its best efforts to obtain all consents, waivers, approvals
and authorization listed in Schedules 1.2(a) and 5.2(a) hereto which may be
necessary from third parties to effectuate this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof and shall
give all notices to third parties required to be given by the Sellers in
contemplation and as a result of the transactions contemplated by this
Agreement. It shall however be the responsibility of the Purchaser to obtain all
permits, licenses and approvals necessary to enable Purchaser to operate the
Stores and Purchaser agrees to diligently pursue all such licenses, permits and
authorizations.
7.4 COMPETING TRANSACTIONS. Prior to the Closing Date (as such date
may be extended by agreement of the parties), the Sellers shall not take any
action, directly or indirectly, to negotiate, cause, promote, authorize or agree
to any transaction competing or interfering with any of the transactions
contemplated by this Agreement, including, without limitation, any merger,
consolidation or reorganization, or acquisition or disposition of the equity
securities of the Company and as of the date hereof shall cease all discussions
with any other potential acquirors of the Assets.
7.5 BEST EFFORTS TO SATISFY CONDITIONS. The Sellers shall use their
best efforts to cause the conditions to the obligations of Purchaser contained
herein to be satisfied to the extent that the satisfaction of such conditions is
in the control of the Sellers, and Purchaser shall use its best efforts to cause
the conditions to the obligations of the Sellers contained in Section 9 hereof
to be satisfied to the extent that the satisfaction of such conditions is in the
control of Purchaser; however, the foregoing shall not constitute a limitation
upon the covenants and obligations of the Sellers and Purchaser otherwise
expressly set forth in this Agreement.
7.6 CONFIDENTIALITY. Purchaser agrees that for and in consideration
of the Sellers' cooperation and disclosure of sensitive business information,
Purchaser shall hold in the highest degree of confidentiality any and all
information received from the Company and designated in writing as
"Confidential" and not publish the same to any party not directly involved in
Purchaser's acquisition of the Assets; provided, however, that Confidential
property shall not include any information which (1) is already known to
Purchaser; or (2) is or becomes publicly known to Purchaser through no wrongful
act of Purchaser; or (3) is rightfully received
-20-
by Purchaser from third-party without authorization of the Sellers; or (5) is
furnished by the Sellers to a third-party without a similar restriction on the
third-party's rights; or (6) is disclosed pursuant to a requirement of a
governmental agency or disclosure is required by operation of law.
7.7 PUBLICITY. Without the consent of Xxxxx, Purchaser will not
disclose in any manner to any third party that the parties have entered into
this Agreement other than its lenders, attorneys, accountants, the IRS and any
licensing authorities and no public announcement of the existence of this
Agreement shall be made by any party without the prior consent of the others.
7.8 EXCLUSIVE DEALING. After execution of this Agreement and prior
to the Closing Date (as such date may be extended by agreement of the parties),
the Sellers will not offer the Shares or the Assets for sale to any person other
than Purchaser nor will the Sellers enter into negotiations with any other party
for the disposition of the Shares or the Assets and the Sellers agree that the
Sellers will not negotiate with any other parties relative to any disposition of
the Shares or the Assets or any part thereof. Furthermore, the Sellers will not,
directly or indirectly, through any officer, director, agent or otherwise,
solicit or initiate, directly or indirectly, or encourage submission of
inquiries, proposals or offers from any potential buyer, other than Purchaser,
or participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to the disposition of the Shares or the
Assets.
SECTION 8. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser to consummate the purchase and sale of the Assets under this
Agreement are subject to the satisfaction of the following conditions, each of
which may be waived by Purchaser. Any such waiver by Purchaser shall not reduce
or impair Purchaser's right to seek indemnification hereunder in respect of the
failure to meet the condition that shall have been waived.
8.1 TAX MATTERS. The receipt by Purchaser of satisfactory assurances
from the Internal Revenue Service ("IRS") stating that it will not pursue
satisfaction of any claim they may have regarding the Company and/or the
Shareholders against the Stores, the Assets, the Purchaser or any affiliate
thereof and no notice of objection to the sale by the Pennsylvania State or
Philadelphia tax authorities is received. This agreement does not limit the IRS'
ability to engage in any enforced collection activity against any amounts due
Sellers hereunder.
8.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
(a) The representations and warranties of the Sellers set
forth in Section 5 hereof and in all agreements, documents and instruments
executed and delivered pursuant hereto or in connection with the Closing of the
transactions contemplated hereunder shall have
-21-
been, on the date hereof and shall be on the Closing Date, true and correct in
all material respects as though made on and as of the Closing Date.
