EXHIBIT 2.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MONEY CENTERS OF AMERICA,
XXXXXXXXXXX X. XXXXXXXXXX,
iGAMES ENTERTAINMENT, INC.,
XXXXXXX XXXXXXXX,
XXXXXX XXXXX
and
MONEY CENTERS ACQUISITION, INC.
Dated as of December 23, 2003
TABLE OF CONTENTS
Page No.
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ARTICLE I. DEFINITIONS........................................................1
ARTICLE II. THE MERGER........................................................9
2.1 The Merger.............................................................9
2.2 Effective Time Of The Merger...........................................9
2.3 Closing .............................................................9
2.4 Surviving Corporation..................................................9
ARTICLE III. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES..............10
3.1 Effect on Merger Sub Capital Stock....................................10
3.2 Effect on Shares......................................................10
3.3 Effect on Warrants....................................................11
3.4 Exchange of Certificates; Payment.....................................11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF MONEY CENTERS..................11
4.1 Organization and Good Standing........................................11
4.2 Corporate Documents...................................................12
4.3 Capitalization of Money Centers.......................................12
4.4 Authorization of Transaction..........................................12
4.5 Noncontravention......................................................12
4.6 Money Centers Financial Information...................................13
4.7 Events Subsequent to Money Centers Interim Balance Sheet..............13
4.8 Tax Matters...........................................................15
4.9 Title to Assets.......................................................17
4.10 Real Property........................................................17
4.11 Leased Real Property.................................................17
4.12 Condition of Facilities..............................................18
4.13 Money Centers Intellectual Property..................................18
4.14 Affiliate Transactions...............................................19
4.15 Contracts............................................................19
4.16 Powers of Attorney...................................................19
4.17 Litigation...........................................................20
4.18 Employee Benefits....................................................20
4.19 Banking Relationships................................................21
4.20 Insurance............................................................21
4.21 Employees............................................................22
4.22 Labor Relations......................................................22
4.23 Legal Compliance.....................................................22
4.24 Brokers' Fees........................................................22
4.25 Undisclosed Liabilities..............................................23
4.26 Disclosure...........................................................23
(i)
ARTICLE V. REPRESENTATIONS AND WARRANTEES OF PARENT AND MERGER SUB...........23
5.1 Representations of Parent Concerning the Transaction..................23
5.2 Power and Authority...................................................34
5.3 No Subsidiaries.......................................................35
5.4 Merger Sub Common Stock...............................................35
ARTICLE VI. ACCESS TO INFORMATION AND DOCUMENTS..............................35
6.1 Access to Information.................................................35
6.2 Effect of Access......................................................35
ARTICLE VII. COVENANTS.......................................................36
7.1 Preservation of Business..............................................36
7.2 Current Information...................................................36
7.3 Material Transactions.................................................37
7.4 Public Disclosures....................................................39
7.5 Confidentiality.......................................................39
7.6 No Shop 39
7.7 Other Actions.........................................................40
7.8 Accounting Methods....................................................40
7.9 Documentation.........................................................40
7.10 Cooperation..........................................................40
7.11 Notice of Subsequent Events..........................................41
7.12 Employee Benefits to Continue........................................41
ARTICLE VIII. CONDITIONS TO CLOSING..........................................41
8.1 Mutual Conditions.....................................................41
8.2 Conditions to the Obligations of Parent and Merger Sub................41
8.3 Conditions to the Obligations of Money Centers........................43
ARTICLE IX. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.....................45
9.1 Survival of Representations...........................................45
9.2 Indemnification.......................................................45
9.3 Conditions of Indemnification.........................................46
9.4 Remedies Cumulative...................................................47
ARTICLE X. TERMINATION, AMENDMENT AND WAIVER.................................47
10.1 Termination..........................................................47
10.2 Effect of Termination................................................47
10.3 Amendment............................................................48
10.4 Extension; Waiver....................................................48
10.5 Procedure for Termination, Amendment Extension or Waiver.............48
(ii)
ARTICLE XI. MISCELLANEOUS....................................................48
11.1 Notices 48
11.2 Further Assurances...................................................49
11.3 Governing Law........................................................49
11.4 Commissions..........................................................49
11.5 Captions 49
11.6 Integration of Exhibits and Schedules................................49
11.7 Entire Agreement.....................................................49
11.8 Expenses 49
11.9 Counterparts.........................................................50
11.10 Binding Effect......................................................50
11.11 No Rule of Construction.............................................50
(iii)
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"AGREEMENT") is entered into as of December 23, 2003, among MONEY CENTERS OF
AMERICA, INC., a Delaware corporation ("MONEY CENTERS"), XXXXXXXXXXX X.
XXXXXXXXXX ("SHAREHOLDER"), iGAMES ENTERTAINMENT, INC., a Nevada corporation
("PARENT"), MONEY CENTERS ACQUISITION, INC., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), XXXXXX XXXXX and XXXXXXX
XXXXXXXX (collectively, "PARENT SHAREHOLDERS").
RECITALS
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WHEREAS, each of the Boards of Directors of Money Centers, Parent and
Merger Sub have approved the merger of Merger Sub with and into Money Centers
(the "MERGER"), upon the terms and subject to the conditions set forth herein
and in accordance with the DGCL.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein, the parties do hereby agree as
follows:
ARTICLE I. DEFINITIONS
(a) "AFFILIATE" shall mean, as to any Person, any other Person
controlled by, under the control of, or under common control with, such Person.
As used in this definition, "control" shall mean possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event, any
Person which owns or holds directly or indirectly five per cent (5%) or more of
the voting securities or five per cent (5%) or more of the partnership or other
equity interests of any other Person (other than as a limited partner of such
other Person) will be deemed to control such other Person.
(b) "AGREEMENT" means this Agreement and Plan of Merger.
(c) "APPLICABLE LAW" or "APPLICABLE LAWS" means any and all
laws, ordinances, constitutions, regulations, statutes, treaties, rules, codes,
licenses, certificates, franchises, permits, principles of common law,
requirements and Orders adopted, enacted, implemented, promulgated, issued,
entered or deemed applicable by or under the authority of any Governmental Body
having jurisdiction over a specified Person or any of such Person's properties
or assets.
(d) "BEST EFFORTS" means the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to achieve
that result as expeditiously as possible, provided, however, that a Person
required to use Best Efforts under this Agreement will not be thereby required
to take actions that would result in a Material Adverse Effect in the benefits
to such Person of this Agreement and the Merger.
(e) "BREACH" means any breach of, or any inaccuracy in, any
representation or warranty or any breach of, or failure to perform or comply
with, any covenant or obligation, in or of this Agreement or any other Contract.
(f) "BUSINESS" means Money Centers' business of providing cash
access services to gaming and other facilities.
(g) "BUSINESS DAY" means any day other than (a) Saturday or
Sunday or (b) any other day on which banks in Pennsylvania are permitted or
required to be closed.
(h) "CERTIFICATE OF MERGER" has the meaning set forth in
Section 2.2.
(i) "CERTIFICATES" has the meaning set forth in Section
3.3(a).
(j) "CHEX ACQUISITION" shall mean the acquisition by Parent of
all of the issued and outstanding capital stock of Chex Systems, Inc. by
purchase or merger.
(k) "CLOSING" shall mean the exchange of the Shares for the
Merger Consideration as set forth herein.
(l) "CLOSING DATE" shall mean the date on which the Closing,
except for the physical tender of Certificates by holders of Shares, is
completed.
(m) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(n) "COMPETING TRANSACTION" has the meaning set forth in
Section 7.6.
(o) "CONFIDENTIAL INFORMATION" means any information
pertaining to the business, operations, marketing, customers, financing,
forecasts and plans of any Party provided to or learned by any other Party
during the course of negotiation of the Merger. Information shall be treated as
Confidential Information whether such information has been marked "confidential"
or in a similar manner.
(p) "CONSENT" means any approval, consent, license, permits,
ratification, waiver or other authorization.
(q) "CONTRACT" means any agreement, contract, lease, license,
consensual obligation, promise, undertaking, understanding, commitment,
arrangement, instrument or document (whether written or oral and whether express
or implied), whether or not legally binding.
(r) "DAMAGES" shall have the meaning set forth in Section
9.2(a).
(s) "DGCL" shall mean the Delaware General Corporation Law, as
amended.
(t) "DISCLOSURE SCHEDULES" means the disclosure schedules
delivered by each Party to the other Parties as required by this Agreement on
the date hereof and initialed by the
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Parties, as subsequently updated or supplemented by the Parties prior to the
Closing. The Disclosure Schedules will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Agreement. The
Disclosure Schedules shall be attached hereto as EXHIBIT A and by reference made
a part hereof.
(u) "EFFECTIVE TIME" has the meaning set forth in Section 2.2.
(v) "EMPLOYEE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(3).
(w) "ENCUMBRANCE" means and includes:
(i) with respect to any personal property, any
security or other property interest or right, claim, lien, pledge, option,
charge, security interest, contingent or conditional sale, or other title claim
or retention agreement or lease or use agreement in the nature thereof, interest
or other right or claim of third parties, whether voluntarily incurred or
arising by operation of law, and including any agreement to grant or submit to
any of the foregoing in the future; and
(ii) with respect to any real property (whether and
including owned real estate or Leased Real Estate), any mortgage, lien,
easement, interest, right-of-way, condemnation or eminent domain proceeding,
encroachment, any building, use or other form of restriction, encumbrance or
other claim (including adverse or prescriptive) or right of Third Parties
(including Governmental Bodies), any lease or sublease, boundary dispute, and
agreements with respect to any real property including: purchase, sale, right of
first refusal, option, construction, building or property service, maintenance,
property management, conditional or contingent sale, use or occupancy, franchise
or concession, whether voluntarily incurred or arising by operation of law, and
including any agreement to grant or submit to any of the foregoing in the
future.
(x) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations issued by the Department of
Labor pursuant to ERISA or any successor law.
(y) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(z) "GAAP" means at any particular time generally accepted
accounting principles in the United States, consistently applied on a going
concern basis, using consistent audit scope and materiality standards.
(aa) "GOVERNING DOCUMENTS" means with respect to any
particular entity, the articles or certificate of incorporation and the bylaws;
all equityholders' agreements, voting agreements, voting trust agreements, joint
venture agreements, registration rights agreements or other agreements or
documents relating to the organization, management or operation of any Person or
relating to the rights, duties and obligations of the equityholders of any
Person; and any amendment or supplement to any of the foregoing.
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(bb) "GOVERNMENTAL AUTHORIZATION" means any Consent, license,
registration or permit issued, granted, given or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Applicable Law.
(cc) "GOVERNMENTAL BODY" means: (i) nation, state, county,
city, town, borough, village, district, tribe or other jurisdiction; (ii)
federal, state, local, municipal, foreign, tribal or other government; (iii)
governmental or quasi-governmental authority of any nature (including any
agency, branch, department, board, commission, court, tribunal or other entity
exercising governmental or quasi-governmental powers); (iv) multinational
organization or body; (v) body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power; or (vi) official of any of the
foregoing.
(dd) "IMPROVEMENTS" means all buildings, structures, fixtures
and improvements located on Land, including those under construction.
(ee) "INDEMNIFIED PARTY" has the meaning set forth in Section
9.3.
(ff) "INDEMNIFYING PARTY" has the meaning set forth in Section
9.3.
(gg) "IRS" means the United States Internal Revenue Service
and, the extent relevant, the United States Department of the Treasury.
(hh) "KNOWLEDGE" means actual knowledge without independent
investigation.
(ii) "LAND" means all parcels and tracts of land in which any
Person has an ownership or leasehold interest.
(jj) "LOCK-UP/LEAK-OUT AGREEMENT" shall mean the
Lock-up/Leak-out Agreement by and between Parent and Xxxxxxx Xxxxxxxx in the
form attached hereto as EXHIBIT B.
(kk) "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE"
means, in connection with any Person, any event, change or effect that is
materially adverse, individually or in the aggregate, to the condition
(financial or otherwise), properties, assets, liabilities, revenues, income,
business, operations, results of operations or prospects of such Person, taken
as a whole.
(ll) "MERGER" has the meaning set forth in the recitals.
(mm) "MERGER CONSIDERATION" has the meaning set forth in
Section 3.2.
(nn) "MERGER SUB" has the meaning set forth in the preamble.
(oo) "MERGER SUB COMMON STOCK" has the meaning set forth in
Section 5.4.
(pp) "MONEY CENTERS" has the meaning set forth in the
preamble.
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(qq) "MONEY CENTERS BOARD" has the meaning set forth in
Section 4.4.
(rr) "MONEY CENTERS CONTRACTS" has the meaning set forth in
Section 4.15.
(ss) "MONEY CENTERS EMPLOYEE PLANS" has the meaning set forth
in Section 4.18.
(tt) "MONEY CENTERS FINANCIAL INFORMATION" has the meaning set
forth in Section 4.6 below.
(uu) "MONEY CENTERS INTELLECTUAL PROPERTY" has the meaning set
forth in Section 4.13(a).
(vv) "MONEY CENTERS INTERIM BALANCE SHEET" has the meaning set
forth in Section 4.6(b).
(ww) "MONEY CENTERS TAX AFFILIATE" has the meaning set forth
in Section 4.8(a).
(xx) "MONEY CENTERS WARRANT" has the meaning set forth in
Section 3.3.
(yy) "ORDER" means any writ, directive, order, injunction,
judgment, decree, ruling, assessment or arbitration award of any Governmental
Body or arbitrator.
(zz) "ORDINARY COURSE OF BUSINESS" means an action taken by a
Person will be deemed to have been taken in the Ordinary Course of Business only
if that action: (i) is consistent in nature, scope and magnitude with the past
practices of such Person and is taken in the ordinary course of the normal,
day-to-day operations of such Person; (ii) does not require authorization by the
board of directors or shareholders of such Person (or by any Person or group of
Persons exercising similar authority) and does not require any other separate or
special authorization of any nature; and (iii) is similar in nature, scope and
magnitude to actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal, day-to-day operations of
other Persons that are in the same line of business as such Person.
(aaa) "PARENT" has the meaning given in the preamble above.
(bbb) "PARENT BUSINESS" means Parent's business of developing,
manufacturing, marketing and distribution of gaming and security applications
for the casino, hospitality and entertainment industries.
(ccc) "PARENT COMMON STOCK" means the common stock, par value
$.004 per share, of Parent.
(ddd) "PARENT CONTRACTS" has the meaning set forth in Section
5.1(o).
