Exhibit 10.28
================================================================================
--------------------------------------------------------------------------------
ACE CASH EXPRESS, INC.
-------------------
NOTE PURCHASE AGREEMENT
---------------------
Dated as of November 15, 1996
$20,000,000
9.03% Senior Secured Notes due November 15, 2003
THIS AGREEMENT AND THE NOTES ISSUED HEREUNDER MAY BE SUBJECT TO THE TERMS OF A
COLLATERAL TRUST AGREEMENT, DATED AS OF NOVEMBER 15, 1996, AS SUCH COLLATERAL
TRUST AGREEMENT MAY BE AMENDED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO
TIME, AMONG THE COMPANY, AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, AND WILMINGTON TRUST COMPANY. BY
ACCEPTANCE OF A NOTE, THE HOLDER THEREOF MAY BECOME BOUND BY THE PROVISIONS OF
SUCH COLLATERAL TRUST AGREEMENT, WHETHER OR NOT SUCH HOLDER BECOMES A PARTY TO
SUCH COLLATERAL TRUST AGREEMENT.
--------------------------------------------------------------------------------
================================================================================
TABLE OF CONTENTS
(Not a Part of the Agreement)
PAGE
1. SALE AND PURCHASE OF NOTES............................................ 1
1.1 Issuance of Notes............................................... 1
1.2 The Closing..................................................... 1
2. COMPANY WARRANTIES AND REPRESENTATIONS................................ 2
3. CLOSING CONDITIONS.................................................... 2
4. PAYMENTS.............................................................. 2
4.1 Interest........................................................ 2
4.2 Scheduled Principal Payments.................................... 2
4.3 Optional Prepayments............................................ 3
4.4 Offer to Prepay upon Change in Control, etc..................... 4
4.5 Partial Prepayment Pro Rata..................................... 5
4.6 Notation of Notes on Prepayment................................. 6
4.7 No Other Prepayments; Acquisition of Notes...................... 6
4.8 Payments Generally.............................................. 6
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES......................... 7
5.1 Registration of Notes........................................... 7
5.2 Exchange of Notes............................................... 7
5.3 Replacement of Notes............................................ 8
5.4 Issuance Taxes.................................................. 8
6. FINANCIAL AND GENERAL COVENANTS....................................... 8
6.1 Operating Cash Flow............................................. 8
6.2 Cash Coverage Ratio............................................. 9
6.3 Fixed Charges Coverage Ratio.................................... 9
6.4 Consolidated Adjusted Debt...................................... 9
6.5 Coverage of Scheduled Debt Payments............................. 9
6.6 Subsidiary Debt................................................. 10
6.7 Restricted Payments............................................. 10
6.8 Restrictions Affecting Subsidiaries............................. 11
6.9 Asset Dispositions.............................................. 11
6.10 Disposal of Ownership of a Subsidiary........................... 12
6.11 Consolidation or Merger......................................... 12
6.12 Liens........................................................... 13
6.13 Transactions with Affiliates and Franchisees.................... 15
6.14 Payment of Taxes and Claims..................................... 16
6.15 Maintenance of Properties; Corporate Existence; etc............. 16
6.16 Payment of Notes and Maintenance of Office...................... 17
6.17 Plans........................................................... 17
6.18 Lines of Business............................................... 18
6.19 Private Offering................................................ 18
6.20 Limitation on AMEX Term Advances, etc........................... 19
i
6.21 Permitted Subsidiaries.......................................... 19
7. INFORMATION COVENANTS................................................. 19
7.1 Financial and Business Information.............................. 19
7.2 Reports to NAIC................................................. 22
7.3 Officer's Certificates.......................................... 23
7.4 Accountants' Certificates....................................... 23
7.5 Inspection...................................................... 23
8. EVENTS OF DEFAULT..................................................... 24
8.1 Nature of Events................................................ 24
8.2 Default Remedies................................................ 26
8.3 Annulment of Acceleration of Notes.............................. 28
9. INTERPRETATION OF AGREEMENT........................................... 28
9.1 Terms Defined................................................... 28
9.2 Accounting Principles........................................... 45
9.3 Directly or Indirectly.......................................... 45
9.4 Section Headings, Table of Contents and Construction............ 45
9.5 Governing Law................................................... 46
10. PURCHASER REPRESENTATIONS............................................. 46
10.1 Purchase for Investment......................................... 46
10.2 Source of Funds................................................. 46
11. MISCELLANEOUS......................................................... 47
11.1 Communications.................................................. 47
11.2 Reproduction of Documents....................................... 48
11.3 Survival........................................................ 48
11.4 Successors and Assigns.......................................... 48
11.5 Amendment and Waiver............................................ 49
11.6 Expenses........................................................ 50
11.7 Waiver of Jury Trial; Consent to Jurisdiction; Etc.............. 51
11.8 Entire Agreement................................................ 52
11.9 Severability.................................................... 52
11.10 Construction.................................................... 52
11.11 Execution in Counterpart........................................ 52
11.12 General Interest Provisions..................................... 53
Annex 1 -- Information as to Purchaser
Annex 2 -- Payment Instructions at Closing
Annex 3 -- Information as to Company
Attachment A -- Company Warranties and Representations
Attachment B -- Closing Conditions
Exhibit A -- Form of 9.03% Senior Secured Note due November 15, 2003
ii
Exhibit B1 -- Form of Closing Opinion of Special Counsel for the Company
Exhibit B2 -- Form of Closing Opinion of Special Counsel for the Trustee
Exhibit B3 -- Form of Closing Opinion of Special Counsel for the Purchaser
Exhibit C -- Form of Collateral Trust Agreement
Exhibit D -- Form of Security Agreement
iii
ACE CASH EXPRESS, INC.
-----------------------
NOTE PURCHASE AGREEMENT
-----------------------
$20,000,000
9.03% Senior Secured Notes due November 15, 2003
Dated as of November 15, 1996
Principal Mutual Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Ladies and Gentlemen:
ACE CASH EXPRESS, INC., a Texas corporation (together with its successors
and assigns, the "Company"), hereby agrees with you as follows:
1. SALE AND PURCHASE OF NOTES
1.1 Issuance of Notes.
The Company will authorize the issuance of $20,000,000 in aggregate
principal amount of its 9.03% Senior Secured Notes due November 15, 2003 (all
such notes, whether initially issued, or issued in exchange or substitution for,
any such note, in each case in accordance with this Agreement, and as amended,
restated or otherwise modified from time to time, the "Notes"). The Notes shall
be in the form of Exhibit A, and shall have the terms as herein and therein
provided.
1.2 The Closing.
(a) Purchase and Sale of Notes. The Company hereby agrees to sell to
you and you hereby agree to purchase from the Company, in accordance with
the provisions hereof, the aggregate principal amount of Notes set forth
below your name in Annex 1 at 99.367725% of the principal amount thereof.
(b) The Closing. The closing (the "Closing") of the Company's sale of
Notes will be held on December 4, 1996 (the "Closing Date") at 9:00 a.m.,
local time, at the office of Gardere & Xxxxx, L.L.P., 0000 Xxx Xxxxxx,
Xxxxx 0000, Xxxxxx, XX 00000. At the Closing, the Company will deliver to
you one or more Notes (as set forth below your name in Annex 1), in the
denominations indicated in Annex 1, in the aggregate principal amount of
your purchase, dated the Closing Date and payable as indicated in Annex 1,
against payment by federal funds wire transfer in immediately available
funds of the purchase price thereof, as directed by the Company in Annex 2.
1
2. COMPANY WARRANTIES AND REPRESENTATIONS
To induce you to enter into this Agreement and to purchase and pay for the
Notes to be delivered to you at the Closing, the Company makes the warranties
and representations set forth in Attachment A, effective as of the date of the
Company's execution of this Agreement and as of the Closing Date, which are
incorporated herein by reference with the same force and effect as though set
forth herein in full.
3. CLOSING CONDITIONS
Your obligations under this Agreement, including, without limitation, the
obligation to purchase and pay for the Notes to be delivered to you at the
Closing, are subject to the conditions precedent set forth in Attachment B,
which are incorporated herein by reference with the same force and effect as
though set forth herein in full, and the failure by the Company to satisfy all
such conditions shall, at your election, relieve you of all such obligations.
The failure of the Company to satisfy such conditions shall not operate to
relieve the Company of its obligations hereunder or to waive any of your rights
against the Company.
4. PAYMENTS
4.1 Interest.
Interest shall accrue on the unpaid principal balance of the Notes on the
basis of a 360-day year of twelve 30-day months at the rate of 9.03% per annum
and shall be payable, in arrears, semi-annually on May 15 and November 15 in
each year, commencing on May 15, 1997, until the principal amount of the Notes
in respect of which such interest shall have accrued shall become due and
payable, and interest shall accrue on any overdue principal (including any
overdue prepayment of principal) and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) on any overdue installment of interest, at a
rate equal to the lesser of (a) the highest rate allowed by applicable law or
(b) the greater of (i) 11.03% per annum or (ii) 2% over the rate of interest
publicly announced by Citibank, N.A. or its successor in New York City as its
"base" or "prime" rate.
4.2 Scheduled Principal Payments.
The Company shall pay, and there shall become due and payable, $4,000,000
in principal amount of the Notes on November 15 in each year beginning on
November 15, 1999 and ending on November 15, 2003, inclusive (each, a "Scheduled
Principal Payment"). Each Scheduled Principal Payment shall be at 100% of the
principal amount payable, together with interest accrued thereon to the date of
payment. Without limitation of the foregoing, all of the principal of the Notes
remaining outstanding, if any, on the maturity date of the Notes, November 15,
2003, together with interest accrued thereon, shall become due and payable on
such date.
4.3 Optional Prepayments.
(a) Optional Prepayments. The Company may at any time after March 1,
1997 prepay the principal amount of the Notes in part, in a principal
amount of not less than $1,000,000 for any such prepayment, or in whole, in
each case together with:
2
(i) an amount equal to the Make-Whole Amount, if any, as of the
prepayment date in respect of the principal amount of the Notes being so
prepaid; and
(ii) interest on such principal amount then being prepaid accrued to
the prepayment date.
(b) Notice of Optional Prepayment. The Company will give notice of any
optional prepayment of the Notes pursuant to this Section 4.3 to each holder of
Notes not less than 30 days or more than 60 days before the date fixed for
prepayment, specifying:
(i) such date;
(ii) that such payment is to be made under Section 4.3 of this
Agreement;
(iii) the principal amount of each Note to be prepaid on such date;
(iv) the interest to be paid on each such Note, accrued to the date
fixed for prepayment; and
(v) a reasonably detailed calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice were the date of
prepayment), due in connection with such prepayment.
Notice of prepayment having been so given, the aggregate principal amount of the
Notes to be prepaid specified in such notice, together with the Make-Whole
Amount, if any, as of the specified prepayment date with respect thereto and
accrued interest thereon shall become due and payable on the specified
prepayment date. Two Business Days prior to the making of such prepayment, the
Company shall deliver to each holder of Notes by facsimile transmission a
certificate of a Senior Financial Officer of the Company specifying the details
of the calculation of such Make-Whole Amount as of the specified prepayment
date.
(c) Effect of Prepayment. Each prepayment of the Notes pursuant to this
Section 4.3 shall be applied to reduce each of the Scheduled Principal Payments
remaining after the date of such prepayment ratably.
4.4 Offer to Prepay upon Change in Control, etc.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
(ii) the obtaining of knowledge of a Control Notice Event by any
Senior Officer of the Company (including, without limitation, via the
receipt of notice of a Control Notice Event from any holder of Notes),
3
the Company will, within two Business Days of the occurrence of either of such
events (or, in the case of any Change in Control the consummation or
finalization of which would involve any action of the Company, at least 30 days
prior to such Change in Control), give written notice of such Change in Control
or Control Notice Event to each holder of Notes by facsimile transmission and,
simultaneously with the sending of such telecopied notice, send a copy of such
notice to each such holder via an overnight courier of national reputation. In
the event of a Change in Control, such written notice shall contain, and such
written notice shall constitute, an irrevocable offer to prepay all, but not
less than all, the Notes held by such holder on a date specified in such notice
(the "Control Prepayment Date") that is not less than 30 days and not more than
60 days after the date of such notice. If the Control Prepayment Date shall not
be specified in such notice, the Control Prepayment Date shall be the 30th day
after the date of such holder's receipt of such notice. If the Company shall
not have received a written response to such notice from each holder of Notes
within ten days after the delivery of such telecopied notice to such holder of
Notes, then the Company will immediately send a second written notice via an
overnight courier of national reputation to each such holder of Notes who shall
have not previously responded to the Company. If the Company shall not have
received a written response to any such second written notice from a holder of
Notes within 15 days after the delivery of such second written notice to such
holder, such holder shall be deemed to have accepted such offer to prepay the
Notes held by such holder. In no event will the Company take any action to
consummate or finalize a Change in Control unless contemporaneously with such
action the Company prepays all Notes required to be prepaid in accordance with
Section 4.4(b).
(b) Acceptance and Payment. To accept such offered prepayment, a holder of
Notes shall cause a notice of such acceptance to be delivered to the Company not
later than 15 days after the date of receipt by such holder of the latest
written offer of such prepayment (provided that such offer may also be deemed to
be accepted under the circumstances specified in Section 4.4(a)). If so
accepted (or so deemed accepted), such offered prepayment shall be due and
payable on the Control Prepayment Date. Such offered prepayment shall be made at
100% of the principal amount of such Notes, together with:
(i) an amount equal to the Make-Whole Amount, if any, as of the
Control Prepayment Date in respect of the principal amount of the Notes
being so prepaid; and
(ii) interest on such principal amount then being prepaid accrued to
the Control Prepayment Date.
Two Business Days prior to the making of any such prepayment, the Company shall
deliver to each accepting holder (including, without limitation, each deemed
accepting holder) of Notes by facsimile transmission a certificate of a Senior
Financial Officer of the Company specifying the details of the calculation of
such Make-Whole Amount as of the Control Prepayment Date.
4
(c) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 4.4 shall be accompanied by a certificate, executed by a Senior
Officer of the Company and dated the date of such offer, specifying:
(i) the Control Prepayment Date;
(ii) that such offer is being made under Section 4.4 of this
Agreement;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each such Note offered to
be prepaid, accrued to the date fixed for payment;
(v) that the conditions of this Section 4.4 have been fulfilled;
(vi) in reasonable detail, the nature and date or proposed date of
the Change in Control; and
(vii) a reasonably detailed calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice was the date of
prepayment), that would be due in connection with such offered prepayment.
(d) Effect of Prepayment. Each prepayment of the Notes pursuant to this
Section 4.4 shall be applied to reduce each of the Scheduled Principal Payments
remaining after the date of such prepayment ratably.
(e) Notice Concerning Status of Holders of Notes. Promptly after each
Control Prepayment Date and the making of all prepayments contemplated on such
Control Prepayment Date under this Section 4.4 (and, in any event, within ten
days thereafter), the Company shall deliver to each holder of Notes a
certificate signed by a Senior Financial Officer of the Company containing a
list of the then current holders of Notes (together with their addresses) and
setting forth as to each such holder the outstanding principal amount of Notes
held by such holder at such time.
4.5 Partial Prepayment Pro Rata.
If at the time any required prepayment or optional prepayment under Section
4.2 or Section 4.3 is due there is more than one Note outstanding, the aggregate
principal amount of each required or optional partial prepayment of the Notes
shall be allocated among the holders of the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
of the Notes then outstanding, with adjustments, to the extent practicable, to
equalize for any prior prepayments not in such proportion.
4.6 Notation of Notes on Prepayment.
Upon any partial prepayment of a Note, such Note may, at the option of the
holder thereof, be:
5
(a) surrendered to the Company pursuant to Section 5.2 in exchange
for a new Note in a principal amount equal to the principal amount
remaining unpaid on the surrendered Note;
(b) made available to the Company for notation thereon of the
portion of the principal so prepaid; or
(c) marked by such holder with a notation thereon of the portion of
the principal so prepaid.