(b) The Sellers have materially performed the agreements and
obligations necessary to be performed by them under this Agreement prior to the
Closing Date, and performed in accordance with the covenants set forth in
Section 7 hereof. Without limiting the generality of the foregoing, the Sellers
shall have obtained all consents, waivers, approvals and authorizations, and
shall have given all notices to third parties, as in the aggregate are necessary
to convey, sell, transfer, assign and deliver to Purchaser all of the Assets and
to vest in Purchaser all right, title, interest and claims of the Sellers in,
to, relating to or arising under the Assets, free and clear of any Liens (as
defined in Section 5.4); excluding, however, the consents, licenses, permits and
approvals to be obtained by Purchaser as described above.
(c) The continued operation of the Stores in the normal course
of business between the date hereof and the Closing Date.
(d) The absence of any material deterioration (or alteration)
of the Assets or the value thereof between the date hereof and the Closing Date,
including but not limited to loss of customers, employee/management attrition,
destruction of equipment, force majeure and declaration of war.
(e) The Sellers shall have delivered to Purchaser a
certificate to the effect that the conditions set forth in subparagraphs 8.1(b)
and 8.1(c) above have been satisfied.
8.3 TRANSFER OF ASSETS. The Sellers shall have delivered to
Purchaser such bills of sale with covenants of warranty, assignments, special
warranty deeds with covenants against grantor's acts only, and other good and
sufficient instruments of transfer and conveyance, in form and substance
reasonably 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 Assets as provided for, and subject to the limitations
and exceptions set forth, in this Agreement.
8.4 OPINION OF COUNSEL TO THE SELLERS. Purchaser shall have received
the opinion of legal counsel for the Sellers satisfactory to the Purchaser,
dated the Closing Date, in form reasonably satisfactory to Purchaser.
8.5 BANK APPROVAL. Purchaser shall have received a final approval
from its primary bank(s) regarding the acquisition of the Assets. Purchaser has
represented that it has received an informal approval of the subject sale and
will, as soon as practicable hereafter, seek final approval and will cooperate
with such institutions in whatever way necessary to obtain their final approval.
8.6 NO ADVERSE CHANGE; MATERIAL DISCREPANCIES. There shall not have
occurred or come to the knowledge of Purchaser between the date hereof and the
Closing Date
-22-
any circumstances which in the aggregate have a material adverse effect on
Purchaser's valuation of the operations, condition (financial or otherwise),
assets or business of the Company and/or CML and the Sellers shall have
delivered to Purchaser a certificate stating that they are not aware of any such
occurrence.
Purchaser, through its attorneys, accountants, employees, agents or
assignees, shall not have discovered, in the course of its due diligence review
of the transactions contemplated hereby, that the financial condition or history
of operations of the business of the Company, CML and/or the Stores is
materially different than the condition and/or history represented to Purchaser
by Xxxxx in the context of the negotiation of the instant acquisition.
8.7 GOVERNMENTAL AND OTHER APPROVALS. Subject to Section 27 below,
any licenses, permits, approvals, consents, authorizations and waivers by
governmental agencies or private parties necessary or desirable to consummate
the transactions contemplated by this Agreement as set forth on Schedules 1.2(a)
and 5.2(a) hereto, shall have been obtained on terms reasonably satisfactory to
Purchaser, including, but not limited to, any licenses required to operate the
Stores.
8.8 NON-COMPETITION AGREEMENTS. Xxxxx, the Company, Xxxxxx Xxxxx and
CML shall each have delivered to Purchaser an executed Non-Competition
Agreement, in the form annexed hereto as Exhibit C.
8.9 RELATIONSHIPS; EMPLOYEES. The Sellers make no representation
that any employee of the Company will accept employment with the Purchaser
following the Closing Date. However, the Sellers will (i) cooperate in
permitting Purchaser to discuss employment with the employees and executives of
the Stores and will encourage such persons to accept any proffered employment
and will not interfere in any negotiations between Purchaser and such persons
with regard to such employment; and (ii) take no action which will impede the
goodwill of customers and others having a business relationship with the
Company, CML and/or the Stores and take no action which will impede Purchaser
and its representatives in their efforts to persuade such persons to continue
such relationship with Purchaser after the Closing Date.
8.10 [INTENTIONALLY DELETED].