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(eee) "PARENT'S COUNSEL" means the Law Offices of Xxxxx X.
Xxxxxxx XX, PA, Boca Raton, Florida.
(fff) "PARENT EMPLOYEE PLANS" has the meaning set forth in
Section 5.1(r)(i).
(ggg) "PARENT EQUITY COMPENSATION PLAN" has the meaning set
forth in Section 7.13.
(hhh) "PARENT FINANCIAL INFORMATION" has the meaning set forth
in Section 5.1(f).
(iii) "PARENT INTELLECTUAL PROPERTY" has the meaning set forth
in Section 5.1(m).
(jjj) "PARENT INTERIM BALANCE SHEET" has the meaning set forth
in Section 5.1(f)(ii).
(kkk) "PARENT SEC REPORTS" has the meaning set forth in
Section 5.1(n).
(lll) "PARENT SHAREHOLDERS" shall be Xxxxxxx Xxxxxxxx and
Xxxxxx Xxxxx.
(mmm) "PARENT TAX AFFILIATE" has the meaning set forth in
Section 5.1(h)(i).
(nnn) "PARTY" or "PARTIES" means Money Centers, Parent and/or
Merger Sub.
(ooo) "PERSON" shall mean an individual, company, partnership,
limited liability company, limited liability partnership, joint venture, trust
or unincorporated organization, joint stock corporation or other similar
organization, government or any political subdivision thereof, or any other
legal entity.
(ppp) "PROCEEDING" means any action, arbitration, audit,
hearing, investigation, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, whether
public or private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
(qqq) "REAL PROPERTY" means any Land and Improvements and all
privileges, rights, easements, hereditaments and appurtenances belonging to or
for the benefit of any Land, including all easements appurtenant to and for the
benefit of any Land (a "DOMINANT PARCEL") for, and as the primary means of
access between, the Dominant Parcel and a public way, or for any other use upon
which lawful use of the Dominant Parcel for the purposes for which it is
presently being used is dependent, and all rights existing in and to any
streets, alleys, passages and other rights-of-way included thereon or adjacent
thereto (before or after vacation thereof) and vaults beneath any such streets.
(rrr) "REAL PROPERTY LEASE" means any lease or rental
agreement pertaining to the occupancy of any improved space on any Land.
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(sss) "REGISTRATION RIGHTS AGREEMENT" shall mean the
Registration Rights Agreement by and between Parent and Xxxxxxxxxxx X.
Xxxxxxxxxx in the form attached hereto as EXHIBIT C.
(ttt) "RELATED AGREEMENTS" shall mean all instruments,
agreements and other documents executed and delivered or to be executed and
delivered pursuant to this Agreement including without limitation the Ownership
and Nondisclosure Agreements and the Employment Agreements described in Section
8.3(i).
(uuu) "RELATED PERSON" means with respect to any Person: (i)
any Person that directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such
specified Person; (ii) any Person that holds a Material Interest in such
specified Person; (iii) each Person that serves as a director, officer, partner,
executor or trustee of such specified Person (or in a similar capacity); (iv)
any Person in which such specified Person holds a Material Interest; and (v) any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity).
For purposes of this definition, (a) "CONTROL" (including "controlling,"
"controlled by," and "under common control with") means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is used in the rules
promulgated under the Securities Act; (b) the "FAMILY" of an individual includes
(i) the individual, (ii) the individual's spouse, (iii) any other natural person
who is related to the individual or the individual's spouse within the second
degree and (iv) any other natural person who resides with such individual; and
(c) "MATERIAL INTEREST" means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of voting securities or other
voting interests representing at least ten percent (10%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity securities or
equity interests in a Person.
(vvv) "REPRESENTATIVE" means with respect to a particular
Person, any director, officer, manager, employee, agent, consultant, advisor,
accountant, financial advisor, legal counsel or other representative of that
Person.
(www) "SEC" means the United States Securities and Exchange
Commission.
(xxx) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
(yyy) "SECURITY INTEREST" means any mortgage, pledge, security
interest, Encumbrance, charge, claim, or other lien, other than: (a) mechanic's,
materialmen's and similar liens; (b) liens for Taxes not yet due and payable or
for Taxes that the taxpayer is contesting in good faith through appropriate
Proceedings; (c) liens arising under worker's compensation, unemployment
insurance, social security, retirement and similar legislation; (d) liens
arising in connection with sales of foreign receivables; (e) liens on goods in
transit incurred pursuant to documentary letters of credit; (f) purchase money
liens and liens securing rental payments under
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capital lease arrangements; and (g) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
(zzz) "SHAREHOLDER" has the meaning set forth in the preamble.
(aaaa) "SHARES" shall mean all issued and outstanding shares
of Money Centers' voting common stock, par value $.01 per share.
(bbbb) "SUBSIDIARY" means with respect to any Person (the
"Owner"), any corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation's or other Person's
board of directors or similar governing body, or otherwise having the power to
direct the business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred), are held by the Owner or one or more of its
Subsidiaries.
(cccc) "SURVIVING CORPORATION" has the meaning set forth in
Section 2.1.
(dddd) "TANGIBLE PERSONAL PROPERTY" means all machinery,
equipment, tools, furniture, office equipment, computer hardware, supplies,
materials, vehicles and other items of tangible personal property of every kind
owned or leased by a Party (wherever located and whether or not carried on a
Party's books), together with any express or implied warranty by the
manufacturers or sellers or lessors of any item or component part thereof and
all maintenance records and other documents relating thereto.
(eeee) "TAX" or "TAXES" means, with respect to any Person, (i)
all income taxes (including any tax on or based upon net income, gross income,
income as specially defined, earnings, profits or selected items of income,
earnings or profits) and all gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, commercial rent, premium, property or windfall profit taxes,
alternative or add-on minimum taxes, customs duties and other taxes, fees,
assessments or charges of any kind whatsoever, together with all interest and
penalties, additions to tax and other additional amounts imposed by any taxing
authority (domestic or foreign) on such person (if any) and (ii) any liability
for the payment of any amount of the type described in clause (i) above as a
result of (A) being a "transferee" (within the meaning of Section 6901 of the
Code or any Applicable Law) of another person, (B) being a member of an
affiliated, combined or consolidated group or (C) a contractual arrangement or
otherwise.
(ffff) "TAX RETURN" means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
(gggg) "THIRD PARTY" means a Person that is not a Party to
this Agreement.
(hhhh) "WARRANTS" has the meaning set forth in Section 3.2(a).
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ARTICLE II. THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement and in accordance with the DGCL, at the Effective Time, Merger
Sub shall be merged with and into Money Centers in accordance with the
provisions of Section 251 of the DGCL. Following the Effective Time, the
separate existence of Merger Sub shall cease, and Money Centers shall continue
as the surviving corporation in the Merger (hereinafter sometimes referred to as
the "SURVIVING CORPORATION") as a business corporation incorporated under the
laws of the State of Delaware under the name "Money Centers of America, Inc."
and shall succeed to and assume all the rights and obligations of Merger Sub in
accordance with the DGCL.
2.2 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective at
such time (the "EFFECTIVE TIME") as a duly executed Certificate of Merger (the
"CERTIFICATE OF MERGER") is filed with the Secretary of State of the State of
Delaware.
2.3 CLOSING. The Closing will take place at the offices of Klehr,
Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP on a date and at the time to be agreed
upon by the parties (the "CLOSING DATE"), following satisfaction or waiver (in
Parent's and/or Merger Sub's sole discretion, as the case may be) of the
conditions set forth in Article VIII or such other time, date and place as
Parent, Merger Sub and Money Centers may agree.
2.4 SURVIVING CORPORATION.
(a) The Certificate of Incorporation of Money Centers shall be
the Certificate of Incorporation of the Surviving Corporation, until duly
amended in accordance with the terms thereof and of the DGCL.
(b) The By-laws of Money Centers shall be the By-laws of the
Surviving Corporation until duly amended in accordance with their terms and as
provided by the Certificate of Incorporation of the Surviving Corporation and
the DGCL.
(c) Those individuals set forth on Schedule 2.4 shall, from
and after the Effective Time, be the directors of the Surviving Corporation
until their respective successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-laws
(d) Those individuals set forth on Schedule 2.4 shall, from
and after the Effective Time, be the officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws
(e) If at any time after the Effective Time, any party shall
consider that any further deeds, assignments, conveyances, agreements,
documents, instruments or assurances in law or any other things are necessary or
desirable to vest, perfect, confirm or record in the Surviving Corporation the
title to any property, rights, privileges, powers and franchises of
9
Merger Sub by reason of, or as a result of, the Merger, or otherwise to carry
out the provisions of this Agreement, the remaining parties, as applicable,
shall execute and deliver, upon request, any instruments or assurances, and do
all other things necessary or proper to vest, perfect, confirm or record title
to such property, rights, privileges, powers and franchises in the Surviving
Corporation, and otherwise to carry out the provisions of this Agreement.
ARTICLE III. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 EFFECT ON MERGER SUB CAPITAL STOCK. At the Effective Time, each
share of the common stock of Merger Sub, issued and outstanding immediately
prior to the Effective Time, shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into one fully paid and
non-assessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
3.2 EFFECT ON SHARES. As of the Effective Time, by virtue of the Merger
and without any action on the part of Money Centers, the Shares issued and
outstanding immediately prior to the Effective Time shall be converted into the
right to receive:
(a) At the Closing, an aggregate of One Million Three Hundred
Fifty One Thousand Six Hundred Forty (1,351,640) shares of Series A Preferred
Stock having the designations, rights and preferences set forth in the
Certificate of Designation in the form set forth at EXHIBIT D hereto, and
warrants to purchase Two Million Five Hundred Thousand (2,500,000) shares of
Parent Common Stock at an exercise price of $.01 per share (the "Warrants") in
the form set forth at EXHIBIT E hereto (the parties hereby agree that the shares
of Series A Preferred Stock shall be deemed received in exchange for 84.4 Shares
and the Warrant shall be deemed received in exchange for 15.6 Shares);
(b) At the closing of the Chex Acquisition, that number of
shares of Parent Common Stock necessary to ensure that Shareholder owns 30% of
the issued and outstanding shares of Parent Common Stock following such
issuance, the issuance of shares of Parent Common Stock in the Chex Acquisition
and assuming full conversion of all shares of Series A Preferred Stock issued
pursuant to Section 3.2(a); and
(c) Subsequent to the closing of the Chex Acquisition, that
number of additional shares of Parent Common Stock equal to 48% of any
additional shares of Parent Common Stock issued to Equitex, Inc. subsequent to
the closing of the Chex Acquisition pursuant to Section 2(b) of the Stock
Purchase Agreement dated November 3, 2003 among Equitex Inc., Parent and Chex
(or any equivalent provision of any successor agreement) (collectively, (a), (b)
and (c) constitute the "MERGER CONSIDERATION").
The holder of each issued and outstanding Share immediately prior to
the Effective Time shall have the right to designate the recipient of his pro
rata share of the Merger Consideration. The sum of the shares of Parent Common
Stock issuable pursuant to Sections 3.2(b) and (c) hereof shall not exceed
13,516,400.
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3.3 EFFECT ON WARRANTS. As of the Effective Time, each outstanding
warrant to purchase Shares (each a "MONEY CENTERS WARRANT") shall be deemed to
constitute a warrant to acquire, on the same terms and conditions as were
applicable under such Money Centers Warrant, that number of shares of Parent
Common Stock (but not Warrants) as the holder of such Money Centers Warrant
would have been entitled to receive had he exercised his Money Centers Warrant
immediately prior to the Effective Time, at an exercise price of $.01 per share.
3.4 EXCHANGE OF CERTIFICATES; PAYMENT.
(a) Money Centers and Shareholder shall surrender to Parent at
the Effective Time the certificates representing all of the outstanding Shares
("CERTIFICATES"), duly endorsed in blank, or accompanied by blank stock powers,
with signatures guaranteed in a manner reasonably acceptable to Parent's
Counsel. Money Centers and Shareholder shall cure promptly any deficiencies with
respect to the endorsement of any certificate or other documents of conveyance
with respect to such Certificate or with respect to the stock powers
accompanying any such Certificate. Upon such surrender, Money Centers shall be
entitled to receive the Merger Consideration by delivery of certificates
evidencing shares of Parent Stock and the Warrants.
(b) At and after the Effective Time, until the Certificates
have been surrendered, such Certificates shall be deemed to evidence only the
right to receive the appropriate Merger Consideration.
(c) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of Shares. If, after the
Effective Time, any Certificate(s) representing Shares is or are presented to
the Surviving Corporation, they shall be canceled and exchanged for the
appropriate Merger Consideration as provided for, and in accordance with, the
provisions of this Article III.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF MONEY CENTERS
As a material inducement for Parent and Merger Sub to enter into this
Agreement and to consummate the transactions contemplated hereby, Money Centers
makes the following representations and warranties as of the date hereof and as
of the Closing Date, each of which is relied upon by Parent and Merger Sub
regardless of any investigation made or information obtained by Parent (unless
and to the extent specifically and expressly waived in writing by Parent on or
before the Closing Date):
4.1 ORGANIZATION AND GOOD STANDING.
(a) Money Centers is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Money Centers 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 or
used by it, or the nature of the activities conducted by it, requires such
qualification and the failure to be so qualified would have a Material Adverse
Effect on Money Centers. Schedule 4.1(a) contains a
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complete and accurate list of every jurisdiction in which Money Centers is
qualified to do business.
(b) Money Centers has no Subsidiary and does not own any
shares of capital stock or other securities of any other Person, other than as
set forth on Schedule 4.1(b).
4.2 CORPORATE DOCUMENTS. Schedule 4.2 shall consist of true and correct
copies of:
(i) the Governing Documents, as amended, of Money
Centers;
(ii) the minute book of Money Centers containing all
existing records of all Proceedings, Consents, actions and meetings of the
shareholders and Board of Directors of Money Centers; and
(iii) the stock transfer ledger of Money Centers and
a shareholder list setting forth all owners of the capital stock of Money
Centers as they appear in the stock transfer ledger of Money Centers.
4.3 CAPITALIZATION OF MONEY CENTERS. The entire authorized capital
stock of Money Centers consists of 1,000 shares of common stock having a par
value of $0.01 per share, of which 100 shares are issued and outstanding. All of
Money Centers' issued and outstanding shares of common stock have been duly
authorized, are validly issued, fully paid and nonassessable, and are held of
record by Shareholder. Other than this Agreement or as set forth on Schedule
4.3, there are no outstanding or authorized options, warrants, rights,
contracts, calls, puts, rights to subscribe, conversion rights or other
agreements or commitments to which Money Centers is a party or which are binding
upon Money Centers providing for the issuance, disposition or acquisition of any
of its capital stock, nor any outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to Money Centers.
