EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement"), dated as of September 7, 2004
(the "Execution Date"), is by and among CAMCO, INC., a Nevada corporation
("Camco"); XXXXXX X. XXXX ("Xxxx"); SUPERPAWN, INC., a Nevada corporation
("SuperPawn"); and CASH AMERICA INTERNATIONAL, INC., a Texas corporation
("Purchaser").
WITNESSETH:
WHEREAS, Camco owns and operates a business that consists of a chain of
SuperPawn pawnshops located at the locations identified on Schedule 1.0(a)
attached hereto and incorporated herein by this reference (the "Primary
Business").
WHEREAS, SuperPawn owns and operates a business that franchises SuperPawn
pawnshop facilities to third parties at the locations identified on Schedule
1.0(b) (the "Franchise Business").
WHEREAS, the Primary Business and the Franchise Business are collectively
referred to herein as the "Business," and Camco and SuperPawn are collectively
referred to herein as the "Seller."
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, all of the assets of Seller and the Business, including,
without limitation, the assets listed on Schedule 1.0(c) attached hereto and
incorporated herein by this reference, but excluding the assets of Seller listed
on Schedule 1.0(d) attached hereto and incorporated herein by this reference
(the "Excluded Assets") (such assets other than the Excluded Assets,
collectively, the "Assets").
WHEREAS, Xxxx is the principal shareholder of Camco and SuperPawn and is a
party to this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties
and covenants herein contained, and on the terms and subject to the conditions
herein set forth, the parties hereto hereby agree as follows:
The definitions of certain defined terms used in Articles I through VIII
of this Agreement are set forth in Article IX of this Agreement. A definitions
cross-reference table indicating the particular section of this Agreement in
which the definition of each defined term used in this Agreement can be found is
set forth on Attachment "A" attached hereto. Attachment "A" hereto also includes
a descriptive list of all Schedules and Exhibits included in this Agreement.
ARTICLE I
PURCHASE AND SALE
Section 1.1 Purchase and Sale of Assets. Subject to and upon the terms and
conditions contained herein, at the Closing, Seller shall sell, transfer,
assign, convey and deliver to Purchaser, free and clear of all security
interests, liens, claims and encumbrances (other than the Assumed Liabilities),
and Purchaser shall purchase, accept and acquire from Seller, the Assets and
assume the Assumed Liabilities.
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Section 1.2 Purchase Consideration.
1.2.1 Purchase Consideration - General. The consideration from
Purchaser to Seller (or, in the case of Section 1.2.1(c) below, Seller, Mack,
Waters, Rowan and Xxxxx Xxxxxxx ("Xxxxxxx")) for the Assets shall consist of the
following (the "Purchase Consideration"):
(a) a wire transfer of an amount equal to the Cash
Consideration, payable in immediately available funds to Seller in such bank
account as is designated by Seller in writing to Purchaser at least 24 hours
prior to the Closing;
(b) the issuance of the following number of duly authorized,
fully paid and non-assessable shares of Purchaser's $.10 par value common stock
("Shares") to Camco or Camco's designee, to be delivered to Escrow Agent to be
held and disposed of pursuant to the Escrow Agreement: the number of Shares
shall be determined by dividing $15,000,000 by the Trading Value; and
(c) wire transfers to each of Seller, Mack, Waters, Rowan and
Xxxxxxx of the respective amounts set forth in Paragraph 18 of the
Non-Competition Agreement (the "Non-Competition Consideration"), in immediately
available funds.
1.2.2 Purchase Consideration - Definitions.
(a) The term "Cash Consideration" means (i) One Hundred
Million Three Hundred Fifty-Eight Thousand and No/100 U.S. Dollars
($100,358,000.00), minus (ii) the Store Credit Amount, all as the amount
determined pursuant to subsections 1.2.2(a)(i)-(ii) herein may be adjusted by
(iii) the Initial Adjusted Debt Amount in accordance with Section 1.2.2(b)
below.
(b) The term "Initial Adjusted Debt Amount" shall have the
meaning assigned to such term in Schedule 1.2.2. If the Initial Adjusted Debt
Amount is greater than $30,508,000.00, the Cash Consideration shall be increased
by $1.00 for each $1.00 the Initial Adjusted Debt Amount is greater than
$30,508,000.00 and if the Initial Adjusted Debt Amount is less than
$30,508,000.00, the Cash Consideration shall be decreased by $1.00 for each
$1.00 that the Initial Adjusted Debt Amount is less than $30,508,000.00 (the
parties agree that Seller's debt obligations as of March 31, 2004 amounted to
$30,508,000.00).
(c) The term "Store Credit Amount" shall mean 90% of the sum
of (i) all layaway deposits paid to Seller under all active layaway accounts of
the Business in effect as of the Closing Date, plus (ii) the amount of all
unused gift certificates and store credits of Seller as of the Closing Date to
the extent such unused gift certificates and store credits were issued to
customers of Seller on or after the 365th day prior to the Closing Date.
(d) For purposes of Section 1.2.1(b) above, the term "Trading
Value" means the average per share closing price of Purchaser's common stock on
the New York Stock Exchange for the ten (10) trading days immediately preceding
the day that is two days prior to the Closing Date; provided, however, in no
event shall the Trading Value be (i) less than $3.00 per share less than the
average per share closing price of Purchaser's common stock on the New York
Stock Exchange for the ten (10) trading days immediately preceding the Execution
Date (such average, the "Signing Date Average"), or (ii) greater than $3.00 per
share greater than the Signing Date Average. If, between the date of this
Agreement and the Closing Date, Purchaser's outstanding common stock shall have
been changed into a different number of shares or different class by reason of
any reclassification,
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recapitalization, stock split, split-up, combination or exchange of shares or a
stock dividend or dividend payable in any other securities shall be declared
with a record date within such period, or any similar event shall have occurred,
the consideration to be delivered pursuant to Section 1.2.1(b) shall be
appropriately adjusted to provide to Seller the same economic effect as
contemplated by this Agreement prior to such event.
Section 1.3 Assumed Liabilities. In addition to the Purchase
Consideration, Purchaser will assume the liabilities and obligations of Seller
that are expressly listed on Schedule 1.3 attached hereto (collectively, the
"Assumed Liabilities"). Notwithstanding the foregoing, Purchaser does not agree
to assume, and shall not assume or pay, perform or discharge any Liabilities or
obligations of Seller other than the Assumed Liabilities.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
SELLER
Seller hereby makes the representations and warranties set forth in this Article
II to Purchaser, and represents and warrants that such statements are true and
correct as of the date hereof. For purposes of this Agreement, the "Knowledge"
of Seller shall include the knowledge of Seller and Xxxx. Except as otherwise
specifically indicated, an individual will be deemed to have "Knowledge" of a
particular fact or other matter if: (a) such individual is actually aware of
such fact or other matter; or (b) a reasonably prudent individual would be
expected to discover or otherwise become aware of such fact or other matter in
the course of conducting a "reasonable investigation" regarding the accuracy of
any representations or warranties contained in this Agreement. For Xxxx and
individuals related to, or employed or engaged by, Seller or Xxxx, a "reasonable
investigation" shall be deemed to have been made if such individual has made a
"due inquiry" to any of the Key Persons of Seller and to Seller's principal
external accountants and lawyers. For individuals related to, or employed or
engaged by, Purchaser, a "reasonable investigation" shall be deemed to have been
made if such individual has made a "due inquiry" to any of the Key Persons of
Purchaser and to Purchaser's principal external accountants and lawyers. As used
herein, the term "Key Persons of Seller" shall mean the individuals listed on
Schedule 2.0(a) and the term "Key Persons of Purchaser" shall mean the
individuals listed on Schedule 2.0(b). A Person (other than an individual) will
be deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving as a shareholder (other than as a shareholder of a
publicly traded company), member, partner, trustee, director or officer of such
Person has Knowledge of such fact or other matter (as such Knowledge is
described in subsections (a) and (b) of this Section above). As used herein, the
term "Actual Knowledge" means (i) with respect to Seller, the actual knowledge
of the Key Persons of Seller and, (ii) with respect to Purchaser, the actual
knowledge of the Key Persons of Purchaser. The Schedules to this Agreement and
any supplements thereto are incorporated herein by this reference. No
representation or warranty of Seller contained in this Agreement shall be
affected or deemed waived or otherwise impaired or limited by reason of any
investigation or due diligence conducted by Purchaser or its representatives,
except to the extent that on or before the Closing Date Purchaser obtains Actual
Knowledge of any facts, events or circumstances that would cause the particular
representation or warranty of Seller in question to be untrue. No representation
or warranty of Purchaser contained in this Agreement shall be affected or deemed
waived or otherwise impaired or limited by reason of any investigation or due
diligence conducted by Seller or its representatives, except to the extent that
on or before the Closing Date Seller obtains Actual Knowledge of any facts,
events or circumstances that would cause the particular representation or
warranty of Purchaser in question to be untrue.
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Section 2.1 Organization and Good Standing. Each entity comprising Seller
(each a "Seller Entity") is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada, with all requisite
corporate power and authority to carry on the Business as currently conducted,
to own or hold under lease its properties and assets, to execute and deliver
this Agreement and the other Transaction Documents and to consummate the
transactions contemplated hereby. Each Seller Entity is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the
properties owned by it, or the nature of the activities conducted by it,
requires such qualification, except in such states where the failure to be so
qualified does not have a Material Adverse Effect, either individually or in the
aggregate. Except as disclosed on Schedule 2.1, neither Seller Entity owns,
directly or indirectly, any interest in any corporation, business trust, joint
stock company, partnership, joint venture, franchise, limited liability company
or other business organization or association. Seller shall deliver to Purchaser
true and complete copies of the articles of incorporation, bylaws and all other
organizational documents of each Seller Entity, and all of such documents are in
full force and effect on the date hereof. Additionally, the officers and
directors of each Seller Entity as of the Execution Date are as set forth on
Schedule 2.1 (and such Schedule 2.1 shall be updated through the Closing Date in
the Supplemental Disclosure Agreement in the manner set forth in Section 5.4
below).
Section 2.2 Authorization and Validity. Except as disclosed on Schedule
2.2, Seller and Xxxx have the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and the other Transaction
Documents to be executed and delivered by either Seller or Xxxx at or prior to
the Closing and to perform their obligations under this Agreement and the other
Transaction Documents, and, except as disclosed on Schedule 2.2, such action has
been duly authorized by all necessary action by the shareholders and boards of
directors of each Seller Entity. This Agreement has been, and subject to
obtaining the consents and approvals set forth in Schedule 2.3 and Schedule 2.4,
the other Transaction Documents will be at the Closing, duly executed and
delivered by each Seller Entity and by Xxxx (as applicable). This Agreement
constitutes, and subject to obtaining the consents and approvals set forth in
Schedule 2.3 and Schedule 2.4, each of the other Transaction Documents at the
Closing will constitute, legal, valid and binding obligations of Seller and
Xxxx, enforceable against Seller and Xxxx (as applicable) in accordance with
their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and subject to general principles of equity.
Section 2.3 No Violation. Except as disclosed on Schedule 2.3, neither the
execution, delivery or performance of this Agreement or the Transaction
Documents nor the consummation of the transactions contemplated hereby or
thereby will (a) conflict with, or result in a violation or breach of the terms,
conditions or provisions of, or constitute a default under, the Articles of
Incorporation or bylaws of either Seller Entity or under any agreement,
indenture or other instrument under which Seller or Xxxx is bound or to which
any of the Assets are subject (other than conflicts, violations or breaches of
which Seller does not have Actual Knowledge and which do not, either
individually or in the aggregate, have a Material Adverse Effect), or result in
the creation or imposition of any security interest, lien, charge or encumbrance
upon any of the Assets; or (b) cause any change in the rights or obligations of
any party under any such agreement, indenture or other instrument (other than
changes of which Seller does not have Actual Knowledge and which do not, either
individually or in the aggregate, have a Material Adverse Effect); or (c)
violate or conflict with any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over Seller, Xxxx, the Business or the Assets, (other than
violations or conflicts of which Seller does not have Actual Knowledge and which
do not, either individually or in the aggregate, have a Material Adverse
Effect); or (d) result in any shareholder of either Seller Entity having the
right to exercise dissenters' appraisal rights.
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Section 2.4 Consents. Except as set forth in Schedule 2.4 and except for
approvals required under the HSR Act, no consent, authorization, approval,
permit or license of, or filing with, any governmental or public body or
authority, or any lender of Seller or Xxxx, or any other Person other than
Persons identified on Schedule 2.9 as Persons whose consent is required, is
required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement or the Transaction Documents and the
consummation of the transactions contemplated herein or therein on the part of
Seller or Xxxx.
Section 2.5 Consumer Loans. All Consumer Loans made in the Business have
been made in compliance and accordance with all Applicable Laws, except where
Seller has no Actual Knowledge of the failure to do so and such unknown failure
would not, either individually or in the aggregate, have a Material Adverse
Effect. All Consumer Loan Documents represent bona fide assets of Seller and
bona fide transactions between Seller and the respective parties to such
transactions. Seller's books and records that are being delivered to Purchaser
contain an accurate record, in all material respects, of the Consumer Loans and
the Consumer Loan Documents, including, without limitation, for each loan
written, all material loan application data and back-up documentation, all
material underwriting criteria and documentation, all notices of adverse action,
all promissory notes and loan documents, all pawn tickets, all buy-sell and/or
repurchase agreements, documentary evidence of compliance with all Applicable
Laws, the underlying check or other items securing or evidencing any security
for such loans, if applicable, the amount loaned, the lawful interest charge and
other lawful charges, if any, to accrue thereon, renewals thereof, all layaway
contracts, and with respect to buy-sell or repurchase agreements - the purchase
price, the repurchase price, and other lawful charges, if any, and with respect
to pawn loans and buy-sell and/or repurchase agreements - an accurate
description, in all material respects, of the pledged goods or the goods subject
to buy-sell or repurchase agreements. All interest, fees and charges on each
Consumer Loan and layaway contract included in the Consumer Loans do not exceed
the maximum rate of interest, charges and fees allowed by Applicable Laws. In
addition to, and without limiting the foregoing, the Consumer Loan Documents are
complete in every material respect and comply in all material respects with all
Applicable Laws. Attached to Schedule 2.5(a) is a true, complete and correct
copy of Seller's standard agreements for the creation of Consumer Loans. Except
as set forth on Schedule 2.5(b), each Consumer Loan has been created using such
standard forms of agreement without material modification or substitution
(except as may be consistent with Seller's ordinary course of business -
provided that any such consistent material modification or substitution is
described in detail on Schedule 2.5(b)) except where Seller has no Actual
Knowledge of the failure to use such standard forms without material
modification and such unknown failure would not, either individually or in the
aggregate, have a Material Adverse Effect; provided, however, in no event does
the aggregate value of the principal amount of all Consumer Loans created on
forms other than on such standard forms exceed a total value of $10,000 in the
aggregate for all Shops (the parties hereto agree that all Consumer Loans that
are not on such standard forms shall be treated as Missing Loans if any Losses
are suffered as a result of such Consumer Loans not being made on such standard
forms.) With respect to pawn loans, all pawn tickets accurately reflect, in all
material respects, that all outstanding pawn loans bear no more than the maximum
lawful finance charge and other lawful charges, if any, applicable to the
transaction and merchandise pawned and all buy-sell or repurchase agreements
accurately reflect, in all material respects, that the repurchase price
represents no more than the maximum lawful repurchase price and all other
charges allowed by law, if any, in connection with each buy-sell transaction.
All pawned merchandise reflected by Seller's books and records is collateralized
as required by law and is collateralized so that Seller has a lawful and valid
security interest and first lien on such pawned merchandise, except where Seller
has no Actual Knowledge of the failure to do so and such unknown failure would
not, either individually or in the aggregate, have a Material Adverse Effect;
provided, however, in no event does the aggregate value of all pawned
merchandise which is not
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collateralized as required by law and/or for which Seller has no valid security
interest and/or a valid first lien on such pawned merchandise exceed a total
value of $10,000 in the aggregate for all Shops (the parties hereto agree that
all pawned merchandise that is not collateralized in the manner described in
this sentence shall be treated as Missing Loans.) All merchandise which is
subject to the terms and conditions of buy-sell or repurchase agreements is
owned by Seller and Seller has good and indefeasible title to all such
merchandise, subject only to the terms of the applicable buy-sell or repurchase
agreements. All pawned merchandise and all merchandise subject to buy-sell or
repurchase agreements, layaway contracts or statutory hold-periods is physically
present on the premises of the Business, and all such merchandise is available
for redemption, repurchase or sale, as the case may be. The Consumer Loan
Documents represent or will represent valid and enforceable obligations arising
from transactions actually made or performed by Seller in the ordinary course of
its business; provided, however, the number of Consumer Loans will fluctuate
between the Execution Date and the Closing Date in Seller's normal course of
business. As used herein, the term "Customer Receivables" means all customer
receivables, including, without limitation, all Consumer Loans included in the
Assets, together with all other accounts receivable of Seller. A summary
description of all Customer Receivables, summarized on a Shop-by-Shop basis as
of July 31, 2004, is set forth on Schedule 2.5(c) (and such Schedule 2.5(c)
shall be updated through the Closing Date in the Supplemental Disclosure
Agreement in the manner set forth in Section 5.4 below.) Except to the extent
paid prior to the Closing Date, such Customer Receivables are or will be valid
and binding obligations of the parties thereto enforceable against them in
accordance with the terms of such agreements; provided, however, at the Closing
Date, some deferred deposit (payday) loans will be past due (but the proportion
of the deferred deposit (payday) loans that are past due as of the Closing Date
will be consistent with Seller's normal course of business). Except as set forth
on Schedule 2.5(c), there is no contest, claim, defense or right of setoff,
other than returns in the ordinary course of business of Seller, relating to the
amount or validity of the Customer Receivables, and Seller has not waived any
material terms of any Customer Receivable (except as may be consistent with
Seller's ordinary course of business - provided that any such consistent waiver
of material terms is described in detail on Schedule 2.5(b)). Schedule 1.0(c)
lists the aggregate active Consumer Loan balances by loan category (pawn loans
secured by collateral other than certificates of title or titled goods and
vehicles, pawn loans secured by certificates of title or titled goods and
vehicles, deferred deposit (payday) loans, title loans and other), with each
such loan category further broken down as current loans or delinquent loans and
delinquent loans carried in inventory, on a Shop-by-Shop basis outstanding as of
July 31, 2004 (and such Schedule 1.0(c) shall be updated through the Closing
Date in the Supplemental Disclosure Agreement in the manner set forth in Section
5.4 below.)
Section 2.6 Financial Statements. Schedule 2.6(a) contains Seller's
audited balance sheets as of December 31, 2003, December 31, 2002 and December
31, 2001, Seller's unaudited balance sheet as of July 31, 2004, Seller's audited
statements of income, retained earnings and cash flows for the years ended
December 31, 2003, December 31, 2002 and December 31, 2001, and Seller's
unaudited statements of income, retained earnings and cash flows for the
seven-month period ended July 31, 2004 (collectively, the "Seller Financial
Statements"). As of their respective dates, to the Knowledge of Seller's Key
Officers, (a) the Seller Financial Statements do not (and the Additional
Financial Statements will not) contain any untrue statements of any material
facts or omit to state any material facts necessary to make the statements made,
in light of the circumstances under which such statements were made, not
misleading with respect to the respective periods covered by the Seller
Financial Statements (and the Additional Financial Statements, as the case may
be); (b) the financial statements and other financial information included in
the Seller Financial Statements (and the Additional Financial Statements, as the
case may be) fairly present in all material respects the financial condition,
results of operations and cash flows of Seller and the Business as of, and for,
the respective periods presented in the Seller Financial Statements (and the
Additional Financial Statements, as the case may be). Except as
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disclosed on Schedule 2.6(b), the Seller Financial Statements have been (and the
Additional Financial Statements will be) prepared in accordance with GAAP and
reflect the consistent application of GAAP throughout the periods involved,
except as expressly disclosed in the notes to such financial statements and
except for normal year-end adjustments in the case of the unaudited Seller
Financial Statements that were prepared for the seven-month period ended July
31, 2004. Also contained in Schedule 2.6(a) is a descriptive list of all
management letters and management letter responses submitted in connection with
the preparation of the Seller Financial Statements and Seller has previously
delivered copies of all such management letters and management letter responses
to Purchaser. Without limiting any other provision of this Agreement, as to the
Key Officers of Seller for purposes of this Section 2.6 only, a "reasonable
investigation" for purposes of Knowledge shall be deemed to have been made if
each Key Officer has made a "due inquiry" to the Key Persons of Seller and any
such other key employees of Seller as each such Key Officer deems reasonably
appropriate for purposes of making the Seller Financial Statements and the
Additional Financial Statements compliant with Seller's representations and
warranties set forth in this Section 2.6. As used herein, Seller's "Key
Officers" as of the date hereof shall be Xxxx, Waters and Rowan.
Section 2.7 Liabilities and Obligations. Schedule 2.7 reflects all
Liabilities of Seller (other than Current Liabilities) that relate to the
Business or the Assets and the operation thereof, arising out of transactions
effected or events occurring on or prior to July 31, 2004 (provided that on the
Closing Date, for purposes of Section 2.7, Section 4.3(a) and Section 4.4(d),
such July 31, 2004 date shall be deemed amended to be the Closing Date) to the
extent Seller has Knowledge of such Liabilities and such Liabilities are not
otherwise disclosed on any other Schedule to this Agreement (and such Schedule
2.7 shall be updated through the Closing Date in the Supplemental Disclosure
Agreement in the manner set forth in Section 5.4 below.) Except as set forth in
any Schedule to this Agreement, Seller is not liable upon or with respect to, or
obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, royalty or other obligation or dividend of any
Person other than Seller except to the extent such Seller has no Actual
Knowledge of such liability or obligation and such unknown liability or
obligation would not have a Material Adverse Effect, either individually or in
the aggregate, on the Assets, the Business or the transactions contemplated by
this Agreement, and Seller has no Knowledge of any legitimate basis for the
assertion of any other such Liabilities of any nature or in any amount. Except
as set forth in Schedule 2.7, since December 31, 2003, Seller has not paid any
dividends, or made any distribution to, or in any way compensated or paid
remuneration to, any shareholder or any of their respective affiliates.
Section 2.8 Title and Use of Assets. Except as set forth on Schedule 2.8,
Seller has, or prior to Closing will have, good, valid and marketable title to
all of the Assets, free and clear of all mortgages, liens, pledges, charges,
security interests, encumbrances or other third party interests of any nature
except for the lien of current taxes or assessments not yet delinquent, liens
and deposits (including mechanics', materialmen's and other liens) arising in
the ordinary course of business securing amounts not yet due and payable, other
Encumbrances that, individually or in the aggregate, do not have a Material
Adverse Effect upon the Assets affected thereby (provided, however, that all
such other Encumbrances will be removed from the Assets prior to the Closing
unless the same are Assumed Liabilities) and, with respect to the Owned Real
Property, the Permitted Encumbrances. Upon consummation of the transactions
contemplated hereby, Purchaser shall, subject to the Assumed Liabilities,
receive good, valid and marketable title to the Assets free and clear of all
security interests, liens, claims and encumbrances, mortgages, pledges,
restrictions, prior assignments and any other similar claims other than for
liens and deposits (including mechanics', materialmen's and other liens) arising
in the ordinary course of business securing amounts not yet due and payable,
and, with respect to the Owned Real Property, the Permitted Encumbrances. Except
as set forth on Schedule 2.8, Seller
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owns, leases or otherwise possesses a transferable right to use all the Assets
(subject to the Assumed Liabilities) and will transfer all of such rights to
Purchaser at Closing.
Section 2.9 Commitments. Schedule 2.9 sets forth all Commitments. Except
as set forth in Schedule 2.9 and Schedule 2.5, Seller has not entered into, nor
are the Assets or the business of Seller bound by, whether or not in writing,
any other Commitments. True, correct and complete copies of the Commitments
(including summaries of all oral Commitments), have heretofore been delivered to
Purchaser. To Seller's Knowledge, no events, occurrences, acts or omissions
exist that, with the giving of notice or lapse of time or both, would constitute
material defaults by Seller under the Commitments. No penalties have been
incurred, and there are no amendments pending, with respect to the Commitments.