In case the entire principal amount of any Note is paid, such Note shall, if
requested in writing by the Company following such payment, be surrendered to
the Company for cancellation and shall not be reissued, and no Note shall be
issued in lieu of the paid principal amount of any Note.
4.7 No Other Prepayments; Acquisition of Notes.
Except for prepayments made in accordance with this Section 4, the Company
may not make any prepayment of principal in respect of the Notes. The Company
will not, and will not permit any Subsidiary or any Affiliate to, directly or
indirectly, acquire or make any offer to acquire any Notes. In case the Company
does acquire any Notes, such Notes will simultaneously with such acquisition be
cancelled, no Notes will be issued in substitution therefor and the aggregate
principal amount of the Notes so cancelled will be applied to reduce each of the
Scheduled Principal Payments remaining after the date of such acquisition
ratably.
4.8 Payments Generally.
(a) Manner of Payment. The Company will pay all amounts payable
with respect to each Note (without any presentment of such Note and without
any notation of such payment being made thereon) by crediting, by United
States of America federal funds bank wire transfer, the account of the
holder thereof in any bank in the United States of America as may be
designated in writing by such holder, or in such other manner as may be
reasonably directed or to such other address in the United States of
America as may be reasonably designated in writing by such holder. Annex 1
shall be deemed to constitute notice, direction or designation (as
appropriate) to the Company with respect to such payments. In the absence
of such written direction, all amounts payable with respect to each Note
shall be paid by check mailed and addressed to the registered holder of
such Note at the address shown in the register maintained by the Company
pursuant to Section 5.1.
(b) Payments Due on Non-Business Days. If any payment due on, or
with respect to, any Note shall fall due on a day other than a Business
Day, then such payment shall be made on the first Business Day following
the day on which such payment shall have so fallen due, provided that if
all or any portion of such payment shall consist of a payment of interest,
for purposes of calculating such interest, such payment shall be deemed to
have been originally due on such first following Business Day, such
interest shall accrue and be payable to (but not including) the actual date
of
6
payment, and the amount of the next succeeding interest payment shall be
adjusted accordingly.
(c) Payments, When Received. Any payment to be made to the holders of
Notes hereunder or under the Notes shall be deemed to have been made on the
Business Day such payment actually becomes available to such holder at such
holder's bank prior to 12:00 noon (local time of such bank).
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
5.1 Registration of Notes
The Company will keep at its office, maintained pursuant to Section 6.16, a
register for the registration and transfer of Notes. The name and address of
each holder of one or more Notes, each transfer thereof made in accordance with
Section 5.2 and the name and address of each transferee of one or more Notes
shall be registered in such register. The Person in whose name any Note shall
be registered shall be deemed and treated as the owner and holder thereof for
all purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary, other than in accordance with Section 5.2.
5.2 Exchange of Notes
(a) Exchange of Notes. Upon surrender of any Note at the office of
the Company maintained pursuant to Section 6.16, duly endorsed or
accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or such holder's attorney duly authorized in
writing, the Company will execute and, within five Business Days after such
surrender, deliver, at the Company's expense (except as provided in Section
5.2(b)), a new Note or Notes in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such holder may
request and shall be substantially in the form of Exhibit A. Each such new
Note shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the surrendered
Note if no interest shall have been paid thereon. Each such new Note shall
carry the same rights to unpaid interest and interest to accrue that were
carried by the Note so exchanged or transferred. Notes shall not be
transferred in denominations of less than $500,000, provided that a holder
of Notes may transfer its entire holding of Notes regardless of the
principal amount of such holder's Notes. The Notes have not been registered
under the Securities Act and may be resold or otherwise transferred only if
registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and the
Company is not required to register the Notes.
(b) Costs. The Company will pay the cost of delivering to or from
such holder's home office or custodian bank from or to the Company, insured
to the reasonable satisfaction of such holder, the surrendered Note and any
Note issued in substitution or replacement for the surrendered Note. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes.
7
5.3 Replacement of Notes
Upon receipt by the Company from the registered holder of a Note of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Note (which evidence shall be, in the case of an
Institutional Investor, notice from such Institutional Investor of such loss,
theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company (provided that if the holder of such
Note is an Institutional Investor or a nominee of an Institutional
Investor, such holder's own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense will execute and, within five Business Days after
such surrender, deliver, in lieu thereof, a replacement Note, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.
5.4 Issuance Taxes
The Company will pay all taxes (if any) due in connection with and as the
result of the initial issuance and sale of the Notes and in connection with any
modification, waiver or amendment of this Agreement or the Notes and shall save
each holder of Notes harmless without limitation as to time against any and all
liabilities with respect to all such taxes.
6. FINANCIAL AND GENERAL COVENANTS
The Company covenants and agrees that on and after the Closing Date and
thereafter for so long as any of its obligations under this Agreement and the
Notes shall be outstanding:
6.1 Operating Cash Flow.
The Company will not at any time permit the ratio of
(a) Consolidated Operating Cash Flow for the period of four
consecutive fiscal quarters of the Company most recently ended at such time
to
(b) Consolidated Operating Cash Flow for,
(i) if the period referred to in clause (a) above ended at
the end of a fiscal year of the Company, the fiscal year of the Company
immediately preceding such fiscal year, or
8
(ii) otherwise, the fiscal year of the Company most recently
ended at such time,
to be less than 0.85 to 1.0.
6.2 Cash Coverage Ratio.
The Company will not at any time permit the ratio of
(a) the Liquid Security Amount at such time
to
(b) Aggregate Working Capital Indebtedness at such time,
to be less than 1.0 to 1.0.
6.3 Fixed Charges Coverage Ratio.
The Company will not at any time permit the Fixed Charges Coverage Ratio
for the period of four consecutive fiscal quarters of the Company most recently
ended at such time to be less than 1.25 to 1.0.
6.4 Consolidated Adjusted Debt.
The Company will not at any time permit the ratio of
(a) Consolidated Adjusted Debt at such time
to
(b) Pro Forma Consolidated Operating Cash Flow for the period of
four consecutive fiscal quarters of the Company most recently ended at such
time
to be greater than 3.0 to 1.0, provided that compliance or non-compliance with
this Section 6.4 shall be determined only as of the end of the Company's
business on each day on which the Company conducts business.
6.5 Coverage of Scheduled Debt Payments.
The Company will not at any time permit the sum of
(a) the excess of the Liquid Security Amount over Aggregate Working
Capital Indebtedness at such time, plus
(b) the Aggregate Available Term Advance Amount at such time,
to be less than the aggregate principal amount of Consolidated Adjusted Debt
scheduled to become due during the period of six months immediately next
following such time.
9
6.6 Subsidiary Debt.
The Company will not at any time permit any Subsidiary to, directly or
indirectly, create, incur, assume, guaranty, have outstanding or otherwise be or
become directly or indirectly liable for, any Debt other than:
(a) Debt of a Subsidiary under its Subsidiary Guaranty Agreement;
(b) Debt of a Subsidiary outstanding on the Closing Date that is
described in Part 6.6(a) of Annex 3, provided that such Debt may not be
extended, renewed, refunded or increased in principal amount after the
Closing Date;
(c) Debt of a Subsidiary owed solely to the Company or a Wholly-Owned
Subsidiary; and
(d) Debt of a Subsidiary outstanding at the time such Subsidiary
becomes a Subsidiary, provided that
(i) such Debt shall not have been incurred in contemplation of
such Subsidiary becoming a Subsidiary,
(ii) immediately after such Subsidiary becomes a Subsidiary no
Default or Event of Default shall exist, and
(iii) such Debt may not be extended, renewed, refunded or
increased in principal amount after the time such Subsidiary becomes a
Subsidiary.
6.7 Restricted Payments.
The Company will not, and will not permit any Subsidiary to, at any time
declare or make, or incur any liability to declare or make, any Restricted
Payment unless immediately after giving effect to such action:
(a) the Fixed Charges Coverage Ratio for the most recently ended
period of four consecutive fiscal quarters of the Company is equal to or
greater than 1.75 to 1.0;
(b) the sum of all Restricted Payments declared or made or obligated
to be made during the then-current fiscal quarter of the Company would not
exceed 5% of Consolidated Net Income for the most recently ended period of
four consecutive fiscal quarters of the Company; and
(c) no Default or Event of Default exists or would exist.
6.8 Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any Subsidiary to, enter into any
agreement that would restrict, or create or otherwise cause or permit to exist
or become effective any consensual restriction or encumbrance on, the ability or
right of any Subsidiary to:
10
(a) pay dividends or make any other Distributions on any Subsidiary's
Capital Stock, to the Company or, if such Subsidiary is not directly owned
by the Company, the parent Subsidiary of such Subsidiary;
(b) pay any Debt owed to the Company or any other Subsidiary;
(c) make any loans, advances or capital contributions to the Company
or any other Subsidiary; or
(d) Transfer any of its Property to the Company or any other
Subsidiary;
provided that the restrictions described in Part 6.8 of Annex 3 existing on the
Closing Date may remain in effect after the Closing Date so long as such
restrictions are not amended or otherwise modified in any manner that causes
them to be more restrictive in respect of any of the foregoing matters than as
an effect on the Closing Date.
6.9 Asset Dispositions.
Except as permitted under Section 6.11 the Company will not, and will not
permit any Subsidiary to, make any Asset Disposition unless:
(a) in the good faith opinion of the Company, such Asset Disposition
is in exchange for consideration having a Fair Market Value at least equal
to that of the Property exchanged and is in the best interest of the
Company or such Subsidiary;
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default exists or would exist; and
(c) immediately after giving effect to such Asset Disposition, the
Disposition Value of all Property that was the subject of any Asset
Disposition occurring in the period of four fiscal quarters of the Company
then next ending would not exceed $2,000,000 (provided that, in the case of
an Asset Disposition of all of the Subsidiary Stock issued by, or all or
substantially all of the Property of, Check Express Finance, Inc., a
Florida corporation, the Disposition Value of such Subsidiary Stock or such
Property shall be excluded for purposes of determining compliance with this
clause (c)).
If the Net Proceeds Amount for any Transfer is applied to a Debt Prepayment
Application or a Property Reinvestment Application within 180 days after such
Transfer, then such Transfer, only for the purpose of determining compliance
with clause (c) of this Section 6.9 as of a date on or after the Net Proceeds
Amount is so applied, shall be deemed not to be an Asset Disposition. You agree,
and each other holder of Notes by its acceptance of any Note shall be deemed to
have agreed, that upon demonstration (including, without limitation, by delivery
to each holder of Notes of reasonably detailed calculations) by the Company to
your or such other holder's satisfaction that any Asset Disposition in respect
of specified items or portions of Property constituting Collateral is in
compliance with the requirements of this Section 6.9 (and, if applicable,
Section 6.10) you or such other holder will, if requested by the Company in
writing to do so, promptly instruct the Trustee that you have, or such holder
has, approved
11
the release of the Trustee's security interest in such specified items or
portions of the Collateral, in accordance with Section 7.1(b) of the Collateral
Trust Agreement.
6.10 Disposal of Ownership of a Subsidiary.
The Company will not, and will not permit any Subsidiary to, Transfer any
shares of Subsidiary Stock, nor will the Company permit any Subsidiary to issue,
sell or otherwise dispose of any shares of its own Subsidiary Stock, provided
that the foregoing restrictions do not apply to:
(a) the issuance of directors' qualifying shares by any Subsidiary;
(b) any such Transfer of Subsidiary Stock constituting a Transfer
described in clause (a) of the definition of "Asset Disposition"; and
(c) the Transfer of all of the Subsidiary Stock of a Subsidiary
owned by the Company and the other Subsidiaries if:
(i) such Transfer satisfies the requirements of Section 6.9,
(ii) in connection with such Transfer the entire Investment
(whether represented by stock, Debt, claims or otherwise) of the
Company and the other Subsidiaries in such Subsidiary is sold,
transferred or otherwise disposed of to a Person other than (A) the
Company, (B) another Subsidiary not being simultaneously disposed
of, or (C) an Affiliate, and
(iii) the Subsidiary being disposed of has no continuing
Investment in any other Subsidiary not being simultaneously disposed
of or in the Company.
6.11 Consolidation or Merger.
The Company will not consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of its Property in a single
transaction or series of transactions to any Person, provided that the foregoing
restriction does not apply to the consolidation or merger of the Company with or
into, or the conveyance, transfer or lease of all or substantially all of the
Property of the Company in a single transaction or series of transactions to,
any Person so long as:
(a) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or lease
all or substantially all of the assets of the Company as an entirety, as
the case may be (the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes its
assumption of the due and punctual performance and observance of each
covenant and condition of the Financing
12
Documents, and the Company shall have caused to be delivered to each holder
of Notes an opinion of independent counsel of recognized national standing
or of Gardere & Xxxxx, L.L.P. or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with
their terms and comply with the terms of the Financing Documents and to the
effect that after giving effect to such transaction the Liens of the
Trustee under the Security Documents remain valid, enforceable and
perfected in accordance with the requirements of the Security Documents;
and
(c) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.
No such conveyance, transfer or lease of all or substantially all of the assets
of the Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 6.11 from its liability under the Financing Documents.
6.12 Liens.
(a) Negative Pledge. The Company will not, and will not permit any
of the Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien
on or with respect to any Property of the Company or any such Subsidiary,
whether now owned or held or hereafter acquired, or any income or profits
therefrom, or assign or otherwise convey any right to receive income or
profits, except:
(i) Taxes, etc. -- Liens for property taxes, assessments or
governmental charges or levies or the claims or demands of
materialmen and mechanics made or incurred in the ordinary course of
business of the Company or such Subsidiary, provided that the payment
thereof is not at the time required by Section 6.14;
(ii) Judicial Liens -- any attachment or judgment Lien,
provided that
(A) the execution or other enforcement of such Lien is
effectively stayed, and
(B) the claims secured thereby are being actively and
diligently contested in good faith (within the applicable time
for initial contest, appeal or petition for rehearing) and by
appropriate proceedings and appropriate book reserves shall
have been established and maintained and shall exist with
respect thereto;
(iii) Ordinary Course Business Liens -- Liens incurred or
deposits made incidental to the conduct of business or the ownership
of Property by the Company or such Subsidiary
13
(A) in connection with workers' compensation,
unemployment insurance and other types of social security and
retirement benefits and similar benefits,
(B) to secure claims or demands of warehousemen,
attorneys and landlords, and
(C) to secure the performance of letters of credit,
bids, tenders, sales contracts, leases, statutory obligations,
surety bonds, indemnity bonds and performance bonds (of a type
other than set forth in Section 6.12(a)(ii)) and other similar
obligations not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred
purchase price of Property;
(iv) Certain Encumbrances -- Liens in the nature of
reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other similar title
exceptions or encumbrances affecting real Property, provided that such
exceptions and encumbrances are incidental to the conduct of business or
the ownership of Property by the Company and such Subsidiary and do not
in the aggregate detract from the value of such Properties or interfere
with the use of such Property in the ordinary conduct of the business of
the Company and the Subsidiaries in a manner that has or could reasonably
be expected to have a Material Adverse Effect;
(v) Intragroup Liens -- Liens on Property of a Subsidiary,
provided that such Liens secure only obligations owing to the Company or
to a Wholly-Owned Subsidiary;
(vi) Purchase Money Liens -- Liens on Property of the Company
created to secure all or any part of the purchase price, or to secure
Debt incurred or assumed to pay all or any part of the purchase price, of
Property acquired by the Company after the Closing Date (including Liens
existing on such Property at the time of the Company's acquisition
thereof), provided that
(A) any such Lien shall attach solely to the item or
items of such Property so acquired,
(B) the principal amount of the Debt secured by any such
Lien shall at no time exceed an amount equal to 80% of the
lesser of (1) the cost to the Company of the Property so
acquired and (2) the Fair Market Value (as determined in good
faith by the board of directors of the Company) of such
Property at the time of such acquisition, and
(C) any such Lien shall be created contemporaneously
with, or within 90 days after, the acquisition of such
Property;
(vii) Closing Date Liens -- Liens in existence on the Closing
Date, provided that such Liens are described in Part 6.12(a)(vii) of
Annex 3; and
14
(viii) Other Liens -- Liens of the Trustee under the Security
Documents securing the Notes and the other Secured Debt.