4.4 AUTHORIZATION OF TRANSACTION. Money Centers has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. On the Closing Date, this Agreement shall be duly and validly
authorized by all necessary action on the part of Money Centers and the
Shareholder in accordance with Applicable Laws and Money Centers' Governing
Documents. This Agreement constitutes the valid and legally binding obligation
of Money Centers, enforceable in accordance with its terms and conditions. Other
than filing the appropriate Certificates of Merger, Money Centers does not need
to give any notice to, make any filing with, or obtain any Consent of any
Governmental Body in order to consummate the Merger. The Board of Directors of
Money Centers (the "MONEY CENTERS BOARD") has duly and validly authorized the
execution and delivery of this Agreement and approved the consummation of the
transactions contemplated hereby, and has taken all corporate actions required
to be taken by the Money Centers' Board for the consummation of the Merger.
4.5 NONCONTRAVENTION. Neither the execution and delivery of this Agreement, nor
consummation of the Merger, by Money Centers will:
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(a) violate any Applicable Law, Order, stipulation, charge or
other restriction of any Governmental Body to which Money Centers is subject or
any provision of its Governing Documents; or
(b) except as disclosed on Schedule 4.5(b), conflict with,
result in a Breach of, constitute a default under, result in the acceleration
of, create in any Person the right to accelerate, terminate, modify or cancel,
or require any notice under any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other arrangement to which
Money Centers is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any Security Interest upon any of its
assets), except where the violation, conflict, Breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Security
Interest would not have a Material Adverse Effect on the financial condition of
Money Centers or on the ability of the Parties to consummate the Merger.
4.6 MONEY CENTERS FINANCIAL INFORMATION. Schedule 4.6 shall include the
following financial information (collectively, the "MONEY CENTERS FINANCIAL
INFORMATION"):
(a) unaudited consolidated and consolidating balance sheets
and statements of income, changes in stockholders' equity and cash flow as of
and for the year ended December 31, 2002, for Money Centers; and
(b) unaudited consolidated and consolidating balance sheets
and statements of income, changes in stockholders' equity and cash flow as of
and for the nine months ended September 30, 2003 (the "MONEY CENTERS INTERIM
BALANCE SHEET") for Money Centers. The Money Centers Financial Information
present fairly the financial condition of Money Centers as of such dates and the
results of operations of Money Centers for such periods, in accordance with GAAP
and are consistent with the books and records of Money Centers (which books and
records are correct and complete).
4.7 EVENTS SUBSEQUENT TO MONEY CENTERS INTERIM BALANCE SHEET. Since the
date of the Money Centers Interim Balance Sheet, and except as disclosed on
Schedule 4.7, there has not been, occurred or arisen, with respect to Money
Centers:
(a) any change or amendment in its Governing Documents;
(b) any reclassification, split up or other change in, or
amendment of or modification to, the rights of the holders of any of its capital
stock;
(c) except as set forth on Schedule 4.7(c), any direct or
indirect redemption, purchase or acquisition by any Person of any of its capital
stock or of any interest in or right to acquire any such stock;
(d) any issuance, sale, or other disposition of any capital
stock, or any grant of any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any capital stock;
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(e) except as set forth on Schedule 4.7(e), any declaration,
set aside, or payment of any dividend or any distribution with respect to its
capital stock (whether in cash or in kind) or any redemption, purchase, or other
acquisition of any of its capital stock;
(f) the organization of any Subsidiary or the acquisition of
any shares of capital stock by any Person or any equity or ownership interest in
any business;
(g) any damage, destruction or loss of any of the its
properties or assets whether or not covered by insurance;
(h) any sale, lease, transfer, or assignment of any of its
assets, tangible or intangible, other than for a fair consideration in the
Ordinary Course of Business;
(i) the execution of, or any other commitment to any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) outside the Ordinary Course of Business;
(j) except as set forth on Schedule 4.7(j) any acceleration,
termination, modification, or cancellation of any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
involving more than $10,000 to which it is a party or by which it is bound;
(k) any Security Interest or Encumbrance imposed upon any of
its assets, tangible or intangible;
(l) any grant of any license or sublicense of any rights under
or with respect to any Money Centers Intellectual Property;
(m) any sale, assignment or transfer (including transfers to
any employees, affiliates or shareholders) of any Money Centers Intellectual
Property;
(n) any capital expenditure (or series of related capital
expenditures) involving more than $10,000 and outside the Ordinary Course of
Business;
(o) except as set forth on Schedule 4.7(o), any capital
investment in, any loan to, or any acquisition of the securities or assets of,
any other Person (or series of related capital investments, loans, and
acquisitions) involving more than $10,000 and outside the Ordinary Course of
Business;
(p) except as set forth on Schedule 4.7(p), any issuance of
any note, bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease obligation
involving more than $10,000;
(q) any delay or postponement of the payment of accounts
payable or other liabilities, other than those being contested in good faith as
set forth in Schedule 4.7(q);
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(r) any cancellation, compromise, waiver, or release of any
right or claim (or series of related rights and claims) involving more than
$10,000 and outside the Ordinary Course of Business;
(s) any loan to, or any entrance into any other transaction
with, any of its directors, officers, and employees either involving more than
$500 individually or $2,500 in the aggregate;
(t) the adoption, amendment, modification, or termination of
any bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and employees (or
taken away any such action with respect to any other Employee Benefit Plan);
(u) any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing such contract
or agreement;
(v) any increase in the base compensation of any of its
directors, officers, and employees;
(w) any charitable or other capital contribution in excess of
$2,500;
(x) any taking of other action or entrance into any other
transaction other than in the Ordinary Course of Business, or entrance into any
transaction with any insider of Money Centers, except as disclosed in this
Agreement and the Disclosure Schedules;
(y) any other event or occurrence that may have or could
reasonably be expected to have a Material Adverse Effect on Money Centers
(whether or not similar to any of the foregoing); or
(z) any agreement or commitment, whether in writing or
otherwise, to do any of the foregoing.
4.8 TAX MATTERS.
(a) Except as set forth on Schedule 4.8: (i) Money Centers and
(ii) each other Person included in any consolidated or combined Tax Return and
part of an affiliated group, within the meaning of Section 1504 of the Money
Centers Code, of which Money Centers is or has been a member ("MONEY CENTERS TAX
AFFILIATE"), for the years that it was a Money Centers Tax Affiliate:
(i) has timely paid or caused to be paid all Taxes
required to be paid by it though the date hereof and as of the Closing Date
(including any Taxes shown due on any Tax Return);
(ii) has filed or caused to be filed in a timely and
proper manner (within any applicable extension periods) all Tax Returns required
to be filed by it with the appropriate Governmental Body in all jurisdictions in
which such Tax Returns are required to be
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filed; and all tax returns filed on behalf of Money Centers and each Money
Centers Tax Affiliate were completed and correct in all material respects; and
(iii) has not requested or caused to be requested any
extension of time within which to file any Tax Return, which Tax Return has not
since been filed.
(b) Money Centers has previously delivered true, correct and
complete copies of all Federal Tax Returns filed by or on behalf of Money
Centers through the date hereof for the periods ending after December 31, 1999.
(c) Except as set forth in Schedule 4.8(c):
(i) since January 1, 2000, neither Money Centers nor
any Money Centers Tax Affiliate (for the years that it was a Money Centers Tax
Affiliate) has been notified by the IRS or any other Governmental Body that any
issues have been raised (and no such issues are currently pending) by the IRS or
any other Governmental Body in connection with any Tax Return filed by or on
behalf of Money Centers or any Money Centers Tax Affiliate; there are no pending
Tax audits and no waivers of statutes of limitations have been given or
requested with respect to Money Centers or any Money Centers Tax Affiliate (for
years that it was a Money Centers Tax Affiliate); no Tax liens have been filed
against Money Centers or unresolved deficiencies or additions to Taxes have been
proposed, asserted or assessed against Money Centers or any Money Centers Tax
Affiliate (for the years that it was a Money Centers Tax Affiliate);
(ii) full and adequate accrual has been made (A) on
the Money Centers Interim Balance Sheet, and the books and records of Money
Centers for all income taxes currently due and all accrued Taxes not yet due and
payable by Money Centers for all periods ending on or prior to the Money Centers
Interim Balance Sheet Date, and (B) on the books and records of Money Centers
for all Taxes payable by Money Centers for all periods beginning after the Money
Centers Interim Balance Sheet Date;
(iii) Money Centers has not incurred any liability
for Taxes from and after the Money Centers Interim Balance Sheet Date other than
Taxes incurred in the Ordinary Course of Business and consistent with past
practices;
(iv) Money Centers has not (A) made an election (or
had an election made on its behalf by another person) to be treated as a
"consenting corporation" under Section 341(f) of the Code or (B) a "personal
holding company" within the meaning of Section 542 of the Code;
(v) Money Centers has complied in all material
respects with all Applicable Laws relating to the collection or withholding of
Taxes (such as Taxes or withholding of Taxes from the wages of employees);
(vi) Money Centers has no liability in respect of any
Tax sharing agreement with any Person and all Tax sharing agreements to which
Money Centers has been bound have been terminated;
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(vii) Money Centers has not incurred any liability to
make any payments either alone or in conjunction with any other payments that:
(A) shall be non-deductible under, or would
otherwise constitute a "parachute payment" within the meaning of Section 280G of
the Code (or any corresponding provision of state local or foreign Applicable
Law related to Taxes); or
(B) are or may be subject to the imposition
of an excise Tax under Section 4999 of the Code;
(viii) Money Centers has not agreed to (nor has any
other Person agreed to on its behalf) and is not required to make any
adjustments or changes on, before or after the Closing Date, to its accounting
methods pursuant to Section 481 of the Code, and the IRS has not proposed any
such adjustments or changes in the accounting methods of Money Centers;
(ix) no claim has been made within the last three
years by any taxing authority in a jurisdiction in which Money Centers does not
file Tax Returns that Money Centers is or may be subject to taxation by that
jurisdiction;
(x) the consummation of the Merger will not trigger
the realization or recognition of intercompany gain or income to Money Centers
under the Federal consolidated return regulations with respect to Federal, state
or local taxes;
(xi) the Shareholder is not a foreign Person within
the meaning of Treasury Regulation ss. 1.1445-2(b) of the rules and regulations
promulgated under Section 1445 of the Code, and Parent has been furnished with a
true and accurate certificate of Money Centers so stating which complies in all
respects with Treasury Regulation ss. 1.1445-2(b)(2) of such rules and
regulations; and
(xii) Money Centers is not currently, nor has it been
at any time during the previous five years, a "U.S. real property holding
corporation" and, therefore, the Shares are not "U.S. real property interests,"
as such terms are defined in Section 897 of the Code.
4.9 TITLE TO ASSETS. Except as disclosed on Schedule 4.9, Money Centers
has good and marketable title to, or a valid leasehold interest in, the
properties and assets owned or leased and used by it to operate the Business in
the manner presently operated by Money Centers, as reflected in the Money
Centers Financial Information.
4.10 REAL PROPERTY. Money Centers does not own or hold an ownership
interest in any Real Property.
4.11 LEASED REAL PROPERTY. Schedule 4.11 contains a correct legal
description, street address and tax parcel identification number of all tracts,
parcels and subdivided lots in which Money Centers has a leasehold interest and
an accurate description (by location, name of lessor, date of lease and term
expiration date) of all Real Property Leases pursuant to which Money Centers has
a leasehold interest.
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4.12 CONDITION OF FACILITIES.
(a) Use of the Real Property of Money Centers for the various
purposes for which it is presently being used is permitted as of right under all
Applicable Laws related to zoning and is not subject to "permitted
nonconforming" use or structure classifications. All Improvements are in
compliance with all Applicable Laws, including those pertaining to zoning,
building and the disabled, are in good repair and in good condition, ordinary
wear and tear excepted, and are free from latent and patent defects. No part of
any Improvement encroaches on any real property not included in the Real
Property of Money Centers, and there are no buildings, structures, fixtures or
other Improvements primarily situated on adjoining property which encroach on
any part of the Land.
(b) Each item of Tangible Personal Property is in good repair
and good operating condition, ordinary wear and tear excepted, is suitable for
immediate use in the Ordinary Course of Business and is free from latent and
patent defects. No item of Tangible Personal Property is in need of repair or
replacement other than as part of routine maintenance in the Ordinary Course of
Business. Except as disclosed in Schedule 4.12(b), all Tangible Personal
Property used in the Business is in the possession of Money Centers.
4.13 MONEY CENTERS INTELLECTUAL PROPERTY.
(a) Money Centers owns, or is licensed or otherwise possesses
legal enforceable rights to use all: (i) trademarks and service marks
(registered or unregistered), trade dress, trade names and other names and
slogans embodying business goodwill or indications of origin, all applications
or registrations in any jurisdiction pertaining to the foregoing and all
goodwill associated therewith; (ii) patentable inventions, technology, computer
programs and software (including password unprotected interpretive code or
source code, object code, development documentation, programming tools,
drawings, specifications and data) and all applications and patents in any
jurisdiction pertaining to the foregoing, including re-issues, continuations,
divisions, continuations-in-part, renewals or extensions; (iii) trade secrets,
including confidential and other non-public information (iv) copyrights in
writings, designs, software programs, mask works or other works, applications or
registrations in any jurisdiction for the foregoing and all moral rights related
thereto; (v) databases and all database rights; and (vi) Internet web sites,
domain names and applications and registrations pertaining thereto
(collectively, "MONEY CENTERS INTELLECTUAL PROPERTY") that are used in the
Business except for any such failures to own, be licensed or process that would
not be reasonably likely to have a Material Adverse Effect.
(b) Except as may be evidenced by patents issued after the
date hereof, there are no conflicts with or infringements of any material Money
Centers Intellectual Property by any third party and the conduct of the Business
as currently conducted does not conflict with or infringe any proprietary right
of a third party.
(c) Schedule 4.13(c) sets forth a complete list of all
patents, registrations and applications pertaining to the Money Centers
Intellectual Property owned by Money Centers.
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Except as set forth on Schedule 4.13(c), all such Money Centers Intellectual
Property listed is owned by Money Centers, free and clear of liens or
Encumbrances of any nature.
