Exhibit 2.2
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ASSET PURCHASE AGREEMENT
by and between
ACCESS CASH INTERNATIONAL L.L.C.
and
CASH RESOURCES, INC.
effective as of
August 1, 2002
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TABLE OF CONTENTS
Article I TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES..................1
1.01 Transfer of Assets.........................................1
1.02 Excluded Assets............................................2
1.03 Assumption of Liabilities..................................3
1.04 Retained Liabilities.......................................3
Article II PURCHASE PRICE................................................4
2.01 Amount; Manner of Payment..................................4
2.02 Allocation of Purchase Price...............................4
Article III CLOSING......................................................4
3.01 Closing....................................................4
3.02 Closing Procedure..........................................5
Article IV REPRESENTATIONS AND WARRANTIES OF SELLER......................6
4.01 Incorporation and Corporate Power..........................7
4.02 Execution and Delivery; Valid and Binding Agreement........7
4.03 No Breach; Consents........................................7
4.04 No Subsidiaries............................................8
4.05 Financial Statements.......................................8
4.06 Absence of Undisclosed Liabilities.........................8
4.07 No Material Adverse Effect.................................9
4.08 Absence of Certain Developments............................9
4.09 Real Property.............................................10
4.10 Assets....................................................10
4.11 Inventory.................................................10
4.12 Customers.................................................10
4.13 Suppliers.................................................11
4.14 Tax Matters...............................................11
4.15 Contracts and Commitments.................................12
4.16 Intellectual Property Rights..............................14
4.17 Litigation; Orders........................................14
4.18 Products and Services.....................................15
4.19 Compliance with Laws; Governmental Authorizations.........15
4.20 Environmental Matters.....................................16
4.21 Books and Records.........................................16
4.22 Disclosure................................................17
Article V REPRESENTATIONS AND WARRANTIES OF BUYER.......................17
5.01 Incorporation and Corporate Power.........................17
5.02 Execution, Delivery; Valid and Binding Agreement..........17
5.03 No Breach; Consents.......................................17
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5.04 Insolvency Proceedings....................................18
ARTICLE VI POST-CLOSING COVENANTS.......................................18
6.01 Transfer and Sales Taxes..................................18
6.02 Further Assurances........................................18
6.03 Cooperation with Proceedings..............................19
6.04 Payment of Retained Liabilities...........................19
6.05 Restrictions on Seller Dissolution and Distributions......19
6.06 Customer and Other Business Relationships.................20
6.07 Expenses..................................................20
6.08 Pro-Ration of Certain Taxes...............................20
6.09 Collection of Accounts Receivable.........................20
6.10 Additional Disclosures and Deliveries.....................21
6.11 Additional Contract Assignments...........................21
Article VII SURVIVAL; INDEMNIFICATION...................................22
7.01 Survival of Representations and Warranties................22
7.02 Indemnification by Seller.................................22
7.03 Indemnification by Buyer..................................23
7.04 Time Limitations..........................................23
7.05 Limitations on Amount.....................................24
7.06 Setoff Against Indemnification Holdback Amount............24
7.07 Method of Asserting Claims-Third Party Actions............24
7.08 Method of Asserting Claims-Other Actions..................26
7.09 Miscellaneous Indemnification Provisions..................27
Article VIII MISCELLANEOUS..............................................27
8.01 Definitions...............................................27
8.02 Press Releases and Announcements..........................31
8.03 Amendment and Waiver......................................31
8.04 Notices...................................................31
8.05 Assignment................................................33
8.06 Severability..............................................33
8.07 Complete Agreement........................................33
8.08 Counterparts..............................................33
8.09 Governing Law.............................................33
8.10 No Third Party Beneficiaries..............................33
8.11 Specific Performance......................................34
8.12 Dispute Resolution........................................34
8.13 Attorneys' Fees and Costs.................................35
8.14 Bulk Sales Laws...........................................35
8.15 Interpretation............................................35
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EXHIBITS AND SCHEDULES
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Assignment and Assumption Agreement
Exhibit C Form of Transition Services Agreement
Exhibit D Form of Noncompetition Agreement
Exhibit E Form of EFT Processing Report
Disclosure Schedule
Schedule 1.01(b) Additional Assigned Contracts
Schedule 1.01(d) Assigned Intellectual Property Rights
Schedule 2.02 Purchase Price Allocation
Schedule 3.02(b)(i) Closing Date Creditor Payoffs
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of August
15, 2002, but effective as of August 1, 2002 (the "Effective Date"), is made and
entered into by and between Access Cash International L.L.C., a Delaware limited
liability company ("Buyer"), and Cash Resources, Inc., a Colorado corporation
("Seller").
WHEREAS, Seller is engaged, among other things, in the business of
owning, marketing, selling, leasing and servicing ATMs and providing or
brokering ATM transaction processing and directly related services (the
"Business"); and
WHEREAS, Seller desires to sell and assign to Buyer, and Buyer desires
to purchase and assume from Seller, pursuant to the terms of this Agreement,
certain assets and Liabilities of Seller used or held for use in connection with
the Business.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements and the conditions set forth in this
Agreement, the parties agree as follows:
ARTICLE I
TRANSFER OF ASSETS; ASSUMPTION OF LIABILITIES
1.01 Transfer of Assets.
Pursuant to the terms of this Agreement, at the Closing Seller will sell
to Buyer, and Buyer will purchase from Seller, free and clear of all
Encumbrances, all of Seller's right, title and interest in and to the
following properties, assets and rights of Seller (collectively, except
for the Excluded Assets described in Section 1.02 hereof, the "Assets"):
(a) all Contracts between Seller and its customers pursuant to which
Seller provides or arranges for the provision of ATM transaction
processing and directly related services (each a "Customer
Contract");
(b) the additional Contracts set forth in Schedule 1.01(b);
(c) all ATMs owned or leased by Seller and all inventories of ATM
supplies and parts, but excluding all of Seller's and CTV's video
advertising systems and equipment and high-toppers and related
equipment even if installed or placed in or on ATMs (the
"Inventory");
(d) the Intellectual Property Rights set forth in Schedule 1.01(d) (the
"Assigned Intellectual Property Rights");
(e) originals or, where appropriate, true and complete copies of all
books, records and other documents and information relating to the
Business or the Assets (whether in documentary, electronic or other
form), including all customer, prospect, dealer and distributor
lists, sales literature, inventory records, warranty and maintenance
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records, purchase orders and invoices, sales orders and sales order
log books, customer information, commission records, correspondence,
product data, price lists, product demonstrations, quotes and bids
and all product catalogs and brochures (but excluding corporate
minutes, stock ledgers, Tax Returns and work papers);
(f) all accounts receivable generated in connection with (i) the
Business or the Assets (including ATM transactions) which accrue (as
determined in accordance with GAAP) on or after the Effective Date
or (ii) the sale of ATMs which are identified as "new" in Section
4.11 of the Disclosure Schedule, regardless of when the accounts
receivable accrued;
(g) all claims of Seller against third parties relating to the Business
or the Assets, whether xxxxxx or inchoate, known or unknown,
contingent or not contingent (including the litigation which is
described in Section 4.17(a) of the Disclosure Schedule and
identified as "possible litigation"), other than the litigation
described in Section 1.02(c);
(h) all guarantees, warranties, indemnities and similar rights in favor
of Seller with respect to any of the foregoing Assets; and
(i) all permits, licenses and other approvals of any Governmental
Authority used or held for use in connection with the Business or
the Assets, to the extent they are assignable.
1.02 Excluded Assets.
Notwithstanding anything to the contrary in this Agreement or in any
schedule or exhibit hereto, Seller is not selling, transferring or
assigning to Buyer any of its assets other than the Assets described in
Section 1.01 (all assets which Seller is retaining are referred to herein
as the "Excluded Assets"). Without limiting the generality of the
immediately preceding sentence, Seller is retaining all of the following
assets:
(a) all of Seller's current cash balances;
(b) all vault cash owned and provided to customers by Seller;
(c) all claims of Seller arising from the litigation which is described
in Section 4.17(a) of the Disclosure Schedule and identified as
"pending cases";
(d) all accounts receivable generated in connection with the Business or
the Assets (including ATM transactions) which accrued (as determined
in accordance with GAAP) prior to the Effective Date, other than the
accounts receivable described in Section 1.01(f);
(e) all of Seller's and CTV's video advertising systems (whether in
Seller's inventory or already placed) and video advertising rights
at customer locations where Seller and/or XxxxxxxxxxxXX.xxx have
placed video advertising equipment;
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(f) all of Seller's and CTV's high-toppers and related equipment
(whether in Seller's inventory or already placed);
(g) all service tools, office and other equipment (other than ATMs),
vehicles and furniture and fixtures owned, leased or otherwise used
by Seller;
(h) all real property owned, leased or otherwise used by Seller
(excluding real property/floor space subject to ATM placement
agreements or ATM space leases and the storage facility identified
in Section 4.15(a)(v)(1) of the Disclosure Schedule); and
(i) all licenses, permits or other approvals of any Governmental
Authority to the extent they are not assignable.
1.03 Assumption of Liabilities.
Pursuant to the terms of this Agreement, at the Closing Buyer will assume
all of Seller's executory obligations under the Contracts which are
included in the Assets, other than (a) any Liability for any breach
thereof to the extent such Liability arises from the ownership or
operation of the Business or the Assets prior to the Effective Date and
(b) any amounts payable under such Contracts with respect to the
ownership or operation of the Business or the Assets (including amounts
due under the Customer Contracts with respect to ATM transactions) prior
to the Effective Date (collectively, the "Assumed Liabilities").