Nothing in this Section 6.12(a) shall be construed to permit the incurrence
or existence of any Debt or any other obligation not otherwise permitted by
this Agreement. Nothing in this Agreement that permits the incurrence or
existence of any Debt or other obligation shall be construed to permit the
incurrence or existence of a Lien securing such Debt unless such Lien is
permitted by this Section 6.12(a).
(b) Equal and Ratable Lien; Equitable Lien. In case any Property
shall be subjected to a Lien in violation of this Section 6.12, the Company
will immediately make or cause to be made, to the fullest extent permitted
by applicable law, provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby pursuant to such
agreements and instruments as shall be approved by the Required Holders,
and the Company will cause to be delivered to each holder of a Note an
opinion, satisfactory in form and substance to the Required Holders, of
independent counsel to the effect that such agreements and instruments are
enforceable in accordance with their terms, and in any such case the Notes
shall have the benefit, to the fullest extent that, and with such priority
as, the holders of Notes may be entitled thereto under applicable law, of
an equitable Lien on such Property securing the Notes. A violation of this
Section 6.12 will constitute an Event of Default, whether or not any such
provision is made pursuant to this Section 6.12(b).
6.13 Transactions with Affiliates and Franchisees.
(a) Affiliates. The Company will not, and will not permit any of the
Subsidiaries to, directly or indirectly, enter into or be a party to any
Material transaction or arrangement or Material group of related
transactions or arrangements (including, without limitation, the purchase
from, sale to or exchange of Property with or the rendering of any service
by or for) with any Affiliate, except:
(i) in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Subsidiary's existing or
proposed business and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate;
and
(ii) employment agreements entered into and obligations incurred
in connection with such employment agreements, in each case, in the
ordinary course of business of the Company or such Subsidiary.
For purposes of this Section 6.13(a), any transaction or arrangement or
group of related transactions or arrangements shall be deemed to be
"Material" if the aggregate of the Affiliate Transaction Amounts in respect
of all such transactions and arrangements collectively during the period
commencing with the Closing Date and ending with the most recent such
transaction or arrangement exceeds $1,000,000.
(b) Franchisees. Without limitation of Section 6.13(a), the Company
will not, and will not permit any of the Subsidiaries to, directly or
indirectly, enter into or be a
15
party to any transaction or arrangement or group of related transactions or
arrangements (including, without limitation, the purchase from, sale to or
exchange of Property with or the rendering of any service by or for) with
any Franchisee, except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's existing or
proposed business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not a Franchisee, provided that the
Company and the Subsidiaries need not make any profit on any such
transaction or arrangement with any Franchisee so long as the consideration
received by the Company and the Subsidiaries in any such transaction or
arrangement is at least sufficient to cover the expenses and costs incurred
by the Company and the Subsidiaries in connection with such transaction or
arrangement.
6.14 Payment of Taxes and Claims.
The Company will, and will cause each of the Subsidiaries to, pay before
they become delinquent,
(a) all taxes, assessments and governmental charges or levies imposed
upon it or its Property, and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, attorneys, landlords and other like Persons that, if
unpaid, might result in the creation of a statutory, regulatory or common
law Lien upon its Property,
provided, that items of the foregoing description need not be paid so long as
such items are being actively contested in good faith and by appropriate
proceedings, appropriate book reserves have been established and maintained with
respect thereto, and such items, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
6.15 Maintenance of Properties; Corporate Existence; etc.
The Company will, and will cause each of the Subsidiaries to:
(a) Property -- maintain its Property in good condition, ordinary
wear and tear and obsolescence excepted, and make all necessary renewals,
replacements, additions, betterments and improvements thereto, provided
that this Section 6.15 shall not prevent the Company or any such Subsidiary
from discontinuing the operation and the maintenance of any of its
Properties if such discontinuance is desirable in the conduct of its
business and such discontinuance could not reasonably be expected to have a
Material Adverse Effect;
(b) Insurance -- maintain, with financially sound and reputable
insurers, insurance with respect to its Property and business against such
casualties and contingencies, of such types and in such amounts as is
customary in the case of corporations of established reputations engaged in
the same or a similar business and similarly situated;
16
(c) Financial Records -- keep proper books of record and account, in
which full and correct entries shall be made of all dealings and
transactions of or in relation to the Properties and business thereof, and
which will permit the production of financial statements in accordance with
GAAP;
(d) Corporate Existence and Rights -- do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate existence, corporate rights (charter and statutory) and corporate
franchises except as permitted by Section 6.11; and
(e) Compliance with Law -- comply with all laws, ordinances and
governmental rules and regulations to which it is subject (including,
without limitation, Environmental Laws, the Occupational Safety and Health
Act of 1970, as amended, and all related rules and regulations) and obtain
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its Properties and the conduct
of its business except for such violations and failures to obtain that, in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
6.16 Payment of Notes and Maintenance of Office.
The Company will punctually pay, or cause to be paid, the principal of and
interest (and Make-Whole Amount, if any) on, the Notes, as and when the same
shall become due according to the terms hereof and of the Notes, and will
maintain an office at the address of the Company as provided in Section 11.1
where notices, presentations and demands in respect of the Financing Documents
may be made upon it. Such office will be maintained at such address until such
time as the Company notifies the holders of the Notes of any change of location
of such office, which will in any event be located within the United States of
America.
6.17 Plans.
(a) Compliance. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to each Plan, comply with all
applicable provisions of ERISA and the IRC, except for such failures to
comply that, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Prohibited Actions. The Company will not, and will not permit
any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such term is
defined in section 406 of ERISA or section 4975 of the IRC) or
"reportable event" (as such term is defined in section 4043 of ERISA)
that could result in the imposition of a tax or penalty;
(ii) incur with respect to any Plan any "accumulated funding
deficiency" (as such term is defined in section 302 of ERISA), whether
or not waived;
17
(iii) terminate any Plan in a manner that could result in the
imposition of a Lien on the Property of the Company or any of the
Subsidiaries pursuant to section 4068 of ERISA or the creation of any
liability under section 4062 of ERISA;
(iv) fail to make any payment required by section 515 of ERISA;
(v) incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan or any liability as a result of the
termination of any Multiemployer Plan; or
(vi) incur any liability or suffer the existence of any Lien on
the Property of the Company or any ERISA Affiliate, in either case
pursuant to Title I or Title IV of ERISA or pursuant to the penalty or
excise tax or security provisions of the IRC,
if the aggregate amount of the taxes, penalties, funding deficiencies,
interest, amounts secured by Liens, and other liabilities in respect of any
of the foregoing at any time could reasonably be expected to have a
Material Adverse Effect.
6.18 Lines of Business.
The Company will not, and will not permit any Subsidiary to, engage to any
substantial extent in any business other than the businesses in which the
Company and the Subsidiaries are engaged on the Closing Date as described in the
Placement Memorandum and businesses reasonably related thereto or in furtherance
thereof (including, without limitation, the business of issuing money orders).
All or substantially all of the business of the Company and the Subsidiaries
will at all times be conducted in, and all or substantially all of the
Properties of the Company and the Subsidiaries will at all times be located in,
the United States of America and Canada.
6.19 Private Offering.
The Company will not, and will not permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar securities for issuance
or sale to, or solicit any offer to acquire any of the same from, any Person so
as to bring the issuance and sale of the Notes within the provisions of section
5 of the Securities Act.
6.20 Limitation on AMEX Term Advances, etc.
The Company will not at any time permit
(a) the aggregate principal amount of the Revolving Commitment
Advances (as such term is defined in the Collateral Trust Agreement) to
exceed $18,500,000, or
(b) the aggregate principal amount of advances or loans by any
Beneficiary (as such term is defined in the Collateral Trust Agreement) to
the Company to exceed the limitation agreed to by such Beneficiary pursuant
to Section 8.9(c)(Z) of the Collateral Trust Agreement.
18
6.21 Permitted Subsidiaries.
Notwithstanding anything else in this Agreement to the contrary, the
Company will not at any time have any Subsidiary that is not a Permitted
Subsidiary.
7. INFORMATION COVENANTS
7.1 Financial and Business Information.
The Company will deliver to each holder of Notes:
(a) Quarterly Financial Statements -- as soon as practicable after
the end of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year), and
in any event within 45 days thereafter,
(i) a consolidated balance sheet as at the end of such quarter,
and
(ii) consolidated statements of earnings, shareholders' equity
and cash flows for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter,
for the Company and the Subsidiaries, setting forth in each case, in
comparative form, the financial statements for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP applicable to quarterly financial statements generally, and
certified as complete and correct by a Senior Financial Officer, and
accompanied by the certificate required by Section 7.3, provided, that
delivery of copies of the Company's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission within the time period
specified above shall be deemed to satisfy the requirements of this Section
7.1(a) so long as such Quarterly Report contains or is accompanied by the
information specified in this Section 7.1(a);
(b) Annual Financial Statements -- as soon as practicable after the
end of each fiscal year of the Company, and in any event within 90 days
thereafter,
(i) a consolidated balance sheet as at the end of such year,
and
(ii) consolidated statements of earnings, shareholders' equity
and cash flows for such year,
for the Company and the Subsidiaries, setting forth, in comparative form,
the financial statement for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied by
(A) an audit report thereon of independent certified public
accountants of recognized national standing, which report shall state
without qualification, that such financial statements have been
prepared and are in conformity with GAAP,
19
(B) a certification by a Senior Financial Officer that such
consolidated statements are complete and correct, and
(C) the certificates required by Section 7.3 and Section 7.4,
provided that the delivery of the Company's Annual Report on Form 10-K for
such fiscal year filed with the Securities and Exchange Commission within
the time period specified above shall be deemed to satisfy the requirements
of this Section 7.1(b) so long as such Annual Report contains or is
accompanied by the reports and other information otherwise specified in
this Section 7.1(b);
(c) SEC and Other Reports promptly upon their becoming available,
(i) each financial statement, report, notice or proxy statement
sent by the Company or any of the Subsidiaries to stockholders
generally,
(ii) each regular or periodic report (including, without
limitation, each Form 10-K, Form 10-Q and Form 8-K), any registration
statement which shall have become effective, and each final prospectus
and all amendments thereto filed by the Company or any of the
Subsidiaries with the Securities and Exchange Commission (and any
successor agency), and
(iii) all press releases and other statements made available by
the Company or any Subsidiary to the public concerning material
developments in the business of the Company or the Subsidiaries;
(d) Notice of Default or Event of Default within five Business Days
of becoming aware
(i) of the existence of any condition or event that constitutes
a Default or an Event of Default, or
(ii) that the holder of any Note, or of any Debt of the Company
or any of the Subsidiaries, shall have given notice or taken any other
action with respect to a claimed Default, Event of Default or default
or event of default,
a notice specifying the nature of the claimed Default, Event of Default or
default or event of default and the notice given or action taken (if any)
by such holder and what action the Company is taking or proposes to take
with respect thereto;
(e) Term Advances within five Business Days of the Company becoming
liable with respect to any Revolving Commitment Advance (as such term is
defined in the Collateral Trust Agreement) under the AMEX Documents, or
with respect to any other Term Advance, a certificate of a Senior Financial
Officer, setting forth the financial information (including reasonably
detailed calculations) required in order to establish whether the Company
was in compliance with the requirements of Sections 6.4, 6.5 and 6.20 (in
each case where such Section imposes numerical financial requirements)
immediately after giving effect to such Revolving Commitment Advance or
other Term Advance;
20
(f) ERISA
(i) within five Business Days of becoming aware of the
occurrence of any "reportable event" (as such term is defined in
section 4043 of ERISA) for which notice thereof has not been waived
pursuant to regulations of the Department of Labor, or "prohibited
transaction" (as such term is defined in section 406 of ERISA or
section 4975 of the IRC) in connection with any Plan or any trust
created thereunder, a notice specifying the nature thereof, what
action the Company is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and
(ii) prompt notice of and, where applicable, a description of
(A) any notice from the PBGC in respect of the commencement
of any proceedings pursuant to section 4042 of ERISA to terminate
any Plan or for the appointment of a trustee to administer any
Plan, and any distress termination notice delivered to the PBGC
under section 4041 of ERISA in respect of any Plan, and any
determination of the PBGC in respect thereof,
(B) the placement of any Multiemployer Plan in
reorganization status under Title IV of ERISA, any Multiemployer
Plan becoming "insolvent" (as such term is defined in section
4245 of ERISA) under Title IV of ERISA, or the whole or partial
withdrawal of the Company or any ERISA Affiliate from any
Multiemployer Plan and the withdrawal liability incurred in
connection therewith, or
(C) the occurrence of any event, transaction or condition
that could result in the incurrence of any liability of the
Company or any ERISA Affiliate or the imposition of a Lien on the
Property of the Company or any ERISA Affiliate, in either case
pursuant to Title I or Title IV of ERISA or pursuant to the
penalty or excise tax or security provisions of the IRC,
provided that the Company shall not be required to deliver any such notice
at any time when the aggregate amount of the actual or potential liability
of the Company and the Subsidiaries in respect of all such events at such
time could not reasonably be expected to have a Material Adverse Effect;
(g) Auditor's Reports each report submitted to the Company or any of
the Subsidiaries by independent accountants (including, without limitation,
each management letter) in connection with any annual, interim or special
audit made of the books of the Company or any of the Subsidiaries;
(h) Actions, Proceedings promptly after the commencement of any
action or proceeding relating to the Company or any of the Subsidiaries in
any court or before any Governmental Authority or arbitration board or
tribunal as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined,
21
could reasonably be expected to have a Material Adverse Effect, a notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;
(i) Notices from Governmental Authority promptly, and in any event
within five Business Days of receipt thereof, copies of any notice to the
Company or any of the Subsidiaries from any federal or state Governmental
Authority relating to any order, ruling, statute or other law or regulation
that could reasonably be expected to have a Material Adverse Effect;
(j) Other Creditors promptly upon the request of any holder of Notes,
copies of any statement, report, certificate, notice or other item
furnished to any holder of Debt of the Company or any of the Subsidiaries
(including, without limitation, monthly financial statements and any other
items furnished to AMEX pursuant to the AMEX Documents) to the extent that
the information contained in such statement, report, certificate, notice or
other item has not already been delivered to each holder of Notes;
(k) Rule 144A promptly upon the request of any holder of Notes,
information required to comply with 17 CFR (S)230.144A, as amended from
time to time; and
(l) Requested Information with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, Properties or prospects of the Company or any of the
Subsidiaries or relating to the ability of the Company to perform its
obligations under the Financing Documents as from time to time may be
reasonably requested by any such holder of Notes.
7.2 Reports to NAIC
Concurrently with the delivery to each holder of Notes of each of the
Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q
pursuant to Section 7.1(c), the Company will deliver (or, in consultation with
the holder of Notes holding the greatest aggregate principal amount of Notes,
cause to be delivered) a copy thereof to: Securities Valuation Office, National
Association of Insurance Commissioners, 0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
7.3 Officer's Certificates
Each set of financial statements delivered to each holder of Notes pursuant
to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a
Senior Financial Officer, setting forth:
(a) Covenant Compliance the financial information (including
reasonably detailed calculations) required in order to establish whether
the Company was in compliance with the requirements of Section 6 (in each
case where such Section imposes numerical financial requirements) as of the
end of the period covered by the financial statements then being furnished
(including with respect to such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Section, and the calculation of the
amount, ratio or percentage then in existence); and
22
(b) Event of Default a statement that the signer has reviewed the
relevant terms of the Financing Documents and has made, or caused to be
made, under his or her supervision or authority, a review of the
transactions and conditions of the Company and the Subsidiaries from the
beginning of the accounting period covered by the income statements being
delivered therewith to the date of the certificate and that such review
shall not have disclosed the existence during such period of any condition
or event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action the Company shall have taken or proposes
to take with respect thereto.