There are no past defaults of Seller that constitute existing material defaults
by Seller under the Commitments. Except as disclosed on Schedule 2.9 or Schedule
2.5, the Commitments are in full force and effect and are valid and enforceable
obligations of Seller and, to the Knowledge of Seller, the other parties thereto
in accordance with their respective terms, except (i) as rights to indemnity
thereunder may be limited by federal or state securities laws or the public
policies embodied therein, (ii) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (iii) as the remedy
of specific performance and other forms of injunctive relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding may be brought; and no defenses, off-sets or counterclaims have been
asserted or, to the Knowledge of Seller, may be legitimately made by any party
thereto, nor has Seller waived any material rights thereunder. Except as
disclosed on Schedule 2.9 or Schedule 2.5, Seller has not received notice of any
default with respect to any Commitment that has not been cured. Except as
disclosed on Schedule 2.9 or Schedule 2.5, Seller has not received notice of any
plan or intention of any other party to any Commitment to exercise any right to
cancel or terminate any Commitment.
Section 2.10 Patents, Trademarks, Service Marks, Copyrights and
Technology.
(a) Seller owns or, to Seller's Knowledge, possesses valid
licenses to use, any software, patents, trademarks, service marks, trade dress,
trade names, assumed or fictitious names and copyrights included in the Assets,
if any, without, to Seller's Knowledge, conflict with the rights of others,
except to the extent that Seller's failure to own, or to have a valid license to
use, any Immaterial IP without conflict with the rights of others would not have
a Material Adverse Effect, either individually or in the aggregate. As used
herein, the term "Immaterial IP" means any software, patents, trademarks,
service marks, trades dress, trade names, assumed or fictitious names and
copyrights not owned by Seller and which, if Seller's ability to use the same in
substantially the same manner in which Seller is using the same in Seller's
ordinary course of business as of, and prior to, the date hereof, was lost or
adversely hindered, would not have a Material Adverse Effect, either
individually or in the aggregate.
(b) Set forth in Schedule 2.10 is a description of all (i)
software, domain names, trademarks, trade names, assumed or fictitious business
names, service marks, registered copyrights (if any), patents, and pending
applications for any of the foregoing included in the Assets that are owned or
used by Seller (collectively, "Material IP"); provided, however, Material IP
shall not include, and Seller has no obligation to describe or list on any
Schedule hereto, any Immaterial IP of which Seller has no Actual Knowledge, (ii)
written license agreements in effect as of the date hereof under which Seller
grants any Person rights to use any of the Material IP or to use any of the
Immaterial IP included in the Assets if the license agreement covering such
Immaterial IP is to be an Assumed Liability, (iii) written license agreements
currently in effect pursuant to which Seller obtained the right to use any
Material IP owned by any third Person and to use any Immaterial IP included in
the Assets
8
owned by any third Person if the license agreement covering such Immaterial IP
is to be an Assumed Liability, and (iv) written agreements currently in effect
in which Seller grants or receives to or from any Person the right to use any
Material IP or any Immaterial IP included in the Assets if the license agreement
covering such Immaterial IP is to be an Assumed Liability (except to the extent
Seller has no Actual Knowledge of such Immaterial IP), material know-how or
material process that qualifies as a trade secret under the laws of the state of
Nevada (collectively, the "Proprietary Rights"); provided, however, Schedule
2.10 does not list all of Seller's software licenses for shrink-wrap type
pc-based software that is loaded, or intended to be loaded, separately onto
desk-top or lap-top computers ("Shrink-Wrap Software"), but Schedule 2.10 does
list each Shrink-Wrap Software program utilized by Seller for which Seller must
have a valid license in order to legally install such software on multiple
computers for multiple users and the number of licenses/seats Seller lawfully
possesses for each such program. For avoidance of doubt, "Proprietary Rights"
does not include any rights that are not included in the Assets.
(c) Except as set forth in Schedule 2.10, Seller has not
within the two (2) year period immediately preceding the date of this Agreement
granted any Person any rights in any of the Proprietary Rights, and, to Seller's
Knowledge, Seller's use of the Proprietary Rights has not infringed any
trademark, service xxxx, copyright, patent, trade name or trade secret of any
third Person. Except as set forth in Schedule 2.4 or in any of the agreements
listed on Schedule 2.9 or 2.10, no consent of third parties will be required for
the transfer of the Proprietary Rights to Purchaser upon consummation of the
transactions contemplated hereby. Except as set forth in Schedule 2.4, Schedule
2.9 or Schedule 2.10 (including, without limitation, any of the agreements
listed therein), the Proprietary Rights are, or will on the Closing Date be,
freely transferable, free and clear of all mortgages, licenses, liens, pledges,
charges, security interests, or encumbrances. Except as set forth in Schedule
2.9 or Schedule 2.10 (including, without limitation, any of the agreements
listed therein), Seller has not received any written claim from any Person
claiming to own or hold a license to use any of the Proprietary Rights owned by
Seller, and, to Seller's Knowledge, there is no valid basis for any such claim.
Except as set forth in Schedule 2.10, to Seller's Knowledge, each of the
Proprietary Rights is valid and subsisting, has not been canceled, abandoned or
otherwise terminated and, if applicable, has been duly issued or filed.
(d) Seller has not received any claim or been served any
complaint, and, to Seller's Knowledge, no basis for any such claim or complaint
exists and no lawsuit has been filed or threatened, alleging that Seller's use
of any Proprietary Rights has infringed any copyright, patent, trade secret,
trademark, trade name, trade dress or other proprietary rights of any Person.
(e) This Section 2.10 sets forth Seller's and Xxxx'x sole
representations or warranties regarding or relating to (i) any infringement or
alleged infringement of any copyright, patent, trade secret, trademark, service
xxxx or other intellectual property, or (ii) any claim, threat or action
relating to such infringement or alleged infringement. Accordingly, and
notwithstanding any other provision of this Agreement, no such infringement or
alleged infringement (or claim, threat or action relating thereto) shall be
deemed to constitute or give rise to any breach or violation of any
representation, warranty or other provision set forth in any part of this
Agreement other than this Section 2.10. For avoidance of doubt, nothing in this
Section 2.10(e) limits any of the representations or warranties set forth in
this Section 2.10.
Section 2.11 Trade Secrets and Customer Lists. Except as set forth on
Schedule 2.9 or Schedule 2.10 (including, without limitation, any of the
agreements listed therein) or Schedule 2.11, Seller has the right to use, free
and clear of any claims or rights of others, all of Seller's trade secrets and
customer lists (subject to privacy law restrictions and Seller's privacy related
policies, to the extent such privacy related policies are described on Schedule
2.11) required for the marketing, as is currently being
9
conducted by Seller, of all merchandise and services presently sold or marketed
by Seller (other than merchandise or services solely included in, or solely
associated with, the Excluded Assets) , and except for any claims or rights of
others described or referenced in this Section 2.11 of which Seller has no
Actual Knowledge and which would not have a Material Adverse Effect, either
individually or in the aggregate.
Section 2.12 Compliance with Laws. Except as set forth on Schedule
2.12(a), Seller, the Assets and the Business are, and for the two full years
prior to the date hereof have been, in compliance with all Applicable Laws,
except for failures to comply with an Applicable Law of which Seller has no
Actual Knowledge and which unknown failures, either individually or in the
aggregate, did not or do not have a Material Adverse Effect. Except as set forth
on Schedule 2.12(a), the PRIMA Client Software (as defined in the form Software
License Agreement attached hereto as Exhibit "F") operates in such a manner so
that all transactions of the Business conducted through such software as of the
date hereof are transacted in compliance with all Applicable Laws, except for
failures to comply with an Applicable Law of which Seller has no Actual
Knowledge and which unknown failures, either individually or in the aggregate,
did not or do not have a Material Adverse Effect. To Seller's Knowledge, Seller
has filed with the proper authorities all necessary statements and reports with
respect to the Assets. Except as set forth on Schedule 2.12(a), no event has
occurred or circumstance exists that (with or without notice or lapse of time)
constitutes or results in a violation by Seller of, or a failure on the part of
Seller to comply with, any Applicable Laws that would affect the Assets, the
Business, the Real Estate, the Assumed Liabilities or Seller, except for
failures to comply with an Applicable Law of which Seller has no Actual
Knowledge and which, either individually or in the aggregate, did not or do not
have a Material Adverse Effect. Except as disclosed on Schedule 2.12(a), Seller
has received no written notice that any of the Real Estate or the premises
thereon is in violation of any Applicable Law. Except as otherwise noted on
Schedule 2.12(b), Seller possesses all necessary licenses, permits and
governmental authorizations that are required by applicable governmental
agencies for Seller to conduct its business in accordance with Applicable Laws,
and all applications required to have been filed for the renewal of such
instruments have been filed on a timely basis with the appropriate governmental
bodies, except where Seller has no Actual Knowledge of the failure to possess
such licenses, permits or governmental authorizations or to file such renewals
and such unknown failure would not, either individually or in the aggregate,
have a Material Adverse Effect. A list of all of Seller's licenses, permits and
governmental authorizations is set forth on Schedule 2.12(b) ("Permits").
Section 2.13 Litigation. Except as set forth in Schedule 2.13, there are
no lawsuits, proceedings, claims, legal actions or investigations instituted, or
to the Knowledge of Seller threatened, against, related to, or affecting, or
that would relate to or affect, Seller, the Business or any of the Assets or
that would prevent the consummation of the transactions contemplated hereunder
and under the Transaction Documents. To the Knowledge of Seller, no event has
occurred or circumstance exists that is reasonably likely as of the date hereof
to give rise to or serve as a basis for the commencement of any such proceeding.
Seller is not (a) subject to any continuing court or administrative order, writ,
injunction or decree applicable specifically to Seller, the Business or the
Assets, or (b) in default with respect to any such order, writ, injunction or
decree. Schedule 2.13 sets forth a description of all pending or, to the
Knowledge of Seller threatened, actions, suits, proceedings, disputes or
investigations in respect of Seller, setting forth, with respect to each action
or suit, the existence and extent of insurance related thereto.
Section 2.14 Environmental Matters. With respect to environmental
compliance by Seller, the following representations and warranties are in
addition to, and do not limit, any of the representations and warranties set
forth in Sections 2.12 and 2.13: (a) Seller has not caused or permitted, and to
Seller's Knowledge no other Person has caused or permitted, any release of any
Hazardous Substance on any of
10
the Real Estate that would result in liability under any Applicable Law except
for any immaterial releases of which Seller has no Actual Knowledge and which do
not, either individually or in the aggregate, have a Material Adverse Effect,
and (b) Seller has never stored, processed or disposed of any Hazardous
Substance on any Real Estate except for Hazardous Substances used in the
ordinary course of the Business and any such use of such Hazardous Substances
has been in accordance with all Applicable Laws.
Section 2.15 Taxes. Other than Purchaser's share of taxes as provided in
Section 5.6.2 and Purchaser's share of Accrued Liabilities as provided in
Section 4.13, Seller has paid, and will hereafter pay, all federal, state and
local income, excise, corporate, franchise, property, sales, use, transaction
privilege, business, occupational, payroll, withholding and other taxes
applicable to Seller, the Assets, the Business or the Liabilities (collectively,
"Taxes") to the extent Purchaser could have liability for such Taxes by reason
of a successor liability statute or similar Applicable Laws or to the extent a
taxing authority could legitimately assert a lien or claim against any of the
Assets after the Closing Date for any unpaid Taxes of Seller. There are no tax
liens on any of the Assets or the Business except for liens for current taxes
and assessments that are not yet delinquent. Notwithstanding anything herein or
elsewhere in this Agreement (including Article VI) to the contrary, Seller makes
no representation regarding, shall not be obligated or required to pay, and
shall not indemnify any of Purchaser's Indemnified Persons for, any amount of
Taxes or related interest or penalties that are first incurred by any of
Purchaser's Indemnified Persons following the Closing.
Section 2.16 Finder's Fee. Seller has not incurred any obligation for any
finder's, broker's or agent's fee in connection with the transactions
contemplated hereby.
Section 2.17 No Community Property. Any interest Xxxx may have in Seller,
the Business or the Assets, if any, represents Xxxx'x sole and separate property
and no other party (except Seller) has any interest in Seller, the Business or
the Assets, whether as an ownership interest, an equity interest, a community
property interest, an interest granted in any agreement or order (including,
without limitation, any prenuptial agreement, settlement agreement, divorce
decree or court order), or any other interest whatsoever.
Section 2.18 Condition of Tangible Assets. The tangible Assets described
on Schedule 1.0(c), including, without limitation, the inventory, if any, and
the furniture, fixtures and equipment are, and at the Closing will be,
physically present at the respective store and home office locations, with the
exception of those items disposed of in the ordinary course of business prior to
Closing, and in good operating condition and repair, ordinary wear and tear
excepted, and are usable in the ordinary course of the Business.
Section 2.19 Sufficiency of Assets. The Assets, including any Assets
provided through, or covered by, leases or contracts included in the Assumed
Liabilities, constitute all of the assets, tangible and intangible, of any
nature whatsoever, necessary to operate the Business substantially in the manner
operated by Seller as of the date hereof. Except as set forth in Schedule 2.19
or as expressly provided elsewhere in this Agreement, the Excluded Assets (other
than cash) are not necessary to the operation of the Business as currently
conducted.
Section 2.20 Real Estate and Leases. With regard to all real estate
(including buildings and improvements) owned or leased by Seller in connection
with the operation of the Business ("Real Estate"), there is disclosed in
Schedule 2.20(a) a list of each parcel of Real Estate. Except for the Charleston
Property and the Boulder Property (collectively, "Owned Real Property") no
Seller Entity owns any Real Estate other than the Home Office Real Estate.
Except for the properties identified as
11
being owned by Xxxx or an entity owned or controlled by Xxxx on Schedule 2.20(a)
("Controlled Real Property"), neither Xxxx nor any entity owned or controlled by
Xxxx has any interest in any Real Estate on which any of the Business is being
conducted. Except for the Owned Real Property and the Home Office Real Estate,
Seller leases all other Real Estate on which any of the Business is being
conducted pursuant to real estate lease agreements between Seller and a party
with, to Seller's Knowledge, a lawful and unencumbered right to lease such Real
Estate to Seller (collectively, the "Leases"). Except as set forth on Schedule
2.20(a), neither Seller nor any other party to a Lease has given to the other
party written notice of any breach or default thereunder that remains uncured as
of the date hereof. To Seller's Knowledge, neither Seller nor any other party to
any Lease is in material default thereunder. Each Lease and each document that
amends, renews, or supplements each Lease, and all related subordination and
non-disturbance agreements are identified on Schedule 2.9 and Seller has, prior
to the Execution Date, delivered true and complete copies of each Lease and all
of such related documents to Purchaser. Set forth on Schedule 2.20(b) is a
description of each condemnation or eminent domain proceeding that is, to
Seller's Knowledge, pending or threatened against any of the Real Estate.
Schedule 2.20(b) also sets forth a summary description of each construction,
remodeling or renovation project being conducted on any of the Real Estate as of
the date hereof which costs or will cost in excess of $25,000 and all contracts
related to any of such projects are described in Schedule 2.9. With respect to
the Owned Real Property, Seller makes the additional representations and
warranties set forth in the Real Estate Purchase Provisions attached to the
Agreement as Exhibit "I." The parties hereto acknowledge and agree that (i) as
reflected on Schedule 1.0(d) attached hereto, the real estate (the "Home Office
Real Estate") upon which Seller's home office headquarters is situated (commonly
referred to as the property located at 0000 Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx
89103) is an Excluded Asset for purposes of this Agreement, and (ii) the Home
Office Real Estate shall be deemed Controlled Real Property and shall be treated
accordingly pursuant to the provisions of this Agreement applicable to
Controlled Real Property. Seller and Xxxx agree that Seller's interest in the
Home Office Real Estate as of the Execution Date will not be disposed of by
Seller in any manner prior to the Closing Date to any party other than Xxxx or
an entity controlled by Xxxx.
Section 2.21 Buildings and Structures. To Seller's Knowledge, and except
as described on Schedule 2.21 hereto and Exhibit "K" attached hereto, all
buildings, structures and improvements on the Real Estate and all other fixed
assets owned or leased by Seller and used in the Business are structurally sound
with no material defects, are in compliance with all applicable codes,
ordinances and other Applicable Laws (except for any failure to comply with an
Applicable Law to the extent Seller has no Actual Knowledge of such failure to
comply and such unknown failure to comply (individually or in the aggregate) did
not or does not have a material adverse effect on the particular building,
structure, improvement or fixed asset), are in good operating condition and
repair, ordinary wear and tear excepted, and are adequate for the uses to which
they are being put.
Section 2.22 Collections, Check Cashing and Other Business. Except as
disclosed on Schedule 2.22, all Other Business Activities are being conducted
and transacted in accordance with all Applicable Laws, in accordance with all of
Seller's Policies and Procedures related thereto and in accordance with all
Commitments that relate to such Other Business Activities. Set forth on Schedule
2.22 is a summary description of all Other Business Activities that Seller is
currently performing or has performed in the two (2) year period ending on the
date hereof. Seller has all permits, licenses, approvals and consents necessary
in order for Seller to lawfully conduct the Other Business Activities.
Section 2.23 Customer Service. A detailed description of all of Seller's
customer reward, layaway, store credit, refund, exchange, merchandise warranty
(express and implied), and all other customer benefits or customer service type
programs, policies and procedures relating to, or covering,
12
any product or service offered to the customers of the Business in existence as
of the date hereof and for the 12 month period prior to the date hereof is set
forth on Schedule 2.23 ("Customer Service Policies"). Except for the Customer
Service Policies described on Schedule 2.23 and except for the express terms of
the Consumer Loan Documents, Seller is not liable to any customer of the
Business for any customer reward, layaway, store credit, refund, exchange,
merchandise warranty (express or implied), or any other customer benefits or
customer service type programs.
Section 2.24 Absence of Certain Changes. Except as disclosed on Schedule
2.24, since January 1, 2004, there has not been any Material Adverse Change in,
or any event or condition that would reasonably be expected to result in any
material adverse change in, the business, operations, assets, results of
operations, or condition (financial or otherwise) of the Business or the
ownership or operation of the Assets or any material portion thereof, all as the
same are described in this Agreement and the Schedules and Exhibits attached
hereto, other than any changes in economic, regulatory or industry conditions
generally. Additionally, except as disclosed on Schedule 2.24, since January 1,
2004 (i) the Business has been conducted by Seller in the ordinary course
consistent with past practice, (ii) Seller has not, in respect of the Business
or the Assets, incurred any material Liability, engaged in any material
transaction, or entered into any material agreement outside the ordinary course
of business consistent with past practice (other than the Confidentiality
Agreement dated as of June 9, 2004, by and between Purchaser and the Seller
Entities, this Agreement or any document or instrument contemplated hereby), and
(iii) Seller has not suffered any material loss, damage, destruction, or other
casualty to any of the Assets (whether or not covered by insurance), which would
constitute a Material Adverse Effect.
Section 2.25 Employees. Schedule 2.25 contains a complete and accurate
list of the following information for each officer and employee of Seller
(including each employee on leave of absence, deferral, or layoff status)
(collectively, "Seller's Employees"): name; job title; date of hire; current
rate of pay; accrued but unpaid vacation time; commissions and bonus and other
incentive compensation paid since January 1, 2003 ("Compensation"). Except as
disclosed in Schedule 2.25 and Schedule 2.9, no independent contractors or
consultants are used in the day-to-day operations of the Assets.
(a) Seller has not violated, and will not violate as a result
of the transactions set forth in this Agreement, the Worker Adjustment and
Retraining Notification Act (the "WARN Act") or any similar state or local legal
requirement, except to the extent that any such violation would not result in
liability to Purchaser or Seller.
(b) To the Knowledge of Seller, no officer, director, agent,
employee, consultant, or contractor of Seller is bound by any contract or
agreement, whether oral or written, that purports to limit the ability of such
officer, director, agent, employee, consultant, or contractor (i) to engage in
or continue or perform any conduct, activity, duties or practice relating to the
Business, or (ii) to assign to Seller or to any other Person any rights to any
invention, improvement, or discovery included in the Assets, except for the
non-competition provisions contained in Seller's employment agreements with Xxx
Xxxxx ("Rowan") and Xxxxx Xxxxxx ("Xxxxxx"). To Seller's Knowledge, no former or
current employee of Seller is a party to, or is otherwise bound by, any contract
or agreement, whether oral or written, that in any way adversely affected,
affects, or will affect the ability of Seller or Purchaser to conduct the
Business as heretofore carried on by Seller.
Section 2.26 Labor Disputes.
(a) Except as disclosed in Schedule 2.26, Seller is, and for
the two full years prior to the date hereof has been, in compliance with all
Applicable Laws relating to employment practices, terms and conditions of
employment, equal employment opportunity, nondiscrimination,
13
immigration, wages, hours, benefits, collective bargaining, the payment of
social security and similar taxes and occupational safety and health, except
where Seller does not have Actual Knowledge of the failure to be in compliance
and such unknown failure does not and would not, either individually or in the
aggregate, have a Material Adverse Effect. Except as disclosed on Schedule 2.26,
Seller is not liable for the payment of any taxes, fines, penalties, or other
amounts, however designated, which have been assessed for Seller's failure to
comply with any of the foregoing Applicable Laws.
(b) Except as disclosed in Schedule 2.26, (i) Seller has not
been, and is not now, a party to any collective bargaining agreement or other
labor contract, (ii) there has not previously been, there is not presently
pending or existing, and to Seller's Knowledge there is not threatened, any
strike, slowdown, picketing, work stoppage or employee grievance process
involving Seller, (iii) to Seller's Knowledge no event has occurred or
circumstance exists as of the date hereof that would reasonably be expected to
provide the basis for any work stoppage or other labor dispute, (iv) there is
not pending or, to Seller's Knowledge, threatened against or affecting Seller,
any proceeding relating to the alleged violation of any Applicable Laws
pertaining to labor relations or employment matters, including any charge or
complaint filed with the National Labor Relations Board or any comparable
governmental body, and there is no organizational activity or other labor
dispute against or affecting Seller or the Business, (v) no application or
petition for an election of, or for certification of, a collective bargaining
agent is pending, (vi) no labor related grievance or arbitration proceeding
exists that might have a Material Adverse Effect, (vii) there is no lockout of
any employees by Seller, and no such action is contemplated by Seller, and
(viii) there has been no charge of discrimination filed against or, to Seller's
Knowledge, threatened against Seller with the Equal Employment Opportunity
Commission or any similar governmental body.
Section 2.27 Employee Benefits.
(a) Set forth in Schedule 2.27 is a complete and correct list
of (a) all "employee benefit plans" as defined by Section 3(3) of ERISA, and (b)
any other material plan, fund, program, policy, arrangement, practice, custom
and understanding (whether written or oral) which provides or have provided
benefits or economic value to Seller's (or Seller's affiliates') employees or
former employees (and/or their dependents), including, without limitation,
bonus, commissions, incentive-compensation, deferred-compensation,
profit-sharing, stock-option, stock-appreciation-right, stock-bonus,
stock-purchase, employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension,
health, life-insurance, disability, accident, group-insurance, vacation,
holiday, sick-leave, fringe-benefit or welfare plan, any other employee
compensation or benefit plans and any trusts or escrows related to any of the
foregoing (whether qualified or nonqualified, written or unwritten) and which is
currently maintained by Seller (or Seller's affiliates) for the benefit of
Seller's (or Seller's affiliates') employees or former employees (and/or their
dependants) or for which Seller (or Seller's affiliates) has (have) any current
liability or obligation with respect to any of Seller's (or Seller's
affiliates') employees or former employees (and/or their dependants), regardless
of how (or whether) liabilities for the provision of benefits are accrued or
assets are acquired or dedicated with respect to the funding thereof
(collectively the "Employee Plans").