1.04 Retained Liabilities.
Notwithstanding anything to the contrary in this Agreement or in any
schedule or exhibit hereto, and regardless of any disclosure to Buyer,
Buyer is not assuming and will not in any way be responsible for, and
Seller will retain and discharge as and when due, all of Seller's
Liabilities other than the Assumed Liabilities (collectively, the
"Retained Liabilities"). Without limiting the generality of the
immediately preceding sentence, each of the following Liabilities of
Seller are excluded from the Assumed Liabilities and will remain the sole
responsibility of Seller:
(a) any Liability arising out of or relating to the Excluded Assets;
(b) any Liability described in Section 1.03(a) or (b);
(c) any Liability for Taxes, including (i) any Taxes arising from or
relating to Seller's ownership or operation of the Business or the
Assets on or prior to the Closing Date and (ii) any Taxes (other
than sales Taxes) arising from or relating to the sale of the Assets
pursuant to this Agreement; and
(d) any Liability arising from or relating to Seller's employment of any
employee or Seller's termination thereof (including any Liability
arising from or relating to Seller's employee benefit plans),
whether or not Buyer hires the affected employee.
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Article II
PURCHASE PRICE
2.01 Amount; Manner of Payment.
(a) The total consideration for the Assets (the "Purchase Price") is
$12,800,000, plus $111,627.57 for the ATMs which are identified
as "new" in Section 4.11 of the Disclosure Schedule, plus
Buyer's assumption of the Assumed Liabilities. Buyer will pay
$12,271,627.57 of the cash portion of the Purchase Price (the
"Initial Payment") at the Closing as set forth in Section
3.02(b)(i) and will withhold and pay, or retain, $640,000 of the
cash portion of the Purchase Price (the "Indemnification
Holdback Amount") as security for Seller's indemnification
obligations under this Agreement. Seller will pay additional
consideration for the Noncompetition Agreements as set forth in
such agreements.
(b) Buyer will deposit the Indemnification Holdback Amount in a
securities account with Bank of America, N.A., and manage the
securities account pursuant to the terms and conditions of a
pledge agreement in form and substance satisfactory to Seller
and Buyer (the "Pledge Agreement"). To the extent not claimed by
Buyer pursuant to this Agreement, Buyer will pay the
Indemnification Holdback Amount to Seller within 10 days
following the 18-month anniversary of the Closing Date.
2.01 Allocation of Purchase Price.
Buyer and Seller will allocate the Purchase Price among the Assets in
accordance with an allocation schedule to be agreed upon by Seller and
Buyer and to be set forth in Schedule 2.02. Buyer and Seller will use
their reasonable best efforts to prepare and agree upon such allocation
schedule as soon as practicable after the Closing Date. Buyer and Seller
will prepare and file all Tax Returns that may be required in connection
with the transactions contemplated by this Agreement pursuant to Code
ss. 1060, all applicable Treasury regulations promulgated thereunder and
any other similar Legal Requirements, and all such Tax Returns will be
consistent with the allocations set forth in Schedule 2.02.
Article III
CLOSING
3.01 Closing.
The closing of the transactions contemplated by this Agreement (the
"Closing") will take place at the offices of Faegre & Xxxxxx LLP, 2500
Republic Plaza, 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, commencing at
10:00 a.m. local time, on the date hereof (the "Closing Date"). The
Closing will be deemed effective as of 12:00 a.m., Central Daylight
Time, on the Effective Date.
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3.02 Closing Procedure.
Seller and Buyer agree to consummate all of the following closing
transactions on the Closing Date:
(a) Seller will deliver or cause to be delivered to Buyer all of the
following:
(i) with respect to those Assets which constitute tangible
personal property, a xxxx of sale substantially in the
form attached as Exhibit A (the "Xxxx of Sale"), duly
executed by Seller;
(ii) with respect to those Assets which constitute intangible
personal property, an assignment substantially in the
form attached as Exhibit B, which assignment will also
contain Buyer's undertaking and assumption of the
Assumed Liabilities (the "Assignment and Assumption
Agreement"), duly executed by Seller;
(iii) such agreements, instruments, certificates and other
documents as Buyer deems necessary or appropriate to
assign to Buyer all of Seller's right, title and
interest in and to the Assigned Intellectual Property;
(iv) a transition services agreement substantially in the
form attached as Exhibit C (the "Transition Services
Agreement") and the Pledge Agreement, both duly executed
by Seller;
(v) noncompetition agreements substantially in the form
attached as Exhibit D, duly executed by each of Seller,
Xxxxxx X. Xxxxx and XxxxxxxxxxxXX.xxx, Inc. (the
"Noncompetition Agreements");
(vi) original releases of, or written authorizations from
Seller's creditors to release, any and all Encumbrances
on the Assets;
(vii) a copy of the text of the resolutions adopted by the
board of directors and shareholders of Seller
authorizing the execution, delivery and performance of
this Agreement and the consummation of all of the
transactions contemplated by this Agreement, certified
by an appropriate officer of Seller as being true and
correct and in full force and effect;
(viii) incumbency certificates executed on Seller's behalf
certifying the signature and office of each officer
executing this Agreement and any of the Ancillary
Agreements;
(ix) a copy of Seller's articles of incorporation, duly
certified as of a recent date by the Secretary of State
of Colorado;
(x) an opinion of Seller's counsel in form and substance
satisfactory to Buyer; and
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(xi) such other certificates, documents and instruments as
Buyer may reasonably request related to the transactions
contemplated hereby.
(b) Buyer will deliver or cause to be delivered to Seller all of the
following:
(i) the Initial Payment by (A) paying to Seller's creditors
the entire unpaid balance of Seller's indebtedness (plus
all accrued interest thereon) specified on the attached
Schedule 3.02(b)(i) as owing to such creditors as of the
Closing Date, (B) depositing $1,000,000 in a trust
account with Faegre & Xxxxxx LLP for purposes of
discharging Seller's obligations to its customers under
the Customer Contracts with respect to ATM transactions
that occurred prior to the Closing Date, which amount
may be disbursed only for such purposes upon the joint
written instruction of Seller and Buyer (provided that
(1) any remaining balance after all such obligations
have been discharged will be Seller's sole property and
Buyer, promptly following Seller's written certification
of such discharge, will authorize the disbursement of
any such remaining balance to Seller, and (2) Seller
will be solely responsible for any shortfall between the
deposited amount and the actual amount of such
obligations), and (C) paying to Seller the remaining
balance of the Initial Payment by wire transfer in
immediately available funds to an account designated in
writing by Seller;
(ii) the Xxxx of Sale, Assignment and Assumption Agreement,
Transition Services Agreement and Pledge Agreement, each
duly executed by Buyer;
(iii) an opinion of Buyer's counsel in form and substance
satisfactory to Seller; and
(iv) such other certificates, documents and instruments as
Seller may reasonably request related to the
transactions contemplated hereby.
(c) Buyer will deposit the Indemnification Holdback Amount with Bank
of America, N.A., as contemplated by this Agreement and the
Pledge Agreement.
(d) Buyer will pay the amounts set forth in the Noncompetition
Agreements by wire transfer in immediately available funds to
accounts designated in writing by Seller, Xxxxxx Xxxxx and CTV.
Article IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that, except as set forth in
the disclosure schedule delivered to Buyer on the Closing Date (the "Disclosure
Schedule"), each of the statements set forth in this Article IV were correct and
complete on the Effective Date and are correct and complete on the Closing Date.
The Disclosure Schedule sets forth the exceptions to the representations and
warranties contained in this Article IV under parts that correspond to the
Sections hereof; provided, however, that the mere listing (or inclusion of a
copy) of a document
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or other item therein shall not be deemed adequate to disclose an
exception to a representation or warranty made herein, unless the
representation or warranty addresses only the existence of the document
or other item itself.
4.01 Incorporation and Corporate Power.
Seller is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Colorado and has all requisite
corporate power and authority necessary to carry on the Business as now
being conducted and to own, lease and operate the Assets. Seller is
qualified to do business as a foreign corporation in each jurisdiction
where the nature of its business or its ownership of property requires
it to be qualified, except where the failure to be so qualified would
not have a Material Adverse Effect.
4.02 Execution and Delivery; Valid and Binding Agreement.
Seller has all requisite corporate power and authority to execute and
deliver this Agreement and each of the Ancillary Agreements to which it
is a party. Without limiting the generality of the foregoing, Seller's
execution and delivery of this Agreement and such Ancillary Agreements,
and Seller's consummation and performance of the transactions
contemplated hereby and thereby, have been duly and validly authorized
by all requisite action of Seller's board of directors and shareholders,
and no other proceedings or actions are necessary to authorize Seller's
execution, delivery, consummation and performance of this Agreement or
such Ancillary Agreements. This Agreement and such Ancillary Agreements
have been duly executed and delivered by Seller and constitute the valid
and binding obligations of Seller, enforceable in accordance with their
respective terms.
4.03 No Breach; Consents.
Except as set forth in Section 4.03 of the Disclosure Schedule, neither
Seller's execution and delivery of this Agreement or any Ancillary
Agreement to which it is a party, nor Seller's consummation or
performance of any of the transactions contemplated hereby or thereby,
will:
(a) contravene any provision of Seller's articles of incorporation,
bylaws or other organizational documents;
(b) conflict with or violate any Legal Requirement, Governmental
Authorization or Order;
(c) conflict with, breach any provision of, constitute a default (or
any event which would, with the passage of time or the giving of
notice, or both, constitute a default) under, result in a
violation of, result in (or give any Person the right to cause)
the termination, amendment, suspension, modification,
abandonment or acceleration of payment under any Contract or
Governmental Authorization;
(d) require any Governmental Authorization or the Consent of any
Person; or
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(e) result in the imposition or creation of any Encumbrance upon or
with respect to any of the Assets.
4.04. No Subsidiaries.
Seller does not hold, and has never held, any direct or indirect
ownership interest in any Person.