(d) Schedule 4.13(d) sets forth a complete list of all
material licenses, sublicenses and other agreements in which Money Centers has
granted rights to any person to use the Money Centers Intellectual Property.
Money Centers will not, as a result of the execution and delivery of this
Agreement or the performance of its obligations under this Agreement, be in
Breach of any license, sublicense or other agreement relating to the Money
Centers Intellectual Property.
(e) Money Centers owns or has the right to use all software
currently used in and material to the Business.
4.14 AFFILIATE TRANSACTIONS. Except as set forth on Schedule 4.14, no
officer, director, or employee of Money Centers or any member of the immediate
family of any such officer, director or employee, or any entity in which any of
such persons owns any beneficial interest (other than any publicly-held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than one percent of the stock of which is
beneficially owned by any of such persons), has any agreement with Money Centers
or any interest in any of their property of any nature, used in or pertaining to
the Business (other than the ownership of capital stock of the corporation as
disclosed in Section 4.3). None of the foregoing Persons has any direct or
indirect interest in any competitor, supplier or customer of Money Centers or in
any Person from whom or to whom Money Centers leases any property or transacts
business of any nature.
4.15 CONTRACTS. Schedule 4.15 is a true, complete and accurate list of
all written or oral Contracts (including a brief description of all oral
arrangements) executed by an officer or duly authorized employee of Money
Centers or to which Money Centers is a party either:
(a) involving more than $10,000, or
(b) in the nature of a collective bargaining agreement,
employment agreement, or severance agreement with any of its directors, officers
and employees.
Money Centers has or will deliver prior to Closing to Parent a correct
and complete copy of each Contract listed in Schedule 4.15 (the "MONEY CENTERS
CONTRACTS"). Except as disclosed in Schedule 4.15: (i) Money Centers has fully
complied with all material terms of the Money Centers Contracts; (ii) other
parties to the Money Centers Contracts have fully complied with the terms of the
Money Centers Contracts; and (iii) there are no disputes or complaints with
respect to nor has Money Centers received any notices (whether oral or in
writing) that any other party to the Money Centers Contracts is terminating,
intends to terminate or is considering terminating, any of the Money Centers
Contracts listed or required to be listed in Schedule 4.15.
4.16 POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of Money Centers.
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4.17 LITIGATION.
(a) Except as set forth in Schedule 4.17(a), there is no
pending or, to Money Centers' Knowledge, threatened Proceeding:
(i) by or against Money Centers or that otherwise
relates to or may affect the Business which, if adversely determined, would have
a Material Adverse Effect; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, the Merger.
To the Knowledge of Money Centers, no event has occurred or circumstance exists
that is reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding. Money Centers has delivered to Parent
copies of all pleadings, correspondence and other documents relating to each
Proceeding listed in Schedule 4.17(a). There are no Proceedings listed or
required to be listed in Schedule 4.17(a) that could reasonably be expected to
have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.17(b):
(i) there is no material Order to which Money Centers
or the Business is subject; and
(ii) to the Knowledge of Money Centers, no officer,
director, agent or employee of Money Centers is subject to any Order that
prohibits such officer, director, agent or employee from engaging in or
continuing any conduct, activity or practice relating to the Business.
(c) Except as set forth in Schedule 4.17(c):
(i) Money Centers has been and is in compliance with
all of the terms and requirements of each Order to which it or the Business is
or has been subject;
(ii) No event has occurred or circumstance exists
that is reasonably likely to constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any term or requirement
of any Order to which Money Centers or the Business is subject; and
(iii) Money Centers has not received any notice or
other communication (whether oral or written) from any Governmental Body or any
other Person regarding any actual, alleged, possible or potential violation of,
or failure to comply with, any term or requirement of any Order to which Money
Centers or the Business is subject.
4.18 EMPLOYEE BENEFITS.
(a) Schedule 4.18 lists all material (i) Employee Benefit
Plans of Money Centers, (ii) bonus, stock option, stock purchase, stock
appreciation right, incentive, deferred
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compensation, supplemental retirement, severance, and fringe benefit plans,
programs, policies or arrangements, and (iii) employment or consulting
agreements, for the benefit of, or relating to, any current or former employee
(or any beneficiary thereof) of Money Centers, in the case of a plan described
in (i) or (ii) above, that is currently maintained by Money Centers or with
respect to which Money Centers has an obligation to contribute, and in the case
of an agreement described in (iii) above, that is currently in effect (the
"MONEY CENTERS EMPLOYEE PLANS"). Money Centers has heretofore made available to
Parent true and complete copies of the Money Centers Employee Plans and any
amendments thereto, any related trust, insurance contract, summary plan
description, and, to the extent required under ERISA or the Code, the most
recent annual report on Form 5500 and summaries of material modifications.
(b) Except as set forth on Schedule 4.18(b), no Money Centers
Employee Plan is (1) a "multiemployer plan" within the meaning of Sections 3(37)
or 4001(a)(3) of ERISA, (2) a "multiple employer plan" within the meaning of
Section 3(40) of ERISA or Section 413(c) of the Code, or (3) is subject to Title
IV of ERISA or Section 412 of the Code.
(c) Except as set forth on Schedule 4.18(c), there is no
Proceeding pending or, to Money Centers' Knowledge, threatened against the
assets of any Money Centers Employee Plan or, with respect to any Money Centers
Employee Plan, against Money Centers other than Proceedings that would not
reasonably be expected to result in a Material Adverse Effect, and to Money
Centers' Knowledge there is no Proceeding pending or threatened in writing
against any fiduciary of any Money Centers Employee Plan other than Proceedings
that would not reasonably be expected to result in a Material Adverse Effect.
(d) Each of the Money Centers Employee Plans has been operated
and administered in all material respects in accordance with its terms and
applicable law, including, but not limited to, ERISA and the Code.
(e) Each of the Money Centers Employee Plans that is intended
to be "qualified" within the meaning of Section 401(a) of the Code has received
a favorable determination, notification, or opinion letter from the IRS.
(f) Except as set forth on Schedule 4.18(f), no director,
officer, or employee of Money Centers will become entitled to retirement,
severance or similar benefits or to enhanced or accelerated benefits (including
any acceleration of vesting or lapsing of restrictions with respect to
equity-based awards) under any Money Centers Employee Plan solely as a result of
consummation of the Merger.
4.19 BANKING RELATIONSHIPS. Schedule 4.19 sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which Money Centers maintains safe deposit boxes or
accounts of any nature and the names of all persons authorized to have access
thereto, draw thereon or make withdrawals therefrom.
4.20 INSURANCE. Schedule 4.20 is an accurate and complete description
of all policies of insurance of any kind or nature, including, but not limited
to, fire, liability, workmen's
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compensation and other forms of insurance owned or held by or covering Money
Centers or all or any portion of its property and assets.
4.21 EMPLOYEES.
(a) Schedule 4.21 contains a complete and accurate list of the
following information for each employee, director, independent contractor,
consultant and agent of Money Centers, including each employee on leave of
absence or layoff status: employer; name; job title; date of hiring or
engagement; date of commencement of employment or engagement; current
compensation paid or payable and any change in compensation since September 30,
2003; and service credited for purposes of vesting and eligibility to
participate under any Money Centers Employee Plan, or any other employee or
director benefit plan.
(b) To the Knowledge of Money Centers, no officer, director,
agent, employee, consultant, or contractor of Money Centers is bound by any
Contract 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 Money Centers or to any other Person any rights to any invention,
improvement, or discovery. No former or current employee of Money Centers is a
party to, or is otherwise bound by, any Contract that in any way adversely
affected, affects, or will affect the ability of Money Centers or Parent to
conduct the Business as heretofore carried on by Money Centers.
4.22 LABOR RELATIONS. Money Centers is not a party to any collective
bargaining or similar agreement. To the Knowledge of Money Centers, there are no
strikes, work stoppages, unfair labor practice charges or grievances pending or
threatened against Money Centers by any employee of Money Centers or any other
Person or entity. Money Centers believes that its relationship with its
employees is good.
4.23 LEGAL COMPLIANCE.
(a) To the Knowledge of Money Centers, Money Centers is in
material compliance with all Applicable Laws (including rules and regulations
thereunder) of any Governmental Bodies having jurisdiction over Money Centers,
including any requirements relating to antitrust, consumer protection, currency
exchange, equal opportunity, health, occupational safety, pension and securities
matters.
(b) Schedule 4.23(b) contains a complete and accurate list of
each Governmental Authorization that is held by Money Centers or that otherwise
relates to the Business. Each Governmental Authorization listed or required to
be listed in Schedule 4.23(b) is valid and in full force and effect. The
Governmental Authorizations listed in Schedule 4.23(b) collectively constitute
all of the Governmental Authorizations necessary to permit Money Centers to
lawfully conduct and operate the Business.
4.24 BROKERS' FEES. Money Centers has no liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
Merger for which Money Centers, Parent or Merger Sub could become liable or
obligated.
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4.25 UNDISCLOSED LIABILITIES. To the Knowledge of Money Centers, it has
no liability (and to the Knowledge of Money Centers, there is no basis for any
present or future Proceeding, charge, complaint, claim, or demand against any of
them giving rise to any liability), except for
(i) liabilities reflected or reserved against in the
Money Centers Interim Balance Sheet; or
(ii) liabilities which have arisen in the Ordinary
Course of Business since the date of the Money Centers Interim Balance Sheet.
4.26 DISCLOSURE. The representations and warranties of Money Centers
contained in this Agreement do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained herein not misleading.
ARTICLE V. REPRESENTATIONS AND WARRANTEES OF PARENT AND MERGER SUB.
As a material inducement for Money Centers to enter into this Agreement
and to consummate the transactions contemplated hereby, Parent and Merger Sub
hereby jointly and severally make the following representations and warranties
as of the date hereof and as of the Closing Date, each of which is relied upon
by Money Centers regardless of any investigation made or information obtained by
Money Centers (unless and to the extent specifically and expressly waived in
writing by Money Centers on or before the Closing Date):
5.1 REPRESENTATIONS OF PARENT CONCERNING THE TRANSACTION.
(a) Organization and Good Standing.
(i) Parent is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Parent 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 or used by it, or the
nature of the activities conducted by it, requires such qualification and the
failure to be so qualified would have a Material Adverse Effect on Parent.
Schedule 5.1(a)(i) contains a complete and accurate list of every jurisdiction
in which Parent is qualified to do business.
(ii) Parent has no Subsidiary and does not own any
shares of capital stock or other securities of any other Person, other than as
set forth on Schedule 5.1(a)(ii).
(iii) (f) Merger Sub is a corporation duly organized
and validly existing and is in good standing under the laws of the State of
Delaware. Merger Sub's authorized capital consists of One Thousand (1,000)
shares of common stock, par value One Mil ($.001) per share, all of which shares
are issued and registered in the name of Parent.
(b) Authorization of Transaction. Parent has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to
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perform its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Parent, enforceable in accordance with its terms
and conditions. Parent is not required to give any notice to, make any filing
with or obtain any, Consent of any Governmental Body in order to consummate the
Merger except for such notice filings as may be required under Applicable Laws.
(c) Capitalization of Parent. The entire authorized capital
stock of Parent consists of 50,000,000 shares of common stock having a par value
of $0.001 per share, of which 14,745,165 shares are issued and outstanding, and
5,000,000 shares of preferred stock, none of which are issued and outstanding.
All issued and outstanding shares of Parent Common Stock have been duly
authorized, are validly issued, fully paid and nonassessable. Other than this
Agreement and as disclosed on Schedule 5.1(c), there are no outstanding or
authorized options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights or other agreements or commitments to which Parent
is a party or which are binding upon Parent providing for the issuance,
disposition or acquisition of any of its capital stock, nor any outstanding or
authorized stock appreciation, phantom stock or similar rights with respect to
Parent.
(d) Noncontravention. Neither the execution and delivery of
this Agreement, nor consummation of the Merger, will:
(i) violate any Applicable Law, Order, stipulation,
charge or other restriction of any Governmental Body to which Parent is subject
or any provision of its Governing Documents; or
(ii) conflict with, result in a Breach of, constitute
a default under, result in the acceleration of, create in any Person the right
to accelerate, terminate, modify or cancel, or require any notice under any
contract, lease, sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, Security
Interest, or other arrangement to which Parent is a party or by which it is
bound or to which any of its assets is subject (or result in the imposition of
any Security Interest upon any of its assets), except where the violation,
conflict, Breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have a
Material Adverse Effect on the financial condition of Parent or on the ability
of the Parties to consummate the Merger.
(e) Affiliate Transactions. No officer, director, or employee
of Parent or any member of the immediate family of any such officer, director or
employee, or any entity in which any of such persons owns any beneficial
interest (other than any publicly-held corporation whose stock is traded on a
national securities exchange or in the over-the-counter market and less than one
percent of the stock of which is beneficially owned by any of such Persons), has
any agreement with Parent or any interest in any of their property of any
nature, used in or pertaining to the Parent Business, except as disclosed in
Schedule 5.1(e). None of the foregoing Persons has any direct or indirect
interest in any competitor, supplier or customer of Parent or in any Person from
whom or to whom Parent leases any property or transacts business of any nature.
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(f) Parent Financial Information. Schedule 5.1(f) shall
include the following financial information (collectively, the "PARENT FINANCIAL
INFORMATION"):
(i) audited consolidated and consolidating balance
sheets and statements of income, changes in stockholders' equity and cash flow
as of and for each of the years ended March 31, 2003, for Parent; and
(ii) unaudited consolidated and consolidating balance
sheets and statements of income, changes in stockholders' equity and cash flow
as of and for the quarter and six months ended September 30, 2003 (the "PARENT
INTERIM BALANCE SHEET") for Parent. Parent Financial Information present fairly
the financial condition of Parent as of such dates and the results of operations
of Parent for such periods, in accordance with GAAP and are consistent with the
books and records of Parent (which books and records are correct and complete).