8.11 OTHER MATTERS. 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.
-23-
SECTION 9. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations
of the Sellers to consummate the sale and purchase under this Agreement and the
obligations of Xxxxx, the Company, Xxxxxx Xxxxx and CML to execute and deliver
the Non-Competition Agreements are subject to the satisfaction of the following
conditions, each of which may be waived by the Sellers. Any such waiver shall
not reduce or impair the Sellers' right to seek indemnification hereunder in
respect of the failure to meet the condition that shall have been waived.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
(a) The representations and warranties of Purchaser set forth
in Section 6 hereof and in all agreements, documents and instruments executed
and delivered pursuant hereto or in connection with the Closing of the
transactions contemplated hereunder shall have been and be true and correct in
all respects at all times commencing with the date of this Agreement and ending
with and on the Closing Date as though made on and as of the Closing Date.
(b) Purchaser shall have performed the agreements and
obligations necessary to be performed by it under this Agreement prior to the
Closing Date.
(c) Purchaser shall have delivered to Sellers a certificate,
executed by Purchaser, to the effect that the conditions set forth in
subparagraphs 9.1(a) and 9.1(b) above have been satisfied.
9.2 OPINION OF COUNSEL TO PURCHASER. The Sellers shall have received
the opinion of Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx dated the Closing
Date, in form reasonably satisfactory to the Sellers.
9.3 JUDGMENT NOTE. Purchaser shall have delivered the Judgment Note
on the Closing Date, pursuant to Section 3 hereof.
9.4 NON-COMPETITION AGREEMENTS. Purchaser shall have delivered to
Seller an executed Non-Competition Agreement, in the form annexed hereto as
Exhibit C.
9.5 NO ADVERSE CHANGE. There shall have been no developments since
the date of this Agreement materially adversely affecting the financial
condition of Purchaser and its ability to perform its obligations under the
Promissory Note.
-24-
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; AND SET-OFF.
10.1 SURVIVAL. The representations, warranties and agreements made
in Sections 5 and 6 hereof and in the Schedules hereto by Purchaser and the
Sellers shall remain operative and in full force for four (4) years after the
Closing Date except with respect to tax matters as to which such representations
and warranties shall continue to survive for the period of any applicable
statutes of limitation.
10.2 INDEMNIFICATION BY THE SELLERS. The Sellers hereby jointly and
severally agree to defend, indemnify and hold Purchaser and its officers,
directors, shareholders, agents and affiliates and their respective successors
and assigns (for purposes of this Section 10.2, collectively, the "Purchaser")
harmless from and against any and all losses, liabilities (accrued, absolute,
contingent or otherwise), suits, proceedings, demands, settlements, judgments,
fines, assessments, damages, expenses and costs (including reasonable attorneys'
fees and litigation expenses) (collectively, the "Indemnifiable Damages") which
Purchaser may suffer or incur by reason of, or which may arise out of: (i) the
inaccuracy of any of the representations and warranties of the Sellers contained
in this Agreement; (ii) the breach by the Sellers of any of the covenants,
warranties or agreements made by them in this Agreement; (iii) any claim for
payment of any liability of the Sellers not specifically assumed by the
Purchaser pursuant hereto; or (iv) any legal obligation to remediate any
environmental condition resulting from the Sellers' operation of the Property
prior to the Closing Date, provided, however, that the Sellers shall only be
liable with respect to any Indemnifiable Damages if the aggregate Indemnifiable
Damages, singly or in the aggregate, equal or exceed $10,000 and then only to
the extent of any such excess. In no event shall the Sellers be obligated under
this Section to indemnify Purchaser to the extent any claim results from
Purchaser's gross negligence or willful misconduct. In no event shall the
Sellers be obligated to indemnify Purchaser for Indemnifiable Damages in excess
of the Purchase Price. Not withstanding anything contained in this Section 10 to
the contrary, Purchaser shall have the right to set off, against amounts due
under the Promissory Note, any amounts due or claimed in good faith to be due to
Purchaser under this Section 10 or Section 11.
10.3 INDEMNIFICATION BY PURCHASER. Purchaser hereby agrees to
defend, indemnify and hold the Sellers harmless from and against any
Indemnifiable Damages which they may suffer or incur by reason of or which may
arise out of: (i) the inaccuracy of any of the representations and warranties of
Purchaser contained in this Agreement; (ii) the breach by Purchaser of any of
the covenants, warranties or agreements made by it in this Agreement; (iii) any
claim for payment of any liability assumed by Purchaser hereunder or otherwise
relating to the ownership or operation of the Stores after the Closing Date,
including, but not limited, to any such liability arising after the Closing Date
under the Assumed Contracts. In no event shall
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Purchaser be obligated under this Section to indemnify the Sellers to the extent
any claim results from their gross negligence or willful misconduct.