4.05 Financial Statements.
(a) Seller has delivered to Buyer the audited financial statements
of Seller as of and for the periods ended December 31, 2001 (the
"Balance Sheet Date") and December 31, 2000 (collectively, the
"Audited Financial Statements"), and the unaudited financial
statements of Seller as of and for the period ended May 31, 2002
(the "May Financial Statements"). Within 10 days after the
Closing Date, Seller will deliver to Buyer the unaudited
financial statements of Seller as of and for the period ended
June 30, 2002 (the "June Financial Statements"). The Audited
Financial Statements and the May Financial Statements each
include, and the June Financial Statements will include, a
balance sheet, statements of income and retained earnings and a
statement of cash flows.
(b) The Audited Financial Statements and the May Financial
Statements are, and the June Financial Statements will be, based
upon the information contained in Seller's books and records and
fairly present Seller's financial condition as of the dates
thereof and results of operations for the periods referred to
therein. The Audited Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby. The May
Financial Statements have been, and the June Financial
Statements will be, prepared on a basis consistent with the
Audited Financial Statements and in accordance with GAAP
applicable to unaudited interim financial statements (and thus
may not contain all notes and may not contain prior period
comparative data which are required to be prepared in accordance
with GAAP), and reflect all adjustments necessary to a fair
statement of the results for the interim period(s) presented
(except for normally recurring year-end adjustments).
4.06 Absence of Undisclosed Liabilities.
In each case with respect to the Business or the Assets, Seller does not
have any Liabilities, and Seller is not a party to or bound by any
agreement of guarantee, support, indemnification, assumption or
endorsement of, or any similar commitment with respect to the
Liabilities of any person, arising out of transactions or events
heretofore entered into, or any action or inaction, or any state of
facts existing, with respect to or based upon transactions or events
heretofore occurring, except (a) as reflected or reserved against in the
Audited Financial Statements, (b) current Liabilities which have arisen
after the Balance Sheet Date in the ordinary course of business (none of
which is a material
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Liability for breach of contract, breach of warranty, tort,
infringement, claim or lawsuit), or (c) as otherwise set forth in
Section 4.06 of the Disclosure Schedule.
4.07 No Material Adverse Effect.
Except as set forth in Section 4.07 of the Disclosure Schedule, since
the Balance Sheet Date, no event has occurred and no circumstance has
arisen which has had, or may with the passage of time be reasonably
expected to have, a Material Adverse Effect.
4.08 Absence of Certain Developments.
Except as set forth in Section 4.08 of the Disclosure Schedule, since
the Balance Sheet Date, Seller has conducted the Business only in the
ordinary course of business and has not, with respect to the Business or
the Assets:
(a) borrowed any amount (including advances on existing credit
facilities other than in the ordinary course of business) or
incurred or become subject to any Liability except (i) current
Liabilities incurred in the ordinary course of business and (ii)
Liabilities under Contracts entered into in the ordinary course
of business;
(b) mortgaged, pledged or subjected to any Encumbrance any of its
assets;
(c) delayed, postponed or accelerated the payment of accounts
payable and other Liabilities other than in the ordinary course
of business;
(d) sold, assigned or transferred (including transfers to any
employees, affiliates or shareholders) any tangible assets,
except sales of inventory in the ordinary course of business, or
canceled any debts or claims except in the ordinary course of
business;
(e) sold, assigned, transferred or granted (including transfers to
any employees, affiliates or shareholders) any Intellectual
Property or other intangible assets;
(f) waived any rights of material value or suffered any
extraordinary losses or adverse changes in collection loss
experience, whether or not in the ordinary course of business or
consistent with past practice;
(g) taken any other action or entered into any other transaction
other than in the ordinary course of business;
(h) suffered any material theft, damage, destruction or loss of or
to any property or properties owned or used by it, whether or
not covered by insurance;
(i) made any capital expenditures or commitments therefor in excess
of $25,000 in the aggregate;
(j) made any loans or advances to, or guarantees for the benefit of,
any Person other than in the ordinary course of business;
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(k) made any change in accounting principles or practices from those
utilized in the preparation of the Audited Financial Statements
or the May Financial Statements; or
(l) taken any action or entered into any agreement not described in
subsections (a) through (k) above that is material to Seller or
agreed or committed, whether orally or in writing, to do any of
the foregoing.
4.09 Real Property.
Seller does not own any real property. The real property subject to the
Real Property Leases constitutes all of the real property that Seller
leases, subleases or otherwise uses in connection with the Business.
4.10 Assets.
(a) Seller has, and will convey, transfer and assign to Buyer at the
Closing, good, valid and marketable title to the Assets, whether
tangible or intangible, free and clear of all Encumbrances
except the Assumed Liabilities.
(b) To Seller's Knowledge, there are no defects, facts or conditions
affecting the tangible Assets which could, individually or in
the aggregate, interfere in any material respect with the use or
operation thereof as currently used or operated, or their
adequacy for such use.
4.11 Inventory.
All items of Inventory are of good, usable and merchantable quality and,
except as set forth in Section 4.11 of the Disclosure Schedule, (a) are
not obsolete or discontinued, (b) are not in need of material repair and
are of such quality as to meet the quality control standards of Seller
and any applicable Legal Requirements, (c) with respect to finished
goods, are saleable as current inventories at the current prices thereof
in the ordinary course of business, (d) are recorded on Seller's books
at cost and (e) no write-down in inventory has been made or should have
been made pursuant to GAAP during the past two years. Section 4.11 of
the Disclosure Schedule sets forth a correct and complete list of all
Inventory and the location thereof.
4.12 Customers.
Section 4.12 of the Disclosure Schedule sets forth (a) the name and
address of each of Seller's top 50 customers as of the Closing Date
(each a "Significant Customer"), based on the number of ATMs for which
Seller provides or has arranged for the provision of electronic funds
transfer services, and (b) for each Significant Customer, the number of
such ATMs. Seller has not received any notice and does not otherwise
have any Knowledge that any Significant Customer (x) has ceased or will
cease to use Seller's products or services, (y) has substantially
reduced or will substantially reduce its use of Seller's products or
services or (z) has sought, or is seeking, to materially reduce the
price it will pay for Seller's products or services, including in each
case after the
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consummation of the transactions contemplated by this Agreement or any
of the Ancillary Agreements. To Seller's Knowledge, no Significant
Customer has otherwise threatened to take any action described in the
immediately preceding sentence due to the consummation of the
transactions contemplated by this Agreement or any of the Ancillary
Agreements.
4.13 Suppliers.
Section 4.13 of the Disclosure Schedule sets forth (a) the name and
address of each supplier from which Seller has obtained services with an
aggregate purchase price of $5,000 or more during the twelve-month
period ended December 31, 2001, in connection with the sale, service
and/or operation of ATMs (each a "Significant Supplier") and (b) the
amount for which each Significant Supplier invoiced Seller during such
period. Seller has not received any notice and does not have any
Knowledge of any material increase in the price of such materials,
supplies, merchandise or other goods or services, or that any
Significant Supplier will not sell materials, supplies, merchandise and
other goods or services to Buyer at any time after the Closing on terms
and conditions substantially the same as are in effect immediately prior
to the Closing, subject to price increases in the ordinary course of
business consistent with past practice. To Seller's Knowledge, no
Significant Supplier has otherwise threatened to take any action
described in the preceding sentence due to the consummation of the
transactions contemplated by this Agreement or the Ancillary Agreements.
4.14 Tax Matters.
(a) Except as set forth in Section 4.14(a) of the Disclosure
Schedule, (i) Seller has filed all Tax Returns that it was
required to file, (ii) such Tax Returns were correct and
complete in all respects, (iii) all Taxes owed by Seller
(whether or not shown on any Tax Return) have been paid and (iv)
no inquiry or claim has ever been made by an authority in a
jurisdiction where Seller does not file Tax Returns that Seller
is or may be subject to taxation by that jurisdiction. Except
for Seller's 2001 federal and state income Tax Returns, which
are on extension, Seller is not currently the beneficiary of any
extension of time within which to file any Tax Return. There are
no Encumbrances on any of the Assets that arose in connection
with any failure (or alleged failure) to pay any Tax.
(b) Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder, or
other third party.
(c) No Governmental Authority will assess, is expected to asses or
has threatened to assess any additional Taxes for any period for
which Tax Returns have been filed. There is no dispute or claim
concerning any Tax Liability of Seller either (i) claimed or
raised by any Governmental Authority in writing or (ii) of which
Seller has Knowledge. Section 4.14(c) of the Disclosure Schedule
lists all federal, state, local, and foreign income and sales
and use Tax Returns filed by Seller for taxable periods ended on
or after December 31, 1999, indicates those
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Tax Returns that have been audited, and indicates those Tax
Returns that currently are the subject of audit. Seller has
delivered to Buyer correct and complete copies of all federal
income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by Seller since
December 31, 1999.
(d) Seller has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
4.15 Contracts and Commitments.
(a) Section 4.15 of the Disclosure Schedule contains an accurate and
complete list of:
(i) for each ATM which is the subject of a Customer
Contract, the name of the customer, the address at which
the ATM is located, the effective date and termination
date of the applicable Customer Contract, the terminal
identification number and whether the applicable
Customer Contract is written or oral;
(ii) each Contract relating to the provision of electronic
funds transfer services to Seller, specifying in each
case the name of the provider and the title of the
Contract;
(iii) each Contract (other than Contracts covered by
subsection (i) of this Section 4.15(a)) relating to the
maintenance or installation of ATMs or otherwise
relating to the help desk and service related functions
of the Business;
(iv) each Contract relating to the borrowing of money or to
mortgaging, pledging or otherwise placing an Encumbrance
on any of the Assets;
(v) each Contract wherein Seller is a lessee of, or holds or
operates any personal property owned by any other party;
(vi) each Contract wherein Seller is a lessor of, or permits
any third party to hold or operate, any personal
property;
(vii) each Contract or group of related Contracts (other than
Contracts covered by the other subsections of this
Section 4.15(a)) that involve the performance of
services or the delivery of goods or materials by
Seller;
(viii) each Contract or group of related Contracts (other than
Contracts covered by the other subsections of this
Section 4.15(a)) that involve the performance of
services or the delivery of goods or materials to
Seller;
(ix) each Contract relating to the payment of a commission or
other form of remuneration in connection with the sale
or lease of goods, materials or services or to the
distribution of goods or materials;
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(x) each Contract or group of related Contracts (other than
Contracts covered by the other subsections of this
Section 4.15(a)) continuing over a period of more than
six months from the date or dates thereof, not
terminable by Seller on 30 days' or less notice without
penalty;
(xi) each Contract containing covenants that in any manner
and to any extent purport to restrict the right of
Seller to freely engage in business anywhere in the
world;
(xii) each Contract relating to the payment of royalties or
other compensation by or to Seller in connection with
the Intellectual Property Rights;
(xiii) any other Contract which is either material to the
Business or the Assets or was not entered into in the
ordinary course of business.