(b) Seller has delivered, or will before Closing deliver, to
Purchaser true, accurate and complete copies of (i) all collective bargaining
agreements pursuant to which contributions to any Employee Plan(s) have been
made or obligations incurred (including both pension and welfare benefits) by
Seller within the past two (2) years, and all collective bargaining agreements
pursuant to which contributions are being made or obligations are owed by
Seller; and (ii) all summary plan descriptions, summaries of material
modifications, employee handbooks and other material written communications
regarding the Employee Plans. Seller has prior to the Execution Date delivered
to
14
Purchaser the documents comprising each Employee Plan (or, with respect to any
Employee Plan which is unwritten, a summary written description of eligibility,
participation, benefits, funding arrangements, assets and any other matters
which relate to said Employee Plan).
(c) During the past five years, neither Seller nor any of its
"ERISA Affiliates" have made or been required to make contributions to any
"multiemployer plan," as defined in Section 3(37) of ERISA. With respect to the
Employee Plans, Seller and all of the ERISA Affiliates of Seller have paid and
discharged promptly when due all liabilities and obligations arising under ERISA
or the Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder (the "Code") of a character which if unpaid or unperformed might
result in the imposition of a lien against any of the Assets. For purposes of
this Section only, an "ERISA Affiliate" of any Person means any other Person
who, together with such Person, would be treated as a single employer under
Section 414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA.
(d) Seller has maintained workers' compensation coverage as
required by applicable state law in each State in which Seller conducts business
through each such State's applicable workers' compensation rules and regulations
and not by self-insurance or otherwise.
Section 2.28 Product Liability. There are no actions, suits, inquiries,
proceedings or investigations by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the Knowledge
of Seller, threatened, against or involving Seller relating to any product
alleged to have been manufactured or sold by Seller and alleged to have been
defective or improperly designed or manufactured, which, if adversely decided,
would have, either individually or in the aggregate, a Material Adverse Effect.
Section 2.29 Intentionally Deleted.
Section 2.30 Intentionally Deleted.
Section 2.31 Books and Records. The books of account and other financial
records of Seller, all of which have been made available to Purchaser, are
complete, accurate and correct in all material respects and represent actual,
bona fide transactions and have been maintained in accordance with consistent
business practices. Schedule 2.31 hereof also sets forth (i) the name of each
bank, savings institution or other Person with which Seller has an account, and
(ii) the names of all Persons, if any, holding powers of attorney from Seller
and a summary statement of the terms thereof.
Section 2.32 Insurance. Schedule 2.32 sets forth a complete list of all
policies of, or binders for, fire, property, casualty, boiler, builder's risk,
business interruption, flood, plate glass, general liability, public liability,
employer's liability, worker's compensation, theft, burglary, employee
dishonesty, employment practices and all other forms of insurance, bonds or
sureties owned or held by Seller. All such policies, or binders thereof, are in
full force and effect, all premiums with respect thereto covering all periods up
to and including the respective dates set forth in Schedule 2.32 have been paid,
and no notice of cancellation or termination has been received with respect to
any such policy or binder. Such policies or binders (i) to Seller's Knowledge,
are sufficient for compliance with all requirements of law currently applicable
to Seller and of all agreements to which Seller is a party or by which Seller is
bound, (ii) to Seller's Knowledge, provide insurance coverage adequate for the
Assets and operations of Seller, and (iii) will remain in full force and effect
through the Closing Date. Schedule 2.32 also identifies all risks that Seller
has designated as being self-insured. Seller has delivered certificates of
insurance in compliance with the terms of all agreements to which Seller is a
15
party or by which Seller is bound to the extent such agreements require Seller
to deliver any such certificates of insurance to any party.
Section 2.33 Privacy. With respect to the operation of the Business,
Seller is in compliance with all aspects of the Xxxxx-Xxxxx-Xxxxxx Act and,
since the inception of such act, has delivered privacy notices to each of its
customers to whom such act requires privacy notices to be delivered, except for
any failures to comply with such act to the extent such Seller has no Actual
Knowledge of such failures to comply and such unknown failures to comply, either
individually or in the aggregate, did not or do not have a Material Adverse
Effect. Copies of the form of all privacy disclosure notices Seller has
delivered to its customers during the two year period ending on the date hereof,
together with a general description of the types of Seller's customers that
received each of such notice forms and the general time frame during Seller's
relationship with each type of customer when Seller delivered such notices to
such customers is set forth on Schedule 2.33.
Section 2.34 Policies and Procedures. All of Seller's employee policies,
employee procedures, employee handbooks, employee guides or instructions,
operations manuals, firearm transaction procedures, software user manuals or any
similar documents or procedures, whether the same are written, oral or
electronic, are described on Schedule 2.34 ("Policies and Procedures"). Seller
has in place a comprehensive written Anti-Money Laundering Compliance Program,
and except as disclosed on Schedule 2.12(a) such program complies with all
Applicable Laws and Seller has at all times complied with such program and
Applicable Laws, except for any failures to comply with the same to the extent
Seller has no Actual Knowledge of such failures to comply and such unknown
failures to comply, either individually or in the aggregate, did not or do not
have a Material Adverse Effect. Seller's Anti-Money Laundering Compliance
Program is a part of the Policies and Procedures. Seller has previously
delivered full, true and complete copies of all Policies and Procedures to
Purchaser. To Seller's Knowledge and except as disclosed on Schedule 2.12(a),
the Business is being operated in compliance with all such Policies and
Procedures, except for any failures to comply with such Policies and Procedures
to the extent such failures to comply, either individually or in the aggregate,
did not or do not have a Material Adverse Effect.
Section 2.35 Franchising. Except for the franchises described on Schedule
2.35 (the "Franchises"), Seller has not sold to any Person a "franchise" or
"business opportunity" as those terms are defined in the Trade Regulation Rule
on Franchising promulgated by the Federal Trade Commission or any applicable
state business opportunity or franchise law. For each of the Franchises, Seller
is a party to franchise agreements (each a "Franchise Agreement") with each of
Seller's franchisees that own and operate such Franchises. Each Franchise
Agreement is a Commitment, is described on Schedule 2.9 and is in full force and
effect. Seller is not and, to Seller's Knowledge, no other party to a Franchise
Agreement is, in default in any material respect under any Franchise Agreement
nor has any event occurred which with the passage of time or the giving of
notice or both would constitute such a default. Each Franchise Agreement, and
all amendments, supplements or other agreements related thereto, is described on
Schedule 2.9 and Seller has, prior to the Execution Date, delivered true and
complete copies of each Franchise Agreement and all amendments or supplements or
other documents related thereto to Purchaser. Seller has previously delivered to
Purchaser all versions of Seller's Uniform Franchise Offering Circular used in
the Business since the 30th business day prior to the execution date of the
first Franchise Agreement Seller ever executed, except as described on Schedule
2.35 attached hereto. Each Franchise was sold, and each Franchise Agreement was
executed, in compliance with all Applicable Laws and all offers Seller has made
to prospective franchisees have been made in compliance with all Applicable
Laws, except for any failures to comply of which Seller has no Actual Knowledge
as of the date hereof and to the extent such unknown failures to comply, either
individually or in the aggregate, did not or do not have a Material Adverse
Effect. Except as described on Schedule
16
2.35 attached hereto, Seller has previously delivered to Purchaser all UFOC
Receipts signed by the franchisees under the Franchise Agreements and all UFOC
Receipts signed by Seller's prospective franchisees (and their guarantors) since
January 1, 2000, together with copies of all State applications, filings,
registrations and exemptions made or received by Seller during such period in
connection with Seller obtaining the lawful right to offer and sell franchises
in each State in which Seller has offered or sold franchises during such period.
All of the Franchises were offered and sold in compliance with all Applicable
Laws, including, without limitation, all franchise disclosure and registration
laws, except for any failures to comply to the extent Seller has no Actual
Knowledge of such failures to comply, and such unknown failures either
individually or in the aggregate, did not or do not have a Material Adverse
Effect. During the term of each Franchise Agreement, Seller's relationship with
each Franchise owner has been conducted in compliance with all Applicable Laws,
except for any failures to comply of which Seller has no Actual Knowledge and
such unknown failures to comply, either individually or in the aggregate did not
or do not have a Material Adverse Effect. Except as set forth on Schedule 2.35,
the Franchises constitute all of the franchises ever sold by Seller and Seller
has never terminated any franchise relationship.
Section 2.36 Intentionally omitted.
Section 2.37 Bulk Sale. Purchaser will suffer no loss, cost or expense
because of the non-compliance, if any, of the parties hereto with any bulk
sale/transfer statute or law.
Section 2.38 Disclosure.
(a) The representations and warranties made by Seller in this
Agreement, the express representations and warranties, if any, made by Seller in
the other Transaction Documents, and the statements contained in the Schedules
to this Agreement are true and correct in all material respects, state all
material facts related thereto and do not omit, or fail to state, a material
fact necessary to make any of such representations and warranties or statements
herein or therein, in light of the circumstances in which they were made, not
misleading.
(b) Seller does not have Knowledge of any fact that has
specific application to Seller (other than general economic, regulatory or
industry conditions) that would have a Material Adverse Effect or, to Seller's
Knowledge, could reasonably be expected to have a Material Adverse Effect as to
the Assets, that has not been set forth in this Agreement, or the Schedules or
Exhibits hereto.
(c) Any information disclosed on any individual Schedule to
this Agreement shall be deemed to be disclosed and incorporated in any other
schedule to this Agreement where such disclosure would on its face reasonably
relate to such other Schedule. Disclosure of any information or document on a
Schedule is not a statement or admission that it is material or required to be
disclosed. Descriptions of any document contained on the Schedules do not
purport to be complete and are qualified in their entirety by the document
itself.
(d) Seller does not have Actual Knowledge of any facts, events
or circumstances that would cause any of Purchaser's representations and
warranties contained in this Agreement to be untrue.
Section 2.39 Investment Representations.
(a) The Shares to be received by Camco pursuant to this
Agreement will be acquired for investment for Camco's own account, not as a
nominee or agent for any unrelated third
17
party, and not with a view to the resale or distribution of any part thereof to
any unrelated third party, and Camco has no present intention of selling,
granting any participation in, or otherwise distributing the same, to any
unrelated third party, but subject to the ability of Camco to transfer shares to
an affiliate (within the meaning of Rule 405 promulgated under the Securities
Act of 1933, as amended (the "Securities Act")) of Camco. Seller and Xxxx
(collectively, the "Seller Group") have no need for liquidity related to Camco's
acquisition of the Shares.
(b) The Seller Group, or a representative thereof, has
received and read or reviewed, and is familiar with, this Agreement and the
other agreements executed in connection with this Agreement and confirms that
all documents, books and records pertaining to Camco's investment in the Shares
and requested by the Seller Group have been made available.
(c) The Seller Group has had an opportunity to ask questions
and receive answers from Purchaser regarding the terms and conditions of the
offering of the Shares and about other information, documents and records
relative to Purchaser's business assets, financial condition, results of
operations and liabilities.
(d) Each member of the Seller Group is an experienced investor
in securities and acknowledges that it can bear the complete economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Shares, and each also is an "accredited investor" within the meaning of
Rule 501(a) promulgated under the Securities Act.
(e) The acquisition of the Shares by Camco is consistent with
the general investment objectives of the Seller Group. The Seller Group
understands that the acquisition of the Shares by Camco involves a high degree
of risk.
(f) The Seller Group understands that the Shares Camco is
acquiring pursuant to this Agreement are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from Purchaser in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may not be
resold without registration under the Securities Act and applicable state
securities laws, except in certain limited circumstances. The Seller Group
further understands that the Share certificates will bear a legend reflecting
such limitations. In this connection, the Seller Group represents that it is
familiar with Rule 144 under the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
The Seller Group agrees that in no event will Camco make any other transfer or
disposition of any of the Shares unless and until, if requested by Purchaser, it
shall have furnished to Purchaser (at the expense of the Seller Group or Camco's
transferee) an opinion of counsel or other evidence, reasonably satisfactory to
Purchaser, to the effect that such transfer may be made without restrictions
under the Securities Act. The Seller Group understands that Purchaser is under
no obligation to register any of the securities sold hereunder.
(g) The Seller Group further understands that the Shares shall
be placed in escrow and released in accordance with the terms and conditions of
the Escrow Agreement; provided, however, that during the term of the Escrow
Agreement Seller shall be entitled to receive any dividends distributed on
account of such Shares being held by the Escrow Agent under the Escrow Agreement
and during such xxxx Xxxxxx shall be entitled to vote such Shares as applicable.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and Xxxx that the following are true
and correct as of the date hereof:
Section 3.1 Organization and Good Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas, with all requisite corporate power and authority to carry on the
business in which it is engaged, to own or hold under lease its properties and
assets, to execute and deliver this Agreement and the other Transaction
Documents and to consummate the transactions contemplated hereby and thereby.
Purchaser, or an assignee of Purchaser permitted under Section 7.5, is, or will
be, duly qualified to do business as a foreign corporation in, and is, or will
be, in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned by it, or the nature of the
activities conducted by it, requires such qualification.
Section 3.2 Authorization and Validity. Purchaser has the absolute and
unrestricted right, power and authority to execute and deliver this Agreement
and the other Transaction Documents and to perform its obligations under this
Agreement and the other Transaction Documents. This Agreement has been, and the
other Transaction Documents will be at the Closing, duly executed and delivered
by Purchaser and will be duly authorized by all necessary action by Purchaser's
board of directors as of the Closing Date. No approval of Purchaser's
shareholders is required in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement constitutes, and the other Transaction Documents at the Closing will
constitute, legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
Section 3.3 No Violation. Neither the execution, delivery or performance
of this Agreement or the Transaction Documents nor the consummation of the
transactions contemplated hereby or thereby will (a) conflict with, or result in
a violation or breach of the terms, conditions and provisions of, or constitute
a default under, the Articles of Incorporation or bylaws of Purchaser or any
agreement, indenture or other instrument under which Purchaser is bound, or (b)
violate or conflict with any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or body
having jurisdiction over Purchaser or the properties or assets of Purchaser.
Section 3.4 Consents. Except as expressly provided in this Agreement to
the contrary, no consent, authorization, approval, permit or license of, or
filing with, any governmental or public body or authority, any lender or lessor
or any other Person is or will be required to authorize, or is or will be
required in connection with, the execution, delivery and performance of this
Agreement or the Transaction Documents and the consummation of the transactions
contemplated thereby on the part of Purchaser.
Section 3.5 Finder's Fee. Purchaser has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the transactions
contemplated hereby.
Section 3.6 Litigation. There are no lawsuits, proceedings, claims, legal
actions or investigations instituted, or to the Knowledge of Purchaser
threatened, against, related to, or affecting, or that would prevent the
consummation of, the transactions contemplated hereunder and under the
Transaction Documents. To the Knowledge of Purchaser, no event has occurred or
circumstance exists
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that is reasonably likely as of the date hereof to give rise to, or serve as a
basis for, the commencement of any such proceeding.
Section 3.7 Purchaser's Common Stock. The issuance of the Shares pursuant
to this Agreement is not and will not be subject to any preemptive rights,
rights of first refusal, subscription or similar rights that have not been
properly waived. Subject to the truth and correctness of the representations and
warranties contained in Section 2.39 and to the Seller Group's compliance with
the agreements contained therein, the Shares to be issued pursuant to this
Agreement have been duly authorized, and when issued pursuant to the terms of
this Agreement will be validly issued and outstanding, fully paid and
non-assessable and free from any lien or encumbrance (including any pre-emptive
rights) and such Shares will be approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
Section 3.8 Issuance Valid. Subject to the truth and correctness of the
representations and warranties contained in Section 2.39 and to the Seller
Group's compliance with the agreements contained therein, the issuance of the
Shares will be exempt from the registration requirements of the Securities Act
and will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws.
Section 3.9 SEC Filings. Purchaser has filed with the U.S. Securities and
Exchange Commission (the "SEC") all required forms, reports and documents,
together with any required amendments, since January 1, 2002 (all such forms,
reports and documents, collectively, the "SEC Filings"). As of their respective
dates, to the Knowledge of the Chief Officers of Purchaser, (a) the SEC Filings
do not contain any untrue statements of any material facts or omit to state any
material facts necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the respective periods covered by the SEC Filings; (b) the financial
statements and other financial information included in the SEC Filings fairly
present in all material respects the financial condition, results of operations
and cash flows of Purchaser as of, and for, the respective periods presented in
the SEC Filings; and (c) the SEC Filings comply in all material respects with
the applicable requirements of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the SEC promulgated thereunder. Without limiting any other provision of this
Agreement, as to the Chief Officers of Purchaser for purposes of this Section
3.9 only, a "reasonable investigation" for purposes of Knowledge shall be deemed
to have been made if each Chief Officer has made a "due inquiry" to the Key
Persons of Purchaser and any such other key employees of Purchaser as each such
Chief Officer deems reasonably appropriate for purposes of making the SEC
Filings. As used herein, Purchaser's "Chief Officers" as of the date hereof
shall be Purchaser's President, Chief Executive Officer and Chief Financial
Officer.
Section 3.10 Financing Ability. At the Closing Purchaser will have
sufficient funds to consummate the transactions contemplated by this Agreement
and pay the Purchase Consideration.
Section 3.11 Disclosure.
(a) The representations and warranties made by Purchaser in
this Agreement and the express representations and warranties, if any, made by
Purchaser in the other Transaction Documents, are true and correct in all
material respects, state all material facts related thereto and do not omit, or
fail to state, a material fact necessary to make any of such representations and
warranties or statements herein or therein, in light of the circumstances in
which they were made, not misleading.
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(b) Purchaser does not have Knowledge of any fact that has
specific application to Purchaser (other than general economic, regulatory or
industry conditions) that would have a Purchaser Material Adverse Effect or, to
Purchaser's Knowledge, could reasonably be expected to have a Purchaser Material
Adverse Effect, that has not been set forth in this Agreement or the Exhibits
hereto.
(c) Purchaser does not have Actual Knowledge of any facts,
events or circumstances that would cause any of Seller's representations and
warranties contained in this Agreement to be untrue.
ARTICLE IV
CLOSING
Section 4.1 Closing. Subject to the terms of Section 4.6 below, the
closing of the transactions contemplated under this Agreement (the "Closing")
shall take place at approximately 2:00 p.m. (Texas time) on or before the later
to occur of (a) October 31, 2004; or (b) seven (7) days after all of the
conditions set forth in Sections 4.2 and 4.3 below have been satisfied or
fulfilled or waived (the "Closing Date"). The Closing shall be conducted at the
offices of Cash America International, Inc., 0000 X. 0xx Xxxxxx, Xxxx Xxxxx, XX
00000, or such other time, date and place as the parties shall agree.
Section 4.2 Seller's Conditions. The obligation of Seller to consummate
the transactions contemplated under this Agreement is subject to the
satisfaction, prior to or at the Closing, of the following conditions (any of
which may be waived by Seller, in whole or in part):
(a) Representations and Warranties True. The representations
and warranties of Purchaser contained in Article III hereof shall be true and
correct in all material respects (provided that each of the representations and
warranties in Section 3.2 and each of the representations and warranties of
Purchaser that contains an express materiality qualification must be accurate in
all respects) as of the date of this Agreement and at and as of the Closing Date
as though then made and, in the case of representations and warranties made as
of a specified date earlier than the Closing Date, on and as of such earlier
date.
(b) No Purchaser Material Adverse Change. No Purchaser
Material Adverse Change shall have occurred.
(c) Consents.
(i) Purchaser shall have received the approval of this
transaction from Purchaser's Board of Directors, and such approval shall be in
full force and effect; and
(ii) Written consents or approvals shall have been
obtained by Seller and/or Purchaser from each party identified in Section 2.9 as
a party from whom consent is required in order to effectively transfer any of
the Assumed Liabilities to Purchaser at the Closing unless (a) Purchaser agrees
to accept the Liability in question as an Assumed Liability without first
obtaining such required consent, or (b) Purchaser and Seller enter into a
mutually satisfactory arrangement (with both parties acting reasonably,
diligently and in good faith to reach such an arrangement) governing their
respective post-Closing rights and obligations relating to the fact that they
were unable to obtain the applicable consent prior to the Closing, with such
post-Closing arrangement to be determined in accordance with the terms of
Section 4.12 below.
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(d) Purchaser's Performance.
(i) All of the covenants and obligations that Purchaser
is required to perform or to comply with pursuant to this Agreement at or prior
to the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all material respects; and
(ii) Purchaser must have delivered each of the documents
required to be delivered by it, and made each of the payments required to be
made by it, pursuant to Section 4.5.
(e) WARN Act Notice Periods. Any and all requisite notice
periods under the Warn Act shall have expired.
(f) No Change in Legal Requirements. There shall not be in
effect any federal, state, local, or foreign or other law, ordinance, regulation
or statute or any injunction that prevents consummation of any of the
transactions contemplated by this Agreement.
(g) Legal Proceedings. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or enforced by any governmental entity which prohibits, restrains,
enjoins, restricts or makes illegal the consummation of the transactions
contemplated by this Agreement.
(h) Supplemental Disclosure Agreement. Seller being satisfied,
in Seller's reasonable discretion, with the form and substance of the
Supplemental Disclosure Agreement.
(i) Xxxx-Xxxxx-Xxxxxx Approval. Purchaser and Seller shall
have received approval of the transaction contemplated hereby from the
Department of Justice and/or the Federal Trade Commission either through the
expiration or the early termination of the applicable waiting period under the
federal Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act ("HSR Act").
(j) NYSE Listing. The Shares shall have been approved for
listing on the New York Stock Exchange, subject to official notice of issuance.
Section 4.3 Purchaser's Conditions. The obligation of Purchaser to
consummate the transactions contemplated under this Agreement is subject to the
satisfaction, prior to or at the Closing, of the following conditions (any of
which may be waived by Purchaser, in whole or in part):
(a) Representations, Warranties and Covenants True. The
representations and warranties of Seller contained in Article II hereof shall be
true and correct in all material respects (provided that each of the
representations and warranties in Sections 2.2 and 2.39 and each of the
representations and warranties that contains an express materiality
qualification must be accurate in all respects) as of the date of this Agreement
and at and as of the Closing Date as though then made, and, in the case of
representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date, and the covenants set forth in
Sections 5.1 and 5.2 shall have been complied with in all material respects.
(b) No Material Adverse Change. No Material Adverse Change
shall have occurred.
(c) Consents. Written consents or approvals shall have been
obtained by Seller and Purchaser from each party described in Section 2.4, as
necessary, and Section 2.9, as
22
necessary, and must be in full force and effect, including, without limitation,
the approval of this Agreement and the transactions contemplated hereby by the
respective Boards of Directors of SuperPawn and Camco, and by the required
amount of SuperPawn's and Camco's respective shareholders, all as determined by
relevant securities laws and their respective articles of incorporation and
bylaws. Additionally, any party with a lien, claim or security interest covering
or affecting any or all of the Assets shall have released, or agreed to release,
on or prior to the Closing Date, all such liens, claims or security interests,
except to the extent such liens, claims or security interests are Assumed
Liabilities.
(d) Seller's Performance.
(i) All of the covenants and obligations that Seller and
Xxxx are required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects; and
(ii) Seller and Xxxx must have delivered each of the
documents required to be delivered by them pursuant to Section 4.4.
(e) WARN Act Notice Periods. Any and all requisite notice
periods under the Warn Act shall have expired.
(f) Legal Proceedings. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or enforced by any governmental entity which prohibits, restrains,
enjoins, restricts or makes illegal the consummation of the transactions
contemplated by this Agreement.