10.4 NOTICE AND RIGHT TO DEFEND THIRD PARTY CLAIMS.
(a) Promptly upon receipt of notice of any third party claim,
demand or assessment or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought on account of an indemnity agreement
contained in this Section 10, the party seeking indemnification (the
"Indemnitee") shall notify in writing, within sufficient time to respond to such
claim or answer or otherwise plead in such action, the party or parties from
whom indemnification is sought (the "Indemnitor") thereof; provided, however,
that failure or delay to supply such notice shall not relieve Indemnitor of its
indemnification obligation hereunder except to the extent that Indemnitor is
actually prejudiced by such failure or delay.
(b) In case any claim, demand or assessment is asserted or
suit, action or proceeding commenced against an Indemnitee (collectively a
"Claim"), and it notifies the Indemnitor of the commencement thereof, if the
Indemnitor acknowledges its indemnification obligations therefor hereunder, then
the Indemnitor shall be entitled to participate therein, and, to the extent that
it may wish, to assume the defense, conduct or settlement thereof, with counsel
satisfactory to the Indemnitee, whose consent to the selection of counsel shall
not unreasonably be withheld. After notice from the Indemnitor to the Indemnitee
of its election to assume the defense, conduct or settlement thereof, the
Indemnitor shall not be liable to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense, conduct
or settlement thereof; provided, however, that if the Indemnitee has any
separate defense from that of the Indemnitor, the Indemnitee shall have the
right to be represented by its own counsel at the Indemnitee's expense. The
Indemnitee shall have the right in any event to participate in any such defense
with its own counsel at its own expense. The Indemnitee will cooperate with the
Indemnitor in connection with any such Claim and make personnel, books and
records relevant to the Claim available to the Indemnitor at Indemnitor's
expense. In the event that the Indemnitor fails timely to defend, contest or
otherwise protect against any such Claim, the Indemnitee shall have the right to
defend, contest or otherwise protect against the same and may make any
compromise or settlement thereof and recover the entire cost thereof from the
Indemnitor, including, without limitation, reasonable attorneys' fees,
disbursements and all amounts paid as a result of such claim or compromise or
settlement thereof.
(c) Anything to the contrary herein notwithstanding, prior to
finally settling any such Claim, the Indemnitor shall give to the Indemnitee
prompt notice of its intention to settle the same and the terms of such proposed
settlement and acknowledging their indemnification responsibility there for
hereunder. If the Indemnitee shall object to such proposed settlement within 20
calendar days, then the Indemnitee shall thereafter, at its sole
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expense, assume the control and defense of such claim, suit, action,
investigation or proceeding and in such event the liability of the Indemnitor
shall be limited to the amount for which the same could have been settled as
proposed by the Indemnitor. If the Indemnitee does not object to the terms of
the proposed settlement within the aforesaid 20 calendar day period, then the
Indemnitor shall have the right to consummate such proposed settlement upon the
terms set forth in the aforesaid notice.
10.5 PAYMENT OF AMOUNTS DUE. The amount of any indemnifiable damages
conceded or determined to be due from the Sellers to Purchaser, pursuant to any
of the provisions of this Section 10, shall be paid by the Sellers to Purchaser
within ten (10) business days from the date so conceded or determined. The
amount of any indemnifiable damages conceded or determined to be due from
Purchaser to the Sellers, pursuant to any of the provisions of this Section 10,
shall be paid to Sellers by Purchaser within ten (10) business days from the
date so conceded or determined.
SECTION 11. BULK TRANSFER LAWS. Purchaser hereby waives compliance
with the provision of any so called Bulk Transfer Laws of any jurisdiction in
connection with the sale of the Assets. The Sellers hereby indemnify and hold
harmless the Purchaser against any and all liabilities which may be asserted by
third parties against the Purchaser as a result of non-compliance with any such
Bulk Transfer Laws.
SECTION 12. FURTHER ACTIONS. From time to time the parties shall
execute and deliver, or cause to be executed and delivered, such documents and
instruments and shall take, or cause to be taken, such further or other actions
as are necessary or desirable to carry out the intent and purposes of this
Agreement, to convey, transfer, assign and deliver to Purchaser, and its
successors and assigns, the Assets (or to evidence any of the foregoing) and to
consummate and give effect to the other transactions, covenants and agreements
contemplated hereby.