(b) Except as set forth in Section 4.15(b) of the Disclosure
Schedule or as provided under Colorado statutory law, with
respect to each Contract that is being assigned to or assumed by
Buyer pursuant to this Agreement:
(i) such Contract is in full force and effect and is valid
and enforceable against each party thereto in accordance
with its terms;
(ii) such Contract is assignable to Buyer without the consent
of any party thereto;
(iii) Seller has no Knowledge of any actual, alleged,
threatened, possible or potential violation or breach of
or default under any such Contract by any party thereto
which, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect.
(c) Section 4.15(c) of the Disclosure Schedule sets forth an
accurate and complete list of all Contracts relating to the
payment of a commission or other form of remuneration in
connection with the sale or lease of goods, materials or
services, which Seller has terminated or with respect to which
Seller has stopped paying commissions thereunder since January
1, 2001 (the "Terminated Sales Representative Agreements"), none
of which are being assigned to or assumed by Buyer under this
Agreement. Seller represents and warrants to Buyer that it had
the legal right to terminate or stop the payment of commissions,
as applicable, under each such Terminated Sales Representative
Agreement and that Seller has no further Liability thereunder.
(d) Prior to the date of this Agreement, Buyer has been supplied
with or given access to a correct and complete copy of each
written Contract, and a written description of Seller's three
largest oral Customer Contracts, together with all amendments,
waivers or other changes thereto.
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4.16 Intellectual Property Rights.
Section 4.16 of the Disclosure Schedule describes all rights in patents,
patent applications, trademarks, service marks, trade names, corporate
names, copyrights, mask works, trade secrets, know-how or other
intellectual property rights owned by, licensed to or otherwise
controlled by Seller in connection with the operation of the Business or
the Assets or used in, developed for use in or necessary to the conduct
of the Business as now conducted (collectively, the "Intellectual
Property Rights"). Seller owns and possesses all right, title and
interest, or holds a valid license, in and to the Intellectual Property
Rights. Seller has not received any notice of, nor does it otherwise
have any Knowledge of, any facts which indicate a likelihood of, any
infringement or misappropriation by, or conflict from, any third party
with respect to the Intellectual Property Rights. No claim by any third
party contesting the validity of any Intellectual Property Rights has
been made, is currently outstanding or, to Seller's Knowledge, is
threatened. Seller has not received any notice of any infringement,
misappropriation or violation by Seller of any intellectual property
rights of any third parties and Seller has not infringed,
misappropriated or otherwise violated any such intellectual property
rights. No infringement, illicit copying, misappropriation or violation
has occurred or will occur with respect to products currently being sold
by Seller or with respect to the conduct of the Business as now
conducted.
4.17 Litigation; Orders.
(a) Except as set forth in Section 4.17(a) of the Disclosure
Schedule (which also identifies the parties to and briefly
describes the basis for each pending, threatened or potential
Proceeding),
(i) there is no pending or, to Seller's Knowledge,
threatened Proceeding that relates to or that may affect
in any manner the Business or any of the Assets;
(ii) there is no pending or, to Seller's Knowledge,
threatened Proceeding that challenges or that may have
the effect of preventing, delaying, making illegal or
otherwise interfering with any of the transactions
contemplated by this Agreement or the Ancillary
Agreements;
(iii) Seller has no Knowledge of any event or circumstance
that is reasonably likely to give rise to or serve as a
basis for the commencement of any Proceeding described
in subparagraphs (i) or (ii) of this Section 4.17(a).
Buyer has been provided with correct and complete copies of all
pleadings, correspondence and other documents and materials
relating to each Proceeding described in Section 4.17(a) of the
Disclosure Schedule, and no Proceeding listed or required to be
listed therein is reasonably likely to have a Material Adverse
Effect.
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(b) Except as set forth in Section 4.17(b) of the Disclosure
Schedule, no Order is in effect that relates to or that may
affect in any manner the Business or any of the Assets.
4.18 Products and Services.
(a) Buyer has been furnished with correct and complete copies of the
standard terms and conditions of sale for each of the products
or services sold or provided by the Business (containing
applicable guaranty, warranty and indemnity provisions). Except
as set forth in Section 4.18(a) of the Disclosure Schedule:
(i) no product sold, leased or delivered by, or service
rendered by or on behalf of, Seller in connection with
the Business is subject to any guaranty, warranty or
other indemnity, express or implied, beyond such
standard terms and conditions; and
(ii) each product sold, leased or delivered by, or service
rendered by or on behalf of, Seller in connection with
the Business has been in material conformity with
applicable contractual commitments and all express and
implied warranties.
(b) Except as set forth in Section 4.18(b) of the Disclosure
Schedule, Seller has not been made aware of any Liability,
whether based on strict liability, negligence, breach of
warranty (express or implied), breach of contract or otherwise,
in respect of any product, component or other item sold by or on
behalf of Seller prior to the Closing, or service rendered by or
on behalf of Seller prior to the Closing, in connection with the
Business, that (i) is not fully and adequately covered by
policies of insurance or by indemnity, contribution, cost
sharing or similar agreements or arrangements by or with other
persons, and (ii) is not otherwise fully and adequately reserved
against as reflected in the May Financial Statements.
(c) Except as set forth in Section 4.18(c) of the Disclosure
Schedule and as may be contained in the standard terms and
conditions referred to in Section 4.18(a), Seller has not
entered into, or offered to enter into, any agreement, contract
commitment or other arrangement (whether written or oral) in
connection with the Business pursuant to which Seller is or
would be obligated to make any rebates, discounts, promotional
allowances or similar payments or arrangements to any customer
(collectively, "Rebate Obligations"). All Rebate Obligations are
reflected in the May Financial Statements or have been incurred
after the date thereof in the ordinary course of business.
4.19 Compliance with Laws; Governmental Authorizations.
(a) Seller and its officers, directors, agents and employees have
complied in all material respects with all applicable Legal
Requirements relating to the ownership and operation of the
Business and the Assets, and, except as set forth in Section
4.19(a) of the Disclosure Schedule, no claims have been filed
against Seller
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alleging a violation of any such Legal Requirements. Seller has
no Knowledge of any action, pending or threatened, to change the
zoning or building ordinances or any other Legal Requirements
affecting the Business or the Assets. Seller is not relying on
any exemption from or deferral of any applicable Legal
Requirement that would not be available to Buyer after it
acquires the Assets.
(b) Seller has, in full force and effect, all Governmental
Authorizations necessary to conduct the Business and own and
operate the Assets. A correct and complete list of all such
Governmental Authorizations is set forth in Section 4.19(b) of
the Disclosure Schedule, together with a description of each
Governmental Authorization's relationship to the Business and
whether such Governmental Authorization is assignable to Buyer.
Seller has conducted the Business and operated the Assets in
compliance with all terms and conditions of such Governmental
Authorizations.
(c) Notwithstanding the foregoing, Buyer may not rely on Seller's
representations and warranties set forth in this Section 4.19
for purposes of determining which Legal Requirements may apply
to, and which Governmental Authorizations may be required in
connection with, Buyer's ownership and operation of the Business
and the Assets after the Closing Date.
4.20 Environmental Matters.
Seller is now and at all times has been in compliance with all
applicable Legal Requirements and Orders relating to pollution,
contamination or the protection of the environment (collectively,
"Environmental Laws"), including Legal Requirements and Orders
concerning air pollution, water pollution, noise control or the on-site
or off-site handling, shipping, discharge, disposal or recovery of any
dangerous, toxic or hazardous pollutant, contaminant, chemical, waste,
material or substance as defined in or governed by any Environmental Law
(collectively, "Hazardous Materials"). Seller is not, and has not been
alleged to be, responsible for (a) any release of Hazardous Materials or
(b) any costs arising under or any violation of Environmental Laws.
4.21 Books and Records.
The books of account and other financial records of Seller, to the
extent they relate to the Business or the Assets, all of which have been
made available to Buyer, are complete and correct in all material
respects and reflect actual, bona fide transactions and have been
maintained in accordance with sound business practices. The minute books
of Seller, to the extent they relate to the Business or the Assets, all
of which have been made available to Buyer, contain accurate and
complete records of all meetings held of, and corporate action taken by,
the shareholders, the board of directors and committees of the board of
directors of Seller, and no meeting of any such shareholders, board of
directors or committee has been held for which minutes have not been
prepared or are not contained in such minute books.
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4.22 Disclosure.
Buyer has been provided with correct and complete copies of or access to
all documentation, and with correct and complete descriptions of all
information that is not in written form, that it has requested in
connection with its due diligence review of the Business and the Assets.
Article V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
5.01 Incorporation and Corporate Power.
Buyer is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware, with the
requisite power and authority to enter into this Agreement and the
Ancillary Agreements and perform its obligations hereunder and
thereunder.