(g) Third Party Approvals and Estoppels. Purchaser and Seller
shall have received all such approvals necessary to consummate the transaction
contemplated hereby, including, without limitation, (w) consents to assignment
of each Commitment that is an Assumed Liability to the extent such Commitment
requires the consent of any party not a party hereto in order for an assignment
of such Commitment from Seller to Purchaser to be effective (the "Contract
Assignment Consents"), with such Contract Assignment Consents to be in form and
substance reasonably satisfactory to Purchaser and Seller (or in the absence of
any particular Contract Assignment Consent, Seller and Purchaser shall have
entered into a satisfactory arrangement pursuant to Section 4.12 below), (x)
estoppel certificates ("Estoppels") in form and substance reasonably
satisfactory to Purchaser, from at least 50% of the landlords for each Shop
location that is not situated on Controlled Real Estate, (y) the written
approval of the parties whose approval may be required under Purchaser's various
credit agreements and other material contracts, other than agreements with
Seller's franchisees, and (z) all permits and licenses from all Federal, State
and local governing authorities that are necessary for Purchaser to commence
operating the Business on the Closing Date. Additionally, between the Execution
Date and the Closing Date, Seller and Purchaser will use their best and good
faith efforts to obtain consents and Estoppels from each of Seller's
franchisees, landlords and third parties to any other material Commitment that
is an Assumed Liability, as the requirements for such consents and Estoppels are
more particularly described on Schedule 4.3(g) hereto. Except as expressly
provided in this Section above and except as expressly provided in Schedule
4.3(g) to the contrary, (i) the ability of Seller to obtain any such consent
shall not be a condition to Closing, and (ii) Seller's sole obligation is to use
its best and good faith efforts to obtain any such consent described on Schedule
4.3(g).
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(h) Employment. Purchaser shall have been provided access to
Seller's employee files and shall have received confirmation, in form and
substance reasonably satisfactory to Purchaser, that no less than 50% of
Seller's field level employees will become employees of Purchaser on the Closing
Date, with the terms of such employment to be reasonably satisfactory to
Purchaser.
(i) Intentionally Omitted.
(j) Supplemental Disclosure Agreement. Purchaser being
satisfied, in Purchaser's reasonable discretion, with the form and substance of
the Supplemental Disclosure Agreement.
(k) Seller's Debts. Purchaser being reasonably satisfied that
all Liabilities of Seller that are secured by, create, or otherwise result in
the filing, creation or perfection of any, liens, security interests or any
other interest in the Assets will be paid in full on or before the Closing Date,
including the payment of any prepayment penalties or fees.
(l) Xxxx-Xxxxx-Xxxxxx Approval. Purchaser and Seller shall
have received approval of the transaction contemplated hereby from the
Department of Justice and/or the Federal Trade Commission either through the
expiration or the early termination of the applicable waiting period under the
HSR Act.
(m) Seller's Minimum Asset Levels. On the Closing Date, the
pawnshop locations of Seller, Seller's wholesale facility and Seller's central
inventory location (each a "Shop") shall have a combined aggregate pawn loan
balance of $26,500,000 and a combined aggregate inventory balance of
$12,750,000. Additionally, each Shop shall have no less than 75% of the pawn
loan balance and inventory balance set forth for each such Shop on Exhibit "J"
attached hereto, which lists the pawn loan balances and inventory balances as of
July 31, 2004; provided, however, if for any reason other than for a breach of
this Agreement by Seller, the Closing Date occurs after December 15, 2004, the
$12,750,000 amount described above shall thereafter be reduced to $12,250,000;
and provided further, however, if for any reason other than for a breach of this
Agreement by Seller, the Closing Date occurs after January 15, 2005, the
$26,500,000 amount described above shall thereafter be reduced to $25,500,000.
The term "Shop" shall mean only the Shops owned and operated by Camco and shall
not include any franchised locations.
(n) Deferred Maintenance. Seller shall have completed all of
the deferred maintenance items described on Exhibit "K" attached hereto in a
good and workmanlike manner, as reasonably determined by Purchaser and Seller
with both parties acting reasonably and in good faith.
(o) Additional Seller's Financial Statements. Purchaser being
delivered no later than ten (10) business days prior to the Closing Date
Seller's trial balances, unaudited balance sheet and unaudited statements of
income, retained earnings and cash flows for the period beginning on January 1,
2004 and ending on the last day of (a) the last full calendar month prior to the
Closing Date if the Closing occurs between the 15th and the last day of the
month, or (b) the next to last full calendar month prior to the Closing Date if
the Closing occurs between the 1st and 14th day of the month unless such trial
balances, unaudited balance sheet and unaudited statements of income, retained
earnings and cash flows are then available in the ordinary course of Seller's
business for the last full calendar month prior to the Closing Date (the
"Additional Financial Statements"), with Purchaser being satisfied, in
Purchaser's reasonable discretion, that such Additional Financial Statements do
not indicate or reflect a Material Adverse Change in the Business during the
period between January 1, 2004 and the Closing Date.
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(p) IT Review. The IT Review shall not have revealed any
significant deficiencies in the systems and controls of Seller's information
systems.
Section 4.4 Seller's Closing Deliveries. At the Closing, Seller shall
deliver, or cause to be delivered to Purchaser all of the following documents in
form and substance satisfactory to Purchaser:
(a) A certificate from each Seller Entity's secretary
certifying as to the names and true signatures of the officers of such
secretary's respective Seller Entity authorized to sign this Agreement and the
other Transaction Documents to be delivered hereunder by such secretary's
respective Seller Entity;
(b) Copies of (i) the resolutions duly adopted by the
shareholders and board of directors of Camco authorizing the execution, delivery
and performance of this Agreement and each of the other Transaction Documents by
Camco, and authorizing the consummation of all of the other transactions
hereunder and thereunder by Camco, and (ii) the articles of incorporation and
bylaws of Camco, each of the foregoing resolutions and documents certified as
true, complete and accurate as of the Closing Date by the secretary of Camco;
(c) Copies of (i) the resolutions duly adopted by the
shareholders and board of directors of SuperPawn authorizing the execution,
delivery and performance of this Agreement and each of the other Transaction
Documents by SuperPawn, and authorizing the consummation of all of the other
transactions hereunder and thereunder by SuperPawn, and (ii) the articles of
incorporation and bylaws of SuperPawn, each of the foregoing resolutions and
documents certified as true, complete and accurate as of the Closing Date by the
secretary of SuperPawn;
(d) A certificate dated as of the Closing Date executed by
Xxxx and an officer of each Seller Entity, each certifying that the conditions
specified in Section 4.2 that are not otherwise waived in writing by Seller and
Xxxx have been fully satisfied or waived by Seller and Xxxx and that the
representations and warranties made by Seller and Xxxx in this Agreement are
true and correct as of the Closing Date;
(e) An original copy of the Xxxx of Sale, in the form of
Exhibit "A" attached hereto and incorporated herein by this reference, signed by
Seller (the "Xxxx of Sale");
(f) An original copy of the Assignment and Assumption
Agreement in the form of Exhibit "B" attached hereto and incorporated herein by
this reference signed by Seller (the "Global Assignment");
(g) An original copy of the Loan Assignment and Assumption
Agreement in the form of Exhibit "C" attached hereto and incorporated herein by
this reference signed by Seller (the "Loan Assignment");
(h) An original copy of the Non-Competition Agreement in the
form of Exhibit "D" attached hereto and incorporated herein by this reference,
signed by Seller, Mack, Waters, Rowan, and Xxxxx Xxxxxxx (the "Non-Competition
Agreement");
(i) An original copy of the Escrow Agreement in the form of
Exhibit "E" attached hereto and incorporated herein by this reference signed by
Seller and Xxxx ("Escrow Agreement");
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(j) An original copy of the Master Ztrading Services and
License Agreement and its accompanying Terms and Conditions Addendum, Service
Level Addendum, Drop Services Addendum and Internet Sales Addendum, all in the
form of Exhibit "F" attached hereto and incorporated herein by this reference,
signed by Ztrading Industries, LLC, Seller and Xxxx (collectively, the "Software
License Agreement");
(k) An original copy of a Lease Agreement for each parcel of
Controlled Real Estate (there is to be a separate Lease Agreement for each piece
of Controlled Real Estate) in the form of Exhibit "G" attached hereto and
incorporated herein by this reference, each signed by the applicable landlord
thereunder (each such Lease Agreement is referred to herein as a "Controlled
Lease" and each Controlled Lease shall reflect the initial lease term base rent
amounts applicable to each parcel of Controlled Real Estate set forth on Exhibit
"H" attached hereto);
(l) Original copies of each Contract Assignment Consent and of
each Estoppel, to the extent the Estoppels are actually received by Seller, in
form and substance reasonably satisfactory to Purchaser and Seller;
(m) The Realty Conveyance Documents, signed by Seller, as
applicable;
(n) Original Certificates of Title transferring any vehicles
included as part of the Assets to Purchaser signed by Seller;
(o) An original copy of any assignments of all trademarks,
patents, domain names, URLs, assumed names and other intellectual property
included in the Assets signed by Seller (the "Intellectual Property
Assignments");
(p) An original copy of the Supplemental Disclosure Agreement
signed by Seller and Xxxx;
(q) An original copy of the Human Resources Agreement ("HR
Agreement") in the form of Exhibit "M" attached hereto signed by Seller and
Xxxx;
(r) An original copy of the Consulting Agreement in the form
of Exhibit "N" attached hereto and incorporated herein by this reference signed
by Camco ("Consulting Agreement");
(s) Original copies of all telephone transfer documents
transferring Seller's telephone numbers included in the Assets to Purchaser and
signed by Seller (the "Telephone Transfer Agreements");
(t) Pay-off letters from all of Seller's creditors who will be
paid at Closing out of the Cash Consideration, together with appropriate written
releases from such creditors;
(u) An original closing statement evidencing the Purchase
Consideration and the final amount payable by Purchaser to Seller hereunder, as
the same may be adjusted by any applicable credits, deductions or pro-rations to
be made between the parties as of the Closing Date, if any (the "Closing
Statement");
(v) If requested by either Seller or Purchaser and if Seller
and Purchaser are able to agree using good faith efforts on its form and
substance prior to the Closing Date, and subject to the terms of Section 4.16
below, an original Preliminary Purchase Consideration Allocation Agreement
("Preliminary Allocation Agreement") signed by Seller and Xxxx that allocates,
on a preliminary basis,
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the consideration given by Purchaser to Seller in connection with the
transaction contemplated hereby to the various Assets prepared by Seller and
Purchaser, with both parties acting reasonably and in good faith; provided,
however, the amount allocated to the Non-Competition Agreement shall equal the
Non-Competition Consideration;
(w) A letter to the ATF describing Seller's post-Closing
delivery of Seller's gun books and ATF forms to the ATF; and
(x) Such other documents relating to the transactions
contemplated by this Agreement as Purchaser may reasonably request and to which
the parties mutually agree.
(y) The consents and Estoppels described in Section 4.3(g) and
on Schedule 4.3(g) hereto in form and substance reasonably satisfactory to
Purchaser, to the extent the same are actually obtained by Seller;
Section 4.5 Purchaser's Closing Deliveries. At the Closing, Purchaser
shall deliver, or cause to be delivered to Seller all of the following documents
in form and substance satisfactory to Seller:
(a) A certificate of the secretary of Purchaser, certifying as
to the names and true signatures of the officers of Purchaser authorized to sign
this Agreement and the other Transaction Documents to be delivered by Purchaser
hereunder;
(b) Copies of (i) the resolutions duly adopted by Purchaser's
board of directors authorizing the execution, delivery and performance by
Purchaser of this Agreement and each of the other Transaction Documents, and the
consummation of all of the other transactions hereunder and thereunder, and (ii)
the articles of incorporation and bylaws, each of the foregoing resolutions and
documents certified as true, complete and accurate as of the Closing Date by the
secretary of Purchaser;
(c) A certificate dated as of the Closing Date from an officer
of Purchaser certifying that the conditions specified in Section 4.3 that are
not otherwise waived in writing by Purchaser have been fully satisfied or waived
by Purchaser and that the representations and warranties made by Purchaser in
Article III above are true and correct as of the Closing Date;
(d) The Cash Consideration, as the same may be adjusted in
accordance with this Agreement and as evidenced by the Closing Statement;
(e) The Non-Competition Consideration described in the
Non-Competition Agreement, to be delivered to Seller (and disbursed by Seller)
in accordance with the terms of the Non-Competition Agreement;
(f) The original Shares to be delivered to the Escrow Agent to
be held under the Escrow Agreement as the escrowed funds thereunder the "Escrow
Funds");
(g) Original copies of the Xxxx of Sale, Global Assignment,
Loan Assignment, Non-Competition Agreement, Software License Agreement, each
Controlled Lease, Contract Assignment Consents, the Realty Conveyance Documents
(as applicable), Intellectual Property Assignments, Supplemental Disclosure
Agreement, HR Agreement, Consulting Agreement, Telephone Transfer Agreements,
Closing Statement, and the Preliminary Allocation Agreement (if requested by
either Seller or Purchaser and if Seller and Purchaser are able to agree using
good faith efforts on its form and substance prior to the Closing Date), each
executed by Purchaser;
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(h) An original copy of the Escrow Agreement signed by
Purchaser and the escrow agent thereunder ("Escrow Agent");
(i) Evidence reasonably satisfactory to Seller that the Shares
have been approved for listing on the New York Stock Exchange, subject to
official notice of issuance;
(j) Such certificates requested by, and in form and substance
reasonably satisfactory to, Seller indicating for applicable sales and use tax
purposes that the inventory included in the Assets is being purchased by
Purchaser for resale;
(k) Purchaser's share of tax required to be paid on the
Closing Date pursuant to Section 5.6.2; and
(l) Such other documents relating to the transactions
contemplated by this Agreement as Seller may reasonably request and to which the
parties mutually agree.
Section 4.6 Termination by Parties. By notice given prior to or at the
Closing, this Agreement may be terminated as follows:
(a) By mutual agreement of Purchaser and Seller;
(b) By Purchaser if a material breach of any provision of this
Agreement has been committed by Seller or Xxxx and such breach has not been
cured to Purchaser's reasonable satisfaction or otherwise waived by Purchaser
within thirty (30) days of notice by Purchaser to Seller or Xxxx, as applicable,
of the existence of such material breach;
(c) By Seller if a material breach of any provision of this
Agreement has been committed by Purchaser and such breach has not been cured to
Seller's reasonable satisfaction or otherwise waived by Seller within thirty
(30) days of notice by Seller or Xxxx to Purchaser of the existence of such
material breach;
(d) By any party hereto if the Closing has not occurred on or
before the end of the 150th day following the Execution Date, unless a later
date for Closing is mutually agreed to in writing by the parties hereto;
provided, however, a party hereto may not terminate this Agreement pursuant to
this Section 4.6(d) if the Closing has not occurred within the time contemplated
by this Section 4.6(d) as a result of a material breach of this Agreement by the
party attempting to terminate this Agreement;
(e) By Purchaser by delivering written termination notice to
Seller at any time after the end of the 120th day following the Execution Date,
but prior to the Closing Date if any condition set forth in Section 4.3 above is
not at the time of such termination satisfied in the manner described in Section
4.3 (however, if the fulfillment of any such unsatisfied condition was
reasonably within the control of Purchaser, such a termination will only be
effective if prior to such termination Purchaser used commercially reasonable
and good faith efforts to attempt to fulfill such unsatisfied condition);
provided, however, that Purchaser shall not be entitled to terminate this
Agreement pursuant to this Section 4.6(e) if such unsatisfied condition relates
solely to the issuance or transfer of permits or licenses containing
substantially the same terms and conditions as to which Seller's permits and
licenses in existence as of the Closing Date are then subject, all as such
permits and licenses are necessary for Purchaser to lawfully commence operating
the Business on the day following the Closing Date in substantially the same
manner as Seller operated the Business prior to the Closing Date; or
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(f) By Seller by delivering written termination notice to
Purchaser at any time after the end of the 120th day following the Execution
Date, but prior to the Closing Date if any condition set forth in Section 4.2
above is not at the time of such termination satisfied in the manner described
in Section 4.2 (however, if the fulfillment of any such unsatisfied condition
was reasonably within the control of Seller or Xxxx, such a termination will
only be effective if prior to such termination Seller and Xxxx used commercially
reasonable and good faith efforts to attempt to fulfill such unsatisfied
condition); provided, however, that Seller shall not be entitled to terminate
this Agreement pursuant to this Section 4.6(f) if such unsatisfied condition
relates solely to the issuance or transfer of permits or licenses containing
substantially the same terms and conditions as to which Seller's permits and
licenses in existence as of the Closing Date are then subject, all as such
permits and licenses are necessary for Purchaser to lawfully commence operating
the Business on the day following the Closing Date in substantially the same
manner as Seller operated the Business prior to the Closing Date.
Section 4.7 Effect of Termination. If this Agreement is terminated
pursuant to Section 4.6, all further obligations of the parties under this
Agreement will terminate and, except as expressly provided below, such
termination shall be the sole remedy of the parties and none of the parties
shall have any further liability hereunder and all further obligations of the
parties under this Agreement will terminate, except that the obligations of each
party contained in Sections 2.16, 3.5, 4.7, 5.6.1, 5.16, 7.1, 7.2, and 7.3 and
in Article VIII hereof will survive such termination; provided, however, that if
this Agreement is terminated by a party hereto because of the breach of this
Agreement by another party hereto and if such breach is (a) a breach of any
representation or warranty made by the breaching party if such breaching party
had Knowledge of the breach on the date on which such representation or warranty
was made and such breach relates to a fact or circumstance that has a Material
Adverse Effect, or (b) attributable to the fraud, bad faith or willful
misconduct of the breaching party, then the terminating party may pursue all
damages, rights and remedies available to such party hereunder or at law or in
equity as a result of such breach. The provisions of this Section shall survive
the termination of this Agreement.
Section 4.8 Possession. Possession of the Assets will be delivered from
Seller to Purchaser on the Closing Date and title to all such Assets shall
become vested in Purchaser on the Closing Date. Following the Closing Date, both
parties agree to cooperate with each other so that there is an orderly transfer
of the business operations of the Business from Seller to Purchaser. The
provisions of this Section shall survive the Closing.
Section 4.9 Tax Escrow. The parties acknowledge Purchaser may have an
obligation to withhold a portion of the Purchase Consideration pursuant to the
purchase price holdback requirements of those provisions of state law described
on Schedule 4.9 to this Agreement (each state identified on such schedule a
"State" and collectively, the "States" and each such provision of state law a
"State Code" and collectively, the "State Codes"). The Escrow Funds being held
pursuant to the Escrow Agreement shall serve as Purchaser's Purchase
Consideration holdback for purposes of satisfying the State Codes. Within 30
days following the Closing, Seller will submit a written notice to each State
pursuant to the State Codes identified in Section A of Schedule 4.9 (and shall
send Purchaser a copy of such written notice) pursuant to the applicable State
Code requesting, and thereafter Seller will use commercially reasonable efforts
to obtain, such response contemplated by the applicable State Code to the effect
that Purchaser shall have no successor liability for any of Seller's tax
obligations relating to such State Code (each a "No Tax Due Letter"). Also
within 30 days of the Closing, Purchaser shall submit a written notice to each
State pursuant to the State Codes identified in Section B of Schedule 4.9 (and
shall send Seller a copy of such written notice) pursuant to the applicable
State Code requesting, and thereafter Purchaser will use commercially reasonable
efforts to obtain, a No Tax Due Letter with respect to such State Code. Seller
shall reasonably cooperate with Purchaser's efforts to obtain any such
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No Tax Due Letter, including, without limitation, making Seller's records
available for audit upon the request of any applicable State. Upon receipt of a
No Tax Due Letter from a State, Purchaser shall no longer be entitled to cause
the Escrow Agent to release any portion of the Escrow Funds for purposes of
paying the tax that is the subject of such No Tax Due Letter. With respect to
any tax for which a No Tax Due Letter has not been received (provided, in the
case of those State Codes identified in Section B of Schedule 4.9, that
Purchaser has complied with the requirements above and has used commercially
reasonable efforts to obtain the related No Tax Due Letter), if any State
pursues a claim against Purchaser for unpaid taxes of Seller for which Purchaser
is not obligated pursuant to the Transaction Documents, the parties agree that
Purchaser may apply the provisions of Article VI with respect to such claim.
Provided Purchaser has complied with the terms of this Agreement and the Escrow
Agreement, Seller's sole recourse for the amount so paid to any State by
Purchaser or the Escrow Agent shall be against the applicable State and not
against Purchaser or Escrow Agent. If Purchaser has not received a No Tax Due
Letter from any particular State by the end of the 12th month following the
Closing Date, Purchaser and Seller shall reasonably cooperate to obtain such
letter as soon as practicable, and if Seller does not cooperate as reasonably
requested by Purchaser then Purchaser may take such steps as may be reasonable
under the circumstances in order to obtain such No Tax Due Letter on or before
the end of the 23rd month following the Closing Date. The provisions of this
Section shall survive the Closing.
Section 4.10 Human Resources.
(a) Subject to Seller's express written permission and to
Seller's reasonable directions as to timing and other matters, Purchaser may
discuss job opportunities with Seller's Employees prior to the Closing Date.
Seller will fully cooperate in good faith with Purchaser in all aspects of
Purchaser's evaluation, interviewing and other analyses of Seller's Employees
for potential employment by Purchaser.
(b) Seller will terminate the employment of all Seller's
Employees who have accepted Purchaser's offer of employment prior to the Closing
Date (such persons are referred to herein as the "Accepting Seller's
Employees"), with such termination to be effective as of 11:59 p.m. (Las Vegas,
Nevada time) on the Closing Date (the "Effective Termination Time"). The
employment of each Accepting Seller's Employee shall be deemed to begin at 12:01
a.m. (Las Vegas, Nevada time) on the day immediately following the Closing Date
(the "Effective Hire Time"). Seller shall be responsible for and pay all
obligations, costs, expenses, accrued but unused vacation and liabilities as
employer with regard to its employees (including without limitation, the
Seller's Employees and Accepting Seller's Employees) that occur during or relate
to periods on or prior to the Effective Termination Time (and that occur on or
after the Effective Termination Time for Seller's Employees who do not become
Accepting Seller's Employees), and that relate to Seller's employment or
termination of employment of such persons. Purchaser shall be responsible for
and pay all obligations, costs, expenses, and liabilities as employer with
regard to its own employees (including, without limitation, all Accepting
Seller's Employees who become employees of Purchaser at the Effective Hire Time)
that occur during or relate to periods on or after the Effective Hire Time and
that relate to Purchaser's employment or termination of such persons. Without
limiting the foregoing, Seller shall be solely responsible for paying each
Accepting Seller's Employee for all of the accrued but unused vacation of each
such Accepting Seller's Employee that accrued on or before the Effective Hire
Time.
(c) Purchaser shall use its commercially reasonable good faith
efforts to provide medical benefits and other employee benefits to Accepting
Seller's Employees with their participation and eligibility to be effective as
of the Effective Hire Time in accordance with Purchaser's applicable
participation and eligibility requirements, but the terms of such benefits are
still subject to determination by Purchaser in its sole discretion, except to
the extent otherwise provided in this Section
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4.10(c). Purchaser agrees, however, that each Accepting Seller's Employee will
be credited with his or her consecutive years of employment service with Seller
as of the Closing Date for purposes of determining each such Accepting Seller's
Employees' eligibility to participate in any benefit plans provided to Accepting
Seller's Employees by Purchaser and for purposes of determining vesting in
benefits under such plans. Purchaser shall, as of the Effective Hire Time, grant
each Accepting Seller's Employee with vacation days pursuant to the terms of the
HR Agreement. Set forth on Schedule 2.25, is an accurate list of each Seller's
Employee's date of hire. Additionally, subject to the terms of Purchaser's
benefit plans in existence as of the date hereof (except as such existing terms
are supplemented by the terms of this Section), Purchaser will make benefits and
benefit levels available to Accepting Seller's Employees to the extent such
benefits and benefit levels are standard for all other similarly situated
employees of Purchaser during such period. Within five days after the execution
of this Agreement, Purchaser will provide summary plan descriptions of
Purchaser's employee benefit plans for Seller's review.
(d) Prior to the Closing Date and for a period of three full
calendar months following the Closing Date, Seller and Purchaser will act in
good faith and with diligence to attempt to accomplish a smooth transition for
all employees of Seller who become Seller's Accepting Employees.
(e) If the Closing does not occur for any reason, Purchaser
agrees that Purchaser will not directly solicit any of Seller's employees for
employment with Purchaser or any of its affiliates for a period of two (2) years
following the date this Agreement is terminated.
(f) The provisions of this Section shall survive the Closing.