7.4 Accountants' Certificates
Each set of annual financial statements delivered pursuant to Section
7.1(b) shall be accompanied by a certificate of the accountants who were engaged
to audit such financial statements, stating that they have reviewed this
Agreement and stating further, whether, in making their audit, such accountants
have become aware of any condition or event that then constitutes a Default or
an Event of Default, and, if such accountants are aware that any such condition
or event then exists, specifying the nature and period of existence thereof.
7.5 Inspection
The Company will permit the representatives of each holder of Notes to
visit and inspect any of the Properties of the Company or any of the
Subsidiaries, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Company
authorizes such accountants to discuss the finances and affairs of the Company
and the Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. Expenses incurred by the holders of the Notes in
connection with this Section 7.5 shall be paid in accordance with Section 11.6.
8. EVENTS OF DEFAULT
8.1 Nature of Events.
An "Event of Default" shall exist if any one or more of the following
occurs and is continuing at any time:
(a) Principal or Make-Whole Amount Payments -- the Company shall fail
to make any payment of principal or Make-Whole Amount on any Note on or
before the date such payment is due;
(b) Interest Payments -- the Company shall fail to make any payment
of interest on any Note on or before five days after the date such payment
is due;
(c) Particular Covenant Defaults -- the Company shall fail to comply
with any covenant contained in Section 6.1 through Section 6.7, inclusive,
Section 6.9 through Section 6.12, inclusive, Section 6.20, or Section
7.1(d);
23
(d) Other Defaults -- the Company or any Subsidiary shall fail to
comply with any other provision of any Financing Document, and such failure
shall continue for more than 30 days after the earlier of (i) the date on
which such failure shall first become known to any officer of the Company
and (ii) the date on which the Company shall have received written notice
of such failure from any holder of Notes or any representative thereof;
(e) Warranties or Representations -- any warranty, representation or
other statement by or on behalf of the Company or any Subsidiary contained
in any Financing Document, or in any certificate, instrument or written
statement furnished in compliance with or in reference to any Financing
Document, shall have been false or misleading in any material respect when
made or deemed made;
(f) Security Document Defaults -- an "Event of Default" as such term
is defined under any Security Document shall have occurred and be
continuing;
(g) Default on Debt --
(i) the Company or any Subsidiary shall fail to make any
payment on any Debt (including, without limitation, any Working
Capital Indebtedness) when due, whether such Debt is due by its
scheduled terms, by demand, by acceleration, as a result of a
termination or otherwise; or
(ii) any event shall occur or any condition shall exist in
respect of any Working Capital Indebtedness of the Company or any
Subsidiary, or under any agreement securing or relating to any such
Working Capital Indebtedness, that immediately or with any one or more
of the passage of time, the giving of notice or the expiration of
waivers or modifications granted in respect of such event or
condition:
(A) causes such Working Capital Indebtedness, or a portion
thereof, to become due before its stated maturity or before its
regularly scheduled date or dates of payment; or
(B) permits any one or more of the holders thereof or a
trustee therefor to require the Company or any Subsidiary to
repurchase such Debt from such holder and such one or more holder
or trustee makes a demand to, or otherwise requires, the Company
or any Subsidiary to so repurchase such Working Capital
Indebtedness; or
(iii) any event shall occur or any condition shall exist in
respect of any Debt (other than Working Capital Indebtedness) of the
Company or any Subsidiary, or under any agreement securing or relating
to any such Debt, that immediately or with any one or more of the
passage of time, the giving of notice or the expiration of waivers or
modifications granted in respect of such event or condition:
(A) causes (or permits any one or more of the holders
thereof or a trustee therefor to cause) such Debt, or a portion
thereof, to become
24
due before its stated maturity or before its regularly scheduled
date or dates of payment; or
(B) permits any one or more of the holders thereof or a
trustee therefor to require the Company or any Subsidiary to
repurchase such Debt from such holder;
provided that the aggregate amount of all obligations in respect of all
such Debt referred to in this clause (g) exceeds at such time $1,000,000;
(h) Involuntary Bankruptcy Proceedings --
(i) a receiver, administrator, examiner, liquidator, custodian,
trustee or similar official in respect of the Company or any
Subsidiary or in respect of all or any part of the Property of the
Company or any Subsidiary shall be appointed by order of a court or
other Governmental Authority and such order shall remain in effect for
more than 60 days, or an order for relief shall be entered with
respect to the Company or any Subsidiary, or the Company or any
Subsidiary shall be adjudicated a bankrupt or insolvent;
(ii) any of the Property of the Company or any Subsidiary shall
be attached or sequestered by court order and such order shall remain
in effect for more than 60 days from the date of its entry and shall
not have been discharged in full or stayed; or
(iii) a petition shall be filed against the Company or any
Subsidiary under any bankruptcy, administration, examinership,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or similar law of any jurisdiction, whether
now or hereafter in effect, and shall not be dismissed within 60 days
after such filing;
(i) Voluntary Petitions -- the Company or any Subsidiary shall file a
petition in voluntary bankruptcy or seeking relief under any provision of
any bankruptcy, administration, examinership, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or similar law
of any jurisdiction, whether now or hereafter in effect, or shall consent
to the filing of any petition against it under any such law;
(j) Assignments for Benefit of Creditors, etc. -- the Company or any
Subsidiary shall make an assignment for the benefit of its creditors, or
shall admit in writing its inability, or shall fail, to pay its debts
generally as they become due, or shall consent to the appointment of a
receiver, administrator, examiner, liquidator, custodian, trustee or
similar official in respect of the Company or any Subsidiary or in respect
of all or any part of the Property of the Company or any Subsidiary; or
(k) Undischarged Final Judgments -- a final judgment, decree or other
order or final judgments, decrees or other orders for the payment of money
aggregating in excess of $1,000,000 shall be outstanding against any one or
more of the Company or the Subsidiaries and any one of such judgments shall
have been outstanding for more
25
than 30 days from the date of its entry and shall not have been discharged
or vacated in full or stayed.
8.2 Default Remedies.
(a) Acceleration on Event of Default.
(i) If an Event of Default specified in clause (h), clause (i)
or clause (j) of Section 8.1 shall exist, all of the Notes at the time
outstanding shall automatically become immediately due and payable,
together with interest accrued thereon and the Make-Whole Amount (as
of the date such Notes first become due and payable), if any, with
respect to such principal amount of such Notes, and all other amounts
owing by the Company under the Notes and this Agreement, in each case
without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived.
(ii) If an Event of Default other than those specified in clause
(h), clause (i) and clause (j) of Section 8.1 shall exist, the holders
of at least 25% in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by any one or more of the
Company, any Subsidiary or any Affiliate) may exercise any right,
power or remedy permitted to such holder or holders by law and shall
have, in particular, without limiting the generality of the foregoing,
the right to declare the entire principal of, and all interest accrued
on, all the Notes then outstanding to be, and such Notes shall
thereupon become, immediately due and payable, without any
presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, and the Company shall immediately pay to
the holder or holders of all the Notes then outstanding the entire
principal of, and interest accrued on, the Notes and, to the extent
permitted by applicable law, the Make-Whole Amount on the date of such
declaration with respect to such principal amount of such Notes, and
all other amounts owing by the Company under the Notes and this
Agreement.
(b) Acceleration on Payment Default. During the existence of an Event
of Default described in Section 8.1(a) or Section 8.1(b), and irrespective
of whether the Notes then outstanding shall have been declared to be due
and payable pursuant to Section 8.2(a)(ii), any holder of Notes that shall
have not consented to any waiver with respect to such Event of Default may,
at such holder's option, by notice in writing to the Company, declare the
Notes then held by such holder to be, and such Notes shall thereupon
become, immediately due and payable together with all interest accrued
thereon, without any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, and the Company shall
immediately pay to such holder the entire principal of and interest accrued
on such Notes and, to the extent permitted by applicable law, the Make-
Whole Amount (as of the date of such declaration), if any, with respect to
such principal amount of such Notes, and all other amounts owing by the
Company under the Notes and this Agreement.
(c) Valuable Rights. The Company acknowledges, and the parties
hereto agree, that the right of each holder to maintain its investment in
the Notes free from repayment (except as herein specifically provided for)
is a valuable right and that the
26
provision for payment of a Make-Whole Amount, if any, by the Company in the
event that the Notes are prepaid or are accelerated as a result of an Event
of Default, is intended to provide compensation for the deprivation of such
right under such circumstances.
(d) Other Remedies. During the existence of an Event of Default and
irrespective of whether the Notes then outstanding shall have been declared
to be due and payable pursuant to Section 8.2(a)(ii) and irrespective of
whether any holder of Notes then outstanding shall otherwise have pursued
or be pursuing any other rights or remedies, any holder of Notes may
proceed to protect and enforce its rights under the Financing Documents by
exercising such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at law, or
both, whether for specific performance of any agreement contained herein or
in aid of the exercise of any power granted under any Financing Document,
provided that the maturity of such holder's Notes may be accelerated only
in accordance with Section 8.2(a) and Section 8.2(b).
(e) Security Documents. The holders of Notes shall be entitled to
all of the rights, benefits and remedies provided in the Security
Documents.
(f) Nonwaiver; Cumulative Rights, etc. No course of dealing on the
part of any holder of Notes or the Trustee nor any delay or failure on the
part of any holder of Notes or the Trustee to exercise any right shall
operate as a waiver of such right or otherwise prejudice such holder's
rights, powers and remedies. All rights and remedies of each holder of
Notes and the Trustee under the Financing Documents and under applicable
law are cumulative to, and not exclusive of, any other rights or remedies
any such holder of Notes or the Trustee would otherwise have.
8.3 Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 8.2(a)(ii), then and in every
such case, the holders of at least 76% in principal amount of the Notes at the
time outstanding (exclusive of Notes then owned by any one or more of the
Company, any Subsidiary or any Affiliate) may, by written instrument filed with
the Company, rescind and annul such declaration and the consequences thereof,
provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant hereto or to the Notes;
(b) all arrears of interest upon all the Notes and all other sums
payable hereunder and under the Notes (except any principal of, or interest
or Make-Whole Amount on, the Notes that shall have become due and payable
by reason of such declaration under Section 8.2(a)(ii)) shall have been
duly paid; and
(c) each and every other Default and Event of Default shall have been
waived pursuant to Section 11.5 or otherwise made good or cured;
and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
27
9. INTERPRETATION OF AGREEMENT
9.1 Terms Defined.
As used herein, the following terms have the respective meanings set forth
below or as otherwise specified below:
Affiliate -- means a Person (other than a Wholly-Owned Subsidiary)
(a) that directly or indirectly Controls, or is Controlled by, or
is under common Control with, the Company,
(b) that beneficially owns 10% or more of the Voting Stock of the
Company, or
(c) 10% or more of the Voting Stock (or in the case of a Person
that is not a corporate entity, 10% or more of the equity interest) of
which is owned by one or more of the Company and the Subsidiaries.
As used in this definition,
Control -- means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Affiliate Transaction Amount -- means, for any period, with respect to
any transaction or arrangement by the Company or any Subsidiary with any
Affiliate, an amount equal to the greater of
(a) $0, and
(b) the remainder of
(i) the aggregate value that would have been obtained by
the Company or such Subsidiary during such period in such
transaction or arrangement assuming such transaction or
arrangement had been entered into upon fair and reasonable terms
with a Person other than an Affiliate, minus
(ii) the aggregate actual value obtained by the Company or
such Subsidiary in connection with such transaction or
arrangement during such period,
all as determined in accordance with sound financial practices.
Aggregate Available Term Advance Amount -- means, at any time, and
with respect to any period of six months immediately next following such
time, the aggregate principal amount (without duplication) of unused credit
available to be
28
drawn upon by the Company at such time under one or more agreements
providing for Term Advances to the Company, each satisfying the following
conditions:
(a) such Term Advances are to be made by AMEX or any bank, trust
company, savings and loan association or other financial institution,
any pension plan, any investment company, any venture capital company,
any insurance company or any other similar financial institution or
entity, regardless of legal form, but in each case other than any
Subsidiary or Affiliate of the Company;
(b) the maturity date or dates of each required principal payment
of the Debt in respect of the portion of each such Term Advance that
shall constitute a portion of the Aggregate Available Term Advance
Amount shall be after the end of such period of six months;
(c) the agreement or agreements providing for such Term Advances
do not contain any provision or provisions permitting the provider or
providers of such Term Advances to refuse to make such Term Advances
solely at the discretion of such provider or providers or upon the
occurrence or existence of one or more adverse or materially adverse
events or circumstances with respect to the Company or its
Subsidiaries; and
(d) at such time no default or event of default or similar
condition exists under the terms of the agreement or agreements
providing for such Term Advances and the terms of such agreement or
agreements at such time permit the Company to draw upon such Term
Advances.
Aggregate Working Capital Indebtedness -- means, at any time, the sum
(without duplication) of all Working Capital Indebtedness of the Company
and the Subsidiaries outstanding at such time.
Agreement, this -- means this agreement, as it may be amended,
restated or otherwise modified from time to time.
AMEX -- means, collectively, American Express Travel Related Services
Company, Inc. and First Data Corporation and their respective successors
and assigns.
AMEX Documents -- means, collectively, the Master Agreement (as such
term is defined in the first recital paragraph of the Security Agreement),
the AMEX Security Agreement (as such term is defined in the third recital
paragraph of the Security Agreement) and any other agreements or
instruments executed by the Company or by AMEX in connection therewith, in
each case as may be amended, restated or otherwise modified from time to
time.
Asset Disposition -- means any Transfer except:
(a) any
29
(i) Transfer from a Subsidiary to the Company or a Wholly-Owned
Subsidiary (including, without limitation, any dissolution of a
Subsidiary, Transfer of Subsidiary Stock issued by a Subsidiary or
other transaction in which the Property of a Subsidiary or the
Subsidiary Stock issued by a Subsidiary is Transferred to the Company
or a Wholly-Owned Subsidiary); and
(ii) Transfer from the Company to a Wholly-Owned Subsidiary;
so long as immediately before and immediately after the consummation of any
such Transfer and after giving effect thereto, no Default or Event of
Default exists; and
(b) any Transfer made in the ordinary course of business and involving
only Property that is either (i) inventory held for sale or (ii) equipment,
fixtures, supplies or materials no longer required in the operation of the
business of the Company or any of the Subsidiaries or that is obsolete.
Business Day -- means any day other than a Saturday, a Sunday or a day on
which commercial banks in Des Moines, Iowa or New York, New York are required or
authorized to be closed.
Capital Lease -- means a lease with respect to which the lessee is required
to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
Capital Stock -- means any class of capital stock, share capital or similar
equity interest of a Person.
Change in Control -- means, at any time, the acquisition by any Person or
group of Persons, directly or indirectly, of
(a) the beneficial ownership of more than 50% of the total voting
power of the then outstanding Voting Stock of the Company (as adjusted by
stock splits, stock dividends or similar events), or
(b) all or substantially all of the Properties and assets of the
Company,
in each case through merger, consolidation, Transfer of Property or otherwise.
For purposes of this definition, "group of Persons" shall mean two or more
Persons that are acting together or in concert as a partnership, limited
partnership, syndicate or other group for the common purpose of directly or
indirectly acquiring, holding or disposing of Securities of an issuer or
Property of any Person.
Closing -- is defined in Section 1.2(b).
Closing Date -- is defined in Section 1.2(b).
30
Collateral -- is defined in Section 1.5 of the Security Agreement.
Collateral Trust Agreement -- means the Collateral Trust Agreement, dated
as of November 15, 1996, among the Company, AMEX, you and the Trustee, as such
agreement may be amended, restated or otherwise modified from time to time.
Company -- is defined in the introductory paragraph.
Consolidated Adjusted Debt -- means, at any time, the total of all Debt of
the Company and the Subsidiaries outstanding at such time (excluding, however,
Aggregate Working Capital Indebtedness), after eliminating all offsetting debits
and credits between the Company and the Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and the Subsidiaries in accordance with
GAAP.