5.02 Execution, Delivery; Valid and Binding Agreement.
Buyer has all requisite limited liability company power and authority to
execute and deliver this Agreement and each of the Ancillary Agreements
to which it is a party. Without limiting the generality of the
foregoing, Buyer's execution and delivery of this Agreement and such
Ancillary Agreements, and Buyer's consummation and performance of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all requisite limited liability company action, and no
other proceedings or actions are necessary to authorize Buyer's
execution, delivery, consummation and performance of this Agreement or
such Ancillary Agreements. This Agreement and such Ancillary Agreements
have been duly executed and delivered by Buyer and constitute the valid
and binding obligations of Buyer, enforceable in accordance with their
respective terms.
5.03 No Breach; Consents.
Neither Buyer's execution and delivery of this Agreement or any
Ancillary Agreement to which its is a party, nor Buyer's consummation or
performance of any of the transactions contemplated hereby or thereby,
will:
(a) contravene any provision of Buyer's articles of organization,
operating agreement or other organizational documents;
(b) conflict with or violate any Legal Requirement, Governmental
Authorization or Order;
(c) conflict with, breach of any provision of, constitute a default
(or any event which would, with the passage of time or the
giving of notice, or both, constitute a default) under, result
in a violation of, increase the burdens under, result in (or
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give any Person to right to cause) the termination, amendment,
suspension, modification, abandonment or acceleration of payment
under any Contract or Governmental Authorization; or
(d) require any Governmental Authorization or the Consent of any
Person.
5.04 Insolvency Proceedings.
Buyer is not the subject of any pending or threatened insolvency
proceedings of any character, including without limitation bankruptcy,
receivership, reorganization, composition or arrangement with creditors,
voluntary or involuntary. Buyer has not made an assignment for the
benefit of creditors or taken any action in contemplation of or which
would constitute a valid basis for the institution of any such
insolvency proceedings. After giving effect to this transaction, Buyer
(a) will have sufficient capital to carry on its business and
transactions, (b) will be able to pay its debts at they mature and
become due, and (c) will own assets the fair value of which will be
greater than the sum of its liabilities (including contingent
liabilities). Buyer is not insolvent nor will it become insolvent as a
result of entering into this transaction.
Article VI
Post-Closing Covenants
6.01 Transfer and Sales Taxes.
Buyer will pay and be solely responsible for all applicable transfer and
sales Taxes relating to the sale of the Assets and the Business to
Buyer. Except as otherwise provided in Section 2.02, Buyer will prepare
and timely file, and Seller will cooperate with Buyer in connection with
Buyer's preparation and filing of, such sales Tax Returns as may be
required to comply with the provisions of all sales Tax-related Legal
Requirements applicable to the transactions contemplated by this
Agreement and each Ancillary Agreement.
6.02 Further Assurances.
(a) If at any time after the Closing any further action by Seller is
necessary to carry out the purposes of this Agreement, Seller
will take such further action (including the execution and
delivery of such further instruments and documents) as Buyer may
reasonably request, at Buyer's sole cost and expense (unless
Buyer is entitled to indemnification therefor under Article
VII).
(b) If at any time after the Closing any further action by Buyer is
necessary to carry out the purposes of this Agreement, Buyer
will take such further action (including the execution and
delivery of such further instruments and documents) as Seller
may reasonably request, at Seller's sole cost and expense
(unless Seller is entitled to indemnification therefor under
Article VII).
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6.03 Cooperation with Proceedings.
(a) In the event and for so long as Buyer is contesting or defending
against any Proceeding in connection with (i) any transaction
contemplated by this Agreement or the Ancillary Agreements or
(ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date
involving Seller, Seller will cooperate with Buyer and its
counsel in the contest or defense, make available its personnel,
and provide such testimony and access to its books and records
as shall be necessary in connection with the contest or defense,
all at Buyer's sole cost and expense (unless Buyer is entitled
to indemnification therefor under Article VII).
(b) In the event and for so long as Seller is contesting or
defending against any Proceeding in connection with (i) any
transaction contemplated by this Agreement or the Ancillary
Agreements or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to
the Closing Date involving Seller, Buyer will cooperate with
Seller and its counsel in the contest or defense, make available
its personnel, and provide such testimony and access to its
books and records as shall be necessary in connection with the
contest or defense, all at Seller's sole cost and expense
(unless Seller is entitled to indemnification therefor under
Article VII). Buyer will retain and take commercially reasonable
measures to safeguard originals or copies of each contract,
document and record of Buyer purchased pursuant to this
Agreement for a period equal to the lesser of seven years or the
duration of the statute of limitations applicable to any matter
which would require the production of such contract, document or
record.
6.04 Payment of Retained Liabilities.
Seller will pay, perform and discharge when due, or make adequate
provision for the payment, performance and discharge when due of, all of
the Retained Liabilities and the other Liabilities of Seller under this
Agreement. If any such Liabilities are not so paid or provided for, and
if Buyer reasonably determines that failure to make any payments will
impair Buyer's use or enjoyment of the Assets or conduct of the
Business, Buyer may, at any time after the Closing Date, elect to make
all such payments directly (but shall have no obligation to do so) and,
following any such payment, will be entitled to a full reimbursement of
all such payments or, in Buyer's sole discretion, to set off and deduct
the full amount of all such payments from the Indemnification Holdback
Amount pursuant to Section 7.05.
6.05 Restrictions on Seller Dissolution and Distributions.
Seller agrees that it will not dissolve, or make any distribution of the
proceeds received pursuant to this Agreement, until Seller has paid, or
made adequate provision for the payment of, all of its obligations
pursuant to Section 6.04.
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6.06 Customer and Other Business Relationships.
For a period of 90 days following the Closing Date, Seller will
cooperate with Buyer in its efforts to continue and maintain for the
benefit of Buyer those business relationships of Seller existing on or
prior to the Closing Date and relating to the business to be operated by
Buyer after the Closing Date, including relationships with lessors,
employees, regulatory authorities, licensors, customers, suppliers and
others, and Seller will satisfy the Retained Liabilities in a manner
that is not detrimental to any of such relationships. Seller will refer
to Buyer all inquiries relating to such business. Seller will not, and
will use commercially reasonable efforts to cause each of its officers,
employees, agents and shareholders to not, take any action that would
tend to diminish the value of the Assets after the Closing Date or that
would interfere with the business of Buyer to be engaged in after the
Closing Date.
6.07 Expenses.
Except as otherwise expressly provided for herein, Seller and Buyer will
pay all of their own expenses, including attorneys' and accountants'
fees, in connection with the negotiation of this Agreement, the
performance of their respective obligations hereunder and the
consummation of the transactions contemplated by this Agreement (whether
consummated or not). In addition, (a) Seller will be solely responsible
for any brokerage commissions, finder's fees, fees for financial
advisory services or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Seller and (b) Buyer will be solely
responsible for any brokerage commissions, finder's fees, fees for
financial advisory services or similar compensation in connection with
the transactions contemplated by this Agreement based on any arrangement
or agreement made by or on behalf of Buyer.
6.08 Pro-Ration of Certain Taxes.
All state, city and local ad valorem Taxes and special assessments which
are attributable to the Assets shall be prorated between the parties as
of the Effective Date, with (a) Seller being responsible for such Taxes
allocable, on a pro rata basis, to the number of days during the year on
or prior to the Effective Date and (b) Buyer being responsible for such
Taxes allocable, on a pro rata basis, to the number of days during the
year thereafter.
6.09 Collection of Accounts Receivable.
Seller will use only commercially reasonable efforts to collect the
accounts receivable which are not being assigned to Buyer under this
Agreement. In addition, Seller will not assign (for collection purposes
or otherwise) or commence any litigation with respect to all or any
portion of such accounts receivable without Buyer's prior written
consent, which consent Buyer may withhold in its reasonable discretion;
provided, however, that Seller may continue to pursue the pending
litigation described in Section 4.17(a) of the Disclosure Schedule.
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6.10 Additional Disclosures and Deliveries.
(a) Within 15 days after the Closing Date, Seller will provide to
Buyer with respect to each Significant Customer (i) the number
of transactions during the 12-month period ended June 30, 2002,
which occurred at ATMs that are subject to Seller's Customer
Contract with such Significant Customer, (ii) the net amount of
surcharge and interchange revenue that Seller has paid to such
Significant Customer during the 12-month period ended June 30,
2002, and (iii) whether ATMs have been placed with or sold to
such Significant Customer.
(b) Within 15 days after the Closing Date, Seller will provide to
Buyer a report setting forth, for each electronic funds transfer
processor used by Seller, all of the monthly information
contained in the attached Exhibit E, updated to cover the
12-month period ended June 30, 2002.
(c) Seller will deliver to Buyer copies of any and all sales, use
and personal property Tax Returns and work papers for the years
1999, 2000 and 2001 within 15 days after the Closing Date and
for year 2002 promptly following Buyer's request therefor.
6.11 Additional Contract Assignments.
(a) From and after the Closing Date, Seller will use its best
efforts to obtain all Consents which may be required in order to
effect the assignment of each of the Contracts set forth in
Section 4.03(c) of the Disclosure Schedule. Promptly after
Seller obtains the required Consents for each such Contract,
Seller will, at Seller's sole cost and expense and without any
right to additional consideration, take such further action and
execute and deliver such further instruments and documents as
Buyer may reasonably request in order to effect the assignment
of such Contract to Buyer.
(b) From time to time after the Closing Date, Seller will, promptly
following Buyer's request therefor, but without any right to
additional consideration, assign to Buyer any Contract which is
(i) not being assigned to Buyer on the Closing Date and (ii) not
covered by Section 6.11(a). In connection with each such
requested assignment, Seller will, at Buyer's sole cost and
expense, take such further action and execute and deliver such
further instruments and documents as Buyer may reasonably
request in order to effect such assignment.