(g) Events Subsequent to Parent Interim Balance Sheet. Since
the date of Parent Interim Balance Sheet, and except as disclosed on Schedule
5.1(g), there has not been, occurred or arisen, with respect to Parent:
(i) any change or amendment in its Governing
Documents;
(ii) any reclassification, split up or other change
in, or amendment of or modification to, the rights of the holders of any of its
capital stock;
(iii) any direct or indirect redemption, purchase or
acquisition by any Person of any of its capital stock or of any interest in or
right to acquire any such stock;
(iv) other than in connection with the Chex
Acquisition, any issuance, sale, or other disposition of any capital stock, or
any grant of any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any capital stock;
(v) any declaration, set aside, or payment of any
dividend or any distribution with respect to its capital stock (whether in cash
or in kind) or any redemption, purchase, or other acquisition of any of its
capital stock;
(vi) the organization of any Subsidiary (other than
the Merger Sub) or the acquisition of any shares of capital stock by any Person
or any equity or ownership interest in any business;
(vii) any damage, destruction or loss of any of the
its properties or assets whether or not covered by insurance;
(viii) any sale, lease, transfer, or assignment of
any of its assets, tangible or intangible, other than for a fair consideration
in the Ordinary Course of Business;
(ix) other than with respect to the Chex Acquisition,
the execution of, or any other commitment to any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
outside the Ordinary Course of Business;
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(x) any acceleration, termination, modification, or
cancellation of any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses), involving more than $10,000 to
which it is a party or by which it is bound;
(xi) any Security Interest or Encumbrance imposed
upon any of its assets, tangible or intangible;
(xii) any grant of any license or sublicense of any
rights under or with respect to any Parent Intellectual Property;
(xiii) any sale, assignment or transfer (including
transfers to any employees, affiliates or shareholders) of any Parent
Intellectual Property;
(xiv) any capital expenditure (or series of related
capital expenditures) involving more than $10,000 and outside the Ordinary
Course of Business;
(xv) any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) involving more than
$10,000 and outside the Ordinary Course of Business;
(xvi) any issuance of any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation involving more than $10,000;
(xvii) any delay or postponement of the payment of
accounts payable or other liabilities, other than those being contested in good
faith as set forth in Schedule 5.1(g)(xvii);
(xviii) any cancellation, compromise, waiver, or
release of any right or claim (or series of related rights and claims) involving
more than $10,000 and outside the Ordinary Course of Business;
(xix) any loan to, or any entrance into any other
transaction with, any of its directors, officers, and employees either involving
more than $500 individually or $2,500 in the aggregate;
(xx) the adoption, amendment, modification, or
termination of any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees (or taken away any such action with respect to any other Employee
Benefit Plan);
(xxi) any employment contract or collective
bargaining agreement, written or oral, or modified the terms of any existing
such contract or agreement;
(xxii) any increase in the base compensation of any
of its directors, officers, and employees;
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(xxiii) any charitable or other capital contribution
in excess of $2,500;
(xxiv) any taking of other action or entrance into
any other transaction other than in the Ordinary Course of Business, or entrance
into any transaction with any insider of Parent, except as disclosed in this
Agreement and the Disclosure Schedules;
(xxv) any other event or occurrence that may have or
could reasonably be expected to have an Material Adverse Effect on Parent
(whether or not similar to any of the foregoing); or
(xxvi) any agreement or commitment, whether in
writing or otherwise, to do any of the foregoing other than in connection with
the Chex Acquisition.
(h) Tax Matters.
(i) Except as set forth on Schedule 5.1(h)(i): (i)
Parent and (ii) each other Person included in any consolidated or combined Tax
Return and part of an affiliated group, within the meaning of Section 1504 of
the Parent Code, of which Parent is or has been a member ("PARENT TAX
AFFILIATE"), for the years that it was a Parent Tax Affiliate of Parent:
(A) has timely paid or caused to be paid all
Taxes required to be paid by it though the date hereof and as of the Closing
Date (including any Taxes shown due on any Tax Return);
(B) has filed or caused to be filed in a
timely and proper manner (within any applicable extension periods) all Tax
Returns required to be filed by it with the appropriate Governmental Body in all
jurisdictions in which such Tax Returns are required to be filed; and all tax
returns filed on behalf of Parent and each Parent Tax Affiliate were completed
and correct in all material respects; and
(C) has not requested or caused to be
requested any extension of time within which to file any Tax Return, which Tax
Return has not since been filed.
(ii) Parent has previously delivered true, correct
and complete copies of all Federal Tax Returns filed by or on behalf of Parent
through the date hereof for the periods ending after December 31, 1999.
(iii) Except as set forth in Schedule 5.1(h)(iii):
(A) since January 1, 2000, neither Parent
nor any Parent Tax Affiliate (for the years that it was a Parent Tax Affiliate)
has been notified by the Internal Revenue Service or any other Governmental Body
that any issues have been raised (and no such issues are currently pending) by
the IRS or any other Governmental Body in connection with any Tax Return filed
by or on behalf of Parent or any Parent Tax Affiliate; there are no pending Tax
audits and no waivers of statutes of limitations have been given or requested
with respect to Parent or any Parent Tax Affiliate (for years that it was a
Parent Tax Affiliate); no Tax liens have been filed against Parent or unresolved
deficiencies or additions to Taxes have been proposed,
27
asserted or assessed against Parent or any Parent Tax Affiliate (for the years
that it was a Parent Tax Affiliate);
(B) full and adequate accrual has been made
(i) on the Parent Interim Balance Sheet, and the books and records of Parent for
all income Taxes currently due and all accrued Taxes not yet due and payable by
Parent for all periods ending on or prior to the Parent Interim Balance Sheet
Date, and (ii) on the books and records of Parent and for all Taxes payable by
Parent for all periods beginning after the Parent Interim Balance Sheet Date;
(C) Parent has not incurred any liability
for Taxes from and after the Parent Interim Balance Sheet Date other than Taxes
incurred in the Ordinary Course of Business and consistent with past practices;
(D) Parent has not (i) made an election (or
had an election made on its behalf by another person) to be treated as a
"consenting corporation" under Section 341(f) of the Code or (ii) a "personal
holding company" within the meaning of Section 542 of the Code;
(E) Parent has complied in all material
respects with all Applicable Laws relating to the collection or withholding of
Taxes (such as Taxes or withholding of Taxes from the wages of employees);
(F) Parent has no liability in respect of
any Tax sharing agreement with any Person and all Tax sharing agreements to
which Parent has been bound have been terminated;
(G) Parent has not incurred any Liability to
make any payments either alone or in conjunction with any other payments that:
(1) shall be non-deductible under,
or would otherwise constitute a "parachute payment" within the meaning of
Section 280G of the Code (or any corresponding provision of state local or
foreign income Tax Law); or
(2) are or may be subject to the
imposition of an excise Tax under Section 4999 of the Code;
(H) Parent has not agreed to (nor has any
other Person agreed to on its behalf) and is not required to make any
adjustments or changes on, before or after the Closing Date, to its accounting
methods pursuant to Section 481 of the Code, and the Internal Revenue Service
has not proposed any such adjustments or changes in the accounting methods of
Parent;
(I) no claim has been made within the last
three years by any taxing authority in a jurisdiction in which Parent does not
file Tax Returns that Parent is or may be subject to taxation by that
jurisdiction;
28
(J) the consummation of the Merger will not
trigger the realization or recognition of intercompany gain or income to Parent
under the Federal consolidated return regulations with respect to Federal, state
or local Taxes;
(K) none of Parent's shareholders are
foreign Persons within the meaning of Treasury Regulation ss. 1.1445-2(b) of the
rules and regulations promulgated under Section 1445 of the Code, and Money
Centers has been furnished with a true and accurate certificate of Parent so
stating which complies in all respects with Treasury Regulation ss.
1.1445-2(b)(2) of such rules and regulations; and
(L) Parent is not currently, nor has it been
at any time during the previous five years, a "U.S. real property holding
corporation" and, therefore, the Parent Common Stock is not "U.S. real property
interests," as such terms are defined in Section 897 of the Code.
(i) Title to Assets. Parent has good and marketable title to,
or a valid leasehold interest in, the properties and assets owned or leased and
used by it to operate the Parent Business in the manner presently operated by
Parent, as reflected in Parent Financial Information.
(j) Real Property. Parent does not own or hold an ownership
interest in any Real Property.
(k) Leased Real Property. Schedule 5.1(k) contains a correct
legal description, street address and tax parcel identification number of all
tracts, parcels and subdivided lots in which Parent has a leasehold interest and
an accurate description (by location, name of lessor, date of lease and term
expiration date) of all Real Property Leases pursuant to which Parent has a
leasehold interest.
(l) Condition of Facilities.
(i) Use of the Real Property of Parent for the
various purposes for which it is presently being used is permitted as of right
under all Applicable Laws related to zoning and is not subject to "permitted
nonconforming" use or structure classifications. All Improvements are in
compliance with all Applicable Laws, including those pertaining to zoning,
building and the disabled, are in good repair and in good condition, ordinary
wear and tear excepted, and are free from latent and patent defects. To the
Knowledge of Parent, no part of any Improvement encroaches on any real property
not included in the Real Property of Parent, and there are no buildings,
structures, fixtures or other Improvements primarily situated on adjoining
property which encroach on any part of the Land.
(ii) Each item of Tangible Personal Property is in
good repair and good operating condition, ordinary wear and tear excepted, is
suitable for immediate use in the Ordinary Course of Business and is free from
latent and patent defects. No item of Tangible Personal Property is in need of
repair or replacement other than as part of routine maintenance in the Ordinary
Course of Business. Except as disclosed in Schedule 5.1(l)(ii), all Tangible
Personal Property used in the Parent Business is in the possession of Parent.
29
(m) Parent Intellectual Property.
(i) Parent owns, or is licensed or otherwise
possesses legal enforceable rights to use all: (i) trademarks and service marks
(registered or unregistered), trade dress, trade names and other names and
slogans embodying business goodwill or indications of origin, all applications
or registrations in any jurisdiction pertaining to the foregoing and all
goodwill associated therewith; (ii) patentable inventions, technology, computer
programs and software (including password unprotected interpretive code or
source code, object code, development documentation, programming tools,
drawings, specifications and data) and all applications and patents in any
jurisdiction pertaining to the foregoing, including re-issues, continuations,
divisions, continuations-in-part, renewals or extensions; (iii) trade secrets,
including confidential and other non-public information (iv) copyrights in
writings, designs, software programs, mask works or other works, applications or
registrations in any jurisdiction for the foregoing and all moral rights related
thereto; (v) databases and all database rights; and (vi) Internet Web sites,
domain names and applications and registrations pertaining thereto
(collectively, "PARENT INTELLECTUAL PROPERTY") that are used in the Parent
Business except for any such failures to own, be licensed or process that would
not be reasonably likely to have a Material Adverse Effect.
(ii) Except as may be evidenced by patents issued
after the date hereof, there are no conflicts with or infringements of any
material Parent Intellectual Property by any Third Party and the conduct of the
Parent Business as currently conducted does not conflict with or infringe any
proprietary right of a Third Party.
(iii) Schedule 5.1(m)(iii) sets forth a complete list
of all patents, registrations and applications pertaining to Parent Intellectual
Property owned by Parent. Except as set forth on Schedule 5.1(m)(iii), all such
Parent Intellectual Property listed is owned by Parent, free and clear of liens
or Encumbrances of any nature.
(iv) Schedule 5.1(m)(iv) sets forth a complete list
of all material licenses, sublicenses and other agreements in which Parent has
granted rights to any person to use Parent Intellectual Property. Parent will
not, as a result of the execution and delivery of this Agreement or the
performance of its obligations under this Agreement, be in Breach of any
license, sublicense or other agreement relating to Parent Intellectual Property.
(v) Parent owns or has the right to use all software
currently used in and material to the Parent Business.
(n) SEC Reports and Financial Statements. Since April 4, 2002,
Parent has filed with the SEC all reports and other filings required to be filed
by Parent in accordance with the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder (the "PARENT SEC REPORTS"). As of
their respective dates, Parent SEC Reports complied in all material respects
with the applicable requirements of the Securities Act, the Exchange Act and the
respective rules and regulations promulgated thereunder applicable to such
Parent SEC Reports and, except to the extent that information contained in any
Parent SEC Report has been revised or superseded by a later Parent SEC Report
filed and publicly available prior to the date
30
of this Agreement, none of Parent SEC Reports contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Parent included in Parent SEC Reports were prepared from and are
in accordance with the accounting books and other financial records of Parent,
were prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by the rules of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and presented fairly the consolidated financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Except as
set forth in Parent SEC Reports, Parent has no liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) other than
liabilities or obligations incurred in the Ordinary Course of Business. Parent
SEC Reports accurately disclose (i) the terms and provisions of all stock option
plans, (ii) transactions with affiliates, and (iii) all material contracts
required to be disclosed pursuant to Item 601(b)(10) of Regulation S-B
promulgated by the SEC.
(o) Contracts. Schedule 5.1(o) is a true, complete and
accurate list of all written or oral contracts, understandings, agreements and
other arrangements (including a brief description of all such oral arrangements)
executed by an officer or duly authorized employee of Parent or to which Parent
is a party either:
(i) involving more than $10,000, or
(ii) in the nature of a collective bargaining
agreement, employment agreement, or severance agreement with any of its
directors, officers and employees.
Parent has delivered or will, prior to Closing, deliver to Money Centers a
correct and complete copy of each Contract (redacted copies for names are
acceptable) listed in Schedule 5.1(o) (the "PARENT CONTRACTS"). Except as
disclosed in Schedule 5.1(o): (i) Parent has fully complied with all material
terms of Parent Contracts; (ii) to the Knowledge of Parent, other parties to
Parent Contracts have fully complied with the terms of Parent Contracts; and
(iii) there are no disputes or complaints with respect to nor has Parent
received any notices (whether oral or in writing) that any other party to Parent
Contracts is terminating, intends to terminate or is considering terminating,
any of Parent Contracts listed or required to be listed in Schedule 5.1(o).
(p) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of Parent.
(q) Litigation.
(i) Except as set forth in Schedule 5.1(q)(i), there
is no pending or, to Parent's Knowledge, threatened Proceeding:
(A) by or against Parent or that otherwise
relates to or may affect the Parent Business which, if adversely determined,
would have a Material Adverse Effect; or
31
(B) that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the Merger.
To the Knowledge of Parent, no event has occurred or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding. Parent has delivered to Money Centers copies of all
pleadings, correspondence and other documents relating to each Proceeding listed
in Schedule 5.1(q)(i). There are no Proceedings listed or required to be listed
in Schedule 5.1(q)(i) that could reasonably be expected to have a Material
Adverse Effect.
(ii) Except as set forth in Schedule 5.1(q)(ii):
(A) there is no material Order to which
Parent or the Parent Business is subject; and
(B) to the Knowledge of Parent, no officer,
director, agent or employee of Parent is subject to any Order that prohibits
such officer, director, agent or employee from engaging in or continuing any
conduct, activity or practice relating to the Parent Business.