Consolidated Earnings Available for Fixed Charges -- means, for any period,
the sum of
(a) Consolidated Net Income for such period, plus
(b) the amount of all Consolidated Interest Charges, income taxes,
depreciation, amortization and Consolidated Lease Rentals, but only to the
extent deducted in the determination of Consolidated Net Income for such
period.
Consolidated Fixed Charges -- means, for any period, the sum of
(a) Consolidated Interest Charges for such period, plus
(b) Consolidated Lease Rentals for such period.
Consolidated Interest Charges -- means, for any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Company and the Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and the Subsidiaries in accordance with
GAAP):
(a) all interest in respect of Debt of the Company and the
Subsidiaries (including, without limitation, Aggregate Working Capital
Indebtedness and imputed interest on Capital Leases) deducted in
determining Consolidated Net Income for such period, together with all
interest capitalized or deferred during such period and not deducted in
determining Consolidated Net Income for such period, but excluding any
dividends in respect of Mandatorily Redeemable Preferred Stock, plus
(b) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such period.
31
Consolidated Lease Rentals -- means, for any period, the sum of the rental
and other obligations required to be paid during such period by the Company or
any Subsidiary as lessee under all leases of real or personal Property (other
than Capital Leases), excluding any amount required to be paid by the lessee
(whether or not therein designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges, provided that if, at the date of determination, any such rental or
other obligations are contingent or not otherwise definitely determinable by the
terms of the related lease, the amount of such obligations (a) shall be assumed
to be equal to the amount of such obligations for the period of 12 consecutive
calendar months immediately preceding the date of determination or (b) if the
related lease was not in effect during such preceding 12-month period, shall be
the amount estimated by a Senior Financial Officer on a reasonable basis and in
good faith.
Consolidated Net Income -- means, for any period, the net income (or net
loss) (before extraordinary gains but after extraordinary losses) of the Company
and the Subsidiaries for such period after deducting, without duplication, all
operating expenses, provisions for all taxes and reserves (including reserves
for deferred income taxes), and all other proper deductions, all in accordance
with GAAP on a consolidated basis, provided that there shall be excluded:
(a) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary or is consolidated or merged with or into the Company
or a Subsidiary, and the income (or loss) of any Person, all or
substantially all of the assets of which have been acquired in any manner,
realized by such other Person prior to the date of acquisition; and
(b) any net income or gain (but not any net loss) during such period
from (i) any change in accounting principles in accordance with GAAP, (ii)
any prior period adjustments resulting from any change in accounting
principles in accordance with GAAP, or (iii) any discontinued operations or
the disposition thereof.
Consolidated Operating Cash Flow -- means, for any period, the sum of
(a) Consolidated Net Income for such period, plus
(b) the amount of all interest expenses, depreciation, amortization,
income taxes, deferred items and other non-cash expenses of the Company and
the Subsidiaries, but only to the extent deducted in the determination of
Consolidated Net Income for such period.
Control Notice Event -- means:
(a) the execution by the Company or any Subsidiary or Affiliate of any
letter of intent or similar agreement with respect to any proposed
transaction or event or series of transactions or events that, individually
or in the aggregate, could reasonably be expected to result in a Change in
Control;
32
(b) the execution of any written agreement that, when fully performed
by the parties thereto, would result in a Change in Control; or
(c) the making of any written offer by any Person or group of Persons
to the holders of the Voting Stock of the Company which offer, if accepted
by the requisite number of such holders, would result in a Change in
Control.
For purposes of this definition, "group of Persons" shall mean two or more
Persons that are acting together or in concert as a partnership, limited
partnership, syndicate or other group for the common purpose of directly or
indirectly acquiring, holding or disposing of Securities of an issuer or
Property of any Person.
Control Prepayment Date -- is defined in Section 4.4(a).
Debt -- means, at any time, with respect to any Person (without
duplication):
(a) its liabilities for borrowed money and its redemption obligations
in respect of Mandatorily Redeemable Preferred Stock;
(b) its Working Capital Indebtedness;
(c) its liabilities for the deferred purchase price of Property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such Property);
(d) all liabilities in respect of Capital Leases of such Person;
(e) all liabilities secured by any Lien with respect to any Property
owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities);
(f) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and
other financial institutions (whether or not representing obligations for
borrowed money, but excluding any such liabilities in respect of letters of
credit issued solely for purposes of supporting payment of current accounts
payable arising in the ordinary course of such Person's business);
(g) its liabilities under so-called "take-or-pay" contracts and other
similar agreements; and
(h) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (g) of this definition.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (h) above to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
33
Debt Prepayment Application -- means, with respect to any Transfer of
Property, the application by the Company or the Subsidiaries of cash in an
amount equal to the Net Proceeds Amount with respect to such Transfer to pay
Debt constituting a portion of Consolidated Adjusted Debt (other than any such
Debt owing to the Company, any of the Subsidiaries or any Affiliate and other
than any such Debt in respect of any revolving credit or similar credit facility
providing the Company or any of the Subsidiaries with the right to obtain loans
or other extensions of credit from time to time, except to the extent that in
connection with such payment of such Debt the availability of credit under such
credit facility is permanently reduced by an amount not less than the amount of
such proceeds applied to the payment of such Debt).
Default -- means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
Disposition Value -- means, at any time, with respect to any Property
(a) in the case of Property that does not constitute Subsidiary Stock,
the greater of (i) the book value thereof or (ii) the Fair Market Value
thereof (such greater amount, for purposes of this definition, with respect
to any Property, the "Relevant Value"), in either case valued at the time
of such disposition in good faith by the Company, and
(b) in the case of Property that constitutes Subsidiary Stock, an
amount equal to that percentage of the Relevant Value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that the
Relevant Value of such Subsidiary Stock represents of the Relevant Value of
all of the outstanding capital stock of such Subsidiary (assuming, in
making such calculations, that all Securities convertible into such capital
stock are so converted and giving full effect to all transactions that
would occur or be required in connection with such conversion) determined
at the time of the disposition thereof, in good faith by the Company.
Distribution -- means, in respect of any corporation, association or other
business entity:
(a) dividends or other distributions or payments on Capital Stock or
other equity interest of such corporation, association or other business
entity (except distributions in such stock or other equity interest); and
(b) the redemption or acquisition of such stock or other equity
interests or of warrants, rights or other options to purchase such stock or
other equity interests (except when solely in exchange for such stock or
other equity interests).
Environmental Laws -- means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any
34
materials into the environment, including, but not limited to, those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
ERISA Affiliate -- means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the IRC.
Event of Default -- is defined in Section 8.1.
Exchange Act -- means the Securities Exchange Act of 1934, as amended.
Fair Market Value -- means, at any time and with respect to any Property,
the sale value of such Property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
Financing Documents -- means this Agreement, the Notes and the Security
Documents.
Fixed Charges Coverage Ratio -- means, for any period, the ratio of
(a) Consolidated Earnings Available for Fixed Charges for such period
to
(b) Consolidated Fixed Charges for such period.
Franchisee -- means any Person who or that is a franchisee of the Company
or of any Subsidiary.
GAAP -- means generally accepted accounting principles as in effect from
time to time in the United States of America.
Governmental Authority -- means
(a) the government of
(i) the United States of America or any state or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or that asserts jurisdiction
over any properties of the Company or any Subsidiary, or
35
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
Guaranty -- means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any Property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
Institutional Investor -- means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any venture capital company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form.
Investment -- means any investment, made in cash or by delivery of
Property, by the Company or any Subsidiary
(a) in any Person, whether by acquisition of stock, Debt or other
obligation or Security, or by loan, Guaranty, advance, capital contribution
or otherwise, or
(b) in any Property.
IRC -- means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
36
Lien -- means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any Property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
Liquid Security Amount -- means, at any time, the sum at such time of
(a) the amount of the Company's collected balances and uncollected
balances (represented by provisional credits) in all bank accounts,
deposits in transit (representing no more than one day's volume of checks
cashed during weekday operations and no more than three days' volume of
checks cashed during weekend and holiday operations), other cash
equivalents, negotiable instruments (other than consumer loans) and other
liquid assets (at their Fair Market Value if less than their face value,
and otherwise at their face value), plus
(b) the amount of currency on hand at the Company's check-cashing
locations,
but in any event excluding the aggregate sum of any cash that the Company is
prevented by agreement from pledging to any Person.
Make-Whole Amount -- means with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:
Called Principal -- means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 4.3 or Section 4.4 or
has become or is declared to be immediately due and payable pursuant to
Section 8.2, as the context requires.
Discounted Value -- means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
Reinvestment Yield -- means, with respect to the Called Principal of
any Note, 0.5% over the yield to maturity implied by (i) the yields
reported, as of 10:00 a.m. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 500" on the Telerate Access Service (or such
other display as may
37
replace Page 500 on Telerate Access Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or (ii) if such yields
are not reported as of such time or the yields reported as of such time are
not ascertainable, the Treasury Constant Maturity Series Yields reported,
for the latest day for which such yields have been so reported as of the
second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded
U.S. Treasury security with the maturity closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury security
with the maturity closest to and less than the Remaining Average Life.
Remaining Average Life -- means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
Remaining Scheduled Payments -- means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 4.3,
Section 4.4 or Section 8.2.
Settlement Date -- means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 4.3 or Section 4.4 or has become or is declared to be immediately
due and payable pursuant to Section 8.2, as the context requires.
Mandatorily Redeemable -- means, with respect to the Capital Stock of any
Person, each share of such Person's Capital Stock that is:
(a) redeemable, payable or required to be purchased or otherwise
retired or extinguished, or convertible into Debt of such Person (i) at a
fixed or determinable date, whether by operation of sinking fund or
otherwise, (ii) at the
38
option of any Person other than such Person, or (iii) upon the occurrence
of a condition not solely within the control of such Person; or
(b) convertible into other Mandatorily Redeemable Capital Stock.
Material -- means material in relation to the business, operations,
affairs, financial condition or Properties of the Company and the Subsidiaries
taken as a whole.
Material Adverse Effect -- means a material adverse effect on
(a) the business, operations, affairs, financial condition or
Properties of the Company and the Subsidiaries taken as a whole,
(b) the ability of the Company to perform its obligations under any of
the Financing Documents,
(c) the validity or priority of any Lien in favor of the Trustee for
the benefit of the holders of the Notes and the holders of the other
Secured Debt, or the relative priority of any claim or right to any
distribution of the holders of the Notes, under any of the Financing
Documents, or
(d) the validity or enforceability of any of the Financing Documents.
Multiemployer Plan -- means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
Net Proceeds Amount -- means, with respect to any Transfer of any Property
by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the Fair
Market Value of such consideration at the time of the consummation of such
Transfer) received by such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and expenses
actually incurred by such Person in connection with such Transfer.
Notes -- is defined in Section 1.1.
PBGC -- means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
Permitted Subsidiary -- means each Subsidiary in existence on the Closing
Date (as set forth in Part A.3(a) of Annex 3), or a single Subsidiary created or
acquired after the Closing for the purpose of engaging in the business of
issuing money orders, provided that:
(a) each such Subsidiary shall at all times be a guarantor under a
Subsidiary Guaranty Agreement;
39
(b) with respect to each such Subsidiary, at any time,
(i) the portion of Consolidated Operating Cash Flow, determined
for the then most recently ended period of four consecutive fiscal
quarters of the Company, attributable to such Subsidiary pursuant to
GAAP is not greater than 1% (or 3.5% in the case of Check Express
Finance, Inc., a Florida corporation), and
(ii) the portion of the consolidated total assets of the Company
and the Subsidiaries, determined as of the end of the then most
recently ended fiscal quarter of the Company, attributable to such
Subsidiary pursuant to GAAP is not greater than 1% (or 3.5% in the
case of Check Express Finance, Inc., a Florida corporation); and
(c) with respect to all such Subsidiaries, at any time,
(i) the portion of Consolidated Operating Cash Flow, determined
for the then most recently ended period of four consecutive fiscal
quarters of the Company, attributable to all such Subsidiaries
pursuant to GAAP is not greater than 5%, and
(ii) the portion of the consolidated total assets of the Company
and the Subsidiaries, determined as of the end of the then most
recently ended fiscal quarter of the Company, attributable to all such
Subsidiaries pursuant to GAAP is not greater than 5%.
Notwithstanding the foregoing, if the Property (or such portion of the Property
as shall be agreed to by the Required Holders) of a single Subsidiary created or
acquired after the Closing for the purpose of engaging in the business of
issuing money orders shall have been made, and shall remain, subject to a first
priority Lien in favor of the Trustee for the benefit of the holders of Notes
and other Beneficiaries (as such term is defined under the Collateral Trust
Agreement) on such terms and conditions, and pursuant to such agreements and
instruments, as shall have been approved by the Required Holders, and the
Company shall have caused to be delivered to each holder of a Note an opinion,
satisfactory in form and substance to the Required Holders, of independent
counsel to the effect that such agreements and instruments are enforceable in
accordance with their terms, then such single Subsidiary shall be deemed to be a
Permitted Subsidiary and the portions of Consolidated Operating Cash Flow
contributed by such single Subsidiary, and the portions of consolidated total
assets attributable to such Subsidiary, shall be excluded for purposes of
determining compliance with the foregoing clause (c) of this definition.
Person -- means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
Placement Agent -- means Xxxxxxxxxx Securities.
40
Placement Memorandum -- means the Confidential Private Placement
Memorandum, dated June 1996, furnished in connection with the placement of the
Notes, including, without limitation, all exhibits, schedules, appendices and
other attachments thereto.
Plan -- means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
Preferred Stock -- means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
Pro Forma Consolidated Operating Cash Flow -- means, for any period of four
consecutive fiscal quarters of the Company, and in connection with any
determination under Section 6.4, Consolidated Operating Cash Flow for such
period, calculated giving effect to pro forma adjustments in accordance with 17
CFR 210.11-01 and 17 CFR 210.11-02 (as in effect on the Closing Date) (for
purposes of this definition, the "Applicable Regulations") with respect to any
acquisitions or divestitures of Property (but not any other transactions) of the
Company and the Subsidiaries that occurred during such period of four
consecutive fiscal quarters of the Company or after the end of such period but
at or before the time as of which Consolidated Adjusted Debt is being determined
for purposes of Section 6.4, provided that if no such acquisitions or
divestitures occurred during the relevant periods referred to above, or if the
Applicable Regulations would otherwise not require any such pro forma
adjustments, Pro Forma Consolidated Operating Cash Flow for such period of four
consecutive fiscal quarters of the Company shall mean Consolidated Operating
Cash Flow, without adjustment, for such period.
Property -- means, unless otherwise specifically limited, any kind of
property or asset, whether real, personal or mixed, tangible or intangible,
xxxxxx or inchoate.
Property Reinvestment Application -- means, with respect to any Transfer of
Property, the application of an amount equal to the Net Proceeds Amount with
respect to such Transfer to the acquisition by the Company or any Subsidiary of
tangible operating assets of the Company or any Subsidiary to be used in the
principal business of such Person.
PTCE 95-60 -- is defined in Section 10.2(a).
Required Holders -- means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any Subsidiary or Affiliate).
Restricted Payment -- means any Distribution in respect of the Company or
any Subsidiary (other than on account of Capital Stock or other equity interests
of a
41
Subsidiary owned legally and beneficially by the Company or a Wholly-Owned
Subsidiary), including, without limitation, any Distribution resulting in the
acquisition by the Company of Securities that would constitute treasury stock.
For purposes of this Agreement, the amount of any Restricted Payment made in
Property shall be the greater of (x) the Fair Market Value of such Property (as
determined in good faith by the board of directors (or equivalent governing
body) of the Person making such Restricted Payment) and (y) the net book value
thereof on the books of such Person, in each case determined as of the date on
which such Restricted Payment is made.