(c) Buyer's assumption obligations in connection with each
assignment effected pursuant to this Section 6.11 will be
limited to Seller's executory obligations under the assigned
Contracts and will specifically exclude, without limitation, (a)
any Liability for any breach of such Contracts to the extent
such Liability arises from performance thereunder prior to the
effective date of assignment and (b) any amounts payable under
such Contracts with respect to performance thereunder prior to
the effective date of assignment.
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Article VII
SURVIVAL; INDEMNIFICATION
7.01 Survival of Representations and Warranties.
All representations, warranties, covenants and obligations in this
Agreement, the Disclosure Schedule, the certificates delivered at the
Closing and any other certificate or document delivered pursuant to this
Agreement shall survive the Closing and the consummation of the
transactions contemplated hereby, subject to Section 7.04. The right to
indemnification, reimbursement or other remedy based upon such
representations, warranties, covenants and obligations shall not be
affected by any investigation conducted with respect to, or any
Knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or
compliance with any such representation, warranty, covenant or
obligation.
7.02 Indemnification by Seller.
Seller will indemnify in full Buyer and its officers, managers,
employees, agents, members, affiliates and subsidiaries (collectively,
the "Buyer Indemnified Parties") and hold them harmless from and against
any loss, Liability, deficiency, diminution in value, damage, expense or
cost (including interest, penalties, costs of investigation and defense,
and reasonable legal and other professional fees and expenses), as
incurred and whether or not involving a Third Party Action, which any of
the Buyer Indemnified Parties may suffer, sustain or become subject to,
as a direct or indirect result of, or arising from or in connection with
any of the following (collectively, "Buyer Losses"):
(a) any breach or inaccuracy in any of the representations and
warranties of Seller contained in this Agreement, the Ancillary
Agreements, or in any exhibits, schedules, certificates or other
documents delivered or to be delivered by or on behalf of Seller
pursuant to the terms hereof or thereof or otherwise referenced
or incorporated in this Agreement (collectively, the "Seller
Related Documents");
(b) any breach of or failure to perform any covenant, obligation or
agreement of Seller contained in this Agreement or any of the
Seller Related Documents;
(c) any Liability to the extent it arises from or relates to
Seller's operation or ownership of the Business or the Assets
prior to the Effective Date, including any Liability for Taxes,
but excluding the Assumed Liabilities; or
(d) any product or component thereof shipped, or any service
provided, by Seller prior to the Effective Date (including any
product liability claims), other than claims under warranties
given in the ordinary course of business and which are no
broader than the warranties referred to in Section 4.18(a).
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7.03 Indemnification by Buyer.
Buyer agrees to indemnify in full Seller and its officers, directors,
employees, agents, stockholders, affiliates and subsidiaries
(collectively, the "Seller Indemnified Parties") and hold them harmless
from and against any loss, Liability, deficiency, diminution in value,
damage, expense or cost (including interest, penalties, costs of
investigation and defense, and reasonable legal and other professional
fees and expenses), as incurred and whether or not involving a Third
Party Action, which any of the Seller Indemnified Parties may suffer,
sustain or become subject to, as a direct or indirect result of, or
arising from or in connection with any of the following (collectively,
"Seller Losses"):
(a) any breach or inaccuracy in any of the representations and
warranties of Buyer contained in this Agreement, the Ancillary
Agreements, or in any exhibits, schedules, certificates or other
documents delivered or to be delivered by or on behalf of Buyer
pursuant to the terms hereof or thereof or otherwise referenced
or incorporated in this Agreement (collectively, the "Buyer
Related Documents");
(b) any breach of, or failure to perform, any covenant, obligation
or agreement of Buyer contained in this Agreement or any of the
Buyer Related Documents, including the timely good faith payment
of the Indemnification Holdback Amount;
(c) any Liability to the extent it arises from or relates to Buyer's
ownership or operation of the Business or the Assets on or after
the Effective Date, including any Liability for Taxes, but
excluding the Retained Liabilities; provided, however, that
nothing in this Section 7.03(c) will limit or restrict in any
manner or to any extent Buyer's right to indemnification
pursuant to Section 7.02(a); or
(d) any product or component thereof shipped, or any service
provided, by Buyer on or after the Effective Date (including any
product liability claims), other than products, components
and/or services which Buyer, through Seller, provides to a
Person as contemplated by the Transition Services Agreement.
7.04 Time Limitations.
(a) Seller will have no Liability (for indemnification or otherwise)
with respect to a claim under Section 7.02(a) (other than those
in Sections 4.01, 4.02, 4.10(a) and 4.20, as to which a claim
may be made through the applicable statute of limitations, and
Section 4.14, as to which a claim may be made through the
statute of limitations applicable to actions by the Internal
Revenue Service or any other Tax Governmental Authority
regarding the subject matter thereof plus six months), unless,
on or before the second anniversary of the Closing Date, Buyer
notifies Seller of such claim specifying the factual basis
thereof in reasonable detail to the extent then known by Buyer.
(b) Buyer will have no Liability (for indemnification or otherwise)
with respect to a claim under Section 7.03(a) (other than those
in Sections 5.01 and 5.02, as to which a claim may be made
through the applicable statute of limitations), unless,
23
on or before the second anniversary of the Closing Date, Seller
notifies Buyer of such claim specifying the factual basis
thereof in reasonable detail to the extent then known by Seller.
(c) Notwithstanding anything to the contrary herein, with respect to
any specific representation, warranty, covenant, obligation or
agreement under which a party has made a claim for
indemnification hereunder and as to which such claim has not
been completely and finally resolved prior to the expiration of
the applicable time period above, such representation or
warranty shall survive for the period of time beyond such time
period sufficient to resolve, completely and finally, the claim
relating to such representation or warranty.
7.05 Limitations on Amount.
(a) Except for fraud or willful misrepresentations or as otherwise
provided below, (i) Seller will have no Liability (for
indemnification or otherwise) with respect to claims under
Section 7.02(a) until the total of all Buyer Losses with respect
to such matters exceeds $50,000 (the "Basket"), in which case
Seller will be liable for the total amount of all Buyer Losses,
and (ii) the aggregate Liability (for indemnification or
otherwise) of Seller with respect to claims under 7.02(a) will
not exceed $3,000,000 (the "Cap"). Notwithstanding the
foregoing, neither the Basket nor the Cap will apply to breaches
of or inaccuracies in representations and warranties set forth
in Sections 4.01, 4.02, 4.10(a) and 4.20.
(b) Except for fraud or willful misrepresentations or as otherwise
provided below, (i) Buyer will have no Liability (for
indemnification or otherwise) with respect to claims under
Section 7.03(a) until the total of all Seller Losses with
respect to such matters exceeds the Basket, in which case Buyer
will be liable for the total amount of all Seller Losses, and
(ii) the aggregate Liability (for indemnification or otherwise)
of Buyer with respect to claims under 7.03(a) will not exceed
the Cap. Notwithstanding the foregoing, neither the Basket nor
the Cap will apply to breaches of or inaccuracies in
representations and warranties set forth in Sections 5.01 and
5.02.
7.06 Setoff Against Indemnification Holdback Amount.
Upon 15 days' notice to Seller specifying in reasonable detail the basis
therefor, Buyer may set off any amount to which it may be entitled under
this Article VII against the Indemnification Holdback Amount. Buyer's
exercise of such setoff right in good faith, whether or not ultimately
determined to be justified, will not constitute an event of default
under this Agreement. Neither the exercise of nor the failure to
exercise such right of setoff will constitute an election of remedies or
limit Buyer in any manner in the enforcement of any other remedies that
may be available to it.
7.07 Method of Asserting Claims-Third Party Actions.
(a) If any Buyer Indemnified Party or Seller Indemnified Party (an
"Indemnified Party") is made a defendant in or party to any
Proceeding instituted by any third
24
party, the liability or the costs or expenses of which are or
may be Buyer Losses or Seller Losses (any such third party
action or proceeding being referred to as a "Third Party
Action"), such Indemnified Party shall give the party from whom
indemnification is sought (the "Indemnifying Party") prompt
written notice thereof. Such written notice shall have attached
thereto the complaint or other papers pursuant to which the
third party commenced such Third Party Action. The failure
promptly to give such notice shall not affect any Indemnified
Party's ability to seek indemnification hereunder unless such
failure has materially and adversely affected the ability of the
Indemnifying Party to defend successfully the relevant Third
Party Action.
(b) An Indemnifying Party shall be entitled to contest and defend
any Third Party Action provided that the Indemnifying Party has
a reasonable basis for concluding that such defense may be
successful and can diligently contest and defend the Third Party
Action. The Indemnifying Party shall give notice of its
intention to so contest and defend to the Indemnified Party
within 21 days after the date it receives the Indemnified
Party's notice of such Third Party Action (but, in all events,
at least five business days prior to the date that an answer to
such Third Party Action is due to be filed). Such contest and
defense shall be conducted by reputable attorneys retained by
the Indemnifying Party.
(c) An Indemnified Party shall be entitled at any time, at its own
cost and expense (which expense shall not constitute a Buyer
Loss or a Seller Loss unless the Indemnified Party reasonably
determines that the Indemnifying Party is not adequately
representing or, because of a conflict of interest, may not
adequately represent, the interests of the Indemnified Party,
and only to the extent that such expenses are reasonable), to
participate in such contest and defense and to be represented by
attorneys of its or their own choosing. If the Indemnified Party
elects to participate in such defense, the Indemnified Party
will cooperate with Indemnifying Party in the conduct of such
defense. The Indemnified Party shall cooperate with the
Indemnifying Party to the extent it reasonably requests such
cooperation in the contest and defense of such Third Party
Action, including providing reasonable access (upon reasonable
notice) to the books, records and employees of the Indemnified
Party if relevant to the defense of such Third Party Action;
provided, that such cooperation shall not unduly disrupt the
operations of the business of the Indemnified Party or cause the
Indemnified Party to waive any statutory or common law
privileges, breach any confidentiality obligations owed to third
parties or otherwise cause any trade secret or confidential
information of such Indemnified Party to become public.