Section 4.11 Permits. The parties agree that at the Closing, the
conveyance of the Permits (excluding any sales/use tax related permits which are
not a part of the Assets and which are not to be conveyed from Seller to
Purchaser at the Closing) from Seller to Purchaser shall be limited to only such
interest in the Permits as Seller has the right to convey to Purchaser in
accordance with all Applicable Laws and Purchaser and Seller agree and
understand that any operation of the Assets by Purchaser after the Closing may
be conditioned on Purchaser obtaining certain permits and licenses in its own
name, including re-issued versions of the Permits, to the extent required by
Applicable Law. The provisions of this Section shall survive the Closing.
Section 4.12 Nonassignability of Assets. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
sell, assign, sublease, transfer, convey or deliver any Asset or any claim or
right or any benefit arising under or resulting from such Asset if such sale,
assignment, sublease, transfer, conveyance or delivery is prohibited by any
Applicable Law or would require the consent or approval of any governmental
authority or other Person and such consent or approval is not obtained prior to
Closing. In the event that the Closing proceeds without the sale, assignment,
sublease, transfer, conveyance or delivery of any such Asset and such Asset does
not become an Excluded Asset by mutual agreement of the parties, then following
the Closing, the parties shall use their commercially reasonable efforts, and
cooperate with each other, to obtain promptly the applicable consents or
approvals; provided, however, that no party shall be required to pay any
consideration therefor other than filing, recordation or similar fees which
shall be paid by the party who is required by any legal requirements or course
of dealing to do so. Pending receipt of such consent or approval, the parties
shall cooperate with each other in any mutually agreeable, reasonable and lawful
arrangements designed to provide to Purchaser the benefits of use of such Asset.
Once consent or approval for the sale, assignment, sublease, transfer,
conveyance or delivery of any such Asset not sold, assigned, subleased,
transferred, conveyed or delivered at the Closing is obtained, Seller shall
sell,
31
assign, transfer, convey and deliver such Asset to Purchaser at no additional
cost to Purchaser. To the extent that any such Asset cannot be transferred or
the full benefits of use of any such Asset cannot be provided to Purchaser
following the Closing pursuant to this Section 4.12, Purchaser and Seller shall
enter into any mutually agreeable commercially reasonable arrangements
(including, without limitation, appropriate management or consulting agreements
or subleasing, sublicensing or subcontracting arrangements) necessary to provide
to Purchaser the economic (taking into account tax costs and benefits) and
operational equivalent, to the extent permitted, of obtaining such consent or
approval and the performance by Purchaser of the obligations thereunder;
provided, however, Seller and Purchaser must use good faith and commercially
reasonable efforts to obtain any consents or approvals necessary in order for
any of such Assets to be effectively assigned to Purchaser and such efforts
shall continue until such consents or approvals are obtained or until it is
determined by either Seller or Purchaser that such consents or approvals cannot
be reasonably obtained, whichever comes first; provided further, however, that
neither Seller nor Purchaser shall be required to expend funds to obtain any
such consent. Seller shall hold in trust for and pay to Purchaser promptly upon
receipt thereof, all income, proceeds and other monies received by Seller in
connection with its use of any Asset (net of any taxes and any other costs
imposed upon Seller) that are intended to be transferred hereunder but which
transfer is prohibited or delayed beyond the Closing Date. The provisions of
this Section shall survive the Closing.
Section 4.13 Prepaid Amounts; Income and Expense Prorations. At the
Closing, appropriate adjustments will be made to the Cash Consideration to
equitably prorate all Prepaid Expenses and all Accrued Liabilities to the extent
the same have been paid or are payable and to the extent the same are assumed by
Purchaser as part of the Assumed Liabilities, all so that Purchaser pays for all
amounts attributable to the period of time after the Closing Date and Seller
pays for all amounts attributable to the period of time on or prior to the
Closing Date. Notwithstanding the foregoing, prepaid amounts relating to items
not to be assumed by Purchaser at the Closing Date will not be Prepaid Expenses
and will not be prorated between the parties, examples of such non-prorated
expenses include, without limitation, amounts for prepaid permits and licenses,
amounts for advertising that occurs prior to the Closing Date, amounts for
prepaid premiums for Seller's insurance policies and, except as provided below,
amounts for Lease Pass-Through Charges. All security and other deposits made by
Seller in connection with any of the Assumed Liabilities shall be deemed Assets.
Except as provided in Section 4.14 below, the parties also agree that all income
earned on or before the Closing Date shall be credited or received by Seller,
and all income earned or accrued after the Closing Date shall be credited and
received by Purchaser; and all expenses and liabilities accrued or becoming due
on or before the Closing Date shall be paid by Seller, and all expenses and
liabilities accrued and becoming due after the Closing Date shall be paid by
Purchaser. Without limiting the foregoing, all ongoing expenses of the Business,
for example, personal property taxes, real property rentals, real estate taxes,
Lease Pass-Through Charges, utility and security charges, and payments to or
from franchisees, landlords, licensors, licensees, vendors, suppliers, service
providers and other contractors of Seller, expressly assumed by Purchaser at the
Closing, if any, will be equitably prorated between Seller and Purchaser as of
the Closing Date. To the extent any adjustment under this Section cannot be
reasonably and finally determined at Closing, the parties hereto agree to
reconcile all such income and expenses and make all adjustments and settlements
between them as may be appropriate or required under this Section as soon as
reasonably practicable after the Closing Date (with each party hereto acting
diligently and in good faith in connection with such post-Closing
reconciliation, adjustment and settlement process); provided, however, the
parties agree and understand that adjustments between them relating to any
amounts payable as Lease Pass-Through Charges may not be capable of being fully
reconciled between the parties hereto until a reasonable period of time
following the date the applicable landlord under any such Lease sends Purchaser
a reconciliation of any such Lease Pass-Through Charges payable under the
respective Lease for the lease year in which the Closing Date occurs; and
provided further, however, the parties hereto also agree that amounts payable
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for real estate and personal property taxes related to any of the Assets may not
be capable of being fully reconciled between the parties hereto until the
applicable taxing jurisdiction issues a statement for the total amount of real
estate or personal property taxes due for the applicable Asset for the year in
which the Closing Date occurs. Prior to the Closing Date, Purchaser and Seller
shall diligently cooperate in good faith with each other in an attempt to
identify with particularity as many of the Prepaid Expenses and Accrued
Liabilities as is reasonably possible (this process may, in Purchaser's
discretion, include, without limitation, a complete inspection at Seller's home
office by Purchaser's accounting representatives of Seller's books and records).
As used herein, the term "Lease Pass-Through Charges" means charges payable
under any Lease that are generally referred to as common area maintenance
charges, tax charges, insurance charges, merchant association charges, waste
disposal charges, water charges or other similar pass-through or additional rent
type charges payable to a landlord under any Lease. The provisions of this
Section shall survive the Closing.
Section 4.14 Cash, Checks and Collections. The Cash Consideration shall be
increased to reflect any of Seller's cash on hand that Purchaser elects, in
Purchaser's sole discretion, to buy from Seller at the Closing. Notwithstanding
anything contained in Section 4.13 to the contrary, the following
reconciliations, adjustments and/or settlements shall also be made as soon as
reasonably practical on or after the Closing Date:
(a) Payments on the following Checks shall be the sole
property of Seller and Seller shall be entitled to the proceeds thereof
(including any NSF and other collection fees related thereto):
(i) all Checks sent through the banking system by or on
behalf of Seller that clear on or prior to the Closing Date, and
(ii) all First Deposit Checks sent through the banking
system by or on behalf of Seller on or prior to the Closing Date if such First
Deposit Checks clear upon their first deposit into the banking system, even if
such First Deposit Checks do not finally clear until after the Closing Date.
(b) Payments on the following Checks shall be the sole
property of Purchaser and Purchaser shall be entitled to the proceeds thereof
(including any NSF and collection fees related thereto) and Seller shall not be
entitled to any further or additional compensation, reimbursement or payment for
any of the items described in this subsection (as such items shall be deemed
Customer Receivables that are included in the Assets acquired by Purchaser):
(i) except for First Deposit Checks, all Checks sent
through the banking system by or on behalf of Seller or Purchaser before, on or
after the Closing Date and that clear after the Closing Date, and
(ii) all First Deposit Checks deposited into the banking
system by or on behalf of Seller on or before the Closing Date that are returned
unpaid in whole or in part at any time after the Closing Date.
As used herein, "First Deposit Checks" shall mean all checks that are deposited
into the banking system and all ACH initiations made through the banking system
by or on behalf of Seller for the first time and have not at the time of such
first deposit or such first ACH initiation ever (x) been returned unpaid for any
reason, or (y) otherwise been sent through the banking system for payment. As
described in this Section, "Checks" include checks and/or ACH initiations
generated from Seller's payday loan, vehicle
33
loan, check cashing or collections activity but do not include Merchandise
Checks. As used herein, "Merchandise Checks" means all checks and/or ACH
initiations payable or granted to Seller or Purchaser as consideration for
merchandise sales made by Seller or Purchaser. Seller shall be entitled to the
proceeds from all Merchandise Checks that were issued as consideration for the
sale of merchandise on or before the Closing Date (no matter when such
Merchandise Checks are finally collected) and Purchaser shall be entitled to the
proceeds from all Merchandise Checks that were issued as consideration for the
sale of merchandise after the Closing Date. The parties will cooperate with each
other diligently and in good faith after the Closing Date in order to reconcile
the amounts to which each party is entitled pursuant to this Section as soon as
reasonably practical after the Closing Date. The provisions of this Section
shall survive the Closing.
Section 4.15 Reimbursements For Merchandise Warranties. The parties agree
that Seller will reimburse Purchaser for all merchandise warranty obligations
and other similar obligations under the Customer Service Policies, including,
without limitation, any refund or exchange policies, to the extent that (a) the
same were made available to Seller's customers in the ordinary course of
Seller's Business on or before the Closing Date, and (b) Purchaser actually
honors the same after the Closing Date. The amount of such reimbursement in
accordance with the preceding sentence shall be equal to Purchaser's actual
out-of-pocket cost based on the actual cost of the underlying merchandise to
Purchaser less the actual value of any merchandise actually received by
Purchaser in any exchange transaction, if any. Seller will make such
reimbursements to Purchaser within 10 days after Purchaser sends written notice
to Seller (together with reasonable supporting documentation) indicating the
amount to be reimbursed to Purchaser by Seller pursuant to this Section.
Purchaser may request any such reimbursement periodically after the Closing
Date, but no such request will be made more often than monthly and no such
request may be made after the sixtieth day following the Closing Date. The
Escrow Agreement will secure, among other things, Seller's obligation to
reimburse Purchaser for the amounts described in this Section 4.15. The
provisions of this Section shall survive the Closing.
Section 4.16 Allocation Agreement. The parties shall cooperate diligently
and in good faith to prepare jointly a Final Purchase Consideration Allocation
Agreement ("Final Allocation Agreement"), which agreement, if any, shall be used
to jointly complete an IRS Form 8594 ("Form 8594") with respect to the
transactions contemplated herein, within 90 days following the Closing Date,
provided, however, upon the request of either party hereto, the parties may file
their own Form 8594; provided further, however, that in all events each such
Form 8594 as filed shall be consistent with the allocation set forth in the
Final Allocation Agreement, if any. The parties hereto contemplate that the
allocations covered by the Final Allocation Agreement, if any, will include
specific allocations of the Purchase Consideration as follows: (i) to the
following Assets on an aggregate basis: to the customer lists and customer
records of the Business, and to the Non-Competition Agreement; provided,
however, that the parties agree that the portion of the Purchase Consideration
allocated to the Non-Competition Agreement shall be equal to the Non-Competition
Consideration, (ii) to the following Assets on a Shop by Shop basis (as
applicable): pawn loans, payday loans, inventory, leasehold interests,
furniture, fixtures and equipment, (iii) to the Boulder Property, if applicable,
and (iv) to the Charleston Property. If despite using diligent and good faith
efforts, the parties are unable to mutually agree upon the allocation of all or
any portion of the Purchase Consideration to any of the Assets (the portion of
the Purchase Consideration not allocated to the Assets per the mutual agreement
of the parties is referred to herein as the "Unallocated Consideration"), the
parties may perform their own separate allocations of the Unallocated
Consideration and file their own separate Form 8594 for the transaction covered
hereby and in such event no Final Allocation Agreement must be executed by the
parties hereto; provided, however, that to the extent the parties agree on any
specific allocation of a portion of the Purchase Consideration (adjusted for
transaction costs and other items that increase or decrease the purchase price
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for tax purposes, as required by applicable tax law) to certain Assets, each
party will use such agreed upon allocation in their separate allocations.
Section 4.17 Real Estate. The parties hereto shall comply with all of the
terms and conditions relative to the Owned Real Property set forth in the Real
Estate Purchase Provisions.
Section 4.18 Pre-Closing Inspections.
4.18.1 Inspection. Immediately prior to the Closing, Purchaser will
conduct a thorough examination, audit and inventory of Seller's merchandise
inventory (whether owned by Seller or subject to the terms of layaway contracts
or statutory hold periods), pawn loans, pawn tickets and the pledged goods
covered thereby, buy-sell and repurchase agreements and the merchandise covered
thereby, layaway merchandise, gun and firearm transactions, title loans,
deferred deposit (payday) loans and all records and documents relating thereto
at each Shop (the "Inspection"). In the course of such Inspection, Purchaser
shall reasonably determine for each Shop, the aggregate purchase amount of the
buy-sell and repurchase agreements and the aggregate loan amount of the pawn
loans (based on the principal or purchase amount indicated in the transaction
documents), the aggregate value of the merchandise inventory of the Pawnshop
Business, the aggregate face amount of the active deferred deposit (payday)
loans, the aggregate loan amount of all title loans and other consumer loans,
and the aggregate value of the furniture, fixtures, equipment and supplies
described above (which shall be the fair market value of such items, as
reasonably determined by Purchaser in the same manner utilized by Purchaser in
Purchaser's prior pawnshop acquisitions). For purposes of this Section, the
"value" of an item of merchandise inventory shall be the Cost of the item.
"Cost" shall mean the original loan amount actually advanced by Seller in
connection with the underlying forfeited merchandise or the actual purchase
price paid by Seller with respect to merchandise acquired by Seller through any
method other than through a pawn loan forfeiture; provided, however, if
Purchaser, in Purchaser's good faith opinion acting in a commercially reasonable
manner determines that the Cost for a particular item is higher or lower than
the Cost Purchaser would reasonably attribute to any particular item or loan in
the normal course of operating Purchaser's own pawnshops, then Purchaser and
Seller shall act reasonably, diligently and in good faith to mutually agree upon
an adjustment (either upward or downward) to such Cost with respect to the item
or loan in question; and provided further, however, if Purchaser requests an
adjustment to the Cost of a particular item or loan and the parties cannot agree
on such an adjustment in accordance with the foregoing provisions, then the
adjustment shall be finally determined to be the Cost that a reasonably prudent
pawnbroker with business experience and sophistication similar in scope and
nature to the experience and sophistication of Purchaser and Seller would
reasonably attribute to the item or loan in question. If necessary, the parties,
acting diligently, in good faith and in a commercially reasonable manner will
appoint an independent pawnbroker that meets the qualifications set forth above
to assist the parties with determining the Cost of an item or loan (other than
gold or diamonds) and in such event, such independent pawnbroker's decision on
the Cost of the loan or item in question shall be final. Unless Seller and
Purchaser otherwise agree to the contrary with respect to any specific
delinquent PFI (with both parties acting reasonably and in good faith),
Delinquent PFI's in existence on the Closing Date will not be included in the
aggregate pawn loan balance or the buy-sell or repurchase agreement valuation,
and such delinquent PFI's will be considered inventory. As used herein,
"Delinquent PFI's" shall be deemed to be all non-forfeited pawn loans and
un-redeemed buy-sell or repurchase agreements on which no payment has been made
within (a) the 113 day period immediately prior to the Closing Date for pawn
loans originated under the laws of the States of Arizona or Washington, or (b)
the 143 day period immediately prior to the Closing Date for pawn loans
originated under the laws of the States of California or Nevada. If Purchaser's
Inspection reveals earning asset levels different than the minimum earning asset
levels required under Section 4.3(m) and, notwithstanding such difference,
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Purchaser and Seller mutually agree to close the transaction contemplated
hereby, the parties hereby agree to make the following adjustments to the Cash
Consideration:
(a) For each $1.00 that the aggregate pawn loan balance for
all Shops combined is less than $25,500,000, the total Cash Consideration shall
be adjusted downward by $3.00; provided, however, if for any reason other than
for a breach of this Agreement by Seller, the Closing Date occurs after January
15, 2005, the $25,500,000 amount described above shall thereafter be reduced to
$24,500,000.
(b) For each $1.00 that the aggregate value of the merchandise
inventory of all Shops combined is less than $12,250,000, the total Cash
Consideration shall be adjusted downward by $1.00; provided, however, if for any
reason other than for a breach of this Agreement by Seller, the Closing Date
occurs after December 15, 2004, the $12,250,000 amount described above shall
thereafter be reduced to $11,750,000.
4.18.2 Missing Loans.
(a) As used herein, a "Missing Loan" shall be any
non-forfeited pawn loan acquired by Purchaser as part of the Assets for which
the underlying collateral is found to be missing. Seller will reimburse
Purchaser within 30 days of the Missing Loan's expiration date as follows:
(i) for Missing Loans that at their expiration result in
a forfeited loan, Seller will reimburse Purchaser for the principal amount of
the Missing Loan; and
(ii) for Missing Loans that result in a reimbursement
for the lost collateral to the borrower, Seller will reimburse Purchaser an
amount equal to the actual out-of-pocket cost to Purchaser of that
reimbursement. Purchaser agrees to use its best efforts to negotiate the minimum
acceptable reimbursement to the borrower. Notwithstanding the foregoing or any
other provision of this Agreement, Seller's reimbursement obligations pursuant
to this Section 4.18.2(a)(ii) will be limited to a maximum amount equal to three
times the actual price for which Purchaser would have sold the missing item in
the ordinary course of Purchaser's operations, with Purchaser acting reasonably
and in good faith, had the item become inventory of Purchaser.
(b) Seller will make Missing Loan reimbursements to Purchaser
within 10 days after Purchaser sends written notice to Seller (together with
reasonable supporting documentation) indicating the amount to be reimbursed to
Purchaser by Seller pursuant to this Section. Purchaser may request any such
reimbursement periodically after the Closing Date, but no such request will be
made more often than monthly and no such request may be made following the first
anniversary of the Closing Date. The Escrow Agreement will secure, among other
things, Seller's obligation to reimburse Purchaser for the amounts described in
this Section 4.18.2.
(c) The provisions of this Section 4.18.2 shall survive the
Closing.
4.18.3 Inspection Start Date. The parties agree that it may take
more than one day for Purchaser to complete the Inspection described above. The
date Purchaser commences the Inspection contemplated above shall be deemed the
"Inspection Start Date." If the Closing occurs and the Inspection Start Date is
earlier than the actual day of the Closing, then upon the consummation of the
Closing, the Closing Date shall still be deemed to be the Closing Date for all
purposes under this Agreement and the Transaction Documents. In this regard, the
following additional agreements are made:
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(a) Both parties agree to cooperate with each other to ensure
that from the commencement of the Inspection of each Shop through the Closing
Date, the business of such Shop is operated by Seller in the ordinary course of
Seller's business, and Seller agrees to afford Purchaser an adequate opportunity
to oversee the operation of the business of such Shop during such period, which
could include, without limitation, having a representative of Purchaser present
in such Shop for the purpose of overseeing the operations of such Shop from the
commencement of the Inspection of such Shop until the Closing Date.
(b) For all periods between the Inspection Start Date and the
actual day of Closing, both parties agree to cooperate with each other so that
there is an orderly transfer of the business operations of the Business on the
Closing Date, collection of all applicable income of each party and the payment
of all applicable expenses attributable to each party in accordance with this
Agreement. Notwithstanding that the Inspection Start Date may be earlier than
the Closing Date, the allocation of all income and expenses for the Business
shall be governed by the other terms and conditions of this Agreement related to
such allocation.
(c) If the Inspection Start Date occurs, but the Closing Date
does not actually occur, Purchaser will reasonably cooperate with Seller to
promptly remove all evidence from the Shops that all or any portion of the
Inspection took place at each applicable Shop and Purchaser will reasonably
cooperate with Seller to prevent any unreasonable interference to the Business
by Purchaser's Inspection teams as such Inspection teams are withdrawn from the
Business.
Section 4.19 Information Technology Review. Seller and Purchaser hereby
agree to cooperate using commercially reasonable efforts to facilitate a review
by Purchaser of Seller's information systems, including all hardware and
software, with such review to be conducted prior to the Closing Date (the "IT
Review").
Section 4.20 Consulting Agreement. Between the Execution Date and the
Closing Date, the parties hereto will use good faith and commercially reasonable
efforts to determine the final composition of the management team that will be
the subject of the Consulting Agreement, as such team is contemplated on Exhibit
"A" attached to the form Consulting Agreement attached hereto as Exhibit "N."
Section 4.21 Survival. The terms of each and every Section of this Article
IV shall survive any termination of this Agreement and shall survive the Closing
in the manner described herein, as applicable.
ARTICLE V
OTHER COVENANTS
Section 5.1 Seller's Negative Covenants. Seller and Xxxx covenant and
agree that, after the Execution Date and until the earlier to occur of (a) the
termination of this Agreement, or (b) the Closing Date, they will not, and will
use their best efforts to cause their respective shareholders, directors and
officers and the Key Persons of Seller to not, solicit, enter into, or entertain
any discussions or negotiations with respect to a Competing Transaction, enter
into any binding agreement with respect to any Competing Transaction, consummate
any Competing Transaction, or agree in writing or otherwise to do any of the
foregoing. Seller shall, within 24 hours of obtaining Knowledge of same, furnish
Purchaser with copies, or if not in writing, a written summary, of any inquiries
or proposals with respect to a Competing Transaction. For purposes of Section
5.1, "Competing Transaction" means any proposal or offer from any Person (other
than Purchaser) relating to any purchase or other acquisition of all or any
37
material portion of the assets of, or any possible disposition or issuance of
any equity interests in, Seller (or any rights or securities exercisable for, or
convertible into, such equity interests), or any merger or other business
combination with Seller.
Section 5.2 Conduct of Business. After the Execution Date and until the
earlier to occur of (a) the termination of this Agreement, or (b) the Closing
Date, Seller shall, unless Seller receives Purchaser's prior written consent
(which consent, except as expressly provided below, shall not be unreasonably
withheld or delayed):
(a) Use commercially reasonable and diligent efforts to
continue to conduct its business in the ordinary course, consistent with
Seller's past practices;
(b) Not declare, pay or make any dividends or distributions on
its capital stock;
(c) Not enter into any agreement (oral or written) with its
directors, officers or salaried employees except as may be necessary to help
consummate the transaction contemplated hereunder; provided, however, that
Seller shall obtain Purchaser's prior written consent prior to entering into any
such agreement, which consent shall not be unreasonably withheld or delayed; and
provided further, however, that Purchaser's written consent shall not be
required for any such agreement that is made in the ordinary course of Seller's
business consistent with past practices;
(d) Not increase the compensation of its directors, officers
or employees;
(e) Not make capital expenditures (or enter into commitments
to make capital expenditures) in excess of $10,000 individually or $25,000 in
the aggregate;
(f) Not enter (without Purchaser's prior written consent, such
consent not to be unreasonably withheld or delayed) into any contract which
would be (or have been) deemed a Commitment had the same been entered into prior
to the Execution Date; or
(g) Not issue any capital stock or grant options to purchase
its capital stock which would result in Xxxx owning less than 67% of the capital
stock on a fully-diluted basis.
Notwithstanding the foregoing, Purchaser hereby approves the acquisition
transactions described on Exhibit "L" attached hereto and incorporated herein by
this reference; provided, however, that such approval shall be deemed to be
withdrawn unless such acquisitions are closed prior to the Closing Date on the
terms and conditions set forth on Exhibit "L" hereto and that Seller's debt
obligations incurred in connection with such acquisitions do not exceed the
limitations therefore set forth on Exhibit "L" attached hereto.