Revolving Advances -- means, without duplication,
(a) all Advances (as such term is defined in the Collateral Trust
Agreement), and
(b) all other advances or loans, or other financial accommodations, to
the Company or any Subsidiary (whether or not they extend or replace all or
a portion of the Advances referred to in clause (a) above, and whether or
not they are used for working capital purposes), in respect of which the
liabilities of the Company or such Subsidiary constitute all or a portion
of AMEX Priority Obligations (as such term is defined in the Collateral
Trust Agreement), or in respect of which the liabilities of the Company or
such Subsidiary are directly or indirectly secured, or otherwise are
entitled to benefits (under the Security Documents or otherwise), in such a
manner as to give the holder or holders of the Debt constituted thereby the
benefits of any Lien priority, priority in right to receive proceeds or
other priority in right of payment, but excluding, in any event,
liabilities constituting Working Capital Indebtedness under clauses (a) or
(b) of the definition of Working Capital Indebtedness.
Scheduled Principal Payment -- is defined in Section 4.2.
Secured Debt -- is defined in the Collateral Trust Agreement.
Securities Act -- means the Securities Act of 1933, as amended from time to
time.
Security -- has the meaning set forth in section 2(1) of the Securities
Act.
Security Agreement -- means the Assignment of Deposit Accounts and Security
Agreement, dated as of November 15, 1996, between the Company and the Trustee,
as such agreement may be amended, restated or otherwise modified from time to
time.
Security Documents -- means the Collateral Trust Agreement, the Security
Agreement, the Subsidiary Guaranty Agreements and the other Security Documents
(as such term is defined in the Collateral Trust Agreement).
Senior Financial Officer -- means any one of the president, the chief
financial officer and the principal accounting officer of the Company.
42
Senior Officer -- means any one of the chairman of the board of directors,
the chief executive officer, the chief operating officer and the president of
the Company.
Source -- is defined in Section 10.2.
Subsidiary -- means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
Subsidiary Guaranty Agreement -- has the meaning assigned to the term
"Guaranty" in the Collateral Trust Agreement.
Subsidiary Stock -- means the Capital Stock (or any options or warrants to
purchase stock or other Securities exchangeable for or convertible into any
Capital Stock) of any Subsidiary.
Successor Corporation -- is defined in Section 6.11.
Term Advances -- means, without duplication,
(a) all Revolving Commitment Advances (as such term is defined in the
Collateral Trust Agreement), and
(b) any other advances or loans, or other financial accommodations, to
the Company or any Subsidiary constituting a portion of Debt of the Company
and the Subsidiaries, but excluding any such advances, loans or other
financial accommodations constituting Working Capital Indebtedness.
Transfer -- means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers, leases (as lessor) or otherwise disposes
of any of its Property, including, without limitation, Subsidiary Stock, and
including, without limitation, any consolidation, merger or other transaction
the direct or indirect result of which is a disposition of all or a portion of
any equity or other interest in any Person. For purposes of determining the
application of the Net Proceeds Amount in respect of any Transfer, the Company
may designate any Transfer as one or more separate Transfers each yielding a
separate Net Proceeds Amount. In any such case, the Disposition Value of any
Property subject to each such separate Transfer attributable to any Property
subject to each such separate Transfer shall be determined by ratably allocating
the aggregate Disposition Value of all Property subject to all such separate
Transfers to each such separate Transfer on a proportionate basis.
43
Trustee -- means Wilmington Trust Company, as trustee under the Collateral
Trust Agreement, and any successor trustee in such capacity.
Voting Stock -- means, with respect to any Person, any Capital Stock of
such Person whose holders are entitled under ordinary circumstances to vote for
the election of directors (or Persons performing similar functions) of such
Person (irrespective of whether at the time Capital Stock of any other class or
classes shall have or might have voting powers by reason of the happening of any
contingency).
Wholly-Owned Subsidiary -- means, at any time, any Subsidiary 100% of all
of the equity interests (except directors' qualifying shares) and voting
interests of which are owned by, and all of the outstanding Debt of which is
held by, any one or more of the Company and the Company's other Wholly-Owned
Subsidiaries at such time.
Working Capital Indebtedness -- means, at any time, with respect to any
Person (without duplication), its liabilities in respect of:
(a) the principal amount of all money orders issued by such Person, or
sold by such Person as agent or otherwise on behalf of any issuer thereof,
or in respect of which such Person is otherwise directly or indirectly
liable;
(b) electronic money transfer services performed by such Person as
principal, agent or otherwise, or in respect of which such Person is
otherwise directly or indirectly liable; and
(c) outstanding Revolving Advances.
Without limitation of the foregoing, clauses (a) and (b) of this definition
shall include (without duplication) all liabilities in respect of "Trust
Funds" as such term is used in the AMEX Documents and the "Trust Amount" as
such term is defined in the Collateral Trust Agreement.
9.2 Accounting Principles.
Where the character or amount of any asset or liability or item of income
or expense, or any consolidation or other accounting computation is required to
be made for any purpose hereunder, it shall be done in accordance with GAAP as
in effect on the date of, or at the end of the period covered by, the financial
statements from which such asset, liability, item of income, or item of expense,
is derived, or, in the case of any such computation, as in effect on the date as
of which such computation is required to be determined, provided, that if any
term defined herein or other provision herein includes or excludes amounts,
items or concepts that would not be included in or excluded from such term or
other provision if such term or provision was defined or otherwise written with
reference solely to GAAP, such term or other provision will be deemed to include
or exclude such amounts, items or concepts as set forth herein.
44
9.3 Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or
that such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including,
without limitation, actions taken by or on behalf of any partnership in which
such Person is a general partner.
9.4 Section Headings, Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc. The titles of the
Sections of this Agreement and the Table of Contents of this Agreement
appear as a matter of convenience only, do not constitute a part hereof and
shall not affect the construction hereof. The words "herein," "hereof,"
"hereunder" and "hereto" refer to this Agreement as a whole and not to any
particular Section or other subdivision. Unless otherwise specified,
references to Sections are to Sections of this Agreement, references to
Annexes are to Annexes to this Agreement, references to Attachments are to
Attachments to this Agreement and references to Exhibits are to Exhibits to
this Agreement.
(b) Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant shall
not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
9.5 Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-
OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF
THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
10. PURCHASER REPRESENTATIONS
10.1 Purchase for Investment.
You represent that you are an "insurance company" (as such term is defined
in section 2(13) of the Securities Act) and that you are purchasing the Notes
for your own account or for one or more separate accounts maintained by you or
for the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their Property
shall at all times be within your or their control. You understand that the
Notes have not been registered under the Securities Act and may be resold or
otherwise transferred only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
10.2 Source of Funds.
45
You represent that at least one of the following statements is an accurate
representation as to each source of funds (a "Source") to be used by you to pay
the purchase price of the Notes to be purchased by you hereunder:
(a) General Account -- you are an insurance company and the Source
is an "insurance company general account," as such term is defined in
Department of Labor Prohibited Transaction Class Exemption 95-60
("PTCE 95-60") (issued July 12, 1995), and there is no employee benefit
plan, treating as a single plan all plans maintained by the same employer
(and affiliates thereof as defined in section V(a)(1) of PTCE 95-60) or
by the same employee organization with respect to which the amount of the
general account reserves and liabilities for all contracts held by or on
behalf of such plan, exceed 10% of the total reserves and liabilities of
such general account as determined under PTCE 95-60 (exclusive of separate
account liabilities) plus surplus, as set forth in the National
Association of Insurance Commissioners Annual Statement filed with your
state of domicile; or
(b) Separate Account -- the Source is a "separate account" (as define
section 3 of ERISA):
(i) 10% Pooled Separate Account -- that is an insurance company
pooled separate account, within the meaning of Department of Labor
Prohibited Transaction Class Exemption 90-1 (issued January 29,
1990) and to the extent that there are any plans whose assets in
such separate account exceed 10% of the assets of such separate
account, you have disclosed the names of such plans to the Company
in writing; or
(ii) Identified Plan Assets -- that is comprised of employee
benefit plans identified by you in writing and with respect to which
the Company hereby warrants and represents that, as of the date of
the Closing, neither the Company nor any ERISA Affiliate is a
"party in interest" (as defined in section 3 of ERISA) or a
"disqualified person" (as defined in section 4975 of the IRC) with
respect to any plan so identified; or
(iii) Guaranteed Separate Account -- that is maintained solely
in connection with fixed contractual obligations of an insurance
company, under which any amounts payable, or credited, to any
employee benefit plan having an interest in such account and to any
participant or beneficiary of such plan (including an annuitant) are
not affected in any manner by the investment performance of the
separate account (as provided by 29 CFR (S)2510.3-101(h)(1)(iii)); or
(c) Qualified Professional Asset Manager -- the Source is an
"investment fund" managed by a "qualified professional asset manager"
(as such terms are defined in Part V of Department of Labor Prohibited
Transaction Class Exemption 84-14) and all the requirements for an
exemption under such Exemption are met with respect to the use of funds
to purchase the Notes; or
(d) Excluded Plan -- the Source is an employee benefit plan that is
excluded from the provisions of section 406 of ERISA by virtue of section
4(b) of ERISA; or
46
(e) Exempt Funds -- the Source is a separate investment account that
is not subject to ERISA and no funds of which come from assets of an
"employee benefit plan" or a "plan" or any other entity that is deemed
to hold assets of an "employee benefit plan" or a "plan" ("employee
benefit plan" is defined in section 3 of ERISA, and "plan" is defined in
section 4975(e)(1) of the IRC).
11. MISCELLANEOUS
11.1 Communications.
All notices and other communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), (b) by registered or certified mail with return receipt
requested (postage prepaid) or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Annex 1, or at such other address
as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at 0000 Xxxxxxxx Xxxxx,
Xxxxx 000,Xxxxxx, Xxxxx 00000, Attention: President, Telephone no.
(000) 000-0000, Telecopy no. (000) 000-0000, or at such other address
as the Company shall have specified to the holder of each Note in writing.
Notices under this Section 11.1 will be deemed given only when actually
received.
11.2 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be
executed, documents received by you at the closing of the issuance of
the Notes (except the Notes themselves), and financial statements,
certificates and other information previously or hereafter furnished to
any holder of Notes, may be reproduced by any holder of Notes or the
Company by any photographic, photostatic, microfilm, micro-card,
miniature photographic, digital or other similar process and each holder
of Notes may destroy any original document so reproduced. Any such
reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original
is in existence and whether or not such reproduction was made by such
holder of Notes or the Company in the regular course of business) and
that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. Nothing in this
Section 11.2 shall prohibit the Company or any holder of Notes from
contesting the accuracy or validity of any such reproduction.
47
11.3 Survival.
All warranties, representations, certifications and covenants made by the
Company in the Financing Documents or in any certificate or other instrument
delivered by it or on its behalf under the Financing Documents at or prior to
the Closing shall be considered to have been relied upon by you and shall
survive the delivery to you of the Notes regardless of any investigation made by
you or on your behalf. All statements in any certificate or other instrument
delivered by or on behalf of the Company pursuant to the terms of the Financing
Documents shall constitute warranties and representations by the Company
hereunder. All payment obligations of the Company hereunder (including, without
limitation, reimbursement obligations in respect of costs, expenses and fees of
or incurred by the holders of the Notes) shall survive the payment of the Notes
and the termination hereof.
11.4 Successors and Assigns.
This Agreement and the Notes shall inure to the benefit of and be binding
upon and enforceable by the Company and the holders, from time to time, of the
Notes, provided that the identity of the holders of the Notes shall be
determined solely by reference to the register for the registration and transfer
of Notes maintained pursuant to Section 5.1.
11.5 Amendment and Waiver.
(a) Requirements. This Agreement may be amended, and the
observance of any term hereof may be waived, with (and only with) the
written consent of the Company and the Required Holders, provided that
no such amendment or waiver shall, without the written consent of the
holders of all Notes (exclusive of Notes held by the Company, any
Subsidiary or any Affiliate) at the time outstanding:
(i) change the amount or time of any prepayment or payment of
principal or Make-Whole Amount or the rate or time of any payment of
interest;
(ii) amend or waive the provisions of Section 8.1(a), Section
8.2 or Section 8.3 or amend or waive any defined term as used
therein,
(iii) amend or waive the provisions of Section 4.4 or amend or
waive any defined term as used therein,
(iv) amend or waive the definition of "Required Holders" or
change the proportion of the principal amount of the Notes required
with respect to any approval or consent required under this
Agreement, or
(v) amend or waive this Section 11.5 or amend or waive any
defined term as used herein.
(b) Solicitation of Noteholders.
(i) Solicitation. Each holder of the Notes (irrespective of
the amount of Notes then owned by it) shall be provided by the
Company with sufficient information to enable such holder to make an
informed decision with respect
48
to any proposed waiver or amendment of any of the provisions of the
Financing Documents. Executed or true and correct copies of any
amendment or waiver effected pursuant to the provisions of this
Section 11.5 shall be delivered by the Company to each holder of
outstanding Notes forthwith following the date on which such
amendment or waiver becomes effective.
(ii) Payment. The Company shall not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the provisions hereof or of the Notes
unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to the holders of
all Notes then outstanding.
(iii) Scope of Consent. Any amendment or waiver made pursuant
to this Section 11.5 by a holder of Notes that has transferred or
has agreed to transfer its Notes to the Company, any Subsidiary or
any Affiliate and has provided or has agreed to provide such
amendment or waiver as a condition to such transfer shall be void
and of no force and effect except solely as to such holder, and
any amendments effected or waivers granted that would not have been
or would not be so effected or granted but for such amendment or
waiver (and the amendments or waivers of all other holders of Notes
that were acquired under the same or similar conditions) shall be
void and of no force and effect, retroactive to the date such
amendment or waiver initially took or takes effect, except solely as
to such holder.
(c) Binding Effect. Except as provided in Section 11.5(b)(iii), any
amendment or waiver consented to as provided in this Section 11.5 shall apply
equally to all holders of Notes and shall be binding upon them and upon each
future holder of any Note and upon the Company whether or not such Note shall
have been marked to indicate such amendment or waiver. No such amendment or
waiver shall extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon.
11.6 Expenses.
(a) Closing Expenses. Whether or not the Notes are sold, the
Company shall pay, at the Closing (if the Notes are sold, and otherwise upon
receipt of any statement or invoice therefor), all reasonable fees, expenses
and costs relating thereto, including, without limitation, the statement
presented at the Closing by your special counsel for fees and disbursements
incurred in connection herewith, each additional statement for fees and
disbursements (promptly upon receipt thereof) of your special counsel rendered
after the Closing in connection with the issuance of the Notes, and all expenses
incurred by you on your behalf or the Company's behalf in complying with each
of the conditions to closing referred to in Section 3 and Attachment B.
(b) Amendments and Waivers. The Company shall pay when billed the
reasonable costs and expenses (including, without limitation, reasonable
attorneys'
49
fees) incurred by the holders of the Notes in connection with the
consideration, negotiation, preparation or execution of any amendments, waivers,
consents, standstill agreements and other similar agreements with respect hereto
(whether or not any such amendments, waivers, consents, standstill agreements or
other similar agreements are executed).
(c) Restructuring and Workout, Inspections. At any time when the
Company and the holders of Notes are conducting restructuring or workout
negotiations in respect hereof, or a Default or Event of Default exists, the
Company shall pay when billed the costs and expenses (including attorneys' fees
and the fees of professional advisors) incurred by the holders of the Notes in
connection with the assessment, analysis or enforcement of any rights or
remedies that are or may be available to the holders of Notes and in connection
with inspections made pursuant to Section 7.5.
(d) Collection. If the Company shall fail to pay when due any
principal of, or Make-Whole Amount or interest on, any Note, the Company shall
pay to each holder of Notes, to the extent permitted by law, such amounts as
shall be sufficient to cover the costs and expenses, including but not limited
to reasonable attorneys' fees, incurred by such holder in collecting any sums
due on such Notes.