(d) Neither the Indemnified Party nor the Indemnifying Party may
concede, settle or compromise any Third Party Action without the
consent of the other party, which consents will not be
unreasonably withheld. Notwithstanding the foregoing, (i) if a
Third Party Action seeks the issuance of an injunction, the
specific election of an obligation or similar remedy, or (ii) if
the subject matter of a Third Party Action relates to the
ongoing business of any Indemnified Party, which Third Party
Action, if decided against the Indemnified Party, would
materially adversely
25
affect the ongoing business or reputation of the Indemnified
Party, then, in each such case, the Indemnified Party alone
shall be entitled to contest, defend and settle such Third Party
Action in the first instance and, if the Indemnified Party does
not contest, defend or settle such Third Party Action, the
Indemnifying Party shall then have the right to contest and
defend (but not settle) such Third Party Action.
7.08 Method of Asserting Claims-Other Actions.
(a) If an Indemnified Party has a claim for indemnification
hereunder against an Indemnifying Party that does not involve a
Third Party Action (including a claim for indemnification with
respect to a third party claim that is not yet the subject of a
Third Party Action), the Indemnified Party shall give the
Indemnifying Party prompt written notice thereof. Such written
notice shall state in reasonable detail the factual basis for
such claim to the extent then known by the Indemnified Party and
the nature of the Buyer Loss or Seller Loss for which
indemnification is sought, and it may state the amount of the
Buyer Loss or Seller Loss claimed. The failure promptly to give
such notice shall not affect any Indemnified Party's ability to
seek indemnification hereunder unless either (i) such failure
has materially and adversely affected the ability of the
Indemnifying Party to investigate such claim, or (ii) such
notice is given after the end of the period specified in Section
7.04. If such notice states the amount of the Buyer Loss or
Seller Loss claimed and the Indemnifying Party notifies the
Indemnified Party that the Indemnifying Party does not dispute
the claim described in such notice or fails to notify the
Indemnified Party within 21 days after its receipt of such
notice whether the Indemnifying Party disputes the claim
described in such notice, the Buyer Loss or Seller Loss in the
amount specified in the Indemnified Party's notice will be
conclusively deemed a liability of the Indemnifying Party to the
Indemnified Party, and the Indemnifying Party shall pay the
amount of such Buyer Loss or Seller Loss to the Indemnified
Party.
(b) If the Indemnifying Party has timely disputed its liability with
respect to such claim, such dispute will be subject to the
dispute resolution provisions of Section 8.12.
(c) If a notice is given pursuant to this paragraph within the
period specified by Section 7.04, which does not state the
amount of the Buyer Loss or Seller Loss claimed, such omission
shall not preclude the Indemnified Party from recovering from
the Indemnifying Party, during or subsequent to such period, the
amount of its Buyer Loss or Seller Loss with respect to the
claim described in such notice. If a notice is given pursuant to
this paragraph within the period specified by Section 7.04,
concerning a third party claim which is not yet the subject of a
Third Party Action and such third party claim subsequently
becomes the subject of a Third Party Action, the Indemnified
Party also shall provide the notice required by Section 7.07(a)
at the time required by that section.
26
7.09 Miscellaneous Indemnification Provisions.
(a) Upon the determination of an Indemnifying Party's liability for
a Buyer Loss or a Seller Loss pursuant to this Article VII and
the amount of such Buyer Loss or Seller Loss (whether such
determination is made pursuant to the procedures set forth in
this Article VII, by agreement between the Indemnified Party and
the Indemnifying Party, by arbitration award or by final
adjudication), the Indemnifying Party shall pay the amount of
such Buyer Loss or Seller Loss to the Indemnified Party within
30 days following such determination.
(b) The rights set forth in this Article VII shall be the exclusive
remedy for breach or inaccuracy of any of the representations
and warranties contained herein on or prior to the Closing Date
and shall be in lieu of contract remedies. Notwithstanding the
foregoing, nothing in this Agreement shall prevent any party
from bringing an action based upon allegations of fraud by the
other party in connection with this Agreement. In the event such
action is brought, the prevailing party's attorneys' fees and
costs shall be paid by the non-prevailing party. With respect to
any breach of a covenant or other obligation contained in this
Agreement the parties shall have available to them all remedies
available under applicable Legal Requirements.
(c) To the extent permitted by applicable Legal Requirements, any
payment under this Article VII shall for Tax purposes be treated
as an adjustment to the Purchase Price.
Article VIII
MISCELLANEOUS
8.01 Definitions.
(a) "Affiliated Group" means any affiliated group within the meaning
of Code ss. 1504(a) or any similar group defined under a similar
provision of any state, local or foreign law.
(b) "Agreement" is defined in the preamble to this Agreement.
(c) "Ancillary Agreements" means the Xxxx of Sale, Assignment and
Assumption Agreement, Transition Services Agreement, Pledge
Agreement and Noncompetition Agreements.
(d) "Assets" is defined in Section 1.01.
(e) "Assignment and Assumption Agreement" is defined in Section
3.02(a)(ii).
(f) "ATM" means an automated teller machine.
(g) "Assigned Intellectual Property Rights" is defined in Section
1.01(d).
27
(h) "Assumed Liabilities" is defined in Section 1.03.
(i) "Audited Financial Statements" is defined in Section 4.05(a).
(j) "Balance Sheet Date" is defined in Section 4.05(a).
(k) "Basket" is defined in Section 7.05(a).
(l) "Xxxx of Sale" is defined in Section 3.02(a)(i).
(m) "Bulk Sales Laws" is defined in Section 8.14.
(n) "Business" is defined in the recitals to this Agreement.
(o) "Buyer" is defined in the preamble to this Agreement.
(p) "Buyer Indemnified Parties" is defined in Section 7.02.
(q) "Buyer Losses" is defined in Section 7.02.
(r) "Buyer Related Documents" is defined in Section 7.03(a).
(s) "Cap" is defined in Section 7.05(a).
(t) "Closing" is defined in Section 3.01.
(u) "Closing Date" is defined in Section 3.01.
(v) "Code" means the Internal Revenue Code of 1986, as amended.
(w) "Consent" means any authorization, consent, approval, filing,
waiver, exemption or other action by or notice to any Person.
(x) "Contract" means any contract, agreement, commitment, promise,
undertaking or understanding, whether oral or written and
whether express or implied, relating to the Business or the
Assets and (x) under which Seller has or may acquire any rights
or benefits, (y) under which Seller has or may become subject to
any Liability or (z) by which Seller or any of the Assets are or
may become bound.
(y) "CTV" means XxxxxXxxxxxXX.xxx, Inc., a Colorado corporation and
affiliate of Seller.
(z) "Customer Contract" is defined in Section 1.01(a).
(aa) "Disclosure Schedule" means the schedule delivered by Seller to
Buyer disclosing exceptions to their representations and
warranties set forth in Article IV.
(bb) "Effective Date" is defined in the preamble to this Agreement.
28
(cc) "Encumbrance" means any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal or restriction of any
kind, including any restriction on use, voting, transfer,
receipt of income or exercise of any other ownership attribute.
(dd) "Environmental Laws" is defined in Section 4.20.
(ee) "Excluded Assets" is defined in Section 1.02.
(ff) "GAAP" means United States generally accepted accounting
principles.
(gg) "Governmental Authority" means any domestic or foreign nation or
government, any state or other political subdivision thereof,
and any domestic or foreign entity or authority exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
(hh) "Governmental Authorization" means any approval, Consent,
license, permit, waiver or other authorization of any
Governmental Authority.
(ii) "Hazardous Materials" is defined in Section 4.20.
(jj) "Indemnification Holdback Amount" is defined in Section 2.01.
(kk) "Indemnified Party" is defined in Section 7.07(a).
(ll) "Indemnifying Party" is defined in Section 7.07(a).
(mm) "Initial Payment" is defined in Section 2.01.
(nn) "Intellectual Property Rights" means all rights in patents,
patent applications, trademarks, service marks, trade names,
corporate names, copyrights, mask works, trade secrets, know-how
or other intellectual property rights.
(oo) "Inventory" is defined in Section 1.01(c).
(pp) "JAG" is defined in Section 8.12.
(qq) "June Financial Statements" is defined in Section 4.05(a).
(rr) "Knowledge" means, when used with respect to Seller, (a) the
actual knowledge of Seller or any officer or director of Seller
regarding the fact or other matter at issue and (b) the
knowledge any such Person reasonably should have had concerning
the existence of such fact or other matter.
(ss) "Legal Requirement" means any federal state, local, municipal,
foreign, international, multinational or other constitution,
law, ordinance, principle of common law, code, regulation,
statute or treaty.
29
(tt) "Liability" means, with respect to any Person, any liability or
obligation of that Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or
otherwise, and whether or not required to be accrued on the
financial statements of the Person.
(uu) "Material Adverse Effect" means any effect on the Assets or the
operations, financial condition, results of operations or
prospects of the Business that, individually or in the aggregate
with other effects, is materially adverse.
(vv) "May Financial Statements" is defined in Section 4.05(a).
(ww) "Noncompetition Agreements" is defined in Section 3.02(a)(v).
(xx) "Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Authority or
arbitrator.
(yy) "Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate,
trust, association, organization, labor union or other entity or
Governmental Authority.
(zz) "Pledge Agreement" is defined in Section 2.01(b).
(aaa) "Proceeding" means any action, claim, arbitration, demand,
proceeding, grievance, subpoena, inquiry, 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 Authority or private arbitrator or mediator.
(bbb) "Purchase Price" is defined in Section 2.01.
(ccc) "Real Property Leases" means the leases of Seller's office
facilities and storage facility identified in Section
4.15(a)(v)(1) of the Disclosure Schedule.
(ddd) "Rebate Obligations" is defined in Section 4.18(c).
(eee) "Retained Liabilities" is defined in Section 1.04.