(iii) Except as set forth in Schedule 5.1(q)(iii):
(A) Parent has been and is in compliance
with all of the terms and requirements of each Order to which it or the Parent
Business is or has been subject;
(B) No event has occurred or circumstance
exists that is reasonably likely to constitute or result in (with or without
notice or lapse of time) a violation of or failure to comply with any term or
requirement of any Order to which Parent or the Parent Business is subject; and
(C) Parent has not received any notice, or
received but subsequently resolved to the satisfaction of the Governmental Body
or other Person (evidence of such approval is attached as Schedule 5.1(q)(iii)),
or other communication (whether oral or written) from any Governmental Body or
any other Person regarding any actual, alleged, possible or potential violation
of, or failure to comply with, any term or requirement of any Order to which
Parent or the Parent Business is subject.
(r) Employee Benefits.
(i) Schedule 5.1(r)(i) lists all material (i)
Employee Benefit Plans of Parent, (ii) bonus, stock option, stock purchase,
stock appreciation right, incentive, deferred compensation, supplemental
retirement, severance, and fringe benefit plans, programs, policies or
arrangements, and (iii) employment or consulting agreements, for the benefit of,
or relating to, any current or former employee (or any beneficiary thereof) of
Parent, in the case of a plan described in (i) or (ii) above, that is currently
maintained by Parent or with respect to which Parent has an obligation to
contribute, and in the case of an agreement described in (iii) above, that is
currently in effect (the "PARENT EMPLOYEE PLANS"). Parent has heretofore made
available
32
to Money Centers true and complete copies of Parent Employee Plans and any
amendments thereto, any related trust, insurance contract, summary plan
description, and, to the extent required under ERISA or the Code, the most
recent annual report on Form 5500 and summaries of material modifications.
(ii) Except as set forth on Schedule 5.1(r)(ii), no
Parent Employee Plan is (1) a "multiemployer plan" within the meaning of
Sections 3(37) or 4001(a)(3) of ERISA, (2) a "multiple employer plan" within the
meaning of Section 3(40) of ERISA or Section 413(c) of the Code, or (3) is
subject to Title IV of ERISA or Section 412 of the Code.
(iii) Except as set forth on Schedule 5.1(r)(iii),
there is no Proceeding pending or, to Parent's Knowledge, threatened against the
assets of any Parent Employee Plan or, with respect to any Parent Employee Plan,
against Parent other than Proceedings that would not reasonably be expected to
result in a Material Adverse Effect, and to Parent's Knowledge there is no
Proceeding pending or threatened in writing against any fiduciary of any Parent
Employee Plan other than Proceedings that would not reasonably be expected to
result in a Material Adverse Effect.
(iv) Each of Parent Employee Plans has been operated
and administered in all material respects in accordance with its terms and
applicable law, including, but not limited to, ERISA and the Code.
(v) Each of Parent Employee Plans that is intended to
be "qualified" within the meaning of Section 401(a) of the Code has received a
favorable determination, notification, or opinion letter from the IRS.
(vi) Except as set forth on Schedule 5.1(r)(vi), no
director, officer, or employee of Parent will become entitled to retirement,
severance or similar benefits or to enhanced or accelerated benefits (including
any acceleration of vesting or lapsing of restrictions with respect to
equity-based awards) under any Parent Employee Plan solely as a result of
consummation of the Contemplated Transactions.
(s) Insurance. Schedule 5.1(s) is an accurate and complete
description of all policies of insurance of any kind or nature, including, but
not limited to, fire, liability, workmen's compensation and other forms of
insurance owned or held by or covering Parent or all or any portion of its
property and assets.
(t) Employees.
(i) Schedule 5.1(t)(i) contains a complete and
accurate list of the following information for each employee, director,
independent contractor, consultant and agent of Parent, including each employee
on leave of absence or layoff status: employer; name; job title; date of hiring
or engagement; date of commencement of employment or engagement; current
compensation paid or payable and any change in compensation since September 30,
2003.
33
(ii) To the Knowledge of Parent, no officer,
director, agent, employee, consultant, or contractor of Parent is bound by any
Contract 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 Parent Business or (ii) to
assign to Parent or to any other Person any rights to any invention,
improvement, or discovery. No former or current employee of Parent is a party
to, or is otherwise bound by, any Contract that in any way adversely affected,
affects, or will affect the ability of Parent to conduct the Parent Business.
(u) Labor Relations. Parent is not a party to any collective
bargaining or similar agreement. To the Knowledge of Parent, there are no
strikes, work stoppages, unfair labor practice charges or grievances pending or
threatened against Parent by any employee of Parent or any other person or
entity.
(v) Legal Compliance.
(i) To the Knowledge of Parent, Parent is in material
compliance with all Applicable Laws of any Governmental Bodies having
jurisdiction over Parent, including any requirements relating to antitrust,
consumer protection, currency exchange, equal opportunity, health, occupational
safety, pension and securities matters.
(ii) Schedule 5.1(v)(ii) contains a complete and
accurate list of each Governmental Authorization that is held by Parent or that
otherwise relates to the Parent Business. Each Governmental Authorization listed
or required to be listed in Schedule 5.1(v)(ii) is valid and in full force and
effect. The Governmental Authorizations listed in Schedule 5.1(v)(ii)
collectively constitute all of the Governmental Authorizations necessary to
permit Parent to lawfully conduct and operate the Parent Business.
(w) Brokers' Fees. Parent has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
Merger for which Parent, Merger Sub or Money Centers could become liable or
obligated.
(x) Undisclosed Liabilities. To the Knowledge of Parent, it
has no liability (and to the Knowledge of Parent, there is no basis for any
present or future Proceeding, charge, complaint, claim, or demand against any of
them giving rise to any liability), except for
(i) liabilities reflected or reserved against in the
Parent Interim Balance Sheet; or
(ii) liabilities which have arisen in the Ordinary
Course of Business since the date of Parent Interim Balance Sheet.
(y) Disclosure. The representations and warranties of Parent
contained in this Agreement do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained herein not misleading.
5.2 POWER AND AUTHORITY. Parent and Merger Sub each has the corporate
power to execute, deliver and perform this Agreement, the Related Agreements,
and, subject to the
34
satisfaction of the conditions precedent set forth herein, has taken all action
required by law, its Governing Documents or otherwise, to authorize the
execution and delivery of this Agreement and such related documents. The
execution and delivery of this Agreement does not and, subject to the receipt of
required regulatory approvals and any other required Third-Party Consents, the
consummation of the Merger contemplated hereby will not, violate any provisions
of the Governing Documents of Parent or Merger Sub or any mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment or decree to which
Parent or Merger Sub is a party or by which it or its properties is bound, any
legal or other restrictions of any kind to which Parent or Merger Sub is
subject, or result in the creation of any Encumbrance upon any of the property
or assets of Parent or Merger Sub. The execution and delivery of this Agreement
has been approved by the Boards of Directors of Parent and Merger Sub. This
Agreement is a valid obligation of Parent and Merger Sub and is legally binding
on each in accordance with its terms.
5.3 NO SUBSIDIARIES. Merger Sub does not own stock in and does not
control, directly or indirectly, any other corporation, association or business
organization. Merger Sub is not a party to any joint venture or partnership.
5.4 MERGER SUB COMMON STOCK. Parent owns, beneficially and of record,
all of the issued and outstanding shares of common stock, par value One Cent
($.01) per share, of Merger Sub (the "MERGER SUB COMMON STOCK"), all which
Merger Sub Common Stock is validly issued and outstanding, fully paid and
non-assessable, free and clear of all liens and encumbrances. Parent has the
corporate power to vote such shares of Merger Sub Common Stock pursuant to this
Agreement. Parent has, or will by the Effective Time have, taken all such
actions as may be required in its capacity as the sole stockholder of Merger Sub
to approve the Merger.
ARTICLE VI. ACCESS TO INFORMATION AND DOCUMENTS.
6.1 ACCESS TO INFORMATION. Between the date hereof and the Closing
Date, each Party will give to the other and its counsel, accountants and other
representatives full access to all the properties, documents, contracts,
personnel files and other records and shall furnish copies of such documents and
with such information with respect to its affairs as may from time to time be
reasonably requested. Each Party will disclose to the other and make available
to such Party and its representatives all books, contracts, accounts, personnel
records, letters of intent, papers, records, communications with regulatory
authorities and other documents relating to the business and operations of Money
Centers, Merger Sub or Parent, as the case may be. In addition, Money Centers
shall make available to Parent all such banking, investment and financial
information as shall be necessary to allow for the efficient integration of
Money Centers' banking, investment and financial arrangements with those of
Parent at the Effective Time. Access of Parent pursuant to the foregoing shall
be granted at a reasonable time and upon reasonable notice.
6.2 EFFECT OF ACCESS.
(a) Nothing contained in this Article VI shall be deemed to
create any duty or responsibility on the part of either Party to investigate or
evaluate the value, validity or enforceability of any Contract or other asset
included in the assets of the other Party.
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(b) With respect to matters as to which any Party has made
express representations or warranties herein, the Parties shall be entitled to
rely upon such express representations and warranties irrespective of any
investigations made by such Parties, except to the extent that such
investigations result in actual knowledge of the inaccuracy or falsehood of
particular representations and warranties.
ARTICLE VII. COVENANTS.
7.1 PRESERVATION OF BUSINESS.
(a) Prior to the Effective Time or the termination of this
Agreement, Money Centers will use its Best Efforts to preserve the Business, to
keep available to Parent and the Surviving Corporation the services of the
present employees of Money Centers, and to preserve for Parent and the Surviving
Corporation the goodwill of the suppliers, customers and others having business
relations with Money Centers. Money Centers shall conduct its Business only in
the usual and ordinary course as it has previously been conducted, including,
without limitation, its policies and practices relating to the collection of
accounts receivable and the payment of accounts payable and other liabilities,
and not introduce any new methods of management, operations or accounting,
without Parent's prior written consent (which shall not be unreasonably
withheld); maintain its assets in as good working order and condition as at
present, ordinary wear and tear excepted; perform all material obligations under
material agreements and leases relating to or affecting it, and keep in full
force and effect present insurance policies.
(b) Prior to the Effective Time or the termination of this
Agreement, Parent will use its Best Efforts to preserve the iGames Business, to
keep available to Parent the services of the present employees of Parent, and to
preserve for Parent the goodwill of the suppliers, customers and others having
business relations with Parent. Parent shall conduct the Parent Business only in
the usual and ordinary course as it has previously been conducted, including,
without limitation, its policies and practices relating to the collection of
accounts receivable and the payment of accounts payable and other liabilities,
and not introduce any new methods of management, operations or accounting,
without Parent's prior written consent of Money Centers (which shall not be
unreasonably withheld); maintain its assets in as good working order and
condition as at present, ordinary wear and tear excepted; perform all material
obligations under material agreements and leases relating to or affecting it,
and keep in full force and effect present insurance policies. Without the prior
written consent of Money Centers, Parent shall not permit Merger Sub to take any
actions or conduct any operations other than in connection with the Merger.
7.2 CURRENT INFORMATION. During the period from the date of this
Agreement to the Effective Time, each Party hereto shall promptly notify each
other Party of any (i) significant change in the normal course of business or
operations of the Parent Business, (ii) Proceeding (or communications indicating
that the same may be contemplated), or the institution or threat or settlement
of Proceedings, in each case involving the Parties the outcome of which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect on the Party, taken as a whole or (iii) event which such Party reasonably
believes could be expected to have a Material Adverse Effect on the ability of
any party hereto to consummate the Merger. Money
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Centers shall notify Parent of any breach of any representation or warranty of
Parent or Merger Sub of which Money Centers has Knowledge prior to the Closing.
Parent shall notify Money Centers of any breach of any representation or
warranty of Money Centers of which Parent has Knowledge prior to the Closing.
7.3 MATERIAL TRANSACTIONS. Prior to the Effective Time, no Party will
(other than (i) as contemplated by the terms of this Agreement and the Related
Agreements, (ii) with respect to transactions for which there is a binding
commitment existing prior to the date hereof disclosed in the Disclosure
Schedules, and (iii) transactions described on Schedule 7.3 which do not vary
materially from the terms set forth on such Schedule 7.3, or in the Ordinary
Course of Business without first obtaining the written consent of the other
Parties):
(a) declare or pay any dividend or make any other distribution
to shareholders, whether in cash, stock or other property;
(b) amend its Governing Documents or enter into any agreement
to merge or consolidate with, or sell a significant portion of its assets to,
any other Person;
(c) except pursuant to options, warrants, conversion rights or
other contractual rights disclosed in either Section 4.3 or Schedule 5.1(c),
issue any shares of its capital stock or any options, warrants or other rights
to subscribe for or purchase such common or other capital stock or any
securities convertible into or exchangeable for any such common or other capital
stock;
(d) directly redeem, purchase or otherwise acquire any of its
common or other capital stock;
(e) effect a reclassification, recapitalization, split-up,
exchange of shares, readjustment or other similar change in or to any capital
stock or otherwise reorganize or recapitalize;
(f) except as set forth in Schedule 7.3(f), enter into any
employment contract which is not terminable upon notice of ninety (90) days or
less, at will, and without penalty except as provided herein or grant any
increase (other than ordinary and normal increases consistent with past
practices) in the compensation payable or to become payable to officers or
salaried employees, grant any stock options or, except as required by law, adopt
or make any change in any bonus, insurance, pension or other Employee Benefit
Plan, agreement, payment or agreement under, to, for or with any of such
officers or employees;
(g) make any payment or distribution to the trustee under any
bonus, pension, profit sharing or retirement plan or incur any obligation to
make any such payment or contribution which is not in accordance with such
Party's usual past practice, or make any payment or contributions or incur any
obligation pursuant to or in respect of any other plan or contract or
arrangement providing for bonuses, options, executive incentive compensation,
pensions, deferred compensation, retirement payments, profit sharing or the
like, establish or enter into any such plan, contract or arrangement, or
terminate or modify any plan;
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(h) prepay any debt in excess of Ten Thousand Dollars
($10,000), borrow or agree to borrow any amount of funds except in the Ordinary
Course of Business or, directly or indirectly, guarantee or agree to guarantee
obligations of others, or fail to pay any monetary obligation in a timely manner
prior to delinquency;
(i) enter into any agreement, contract or commitment having a
term in excess of three (3) months or involving payments or obligations in
excess of $10,000 in the aggregate, except in the Ordinary Course of Business;
(j) amend or modify any material Contract;
(k) agree to increase the compensation or benefits of any
employee (except for normal annual salary increases in accordance with past
practices);
(l) place on any of its assets or properties any pledge,
charge or other Encumbrance, except as otherwise authorized hereunder, or enter
into any transaction or make any contract or commitment relating to its
properties, assets and business, other than in the Ordinary Course of Business
or as otherwise disclosed herein;
(m) guarantee the obligation of any person, firm or
corporation, except in the Ordinary Course of Business;
(n) make any loan or advance in excess of Ten Thousand Dollars
($10,000) or cancel or accelerate any material indebtedness owing to it or any
claims which it may possess or waive any material rights of substantial value;
(o) sell or otherwise dispose of any Real Property or any
material amount of any tangible or intangible personal property other than
leasehold interests in closed facilities, except in the Ordinary Course of
Business;
(p) commit any act or fail to do any act which will cause a
Breach of any Contract and which will have a Material Adverse Effect on its
business, financial condition or earnings;
(q) violate any Applicable Law which violation might have a
Material Adverse Effect on such Party;
(r) purchase any real or personal property or make any other
capital expenditure where the amount paid or committed is in excess of Ten
Thousand Dollars ($10,000) per expenditure;
(s) except in the Ordinary Course of Business, enter into any
agreement or transaction with any of such Party's Affiliates; or
(t) engage in any transaction or take any action that would
render untrue in any material respect any of the representations and warranties
of such Party contained in this
38
Agreement, as if such representations and warranties were given as of the date
of such transaction or action.
