INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this "Agreement") is made and entered into
as of the 14 day of April, 1998 by and among PAYDAY CHECK ADVANCE, INC.
("Payday"), an Illinois corporation, SONOMA HOLDING CORP. ("Sonoma"), an
Illinois corporation, XXXXXXXX X. XXXXXX ("Xxxxxx") and the other parties whose
signatures appear below (collectively, the "Investors").
RECITALS:
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WHEREAS, the Investors desire to make a financial investment in Sonoma
in exchange for ownership of certain shares of stock in Sonoma and other
consideration more fully described in this Agreement and Sonoma desires to
accept the investment and provide the consideration;
WHEREAS, Sonoma owns and controls eighty percent (80%) of the stock of
Payday;
WHEREAS, Payday and Sonoma desires to provide the Investors with
certain representations regarding each of them and their holdings and with
certain rights and benefits as more fully described in this Agreement;
WHEREAS, Xxxxxx is President of Sonoma and an officer of Payday,
personally controls the licenses necessary to operate and expand Payday's
business, and has agreed to guaranty certain portions of Payday's and Sonoma's
obligations; and
WHEREAS, Payday, Sonoma, Xxxxxx and the Investors desire to enter into
this Agreement to more completely set forth their agreements, rights and
obligations with respect to the Investors' investment in Sonoma;
NOW, THEREFORE, in consideration of Ten and 00/100 Dollars in hand
paid, the foregoing recitals and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Payday, Sonoma, Xxxxxx
and the Investors agree as follows:
1. INCORPORATION OF RECITALS. The foregoing recitals are incorporated into
this Agreement by this reference as fully and with the same force and effect as
if repeated herein at length.
2. INVESTMENT. The Investors, agree to pay to the aggregate amount of
$140,000 in cash (the "Investment"), which Investment shall be made
contemporaneously with the full execution and delivery of this Agreement. The
Investment shall be used to fund Payday's capital expenses relating to the
opening additional locations of Payday's paycheck advance stores. Sonoma and
Payday shall not use the Investment for any other purpose. Pursuant to the terms
of the Notes (as hereinafter defined), prior to the maturity date of the Notes,
the Investment shall be on a revolving basis, such that to the extent Sonoma and
Payday comply with the restrictions set forth in the Notes and less than the
full amount of the Investment remains outstanding, Sonoma and Payday may borrow
and reborrow the Investment.
3. NOTES AND STOCK. In exchange for the Investment, (a) Sonoma and Payday
shall execute and deliver to each of the Investors a promissory note
(individually, a "Note"; collectively, the "Notes") in the principal amount of
each Investor's portion of the Investment, as set forth on the signature pages
of this Agreement, and (b) Sonoma shall execute and deliver to each of the
Investors an aggregate amount of 210,000 newly authorized shares of the stock of
Sonoma (the "Stock") distributed to each Investor in the amounts set forth on
the signature pages of this Agreement. The Notes shall bear interest at the rate
of twelve percent (12%) per annum. The Notes shall be repaid upon the date which
is four (4) months after the date hereof. Sonoma and Payday shall make periodic
payments of interest only on the outstanding principal balance of the Notes
monthly as provided in the Notes. Sonoma shall issue certificates for the Stock
within seven (7) days of the execution and delivery of this Agreement. The Stock
shall be issued at par with the other outstanding shares of Sonoma and the
Investors shall have all rights to register their shares at their election with
the next registration filing for Sonoma or any succeeding registration, as each
Investor may elect.
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4. SECURITY. As additional security for Payday's and Sonoma's obligations
hereunder, Xxxxxx shall execute and deliver a guaranty of the Notes and Payday
shall execute and deliver a certain Uniform Commercial Code Financing Statement
(the "UCC") granting the Investors or a nominee thereof, a junior security
interest in the accounts receivable of Payday. The Investors acknowledge that
Sonoma and Payday have granted a prior security interest in and to Payday's
accounts receivable to Illinois State Bank, Payday's primary lending
institution. The Investors agree that if Payday elects to refinance its existing
bank debt, the Investors or their nominee shall execute such documents as are
reasonably required by a new primary lending institution to subordinate the
security interest held by the Investors pursuant to the UCC to the interests of
the new primary lending institution; provided, however, that (a) all amounts due
and owing to Illinois State Bank be repaid in full and (b) any amounts funded to
Payday by said new primary lending institution in excess of those amounts needed
to repay Illinois State Bank are used first to repay the Investors pursuant to
the Notes.