Section 5.3 Assistance With Due Diligence. From and after the date of this
Agreement and until the Closing Date (or the termination of this Agreement),
Seller and Xxxx shall, and shall cause the Key Persons of Seller to, (i) use
their reasonable best efforts to assist Purchaser and Purchaser's
representatives in Purchaser's due diligence review of Seller, the Assets and
the Business, (ii) ensure Purchaser and Purchaser's representatives have full
and complete access to all of Seller's properties, books, contracts,
commitments, personnel and records related to the Assets and any other
information Purchaser, in Purchaser's reasonable discretion, deems necessary to
complete such due diligence review, and (iii) furnish promptly to Purchaser all
information concerning Seller's business, properties and personnel as may be
requested by Purchaser and/or Purchaser's representatives. Seller shall provide
Purchaser with copies of all documents that pertain to the disclosures set forth
in the Schedules and any
38
Supplemental Disclosure Agreement and, upon Purchaser's request, shall provide
Purchaser with copies of all other requested documents that pertain to this
transaction. All information as may be furnished by or on behalf of Seller to
Purchaser or Purchaser's representatives pursuant to this Section 5.3 shall be
and remain confidential. Purchaser will conduct any and all investigations and
inspections of the Assets in a professional and reasonable manner during the
regular business hours of Seller and such investigations and inspections by
Purchaser will be subject to Seller's reasonable direction designed to prevent
any material disruption to the Business prior to the Closing Date.
Section 5.4 Notification of Certain Matters. Each of Seller and Purchaser
shall promptly advise the other party orally and in writing of (a) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality being or becoming untrue or inaccurate in any
respect or any such representation or warranty that is not so qualified being or
becoming untrue or inaccurate in any material respect, or (b) the failure by it
to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement. Should
any fact or condition require any change to the Schedules after the Execution
Date Seller shall promptly deliver to Purchaser a written supplement to the
Schedules specifying such change. The parties contemplate that between the
Execution Date and the Closing Date a party may need to modify certain Schedules
attached to this Agreement, and the parties agree that notwithstanding any other
provision of this Agreement, any such modification to the Schedules by any party
shall not constitute a breach by such party under this Agreement. In this
regard, the parties agree to execute at the Closing, a Supplemental Disclosure
Agreement ("Supplemental Disclosure Agreement") in form and substance reasonably
satisfactory to Seller and Purchaser that sets forth the final agreed upon
version of each of the Schedules to this Agreement, as such Schedules may change
between the Execution Date and the Closing Date in any manner permitted under
this Agreement, provided, however, that the parties agree to act diligently,
reasonably and in good faith to agree on the terms of the Supplemental
Disclosure Agreement; and provided further, however, that the form and substance
of Schedules 1.0(a), 1.0(b), 1.0(c), 1.0(d), 1.2.2, 1.3, 2.6(a), 2.6(b), 2.8 and
4.16 attached hereto are hereby deemed to be final and Seller shall have no
right to request or require any changes to the form and substance of Schedules
1.0(a), 1.0(b), 1.0(c), 1.0(d), 1.2.2, 1.3, 2.6(a), 2.6(b), 2.8 and 4.16
attached hereto unless Purchaser, in Purchaser's reasonable discretion, agrees
to consider, or consents to, such change or unless Purchaser requests any such
change and Purchaser and Seller subsequently agree upon such change in the
manner described above; and provided further, however, that the form and
substance of Schedule 1.0(c) attached hereto may be changed to add additional
Assets to such Schedule that Seller actually acquires between the Execution Date
and the Closing Date and subtract any Assets that Seller disposes of between the
Execution Date and the Closing Date (however, unless Purchaser consents to the
same in writing, any addition or subtraction of Assets from the Business must be
done in the ordinary course of Seller's business (except for subtractions of
Assets due to Force Majeure), must be consistent with Seller's past practices
(except for subtractions of Assets due to Force Majeure) and may not have a
Material Adverse Effect).
Section 5.5 Further Instruments of Transfer. Following the Closing, at the
request of either party hereto, the other party hereto shall deliver any further
instruments of transfer and take all reasonable action as may be necessary or
appropriate to vest in Purchaser good and marketable title to the Assets, with
any such instrument or action to be reasonably satisfactory to both parties
hereto. The provisions of this Section shall survive the Closing.
Section 5.6 Transaction Costs and Tax Matters.
5.6.1 Whether or not the transactions contemplated hereby are
consummated, each party will pay its own transaction costs and expenses related
to the transactions contemplated by this
39
Agreement (including, without limitation, out-of-pocket due diligence and travel
expenses, copy, fax, delivery, filing and recording fees and costs (except as
expressly provided in this Section and in Section 5.11 below), and the fees and
expenses of any attorneys, accountants, consultants, lenders, investment bankers
or other advisors such party may engage to assist it with the transaction).
Notwithstanding the foregoing, if any party (excluding Seller or Xxxx or any of
their affiliates) to a Commitment that is (a) identified as to be assigned on
Schedule 2.9, and (b) further identified on Schedule 2.9 as a Commitment that
requires a third party consent to assignment, charges an assignment fee as a
condition to consenting to such assignment, Seller shall pay such assignment fee
if the same is commercially reasonable and is permitted to be charged by the
party charging the same pursuant to the express terms of the Commitment to be
assigned; provided, however, that (i) if the Closing occurs, Purchaser shall
reimburse Seller at the Closing for 50% of all such commercially reasonable
assignment fees that are actually paid by Seller to the extent such fees are
permitted to be charged by the party charging the same pursuant to the express
terms of the Commitment being assigned and (ii) if this Agreement is terminated,
Purchaser shall reimburse Seller promptly following the date on which this
Agreement is terminated for 50% of all such commercially reasonable assignment
fees that are actually paid by Seller to the extent such fees are permitted to
be charged by the party charging the same pursuant to the express terms of the
Commitment being assigned. Additionally, each party shall pay in a timely manner
all of their respective taxes resulting from or payable in connection with the
sale of the Assets pursuant to this Agreement, except as provided in Section
5.6.2.
5.6.2 Seller and Purchaser shall each pay 50% of any and all taxes
resulting from the sale of the Assets hereby identified on Schedule 5.6.2
("Transfer Taxes") and Purchaser and Seller shall pay all transfer taxes and
recording fees relating to the transfer of the Owned Real Property from Seller
to Purchaser hereunder in the manner specified in the Real Estate Purchase
Provisions. Purchaser shall be required to deliver to Seller on the Closing Date
its share of Transfer Taxes set forth in Schedule 5.6.2, unless the parties
agree to a different amount prior to Closing. Seller shall promptly deposit the
amount paid by Purchaser, together with an equal amount paid by Seller, with the
applicable taxing authority(ies) in order to avoid the imposition of any late
payment penalty with respect thereto. No later than the 30th day following the
Closing Date, Seller shall provide Purchaser with reasonable supporting
documentation evidencing that all required Transfer Tax payments required as a
result of the sale of the Assets hereby have been made by Seller. If it is
determined that any further amounts are due with respect to Transfer Taxes,
Seller and Purchaser shall each promptly cause 50% of such taxes and any
interest, or penalties or additional amounts with respect thereto to be paid. To
the extent that any state or local law or regulation precludes Seller from
absorbing any of the Transfer Taxes ("No-Share Taxes"), the Cash Consideration
shall be reduced by fifty percent of the amount of such No-Share Taxes and
Purchaser shall be responsible, in addition to the amounts for which it
otherwise is responsible hereunder, for that portion of the No-Share Taxes by
which the Cash Consideration has been reduced. Purchaser and Seller agree that
the amount by which the Cash Consideration is reduced pursuant to the
immediately preceding sentence shall be deemed to be part of the Purchase
Consideration for purposes of allocating such amount to the goodwill of the
Business pursuant to Section 4.16. Notwithstanding the foregoing, in no event
shall Purchaser be obligated to pay any income, gross receipts, business or
occupational taxes imposed on Seller in connection with the transactions
contemplated hereby, except to the extent such taxes are specifically identified
in Schedule 5.6.2.
5.6.3 Purchaser and Seller shall, and shall cause their affiliates
to, cooperate as reasonably requested by a party hereto, at the sole expense of
the requesting party, in connection with the requesting party's preparation of
tax returns, defense of any audit, examination or inquiry with respect to any
taxes, and pursuit of any tax refund or credit, to the extent the same may
pertain to the Business or the Assets.
40
5.6.4 If any indemnification amount is paid by a party under this
Agreement, such amount shall be treated for all applicable income tax purposes
as an adjustment to the Purchase Consideration paid for the Assets.
5.6.5 The provisions of this Section 5.6 shall survive the Closing.
Section 5.7 Name Change. As soon as practicable but in no any event no
later than the seventh (7th) day following the Closing Date, SuperPawn shall
amend its articles of incorporation and take all other actions necessary to
change its name from "SuperPawn, Inc." to another name not similar in any
fashion or manner to such name and Seller will coordinate such change so that
simultaneously Purchaser may obtain the rights to such name in whatever form or
fashion Purchaser deems advisable. The provisions of this Section shall apply to
the corporate entity name of SuperPawn as well as to all assumed name and other
similar filings and reservations referencing the name "SuperPawn" or any
variation thereof. The provisions of this Section shall survive the Closing.
Section 5.8 Material Change. Between the Execution Date and the Closing
Date, (i) Seller shall inform Purchaser in writing within a commercially
reasonable period of time following the occurrence of any Material Adverse
Change, and (ii) Purchaser shall inform Seller in writing within a commercially
reasonable period of time following the occurrence of any Purchaser Material
Adverse Change.
Section 5.9 Mortgages, Liens and Guaranties. Except as expressly permitted
pursuant to Section 5.2 above, from and after the Execution Date until the
Closing Date, Seller shall not, without the prior written approval of Purchaser,
enter into or assume any mortgage, pledge, conditional sale or other title
retention agreement, permit any security interest, lien, encumbrance or claim of
any kind to attach to any of the Assets, whether now owned or hereafter
acquired, or guarantee or otherwise become contingently liable for any
obligation of another, or make any capital contribution or investment in any
Person. The terms of this Agreement shall not restrict Seller's right, after the
Execution Date, to open, close, terminate, create or administer Consumer Loans
and Consumer Loan Documents in the ordinary course of Seller's business.
Section 5.10 Seller's Principals. Xxxx has read the terms and conditions
of this Agreement and has (or will, prior to Closing) read the Transaction
Documents and acknowledges that (1) the execution of this Agreement and the
Transaction Documents and the undertakings of Xxxx in this Agreement and the
Transaction Documents are (or will be) in partial consideration for, and a
condition to the consummation by, Purchaser of the transactions contemplated by
this Agreement and the Transaction Documents, and (2) Purchaser would not have
executed (or will not execute) this Agreement or any Transaction Documents
executed (or to be executed) pursuant to this Agreement without the execution of
this Agreement and such undertakings by Xxxx. Between the Execution Date and the
end of the 2nd year following the Closing Date, Seller and Xxxx agree that they
will not dissolve, reorganize or make any material changes to the organizational
structure or formation agreements and documents of either Seller Entity except
as described in Section 5.7 above; provided, however, that Seller may undertake
such a transaction if Purchaser receives an express written assumption of
Seller's then surviving rights and obligations under this Agreement and any
Transaction Document, with such assumption being signed by, and binding on, the
party or parties succeeding to the interest of Seller and the party or parties
receiving anything more than a de minimis portion of the proceeds of the
transactions contemplated by this Agreement. The provisions of this Section
shall survive any termination of this Agreement and shall survive the Closing.
41
Section 5.11 Direction of Energies Prior to Closing. Unless or until this
Agreement is terminated under Section 4.6, each party hereto shall use
commercially reasonable and diligent efforts to (a) cause the conditions in
Section 4.2 and Section 4.3 to be satisfied, and (b) take, or cause to be taken,
all actions, and do, or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated hereby, including, without limitation, obtaining all
authorizations, consents, waivers and approvals as may be required in accordance
with this Agreement. Except as may be necessary to fulfill the requirements set
forth in the immediately preceding sentence, neither party will be obligated to
pay money or incur obligations in order to obtain any authorizations, consents,
waivers or approvals as may be required in accordance with this Agreement.
Notwithstanding the foregoing or any other provision of this Agreement,
Purchaser may, beginning on the day following the execution of this Agreement
and subject to Seller's reasonable directions as to timing and other matters,
contact Seller's licensors, regulatory authorities, suppliers, lenders, agents,
franchisees, lessors, service providers and contractors regarding the
transactions contemplated hereby; provided, however, that Seller will use its
best efforts to provide Purchaser with such directions promptly prior to the
beginning of such day. Without limiting the foregoing, each party hereto agrees
to make an appropriate filing of a Notification and Report Form pursuant to the
HSR Act and any other regulatory law with respect to the transactions
contemplated hereby as promptly as practicable after the Execution Date and to
supply as promptly as practicable any additional information and documentary
material that may be requested pursuant to the HSR Act and any other regulatory
law and to take all other actions necessary to cause the expiration or
termination of the applicable waiting periods under the HSR Act as soon as
practicable. Each party will be responsible for their own costs and expenses
incurred in connection with the preparation of their respective HSR Act filings
or any similar filings; provided, however, Purchaser will be solely responsible
for paying the filing fee required under the HSR Act.
Section 5.12 Customer and Other Business Relationships. After Closing,
Seller will cooperate with Purchaser in its efforts to continue and maintain for
the benefit of Purchaser those business relationships of Seller existing prior
to the Closing and relating to the business to be operated by Purchaser after
the Closing, including relationships with employees, customers, licensors,
regulatory authorities, suppliers, lenders, agents, franchisees, lessors,
service providers, contractors and others; provided, however, Seller's
obligations under this sentence shall survive the Closing only until the end of
the 3rd full calendar month following the Closing; and provided further,
however, that Seller will not be obligated to incur any expense in performing
its obligations under this sentence. In addition to the foregoing, Seller will
satisfy any retained Liabilities (that are not Assumed Liabilities) in a manner
that is not detrimental to any of the above-described relationships. Seller will
refer to Purchaser all inquiries relating to the Business following the Closing
Date. Neither Seller nor Xxxx shall take any action that would diminish the
value of the Assets after the Closing or which would interfere with the business
of Purchaser after the Closing, including, without limitation, disparaging the
name or business of Purchaser. The provisions of this Section shall survive the
Closing; provided, however, to the extent any provisions of this Section
specifically state that they shall survive the Closing for a certain period of
time, such provisions shall survive the Closing only for such specified period
of time.
Section 5.13 Retention of and Access to Records. After the Closing Date,
Purchaser shall retain for a period consistent with Purchaser's record retention
policies and practices in effect as of the Execution Date, those records of
Seller delivered to Purchaser. After the Closing, Purchaser shall provide Seller
and its representatives reasonable access thereto, during normal business hours
and on at least three days' prior written notice, to enable Seller to prepare
financial statements or tax returns or respond to tax audits; provided, however,
Purchaser's obligations under this sentence shall survive the Closing only until
the end of the 26th full calendar month following the Closing Date; and provided
further, however, that Purchaser will not be obligated to incur any expense in
performing its obligations
42
under this sentence. After the Closing Date, Seller shall retain for a period
consistent with Seller's record retention policies and practices in effect as of
the Execution Date, those records of Seller in Seller's possession as of the
Execution Date and as of the Closing Date that are or were applicable to the
Business. After the Closing, Seller shall provide Purchaser and its
representatives reasonable access to records regarding any Assets or Excluded
Assets and to records regarding any Liabilities (including, without limitation,
the Assumed Liabilities), during normal business hours and on at least three
days' prior written notice, in connection with claims asserted by third parties
against Purchaser specifically as to any such Excluded Assets or retained
Liabilities; provided, however, Seller's obligations under this sentence shall
survive the Closing only until the end of the 26th full calendar month following
the Closing Date; and provided further, however, that Seller will not be
obligated to incur any expense in performing its obligations under this
sentence. The provisions of this Section shall survive the Closing; provided,
however, to the extent any provisions of this Section specifically state that
they shall survive the Closing for a certain period of time, such provisions
shall survive the Closing only for such specified period of time.
Section 5.14 Assistance in Proceeding. Seller and Xxxx will cooperate with
Purchaser in the contest or defense of, and make available, at Purchaser's sole
expense, such persons and provide any testimony and access to its books and
records in connection with, any proceeding involving or relating to (a) any
transaction contemplated by this Agreement, or (b) any action, activity,
circumstance, condition, conduct, event, fact, failure to act, incident,
occurrence, plan, practice, situation, status, or transaction involving Seller,
the Assets or the Business; provided, however, that except as otherwise
described in Article VI of this Agreement, the obligations of Seller and Xxxx
under this sentence that accrue after the Closing Date shall survive the Closing
only until the end of the 24th full calendar month following the Closing; and
provided further, however, that except as otherwise described in this Agreement
(including, without limitation, Article VI of this Agreement), Seller will not
be obligated to incur any expense in performing its obligations under this
sentence. The provisions of this Section shall survive the termination of this
Agreement and shall survive the Closing; provided, however, to the extent any
provisions of this Section specifically state that they shall survive the
Closing for a certain period of time, such provisions shall survive the Closing
only for such specified period of time.
Section 5.15 Schedule 4.3(g). Between the Execution Date and the Closing
Date, the parties hereto will comply with the terms and conditions of Schedule
4.3(g) and will use diligent, good faith and commercially reasonable efforts to
mutually agree on a resolution of the matters identified in Schedule 4.3(g) in
the manner more particularly described in such Schedule.
Section 5.16 Redundant Data Center. Between the Execution Date and the
Closing Date Seller will use diligent and good faith efforts to establish a
redundant off-site data facility ("Redundant Facility") for the technology
business of Seller that is an Excluded Asset, as such Redundant Facility is more
particularly described in the form Software License Agreement attached hereto as
Exhibit "F." Seller agrees to diligently commence and pursue securing a location
for the Redundant Facility and to diligently commence and pursue to completion
the design, development, construction and operation of the Redundant Facility as
soon after the Execution Date as is reasonably possible, with Seller acting in
good faith and in a commercially reasonable manner. Seller shall use diligent,
good faith and commercially reasonable efforts to cause the Redundant Facility
to be fully-functional on or before the Closing Date; provided, however,
Purchaser shall not be obligated to cause the Redundant Facility to be fully
functional until the earlier to occur of (a) the date set forth therefore in the
form Software License Agreement attached hereto as Exhibit "F," or (b) the 150th
day following the Execution Date. If the Closing does not occur for any reason
other than as a result of a breach by Seller of the terms of this Agreement,
Purchaser agrees to buy from Seller, at Seller's cost, all of the computer
equipment to be dedicated to the Redundant Facility that Seller procures from
independent third parties in arms-length
43
transactions after the Execution Date; provided, however, in no event shall
Purchaser be obligated to pay Seller more than $132,000 for any of such
equipment and any such equipment that Purchaser does not buy from Seller, to the
extent Seller incurred more than $132,000 in procuring such equipment, shall
remain the sole property of Seller; provided further, however, that prior to
Purchaser purchasing any of such equipment from Seller, Seller must provide
Purchaser with reasonable supporting documentation evidencing the cost of such
equipment and describing the purpose that such equipment is or was intended to
serve in the Redundant Facility. Seller shall deliver possession of all such
equipment Purchaser buys from Seller pursuant to this Section promptly after
Seller receives payment therefore from Purchaser and at such time all such
equipment purchased by Purchaser shall be the sole property of Purchaser and
Seller shall have no further rights thereto. The provisions of this Section
shall survive the Closing and shall survive any termination of this Agreement.
Section 5.17 Survival. The terms of each and every Section of this Article
V shall survive any termination of this Agreement and shall survive the Closing
in the manner described herein, as applicable.
ARTICLE VI
REMEDIES
Section 6.1 Survival of Representations, Warranties and Covenants. The
representations and warranties of the parties contained in this Agreement, the
Schedules (including any supplements thereto made by Seller), the Transaction
Documents and any other certificate or document delivered pursuant to this
Agreement shall survive the Closing until the second anniversary of the Closing
Date (except the representations and warranties of Seller and Xxxx set forth in
Sections 2.15 and 4.9 shall survive until the fifth anniversary of the Closing
Date). The covenants, agreements and indemnities (except those contained in
Sections 5.1, 5.2, 5.3, 5.4, 5.8, 5.9, and 5.11, each of which shall not survive
the Closing Date) contained herein shall survive the Closing without limitation
as to time unless the covenant, agreement or indemnity specifies a time
limitation, in which case such covenant, agreement or indemnity shall survive
until the expiration of such specified term. The provisions of this Section
shall survive the termination of this Agreement and shall survive the Closing;
provided, however, to the extent any provisions of this Section specifically
state that they shall survive the Closing for a certain period of time, such
provisions shall survive the Closing only for such specified period of time.
Section 6.2 Indemnification by Seller and Xxxx. Seller and Xxxx, jointly
and severally, shall defend, indemnify and hold harmless Purchaser and
Purchaser's affiliates and their respective subsidiaries, shareholders,
affiliates, officers, directors, employees, agents, successors and assigns
(Purchaser and such persons and entities, collectively, "Purchaser's Indemnified
Persons"), and shall reimburse Purchaser's Indemnified Persons, for, from and
against each and every demand, claim, loss, liability, judgment, damage, lien,
fine, penalty, action, cost and expense (including, without limitation,
reasonable fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, the "Losses") imposed on or incurred by
Purchaser's Indemnified Persons, directly or indirectly, relating to, resulting
from, or arising out of (i) a breach of any representation or warranty made by
Seller in this Agreement, (ii) a breach of any express representation or
warranty, if any, made by Seller or Xxxx in any Transaction Document (other than
this Agreement), (iii) except for obligations maturing or accruing after the
Closing Date under the Assumed Liabilities, any Liabilities, obligations or
duties of Seller or Xxxx, whether accrued, absolute, contingent or otherwise,
arising out of, or in any way connected with, Seller's or Xxxx'x activities
relating to the Assets, the Liabilities of the Business or the Business and/or
the operation of the Assets or the Business prior to the Closing (or, if the
same are not Assumed Liabilities, arising out of, or in any way connected with
Seller's or Xxxx'x activities relating to the Assets, the Liabilities of the
Business or the Business before, on and after the Closing),
44
(iv) except for obligations maturing or accruing after the Closing Date under
the Assumed Liabilities, the ownership, use, possession or operation of the
Assets or the Business at any time prior to the Closing Date, (v) any breach or
nonfulfillment of any covenant, agreement or other obligation of Seller or Xxxx
under this Agreement, any Transaction Document or any certificate or other
document delivered or to be delivered pursuant hereto or thereto, including,
without limitation, Seller or Xxxx'x obligation to pay Purchaser any portion of
the Final Debt Consideration Amount (to the extent Seller or Xxxx is required to
pay any Final Debt Consideration Amount to Purchaser pursuant to Schedule
1.2.2), or (vi) the Schedule 9.16 Items; provided, however, that Purchaser will
pay over to Seller or Xxxx, as applicable, any insurance proceeds actually
received by Purchaser in respect of any such Losses to the extent such Losses
shall have been paid by Seller or Xxxx, as applicable, pursuant to this Section
6.2 and such proceeds have not already been applied by Purchaser to offset all
or any portion of such Losses; provided further, however, that Purchaser, in
Purchaser's sole and absolute discretion, may determine whether or not to file
or pursue a claim under any insurance that might be applicable to the matters
underlying any such Losses and Purchaser shall have no obligation to file or
pursue a claim under any such insurance. For purposes of this Agreement, Losses
shall be calculated after giving effect to any related tax benefit and amounts
recovered from third parties, including amounts recovered under insurance
policies with respect to such Losses, net of any costs to recover such amounts.