7.4 PUBLIC DISCLOSURES. Parent and Money Centers will consult with each
other before issuing any press release or otherwise making any public statement
with respect to the transactions contemplated by this Agreement, and shall not
issue any such press release or make any such public statement prior to such
consultation except as may be required by Applicable Law. The Parties shall
issue a joint press release, mutually acceptable to Money Centers and Parent,
promptly upon execution and delivery of this Agreement.
7.5 CONFIDENTIALITY. Parent and Money Centers shall hold, and shall use
their best efforts to cause their respective auditors, attorneys, financial
advisors, bankers and other consultants and advisors to hold, in strict
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all Confidential Information, and each Party
shall not release or disclose such Confidential Information to any other Person,
except its auditors, attorneys, financial advisors, bankers and other
consultants and advisors in connection with the transactions contemplated by
this Agreement.
7.6 NO SHOP. From the date of this Agreement until the earlier of (i)
the Effective Time, (ii) April 30, 2004, or (iii) until this Agreement is
terminated in accordance with Article X hereof, neither Parent, Money Centers
nor Merger Sub shall initiate, solicit or encourage (including by way of
furnishing assistance or proprietary information), or take any other action to
facilitate, any inquiries or the making of any proposal relating to, or that may
reasonably be expected to lead to, any "Competing Transaction" (as defined
below), or enter into any discussions or negotiate with any person or entity in
furtherance of such inquiries or to obtain a Competing Transaction, or agree to
or endorse any Competing Transaction, or authorize or permit any of its
Representatives to take any such action, and each Party shall promptly notify
the other Party of all relevant terms (including the identity of the parties
involved) of any such inquiries and proposals received by such Party or any such
officer, director, investment banker, financial advisor, attorney, accountant or
other representative relating to any of such matters and if such inquiry or
proposal is in writing, such Party shall promptly deliver or cause to be
delivered to the other Party a copy of such inquiry or proposal. For the
purposes of this Agreement, "COMPETING TRANSACTION" shall mean any of the
following (other than the Merger) (i) any merger, consolidation, share exchange,
business combination or similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of the assets of any Party;
(iii) any tender offer or exchange offer for more than fifty percent (50%) of
the outstanding shares of the capital stock of any Party or other form of
investment in, or purchase of, capital stock of any Party; (iv) any current
Affiliate acquiring beneficial ownership of, or any group (as such term is
defined under Section 13(d) of the Exchange Act) being formed which beneficially
owns or has the right to acquire beneficial ownership of, twenty-five percent
(25%) or more of the outstanding shares of the capital stock of any Party; or
(v) any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing. In the event that
the provisions of this Section 7.6 are violated by any Party or by any Party's
Representatives, and the Merger is not consummated, then, in addition to other
remedies available to the non-violating Party, the non-violating Party will be
entitled to receive from the violating Party all out-of-pocket expenses
(including reasonable
39
attorneys' fees and expenses relating to the Merger), which such non-violating
Party has incurred.
7.7 OTHER ACTIONS. None of Money Centers, Parent or Merger Sub shall
knowingly or intentionally take any action, or omit to take any action, if such
action or omission would, or reasonably might be expected to, result in any of
its representations and warranties set forth herein being or becoming untrue in
any material respect, or in any of the conditions to the Merger set forth in
this Agreement not being satisfied, or delay the Effective Time or (unless such
action is required by Applicable Law) which would have a Material Adverse Effect
the ability of Money Centers or Parent to obtain any Consents required for the
consummation of the Merger without imposition of a condition or restriction
which would have a Material Adverse Effect on the Surviving Corporation or which
would otherwise materially impair the ability of Money Centers or Parent to
consummate the Merger in accordance with the terms of this Agreement or
materially delay such consummation. Without limiting the generality of the
foregoing, Money Centers shall use its reasonable best efforts to obtain all
Consents required of Third Parties in respect of the Merger under all material
Contracts to which Money Centers is a party, including without limitation lessor
consents under the lease of Money Centers' corporate headquarters.
7.8 ACCOUNTING METHODS. Prior to Closing, Money Centers will not
change, in any material respect, its methods of accounting in effect at its most
recent fiscal year end except as required by changes in GAAP as concurred by
Money Centers' independent accountants.
7.9 DOCUMENTATION. True and complete copies of all Disclosure Documents
will be delivered by Money Centers to Parent and by Parent to Money Centers
within five (5) days from the date hereof or shall be attached to the relevant
Disclosure Schedule when such Disclosure Schedule is delivered.
7.10 COOPERATION.
(a) Parent and Money Centers shall together or pursuant to an
allocation of responsibility agreed to between them, (i) cooperate with one
another in determining whether any filings are required to be made or consents
are required to be obtained in any jurisdiction prior to the Effective Time in
connection with the consummation of the Merger and cooperate in making any such
filings promptly and in seeking to obtain timely any such Consents, (ii) use
their respective commercially reasonable efforts to cause to be lifted any
impediment preventing consummation of the Merger, or any part thereof, or the
other transactions contemplated hereby, and (iii) furnish to one another and to
one another's counsel all such information as may be required to affect the
foregoing actions.
(b) Subject to the terms and conditions herein provided, and
unless this Agreement shall have been validly terminated as provided herein,
each of Parent and Money Centers shall use all reasonable efforts (i) to take,
or cause to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party (or any subsidiaries or
affiliates of such party) with respect to this Agreement and to consummate the
Merger, subject to the vote of its stockholders described above, and (ii) to
obtain (and to
40
cooperate with the other party to obtain) any Consent by any Governmental Body
and/or any Third Party which is required to be obtained or made by such Party or
any of its Affiliates in connection with this Agreement and the Merger. Each of
Parent and Money Centers will promptly cooperate with and furnish information to
the other in connection with any such burden suffered by, or requirement imposed
upon, either of them or any of their Affiliates in connection with the
foregoing.
7.11 NOTICE OF SUBSEQUENT EVENTS. Money Centers shall notify Parent of
any changes, additions or events of which it has or obtains knowledge as to
which it concludes or reasonably should conclude would cause any material change
in or material addition to any Disclosure Schedule delivered by Money Centers
under this Agreement or otherwise would, in Money Centers' reasonable judgment,
likely result in a breach of this Agreement by Money Centers prior to the
Closing Date, promptly after the occurrence of the same.
7.12 EMPLOYEE BENEFITS TO CONTINUE. Parent shall ensure that the
Surviving Corporation maintains Employee Benefit Plans that provide those of
Money Centers' employees who are employed by the Surviving Corporation with
benefits that are not materially less than those historically provided by Money
Centers.
ARTICLE VIII. CONDITIONS TO CLOSING.
8.1 MUTUAL CONDITIONS. The respective obligations of each party to
effect the Merger shall be subject to the satisfaction, at or prior to the
Closing Date, of the following conditions (any of which may be waived in writing
by Parent, Merger Sub and Money Centers):
(a) None of Parent, Merger Sub or Money Centers shall be
subject to any Order by a court of competent jurisdiction which (i) prevents or
materially delays the consummation of the Merger or (ii) would impose any
material limitation on the ability of Parent effectively to exercise full rights
of ownership of the common stock of the Surviving Corporation or any material
portion of the assets or Business of Money Centers, taken as a whole.
(b) No statute, rule or regulation, shall have been enacted by
any Governmental Body that makes the consummation of the Merger illegal.
(c) Parent, Merger Sub and Money Centers shall have received
all Consents of Third Parties that are required of such Third Parties prior to
the consummation of the Merger, in form and substance acceptable to Parent or
Money Centers, as the case may be, except where the failure to obtain such
consent, approval or authorization would not have a Material Adverse Effect on
the Surviving Corporation.
8.2 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub under this Agreement are subject to the
satisfaction, at or before the Closing, of each of the following conditions:
(a) The representations and warranties of Money Centers
contained herein that are qualified as to materiality shall be true in all
respects on and as of the Closing Date with
41
the same force and effect as though made on and as of such date, and each of the
representations and warranties of Money Centers that are not so qualified shall
be true in all material respects.
(b) Money Centers shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
required by this Agreement to be performed or complied with by Money Centers at
or prior to the Closing.
(c) There shall not be threatened, instituted or pending any
Proceeding by or before any court or Governmental Body requesting or looking
toward an Order that (a) restrains or prohibits the consummation of the Merger,
(b) could have a Material Adverse Effect on Parent's ability to exercise control
over or manage Money Centers after the Closing or (c) could have a Material
Adverse Effect on Money Centers.
(d) On the Closing Date, there shall be no effective Order
issued by a court of competent jurisdiction restraining or prohibiting the
consummation of the Merger.
(e) Money Centers shall have delivered to Parent a
certificate, dated the Closing Date, executed by a duly authorized officer of
Money Centers certifying the fulfillment of the conditions specified in Sections
8.2(a), (b) and (c).
(f) Money Centers shall have delivered to Parent a
certificate, dated the Closing Date, executed by the Secretary of Money Centers,
certifying as to (i) Money Centers' Governing Documents, (ii) resolutions with
respect to the Merger adopted by Money Centers' board of directors and
shareholders attached thereto, and (iii) incumbency and signatures of the
persons who have executed this Agreement, the Related Agreements to which it is
a Party and any other documents, certificates and agreements to be executed and
delivered at the Closing pursuant to this Agreement or any of the Related
Agreements to which it is a party on behalf of Money Centers.
(g) Parent shall have received an opinion of Klehr, Harrison,
Branzburg & Xxxxxx LLP, counsel to Money Centers, dated the Closing Date, in
form and substance reasonably satisfactory to Parent.
(h) Shareholder shall have entered into an employment
agreement with Parent on terms and conditions reasonably acceptable to Parent.
(i) The Related Agreements to which Money Centers is a party
and all other documents to be delivered by Money Centers to Parent at the
Closing shall be satisfactory in form and substance to Parent.
(j) All Consents of all Third Parties and Governmental Bodies
shall have been obtained that are necessary, in the opinion of Parent Counsel,
in connection with (a) the execution and delivery by Money Centers of this
Agreement and the Related Agreements to which it is a Party or (b) the
consummation by Money Centers of the Merger and copies of all such Consents
shall have been delivered to Parent.
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(k) Parent shall have completed a business and legal due
diligence investigation of Money Centers, its assets and properties and the
Business, the results of which shall be satisfactory to Parent in its sole
discretion.
(l) Parent shall receive possession of the Certificates.
(m) Parent shall receive from Money Centers audited
consolidated and consolidating balance sheets and statements of income, change
in stockholders' equity and cash flow as of and for the twelve months ended
September 30, 2003.
(n) Money Centers shall deliver an industry-standard
commitment letter to Parent providing for the refinancing of its existing vault
cash and, upon consummation of the acquisition of Chex Services, Inc. by iGames
Entertainment, Inc., the existing vault cash of Chex Services, Inc. Such
commitment letter shall be subject to the standard contingencies for commitment
letters in this area of financing.
8.3 CONDITIONS TO THE OBLIGATIONS OF MONEY CENTERS. The obligations of
Money Centers under this Agreement are subject to the satisfaction, at or before
the Closing, of each of the following conditions:
(a) The representations and warranties of Parent and Merger
Sub contained herein that are qualified as to materiality shall be true in all
respects on and as of the Closing Date (except for the representations and
warranties made as of a specific date which shall be true in all material
respects as of such date) with the same force and effect as though made on and
as of such date, and each of the representations and warranties of Parent and
Merger Sub that are not so qualified shall be true in all material respects.
(b) Parent and Merger Sub shall have performed and complied in
all material respects with all covenants, agreements, obligations and conditions
required by this Agreement to be so performed or complied with by Parent and
Merger Sub at or prior to the Closing.
(c) There shall not be threatened, instituted or pending any
Proceeding by or before any court or Governmental Body requesting or looking
toward an Order, that restrains or prohibits the consummation of the Merger.
(d) On the Closing Date, there shall be no effective Order
issued by a court of competent jurisdiction restraining or prohibiting the
consummation of the Merger.
(e) Parent and Merger Sub shall have delivered to Money
Centers a certificate, dated the Closing Date, executed by a duly authorized
officer of Parent and Merger Sub, certifying to the fulfillment of the
conditions specified in Sections 8.3(a), (b) and (c).
(f) Parent shall have delivered to Money Centers a
certificate, dated Closing Date, executed by the Secretary of Parent, certifying
as to (i) Parent and Merger Sub's Governing Documents, (ii) resolutions with
respect to the Merger adopted by Parent's and Merger Sub's respective boards of
directors and shareholders attached thereto, and (iii) incumbency and signatures
of the persons who have executed this Agreement, the Related Agreements to which
43
Parent or Merger Sub is a Party and any other documents, certificates and
agreements to be executed and delivered at the Closing pursuant to this
Agreement or any of the Related Agreements to which it is a party on behalf of
Money Centers.
(g) Parent shall have delivered to Money Centers the
Registration Rights Agreement, executed by Parent.