5. OPTIONS FOR ADDITIONAL STOCK. Upon the maturity date of the Notes, each
Investor shall have the option of purchasing additional Stock for a period of
one (1) year from said maturity date as follows: (a) an aggregate of up to
175,000 additional shares of the Stock in the amounts for each Investor set
forth on the signature pages of this Agreement at the price of $.20 per share
and (b) an aggregate of up to 175,000 additional shares of the Stock in the
amounts for each Investor set forth on the signature pages of this Agreement at
the price of $.25 per share.
6. REPRESENTATIONS. Sonoma and Payday hereby represent to each of the
Investors the following:
a. The execution and delivery of this Agreement, the Notes and
the other documents related to the transaction described
herein have been duly and properly authorized by the Boards of
Directors of Payday and Sonoma (the "Boards") in accordance
with their respective By-Laws. The issuance of the Stock,
including, without limitation, the optional Stock, and the
certificates therefor in accordance with the terms of this
Agreement also has been duly and properly authorized by
Sonoma's Board.
b. Payday currently owns, operates or controls at least twelve
(12) "retail" cash advance stores under the name "Payday
Express". Sonoma and Payday will use the Investment to fund
the capital expenses of opening additional Payday Express
locations, and for no other purpose.
c. Sonoma and Payday are duly and validly organized as Illinois
corporations, are in good standing under the laws of the State
of Illinois and have paid all current franchise fees and taxes
in Illinois and any other state where Sonoma, Payday or any of
their subsidiaries may need to make such payments in order to
effectively operate the businesses of Sonoma, Payday and their
subsidiaries.
7. DEFAULT. If Payday or Sonoma shall default on its obligations or
materially breach any of its representations contained herein or in the Notes,
the Investors shall have the right to accelerate the repayment obligations in
the Notes and shall have any other rights or remedies available to them as
creditors and/or shareholders of Sonoma as may be available under applicable
laws, statutes, ordinances, rules and regulations in a court of competent
jurisdiction.
8. MISCELLANEOUS.
a. ENTIRE AGREEMENT; AMENDMENTS. This Agreement embodies the
entire understanding among the Investors, Payday, Sonoma and
Xxxxxx concerning the Investment and supersedes any and all
prior negotiations, understandings or agreements. This
Agreement may be amended or modified from time to time only by
a written instrument adopted, executed and agreed to by all of
the Investors and the other parties hereto.
b. NOTICES. All notices and demands required or permitted under
this Agreement shall be in writing and may be delivered to the
Investor to whom it is to be given, either in person or by
guaranteed overnight courier, or sent by certified mail,
postage prepaid, to the address as shown from time to time on
the
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records of Sonoma, or if given to Payday, Sonoma or Xxxxxx, at
their respective addresses set forth below. Any notice or
demand mailed as aforesaid shall be deemed to have been given
on the date that such notice or demand is deposited in the
mails. Any party hereto may specify a different address, which
change shall become effective upon receipt of such notice by
the other parties hereto.
c. SEVERABILITY. If any provision of this Agreement or the
application of such provision to any party or circumstance
shall be held invalid, the remainder of this Agreement, or the
application of such provision to parties or circumstances
other than those as to which it is held invalid, shall not be
affected.
d. PARTIES BOUND. This Agreement shall be binding upon the
parties and their respective successors, assigns, heirs,
devisees, legal representatives, executors and administrators.
e. APPLICABLE LAW. The laws of the State of Illinois shall govern
this Agreement, excluding any conflict of laws rules. The
parties, hereto irrevocably agree that all actions or
proceedings in any way, manner or respect, arising out of or
from or related to this Agreement shall be litigated only in
courts having situs within Xxxx County, Illinois. Each party
hereto hereby consents and submits to the jurisdiction of any
local, state or federal court located within said county and
state and hereby waives any rights it may have to transfer or
change the venue of any such litigation. The prevailing party
in any litigation in connection with this Agreement shall be
entitled to recover from the other party all costs and
expenses, including without limitation fees of attorneys and
paralegals, incurred by such party in connection with any such
litigation.
f. HEADINGS. The headings in this Agreement are inserted for
convenience and identification only and are in no way intended
to describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof.
g. COUNTERPARTS. This Agreement may be executed in multiple
counterparts with separate pages, and each such counterpart
shall be considered an original, but all of which together
shall constitute one and the same instrument.
h. PRONOUNS. All pronouns shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
i. EFFECT OF WAIVER OR CONSENT. A waiver or consent, express or
implied, to or of any breach or default by any party in the
performance by that party of its obligations hereunder or with
respect to the Company is not a consent or waiver to or of any
other breach or default in the performance by that party of
the same or any other obligations of that party. Failure on
the part of a party to complain of any act or to declare any
party in default hereunder, irrespective of how long that
failure continues, does not constitute a waiver by that party
of its rights with respect to that default.
j. FURTHER ASSURANCES. Each party hereto shall execute and
deliver any additional documents and instruments and perform
any additional acts that may be necessary or appropriate to
effectuate and perform the provisions of this Agreement and
the transactions contemplated herein.
k. INDEMNIFICATION FOR BREACH. To the fullest extent permitted by
law, each party hereto shall indemnify each other party and
hold all of them harmless from and against all losses, costs,
liabilities, damages and expenses (including, without
limitation, costs of suit and attorneys' fees) they may incur
on account of any material breach by that party of this
Agreement.