SECTION 13. TERMINATION. This Agreement shall terminate and shall be
of no further force or effect:
(i) as provided in Sections 8 or 9 hereof;
(ii) Upon mutual agreement of the parties;
(iii) Upon notice given by the Purchaser or the Sellers
in the event the Closing has not occurred on or before March 31,
1995 due to a circumstance not resulting from or caused by any act
or omission of the party giving such notice;
(iv) Upon notice given by the Purchaser or the Sellers
to the other party in the event a law, regulation or judicial decree
prohibits the Closing; or
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(v) Upon notice given by the Purchaser or the Sellers to
the other party in the event that any representation or warranty
made by the other party herein was incorrect in any material respect
when made; or that such other party has failed to perform any
covenant contained herein in any material respect and such failure
has continued for thirty (30) business days following notice of such
failure; or that a condition to the obligation of such party as set
forth herein is not satisfied as of March 31, 1995.
SECTION 14. CERTAIN LEASES; RIGHT OF FIRST REFUSAL.
(a) Xxxxx owns the real estate in which the Stores indicated
as numbers 1, 2, 6, 7, 15, 20, 21, 22 and 27 are located (the "Xxxxx Stores").
Notwithstanding anything contained herein to the contrary, as of the Closing
Date, the Purchaser shall enter into standard form triple net leases, in form
acceptable to the parties, with Xxxxx regarding each of the Xxxxx Stores. Such
leases shall be for an initial five (5) year period at a monthly rental of
$1,800.00 with an option of Purchaser to extend for a further period of five (5)
years at a rent equal to $1,890.00 per month. As to the Stores 3 and 17, in
addition to monthly rental due the lessor thereunder, for the balance of the
term of such leases, Purchaser shall pay to Xxxxx the difference between such
monthly rent and $1,800.
(b) Sellers hereby grant to Purchaser the right of first
refusal to buy the stores numbered 10 and 26 on Schedule A.
SECTION 15. EXPENSES; BROKERS.
(a) Except as otherwise specifically provided herein, the
Sellers and Purchaser shall bear their own legal fees and other costs and
expenses with respect to the negotiation, execution and the delivery of this
Agreement and the consummation of the transactions hereunder, and the Assets
shall not be reduced or impaired by the payment or accrual of any such costs and
expenses. Any sales, use, conveyance or transfer taxes ("Tax") relating to the
conveyance of the Assets, if applicable, in connection with the transactions
contemplated herein shall be paid by the party on whom such liability is imposed
by applicable law.
(b) The Purchaser, on the one hand, and the Company and the
Shareholders, on the other, represent and warrant each to the other that they
have not engaged the services of any broker or finder in connection with the
transactions herein provided for.
SECTION 16. CONSTRUCTION.
(a) The descriptive headings of this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.
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(b) Any representation or warranty made to the knowledge of
any parties hereto, or as to what any such party is aware of, or statements of
similar purport, shall mean that such party has made a reasonable investigation
of the facts in connection therewith and is making such representation or
warranty based upon the results of such investigation.
(c) The terms "material" and "materially" when used with
respect to amounts of money or values shall refer to an amount or amounts of
$25,000 or more individually or in the aggregate.
SECTION 17. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient when
delivered personally or telecopied by confirmed facsimile, or three (3) days
after mailing by registered or certified mail, return receipt requested, or the
next day if sent by nationally recognized overnight courier with proof of
delivery, in each case postage prepaid, addressed as follows:
If to Purchaser:
Monetary Management Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Vice President -
Corporate Development
Telecopy No. (000) 000-0000
with a copy to:
Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No. (000) 000-0000
If to Sellers:
Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx Xxxxxx, XX 00000
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with a copy to:
Xxxxxx X. Xxxxxxx, Esquire
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopy No. (000) 000-0000
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
SECTION 18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to conflicts of law.
SECTION 19. ASSIGNABILITY. This Agreement shall be binding upon the
parties and their respective successors and assigns; provided, however, that
this Agreement and the rights, privileges, duties and obligations of the Sellers
herein may not be assigned or delegated without the prior written consent of
Purchaser. Purchaser may assign its rights, privileges, duties and obligations
hereunder.