11.7 Waiver of Jury Trial; Consent to Jurisdiction; Etc.
(a) Waiver of Jury Trial. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE FINANCING
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
(b) Consent to Jurisdiction. ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT
IN RESPECT OF ANY BREACH UNDER ANY FINANCING DOCUMENT MAY BE BROUGHT BY SUCH
PARTY IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK, OR ANY
NEW YORK STATE COURT LOCATED IN NEW YORK CITY, NEW YORK AS SUCH PARTY MAY IN ITS
SOLE DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE IN
PERSONAM JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVE AND AGREE NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL,
BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO
THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY FINANCING DOCUMENT OR TRANSACTION
CONTEMPLATED THEREBY BROUGHT IN ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
50
(c) Service of Process. EACH PARTY HERETO IRREVOCABLY AGREES THAT
PROCESS PERSONALLY SERVED, SERVED BY U.S. REGISTERED MAIL OR SERVED IN
THE MANNER PROVIDED FOR COMMUNICATIONS IN THIS AGREEMENT, AT THE
ADDRESSES PROVIDED HEREIN FOR NOTICES, OR, IN THE CASE OF THE COMPANY,
TO ITS AGENT FOR SERVICE OF PROCESS LISTED IN PART 11.7(c) OF ANNEX 3
(WHICH PERSON THE COMPANY HEREBY IRREVOCABLY APPOINTS AS ITS AGENT FOR
SUCH PURPOSE), SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY LAW,
ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY FINANCING DOCUMENT OR TRANSACTION CONTEMPLATED
THEREBY, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY
JUDGMENT IN RESPECT OF ANY BREACH UNDER ANY FINANCING DOCUMENT. RECEIPT
OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A
DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
COMMERCIAL DELIVERY SERVICE.
(d) Other Forums. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO
LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY WRITS, PROCESS OR
SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
JURISDICTION OVER ANY OTHER PARTY HERETO IN SUCH OTHER JURISDICTION, AND
IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.
11.8 Entire Agreement.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
11.9 Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
11.10 Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
11.11 Execution in Counterpart.
51
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
11.12 General Interest Provisions
Nothing contained in this Agreement or in any of the Financing Documents
shall be construed to obligate the Company, under any circumstances whatsoever,
to pay interest in excess of the maximum non-usurious interest rate applicable
to the Company under applicable law. If any sums received from the Company are
at any time under applicable law deemed to be in excess of the maximum non-
usurious amount any holder of the Notes could collect under applicable usury
law, the effective rate of interest on the Notes shall be reduced to and be the
maximum non-usurious interest rate permitted under applicable law and the
Company shall accept as its sole remedy under such circumstances either return
of any sums of interest that may have been collected and that produced a rate of
interest in excess of the applicable maximum non-usurious interest rate or the
application of those sums as a credit against the unpaid principal amount of the
Notes, whichever remedy may be elected by any holder of the Notes.
[Remainder of page intentionally blank; next page is signature
page.]
52
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
ACE CASH EXPRESS, INC.
By
--------------------------------
Name:
Title:
Accepted:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
[Signature page for Note Purchase Agreement of ACE CASH EXPRESS, INC. in
connection with the issuance of its 9.03% Senior Secured Notes due 2003]
ANNEX 1
INFORMATION AS TO PURCHASER
================================================================================
Purchaser Name PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Name in which to register Principal Mutual Life Insurance Company
Note(s)
--------------------------------------------------------------------------------
Note registration R-1; $16,000,000
number(s); Principal
amount(s)
--------------------------------------------------------------------------------
Payment on account of
Note(s)
Method Federal Funds Wire Transfer
Account information Norwest Bank Iowa, N.A.
0xx & Xxxxxx Xxxxxxx
Xxx Xxxxxx, XX 00000
ABA# 000000000
For credit to Principal Mutual Life Insurance
Company, Account No. 014752, Reference:
OBI:PFGSE(S) B 1-B-60815 ( )Principal
$_____________ Interest $___________.
--------------------------------------------------------------------------------
Accompanying information Name of Company: Ace Cash Express, Inc.
Description of
Security: 9.03% Senior Secured Notes
due November 15, 2003
PPN: 004403 A* 2
Due date and application (as among principal,
Make-Whole Amount and interest) of the
payment being made:
--------------------------------------------------------------------------------
Address for notices Principal Mutual Life Insurance Company
related to payments 000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Investment - Accounting & Treasury -
Securities
--------------------------------------------------------------------------------
Address for all other Principal Mutual Life Insurance Company
notices 000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Investment Department - Securities
--------------------------------------------------------------------------------
Annex 1-1
ANNEX 1
INFORMATION AS TO PURCHASER (Cont.)
================================================================================
Purchaser Name PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Tax identification number 00-0000000
================================================================================
Annex 1-2
ANNEX 1
INFORMATION AS TO PURCHASER (Cont.)
================================================================================
Purchaser Name PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Name in which to register Principal Mutual Life Insurance Company
Note(s)
--------------------------------------------------------------------------------
Note registration R-2; $2,000,000
number(s); Principal
amount(s)
--------------------------------------------------------------------------------
Payment on account of
Note(s)
Method Federal Funds Wire Transfer
Account information Norwest Bank Iowa, N.A.
0xx & Xxxxxx Xxxxxxx
Xxx Xxxxxx, XX 00000
ABA# 000000000
For credit to Principal Mutual Life Insurance
Company, Separate Account No. 032395,
Reference: OBI:PFGSE(S) B 16-B-60815 ( )
Principal $__________ Interest $__________.
--------------------------------------------------------------------------------
Accompanying information Name of Company: Ace Cash Express, Inc.
Description of
Security: 9.03% Senior Secured Notes due
November 15, 2003
PPN: 004403 A* 2
Due date and application (as among principal,
Make-Whole Amount and interest) of the
payment being made:
--------------------------------------------------------------------------------
Address for notices related Principal Mutual Life Insurance Company
to payments 000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Investment - Accounting & Treasury -
Securities
--------------------------------------------------------------------------------
Annex 1-3
ANNEX 1
INFORMATION AS TO PURCHASER (Cont.)
================================================================================
Purchaser Name PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Address for all other Principal Mutual Life Insurance Company
notices 000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Investment Department - Securities
--------------------------------------------------------------------------------
Tax identification number 00-0000000
================================================================================
Annex 1-4
ANNEX 1
INFORMATION AS TO PURCHASER (cont.)
===============================================================================
Purchaser Name PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
-------------------------------------------------------------------------------
Name in which to register Principal Mutual Life Insurance Company
Note(s)
--------------------------------------------------------------------------------
Note registration R-3; $2,000,000
number(s); Principal
amount(s)
--------------------------------------------------------------------------------
Payment on account of
Note(s)
Method Federal Funds Wire Transfer
Account information Norwest Bank Iowa, N.A.
0xx & Xxxxxx Xxxxxxx
Xxx Xxxxxx, XX 00000
ABA# 000000000
For credit to Principal Mutual Life Insurance
Company, Account No. 0000000, Reference:
OBI:PFGSE(S) B 916-B-60815 ( )Principal
$_____________ Interest $___________.
--------------------------------------------------------------------------------
Accompanying information Name of Company: Ace Cash Express, Inc.
Description of
Security: 9.03% Senior Secured Notes due
November 15, 2003
PPN: 004403 A* 2
Due date and application (as among principal,
Make-Whole Amount and interest) of the
payment being made:
--------------------------------------------------------------------------------
Address for notices Principal Mutual Life Insurance Company
related to payments 000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Investment - Accounting & Treasury -
Securities
--------------------------------------------------------------------------------
Annex 1-5
ANNEX 1
INFORMATION AS TO PURCHASER (Cont.)
================================================================================
Purchaser Name PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Address for all other Principal Mutual Life Insurance Company
notices 000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Investment Department - Securities
--------------------------------------------------------------------------------
Tax identification number 00-0000000
================================================================================
Annex 1-6
ANNEX 2
PAYMENT INSTRUCTIONS AT CLOSING
Re: Ace Cash Express, Inc. --
$20,000,000 9.03% Senior Secured Notes due 2003
-----------------------------------------------
In accordance with Section 1.2(b) of the Note Purchase Agreement, the
Company directs you to make payment for the Note or Notes being purchased by you
by payment by federal funds wire transfer in immediately available funds of the
purchase price thereof to:
Xxxxx Fargo Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
ABA no.: 000000000
Account no.: 000-000-0000
Account name: Ace Cash Express Inc. - Concentration Account
Contact person at bank:
Name: Xxxxxxx Xxxx
Phone no.: (000) 000-0000
Annex 2-1
ANNEX 3
INFORMATION AS TO COMPANY
Part A.2(a) -- Financial Statements.
[To be provided by the Company]
********
Part A.2(b) -- Debt as of the Closing Date.
[To be provided by the Company]
********
Part A.2(c) -- Material Adverse Change.
[To be provided by the Company]
********
Part A.3(a) -- Ownership of Subsidiaries.
[To be provided by the Company]
********
Part A.9 -- Restrictions on Company and Subsidiaries.
[To be provided by the Company]
********
Part A.11(e) -- ERISA Matters.
[To be provided by the Company]
********
Part A.17(a) -- Use of Proceeds.
[To be provided by the Company]
********
Annex 3-1
Part 6.6(a) -- Subsidiary Debt.
[To be provided by the Company]
********
Part 6.8 -- Restrictions Affecting Subsidiaries.
[To be provided by the Company]
********
Part 6.12(a)(vii) -- Closing Date Liens.
[To be provided by the Company]
********
Part 11.7(c) -- Agent for Service of Process.
[To be provided by the Company]
Annex 3-2
ATTACHMENT A
A. COMPANY WARRANTIES AND REPRESENTATIONS
To induce you to enter into this Agreement and to purchase and pay for the
Notes to be delivered to you at the Closing, the Company makes the following
warranties and representations, effective as of the date of the Company's
execution of this Agreement and as of the Closing Date:
A.1 Full Disclosure.
The Placement Memorandum (a copy of which previously has been delivered to
you) correctly describes the general nature of the business and principal
Properties of the Company and the Subsidiaries as of the Closing Date. Neither
the statements made by the Company in the Financing Documents, the Placement
Memorandum, the financial statements referred to in Section A.2(a), nor any
other written statement furnished by or on behalf of the Company to you in
connection with the negotiation or the closing of the sale of the Notes, taken
as a whole, contain any untrue statement of a material fact or omit a material
fact necessary to make the statements contained therein and herein not
misleading under the circumstances under which they were made. There is no fact
that the Company has not disclosed to you in writing that has had or, so far as
the Company can now reasonably foresee, could reasonably be expected to have, a
Material Adverse Effect (provided that the Company makes no warranty or
representation in this sentence as to general, economic, market and industry
conditions that are generally applicable to the Company and the Subsidiaries and
all other Persons that are in the same or similar businesses as the Company and
the Subsidiaries and are similarly situated).
A.2 Financial Statements; Debt; Material Adverse Change.
(a) Financial Statements. The Company has provided you with the
financial statements described in Part A.2(a) of Annex 3. All of such
financial statements have been prepared in accordance with GAAP consistently
applied (except as otherwise noted therein) and present fairly, in all material
respects, the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates, and the results of their operations
and cash flows for the periods, specified therein.
(b) Debt. Part A.2(b) of Annex 3 lists all Debt of the Company
and the Subsidiaries as of the Closing Date, and provides the following
information with respect to each item of such Debt: the obligor, each
guarantor thereof and each other Person similarly liable in respect thereof,
the holder thereof, the outstanding amount, the current portion of the
outstanding amount, the final maturity, required sinking fund payments and a
description of the collateral securing such Debt.
(c) Material Adverse Change. Except as disclosed in Part A.2
(c) of Annex 3, since June 30, 1996, there has been no change in the business,
operations, affairs, financial condition or Properties of the Company or the
Subsidiaries, except changes that, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
Attachment A-1
(d) Summary and Pro Forma Financial Information. All statements or
summaries of historical financial condition and performance of the Company and
the Subsidiaries included in the Placement Memorandum have been derived from
financial statements and information prepared on a basis of accounting
consistent with GAAP and with the accounting principles currently used by the
Company, to the extent applicable, except as noted therein. All pro forma
information with respect to the Company and the Subsidiaries included in the
Placement Memorandum has been derived from financial statements and information
prepared on a basis of accounting consistent with GAAP and with accounting
principles currently used by the Company, except as noted there in, and all
material assumptions on which such pro forma information was based are disclosed
therein.
A.3 Subsidiaries and Affiliates.
(a) Ownership of Subsidiaries. Part A.3(a) of Annex 3 states
(i) the name of each Subsidiary, its jurisdiction of organization,
form of organization and the percentage of its Voting Stock owned by the
Company and each other Subsidiary, and
(ii) the name of each Affiliate and the nature of the affiliation of
such Affiliate.
Each of the Company and the Subsidiaries has record title to all of the shares
it purports to own of the stock of each Subsidiary, free and clear in each case
of any Lien. All such shares have been duly issued and are fully paid and
nonassessable.
(b) Dividend Restrictions, etc. No Subsidiary is a party to, or
otherwise subject to, any legal restriction or any agreement (other than this
Agreement, the agreements listed in Part 6.8 of Annex 3 and statutory,
regulatory or common law restrictions) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of the Subsidiaries that own
Voting Stock of such Subsidiary.
A.4 Title to Properties.
(a) General. Each of the Company and the Subsidiaries has indefeasible
title to all of the Property reflected in the most recent balance sheet referred
to in Part A.2(a) of Annex 3 and to all of the Property purported to have been
acquired by the Company or any Subsidiary after such date (except as sold or
otherwise disposed of in the ordinary course of business), except for such
failures to have indefeasible title as are immaterial to such balance sheet and
that, in the aggregate for all such failures, could not reasonably be expected
to have a Material Adverse Effect. All Property of the Company and the
Subsidiaries is free from Liens not permitted by Section 6.12.
(b) Leases. All leases necessary for the conduct of the respective
businesses of the Company and the Subsidiaries are valid and subsisting and are
in full force and effect, except for such failures to be valid and subsisting
that, in the aggregate for all such failures, could not reasonably be expected
to have a Material Adverse Effect.
Attachment A-2
aggregate for all such failures, could not reasonably be expected to have a
Material Adverse Effect.
(c) Intellectual Property. Each of the Company and the Subsidiaries
owns, possesses or has the right to use all of the licenses, permits,
franchises, patents, copyrights, trademarks, service marks and trade names
necessary for the present and currently planned future conduct of its
business, without any known conflict with the rights of others, except for
such failures to own, possess, or have the right to use, that, in the
aggregate for all such failures, could not reasonably be expected to have a
Material Adverse Effect.
A.5 Returns Filed, Taxes Paid.
All tax returns required to be filed by or on behalf of each of the
Company and the Subsidiaries and any other Person with which the Company or
any Subsidiary files or has filed a consolidated return in any jurisdiction
have been filed on a timely basis, and all taxes, assessments, fees and
other governmental charges upon each of the Company and such Subsidiaries
and upon any of their respective Properties, income or franchises, that are
due and payable have been paid, except for such tax returns and such tax
payments that individually or in the aggregate for all such tax returns and
payments, could not reasonably be expected to have a Material Adverse
Effect, or the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect
to which the Company or a Subsidiary, as the case may be, has established
appropriate reserves.
A.6 Pending Litigation, etc.
There are no proceedings, actions or investigations pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
the Subsidiaries in any court or before any Governmental Authority or
arbitration board or tribunal that, in the aggregate for all such proceedings,
actions and investigations, could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any of the Subsidiaries is in violation
of any judgment, order, writ, injunction or decree of any court, Governmental
Authority, arbitration board or tribunal that, in the aggregate for all such
violations, could reasonably be expected to have a Material Adverse Effect.
A.7 Corporate Organization and Authority.