Notwithstanding the foregoing, Purchaser shall not be entitled to assert any
claim for indemnification under this Section 6.2 unless and until such time as
all Losses exceed $750,000 ("Purchaser's Basket") in the aggregate, at which
time any and all claims of Purchaser for indemnification of Losses in excess of
Purchaser's Basket may be asserted; provided, however, that Purchaser's Basket
shall not be applicable to any Losses attributable to (a) the failure of Seller
to deliver any of the Assets to Purchaser free from all Liabilities other than
the Assumed Liabilities or to pay or otherwise satisfy any payment obligations
related to the Assets which are presently existing or exist at any time prior to
the Closing Date and are not expressly assumed by Purchaser as an Assumed
Liability, (b) any breach by Seller or Xxxx of any representation, warranty,
covenant or obligation set forth in this Agreement or any Transaction Document
if such breach is attributable to the fraud, bad faith or willful misconduct of
Seller or Xxxx or if Seller or Xxxx had Actual Knowledge of the breach at the
time the covenant, representation or warranty was made, (c) the failure by
Seller or Xxxx to make or pay, as appropriate, to or for the benefit of
Purchaser, as appropriate, all or any portion of the Final Debt Consideration
Amount (to the extent Seller or Xxxx is required to pay any Final Debt
Consideration Amount to Purchaser pursuant to Schedule 1.2.2), or any
prorations, adjustments, reimbursements, settlements or reconciliations
specifically required to be made or paid by Seller or Xxxx pursuant to the
provisions of Article IV of this Agreement, (d) any breach by Seller of Section
2.8, 2.15 or 2.16, (e) Seller's failure to make any payment required to be made
by Seller in accordance with Section 4.9 or Section 5.6, or (f) the Schedule
9.16 Items. Notwithstanding anything in this Agreement to the contrary, none of
the Purchaser's Indemnified Persons shall be entitled to indemnity under the
Escrow Agreement or otherwise under this Section 6.2 with respect to, and Seller
shall not otherwise be liable for, any breach of a representation or warranty of
Seller hereunder if Purchaser had Actual Knowledge of such breach at or prior to
the Closing. The provisions of this Section shall survive the termination of
this Agreement and shall survive the Closing.
Section 6.3 Indemnification by Purchaser. Except as otherwise expressly
provided in this Article VI, Purchaser shall defend, indemnify and hold harmless
Seller, Xxxx, and each of their respective subsidiaries, shareholders,
affiliates, officers, directors, employees, agents, successors and assigns
(Seller and such persons and entities, collectively, "Seller's Indemnified
Persons"), and shall reimburse Seller's Indemnified Persons, for, from and
against all Losses imposed on or incurred by Seller's Indemnified Persons,
directly or indirectly, relating to, resulting from or arising out of (i) a
breach of any representation or warranty made by Purchaser in this Agreement,
(ii) a breach of any
45
express representation or warranty, if any, made by Purchaser in any Transaction
Document (other than this Agreement), (iii) any breach or nonfulfillment of any
covenant, agreement or other obligation of Purchaser under this Agreement, any
Transaction Document or any certificate or other document delivered or to be
delivered pursuant hereto or thereto, including, without limitation, Purchaser's
obligation to pay Seller any portion of the Purchase Consideration, any portion
of the Debt Holdback (to the extent Purchaser is required to pay any portion of
the Debt Holdback to Seller pursuant to Schedule 1.2.2), the Final Debt
Consideration Amount (to the extent Purchaser is required to pay any Final Debt
Consideration Amount in excess of the Debt Holdback to Seller pursuant to
Schedule 1.2.2), and Purchaser's obligation to pay its share of sales taxes as
provided in Section 5.6.2, (iv) obligations maturing or accruing after the
Closing Date under the Assumed Liabilities, or (v) the ownership, use,
possession or operation of the Assets from and after the Closing Date, provided,
however, that Seller or Xxxx, as applicable, will pay over to Purchaser any
insurance proceeds actually received by Seller or Xxxx in respect of any such
Losses to the extent such Losses shall have been paid by Purchaser pursuant to
this Section 6.3 and such proceeds have not already been applied by Seller or
Xxxx, as applicable, to offset all or any portion of such Losses; provided
further, however, that Seller or Xxxx, in their sole and absolute discretion,
may determine whether or not to file or pursue a claim under any insurance that
might be applicable to the matters underlying any such Losses and neither Seller
nor Xxxx shall have any obligation to file or pursue a claim under any such
insurance. Notwithstanding the foregoing, neither Seller nor Xxxx shall be
entitled to assert any claim for indemnification under this Section 6.3 unless
and until such time as all claims of such parties for indemnification hereunder
exceed $750,000 ("Seller's Basket") in the aggregate, at which time any and all
claims of Seller and/or Xxxx for indemnification in excess of Seller's Basket
may be asserted; provided, however, that Seller's Basket shall not be applicable
to any Losses attributable to (a) the failure of Purchaser to pay Seller any
portion of the Purchase Consideration, (b) any breach by Purchaser of any
representation, warranty, covenant or obligation set forth in this Agreement or
any Transaction Document if such breach is attributable to Purchaser's fraud,
bad faith or willful misconduct or if Purchaser had Actual Knowledge of the
breach at the time the covenant, representation or warranty was made, (c) the
failure by Purchaser to make or pay, to or for the benefit of Seller and Xxxx,
as appropriate, any portion of the Debt Holdback (to the extent Purchaser is
required to pay any portion of the Debt Holdback to Seller pursuant to Schedule
1.2.2) or any portion of the Final Debt Consideration Amount (to the extent
Purchaser is required to pay any Final Debt Consideration Amount in excess of
the Debt Holdback to Seller pursuant to Schedule 1.2.2), or any prorations,
adjustments, reimbursements, settlements or reconciliations specifically
required to be made or paid by Purchaser pursuant to the provisions of Article
IV of this Agreement, (d) any breach by Purchaser of Section 3.5, or (e)
Purchaser's failure to make any payment required to be made by Purchaser in
accordance with Section 5.6. Notwithstanding anything in this Agreement to the
contrary, none of the Seller's Indemnified Persons shall be entitled to
indemnity under this Section 6.3 with respect to, and Purchaser shall not
otherwise be liable for, any breach of a representation or warranty of Purchaser
hereunder if either Seller or Xxxx had Actual Knowledge of such breach at or
prior to the Closing. The provisions of this Section shall survive the
termination of this Agreement and shall survive the Closing.
Section 6.4 Indemnification Procedures. If any action, claim or proceeding
shall be brought or asserted by one or more third parties against a party hereto
or any successor or indemnified person related thereto (the "Indemnified
Person") in respect of which indemnity may be sought under this Article VI from
an indemnifying person or any successor thereto (the "Indemnifying Person"), the
Indemnified Person shall give prompt written notice of such action, claim or
proceeding, together with a copy of such claim, process or other legal pleading,
to the Indemnifying Person, who shall assume the defense thereof, including the
employment of counsel approved by the Indemnified Person (which approval shall
not be unreasonably withheld or delayed) and the payment of all expenses; except
that
46
any delay or failure to so notify the Indemnifying Person shall relieve the
Indemnifying Person of its obligations hereunder only to the extent, if at all,
that it is prejudiced by reason of such delay or failure. The Indemnified Person
shall have the right to employ separate counsel in any of the foregoing actions,
claims or proceedings and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the Indemnified Person
unless both the Indemnified Person and the Indemnifying Person are named as
parties and the Indemnified Person shall in good faith determine that
representation by the same counsel is inappropriate. In the event that the
Indemnifying Person, within twenty days after notice of any such action, claim
or proceeding (or, if earlier, by the 10th day preceding the day on which an
answer or other pleading must be served in order to prevent judgment by default
in favor of the person asserting such action, claim or proceeding), fails to
assume the defense thereof, the Indemnified Person shall have the right (upon
further notice to the Indemnifying Person) to undertake the defense, compromise
or settlement of such action, claim or proceeding for the account and at the
risk of the Indemnifying Person and at the Indemnifying Person's expense,
subject to the right of the Indemnifying Person to assume the defense of such
action, claim or proceeding with counsel reasonably satisfactory to the
Indemnified Person at any time prior to the settlement, compromise or final
determination thereof. Anything in this Article VI to the contrary
notwithstanding, the Indemnifying Person shall not, without the Indemnified
Person's prior written consent, settle or compromise any action, claim or
proceeding, or consent to the entry of any judgment with respect to any action,
claim or proceeding for anything other than money damages paid by the
Indemnifying Person, and then only if the claimant provides to the Indemnified
Person a release from all liability in respect of such action, claim or
proceeding. The Indemnifying Person may, without the Indemnified Person's prior
written consent, settle or compromise any such action, claim or proceeding or
consent to entry of any judgment with respect to any such action, claim or
proceeding that requires solely the payment of money damages by the Indemnifying
Person, and that includes as an unconditional term thereof the release by the
claimant or the plaintiff of the Indemnified Person from all liability in
respect of such action, claim or proceeding. The Indemnified Party and the
Indemnifying Party will cooperate with all reasonable requests of the other. As
a condition to asserting any rights under this Article VI, each Purchaser's
Indemnified Person must appoint Purchaser, and each Seller's Indemnified Person
must appoint Xxxxxx Xxxx, as its sole agent for all matters relating to any
claim hereunder. The provisions of this Section shall survive the termination of
this Agreement and shall survive the Closing.
Section 6.5 Burden of Proof; Waiver. The right to indemnification,
reimbursement, or any other remedy based on the breach of any representations,
warranties, covenants or obligations set forth herein or in the Transaction
Documents by the non-breaching party shall not be affected by any investigation
conducted by the non-breaching party with respect to the accuracy or inaccuracy
of, or compliance with, any such representation, warranty, covenant or
obligation, except to the extent the non-breaching party had Actual Knowledge at
or prior to the Closing of the inaccuracy of, or non-compliance with, any such
representation, warranty, covenant or obligation; provided, however, the
provisions of the foregoing exception shall not apply to Schedule 9.16 Items. In
cases throughout this Agreement where the term Actual Knowledge qualifies or
limits any representation, warranty, covenant or obligation of a party hereto,
the parties hereby agree that the burden of proving that a party had Actual
Knowledge of the fact or matter in question shall be borne by the party to whom
such Actual Knowledge is attributed. No waiver by any party of any default or
breach by another party of any representation, warranty, covenant or condition
contained in this Agreement, any Transaction Documents, any attachments,
exhibits or schedules attached hereto or thereto or any document, instrument or
certificate contemplated hereby shall be deemed to be a waiver of any subsequent
default or breach by such party of the same or any other representation,
warranty, covenant or condition. No act, delay, omission or course of dealing on
the part of any party in exercising any right, power or remedy under this
Agreement or at law or in equity shall operate as a waiver thereof or otherwise
47
prejudice any of such party's rights, powers and remedies, except as expressly
provided herein to the contrary. No waiver of any provision of this Agreement or
of any parties' failure to comply with this Agreement shall be valid unless such
waiver is in writing and signed by the party to be charged with waiving the
benefits of such provision or compliance. The provisions of this Section shall
survive the termination of this Agreement and shall survive the Closing.
Section 6.6 Remedies. Except as expressly set forth elsewhere in this
Agreement to the contrary (including, without limitation, the provisions of
Sections 4.7 and 7.3), the remedies provided in this Article VI shall be the
sole and exclusive remedies available to a party hereto for the breach of any
representation, warranty, covenant or obligation hereunder by another party
hereto; provided, however, that, notwithstanding the foregoing and subject to
the limitations contained in Sections 6.2, 6.3 and 6.7: (i) any party may seek
injunctive or similar equitable relief for any breach of this Agreement by
another party, and (ii) any party may seek any damages, rights and remedies
available to such party hereunder or at law or in equity for (x) any breach by a
party hereto of any covenant or obligation of such breaching party set forth in
this Agreement or any Transaction Document if such breach is attributable to the
breaching party's fraud, bad faith or willful misconduct, or (y) any violation
of tax or securities related laws by a party hereto. All remedies available to
the parties, whether hereunder or at law or in equity, as such remedies may
otherwise be limited pursuant to this Agreement, shall be cumulative and the
election of any one or more shall not constitute a waiver of the right to pursue
other available remedies. The provisions of this Section shall survive the
termination of this Agreement and shall survive the Closing.
Section 6.7 Limitation of Liability. Notwithstanding anything contained in
this Agreement or any Transaction Document to the contrary, it is agreed and
acknowledged that the liability of Seller and Xxxx hereunder and under any
Transaction Document, in the event the Closing occurs, shall be limited to a
combined aggregate amount equal to $20,000,000. Notwithstanding anything
contained in this Agreement or any Transaction Document to the contrary, in the
event the Closing occurs, except for Purchaser's obligation to pay the Purchase
Consideration, it is agreed and acknowledged that the liability of Purchaser
hereunder and under any Transaction Document shall be limited to a combined
aggregate amount equal to $20,000,000. In the event the Closing does not occur,
the parties hereby agree that the liability of one party to the other shall not
be limited, except as to the extent required or permitted by Applicable Law.
Purchaser also agrees that from and after the Closing Date any Shares then being
held by the Escrow Agent pursuant to the Escrow Agreement, if any, shall serve
as the first source for satisfaction of any of claims made by Purchaser under
this Agreement except for claims related to Seller's failure to make any payment
to Purchaser required pursuant to the provisions of Schedule 1.2.2, if any and
Seller agrees that it will make any such Schedule 1.2.2 payment, if any, to
Purchaser in the manner more particularly described in Schedule 1.2.2. The
provisions of this Section shall survive the termination of this Agreement and
shall survive the Closing. Notwithstanding the foregoing, if the Closing occurs,
amounts paid or payable by one party to the other pursuant to Schedule 1.2.2 or
pursuant to the express proration, adjustment, reimbursement, settlement or
reconciliation covenants and provisions of Article IV of this Agreement shall
not be applied against, or act to reduce, the maximum post-Closing liability
limitation amount set forth in this Section for the party paying, or obligated
to pay, such amounts.
Section 6.8 Survival. The terms of each and every Section of this Article
VI shall survive any termination of this Agreement and shall survive the Closing
in accordance with their respective terms.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Confidentiality. As used in this Agreement, "Confidential
Information" shall mean any and all information, knowledge and intelligence of
any type whatsoever, whether in writing, oral or electronic, relating in any
manner to the party possessing, owning and disclosing such information
("Disclosing Party"), including, but not limited to, all of the Disclosing
Party's financial information and all due diligence materials delivered by the
Disclosing Party to the other party ("Receiving Party"), including all trade
secrets, marketing strategies, business strategies, financial information,
procedures, research, lists, methodologies, contracts, business records, and
know-how; provided, however, any information that is either (i) generally known
by the public through no fault of the Receiving Party, (ii) disclosed to the
Receiving Party without any associated obligation of confidentiality from a
source other than the Disclosing Party who was authorized to disclose such
information without a confidentiality obligation, whether by contract, fiduciary
duty or otherwise, to the Disclosing Party, or (iii) independently known to, or
developed by, the Receiving Party without reference to the Disclosing Party's
Confidential Information, shall not be considered Confidential Information. The
fact that this Agreement exists shall also be deemed Confidential Information,
except to the extent any disclosure of the terms of this Agreement is required
by any Applicable Law, including, without limitation, any applicable securities
law. In order to enable the parties hereto to perform their pre-Closing due
diligence, a Disclosing Party hereto may disclose certain of its own
Confidential Information to a Receiving Party. The Receiving Party recognizes
and acknowledges that the Disclosing Party's Confidential Information is the
exclusive property of the Disclosing Party, is material, is confidential and
greatly affects the goodwill and the personal and business success of the
Disclosing Party. Accordingly, as a material inducement for each party to enter
into this Agreement, each party hereto hereby covenants and agrees that, except
as expressly provided herein, it will not now, or at any time in the future,
directly or indirectly, divulge, reveal or communicate, either orally or in
writing, to any other Person or to the public, any of the other party's
Confidential Information or use any of the other party's Confidential
Information for their benefit or for the benefit of others except: (i) with the
prior written consent of the Disclosing Party (which consent may be withheld in
such Disclosing Party's sole discretion); or (ii) as required by law, rule or
regulation. Notwithstanding the foregoing, the Receiving Party may disclose the
Disclosing Party's Confidential Information to the employees, officers,
directors, shareholders, accountants, attorneys, consultants and advisors of
such Receiving Party, but only to the extent such people require such
Confidential Information in order for the Receiving Party to effectively pursue
the consummation of the transaction contemplated by this Agreement; provided,
however, the Receiving Party shall require any of its employees, officers,
directors, shareholders, accountants, attorneys, consultants or advisors who
receive the Disclosing Party's Confidential Information to comply with the
confidentiality provisions of this Agreement and the Receiving Party shall be
liable for any breach of the terms of the confidentiality provisions of this
Agreement by its own employees, officers, directors, shareholders, accountants,
attorneys, consultants or advisors as if the Receiving Party had breached the
Agreement itself. If there any inconsistencies or conflicts between the terms of
this Agreement and the terms of that certain Confidentiality Agreement dated
June 9, 2004, executed by and between Seller and Purchaser, the terms of this
Agreement shall control any such inconsistencies or conflicts. The provisions of
this Section shall not prohibit any party from contacting the other party's
employees, suppliers, vendors, landlords, franchisees, tenants, licensors,
licensees, advisors, distributors or service providers to the extent such third
parties need to be contacted in order to effectuate the Closing of the
transactions contemplated hereby; provided, however, that no party hereto may
contact any of the other party's suppliers, vendors, landlords, franchisees,
tenants, licensors, licensees, advisors, distributors or service providers
without first obtaining such other party's prior consent to make such contact,
such consent not to be unreasonably withheld or delayed.
49
The provisions of this Section shall survive the termination of this Agreement
and shall survive the Closing.
Section 7.2 Return of Confidential Information; Public Releases. If this
Agreement is terminated for any reason, each Receiving Party will return to the
Disclosing Party all of the Disclosing Party's Confidential Information without
keeping copies of such Confidential Information (except for one record copy to
be maintained in confidence by the Receiving Party's counsel) and shall not use
any of the Disclosing Party's Confidential Information for its benefit or for
the benefit of others. Additionally, at all times after the Execution Date until
the Closing, Seller and Purchaser shall not make any public release of
information regarding the matters contemplated herein except (i) that Purchaser
and Seller may each continue such communications with employees, officers,
directors, shareholders, accountants, attorneys, consultants, advisors,
suppliers, lenders, lessors and other particular individuals or groups as may be
legally required or necessary or appropriate and not inconsistent with the best
interests of the other party or the prompt consummation of the transactions
contemplated by this Agreement, and (ii) as required by law; provided, however,
that Purchaser may make public releases regarding this Agreement and the
transactions contemplated hereby to the extent Purchaser reasonably believes the
same to be prudent in connection with its disclosure obligations or its past
practices; and provided further, however, Purchaser will not make any such
public release unless it has first given Seller a reasonable opportunity to
review and comment on such release. The provisions of this Section shall survive
the termination of this Agreement and shall survive the Closing.
Section 7.3 Breach of Confidentiality Provisions. In view of the
irreparable harm and damage which would occur to the Disclosing Party as a
result of a breach or a threatened breach by the Receiving Party under Sections
7.1 or 7.2 hereof, and in view of the lack of an adequate remedy at law to
protect the Disclosing Party in connection with such a breach, the Disclosing
Party shall have the right to receive, and the Receiving Party hereby consents
to the issuance of, temporary and permanent injunctions enjoining the Receiving
Party from any violation of Sections 7.1 and 7.2 of this Agreement. The
Receiving Party acknowledges that both temporary and permanent injunctions are
appropriate remedies for such a breach or threatened breach. The foregoing
remedies shall be in addition to, and not in limitation of, any other rights or
remedies to which the Disclosing Party is or may be entitled at law or in
equity, including, without limitation, the right to specific performance and the
right to receive damages. The Receiving Party's obligation to protect the
Disclosing Party's Confidential Information in accordance with this Agreement
shall terminate five (5) years from the date of this Agreement. The provisions
of this Section shall survive the termination of this Agreement and shall
survive the Closing; provided, however, to the extent any provisions of this
Section specifically state that they shall survive the termination of this
Agreement or the Closing for a certain period of time, such provisions shall
survive such termination or Closing only for such specified period of time.
Section 7.4 Amendment. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by all of the parties
hereto.
Section 7.5 Assignment. Neither this Agreement nor any right created
hereby or in any agreement entered into in connection with the transactions
contemplated hereby shall be assignable by any party hereto; provided, however,
Purchaser may assign all of its rights under this Agreement to an affiliate of
Purchaser ("Permitted Assignee"); provided further, however, that Purchaser
shall remain jointly and severally liable with such Permitted Assignee for all
of the obligations and liabilities of the "Purchaser" hereunder. Additionally,
in the event of such an assignment by Purchaser to a Permitted Assignee, (a)
Purchaser and the Permitted Assignee shall each make the representations and
warranties set forth in Article III hereof, as the same may need reasonable
modification to properly reflect the entity type and state of formation of the
Permitted Assignee (except the Permitted Assignee will not make the
50
representation set forth in the third sentence of Section 3.2, (b) Purchaser
shall, in addition to remaining primarily, jointly and severally liable for all
of the obligations of the "Purchaser" hereunder, be responsible for directly
performing any of the obligations of the "Purchaser" hereunder that would be
impossible or impractical for the Permitted Assignee to perform, including,
without limitation, the issuance of the Shares.
Section 7.6 Parties In Interest; No Third Party Beneficiaries. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, devisees,
executors, administrators, trustees, legal representatives, successors and
assigns of the parties hereto. Neither this Agreement nor any other agreement
contemplated hereby shall be deemed to confer upon any Person not a party hereto
or thereto any rights or remedies hereunder or thereunder. The provisions of
this Section shall survive the termination of this Agreement and shall survive
the Closing.
Section 7.7 Entire Agreement. This Agreement, the attached Attachments,
Exhibits and Schedules, and the Transaction Documents constitute the entire
agreement of the parties regarding the subject matter hereof, and supersede all
prior agreements and understandings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof. Except as expressly
provided elsewhere in this Agreement, if there are any conflicts between the
terms of this Agreement, the Attachments, Exhibits or Schedules attached hereto
or any of the Transaction Documents, the most restrictive of the conflicting
provisions shall control. The provisions of this Section shall survive the
termination of this Agreement and shall survive the Closing.
Section 7.8 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable. The provisions of this Section shall survive the
termination of this Agreement and shall survive the Closing.
Section 7.9 Captions. The captions in this Agreement are for convenience
of reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
Section 7.10 Notice. Any notice or communication hereunder or in any
agreement entered into in connection with the transactions contemplated hereby
must be in writing and given by (a) depositing the same in the United States
mail, postage prepaid and registered or certified with return receipt requested
and addressed to the intended recipient's Notice Address, (b) by sending the
same via a nationally recognized overnight courier for next business day
delivery to the intended recipient's Notice Address, (c) by sending the same via
an electronically confirmed telecopy transmission to the telecopy number listed
in the intended recipient's Notice Address, or (d) by delivering the same in
person to the intended recipient's Notice Address. Any such notice shall be
deemed received on the earlier to occur of (a) the date of actual receipt of the
notice, (b) the date evidenced on a signed delivery receipt as the date of
delivery or the date delivery was refused, if the notice is delivered in person,
or via certified or registered mail or by an overnight courier for next business
day delivery, or (c) on the date set forth on an electronically generated fax
confirmation sheet if the notice is sent via telecopy. Any notice delivered by
Purchaser to any one Seller Entity or to Xxxx shall constitute notice to each
such Seller
51
Entity and to Xxxx. For purposes of notice, the address for notices ("Notice
Address") for each party hereto is as follows:
IF TO SELLER OR XXXX:
Camco, Inc.
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Phone: 702.735.4444 ext. 141
Fax: 000.000.0000
With a copy (which shall not constitute notice) to:
Xxxxxxxx X. Xxxxx
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
If to Purchaser:
Cash America International, Inc.
0000 X. 0xx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxxxx
Phone: 000.000.0000
Fax: 000.000.0000
Any party may change its Notice Address for notice by written notice given to
the other parties in accordance with this Section.
Section 7.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Any signature on this
Agreement or any other Transaction Document may be a facsimile signature and all
parties agree that any signature delivered by facsimile shall be treated as an
original signature to any such document.