SECTION 20. WAIVERS AND AMENDMENTS. Any waiver of any term or
condition of this Agreement, or any amendment or supplement of this Agreement,
shall be effective only if in writing executed by the party against whom such
waiver, amendment or supplement is sought to be enforced. A waiver of any breach
or failure to enforce any of the terms or conditions of this Agreement shall not
in any way affect, limit or waive a party's rights hereunder at any time to
enforce strict compliance thereafter with every term or condition of this
Agreement.
SECTION 21. THIRD PARTY RIGHTS. Notwithstanding any other provision
of this Agreement, and except as expressly provided in Section 10 hereof, this
Agreement shall not create benefits on behalf of any third party, and this
Agreement shall be effective only as among the parties hereto, their successors
and permitted assigns.
SECTION 22. ILLEGALITIES. In the event that any provision contained
in this Agreement shall be determined to be invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and the remaining provisions of this
Agreement shall not, at the election of the party for whose benefit the
provision exists, be in any way impaired.
SECTION 23. NO PRESUMPTION AGAINST THE DRAFTER. Each of the parties
to this Agreement participated in the drafting of this Agreement and the
interpretation of any ambiguity
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contained in this Agreement will not be affected by the claim that a particular
party drafted any provision hereof.
SECTION 24. COUNTERPARTS. This Agreement may be executed in multiple
counterparts all of which taken together shall constitute one and the same
instrument.
SECTION 25. ENTIRE AGREEMENT. This Agreement (including the
Schedules and the Exhibits delivered pursuant hereto) constitutes the entire
agreement between the parties and pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties.
SECTION 26. RISK OF LOSS. The risk of loss or damage to the Assets
caused by fire or otherwise, between the date of this Agreement and the Closing
hereof, shall be on Sellers. In the event of fire or the casualty loss to any
one particular Store or any of the purchased Assets prior to Closing, which at
the time of Closing, prevents the normal operation of that Store alone, and
which cannot be repaired or returned to operation within ninety (90) days from
the date of loss, the Purchaser shall have the option to adjust the Purchase
Price by an amount agreed upon by the parties hereto, or to proceed under this
Agreement and be entitled to claim and accept all insurance proceeds due to the
Sellers.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
MONETARY MANAGEMENT CORP.
By: /s/ Xxxxxx Xxxxxxxx
----------------------
Xxxxxx Xxxxxxxx, Executive Vice President
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HAPPY'S CHECK CASHING, A SOLE
PROPRIETORSHIP
By: /s/ Xxxxxx Xxxxx
----------------------
Xxxxxx Xxxxx, Sole Proprietor
CHASE MONEY LOAN, INC.
By: /s/ Xxxxxx Xxxxx
----------------------
Xxxxxx Xxxxx, President
XXXXXX XXXXX, AN INDIVIDUAL
/s/ Xxxxxx Xxxxx
----------------------------
XXXXXX XXXXX, WIFE OF XXXXXX XXXXX
/s/ Xxxxxx Xxxxx
----------------------------
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SCHEDULES AND EXHIBITS
TO
ASSET PURCHASE AGREEMENT
JANUARY 9, 1995
Schedule Number Brief Description
A List of all Xxxxx Stores
1.2(a) Licenses and Authorizations
1. Business Privilege License
2. Pawn-broking License
3. Pennsylvania Lottery License
4. Dealers in Precious Metals License
1.2(b) Personal Property
1.2(c) Real Property
Leasehold interest in each of Stores listed on Exhibit A.
1.2(e) Intellectual Property, etc.
[None]
3.1 Allocation of Purchase Price
Furniture, Fixtures and Equipment $ 300,000
Goodwill 2,400,000
----------
$2,700,000
5.2(a) Required Consents, Approvals, Authorizations,
Waivers and Notices
Landlord's Consent to Assignment of Lease for each Store
being acquired.
5.2(c)(iii) Acceleration of Debts and Obligations
[None]
5.8(a) Compensation of Employees
5.8(b) Employee Disputes; Termination of Employment
[None]
5.9 Employee Benefit Plans, etc.
[None]
5.11(a) Contracts
1. JM Security
2. Spectaguard Security
3. Land Security
4. Xxxxxxxx Security
5. Leases for each of the Stores *
6.2 Consents required by Purchaser
- Final approval of Purchaser's bank(s)
- Licenses from various state and other authorities
EXHIBIT A
Promissory Note
Exhibit B
Intentionally Deleted
Exhibit C
Non-Competition Agreement