SEE ATTACHED PAGES FOR SIGNATURES
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the date first set forth above.
PAYDAY CHECK ADVANCE, INC., an Illinois corporation,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
----------------------------------
Title: President
------------------------------------------
SONOMA HOLDING CORP., an Illinois corporation, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
-----------------------------------------
Title: President
-----------------------------------------
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxx
INVESTMENT INITIAL OPTION
AMOUNT SHARES SHARES INVESTOR*
------ ------ ------ --------
$40,000.00 42,000 35,000(1) -------------------------------------------------------
35,000(2) Name: Xxxxxxxx Xxxxxx
Address: 000 Xxxx Xxxx Xxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
SS#:
---------------------------------
*Note: Each Investor shall sign and deliver a separate signature page of this
document; Payday, Sonoma and Xxxxxx shall sign all of such signature pages.
(1) First option at $.20 per share
(2) Second option at $.25 per share
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the date first set forth above.
PAYDAY CHECK ADVANCE, INC., an Illinois corporation,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
-----------------------------------------
SONOMA HOLDING CORP., an Illinois corporation, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
----------------------------------------
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxx
INVESTMENT INITIAL OPTION
AMOUNT SHARES SHARES INVESTOR*
------ ------ ------ --------
$20,000.00 21,000 17,500(1) ---------------------------------------------------
17,500(2) Name: Xxxx Xxxxxxxxx
Address: 00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
SS#:
--------------------------
*Note: Each Investor shall sign and deliver a separate signature page of this
document; Payday, Sonoma and Xxxxxx shall sign all of such signature pages.
(1) First option at $.20 per share
(2) Second option at $.25 per share
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the date first set forth above.
PAYDAY CHECK ADVANCE, INC., an Illinois corporation,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
-----------------------------------------
SONOMA HOLDING CORP., an Illinois corporation, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
----------------------------------------
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxx
INVESTMENT INITIAL OPTION
AMOUNT SHARES SHARES INVESTOR*
------ ------ ------ --------
$20,000.00 21,000 17,500(1) ------------------------------------------------
17,500(2) Name: Xxxx Xxxxx
Address:
-----------------------------------
-----------------------------------
SS#:
-----------------------
*Note: Each Investor shall sign and deliver a separate signature page of this
document; Payday, Sonoma and Xxxxxx shall sign all of such signature pages.
(1) First option at $.20 per share
(2) Second option at $.25 per share
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the date first set forth above.
PAYDAY CHECK ADVANCE, INC., an Illinois corporation,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
-----------------------------------------
SONOMA HOLDING CORP., an Illinois corporation, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
----------------------------------------
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxx
INVESTMENT INITIAL OPTION
AMOUNT SHARES SHARES INVESTOR*
------ ------ ------ --------
$20,000.00 21,000 17,500(1) ----------------------------------------------------------
17,500(2) Name: Xxxx Xxxxx
Address: 0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
SS#:
--------------------------------
*Note: Each Investor shall sign and deliver a separate signature page of this
document; Payday, Sonoma and Xxxxxx shall sign all of such signature pages.
(1) First option at $.20 per share
(2) Second option at $.25 per share
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the date first set forth above.
PAYDAY CHECK ADVANCE, INC., an Illinois corporation,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
-----------------------------------------
SONOMA HOLDING CORP., an Illinois corporation, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Printed Name: XXXXXXXX X. XXXXXX
---------------------------------
Title: President
----------------------------------------
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxx
INVESTMENT INITIAL OPTION
AMOUNT SHARES SHARES INVESTOR*
------ ------ ------ ---------
$20,000.00 21,000 17,500(1) -----------------------------------------------------------
17,500(2) Name: Xxx Xxxxx
Address: 000 Xxxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
SS#:
---------------------------
*Note: Each Investor shall sign and deliver a separate signature page of this
document; Payday, Sonoma and Xxxxxx shall sign all of such signature pages.
(1) First option at $.20 per share
(2) Second option at $.25 per share