(h) Parent shall have delivered to Money Centers the
Lock-up/Leak-out Agreement, executed by Xxxxxxx Xxxxxxxx.
(i) Money Centers shall have received an opinion of Parent
Counsel dated the Closing Date, in form and substance reasonably satisfactory to
Money Centers.
(j) The Related Agreements to which Parent or Merger Sub is a
party and all other documents to be delivered by Parent and Merger Sub to Money
Centers at the Closing shall be satisfactory in form and substance to Money
Centers.
(k) All Consents of all Third Parties and Governmental Bodies
shall have been obtained that are necessary, in the opinion of counsel to Money
Centers, in connection with (a) the execution and delivery by Parent and Merger
Sub of this Agreement or the Related Agreements to which either of them is a
party, and (b) the consummation by Parent and Merger Sub of the transactions
contemplated hereby or thereby, and copies of all such Consents shall have been
delivered to Money Centers.
(l) Xxxxxx Xxxxx shall have entered into an employment
agreement with Parent and the Surviving Corporation on terms and conditions
reasonably satisfactory to Money Centers.
(m) Parent shall have furnished Money Centers with copies of
the Ownership and Nondisclosure Agreements signed by each employee, officer or
consultant of Parent identified on Schedule 5.1(t)(i).
(n) Parent shall have granted all stock options listed on
Schedule 8.3(n).
(o) Parent shall have delivered to Money Centers (i) the
resignations of all directors of Parent other than Xxxxxx Xxxxx, and (ii) the
resignations of all officers of Parent other than Xxxxxx Xxxxx and Xxxxxx
Xxxxx'x resignation as Chief Executive Officer, each effective upon Closing.
(p) Parent shall have delivered to Money Centers evidence of
the expansion of Parent's Board of Directors to six (6) members, the appointment
thereto of four (4) additional directors nominated by Shareholder (one of whom
shall be Shareholder) and the appointment of Shareholder as Chairman of the
Board of Directors of Parent.
(q) Parent shall deliver to Shareholder the Warrants and
certificates evidencing ownership of the shares of Parent Common Stock and
Series A Preferred Stock described in Section 3.2(a).
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(r) Parent shall have filed the Certificate of Designations,
Rights and Preferences of Series A Preferred Stock with the Secretary of State
of the State of Nevada.
ARTICLE IX. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties
made by any party to this Agreement or pursuant hereto, as modified by any
Disclosure Schedule, exhibit, certificate or other document executed and
delivered pursuant hereto shall survive the Closing and any investigation made
by or on behalf of any party hereto for a period of two years following the
Closing Date. All statements contained herein or in any schedule, exhibit,
certificate or other document executed and delivered pursuant hereto shall be
deemed representations and warranties for purposes of Sections 9.1, 8.2(a), and
8.3(a). The right to indemnification or other remedy based upon such
representations and warranties shall not be affected by any investigation
conducted with respect to, or any knowledge acquired at any time, whether before
or after execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of any such representation or warranty.
9.2 INDEMNIFICATION.
(a) Subject to the terms and conditions of this Article IX,
Money Centers and Shareholder shall, jointly and severally, indemnify, defend
and hold harmless Parent and the Surviving Corporation (and their respective
Representatives, Affiliates, successors and assigns), from and against all
Claims, assessments, losses, damages, liabilities, deficiencies, judgments,
settlements, costs and expenses, including interest, penalties and reasonable
attorneys' fees and expenses incurred in enforcing this indemnification or in
any litigation between the Parties or with Third Parties (collectively,
"DAMAGES") asserted against, resulting to, imposed upon, suffered or incurred by
Parent or the Surviving Corporation (or any of their respective officers,
managers, members, employees, Affiliates, successors or assigns), directly or
indirectly, by reason of or resulting from (i) any failure of Money Centers to
duly perform or observe any term, provision, instrument, covenant or agreement
to be performed or observed by it, prior to the Closing, pursuant to this
Agreement or any Related Agreement and/or (ii) a breach of any representation,
warranty, covenant or agreement of Money Centers contained in or made pursuant
to this Agreement or any of the Related Agreements, provided, however, that the
maximum liability of Money Centers and Shareholder (collectively and not
individually) to Parent and the Surviving Corporation for Damages under this
Section 9.2(a) shall not exceed the Merger Consideration.
(b) Subject to the terms and conditions of this Article IX,
Parent, the Surviving Corporation and the Parent Shareholders shall, jointly and
severally, indemnify, defend and hold harmless Money Centers (and its respective
Representatives, Affiliates, successors and assigns) at any time after
consummation of the Closing, from and against all Damages asserted against,
resulting to, imposed upon or incurred by Money Centers, directly or indirectly,
by reason of or resulting from: (i) any failure of Parent or Merger Sub to duly
perform or observe any term, provision, instrument, covenant or agreement to be
performed or observed by it, prior to the Closing, pursuant to this Agreement or
any Related Agreement; or (ii) a breach of any representation, warranty,
covenant or agreement of Parent or Merger Sub
45
contained in or made pursuant to this Agreement, provided, however, that the
maximum liability of Parent and the Parent Stockholders to Money Centers
(collectively and not individually) for Damages under this Section 9.2(b) shall
not exceed the Merger Consideration paid to Money Centers hereunder.
(c) Notwithstanding any provision hereof to the contrary,
Money Centers and Shareholder shall not be liable to Parent and the Surviving
Corporation, and Parent and the Parent Shareholders shall not be liable to Money
Centers, unless the aggregate Damages exceed $250,000, and then only to the
extent that the aggregate Damages exceed $250,000.
9.3 CONDITIONS OF INDEMNIFICATION. The obligations and liabilities of
Parent, the Surviving Corporation and the Parent Shareholders, on the one hand,
and Money Centers and Shareholder, on the other hand, as indemnifying parties
(each, an "INDEMNIFYING PARTY") to indemnify Money Centers, Parent and the
Surviving Corporation, as applicable (each, an "INDEMNIFIED PARTY"), under
Section 9.2 with respect to Claims made by Third Parties shall be subject to the
following terms and conditions:
The Indemnified Party shall give written notice to the Indemnifying Party of any
Damages with respect to which it seeks indemnification promptly after the
discovery by such party of any matters giving rise to such Claim for
indemnification; provided, however, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under Section 9.2 unless it shall have been prejudiced by the
omission to provide such notice. In case any Claim is brought against an
Indemnified Party, the Indemnifying Party shall be entitled to participate in
the defense thereof and, to the extent that it may wish, to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnified Party, and
after notice from the Indemnifying Party of its election so to assume the
defense thereof, the Indemnifying Party will not be liable to the Indemnified
Party under Section 9.2 for any legal or other expense subsequently incurred by
the Indemnified Party in connection with the defense thereof; provided, however,
that (i) if the Indemnifying Party shall elect not to assume the defense of such
claim or action or (ii) if the Indemnified Party reasonably determines that
there may be a conflict between the positions of the Indemnifying Party and the
Indemnified Party in defending such Claim, then separate counsel shall be
entitled to participate in and conduct such defense, and the Indemnifying Party
shall be liable for any reasonable legal or other expenses incurred by the
Indemnified Party in connection with such defense (but not more than one
counsel). The Indemnifying Party shall not be liable for any settlement of any
Claim effected without its written consent, which consent shall not be
unreasonably withheld. The Indemnifying Party shall not, without the Indemnified
Party's prior written consent, which consent shall not be unreasonably withheld,
settle or compromise any Claim to which the Indemnified Party is a party or
consent to entry of any judgment in respect thereof. The Indemnifying Party
further agrees that it will not, without the Indemnified Party's prior written
consent, settle or compromise any claim or consent to entry of any judgment in
respect thereof in any pending or threatened Claim in respect of which
indemnification may be sought hereunder (whether or not the Indemnified Party is
an actual or potential party to such Claim) unless such settlement or compromise
includes an unconditional release of the Indemnified Party from all liability
arising out of such Claim.
46
9.4 REMEDIES CUMULATIVE. Except as expressly provided in this
Agreement, the remedies provided herein shall be cumulative and shall not
preclude assertion by any Party hereto of any other rights or the seeking of any
other remedies against any other Party hereto.
ARTICLE X. TERMINATION, AMENDMENT AND WAIVER.
10.1 TERMINATION. This Agreement may be terminated at anytime prior to
the Effective Time:
(a) by mutual written consent of Parent, Merger Sub and Money
Centers;
(b) by Parent or Money Centers:
(i) if the Merger shall not have been consummated on
or before March 31, 2004, unless the failure to consummate the Merger is the
result of a willful and material Breach of this Agreement by the Party seeking
to terminate this Agreement;
(ii) if any court of competent jurisdiction or other
Governmental Body shall have issued an Order or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and
non-appealable;
(iii) in the event of a Breach by the other Party of
any representation, warranty, covenant or other agreement contained in this
Agreement which cannot be or has not been cured within thirty (30) days after
the giving of written notice to the breaching Party of such Breach (provided
that the terminating Party is not then in Breach of any representation,
warranty, covenant or other agreement contained in this Agreement);
(iv) in the event that (i) all of the conditions to
the obligation of such Party to effect the Merger set forth in Section 8.1 shall
have been satisfied and (ii) any condition to the obligation of such Party to
effect the Merger set forth in Section 8.2 (in the case of Parent) or Section
8.3 (in the case of Money Centers) is not capable of being satisfied prior to
the end of the period referred to in Section 10.1(b)(i);
(v) if there shall have occurred prior to the
Effective Time changes in Applicable Law that, in the aggregate, shall have a
Material Adverse Effect on either Party; or
(c) By Money Centers if Money Centers determines in good faith
that the Chex Acquisition is unlikely to be consummated.
10.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 10.1, this Agreement shall forthwith become
void and have no effect, without any liability or obligation on the part of any
Party except to the extent that such termination results from the willful and
material Breach by a Party of any of its representations, warranties, covenants
or other agreements set forth in this Agreement, in which case the terminating
Party shall have the right to pursue any remedies available to it at law or in
equity.
47
10.3 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the Parties.
10.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
Parties may (i) extend the time for the performance of any of the obligations or
other acts of the other Parties, (ii) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (iii) waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a Party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such Party.
10.5 PROCEDURE FOR TERMINATION, AMENDMENT EXTENSION OR WAIVER. A
termination of this Agreement pursuant to Section 10.1, an amendment of this
Agreement pursuant to Section 10.3, or an extension or waiver pursuant to
Section 10.4 shall, in order to be effective, require in the case of Parent,
Merger Sub or Money Centers, action by its Board of Directors or the duly
authorized designee of the Board of Directors.
ARTICLE XI. MISCELLANEOUS.
11.1 NOTICES. Any communications required or desired to be given
hereunder shall be deemed to have been properly given if sent by hand delivery
or by facsimile and overnight courier or overnight courier to the parties hereto
at the following addresses, or at such other address as either party may advise
the other in writing from time to time:
If to Parent or Merger Sub:
--------------------------
iGames Entertainment, Inc.
000 Xxxxxx Xxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
---------------
The Law Office of Xxxxx X. Xxxxxxx XX, PA
0000 Xxxxxxxx Xxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Money Centers:
--------------------
Money Centers of America, Inc.
000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
48
with a copy to:
--------------
Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
All such communications shall be deemed to have been delivered on the
date of hand delivery or facsimile or on the next Business Day following the
deposit of such communications with the overnight courier.
11.2 FURTHER ASSURANCES. Each Party hereby agrees to perform any
further acts and to execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement.
11.3 GOVERNING LAW. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of Delaware, applied without
giving effect to any conflicts of law principles.
11.4 COMMISSIONS. Each of the Parties hereto represents and warrants
that no broker or finder is entitled to any brokerage or finder's fee or other
commission in connection with the Merger. Each of the Parties hereto shall pay
or discharge, and shall indemnify and hold the other harmless from and against,
all claims or liabilities for brokerage commissions or finder's fees incurred by
reason of any action taken by it.
11.5 CAPTIONS. The captions or headings in this Agreement are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Agreement.
11.6 INTEGRATION OF EXHIBITS AND SCHEDULES. All Exhibits and Disclosure
Schedules to this Agreement are integral parts of this Agreement as if fully set
forth herein.
11.7 ENTIRE AGREEMENT. This Agreement, the Related Agreements,
including all Exhibits and Disclosure Schedules attached hereto and thereto
contain the entire agreement of the parties and supersede any and all prior or
contemporaneous agreements between the parties, written or oral, with respect to
the transactions contemplated hereby. Such agreement may not be changed or
terminated orally, but may only be changed by an agreement in writing signed by
the party or parties against whom enforcement of any waiver, change,
modification, extension, discharge or termination is sought.
11.8 EXPENSES. Except as expressly provided otherwise, each party
hereto will bear its own costs and expenses (including fees and expenses of
auditors, attorneys, financial advisors, bankers, brokers and other consultants
and advisors) incurred in connection with this Agreement, the Related Agreements
and the transactions contemplated hereby and thereby.
49
11.9 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall together constitute and be one and the
same instrument.
11.10 BINDING EFFECT. This Agreement shall be binding on, and shall
inure to the benefit of, the Parties hereto, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No Party may assign any right or obligation hereunder without
the prior written consent of the other Parties.
11.11 NO RULE OF CONSTRUCTION. The Parties agree that, because all
Parties participated in negotiating and drafting this Agreement, no rule of
construction shall apply to this Agreement which construes ambiguous language in
favor of or against any Party by reason of that Party's role in drafting this
Agreement.
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IN WITNESS WHEREOF, Parent, Merger Sub and Money Centers have caused
this Agreement and Plan of Merger to be executed by their respective duly
authorized officers, all as of the day and year first above written.
BY PARENT:
iGAMES ENTERTAINMENT, INC.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
BY MERGER SUB:
MONEY CENTERS ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
BY MONEY CENTERS:
MONEY CENTERS OF AMERICA, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
Xxxxxxxxxxx X. Xxxxxxxxxx
Chairman and Chief Executive Officer
BY SHAREHOLDER:
/s/ Xxxxxxxxxxx X. Xxxxxxxxxx
Xxxxxxxxxxx X. Xxxxxxxxxx
BY PARENT SHAREHOLDERS:
/s/ Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
SCHEDULE OF EXHIBITS
Exhibit A Disclosure Schedules
Exhibit B Lock-up/Leak-out Agreement
Exhibit C Registration Rights Agreement
Exhibit D Certificate of Designation of Series A Preferred Stock
Exhibit E Form of Warrant