(fff) "Seller Indemnified Parties" is defined in Section 7.03.
(ggg) "Seller Losses" is defined in Section 7.02.
(hhh) "Seller Related Documents" is defined in Section 7.02.
(iii) "Seller" is defined in the preamble to this Agreement.
(jjj) "Significant Customer" is defined in Section 4.12.
30
(kkk) "Significant Supplier" is defined in Section 4.13.
(lll) "Tax" means any federal, state, local or foreign tax, charge,
fee, levy or other assessment of every kind or nature, including
all net income, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profit, windfall
profit, capital stock, environmental, license, withholding,
payroll, employment, unemployment, social security, disability,
excise, estimated, severance, stamp, registration, occupation,
premium, personal or real property, alternative or add-on
minimum, or other taxes, customs duties, fees, assessments, or
charges of any kind or nature, including all interest and
penalties thereon and additions to tax or additional amounts
imposed by any taxing authority, domestic or foreign.
(mmm) "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.
(nnn) "Terminated Sales Representative Agreements" is defined in
Section 4.15(c).
(ooo) "Third Party Action" is defined in Section 7.07(a).
(ppp) "Transition Services Agreement" is defined in Section
3.02(a)(iv).
8.02 Press Releases and Announcements.
Any public announcement, including any announcement to employees,
customers or suppliers and others having dealings with Seller, or
similar publicity with respect to this Agreement or the transactions
contemplated by this Agreement, will be issued, if at all, at such time
(but not prior to Closing) and in such manner as Buyer determines and
approves; Buyer will have the right to be present for any in-person
announcement. Unless consented to by Buyer or required by applicable
Legal Requirements, Seller will keep this Agreement and the transactions
contemplated by this Agreement confidential.
8.03 Amendment and Waiver.
This Agreement may not be amended or waived except in a writing executed
by the party against which such amendment or waiver is sought to be
enforced. No course of dealing between or among any Persons having any
interest in this Agreement will be deemed effective to modify or amend
any part of this Agreement or any rights or obligations of any Person
under or by reason of this Agreement.
8.04 Notices.
All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered
or three business days after being mailed by first class U.S. mail,
return receipt requested, or when receipt is acknowledged, if sent by
facsimile, telecopy or other electronic transmission device. Notices,
demands and
31
communications to Buyer and Seller will, unless another address is
specified in writing, be sent to the address indicated below:
Notices to Buyer:
Access Cash International L.L.C.
Xxxxxx Center II, Suite 300
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
and
eFunds Corporation
000 Xxxx Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: Law Department
Facsimile: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx LLP
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
Notices to Seller:
Cash Resources, Inc.
0000 X. Xxx Xxxxx Xxxx, X-000
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, President
With a copy to:
Xxxxxx X. Xxxxx
0000 X. Xxxxxx Xx.
Xxxxxxxxx, XX 00000
With a copy (which shall not constitute notice) to:
Faegre & Xxxxxx LLP
0000 00xx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
32
8.05 Assignment.
This Agreement and the Ancillary Agreements, and all of the provisions
hereof and thereof, will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns,
provided that neither this Agreement nor any of the Ancillary
Agreements, nor any of the rights, interests or obligations hereunder or
thereunder, may be assigned by any party hereto or thereto without the
prior written consent of the other party hereto, and provided further,
that Buyer may, without Seller's consent, assign this Agreement and any
Ancillary Agreement, and any of its rights, interests or obligations
hereunder or thereunder, to any parent of Buyer, to any of such parent's
subsidiaries, and in connection with any merger, consolidation,
reorganization, sale of all or substantially all of Buyer's assets or
similar transaction.
8.06 Severability.
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if
any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Agreement.
8.07 Complete Agreement.
This Agreement, the Ancillary Agreements, the exhibits and schedules
hereto and the other documents referred to herein contain the complete
agreement between the parties and supersede any prior understandings,
agreements or representations by or between the parties, written or
oral, which may have related to the subject matter hereof in any way.
8.08 Counterparts.
This Agreement may be executed in one or more counterparts, any one of
which need not contain the signatures of more than one party, but all
such counterparts taken together will constitute one and the same
instrument.
8.09 Governing Law.
THE INTERNAL LAW, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, OF THE
STATE OF DELAWARE WILL GOVERN ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE PERFORMANCE OF THE
OBLIGATIONS IMPOSED BY THIS AGREEMENT.
8.10 No Third Party Beneficiaries.
This Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein express or implied shall give or be
construed to give to any Person or
33
entity, other than the parties hereto and such permitted assigns, any
legal or equitable rights hereunder.
8.11 Specific Performance.
Seller and Buyer acknowledge and agree that the subject matter of this
Agreement (including the Business and the Assets) is unique, that the
other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached, and that the remedies
available at law would not be adequate to compensate the other party in
the event of a default or breach. Accordingly, Seller and Buyer agree
that the other party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions of this
Agreement in addition to any other remedy to which it may be entitled,
at law or in equity. Seller and Buyer waive any defense that a remedy at
law is adequate.
8.12 Dispute Resolution.
Subject to the procedures set forth in Article VII, each party shall
proceed in good faith to negotiate the resolution of any and all
disputes that may arise under this Agreement. If any such dispute is not
resolved within 30 days after the earliest date upon which a party
notified the other of its desire to attempt to resolve the dispute, then
the dispute shall be promptly submitted to arbitration by a single
arbiter through the Judicial Arbiter Group ("JAG"), any successor of the
Judicial Arbiter Group, or any similar arbitration provider that can
provide a former judge to conduct such arbitration if JAG is no longer
in existence, or an arbiter appointed by the court. The arbiter shall be
selected by JAG or the court on the basis, if possible, of his or her
expertise in the subject matter(s) of the dispute. The decision of the
arbiter shall be final, non-appealable and binding upon the parties, and
it may be entered in any court of competent jurisdiction. The
arbitration shall take place in Denver, Colorado. The arbitrator shall
be bound by and apply Delaware law with respect to all issues involved
in the arbitration, including rules relating to the admissibility of
evidence, all relevant privileges and the attorney work product
doctrine. All discovery shall be completed in accordance with the time
limitations prescribed in the Delaware Rules of Civil Procedure, unless
otherwise agreed by the parties or ordered by the arbitrator on the
basis of strict necessity adequately demonstrated by the party
requesting an extension or reduction of time. The arbitrator shall have
the power to grant equitable relief where applicable under the Delaware
law. The arbitrator shall issue a written opinion setting forth her or
his decision and the reasons therefor within 30 days after the
arbitration proceeding is concluded. Notwithstanding the foregoing,
either party may seek and obtain an injunction or other appropriate
relief from a court to preserve or protect the status quo with respect
to any matter pending conclusion of the arbitration proceeding, but no
such application to a court shall in any way be permitted to stay or
otherwise impede the progress of the arbitration proceeding.
34
8.13 Attorneys' Fees and Costs.
If either party files or institutes any arbitration or litigation
against the other party under this Agreement, the prevailing party in
any such arbitration or litigation will be entitled to recover from the
non-prevailing party its attorneys' fees, witness fees, costs and
expenses, court costs and other expenses, in each case to the extent
reasonable, whether or not such arbitration or litigation is prosecuted
to judgment or other relief. The "prevailing party" in any litigation or
arbitration is the party that the arbitrator or court determines is the
prevailing party, taking into consideration the merits of the claims
asserted by the parties, the relative values of the judgments,
settlements or other forms of relief awarded to the parties, and the
relative equities between the parties.
8.14 Bulk Sales Laws.
The parties waive compliance with the bulk transfer provisions of the
Uniform Commercial Code or any similar Legal Requirements, including any
Legal Requirement that requires notice to creditors of any transaction
contemplated by this Agreement or the Ancillary Agreements
(collectively, the "Bulk Sales Laws"), to the extent that the Bulk Sales
Laws of any jurisdiction may be applicable to the transactions
contemplated by this Agreement or the Ancillary Agreements. Seller
agrees to indemnify and defend each Buyer Indemnified Party and hold
them harmless from and against any Buyer Losses, in accordance with the
terms of Article VII, that any of them may suffer in connection with
Seller's noncompliance with the Bulk Sales Laws.
8.15 Interpretation.
(a) Article titles and headings to sections herein are inserted for
convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
The schedules and exhibits referred to herein shall be construed
with and as an integral part of this Agreement as though set
forth verbatim herein.
(b) In this Agreement, unless a clear contrary intention appears:
(i) the terms "hereunder," "hereof," "hereto" and words of
similar import shall be deemed references to this Agreement as a
whole and not to any particular Article, Section or other
provision hereof, (ii) the term "including" means including
without limiting the generality of any description preceding
such term, (iii) "or" is used in the inclusive sense of "and/or"
and (iv) references to documents, instruments or agreements
shall be deemed to refer as well to all addenda, exhibits,
schedules or amendments thereto.
[The remainder of this page has been left blank intentionally. Signature
page follows.]
35
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CASH RESOURCES, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name:
Title:
ACCESS CASH INTERNATIONAL L.L.C.
By: /s/ X.X. Xxxxxxxxx
---------------------------------------
Name: X.X. Xxxxxxxxx III
Title: Chairman and CEO
List Identifying Contents of
Omitted Schedule
The following Exhibits and Schedules have been omitted from this Exhibit 2.4
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Assignment and Assumption Agreement
Exhibit C Form of Transition Services Agreement
Exhibit D Form of Non-competition Agreement
Exhibit E Form of EFT Processing Report
Schedule 1.01(b) Additional Assigned Contracts
Schedule 1.01(d) Assigned Intellectual Property Rights
Schedule 2.02 Purchase Price Allocation
Schedule 3.02(b)(i) Closing date creditor Payoffs
The registrant will furnish supplementally a copy of any omitted Schedule or
Exhibit to the Securities and Exchange Commission upon the request of the
Commission.