Each of the Company and the Subsidiaries:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of organization;
(b) has all corporate power and authority necessary to own and
operate its Properties and to carry on its business as now conducted and as
presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and other
governmental authorizations necessary to own and operate its Properties and
to
Attachment A-3
carry on its business as now conducted and as presently proposed to be
conducted, except where the failure to have such licenses, certificates,
permits, franchises and other governmental authorizations, in the aggregate
for all such failures, could not reasonably be expected to have a Material
Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is authorized
to do business and is in good standing, as a foreign corporation, in each
state in the United States of America and in each other jurisdiction where
the failure to be so qualified or licensed and authorized and in good
standing, in the aggregate for all such failures, could reasonably be
expected to have a Material Adverse Effect (Exhibit A to the opinion of
Gardere & Xxxxx, L.L.P. delivered to you on the Closing Date pursuant to
Section B.1(a) of Attachment B includes, but is not necessarily limited to,
disclosure of all states where such qualification, licensing or
authorization is required in order for the warranty and representation in
this clause (d) to be true).
A.8 Charter Instruments, Other Agreements.
Neither the Company nor any of the Subsidiaries is in violation in any
respect of any term of any charter instrument or bylaw. Neither the Company nor
any of the Subsidiaries is in violation in any respect of any term in any
agreement or other instrument to which it is a party or by which it or any of
its Property may be bound except for such violations that, in the aggregate for
all such violations, could not reasonably be expected to have a Material Adverse
Effect.
A.9 Restrictions on Company and Subsidiaries.
Neither the Company nor any of the Subsidiaries:
(a) is a party to any contract or agreement, or subject to any
charter or other corporate restriction that, in the aggregate for all such
contracts, agreements, and charter and corporate restrictions, is
reasonably likely to have a Material Adverse Effect;
(b) is a party to any contract or agreement that restricts the right
or ability of such corporation to incur Debt, other than this Agreement and
the agreements listed in Part A.9 of Annex 3 (true, correct and complete
copies of each of the agreements listed in such Part have been provided to
you), none of which restricts the issuance and sale of the Notes or the
performance of the Company under the Financing Documents; or
(c) has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its Property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 6.12.
A.10 Compliance with Law.
Attachment A-4
Neither the Company nor any of the Subsidiaries is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, except for
such violations that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
A.11 Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the IRC
relating to employee benefit plans (as defined in section 3 of ERISA), and
no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by
the Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights or Properties of the Company or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty or excise
tax provisions or to section 401(a)(29) or 412 of the IRC, other than such
liabilities or Liens that individually or in the aggregate are not
Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate current value of
the assets of such Plan allocable to such benefit liabilities. The term
"benefit liabilities" has the meaning specified in section 4001 of ERISA
and the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and the ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities)
under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard
to liabilities attributable to continuation coverage mandated by section
4980B of the IRC) of the Company and the Subsidiaries is not Material.
(e) Part A.11(e) of Annex 3 sets forth all ERISA Affiliates and all
"employee benefit plans" maintained by the Company (or any "affiliate"
thereof) or in respect of which the Notes could constitute an "employer
security" ("employee benefit plan" has the meaning specified in section 3
of ERISA, "affiliate" has the meaning specified in section 407(d) of ERISA
and section V of PTCE 95-60 and "employer security" has the meaning
specified in section 407(d) of ERISA).
Attachment A-5
(f) The execution and delivery of the Financing Documents and the
issuance and sale of the Notes hereunder will not involve any transaction
that would subject the Company, any ERISA Affiliate or any Plan to the
prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the IRC. The
representation by the Company in the first sentence of this Section A.11(f)
is made in reliance upon and subject to the accuracy of your representation
in Section 10.2 as to the sources of the funds used to pay the purchase
price of the Notes to be purchased by you.
A.12 Environmental Compliance.
Neither the Company nor any of the Subsidiaries has:
(a) knowledge or any notice of any claim, or the existence of any
proceeding raising any claim, or any facts that would give rise to any
claim, public or private, against the Company or any of the Subsidiaries or
any Property currently or previously owned, leased or operated by any of
them alleging any damage to the environment or violation of any
Environmental Laws, except, for such claims or facts that, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect;
(b) stored or disposed of any hazardous or toxic substances, wastes
or pollutants in a manner contrary to any Environmental Laws, except for
such violations that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect; or
(c) maintained, operated or permitted to exist conditions in
buildings and improvements on any Properties currently or previously owned,
leased or operated by any of them in a manner in violation of any
Environmental Laws, except, for such violations that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
A.13 Sale of Notes is Legal and Authorized; Obligations are Enforceable.
(a) Sale of Notes is Legal and Authorized. Each of the issuance, sale
and delivery of the Notes by the Company, the execution and delivery of the
Financing Documents by the Company and compliance by the Company with all
of the provisions of the Financing Documents:
(i) is within the corporate powers of the Company; and
(ii) is legal and does not conflict with, result in any breach
of any of the provisions of, constitute a default under, or result in
the creation of any Lien (other than a Liens granted to the Trustee
pursuant to the Security Documents) upon any Property of the Company
or any of the Subsidiaries under the provisions of,
Attachment A-6
(A) any agreement, charter instrument, bylaw or other
instrument to which it is a party or by which it or any of its
Property may be bound, or
(B) any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or
any of the Subsidiaries.
(b) Obligations are Enforceable. The execution and delivery of each
Financing Document has been duly authorized by all necessary action on the
part of the Company, each Financing Document has been executed and
delivered by one or more duly authorized officers of the Company, and each
Financing Document constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except that the enforceability of each such Financing Document may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium, or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
A.14 Governmental Consent to Sale of Notes.
(a) Generally. Neither the nature of the Company or any of the
Subsidiaries, or of any of their respective businesses or Properties, nor
any relationship between the Company or any of the Subsidiaries and any
other Person, nor any circumstance in connection with the offer, issuance,
sale or delivery of the Notes and the execution and delivery of any of the
Financing Documents, or the performance of the obligations under such
Financing Documents, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of the Company or any Subsidiary as a
condition to the execution and delivery of any of the Financing Documents,
the offer, issuance, sale or delivery of the Notes, or the performance of
the obligations under any of the Financing Documents.
(b) Particular Laws. The issuance and sale of the Notes, the
incurrence of the Debt represented thereby, and the performance under the
Financing Documents, by the Company,
(i) is not subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act of
1935, as amended, the Transportation Acts of the United States of
America (49 U.S.C.), as amended, or the Federal Power Act, as amended,
and
(ii) does not violate any provision of any statute or other rule
or regulation of any Governmental Authority applicable to the Company
or any of the Subsidiaries.
Attachment A-7
A.15 No Defaults Under Financing Documents.
No event has occurred and no condition exists that, upon the execution and
delivery of the Financing Documents and the issuance and sale of the Notes,
would constitute a Default or an Event of Default.
A.16 Private Offering of Notes.
(a) Offering. Neither the Company nor the Placement Agent (the only
Person authorized or employed by the Company as agent, broker, dealer or
otherwise in connection with the offering or sale of the Notes or any
similar Security of the Company, other than employees of the Company) has
offered any of the Notes or any similar Security of the Company for sale
to, or solicited offers to buy any thereof from, or otherwise approached or
negotiated with respect thereto with, any prospective purchaser, other than
not more than 40 Institutional Investors (including you), each of whom was
offered all or a portion of the Notes at private sale for investment.
(b) Securities Act. Neither the Company nor any of the Subsidiaries,
nor any agent acting on behalf of any of them, has taken any action that
would subject the issuance or sale of the Notes to the registration
provisions of section 5 of the Securities Act or to the registration,
qualification or other similar provisions of any securities or "blue sky"
law of any applicable jurisdiction.
A.17 Use of Proceeds of Notes.
(a) Use of Proceeds. The Company shall use the proceeds of the sale
of the Notes as set forth in Part A.17(a) of Annex 3.
(b) Margin Securities. No part of the proceeds from the sale of the
Notes under this Agreement will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of
Regulation G of the Board of Governors of the Federal Reserve System (12
CFR 207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a
violation of Regulation X of such Board (12 CFR 224) or to involve any
broker or dealer in a violation of Regulation T of such Board (12 CFR 220).
Margin stock does not constitute more than 1% of the value of the
consolidated assets of the Company and the Subsidiaries and the Company
does not have any present intention that margin stock will constitute more
than 1% of the value of such assets. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation G.
(c) Absence of Foreign or Enemy Status. Neither the sale of the Notes
nor the use of proceeds from the sale thereof will result in a violation of
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended), or any ruling
issued thereunder or any enabling legislation or Presidential Executive
Order in connection therewith.
Attachment A-8
A.18 Warranties and Representations in Other Financing Documents True.
Each of the warranties and representations of the Company contained in the
other Financing Documents is true.
Attachment A-9
ATTACHMENT B
B. CLOSING CONDITIONS
Your obligations under this Agreement, including, without limitation, the
obligation to purchase and pay for the Notes to be delivered to you at the
Closing, are subject to the following conditions precedent:
B.1 Opinions of Counsel.
You shall have received from
(a) Gardere & Xxxxx, L.L.P., special counsel for the Company,
(b) Xxxxxxxx, Xxxxxx & Finger, P.A., special counsel for the Trustee,
and
(c) Xxxx & Xxxxxx, your special counsel,
closing opinions, each dated as of the Closing Date, substantially in the
respective forms set forth in Exhibit B1, Exhibit B2 and Exhibit B3 and as to
such other matters as you may reasonably request. This Section B.1 shall
constitute direction by the Company to such counsel named in the immediately
preceding clause (a) to deliver such closing opinion to you.
B.2 Warranties and Representations True; Compliance with Agreement.
(a) Warranties and Representations True. The warranties and
representations of the Company in Attachment A and elsewhere in the
Financing Documents shall be true on the Closing Date with the same effect
as though made on and as of that date.
(b) Compliance with Financing Documents. The Company shall have
performed and complied with all agreements and conditions contained in the
Financing Documents that are required to be performed or complied with by
the Company on or prior to the Closing Date, and such performance and
compliance shall remain in effect on the Closing Date.
B.3 Company Certificates.
(a) Officer's Certificate. The Company shall have delivered to you a
certificate signed by two Senior Officers of the Company, dated the Closing
Date, certifying that the conditions specified in Section B.2 have been
fulfilled and as to such other matters as you may reasonably request.
(b) Secretary's Certificate. The Company shall have delivered to you
a certificate signed by the Secretary or an Assistant Secretary of the
Company certifying as to true and correct copies attached thereto of the
charter documents and bylaws of the Company and the resolutions attached
thereto and other corporate
Attachment B-1
proceedings relating to the authorization, execution and delivery of the
Financing Documents.
B.4 Trustee's Certificate.
The Trustee shall have delivered to you a certificate certifying as to the
resolutions attached thereto and other proceedings relating to the
authorization, execution and delivery of the Security Documents.
B.5 Legality.
The Notes shall on the Closing Date qualify as a legal investment for you
under applicable insurance law (without regard to any "basket" or "leeway"
provisions), and the acquisition thereof shall not subject you to any penalty or
other onerous condition pursuant to any such law or regulation, and you shall
have received such evidence as you may reasonably request to establish
compliance with this condition.
B.6 Security Documents, etc.
The Company and each of the other intended partes thereto shall have
executed and delivered each of the Collateral Trust Agreement, the Security
Agreement and the other Security Documents required by the terms of the
Collateral Trust Agreement, the Security Agreement and this Agreement to be in
effect on the Closing Date, and you shall have received original counterparts or
certified copies (as you may reasonably request) of each of the foregoing. The
Company shall have taken, or caused to be taken, all actions necessary to
perfect the Liens of the Trustee contemplated by the Security Documents to the
extent such perfection is required by the terms of the Security Documents.
B.7 Private Placement Number.
There shall have been obtained a private placement number for the Notes
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners), and you shall have been informed in writing of such private
placement number.
B.8 Expenses.
All fees and disbursements required to be paid pursuant to Section 11.6
shall have been paid in full.
B.9 Proceedings Satisfactory.
All proceedings taken in connection with the issuance and sale of the Notes
and all documents and papers relating thereto shall be satisfactory to you and
your special counsel. You and your special counsel shall have received copies of
such documents and papers as you or they may reasonably request in connection
therewith or in connection with your special counsel's closing opinion, all in
form and substance satisfactory to you and your special counsel.
Attachment B-2
EXHIBIT A
[FORM OF NOTE]
THIS NOTE AND THE NOTE PURCHASE AGREEMENT REFERRED TO BELOW MAY BE SUBJECT TO
THE TERMS OF A COLLATERAL TRUST AGREEMENT, DATED AS OF NOVEMBER 15, 1996, AS
SUCH COLLATERAL TRUST AGREEMENT MAY BE AMENDED, RESTATED OR OTHERWISE MODIFIED
FROM TIME TO TIME, AMONG THE COMPANY, AMERICAN EXPRESS TRAVEL RELATED SERVICES
COMPANY, INC., PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, AND WILMINGTON TRUST
COMPANY. BY ACCEPTANCE OF THIS NOTE, THE HOLDER HEREOF MAY BECOME BOUND BY THE
PROVISIONS OF SUCH COLLATERAL TRUST AGREEMENT, WHETHER OR NOT SUCH HOLDER
BECOMES A PARTY TO SUCH COLLATERAL TRUST AGREEMENT.
ACE CASH EXPRESS, INC.
9.03% Senior Secured Notes due November 15, 2003
No. R-___
$ [Date]
-------------
PPN: 004403 A* 2
ACE CASH EXPRESS, INC., a Texas corporation, (the "Company"), for value
received, hereby promises to pay to ________________________ or registered
assigns the principal sum of ________________________ DOLLARS ($____________) on
November 15, 2003 and to pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on the unpaid principal balance hereof from the date of
this Note at the rate of at the rate of 9.03% per annum, semi-annually on May 15
and November 15 in each year, commencing on May 15, 1997 or the payment date
next succeeding the date hereof, until the principal amount hereof in respect of
which such interest shall have accrued shall become due and payable; and to pay
on demand interest on any overdue principal (including any overdue prepayment of
principal) and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate equal to the
lesser of (a) the highest rate allowed by applicable law or (b) the greater of
(i) 11.03% per annum or (ii) 2% over the rate of interest publicly announced by
Citibank, N.A. or its successor in New York City as its "base" or "prime" rate.
Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Note Purchase Agreement
referred to below.
This Note is one of the issue of the 9.03% Senior Secured Notes due
November 15, 2003 of the Company issued in an aggregate principal amount limited
to $20,000,000
EXHIBIT A-1
pursuant to the Company's Note Purchase Agreement (as may be amended, restated
or otherwise modified from time to time, the "Note Purchase Agreement"), dated
as of November 15, 1996, with the purchaser listed on Annex 1 thereto, and is
entitled to the benefits thereof. Capitalized terms used herein and not
otherwise defined herein have the meanings specified in the Note Purchase
Agreement. This Note is secured pursuant to the terms of the Security Documents
and is entitled to the benefits thereof.
The Company agrees to make required payments on the Notes as provided in
the Note Purchase Agreement. In addition, as provided in the Note Purchase
Agreement, this Note is subject to prepayment, in whole or in part, in certain
cases without a Make-Whole Amount and in other cases with a Make-Whole Amount.
This Note is a registered Note and is transferable only by surrender hereof
at the principal office of the Company as specified in the Note Purchase
Agreement, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of this Note or its attorney duly authorized
in writing.
Under certain circumstances, as specified in the Note Purchase Agreement,
the principal of this Note (together with any applicable Make-Whole Amount) may
be declared due and payable in the manner and with the effect provided in the
Note Purchase Agreement.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
ACE CASH EXPRESS, INC.
By
--------------------------------
Name:
Title:
EXHIBIT A-2
EXHIBIT B1
[FORM OF CLOSING OPINION OF SPECIAL COUNSEL FOR THE COMPANY]
EXHIBIT B1-1
EXHIBIT B2
[FORM OF CLOSING OPINION OF SPECIAL COUNSEL FOR THE TRUSTEE]
EXHIBIT B2-1
EXHIBIT B3
[FORM OF CLOSING OPINION OF SPECIAL COUNSEL FOR THE PURCHASER]
EXHIBIT B3-1
EXHIBIT C
[FORM OF COLLATERAL TRUST AGREEMENT]
EXHIBIT D
[FORM OF SECURITY AGREEMENT]