Section 7.12 Survival. The terms of each and every Section of this Article
VII shall survive any termination of this Agreement and shall survive the
Closing in accordance with their respective terms.
ARTICLE VIII
RESOLUTION OF DISPUTES
Section 8.1 Mediation. Each party hereto (each, a "Claiming Party") agrees
that as a condition precedent to the bringing of any litigation or arbitration
action, suit or proceeding to settle any disputes between the parties hereto, or
to resolve any claim or controversy arising out of, or related to
52
this Agreement or the Transaction Documents or the making, performance, or
interpretation thereof, or to enforce any rights hereunder or under any
Transaction Document, or to assert a claim for damages in connection herewith or
in connection with any Transaction Document (collectively, an "Action"), that
such Claiming Party will give each other party hereto (each, a "Non-Claiming
Party") ten (10) days prior written notice ("Claim Notice") of its intent to
bring such an Action, and to be effective such Claim Notice must specifically
describe the claim in detail and must identify the Approved Jurisdiction in
which the Claiming Party desires to bring such Action. Upon receipt of a Claim
Notice, any Non-Claiming Party may elect to require mediation as provided herein
(which election shall be made by written notice given by such Non-Claiming Party
to the other parties hereto within ten (10) days of its receipt of the Claim
Notice). If a Non-Claiming Party timely requires mediation, the parties hereto
agree to submit to non-binding mediation in the Approved Jurisdiction, with such
mediation to be conducted in accordance with laws of the State of Texas;
provided, however, that the mediator used in the mediation proceeding must have
its principal place of business in the metropolitan area of the selected
Approved Jurisdiction. A Claiming Party's failure to give a proper and complete
Claim Notice required by this Section 8.1 shall be grounds for the staying of
any such Action pending submission of a proper and complete Claim Notice by the
Claiming Party to the Non-Claiming Party and pending the completion of any
mediation, if any, required by the Non-Claiming Party pursuant to this Section.
The provisions of this Section 8.1 do not apply to Actions that are excluded
from the mandatory arbitration provisions of this Agreement. Each party will be
responsible for its own costs and expenses incurred in connection with any
mediation proceeding; provided, however, Seller and Purchaser will equally share
the responsibility for paying the costs and fees of the mediator.
Section 8.2 Arbitration. Except as provided in Section 8.4 and Section 8.8
below, each party hereto agrees that any Action not settled pursuant to the
mediation process described in Section 8.1 shall be finally settled solely and
exclusively by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association ("AAA") or any successor organization.
The place of arbitration shall be the Approved Jurisdiction described in the
Claim Notice; provided, however, that the laws applicable to the arbitration
proceeding shall be the laws of the State of Texas. The procedure for selecting
the arbitrator(s) will be as prescribed by the AAA or its successor; provided,
however, that if the AAA or a successor is not in existence or does not provide
such a procedure, then Seller and Purchaser will each select one arbitrator and
said arbitrators will select a third; provided further, however, that all
arbitrators used in any arbitration proceeding must have their principal place
of business in the metropolitan area of the selected Approved Jurisdiction.
Section 8.3 Arbitration Awards. The award of the arbitrator(s) shall be
the sole and exclusive remedy between the parties regarding any Action brought
before the arbitrator(s) and shall be made and shall promptly be payable free of
any tax (to the extent the party making such payment is responsible for such
tax), deduction, or offset. Any costs, fees, or taxes incident to enforcing the
award shall, to the maximum extent permitted by law, be charged against the
party resisting such enforcement if the award is confirmed by the court.
Judgment upon the award of the arbitrator(s) may be entered in a court having
jurisdiction thereof located in the Approved Jurisdiction in which such
arbitration proceeding is held, or application may be made to a court of
competent jurisdiction in such Approved Jurisdiction for a judicial acceptance
of the award or for an order of enforcement.
Section 8.4 Injunctive Relief. Nothing herein contained shall bar the
right of either party to obtain injunctive relief against threatened conduct
that will cause loss or damages under the applicable laws and rules of equity,
including the applicable rules for obtaining preliminary injunctions; provided,
however, that such relief must be sought only from a court of competent
jurisdiction that is located within an Approved Jurisdiction. Any claim brought
under this Section 8.4 is not subject to the Claiming Party first proceeding
under Sections 8.1 or 8.2 above.
53
Section 8.5 Waiver of Jury Trial. To the extent permitted by applicable
law, each party hereto irrevocably waives trial by jury in any Action, whether
at law or in equity, brought by any of them against any of the others.
Section 8.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS (BUT NOT THE LAWS AND RULES GOVERNING CONFLICTS OF
LAWS) OF THE STATE OF TEXAS. THE CLAIMING PARTY HAS THE RIGHT TO CHOOSE THE
APPROVED JURISDICTION IN WHICH ANY ACTION ARISING BETWEEN THE PARTIES WILL BE
HEARD. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE
JURISDICTION OF, AND TO RESOLVE ANY ACTION IN, THE APPROVED JURISDICTION
SELECTED BY THE CLAIMING PARTY. EACH PARTY AGREES (I) NOT TO COMMENCE ANY ACTION
EXCEPT IN AN APPROVED JURISDICTION, (II) TO WAIVE ANY DEFENSES AS TO PERSONAL
JURISDICTION IN ANY APPROVED JURISDICTION, AND (III) THAT SERVICE OF ANY
PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED OR CERTIFIED MAIL TO
EACH PARTY'S RESPECTIVE ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT SHALL BE
EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION BROUGHT AGAINST A PARTY HERETO IN
ANY APPROVED JURISDICTION. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION IN ANY APPROVED
JURISDICTION AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH APPROVED JURISDICTION THAT ANY SUCH
ACTION BROUGHT IN ANY SUCH APPROVED JURISDICTION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. FOR PURPOSES OF THIS AGREEMENT AND ANY TRANSACTION DOCUMENT,
ONLY TARRANT COUNTY, TEXAS AND XXXXX COUNTY, NEVADA SHALL BE "APPROVED
JURISDICTIONS."
Section 8.7 Costs and Fees. In the event Purchaser brings an Action
against Seller or Xxxx in Tarrant County, Texas or in the event Seller or Xxxx
brings an Action against Purchaser in Xxxxx County, Nevada and the party
bringing such Action does not ultimately prevail in such Action, then, in
addition to any other relief the prevailing party may be awarded, the
non-prevailing party shall be obligated to reimburse the prevailing party for
the prevailing party's actual documented out-of-pocket travel costs incurred in
connection with defending such Action. Furthermore, the prevailing party in any
Action shall be entitled to recover from the other party reasonable
out-of-pocket costs and expenses, including reasonable attorneys' fees and
disbursements, court costs, arbitration costs and fees and the costs and fees of
the arbitrators, if applicable, incurred in connection with such Action,
provided, however, the reimbursement of any such costs, expenses, fees and
disbursements by one party to the other under this sentence shall be in addition
to any other relief that may be awarded. Notwithstanding anything herein to the
contrary, in the event a court or the arbitrator(s) determine that no party in
an Action can be deemed the prevailing party in such Action, the court or
arbitrator(s) may, for good cause, to be determined in the sole discretion of
the court or the arbitrator(s), require each party to pay all or any portion of
their own travel-related costs, attorneys' fees, court costs, arbitration
related fees and costs and/or any other out-of-pocket costs or expenses incurred
by such party in connection with such Action.
Section 8.8 Third Parties in an Action. Notwithstanding anything herein to
the contrary, no party hereto will be compelled to mediate or arbitrate any
Action if an unrelated third party that is not a party to this Agreement or any
applicable Transaction Document is a necessary party to the Action unless such
third party (whether one or more) agrees to join the mediation or arbitration or
can be
54
compelled to join the mediation or arbitration. In no event, however, can any
such unrelated third party mandate a change in the governing law hereunder or
under any Transaction Document or mandate that such Action be heard in any
location other than in an Approved Jurisdiction unless such unrelated third
party obtains a final and non-appealable court order mandating a change in
location or a change in the governing law.
Section 8.9 Survival. The terms of each and every Section of this Article
VIII shall survive any termination of this Agreement and shall survive the
Closing.
ARTICLE IX
DEFINITIONS
This Article IX sets forth the definitions of certain defined terms used
throughout Articles I through VIII of this Agreement.
Section 9.1 Accrued Liabilities. The term "Accrued Liabilities" means all
Assumed Liabilities that have a scheduled payment date after the Closing Date
and relate to a period of time prior to the Closing Date (Accrued Liabilities
may include, without limitation, real estate taxes, personal property taxes, and
Lease Pass-Through Charges).
Section 9.2 Applicable Laws. The term "Applicable Laws" means all laws,
regulations, rules, statutes, orders, ordinances and licensing requirements that
are or were applicable to Seller or the conduct or operation of the Business or
the ownership or use of any of its assets, including without limitation the
Assets. Without limiting the foregoing, Applicable Laws include, without
limitation, all federal, state and local laws, regulations, rules, statutes,
orders, ordinances and requirements, and specifically include, without
limitation, the Bank Secrecy Act, the U.S.A. Patriot Act, the Xxxxx-Xxxxx-Xxxxxx
Act, the Consumer Reporting Employment Clarification Act, the Consumer
Collection Credit Act, the Fair Debt Collection Practices Act, the Fair Credit
Reporting Act, the Americans With Disabilities Act, all truth-in-lending related
laws, all gun and firearm laws, all laws of each state and locality in which
Seller or any of Seller's affiliates or franchisees do business that are
applicable to employers, pawnbrokers, jewelers, second-hand goods dealers,
payday lenders, check cashers and title lenders, all state and federal
franchising and business opportunity laws, all usury and consumer protection
related laws, all federal, state and local tax laws, all applicable zoning and
licensing laws, all environmental and human health and safety laws, all other
federal, state and local laws, regulations, rules, statutes, orders, ordinances
and requirement, together with all regulations, rules, orders and requirements
promulgated under each of the foregoing.
Section 9.3 Commitments. The term "Commitments" means all Consumer Loans,
all Consumer Loan Documents, all Leases, all Franchise Agreements and all other
written or oral documents, agreements, contracts, commitments, letters of
intent, leases, licenses, instruments, notes, binders and obligations that
relate to the Assets or the Assumed Liabilities or that entitle Seller to
receive, or require Seller to pay, $5,000 or more or that grant Seller rights,
or impose obligations on Seller, that will or could extend beyond the Closing
Date.
Section 9.4 Consumer Loan Documents. The term "Consumer Loan Documents"
means all Consumer Loan accounts, documents, files, pawn tickets, buy-sell or
repurchase agreements, layaway contracts, loan documents, loan contracts, loan
applications, loan files, customer checks, promissory notes, promises to pay,
certificates of title, security agreements, sales receipts, store credit
receipts and vouchers, consignment contracts and other evidences of indebtedness
or evidences of accounts receivable reflected by Seller's books and records as
owed to and owned by Seller.
55
Section 9.5 Consumer Loans. The term "Consumer Loans" means all consumer
loan accounts and receivables of the Business, including, without limitation,
pawn loans, deferred deposit (or payday) loans, auto (or title) loans,
installment loans and all other loans made by Seller to consumers, to the extent
that any such loans, whether or not the same are current or delinquent, are
being assigned to and assumed by Purchaser pursuant to this Agreement and the
other Transaction Documents.
Section 9.6 Current Liabilities. The term "Current Liabilities" means any
current liabilities, current expenses or other current obligations of Seller
incurred or arising in Seller's ordinary course of business that are generally
consistent with Seller's past practices.
Section 9.7 Force Majeure. The term "Force Majeure" means the occurrence
of an act of God or any event that is beyond the reasonable control of a party
hereto so long as such party acted diligently, reasonably and in good faith to
prevent or cure such event.
Section 9.8 GAAP. The term "GAAP" means generally accepted accounting
principles as in effect in the United States as set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
substantial segment of the accounting profession, that are applicable to the
circumstances in question as of the date of determination, consistently applied.
Section 9.9 Hazardous Substances. The term "Hazardous Substance(s)" means
any and all solid, hazardous, toxic, harmful or radioactive substances or
wastes; pollutants; contaminants of any kind; or any other materials or
substances, including without limitation asbestos, presumed asbestos-containing
material or asbestos containing material, petroleum substance/crude oil or any
refined or unrefined fraction or derivative of crude oil such as motor fuels,
that are now or hereafter identified, classified, defined, or regulated under
any Applicable Laws.
Section 9.10 Liability. The term "Liability" means, with respect to any
Person, any liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute or contingent, foreseen or
unforeseen, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise and whether or not the same is
required to be accrued on the financial statements of such Person.
Section 9.11 Material Adverse Effect and Material Adverse Change. The
terms "Material Adverse Effect" and "Material Adverse Change" mean any
circumstance, event, or series of circumstances or events, of whatever nature
(other than any change in economic, regulatory or industry conditions generally)
which together or individually (a) would reasonably be expected to have a
material adverse effect on the operations, Liabilities, value or condition
(financial or otherwise) of the Assets, the Business or Seller, or (b) would
reasonably be expected to render it impossible for Seller or Xxxx to consummate
the transactions contemplated under this Agreement or under any of the
Transaction Documents.
Section 9.12 Other Business Activities. The term "Other Business
Activities" means all collection activities, check cashing activities, title
loan activities, insurance products and services, money order and wire transfer
products and services, prepaid products and services, tax preparation services
and all other products, services and business activities sold or conducted by
the Business other than pawn loans and deferred deposit (payday) loans and the
sale of merchandise acquired as a result of pawn loan forfeitures.
56
Section 9.13 Person. The term "Person" shall mean an individual,
partnership, corporation, trust, limited liability company, limited liability
partnership, joint stock company, unincorporated association, joint venture or
any other entity or any government body.
Section 9.14 Prepaid Expenses. The term "Prepaid Expenses" means all
amounts that have been prepaid by Seller for a period of service that extends
beyond the Closing Date to the extent the same are paid in connection with
Assumed Liabilities, and Prepaid Expenses may include, without limitation, rents
(for the current or next calendar month), waste services and security services.
Section 9.15 Purchaser Material Adverse Effect and Purchaser Material
Adverse Change. The terms "Purchaser Material Adverse Effect" and "Purchaser
Material Adverse Change" mean any circumstance, event, or series of
circumstances or events, of whatever nature (other than any change in economic,
regulatory or industry conditions generally) which together or individually (a)
would reasonably be expected to have a material adverse effect on the
operations, Liabilities, value or condition (financial or otherwise) of
Purchaser or its business, or (b) would reasonably be expected to render it
impossible for Purchaser to consummate the transactions contemplated under this
Agreement or under any of the Transaction Documents.
Section 9.16 Schedule 9.16 Items. The term "Schedule 9.16 Items" means the
facts, matters and items set forth in Schedule 9.16 hereto.
Section 9.17 Transaction Documents. The term "Transaction Documents" means
this Agreement and the other agreements, certificates, instruments and documents
contemplated hereby to be executed and delivered by any party to this Agreement
at or prior to the Closing.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
57
EXECUTED effective as of the Execution Date.
PURCHASER: CAMCO:
CASH AMERICA INTERNATIONAL, CAMCO, INC., a Nevada corporation
INC., a Texas corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx
------------------------------ -------------------------------
Xxxxxx X. Xxxxxx, President Xxxxxx X. Xxxx,
Chief Executive Officer
SUPERPAWN: XXXX:
SUPERPAWN, INC., a Nevada corporation
/s/ Xxxxxx X. Xxxx
------------------------------
XXXXXX X. XXXX
By: /s/ Xxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxx,
Chief Executive Officer
58
ATTACHMENT A
DEFINITIONS CROSS-REFERENCE TABLE
AND
LIST OF EXHIBITS AND SCHEDULES
DEFINITIONS CROSS-REFERENCE TABLE:
DEFINED TERM SECTION OF AGREEMENT**
--------------------------------- ----------------------
AAA 8.2
Accepting Seller's Employees 4.10
Accrued Liabilities 9.1
Action 8.1
Actual Knowledge Article II Preamble
Additional Financial Statements 4.3
Affidavit XXXX - Section 4
Agreement Preamble
Allocated Amount XXXX - Section 4
Applicable Laws 9.2
Approved Jurisdictions 8.6
Assets Recitals
Assumed Liabilities 1.3
Assumed Taxes XXXX - Section 4
Xxxx of Sale 4.4
Boulder Property XXXX - Preamble
Business Recitals
Camco Preamble
Cash Consideration 1.2.2
Charleston Property XXXX - Preamble
Checks 4.14
Chief Officers 3.9
Claim Notice 8.1
Claiming Party 8.1
Closing 4.1
Closing Date 4.1
Closing Statement 4.4
Code 2.27
Commitments 9.3
Compensation 2.25
Competing Transaction 5.1.1
Confidential Information 7.1
Consumer Loan Documents 9.4
Consumer Loans 9.5
Contract Assignment Consents 4.3
Controlled Lease 4.4
Controlled Real Property 2.20
Cost 4.18.1
Current Liabilities 9.6
59
DEFINED TERM SECTION OF AGREEMENT**
--------------------------------- ----------------------
Customer Receivables 2.5
Customer Service Policies 2.23
Debt Holdback Schedule 1.2.2
Deed XXXX - Section 4
Delinquent PFI's 4.18.1
Disclosing Party 7.1
Effective Hire Time 4.10
Effective Termination Time 4.10
Employee Plans 2.27
Encumbrances XXXX - Section 2
ERISA Affiliates 2.27
Escrow Agent 4.5
Escrow Agreement 4.4
Escrow Funds 4.5
Estoppels 4.3
Excluded Assets Recitals
Execution Date Preamble
Final Allocation Agreement 4.16
Final Debt Consideration Amount Schedule 1.2.2
First Deposit Checks 4.14
Force Majeure 9.7
Form 8594 4.16
Franchise Agreement 2.35
Franchise Business Recitals
Franchises 2.35
GAAP 9.8
Global Assignment 4.4
Hazardous Substances 9.9
Xxxxxxx 1.2.1
Home Office Real Estate 2.20
HR Agreement 4.4
HSR Act 4.2
Immaterial IP 2.10
Improvements XXXX - Section 1
Indemnified Person 6.4
Indemnifying Person 6.4
Initial Adjusted Debt Amount 1.2.2
Inspection 4.18.1
Inspection Start Date 4.18.3
Intellectual Property Assignments 4.4
IT Review 4.19
Key Officers 2.6
Key Persons of Purchaser Article II Preamble
Key Persons of Seller Article II Preamble
Knowledge Article II Preamble
Land XXXX - Section 1
Lease Pass-Through Charges 4.13
Leases 2.20
60
DEFINED TERM SECTION OF AGREEMENT**
--------------------------------- ----------------------
Liability 9.10
Loan Assignment 4.4
Losses 6.2
Xxxx Preamble
Material Adverse Change 9.11
Material Adverse Effect 9.11
Material IP 2.10
Merchandise Checks 4.14
Missing Loans 4.18.2
Non-Claiming Party 8.1
Non-Competition Agreement 4.4
Non-Competition Consideration 1.2.1
No-Share Taxes 5.6.2
No Tax Due Letter 4.9
Notice Address 7.10
Other Business Activities 9.12
Owned Real Property 2.20
Owned Realty Taxes XXXX - Section 4
Owner Policy XXXX - Section 4
Permits 2.12
Permitted Assignee 7.5
Permitted Encumbrances XXXX - Section 2
Person 9.13
Policies and Procedures 2.34
Preliminary Allocation Agreement 4.4
Prepaid Expenses 9.14
Primary Business Recitals
Proprietary Rights 2.10
Purchase Consideration 1.2.1
Purchaser Preamble
Purchaser Material Adverse Change 9.15
Purchaser Material Adverse Effect 9.15
Purchaser's Basket 6.2
Purchaser's Indemnified Persons 6.2
Qualified Appraiser XXXX - Section 8
Real Estate 2.20
Real Estate Permits XXXX - Section 1
Real Estate Purchase Provisions XXXX - Preamble
Realty Conveyance Documents XXXX - Section 4
Realty No-Purchase Notice XXXX - Section 8
Receiving Party 7.1
Redundant Facility 5.16
Retained 4.3(g) Contracts Schedule 4.3(g)
XXXX Attachment A
Rowan 2.25
Schedule 9.16 Items 9.16
SEC 3.9
SEC Filings 3.9
61
DEFINED TERM SECTION OF AGREEMENT**
--------------------------------- ----------------------
Securities Act 2.39
Seller Recitals
Seller Entity 2.1
Seller Financial Statements 2.6
Seller Group 2.39
Seller's Basket 6.3
Seller's Employees 2.25
Seller's Indemnified Persons 6.3
Shares 1.2.1
Shop 4.3
Shrink-Wrap Software 2.10
Signing Date Average 1.2.2
Software License Agreement 4.4
Specifications XXXX - Section 3
State(s) 4.9
State Code(s) 4.9
Store Credit Amount 1.2.2
Studies and Plans XXXX - Section 1
SuperPawn Preamble
Supplemental Disclosure Agreement 5.4
Survey XXXX - Section 2
Taxes 2.15
Telephone Transfer Agreements 4.4
Tests XXXX - Section 6
Title Commitment XXXX - Section 2
Title Company XXXX - Section 2
Title Company Requirements XXXX - Section 2
Trading Value 1.2.2
Transaction Documents 9.17
Transfer Taxes 5.6.2
Unallocated Consideration 4.16
Warn Act 2.25
Warranties XXXX - Section 1
Waters 2.25
** As used in this Attachment, the term XXXX means the Real Estate Purchase
Provisions attached to the Agreement as Exhibit "I"
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EXHIBITS:
A. Xxxx of Sale
B. Global Assignment
C. Loan Assignment
D. Non-Competition Agreement
E. Escrow Agreement
F. Software License and Maintenance Agreement
G. Form Lease Agreement for Controlled Real Estate
H. Rental Terms for Controlled Real Estate
I. Real Estate Purchase Provisions
J. Minimum Earning Asset Levels
K. Deferred Maintenance Items
L. Terms of Pre-Approved Seller Acquisitions
M. Human Resources Agreement
N. Consulting Agreement
SCHEDULES:
AGREEMENT
SECTION SCHEDULE
--------- -----------------------------------------------------------------
1.0(a) List of Owned Locations
1.0(b) List of Franchised Locations
1.0(c) List of Assets
1.0(d) List of Excluded Assets
1.2.2 Debt Adjustment Amount Calculation Method
1.3 Assumed Liabilities
2.0(a) Key Persons of Seller
2.0(b) Key Persons of Purchaser
2.1 Seller's Affiliates, Officers and Directors and Seller's
Interests in Other Ventures
2.2 Seller's Required Consents
2.3 Conflicts with Seller's Agreements
2.4 Seller's Required Third Party Consents
2.5(a) Loans, Documents and Files - Forms and Procedures
2.5(b) Exceptions to Loans, Documents and Files - Forms and Procedures
2.5(c) Customer Receivables
2.6(a) Seller's Audited Financial Statements for the 12 month periods
ended 12/31/01, 12/31/02, and 12/31/03, Seller's trial balances
and Unaudited Financial Statements for the period ended 7/31/04;
and Seller's Management Letters and Related Responses
2.6(b) Non-GAAP items in Seller's Financial Statements
2.7 Liabilities
2.8 Liens and Encumbrances
2.9 Commitments
2.10 Intellectual Property
2.11 Trade Secrets and Customer Lists
2.12(a) Compliance with Laws
2.12(b) Permits and Licenses
63
AGREEMENT
SECTION SCHEDULE
--------- -----------------------------------------------------------------
2.13 Litigation
2.19 Sufficiency of Assets
2.20(a) Real Estate
2.20(b) Condemnation and Construction Matters
2.21 Buildings and Structures
2.22 Other Business Activities
2.23 Customer Service Policies
2.24 Change in Business
2.25 Employees
2.26 Employment and Labor Matters
2.27 Employee Benefit Plans
2.31 Banking Relationships and Powers of Attorney
2.32 Insurance
2.33 Privacy Notices
2.34 Policies and Procedures
2.35 Franchises
4.3(g) Certain Consents and Estoppels
4.9 Tax Laws with Successor Liability
5.6.2 Sales Tax
9.16 Schedule 9.16 Items
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